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February 15, 2025 26 mins
The Hidden Profit Killers in Restaurants—And How to Fix Them In this episode, Sam Erik Ruttmann interviews Geordy Murphy, a visionary restaurateur and owner of Cypress Hospitality Group. Geordy shares his journey from managing restaurants to developing innovative software solutions for the hospitality industry with FOBESoft. The conversation covers key themes such as the importance of budgeting, leadership lessons learned from culinary icons like Wolfgang Puck, the impact of technology on the restaurant industry, and the challenges faced during the pandemic. Geordy emphasizes the need for restaurateurs to understand their financials and adapt to the evolving landscape of hospitality.
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(00:01):
You are listening to the Social Hotelier Show,
a podcast that inspires hoteliers to create meaningful
and memorable experiences
for their customers
in pursuit of their passion.
We share our views and experiences

(00:29):
Jodie Murphy is Jody Murphy is a visionary
restauranteur
has left an indelible Mark on the hospitality
industry.
Starting in San Francisco's vibrant dining scene. He
created acclaimed concepts like Jody's, which was a
name, one of the 10 best restaurants in
The US in 1994
and long life noodle company,
five hottest concepts

(00:50):
honorary in 1999,
driven by a passion for operational excellence. He
developed the Forbesoft,
a revolutionary
tool providing daily profit and loss insights for
restaurant operators.
Today, as the owner of Cypress Hospitality Group,
Jody blends
innovative software solutions with his extensive expertise
continuing to shape the future of restaurant management.

(01:13):
So welcome. It's an honor to have you
on the show. Welcome to the show, Jody.
Thank you, Sam. It's a pleasure to be
here.
Let's talk a little bit about your career.
I mean, you have a long distinguished career.
You worked with some very well known,
personalities in the industry.
And so
it has been in diverse. I can see

(01:33):
that looking at your,
biodata spanning roles in country clubs,
fine dining
and then technology. So what pivotal moment shaped
your transition
from hospitality management to developing your innovative software
solutions for the industry?
Well, what happened was as,
out of college, I I had worked when
I was in college for club corporations in

(01:53):
America. So when I graduated, I got offered
a job. I rented a country club for
that in Dallas, Texas called Canyon Creek Country
Club, migrated to San Francisco
where I worked with the Chifton Group for
a number of years, and then I opened
the post trio with Wolfgang Pock,
for three years.
Went out on my own, mentioned the restaurants
that you just mentioned.

(02:14):
And when we had six Asian noodle restaurants
called Long Life Noodle Company,
my wife had gotten married, and we decided
we wanted to raise our kids in Florida
where I grew up, a place called Beach.
So I sold my shares back to our
Taiwanese partners
and moved to Florida.
I started a company called Cypress Hospitality Group

(02:34):
for one of the premier headhunters
in the country for, you know, restaurants mainly,
chefs, managers, etcetera.
And I had
gotten so many phone calls from friends that
were, you know, can you do a budget
for me? Can you look at my p
and l for me? Can you help me
with this or that? You know, friends that
I had had
cultivated over the eighteen years that I spent

(02:56):
in San Francisco.
And I had this idea of the way
that I always operated,
FobiSoft
food and beverage software,
where I being that the
the restaurant business is a rearview mirror business.
You operate for a month and then you
turn around and you say, did we make
money last month? Well,
to me, that wasn't good enough for me

(03:17):
at the time. With six restaurants,
you had to, you know, know what was
going on every single day.
So I came up with the idea
of loading these programs on the computers at
these at the restaurants, and then every night
they'd fax me,
what they
the revenue was that day, front of house
and back of the house labor and what
they spent.
So fast forward, so long while I've moved

(03:39):
back to Florida.
And I was riding my bike cycling one
day, and,
I just came up with the idea for
Phobisoft. And I found a programmer, and we
just built it to see what would happen.
And now we've got hundreds of restaurants on
the platform.
We're teaching people how to increase their profit,
we say, from 20 to 40%.

(04:00):
If they work the program, it's going to
happen.
And and that's that's
where we are today.
Oh, fantastic.
Yeah. Budgeting has been a little bit of
a challenge for many restaurateurs.
They they are good in, in customer service.
They're obviously
excelling in the culinary side.
What were sort of the key points that
you picked up on immediately that you could

(04:21):
share that,
the restaurant tourist bought into that they were
want want to work with you with the
concept that you had? Well, what we've done,
with the platform is we've broken it into
four parts.
We have your cost of goods, which everybody
pretty much understands, and your labor, which a
lot of people understand.
And then we have what we refer to
as your controllables and your non controllables.

