Inside the Secret Financial Struggles of Your Favorite Restaurants︱Restaurant Roundtable S01E05

Episode Transcript
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Speaker 1 (00:00):
One question I wanted to kind of go around the
group because I'm really interested in this myself and it's
something we've never really talked about before, is how everyone
funded their business offshore accounting New bike, Hello, and welcome
back to a restaurant roundtable presented by Craft Times Away

(00:21):
from Home. We are a podcast for chefs by chefs,
and we actually have a guest with us today, mister
Will Zell, who's joining us. So today we're gonna be
talking about restaurant funding, something that I wish that I
had been able to listen to a podcast like this
before getting into opening our restaurants. And we have Will
with us today, who has been investing in startups since

(00:42):
two thousand and six. Here in Columbus, Ohio. Will is
the co founder of asset Watch and the managing partner
at Vessel. In twenty twelve, Will and his wife also
opened their own cafe called swede Aroma Coffee in Bell Fountain, Ohio.
So you are, as we are saying today, a Swiss
army knife of everything from funding to opening restaurants. And

(01:03):
I think before we get into kind of like the
meat of what is we're talking today, kind of like
to give a little primer of some of the different
ways to raise money, because there's twenty different ways that
you can raise capital to start a restaurant. You're an
expert and I'd love that if you could, you know,
introduce yourself and talk about different ways to raise money
for a restaurant. Yeah.

Speaker 2 (01:20):
Well, thank you all for the opportunity to be with
you today. This is exciting. So you know, when you
look at opening a restaurant and capitalizing it as a
small business to begin with, there is a kind of
toolbox of potential funding options that you can utilize from
self funding being able to bootstrap, which can be be
very difficult given all of the input costs generally associated

(01:43):
with building out. But if you do have personal direct
family wealth to be able to fund the startup costs,
you can The second would be friends and family. So
outside of just you and your your direct capability to fund,
are there relatives or friends within your close network that
would be able to provide capital to help you build
all the way through unknown private investors, so not friends

(02:04):
and family, but individuals who would be investing with their
private wealth, their own personal capital, through to professional investors,
which would be private equity firms, venture capital firms that
we can get into some of the difficulty of that
in their early days, all the way through traditional lending
sources or financing sources like banks, and then within the
banking system there's a number of different programs from SBA

(02:27):
loans all the way way through true traditional.

Speaker 1 (02:30):
Loans to utilize.

Speaker 2 (02:31):
So those are the general sources if you think of
the buckets where you could find lending, and then there's
also a kind of spectrum of how you would structure
the financing for a restaurant, all the way from debt
to equity and kind to set some definitions. Obviously, on
the debt side, it is like getting up a loan,
if you will, from any of those individual sources where

(02:54):
there is an expectation to pay back that loan with
an interest rate associated to it, and a particular period
of time in which that can be structured, all the
way through to selling an equity stake in your business,
where you would bring in capital from that outside investor
and you would give them a percentage of the business
ownership in return. I mean, there are pros and cons

(03:17):
for each of those, but if you think of those
as buckets of potential sources, and then how you could
structure it, and then there's like one hundred derivatives from
there in terms of how you structure un Happy to
get my thoughts on, I think the things that make
the most sense.

Speaker 1 (03:29):
To Yeah, I definitely want to get into what the
pros and cons of each of those ways of raising
capital is. But before that, you own a coffee shop,
so you're familiar with the hospitality industry as well. How
does owning your own restaurant compared to the world as startups.

Speaker 2 (03:44):
Yeah, So what we do at Vessel is we primarily
invest in technology companies technology startups, so it's very much
venture capital type investing. When it comes to venture capital investing,
you're generally taking a big swing to put money into
a business.

Speaker 1 (03:59):
That is very speculative.

Speaker 2 (04:01):
So you're generally buying equity for that business in return
for the capital that you give them, and there's a
hope that you may get it back at some point
in the future, but a reality that you might not.

Speaker 1 (04:12):
Get it back.

Speaker 2 (04:12):
With as said, you're placing a large number of investments
in companies that have the potential to give a very
significant return on the capital. So I'm investing in a
company early, and you know, ten years from now that
could go from just a startup to a company that's
generating hundreds of millions of dollars in revenue, and the
return on that investment could be very, very big. So
that's a very particular type of investing that's probably not

(04:36):
ideal for restauranteurs for people within the hospitality industry that
are just getting getting going and kind of being on
the other side of being.

Speaker 1 (04:43):
A founder and operator.

Speaker 2 (04:44):
And before you get too much into this, I want
to give a major shout out to my wife, Bets.

Speaker 1 (04:48):
She is really the one.

Speaker 2 (04:50):
That has made Sweeter Alms Coffee a success. She's the
operator of it. I'm much more as an advisor to
the business and consumer of the product, but she is
a starting a champion at what she does in a
world class operator.

Speaker 1 (05:03):
So with that, with that said.

Speaker 2 (05:04):
You know, when you're looking at the hospitality industry, number one,
I love it because you have the ability to create
a really unique experience and directly serve the public every
single day and serve your local community most of the time.
To create, you know, something that is a different experience
than what is out there.

Speaker 1 (05:20):
But you've got to be realistic.

Speaker 2 (05:21):
Especially in how you're thinking about capitalizing that. So when
it comes to the best strategy is, especially if you're
looking at kind of location number one to get things going,
I would really focus on the friends and family, and
I would focus on depth type structures that would have
runway built into them to allow you to have time
to really stand up the business before you have very

(05:44):
meaningful expectations of returning capital to investors.

Speaker 3 (05:48):
Would you say that you invest more in the restaurant
to ear than the restaurant then if would that be
a different way to kind of frame it. Yeah, a
restaurant is like a concept and the restaurant tour is
the idea, So you would invest in.

Speaker 1 (05:58):
The intellectual side of it.

Speaker 2 (06:00):
Yeah, absolutely, when you're when you're thinking about, like as
an investor, in approaching a business, obviously there's the market
the business itself, but so much of the returns that
are driven both to success positive and negative outcoones, are
really built on betting on people. And you know, you're
looking for some very common factors for entrepreneurs. Do they

(06:23):
have the grit to manage through the crappiness that is
inevitable in when you're starting your own business, Do they
have the focus on value and understanding what it takes
to pull various components together to create something that customers
will love and that they will come back for a
on a repeated basis, So you can build long term

(06:43):
relationships with customers, and then do they understand the economics
of a particular business to be able to build it profitably.
And again, tech startups are very different from from restaurants,
but those are the kind of common components.

Speaker 1 (06:56):
That you're looking for, especially in the restaurant industry. So
one question I wanted to kind of go around the
group because I'm really interested in this myself and it's
something we've never really talked about before, is how everyone
funded their business. We don't need to name names of
investors or anything like that, but just kind of did
you get a bank investment, have you looked for private

(07:17):
did you give away equity? And then kind of how's
that going for you? And then what I want will
to do is kind of to explain to the folks
at home, like kind of what the pros and cons
are to Like you said, the private investment.

Speaker 4 (07:28):
So my first start off was funded through private investment kickstarter.
I mean it was a while ago and Kickstarter was
still a thing, but it showed community buy in, which
made the rest of the fundraising go a little bit easier.
It was such a big process and it required so
much capital to go through that process. I have at

(07:48):
placement memorandums all of that that when it was time
for me to start the venture that I'm on right now,
I did it with my own money and it's definitely
made my growth slower and I could go out and
look for loans or anything like that. Right now, I've
appreciated that I can grow kind of at a slower
pace and make sure that everything feels really solid before

(08:09):
I go out and try and expand. So I'm making
mistakes at a much smaller scale financially, and once that's
really solid, then I'll probably push harder.

Speaker 5 (08:17):
So we did a combination of self funding as well
as lending. The lending route, so we did the lift
local UH through the SBA, and then we also foresee
funding from Freedom Equity, which is a nonprofit that's based
here in Columbus where their goal is to get provide

(08:39):
funding to minority own businesses. We met with a couple vcs,
but they're not interested in the restaurant industry. We would
actually be able to expand a lot quicker if we
were able to get an investment.