(04:43):
The majority of restaurants out there, after your
cost of goods, and hopefully they're calculating them
correctly,
and your labor,
when you get into the the controllable piece,
a lot of restaurants just have a line
item that says supplies.
Well, that's like a dump all category.
You know? Everything that they come in, be
it our restaurant supply, kitchen supply, China glass

(05:04):
and silver, you know, linen and laundry. At
the laundry list, we have 33 different line
items between the two categories. Now that seem
might seem like a lot, but the restaurant
business is a business of pennies.
So when you can look through that
and and budget each category on a monthly
basis,
you end up immediately saving money.
And some people might think, well, that's you

(05:25):
know, seems like it's a lot of work.
But what we've done is we've built EDI
connections to all the major broadliners.
So when the when the invoice comes in,
our program reads the invoice and parses it
to the correct cell. So if you bought
silverware, it's going to China Glass and Silver.
If you bought chemicals for your dish machine,
it's going to the chemical slot. So you

(05:46):
don't have to sit there and systematically every
day go through that. It's being done for
you.
And and that's where
I think that, you know, a lot of
the majority of the restaurants out there today
probably haven't worked on or done a budget
since they looked for investors or went to
a bank, etcetera.
So that kinda goes to the wayside.
But if you don't have a baseline, how

(06:08):
do you know how you're doing?
You know? That's what makes it a rearview
mirror business. You know? You know from your
revenue, oh, gosh. I didn't do this much
last year this time, or I did more
than I did last year at this time.
But from your expense standpoint, and we all
know that that things have gotten more expensive,
to operate with a budget,
it just it it gives us an opportunity

(06:30):
to help the restaurateur
increase their profit because what we refer to
is we take little bites. And when we
break out, we we do the budget for
them with them. Yeah. So when we look
at it and we say, okay. If we
can find a point in your cost of
goods, which we typically can, and if we
can find a point in your labor, which
we can, because if you save an hour

(06:51):
a day in the front of house and
an hour a day in the back of
the house, you're gonna save between $14,000 and
$18,000
a year, which is significant. And then if
you can find a point in your controllables,
which is very easy, and a point in
your non controllables,
that's four points. So if you have a
restaurant making 10% profit,
now they're making 14%
profit, that's a 40% increase. Yeah. It's very

(07:14):
impactful for restaurants.
Sure. So that's, you know, where the budgeting
piece comes in,
to give give them a baseline.
Okay. Now
you manage your restaurants yourself, and you work
with some culinary icons
like, Wolfgang Pook. It must have brought you
some unique insights. I mean,
I I never met him, but I I

(07:35):
read about him. I saw what kind of
restaurants he had and the concepts he had.
But, curious from your point of view, what
key leadership lessons did you learn that you
apply now to your business as you do
it and and to the growth? I mean,
was he somebody that you said, okay. He
has some ideas I want to learn from,
and I want to develop them to to
my own. Well, I I would say a

(07:57):
couple things. Number one is he's one of
the nicest guys you've ever met.
He it's you know, if you go back
in our industry, you know, for years, we
had these chefs that were
throwing stuff and and and yelling and screaming
and all that. That's not the case. Wolf
is is an even keel,
you know, doesn't get upset,
just he's just a great guy.

(08:18):
And the other thing with Wolfgang is quality.
I mean, every single thing that you bring
into the restaurant
is typically of the highest quality that you
can get.
Because, you know, if he says that, you
know, if you start with a high quality
item,
it's it's hard to mess it up. Yeah.
And you don't get too complicated.

(08:39):
Yeah. And his
his his, I you know, his service.
How many people have been in restaurants? In
fact, I was in one of a month
or so ago
that my wife and I tried to order
this appetizer, and the service said, well, that
appetizer is only served at the bar.
What's that?

(08:59):
Whereas, you know, Wolfgang would serve you with
if you wanna sit at the bar and
eat eat the whole menu, then then have
at it. You know? If you wanna if
you wanna, you know, change this on the
menu because you know, on this dish because
it it doesn't necessarily agree with you, then
then that that's fine. I mean, he's in
the hospitality business, and he's just one of
the coolest guys that he's ever met.

(09:23):
That's When did he have some particular insight,
understanding what the customer is looking for that
made him successful, or was it just that
he had you're looking at the personality and
the and the product itself that sold itself?
How do you see his I think his
product sold itself, and I think that his
innovative
you know, like, when he started with the
pizzas way back when,

(09:44):
you know, at the first Spago on Sunset.
But I think that one of the things
was that, you know, he attributes his success,
and you have to, of course, ask him,
but from my understanding is when he was
at Ma Maison and and the Pritikin diet
was the big thing. And and, you know,
so a lot of the Hollywood people would
come in and say, you know, I want
this dish, but I gotta eat it like
this, this, and this. And he would make

(10:06):
it for them. Yeah. And he would do
it. Whereas today, you know, or, you know,
over the years, if you're
in a restaurant and you're telling,
you know, those restaurants still today that say,
you know, we're not gonna alter the dish
for you.
You know? And not to be there are
a lot of people out there that we
all know that have these
eating restrictions.

(10:28):
But you you're in the hospitality business,
and that's what you chose to be in.
So I think that's what you know, that's
being hospitable.
That's what it's all about.
Yeah. Sure.
When you went into your own business and
so on and greatly developed your company,
what was some most unexpected challenges, yeah, you

(10:49):
faced while you built your brand or product?
And and,
how did it reshape your vision? Because it
is always something new that comes up unexpected.
And is there something you like like to
share for the audience that they can bring
back further as a kind of a learning?
Well, one one of the things that you
know, I just decided that I was going

(11:10):
to build FoveySoft because my feeling is stand
still to this day that every restaurant needs
it.
They need some you need to know where
you stand on a daily basis. You spend
so much time,
in doing, you know, from service to to
the culinary
piece of it, to making sure that everything's
right. But the financials,

(11:31):
two things.
If you Jose Andres,
recently was asked, what's the most important thing
that you can tell a restaurant tour? And
he said, understand the financials.
And another chef, his name is Evan Funke,
who,
was just on Netflix. He's on Netflix today
on Top Chef or or,
Worldship Video Show that's on Netflix.

(11:54):
They asked him is his first restaurant, they
spent 3 and a half million dollars,
and they closed.
And they asked him,
what happened? And he said, I didn't understand
the financials.
So that piece itself
is
my feeling the most important piece.

(12:15):
Of course, if you're a chef, you want
the food correct, and you want your service
right or whatever,
but it's a business.
Yeah. And that's the important piece that I
think people need to understand.
Sure. And and,
you know, I can't I can't get back.
What was the question? The initial question you
asked?
No. No. I think, you you actually you

(12:36):
answered the question basically that,
what what are the sort of leading,
leading things that you have to pay your
pay attention to? And I think you answered
the question very well, but,
I would be interested also to know, what
is one of the leadership lessons you learned
the hardware
hard way in your career and you having
your own business and how does it guide

(12:57):
you your decisions today?
Well, I think it's,
I was in a situation years ago in
a restaurant where I had a issue with
a with a top level employee, and and
I just kept letting it linger and linger
and linger and linger. And I think the
thing to do is what I've learned from
that is make a decision and move on.
It can be the right decision or the

(13:17):
wrong decision. You can always change it. Yeah.
But to let things just keep lingering and
lingering when it's bothersome or or whatever it
is,
it's
to make decisions.
And whether you've made the right one, you
know, I used to tell tell managers that
if
something arises,

(13:38):
try to think of three things that you
could do
as opposed to just snap, make a decision.
Should I do this? Should I do that?
Or should I do this? And you can
do that in a matter of minutes, especially
if you're on the floor in a busy
restaurant. And again, that is gonna give you
an opportunity to make a better decision,
but make a decision and move on. And
if it's not the right decision, okay, we

(13:58):
can go back and look at it. But
you can't can't
keep things compounding.
Otherwise, you're gonna have all these things that
you haven't
decided on, and it's gonna become a mess.
So that that's one of the major things
that I think is Yeah.
Has there been a time when you made
a what we we call it, a controversial
decision
in your career? And then how did you

(14:19):
handle that criticism or doubt? Because I'm sure
that if somebody doesn't agree with what you
said did and so on, they may have
some issues and so on. Has there been
a time in your career where you think
that, oh, okay. Did I make the right
decision? Or, okay. It was controversial, but I
made it. And then you had to deal
with the,
sort of the feedback.
Yeah. I think that that goes back to

(14:41):
what what I was just talking about.
It's it's making the decision.
Yeah. Sometimes it's right and sometimes it's wrong.
I got rid of a chef one time
that maybe I shouldn't have. But you
you you you wanna make sure that everybody's
on board in the same in in the
boat's going in the same direction.
You know, when you when you're the reason

(15:01):
that that situation happened is because everybody was
going this way, and this one person wanted
to go that way Yeah. Continuously.
So,
it ended up being a good decision,
but it took a minute for it to
happen.
And and that's that's you know, it goes
back to the you gotta make a decision
and move on. Sure. Sure.