Speaker 1 (08:56):
How did you find those programs? Just like googling or so.

Speaker 5 (09:00):
So we found out about the Lift Local just meeting
with the branch manager at one of the local Huntington
bank and I We'll say, like, yes, it gave funding,
but it came at a price from the interest side
because it was market plus prime, so a lot higher.
We have a relationship with the executive director for Freedom Equity,

(09:22):
so their rate was about five percent, which was great.

Speaker 1 (09:26):
But yeah, would you recommend doing that route again or
I mean.

Speaker 5 (09:29):
I would definitely reach out to Freedom Equity if you
are here in Columbus. The turnaround time is very quick,
lower credit score, and their goal is to put money
like into the hands of minority owned businesses. The Lift
Local was a good start. Now you do have to
give You have to put up twenty five percent, you know,

(09:51):
So if you're in a position where you have that,
you know you're using a little bit of your money
to get somebody else's money, but you're paying a higher interest.

Speaker 1 (09:59):
So shore accounts in Dubai I'm not to talk about.

Speaker 3 (10:07):
Yeah, no, I have a I'm not. I kind of
have a it's ultimately it's private. However, what got me
there was the mindset of BC. That was a lot
of conversations because I couldn't justify to myself how I
could invest in a restaurant as a person who was
working in a restaurant, like I wouldn't give money to
a restaurant. Yeah, so it's very hard for me to imagine, like,
how would you give this an expect like on the

(10:27):
margin for a restaurant that we were probably talking about, Like,
I've seen a lot of the failed businesses, So I
looked at what is realistic for payback and I was like,
there's no way that somebody who has just kind of
money is going to want to invest in.

Speaker 1 (10:37):
Then I don't want any emotion attached to it.

Speaker 3 (10:39):
So I avoided investments from close to seven, seven or
eight years because people were just like, hey, we want
to throw money at this thing, and I was like,
it's not that easy. You're not seeing like that what
the margins looks like for what happens if I break
my leg? You know, like yeah, So when I split
myself out of it and said, hey, what do I
offer intellectually, like what is Abashar doing for the business
as a human or a being or what is that worth?

(10:59):
It turned in to maybe in equity, not a dollar
amount a dollar bouts with equity and then then having
no background and finance whatsoever and listening to rumors, so
I was like, I think I need this much. So
I asked for a number which was way high, and
people are like, what do you need.

Speaker 1 (11:14):
That kind of money?

Speaker 3 (11:15):
Which is interesting because the people that will generally give
me the money there were talking about hundreds of millions, right,
So I was like, this is what I need.

Speaker 1 (11:21):
They're like, well, why do you need that?

Speaker 3 (11:21):
And I was like, what are you talking about? Like
have you have you seen what shortages like? Have you
seen what equipment things were like? And guess what I
ended up using is I only like to ask once.
So it all went and it all went to the
correct place. But I had to ask for an uncomforable amount,
and so I held off for ten years until I
was like, well, I know it's going to take this,
so let's get it this way. And then I know
that I'm not going to spend fifteen years working in
this specific restaurant and if it, Paiales, I don't want

(11:43):
to like know this the rest of my life saying
that I failed a restaurant.

Speaker 1 (11:46):
I don't have anything anybody outside of that.

Speaker 3 (11:47):
So I kind of tried to do it this way
and then try to not Bob Rosset where it's like,
what would I if I had to sell my restaurant
worklow would that?

Speaker 1 (11:53):
And then made my best guss.

Speaker 3 (11:54):
But with that, when I had that out, people were like, man,
you have you have your shit together, and I was like,
I have no idea.

Speaker 1 (11:58):
What I'm talking about.

Speaker 3 (11:59):
But if I were to guess, maybe this would be
the closest that I could do. And if this is
the result that would be ideal. Let's start at the divorce.
Let's see what the worst get scenario is, and we
don't want that to happen. But if the worst condition
is acceptable, then you'd be invested. Yeah, And then I
think that's that perspective changed. And still I was like,
I don't like until you see that money get your account,
You're always terrified, like is a go a habit? Is

(12:19):
gonna habit because there's a lot of problems set as
we all know, people that say they're going to do
stuff and they just don't come through oka hear like,
oh I already signed the lease, so now it needs
to come So yeah, with private I think that's the
risk is you have to go about word mouth. And
I had all my ideal assign but still like, if
somebody doesn'tant to give it to you, then don't give
it to you. It's very challenging because you evaluate that
in the way that we see money every day, which
is we see cash flow. We don't go like, hey,

(12:40):
we want to spend one hundred fifty thousand dollars to bill,
but that's not normal for us. So you have to
disassociate the dollar amount with the dollars. What are these stuff?

Speaker 1 (12:48):
I talk about that a lot, like where my private life,
like one thousand dollars is a ton of money and
the restaurants is like changing hands every three seconds. And
so you need to like ship your brain for your investors.
Are they partners or are they just investors that like,
do they.

Speaker 3 (13:03):
Have a say in anything or they So I ought
to offer them the same because I think any advice
is useful advice and I at some point want to
be an investor too. So my goal is and just
to lego my restaurend it's also to be like there's
so many people that want of their restaurants, have no
idea how so if I can help with that as
so many going through it from knowing nothing to getting somewhere,
I hope that I can gain enough experience and so
I ask questions even if they investor, like hey, how

(13:25):
how are you able to do this? Can you teach
me how? Because like that's ultimately we're just we're trying
to make the community better. I think this is the
goal that that's why people invest in Columbus, and that's
what they should be investing in, not hey you make
for they got hot times, let's making more on hot dots.
Like I don't know if that's the best. There's other
businesses that can do that a little bit better. So
generally I offered I just put in my terms like hey,
like I want you to have this amount because what

(13:47):
you're investing in is not just now but five years
from now. And I'm going to ask you for advice
a lot of times. And I want that to be
valuable too, because I know that people say advices to you,
but I find worth to it, like more than any
dollar amount, so it kind of works both ways.

Speaker 1 (13:58):
And then we both raise our value the same time,
so it works together.

Speaker 3 (14:02):
And again that's like a dead investment is whatever for
a restaurant, it's there's better ways to do that investment.

Speaker 1 (14:06):
I think your restaurant's the best best case scenario for that.
I tell whenever I need to raise money, I tell
anyone who will listen, like, when you invest in a restaurant,
you're not doing to put your kids through college. It's
about what investing in a restaurant says, and you having
ownership over something. It's almost like a vanity play. Yeah,
Like it's not generally something that I would say is
like something that you're going to make a ton of

(14:27):
money off of. And we can go into the statistics
in a minute.

Speaker 5 (14:30):
What's the R So what's the expect that ROI like
with the terms I mean it's on.

Speaker 1 (14:37):
Is also like when you court an investor.

Speaker 3 (14:39):
It's also a little bit different because you want to
find the right person, not that's investing in a I
was on TV. I want that person to be in
my portfolio that can collect them and say, hey, look
at this guy that I made big that's stuck generally
you want to have on your investment pool. For our
part is do you find somebody's like, hey, I see that.
As you were saying, you know the grind of value,
you know how to run a business. You probably have
five or six things that you see and like I

(15:00):
I could say that a lot of things that we
restaurant owners offer outside to investors, like, hey, I noticed
that it takes me fifteen steps to persist in this
pos What if there was five stoves instead, and it
saves time and saved money. That there's so many outlets
just because of the volume of things that we do
in restaurants that it offers so many other services of
the natural product the offer and inefficiencies like toasts are.

Speaker 1 (15:17):
Killing so approvider like they don't know anything about restaurants.

Speaker 4 (15:20):
I think the artist less line I learned from getting
investors is you have to say no to them, like
you have to say no to not just like Avastrom
getting what. You don't want to take everybody's money. You
want to make sure you're finding the right person who's
giving you just the right money.

Speaker 1 (15:33):
Interested. So what should they be looking out for? Yeah,
I think there's a few different things and you know,
I'm really excited to hear your perspective on this. But
for for Eopening Chatman's we were looking to give away
equity in the business to raise the money. And what
we ended up doing because our investor didn't he wanted
to need to own one hundred percent of the business,

(15:55):
we just decided to do a debt structured deal, okay,
and then the pandemic happened and we ended up losing
a ton of money in the first year. For the
whole time the interest was collecting on it. So we
took what was let's just throw out a square number,
a half a million dollar investment that turned really quickly
into six hundred thousand, where if it had been an
equity partner, it would have been okay, Like it just

(16:16):
would have been all right, like we did crappy for
the first year. Now I can start paying you back
in a year two. But instead we kind of dug ourselves
into a bigger hole. So that's one scenario of like
talking about you know, I should have to Kate's point,
I probably should have had noted that and been like, look,
I am trying to raise an equity to all go
to someone else. If I need to, but it's kind

(16:37):
of hard when someone's got again whole numbers, like a
half million dollars to dangle in front of you like
this fulfills everything that I need to get the restaurant
up and going. It's really easy to just sign paperwork
and get the money in the bank and go. We
didn't know pandemic was coming two weeks later. Yeah, you know,
so that was kind of just crappy timing. But to
I mean, before you even go to investor, you need

(16:59):
to become of the deck. You need to talk to
people about what industry to like. You need to come
with a P and L. Basically, you need to Kate
and I were talking about this war we went on
and sorry film, you need to go to a lawyer
and get paperwork. You need twenty thousand dollars in cash
just to give a lawyer mentioned.

Speaker 4 (17:16):
It too, like you need to have your exit strategy
before you can even talk about starting a thing. Before
you know if you're getting investors or partners or loans.
You need to know what it looks like when you
have to walk away.

Speaker 3 (17:27):
I would say some of it it is not just
you need to I think some of it's kind of
the why I think to foring with business, other people's
lab there dependent on your decisions. And for that reason
I look at the divorce because I look at it
was like everybody that's seradom me, I can figure it out.

Speaker 1 (17:39):
You know, we're keep one human being.

Speaker 3 (17:41):
But if somebody is devoting if I was an investor
to this person, who I am paying to them in here?
So I am investing in your time, what does it
look like for them? If this doesn't work out and
we try to find a way, it's like, hey, this
is this is how we take care of every way
before before me.

Speaker 1 (17:53):
And it has to start with.

Speaker 3 (17:54):
Like, well, if depend on happened again, how do we
build our businesses so they can adapt or be modular
as opposed to I have this fixed idea that will
never go to go service. You know, that's challenging these spaces.
So I think now it's like I don't know if
that people spend enough time thinking about that. There's that
confidence that you have when somebody tells you that you
do listen to jam or something you need that You're like, oh,

(18:15):
of course, someone of the fuff it up and it's
going to sound great. They're like I always try to
look at it like, well, what if it's not then
then are we out of steam? Or is it going
to ruin us? Or like what's going to happen? Is
my entire life now ruined because my idea fails? And
I think that's challenging to think about. When are every
day we get such like adrenalin bumps because like, well
we're doing this, we're getting people food.

Speaker 1 (18:32):
Yeah, they go, you're doing a massive chop and you
get cool. What else do we need? You know? Yeah?
Well what do you think of this conversation?

Speaker 2 (18:38):
No, I think all really good unique insights are very
different perspectives, which is which is great. I think a
lot of it that does depend on the why and
the business that you want to build and kind of
how you see it three five, seven, ten years down
the road. It's a really, really, really important part of it.
Meaning if you're going into a concept to build to
scale and you know that you want to sell it
at some point and there's a strategy for or that,

(19:00):
that's a very different approach versus I'm starting something that
I wanted for the next twenty thirty years of my life.

Speaker 1 (19:06):
This is my dream and this is what I want
to do, I think between those two.

Speaker 2 (19:09):
So if I would look at those as two scenarios,
I would feel much more comfortable on taking equity on
if I have a kind of clear view towards an
exit of you know, three, five, seven years down down
the road. From an equity perspective, an investor doesn't get
paid back until there's an equity event, right or distributions
that that could could come out of the business. But

(19:30):
by and large, when you're looking at the good return
of where I get all my money back plus a gain,
it's that exit event. If I'm looking more of something
that I want to do, you know, for ten plus years,
single location or a few locations at most, then.

Speaker 1 (19:44):
I would think more about a debt structure.

Speaker 2 (19:47):
At the end of the day, though, a lot of
this boils down to like, what can you do right,
what is your network of relationships, what is your personal
financial position, who are the relationships that you have and
people are on that desire to get a shot at
opening a business or on very entirely different places on
that spectrum, what I would kind of go for for

(20:07):
an ideal scenario on starting to say, starting with the
first location on a restaurant is I would structure a
convertible debt facility, And what that means is it's a
financing that starts out as debt, but then has provisions
in the actual debt instrument itself where the debt can
be applied or can be converted into equity. And I

(20:30):
think you bring up a really interesting like twenty nineteen
who had a global pandemicemic on their being go card
right as some of that would fundamentally disrupt the restaurant industry,
and I think anything moving forward should take that in mind.
So in that convertible, the ability for the restaurant tour
to trigger a conversion into equity in the case of
a scenario like a global pandemic or something else that

(20:52):
would fundamentally disrupt.

Speaker 1 (20:53):
The ability to pay back. Where are you five years
ago from I would not have had that.

Speaker 2 (20:58):
I think that's the beauty of something like this is
the lived experience right through something that is once in
a lifetime.

Speaker 1 (21:05):
We negotiated a force masure into that contract and I
was looking at it like we would never need any
of this. Two weeks later, I'm like, oh, hello, thank god,
we did some of this, So I'm met there's some
statistics out there and then a question on the back
of it, but most people know this stat It definitely
has been changing for the last few years because of
the pandemic. The new data is seventeen percent of restaurants
fail within their first year and sixty two percent fail

(21:27):
within three years. Wow, that is sobering. What are some
of the most financial common financial mistakes you've seen? Not
just restaurants, but businesses.

Speaker 2 (21:37):
Make all right, So this partially is kind of financial.
The other is like launch mistakes because for me, especially
in a restaurant business or any retail business, so much
of the success to get past year one is the
momentum that you build in like months one through three,
and it is not at all.

Speaker 1 (21:56):
If you build it, they will come.

Speaker 2 (21:57):
In the restaurant industry, now, the lead up the need
to so the lead up time and having a really
solid plan of how you are going to kind of
pre opening a build momentum towards people being interested in coming,
and then through day one, opening into the first few weeks,
first few months, making sure that you're building momentum and

(22:19):
giving people really like when they come in. Number one,
make sure it's an incredible experience, right, because people will
always be making value decisions. If I come into a
new restaurant and I'm paying the same amount of money
and getting a worse experience than other places that I
have gone to in the past, I'm not coming back again.
If I come in and I pay the same amount

(22:39):
of money and have a better experience, that's a likelihood
of me coming back again. If for somehow I come
in and pay a little bit less and have an
incredible experience, I'm your customer for life.

Speaker 1 (22:49):
Right. So people are always.

Speaker 2 (22:51):
Making value decisions, and what you want to be able
to do is when they come in, you're delivering them
a much more incredible experience than they could.

Speaker 1 (22:59):
Have at all the other places that are available.

Speaker 2 (23:01):
To them to eat food, right, which is if not
just the similar type of business, right, it is all
the decisions and place where they could go to spend
money on food. And so how do you create that
experience through the quality of the product, the customer service,
and the atmosphere itself to get them to say I

(23:21):
want to come back? And then how do you incentivize
them to tell others about that experience that they had.
So it's really building momentum early on. One of the
things that my wife did, which was a genius move,
and she'll tell you she saw.

Speaker 1 (23:33):
It somewhere else, but she executed.