(15:22):
Now the
during the years, I mean, you have been
around for a long time in the in
the industry.
How have you seen the hospitality or restaurant
industry
transformed in in the last decade? And,
what pivotal role do you think the technology
has played in this evolution?
I think technology has probably played a pretty
big role. Yeah.

(15:43):
Especially for, you know, one thing that, like,
we're doing, but just the the whole tech
industry,
the social media piece,
the, you know, the the the when you
walk in a restaurant, you know, beacons can
tell from your phone that you're in the
restaurant. They can have offerings, etcetera.
But,
you know, like what we do now at

(16:05):
Fobisoft,
we constantly try to stay ahead of the
curve. You know, we've gotten it to the
point now where
you don't really have to enter any information.
We import import from the point of sale
system food, beer, wine, liquor, front of the
house, back of the house,
labor because we've already built the salaries behind
with the payroll taxes, etcetera.

(16:25):
We have EDI connections with with all the
major broad liners, like I like I mentioned.
And then we have a you can upload
an invoice. Just take a picture. Boom. Goes
to the cloud, parses to the cell. And
now what we do is once a week
for those that want it, we email them
a snapshot of where they stand. So they
know, you know, at once a week, the

(16:45):
restaurateur is getting a, here's my dashboard.
And they don't even have to to
do anything to get it. So I think
that's helping transform
from a technological
standpoint.
And and then just the exposure piece
True. That everybody's getting through through social media
these days.

(17:05):
Yeah.
Now
we we went through the time of the
pandemic. And so what how did that affect
you? How did it affect you? And
and,
was there a opportunity to pivot
with the folks during that time and
maybe a lasting change is did it bring
to your business model? Well, what happened with
the pandemic is I had financed this myself

(17:26):
up to that point. Mhmm. And it was
getting more difficult.
And then the pandemic hit, and we lost
every customer.
So I found a small angel fund out
of Orlando, Florida that helped us, and that's
what's put us in the position today to
grow and and and be where we are.
So the pandemic was a hit, but it
also

(17:48):
brought up, you know,
some great partners that we have today.
Yeah. Yeah. That's great.
Now the the future of technology in hospitality
with the advancement in automation and data analytics,
how do you envision the future of hospitality
management evolving?
And what role do you see the
the the kind of softwares and and the,

(18:10):
service you provide playing in that transformation?
Well, I think it's only gonna get better.
And but but the the other thing is
that
there are some platforms out there that are
just giving you too much information.
You it's it's it's
it's a business. You need to have,

(18:30):
your own analytics and what's going to make
you successful.
But there are certain things that when you
get tech people
or maybe accounting people involved in the hospitality
business that don't necessarily understand
the pieces of the hospitality business,
that can kinda
basically give you too much information.

(18:52):
Yeah.
I think what we've done and there's a
couple other platforms out there kind of similar
to ours that that,
that that help.
But I think that it's
the more
I think technology is gonna help more in
maybe

(19:12):
getting butts in the seats and and exposure
or continue exposure like that versus, you know,
the analytical type thing that we do because
how many how many ways can you analyze
a dish? You know? It it it caught
you know, your plate cost it cost this
much to make it. You know? This is
how much we should charge.
So you don't wanna get too

(19:34):
overburdened with your tech stack and have too
much information.
Yeah. Yeah. That makes sense.
Good. Now,
where do you see the future in terms
of your your business,
evolving? Where do you go from here? Is
this the the model as it is? Is
is the the model you're gonna stick with,
or are you looking already,
any other ways ways that you're gonna advance

(19:55):
in in, and help the restaurant owners
in their business?
Well, we're constantly
upgrading and working on our platform.
Yeah. I've been off
asked asked a few times, you know, could
you do this for,
you know, a different industry or whatever?
And, of course, it's I mean, it's applicable
could be applicable to a bunch of different

(20:16):
industries. But just in The United States, there's
800,000
restaurants.
That's a massive market.
Yeah. You know? And we learn from each
one of our clients. You know? People look
at things a different way, you know, and
and we've made certain changes.
So we're we're constantly enhancing,
you know, the platform. Like, we used to
just have, you know, a food cost line,
and now we break it out to, you