Speaker 2 (23:35):
It very well is when we launched, we had bumper
stickers with Sweeter on this coffee, and we did basically,
if we spot a bumper sticker out in the community,
we'll stop and we'll give you a five dollars, ten dollars,
we could do whatever it was, but basically a little
gift card that we would throw on your windshield basically
if we saw you out in the community. And it

(23:57):
was part of kind of that early launch marketing that
we did, and it kind of drove two things.

Speaker 1 (24:02):
One people loved it. They love being spotted.

Speaker 2 (24:05):
But number two, if you drive around Bell Fountain, Ohio today,
I would bet thousand dollars that if you spent an
hour driving around Bell Found, Ohio, you'd see at least
five cars today with Sweeter and was bumper stickers on it.

Speaker 1 (24:16):
She created an army of little billboards. We might need
to have you back when we do our next marketing
at the SUDE, but those are like momentum building things, right.
And so when a restaurant opens typically it loses money
for a period of time. I assume that's true with
most startups. What is your recommendation for the amount of
runway that you should leave yourself when raising money?

Speaker 2 (24:35):
And it kind of goes to what you're saying on
like having the divorce in mind. From an initial capitalization perspective,
I would fund at the startup the most pessimistic.

Speaker 1 (24:44):
View of your business.

Speaker 2 (24:45):
If you're in the position where you are, you know,
starting a business, you're you're doing it with optimism, right,
Nobody starts a business because they're pessimistic on their ability
it comes to financial planning and having building runway. I
would fund the most pessimistic view that you possibly can,

(25:07):
and I would have months of runway, probably six to
nine months of runway on hand if you can. That's
it's tough in the restaurant business, for sure, it's very,
very tough in the restaurant business. But I would, regardless
of what the numbers look like, I would I would
try to have months of runway on hand.

Speaker 1 (25:25):
In your experience, that's something that investors understand that restaurants
lose or just any venture loses money for a period
of time, or is that something that's like people start
knocking down the door for their check and you're like,
uh so's start up mode.

Speaker 2 (25:39):
Yeah, if they don't have that expectation. To your point,
I wouldn't take the money. You know, the restaurant business
is so difficult in and of itself, just when you're
looking at how do you generate enough pre cash flow
for you and your family that if you have and
again this is tough because you need that you have
to balance capital with the needs that you have. I
would do my best to really understand. I would have

(26:00):
the investor articulate to me what they know about the
restaurant industry and making sure that they understand that this
is going to be a while before they get paid back,
and I make those early terms as founder friendly as possible.

Speaker 1 (26:12):
So there's kind of a common saying in the restaurant industry.
It's I pray for twenty percent, hope for ten, and
settle for five. Most restaurants actually settle into the three
to five percent.

Speaker 5 (26:23):
And it depends on the type of restaurant because full
service versus fast casual.

Speaker 1 (26:29):
Is that's a good question. That is for us, I
would be static with ten percent. Yeah, return, Like what's
your bottom line goal.

Speaker 5 (26:38):
We average anywhere between seven to eight.

Speaker 1 (26:41):
Yeah, so stoked. Yeah. Plus, if you're like a premium steakhouse,
three percent out.

Speaker 3 (26:46):
Of color check, it's a lot more than twenty percent
at five it's yeah, yeah, putting two models against each other.

Speaker 5 (26:52):
Yeah, full service, you're supposed to expect about three to
five percent fast casuals about six to nine fulls than
to your point, you knowingad labor costs, supplies, food call.

Speaker 3 (27:12):
Yeah, I think it's so just a balance of your
product versus your labor. Yeah, labors. Everything has specialized labor rights.
So depending on the what your labor goals are, you
would adjust basic right you can afford the labor you
can afford.

Speaker 1 (27:24):
I mean, the typical wisdom for restaurants. I know all
restaurants are a little bit different. But as you look
at a P and L, there's what are called variable
costs and fixed costs. Fixed costs or stuff like your rent,
your power and water, which I know those fluctuate a
little bit, but they're generally not necessarily a function of
how busy you are. The variable costs, the things we
can control are generally labor and cost of goods sold,

(27:45):
cogs those two added together typically called prime cost YEP.
So the conventional wisdom is that you want your prime
costs to be about sixty five percent in these times
where inflation is killing us on cost of goods and
labor has gone up. How have you guys controlled your
prime costs in this in this environment and more specifically

(28:09):
to you, how have you seen this affecting the not
just the restaurant industry, but but just the industry with well.

Speaker 2 (28:15):
Just in our experience of Sueteroma's the this has been
a crazy time, right because ultimately the end of the day,
it comes down to pricing, right, So you can't necessarily
control the cost, but you can't control pricing. And when
over the last couple of years both the labor costs
and the food costs have been just insane, It's like,

(28:36):
how often are you resetting pricing? And we've we tried
to keep this balance and Beth has done a really
good job, but this is I don't know, We've never
in twelve years seen anything like the last couple of years.

Speaker 1 (28:49):
I mean, at the end of the day, it's just
gonna passed along to the guests because of the pass
which is right, that's I think what we're feeling about
of the pushback in the industry right now is people
are like, why are scallops forty dollars for three scallops?
It's just like that set a cost of down stuff.

Speaker 4 (29:02):
Yeah, I think there's als at of this perception from
the customer that restauranteurs are rich.

Speaker 1 (29:08):
We've talked about this.

Speaker 6 (29:11):
Understand thinks that too, and they were just greedy and
trying to like put more money in our pockets when honestly,
I'd just like to put some money in my Yes.

Speaker 1 (29:21):
We actually had a funny scenario to go on a
quick side. But we're hearing Ginger Rabbit our jazz lounge
about once a month we do a dinner series here.
We'll tag up the jazz and food and try to
create a cohesive environment. And a grad student for most
You came to me and said, I really want to
do my senior thesis here. It's about the working class
food of Ohio. I was like, okay, like that sounds

(29:42):
like a great idea in my mind. I'm work a
working class person. And we released the tickets for it
and it was like seventy five dollars ahead for a
five course taste in any of the food wherever, and
we got so much backlash. I'm like, you're calling it
the working class dinner and like nobody can afford it,
And I'm like, whoa do you guys think that? I'm
like not with you on this, Like I'm you know,
I'm not so oh yeah.

Speaker 3 (30:01):
I honestly I think that is a specific instance given
a population.

Speaker 1 (30:06):
I don't think it's everybody necessarily, because you still sold tickets.

Speaker 3 (30:09):
What some people say is like a pound of feathers
and a pound of where I do weigh the same,
but it feels different. Yeah, when someone is coming at
you with something, it's different than hey, I'm doing it.
So I just removed the person personal aspect and I go, hey,
does it meet the goals that we were required?

Speaker 1 (30:21):
Are we doing the right thing here?

Speaker 3 (30:23):
As limited as everything else since entire world, there's no
shorte of opinions, Yeah, but there's no limited opinions.

Speaker 1 (30:27):
There's unlimited opinions.

Speaker 3 (30:28):
So you will always receive them, and it seems like
those are the ones that are that to discussing this.
But I always look at like, how much time do
I want to invest in deciding whether this is a
valid point or not, and it can be a valid
for that person. But if that person's not going to
mind to take it anyway, if they're would they have
modern sixty five we when they have about it in fifty five?
What's the price a boy?

Speaker 1 (30:46):
Well, speaking of that and flipping it back to you,
you run a very nice restaurant with a you know,
to me Mobert moderately priced, but in the scheme of things,
expensive pacing menu. If you felt pushed back on pricing
or any of those things in these times, then I'll
clan like pliant.

Speaker 3 (31:01):
Like when I was raised, I couldn't spend over ten
dollars at Long Goard to stay Cask, and I couldn't
get a stake hundred well done. So I had no
more than one powel. And it's not that we couldn't
afford too towels. My parent's like nearly at one, right,
So the.

Speaker 1 (31:11):
Way that I was raised is different than the way
that I kind of behave.

Speaker 7 (31:13):
Now.

Speaker 3 (31:13):
What I look at is value, as he was saying,
in value is if I'm charging one hundred and forty,
I wanted to feel like three hundred. I had to
go as somebody that was born in Columbus. What do
the dollars do you like to me? And it's different
than New York. So what we charge, I would say,
is it appropriate? I think we're charging Actually I'll be
less than what would be the pop or if it
wasn't another city, in terms of what I want.

Speaker 1 (31:33):
To pay my bath.

Speaker 3 (31:34):
That's the only the thing is like the money that
goes out I see if the labor costs, I see
the same goods.

Speaker 1 (31:38):
Our food cost is neary marine good because of labor.
Because our staff cares to go.

Speaker 3 (31:42):
From raw ingredients to processing ingredients. They looked into this
or through things because we bade them to do that,
and they enjoy it. It's like you can't have one
that you have. The slider will turn, but you can't
make the cost go way. You can't just turn into
one percent food cost. That's not realistic to somebody suffering.

Speaker 4 (31:56):
You do you have something that would trigger like a
price increase? I know right now it's a steady thing
like do you have things.

Speaker 1 (32:02):
Schedule treasure up? And we do. Honestly, we asked our
guests first. We ask as best as we can.

Speaker 3 (32:06):
We ask our regulars, the ones that support us the most,
say hey, this is what we're looking at.

Speaker 1 (32:10):
We'll just be transferred.

Speaker 3 (32:11):
Like, hey, if we raise our press by ten dollars
and we added some more value, say hey, we got
creative and we added I don't know we went from
so I would say it's a good value. We were
at one twenty five we were serving six courses, or
at one forty we're serving fifteen courses.

Speaker 1 (32:23):
I don't know.

Speaker 3 (32:23):
It sounds pretty like a good value to me. It
seems like if that's that's understood, then you can look
at other examples and draw it back because you can
make a comparison and say, hey, if you get a
tailor scop concert, how much do bay for shild you
take it you're spending five hundred dollars for that? Do
you see that same value like the joy that you
get to that concert? Can we provide this? I'm not
saying one is work ord the other one saying can
we provide equivalent enjoy at a restaurant? And that's where

(32:43):
we say, Okay, let's add more service points, let's do
those things. But we need to charge more to be
able to do that, so we'll get some But generally,
like what we built is trust over the course of
ten years. Like we've always undersold ourselves up till this day,
and we still are kind of understanding ourselves. But if
we don't set it out value and we conform to
what we're told, we will be able to pund our business.

Speaker 1 (33:02):
Everyone. I really like the what you just said.

Speaker 4 (33:05):
I'm going to tie it into more advice that's given out,
which is, don't price it the way that you would
spend the money. I like that you figured out what
the price needed to be, and then how can I
make it something that I would pay?

Speaker 3 (33:14):
Yeah, and that's a part of that such whatever, there
is a need price, and when you think that you
can be a certain way above or below that price
because of your ego, then things get a little tough
because it just I mean, it's just out there. It's
the fact that you can't say, hey, this is my
labor pass. I'm just gonna because I'm smarter. It's just
going to go away. You're going to see your bankund
dropping and like a scary time. But when I see
that happening, like it's too late. What do we do
wrong to get to hear? It's we're already in the weeds.

(33:36):
We should have predicted that we tried to forecast to
be like, hey, what would happen in these months, these
crappy months, what's gonna happen in the cutting team that
is pretty good. They give you some projections and baslines
on those things, but it's always like we're trying to
look for I say, when times are good, we prepare
for the bad times.

Speaker 1 (33:49):
When times are bad, we know they will pass.

Speaker 3 (33:50):
A beginnkeepo doesn't check kind of then the whole picture
seems to cut and then our job as owners just
to make sure the staff is where that but hey,
it's okay, it's a slow day to day. It's not
the end of the world. Because you don't want them
to feel we don't know what we're doing. That's the
worst thing you can ever understand here.

Speaker 2 (34:02):
Yeah, I do think it was an incredible series, and
it's probably multiple series of really getting into the realities
for restauranteurs, because I think you hit the nail on
the head. There's this perception and in the community and
the public of all, you own a restaurant, you've got
to be wealthy or just you know, pushing that that,
you know, taking all the money, and it's a very very,
very different reality when I look at my wife and

(34:23):
what she goes through and distress and the process.

Speaker 3 (34:26):
And as a restaurant or wouldn't you want someone who
is doing this and putting their body at ease and
doing wouldn't you want them.

Speaker 1 (34:32):
To be wealthy like you had a bad thing? You
want them?

Speaker 3 (34:34):
I think that's what you'd want them to do, because
how much do you invest in it? It would be nice?

Speaker 1 (34:38):
I bad how're.

Speaker 4 (34:39):
Streaming up to like my first meetings with potential investors
and like trying not to let them see that I
had to pop my hood to unplug the power from
my battery to turn my car off, like they were.

Speaker 1 (34:49):
Just I think they're just things. Hey, I got this
battery charge in the back of mind. Yeah exactly.

Speaker 3 (34:55):
I think that's the sort of people you want to
look for, because people are people right now, just a
different Yeah, values, I see anythink.

Speaker 4 (35:00):
Versus reality always be the thing.

Speaker 1 (35:03):
Last question that I have for the group, if you
could go back in time, and I'm not talking to
our childhoods, I'm literally talking like five years just with
what you've learned since the pandemic and learned since all
of us have open businesses pretty much. And in that
time is what piece of advice would you have for
your younger self about funding your restaurant as it exists now?

Speaker 3 (35:22):
Mine is going to be counter to a lot of
advice because one could assentitiate with what our model is
is slightly disruptive. We are aware of the trends and
move in the industry long enough that we know where
it doesn't work, so we just try to avoid all
those things. But that's based on mine was that I
think I perhaps wated too long. There's a runway and
eventually it runs out, so you have to kind of balance.
It's not one or the other, but you should evaluate
your opting to time, you decide where you want to

(35:43):
go with it, and then make a plan. And I
think I think what I would say one hundred percent
with apparancy is okay, you should plan, probably be planning
more because even if you don't have all the plan
at least you have like a brainwork that you can
develop and tune in and refine and then when it
when it comes time, like all of those things will
be helpful.

Speaker 4 (36:00):
Say that being able to walk away, like sometimes I
would get so excited and I knew that maybe this
wasn't the right first step, but I still took it
because I was excited and there was inertia and momentum.
I would like to go back and tell my former
self to just feel comfortable saying no walking away, walking
away from an investor, from a location that you've invested

(36:21):
a lot of time and energy into, walking away from
the idea that you're going to open seven days a week.
Start as small as you financially and feasibly can, and
like add on to it, because it's a lot easier
to add on than it is to take it away.
And especially if your plan is around a place that's
only opened this amount of days doing this amount of stuff,
if you can add on, it's good for everybody, probably

(36:43):
for you too. So I think scaling back my expectations
and walking away when it doesn't feel like the right fit.
That would be my advice for me, and also more
dedicated outlets.

Speaker 5 (36:52):
So my husband's not here, but we both would say
that we would have did this.

Speaker 1 (36:57):
We were much shong. We all, I'm.

Speaker 5 (37:02):
Forty three and he's fifty one, and we opened in
twenty two, so we were after COVID. We have never
owned a restaurant like ever, so we went like, all in, Yeah,
we would have did it when we were in our
late twenties early So.

Speaker 1 (37:22):
You wound further went back that You're like, I would
have done this again, but I would have done it earlier.

Speaker 5 (37:30):
Yeah, you have more energy. It's it's it's a lot
of work and stress, and it's a lot, you know,
It's not just you know, financial stress, just stress on
your body, your mental A lot more you can endure
when you were in your.

Speaker 1 (37:43):
Mids, you know, late twenties, early thirties.

Speaker 4 (37:46):
By doing it when you're older and a little more tired,
you also have a more reasonable expectation of what you're
capable of. Like I think if I were younger, I'd
be like, oh, I'll just work harder, I'll just work
more hours. And now I'm like, I don't know if
I can actually work more than sixteen hours. Maybe I
need to sleep a little.