(20:37):
know, beef, poultry,
fish, grocery, dairy,
produce. So someone can see if their if
their if their cost of goods, if their
food cost is running high, they can pinpoint
more accurately where the issue is. So it's
that type of thing. But here again, it's
not giving them, you know, too much information

(21:00):
Yeah. They're not going to pay attention to
it. Yeah.
Okay.
They will step out of the the the
costings and and the budgeting and so on
and providing,
data and so on. But from your personal
point of view, and you have seen the
industry evolving, what are the things that,
that, you're happy about and where you see
it's going next in sort of the future

(21:21):
of the restaurant business? And what are the
things that you you say, oh, that's too
bad that this has has already disappeared in
our our business?
Well, one thing that's it's kind of a
two edged sword because, I mean, I was
I basically,
went to business school, but trained somewhat classically,
you know, as a chef in French, you

(21:41):
know, basics or whatever.
I love the idea of, you know, all
the new types of cuisine,
that are that are popping up today. But
I think in that, it's it's taken away
some of the and I don't wanna hear
necessarily say the fine dining
because not for that extreme,
but
the more,

(22:02):
casual fine dining, I would say.
You know, your your your basic French bistros,
you know, there's not a lot as many
of those as there used to be. I
don't wanna be a, you know, get off
my lawn guy, but because I love some
of the new cuisines and and things that
the innovative
things that are happening.
And but I think that that and I

(22:22):
think that that that that the
the younger
generation today,
that's why. Because they're coming up with different
ideas.
You know? They they've come from different backgrounds.
They're bringing different things to the industry, which
is great. I mean, it's really, really neat
to see, you know I haven't in a
while, but, yeah, I've seen a, you know,
a new spice or something of that nature

(22:45):
that you're like, wow. Where's that from? You
know, how's that used?
Yeah. Yeah. Yeah. Which I think is pretty
cool. Yeah. Yeah. Yeah. I like something about
now what what has been developed. The people
are have the the
the chefs who really who had a chance
to travel around the world and have picked
up ideas,
and they're kind of creating a,

(23:05):
not a confusion, but a fusion of of
tastes. And I think that's quite interesting these
days. And, and or even just taking a
traditional
cuisine and
presented in a very unique way, you know,
taking a maybe an extreme sample of,
having Italian
pasta served with a Japanese presentation or something

(23:28):
like that just to get
you could say do something differently because I
think there's always a market who are,
in search for new ideas and and looking
for ways
of doing things.
Just curious. So have you seen because you
are you are surrounded by a lot of
restaurants, and you go to a lot of
them. Anything in particular that has, kind of
you have noticed at all. That was an

(23:49):
interesting idea so lately.
Yeah. Well, I I live in North Florida,
so it's not like it's San Francisco or
New York or whatever. Right. Right. We we're
not lucky enough to have that many. But
when we travel,
Yep. You know, like in in DC, I've
seen some cool stuff. You know, we went
to a really neat, you know,
ramen,
spot there. And then and then there's another

(24:11):
restaurant,
there that's that's that's,
one of my favorites called the the Le
Diplomat. I mean, it's a classic French bistro
type situation.
But, yeah, there's there's
there's a lot
of new innovative stuff happening,
which is interesting.

(24:32):
Yeah. Sure. Sure.
So, well, thanks for it, Jordy. It has
been a very interesting discussion, and thanks for
sharing about your insights.
People are interested to find out more about,
Fobesoft.
How can they
find you, and, where are the best ways
to reach out to you? It's, our well,
our website is f0bes0ft.com,

(24:53):
fobisoft
Com.
And my email
is ge0@fobisoft.com.
And that's the best way.
Either shoot me an email. I'm happy to
set up a demo. It takes twenty, twenty
five minutes to see it,
or discuss, you know, anything, you know, from
a restaurant standpoint with restaurateurs,

(25:14):
where we where we can help.
Okay. Excellent, Jordy. And, I will put these
in the show notes so we'll,
people who are either listening to the podcast,
they will have it in the in the
show notes or or in in the when
it was a YouTube episode, that will also
be in the description. So,
they will find you. So that's been great.

(25:34):
So thanks very much again.
And for all the listeners, if this is
your first time joining the social hotelier
podcast,
I really appreciate you taking the time
and take a moment to leave a review,
give it a thumbs up and don't forget
to subscribe coming your, so we have a
lot of guests coming your way, who either
are in the tourism or hospitality industry. So

(25:55):
stay tuned for the most thought provoking
conversations.
So until next time, take care and keep
exploring.
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.

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