Speaker 5 (38:03):
But I would have did it for myself. I was
doing it for someone else, Like I was in corporate.
I was a buyer, so I was putting in those hours,
you know, for someone else, and I could have did
it for me.

Speaker 3 (38:15):
I guess a good one that a lot of people
often forget is sometimes we get in the mindset that
we can overpower a business and which we're working in,
and that doesn't benefit either the business or you. Why
not use that energy when the time is right, build
it into your like toolbox or hey, I should I
should avoided in this thing and do it that way,
and let me invest in this way, Let me investment.
Let me view myself as an investment just as much

(38:37):
as yes, yeah, what about you?

Speaker 1 (38:39):
What about you?

Speaker 2 (38:40):
It is and it kind of ties into way you're
just saying it is, how do you build in an
intentional switch where you can actually turn off the business?
Which I know is very very difficult to do a
book in my life and I to be in in
this game, you have to be devoted to what you're doing,
but it can be all consuming, right and it would
be going back five years would be literally try to

(39:02):
find some way to physically turn off your mind from
thinking about business. Have that switch, Try to find that
space where you can really disconnect. And again I'm still struggling,
but I have a good way to.

Speaker 1 (39:12):
Do that that is now legal in Ohio. I think
for my piece of advice to my younger self, I
think that trusting your gut a little bit on like
feeling the ick on certain things where you kind of

(39:33):
you kind of feel like pot committed, like you need
to go where there's a little bit to Kate's point
of like being able to walk away from something because
you don't feel like it's right. I mean at the
end of the day, and Abashar says this all the time,
is like the businesses are a reflection of us, and
if you're not one hundred percent into the thing, how
is it going to be successful? And I think when
Chatman's opened, I didn't have a kid at that point.
I was super excited to have my own thing, and

(39:55):
I was there every single day for every single service.
Those things change over time, and I kind of wish
that I had set up a situation where I was
that stoked about it, but it could have run without
me for a period of time because I didn't know
that we were going to have a care than all
those things. It was almost like a shock to the system.
And we open number two and then we open number three.
They're all different concepts, and it's like I need to
be stoked as stoked about every single one of those.

(40:18):
And you're just not able to keep your eyes on
everything at that point. I think being a little bit
more pragmatic about expansion and making sure that the passion
is there for every single one. If you're feeling the itck,
trust that gut feeling, and like be okay walking away
from the situation.

Speaker 4 (40:31):
My last advice for other people, I guess for me also,
but my advice for other people is to make sure
that you've had you have the paperwork, half the lawyer.

Speaker 7 (40:40):
For everything, account ye, have your experts, make sure that
they've vetted everything, have other people releases, have other people
look through your partnership agreement.

Speaker 4 (40:54):
Make sure your partnership agreement is an actual thing you're
going to be able to lean on.

Speaker 1 (40:59):
I think that US restaurant tours, for lack of a better
term for US, are all very giving an open group.
I think that finding someone who's walked the steps before
my gus asked the questions, I was like, what you do, Like,
don't be afraid to ask the question.

Speaker 4 (41:13):
Don't be afraid to get a second opinion as much
as you can take the emotion out before it gets
emotional better.

Speaker 3 (41:18):
Okay, don't be afraid to get a second Viewers well,
let's just say moving to swap EJ and say DJ
is a tarnut pounder. Here's the guy you're talking to.
What in your eyes would be your parameters of seeing? Like,
this is what this person's role should be in his business?

Speaker 1 (41:32):
So what is he a mascot? Is he a motivator?
Is he like? What's is he supposed to be? Everything?
What would be an ideal tangent this guy?

Speaker 2 (41:38):
My number one piece of advice for founders across the
board is that you get in the started business and
the very first thing that's going to happen is the
market's going to punch you in your face and it
is going.

Speaker 1 (41:48):
To expose what you're weak at.

Speaker 2 (41:50):
It's like what Mike Tyson says, everyone has a pliant
ticket punched in the face when you're starting business. That's
what happens first, right, because we all have strengths and
affle strengths.

Speaker 1 (41:58):
At least I know I was naive. Is what are
my weaknesses? I mean?

Speaker 2 (42:01):
So the market's going to punch in the face and
it's going to tell you what you're what you suck
at more than anything else, And so much about survival
is how do.

Speaker 1 (42:08):
You respond to that?

Speaker 2 (42:08):
By filling those gaps with partners, with team members, so
on and so forth. So what I look for is
somebody who has self awareness, like who can articulate to
me the things that they're good at and also the
things that they are not great at, and then here's
my strategy for building out my team to help me
and help us succeed.

Speaker 1 (42:27):
If I'm going to be an investor in.

Speaker 2 (42:29):
That, investing in a person who has a high degree
of self awareness for what they're what they can do
well is really really important.

Speaker 1 (42:37):
To bring that back to the beginning.

Speaker 3 (42:38):
Do you find that person is off in the home
run hitter or the quiet guy in the back and
people that you interact with.

Speaker 2 (42:43):
Kay, we're always talking to the person that is the
spokesperson for the organization. And it's actually a really good
question because often like the founder, may not be the
best CEO over time. Like for me, one asset Watch
is a two hundred and twenty person company. Now you
want to know, the last thing in the world I
want to be doing is being the CEO of a
two hundred and twenty person company and running the day

(43:03):
to day of that. So I knew early on that
what I love is the early stages of company formation
and when something starts to grow. The best thing that
I can do for me, for stakeholders, for the company
is find my replacement. When you're dealing at the very
very early stage, it may not the person who is
talking to you may have to be that person that's
sitting in the background because that's the only person that's there.

(43:24):
What you want to discover is you want to give
grace for getting to know that person and who they
are and how the best contribute value over time. But
the more self aware they are of where they ultimately
need to be and that organization, the better.

Speaker 3 (43:36):
Sometimes in the restaurant, peopleind the person that's going to
be the dishwasher of the person that's coming with no expectation,
and they always like what we see is I would say,
in the part of the way it's like your rockstar.

Speaker 1 (43:45):
Yeah, they don't know it. They're just like, hey, I'm
here to just do this thing. I've always kind of been.

Speaker 3 (43:49):
A favor of like empowering that sort of thing where
it's like, can trust them with your voice because they
just want to do the best for the business, or
so he's wice And it seems like those are harder
things to find because we're all was like looking forever
and we want like the Big Bay results.

Speaker 4 (44:02):
Second year as builder, and you're looking for your maintainers,
the people who will maintain the flow so that you
can continue building.

Speaker 1 (44:10):
Probably it's the equivalent like risk bet in restaurants.

Speaker 3 (44:12):
It's like we tried to bet on somebody that may
not have the culinary school back the shops, but sometimes
they trainable.

Speaker 5 (44:19):
Yeah, people, that's trainable.

Speaker 1 (44:22):
All right, Well, that was a delicious conversation as always, guys.
And uh now on to our favorite segment or maybe
our not favorite segment. We haven't decided yet. We'll catch
up of the day, So who would like to go first?
I'll go. Uh.

Speaker 5 (44:36):
So we made it back home to Philadelphia to see
Jamar's g mom who's ninety nine years old, so we
definitely had to make that drive home to say what's
up to her? And then on Black Friday, I want
to give actually want to give a shout out to
Larisse Parnell. He is the founder of Financial Foundation. So

(44:57):
he teamed up with Huntington Bank and did a city
cash mop. So the three cities that they went to
was Cincinnati, Columbus and Cleveland, and Marlow's was the Columbus
restaurant that was patronize, so we were very happy about that.

Speaker 1 (45:13):
Awesome anyone else Cake.

Speaker 4 (45:15):
My son just got accepted to college, so all of
my stress, congratulations financial.

Speaker 1 (45:22):
My catchup of the day is actually a little sad.
My in law's dog that's been with them for a
very long time. Unfortunately had to put her down this weekend,
So shout out our apemia. You'll be missed a little girl.

Speaker 3 (45:33):
We just got done with Thanksgiving, so we do a
fun thing for Thanksgiving. We'd started off as kind of
like we wanted to take the stress off our staff,
so we do the day before Thanksgiving, we shut down.
We do a full stamp like a family, real like
a friends giving for the whole company. So this year
we ended up doing we do like spoke turkey for
all of our staffs. We did eighty two turkeys this year.

Speaker 1 (45:53):
Wow, oh boy, next year, I don't know what we're
gonna do. We need a bigger spoker. I don't want
to talk about it, but it did work out.

Speaker 3 (46:03):
It was nice to kind of just have everybody together
and just like showing something any excuse to have a
art so almost yeah. Yeah, and then we did the
family with appulsh is, like we'll meet two hundred people,
so yeah.

Speaker 1 (46:12):
I mean the eating holidays are always the best. That's
what we live for. So do you guys ever get
a break and reading holidays or do you ought to
cook for I made a vow four years ago that
I was never cooking Thanksgiving dinner again because it's just
too stressful movie and I just want to spend time
with my family. But this year we did, Like you,
we did thirty two Thanksgiving packages that people purchase, and
I just threw a little extra one on there for me,
so all that I really had to do was reheat

(46:34):
things and cook a turkey that we had prepped over
at here rates so fantastic.

Speaker 4 (46:38):
I also did similar thing. I know that Thanksgiving can
be a crazy place for a bakery, and I would
prefer to spend it in national parks all alone. So
that's generally what we do. This year, we didn't because
we're still recovering from a couple of surgeries and we're
celebrating my son getting into college.

Speaker 1 (46:56):
Do you guys do your own turkeys?

Speaker 3 (46:57):
Oh?

Speaker 2 (46:58):
No?

Speaker 5 (46:59):
New This year we went and just visited family. They
had thanksgiven dinner at Mar's grandm's house, so the family,
all the family came. So they had some family come
up from Florida and one person came from upstate New York.

Speaker 1 (47:13):
And now on to our favorite segment or maybe youre
not favorite segment. We haven't decided yet. Underrated, overrating, Kate,
you are normally the best at this. Do you want
to rapid fire some overrated? Underrated? Sure? And well has
to answer the first one, so please.

Speaker 4 (47:28):
Feel free to cut any of these. Okay, So it's
Thanksgiving here, just passed, So let's go into cranberry sauce.

Speaker 2 (47:39):
Way overrated unless it has the real cranberries in it. Yeah,
so I would say that that's kind of in the middle.
But otherwise I'm completely overrated.

Speaker 1 (47:47):
I may go overrated, underrated. I'm not the moli. It's
new to me. I didn't always have a growing up,
so it was very cool to have us can. But
I think what is what is overrated?

Speaker 3 (47:57):
It?

Speaker 1 (47:57):
If it doesn't have the ridges I kind of have oridges,
if it has origes, where to cut it? Exactly?

Speaker 5 (48:05):
Overrated?

Speaker 3 (48:06):
Like it?

Speaker 1 (48:06):
What's your thought?

Speaker 4 (48:07):
I'm a Lingenberry person, so I think that's the American cranberry, right,
is the American Lanenberry is the cranberry.

Speaker 1 (48:15):
I thought that cranberrys were American.

Speaker 4 (48:17):
No, that's what I mean, like Lanenberry would be the
American cranberry. Is the Lanenberry that I want?

Speaker 1 (48:23):
Oh, now, I gotcha.

Speaker 4 (48:24):
Okay, Yeah, I didn't do a great job of saying
that one, but I do love. I do love it
has a nice spoil, a little acidity there.

Speaker 1 (48:34):
Three to two. Yeah, I'm a late comer.

Speaker 4 (48:37):
I didn't have Thanksgiving growing up the way that we
have it.

Speaker 1 (48:40):
So it's interesting.

Speaker 4 (48:42):
Okay, Restaurant week menus, participating in local restaurant weeks.

Speaker 1 (48:46):
Oh, I'm gonna say a soft overrated on that one,
only because I feel like I feel like people don't
put major effort into it, and I feel like if
you do, it's actually underrated. But most of time you
see people just doing a lay up, three course whatever menu,
And I don't think I've.

Speaker 4 (49:04):
Always wanted to ask follow up. Are the people who
come in for restaurant Week to Chapman's or any of
your other locations are they your normal client? Are they
your normal customers?

Speaker 1 (49:14):
We've never participated in restaurant week before. But I think
that kind of the point of restaurant week is new
guest acquisition, which if you're not compatible necessarily with the
guests who are coming in, I don't necessarily view it
as a positive thing. However, I feel like if you
continue to just do what you're good at and don't
do it a cheaper, a dumbed down as some people say,
menu for restaurant Week, but you stay true to yourself,

(49:34):
which I'm sure that if you do it that's exactly
how you do it, then I think that you can
have a new guest acquisition in a way where you're
still like speaking honestly about what it is that you're
doing for people, so that you're not incompatible.

Speaker 3 (49:45):
Yeah, we did what was called restaurant recovery week with
anybody that works in restaurant. Seriously, they can half off
the menu next week because you know what it's like
to work restaurant.

Speaker 1 (49:55):
Yes, we find a leverage in it. I love it.

Speaker 3 (49:58):
I think the concept actually is loitererrated because it's like,
if I was at diner, it'd be cool to be
have options. I think it is being executed in an
overrooted manner because it's just being used as a term.
I can say, like, here's this group of people draft from.

Speaker 5 (50:09):
And they just give people to come there.

Speaker 3 (50:10):
And if we if we have some structure behind it,
and we're like, hey, this is going seven businesses.

Speaker 1 (50:15):
If you all talked about it and said.

Speaker 3 (50:16):
Hey, we want to do generally, the overpowering entity that
controls it, which I don't know who it is, any participated.

Speaker 1 (50:23):
Craft Times Away from Home can sponsor a new type
of restaurant week where we give us your best. They
must we don't participate.

Speaker 5 (50:31):
It doesn't it doesn't make sense for our concept.

Speaker 3 (50:34):
We don't do it because the one reason that we
don't do it because a lot of our tap has
worked in restaurants. So that's one of our one of
our unsaid benefits is that you don't participate.

Speaker 1 (50:43):
Week, we'll go downhill.

Speaker 5 (50:47):
If Chipotle starts participate.

Speaker 1 (50:48):
How about you from a diner standpoint, I think they're
relatively overrated.

Speaker 2 (50:52):
I love the concept of them. I'd see him most
of your sound executed. Well, yeah, I think I agree
with the group.

Speaker 4 (50:58):
What about law large multi page menus versus very small
limited menus. I know that I'm giving you two things in.

Speaker 1 (51:06):
One but two questions. Which one would you prefer?

Speaker 4 (51:10):
Question We'll go with We'll start with the long multi
page menu. How do you feel about having a long,
multi page menu. I'm asking people who have very small kitchens,
so I already know.

Speaker 1 (51:20):
How you feel. I would say overrided. But it has
nothing to do with the kitchen. It has to do
with attention span.

Speaker 3 (51:25):
For me, when I see a large menu, I get
I don't know what to do, very challenging, even especially
in this TiO, because our attention spans are short to
how do you even start? And it feels like to
me that seems like manipulative marketing because what your placement
of items is going to matter more than the item itself.
And I think that I know that that's a true
fact in life, but I don't agree with it.

Speaker 1 (51:43):
I'm going to attack this from a point of quality
and actually say something that you probably aren't expecting. I
actually think that they're overrated if the quality can be
kept good. I've mostly found that large menus, the quality
suffers because you just have too much Doubtif going on,
I'm going to interrupt for one second.

Speaker 3 (51:57):
If it's a Chinese restaurant, you can read anywhere's in
English sent then it's one hundred percent.

Speaker 1 (52:02):
That was the under example that I was about the
greatest just where my family was in town and they
had like anything that anyone wanted on this stone. You
can have a barbecue, you guys. Yeah, whatever. It was great.
Everyone got what they wanted and there was no like
fighting over it. It was great. So if the quality had
been slightly better on all the things, just even like
ten percent, would have been absolute home run. So I

(52:23):
know that's surprising, but I'm going to go over it
on overrad It.

Speaker 4 (52:27):
Yeah, same right, seven day being open seven days a week.

Speaker 1 (52:32):
So here's the thing.

Speaker 4 (52:33):
I mean, we're talking about finances, so.

Speaker 1 (52:35):
Like, well that is that leads me into a very
interesting situation where this year twenty twenty four, we had
to restructure everything that we did at Chapman's. Our prime
cost was no mat longer matching everything else, and we
had some decisions to make, and one of them is
we could just raise prices across the board and shoot
for a ppa that was much higher, like closer to
one hundred dollars ahead on nil cart menu. That's a

(52:56):
lot puts us in a different tier than the one
that we had necessarily shot to do, or we had
another option, which was to just raise the floor a
little bit, and we decided to open all seven days,
and we actually lowered our labor cost a year over year.
We opened two more days and our labor costs went
down and our revenue went for the last two quarters
and twenty twenty four. So as much as I don't

(53:16):
want to work seven days a week or Sundays for
that matter, I would say that opening seven days a
week is actually underrated. And if you'd asked me a
year ago, I would have given you an exact opposite
answer to that.

Speaker 3 (53:26):
And the reason that I'm going to say underrated is
because of a place like waffle House, which what it
offers is for us as people at a hospitality, if
we're able to be in a pase that we can
do that, it is one of the best feelings in
the world to know that there's a base and company
that you can go to a half on it.

Speaker 1 (53:39):
That's what we want to do.

Speaker 3 (53:40):
I think it's not an ideal situation would be it
would be awesome to do that. People want, yeah, and
when you have that creating, that's the thing that makes
you like I can't get it because of this.

Speaker 1 (53:50):
What if you could? I think if you can do
it really, really well, it's absolutely underrated.

Speaker 3 (53:53):
But I think there's everything leading up to that, and
it can't be executed well, then overrated because if you
have one shitty experience, no sense everything, it doesn't matter
one day day of the weekness underrated.

Speaker 1 (54:03):
Like you want to be open seven days? I meant
I personally don't want to.

Speaker 5 (54:09):
But most places in the restaurant industry they're closed on Mondays.
So by you being open, it gives consumers.

Speaker 1 (54:19):
What it's a chicken or and egg thing. People not
go out on Mondays because no one's open, or.

Speaker 5 (54:26):
Go to Monday's on a Monday for lunch. That place
is stacked. It's crazy.

Speaker 1 (54:31):
So why are you guys closed on Mondays?

Speaker 5 (54:32):
We wanted to give the staff one day off, but
North Market is open seven days a week, so we
don't have a choice.

Speaker 1 (54:38):
They didn't give you any provisions where you could choose.

Speaker 5 (54:40):
No, you get a certain amount of days where you
can close for the year, but they're open seven days
a week.

Speaker 1 (54:48):
And have you found that to be good? Do you
like it? You need to be like on well, we're
in the winter month.

Speaker 5 (54:55):
We're going into the wintertime, so it's a little bit
slower from a foot traffic standpoint, but they do get.

Speaker 1 (55:00):
A nice lunch.

Speaker 3 (55:02):
So I think the other side is and it gives
the day off hour seven days and not the same
thing in seven days if you have like team or
tach k three days. But you know what, I think
that's also potential to say we have a new way
to approach the business if you have.

Speaker 4 (55:15):
A My current conversation with my staff is about holiday parties.
Some people feel very strongly that they don't want to
go to a party. They'd rather just have the time
off of work. Other people really want to be celebrated
or have that kind of collective non work conversation. How
do you feel about holiday parties?

Speaker 5 (55:33):
Underrate it?

Speaker 1 (55:34):
You think you should?

Speaker 5 (55:34):
Oh no, I'm sorry. Overrate it. We give we give
a bonus, we do as our days.

Speaker 2 (55:40):
No party, okay, of course, sure, we're not doing the
party at a sweeteromes because we now consider them overrated.
So it's been a point of contention and a lot
goes into it, and you got a very low percentage
of participation.

Speaker 1 (55:52):
I mean, I like the party. It's the only time
that I ever get to cut loose of the tea,
I have a strong rule I don't go out to
the bar with the team. So it's literally the only
night that I actually and be myself and hang out
with my team. So all right with that, we will
move into the dessert, which are are parting thoughts. Which
is one thing that our listeners should be sure to
take away from this episode that a sure. What do
you think the one thing that people should take away

(56:13):
from this episode.

Speaker 3 (56:14):
Is, I think it's a pretty common thing nowadays, but
it was not nice mean beginning.

Speaker 1 (56:20):
Is the more you learn, the more.

Speaker 3 (56:22):
You realize what you joke now, and having the awareness
of that can take you a lot further than the
times that you hear nothing in response. I think my
biggest flag the thing that I've learned is I hear
no feedback and I get concerned. So feedback is superported
to all of these socially when it comes to make
sure you get the feedback we're doing and you push

(56:43):
it honesty and yeah, Chico, what's your biggest takeaway from how.

Speaker 5 (56:47):
Would I they do your due diligence and ask a
lot of questions and just make sure that you're getting
the right advice before starting your business, Kate.

Speaker 4 (56:58):
I found Will saying that he's investing in the person,
not that concept, like kind of a moment for me
to consider.

Speaker 1 (57:05):
I think for me, my biggest takeaway, the thing that
I want the folks at home are considering possibly opening
their own business to takeaway is that there's a million
ways to do this and to find people who are
experts in it to help walk you through and then
at the end of the day, trust your own God
in it.

Speaker 3 (57:19):
But I'm be careful to not pay the experts online.
I don't do like Fiver for investors. Yes, No, I mean.

Speaker 1 (57:28):
To talk to well basically, well, what's your biggest.

Speaker 2 (57:31):
Takeaway from the Actually is what you mentioned. I think
it's you missed a very specific instance, but it's broad
broadly applicable. It's very easy to get complex very quickly
in starting a business in this type of business, and
I would strive to keep things simple because it's always
easy to add complexity. Complexity one too, heal very hard
to take complexity away. So you know, whether it's the

(57:55):
concept itself, how you think about financing it, what goes
into it. Just try to keep things as simple as possible,
because once you go, there's going to be a whirlwind
of challenges to deal with.

Speaker 1 (58:07):
Thank you well for joining us today. This is really
awesome to have another person joining the roundtable with a
different perspective. Can you tell the people where to find
your your stuff? Yeah?

Speaker 2 (58:16):
First of all, I want to just give a shout
out to you all for being in the grind day
in and day out. And this is like a world
of wealth and information and learning for people that want
to start a business. So I would recommend people talk
to you for they talk to me, but again, apply
me online on LinkedIn. Will Zell Build vessel dot com

(58:37):
is our website. Wzl at build vessel dot com is
my email. Feel free to reach out to me again.
I love founders. I love the founder's journey. Anyone that's
willing to take the risk to pursue their dream is
worthy of our time and attention and our support.

Speaker 1 (58:51):
Awesome. Thank you, thank you, thank you, thank you for
joining us for another episode of Restaurant Roundtable, brought to
you by Craft Times Away from Home. If you like
you heard, please smash that like button like turkey sandwich
and we'll see again soon. As you might expect. The
opinions that we express on this podcast or just that
opinions and for entertainment purposes only.

Speaker 5 (59:12):
If you love this podcast, help us out give us
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Speaker 4 (59:16):
Also, be sure to go to Craft Times Away from
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Speaker 5 (59:22):
So remember, if you like what you heard today.

Speaker 1 (59:25):
Please head over to Kraft Times Away from Home dot
com and sign up.

Speaker 4 (59:29):
We have got all sorts of exclusives coming with special insights,
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Speaker 2 (59:35):
Of course, subscribe share like all those things.

Speaker 1 (59:40):
See you next time.

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