Running a Restaurant: The Challenges and Opportunities in the Restaurant Operation
Best Served & Fireside at Five #2
by Andrew Parr
This article is the second in a series of five that will focus on different aspects of the restaurant industry. The series is based on five panel discussions created through a collaboration of Jensen Cummings’s Best Served Live and Connor Holmes’s & Gertie Harris’s Fireside at Five. Cummings has also developed the Paragon Pillars, the “North Star” guiding all of his conversations. The Paragon Pillars set the lofty goals of creating an environment in which restaurants can attain 75% employee retention and satisfaction coupled with 19% net profit at flow state. Jensen Cummings also gets a (touchless) high five on the assist with this piece. Fireside at Five finds its genesis from FDR’s Fireside Chats. Its mission is to provide a welcoming environment where passionate and engaged professionals can connect with other diverse colleagues in a facilitated and intentional format.
Today’s contributing panelists are Kendra Anderson, Owner of Cabana X @ Bar Helix; Yume Tran, Co-Owner and Chef of Indochine Cuisine; Kyle Peters, Co-Owner and Operations Manager of Sexy Pizza; and Hayley Charles, General Manager at Habit Carbon Hospitality Collective.
Cummings kicked off the conversation by positing to the panelists that the business model for restaurants is and has been broken. The status quo and “industry standards” are no longer valuable or sustainable measuring sticks. Furthermore, he harkened back to a time when major department stores (think way back like Sears, J.C. Penny, and The May Company) were the anchors of malls and communities which drove neighborhood traffic to the benefit of all businesses in the area, while the modern shift has been to restaurants as the cultural pillars and community anchors.
Living in a world in which the words “pivot” and “razor thin margins” cause gag reflexes due to their inexorable use, we are graced with four restauranteurs who are truly making significant change on a daily basis. These leaders are not using gimmicks or inimitable paradigms, but rather, they have implemented strategy and executed tactics which everyone can replicate if it fits your restaurant model (or if you are ready to change your model).
Kendra Anderson converted Bar Helix (previously a Negroni and Champagne bar), which typically operated with 85% of revenue coming from alcohol sales to Cabana X @ Bar Helix; an equally intriguing brand transporting guests to luxurious destinations through a themed food menu paired with cocktails constructed of liquor and ingredients native to that city and region. She is essentially executing a fully branded monthly pop up including a complete uniform change for the staff to reflect the cabana theme as well as all new Spotify playlists to add to the authenticity of the experience. Upon approaching the outdoor host stand, guests are made to feel as though they are checking in to a hotel and waiting to dash off to the pool. Anderson has found that guests who have acclimated to the pop up are now eagerly anticipating the next month’s destinations.
Kyle Peters and his business partner have invested heavily in their community and their employees. Sexy Pizza not only provides charitable contributions on a quarterly basis to five different organizations specifically for the benefit of those organizations, but also is able to leverage that giving to raise Sexy Pizza’s profile and drive revenue. Peters takes the long view that giving to organizations in the community which in turn give to others, comes full circle back to the restaurant. By maintaining such a significant giving program as well as a robust employee benefits plan (100% paid health and dental, 401K and paid PTO), Peters is able to upsell in a way that provides value to the customer as opposed to simply driving price for the sake of driving price. When guests ask why Sexy Pizza may charge more than its competitors, Peters team is able to discuss the social mission for both the community and the employees of the business.
Hayley Charles emphasized that Habit Carbon Hospitality Collective is truly interested in helping the guest while providing a safe environment for said guests, as well as their hard-working employees who put themselves at risk by coming to work in a high contact environment every day. One of the largest obstacles Charles and other panelists found was with the ever-shifting landscape of what guests can and cannot do, simply educating guests that they were open and what services Habit Carbon could provide was the very first step; and remains an ongoing effort. Habit Carbon put significant thought into the redesign of their menu and how guests interact with their food and beverages. One example is producing menu items that are good to take on a walk. They have also ramped up large quantity orders, as people are clamoring to take their donuts to share dozens with friends and family. That has not come without hurdles to overcome. Both Charles and Anderson talked about the challenges in obtaining take away packaging as well as PPE for their staffs. By the time Anderson sourced the packaging she wanted, the business had already shifted from predominantly take away to predominantly outdoor dining. Charles had to source hand sanitizer from Kansas.
Starting as what most would consider an industry outsider, Yume Tran spends 90% of her time thinking about how she can raise revenue rather than losing sleep about costs. Tran entered the industry 17 years ago from the business consulting world when her husband told her he wanted to open a restaurant. She has never stopped looking at Indochine the way she would look at and evaluate any other business when she was consulting. Tran recognizes that regardless of the business, there is a certain cost floor below which an operator cannot reach. The solution, what should be considered a self-evident truth, is to constantly raise revenue. She is focused on marketing, and how to be able to spend more marketing dollars while also increasing her marketing ROI to 5X the investment. The thought of spending more marketing dollars to get a higher return versus thinking about how to spend less marketing dollars and maintaining the same return is a predominantly foreign concept to most operators. Rather than trying to completely renegotiate her lease in the middle of this pandemic, Tran simply asked her landlord for help with marketing dollars, which they happily obliged. Indochine is currently up more than 20% year over year. Yup, you read that right!
The strategies discussed by the panelists are not just to be used in the time of COVID but are foundational in the shift of the modern restaurant construct. Restauranteurs must be innovators, as they often have been, on the vanguard of what comes next; because winter is coming. The stark reality is that as quickly as these panelists and other restauranteurs were able to adapt and overcome when guidance changed daily and hourly, circumstances will change again. The best way to be prepared for those changes, both in the short term and for the long-term renaissance of the industry is to start now.
WRITTEN BY
Andrew Parr is a restaurant and hospitality industry leader with over 25 years of experience including operations, consulting, project management, & mentorship. He is the Founder + Chief Advisor at Angry Olive Consulting in Denver, CO.
Facebook and Instagram @angryoliveconsulting.
Linked In: https://www.linkedin.com/in/andrewparr/
Additional information on Best Served + Fireside at Five and The Paragon Pillars:
Best Served + Fireside at Five chats can be viewed on YouTube
· Chat 1 of 5: Why Restaurants Need to Invest in Their Most Valuable Asset – Their People
· Chat 2 of 5: Running a Restaurant: The Challenges and Opportunities in the Restaurant Operation
Best Served Fresh episode discussing the Paragon Pillars
Additional resources related to the topics of this article are provided as food for thought and not as specific endorsements of the authors or contents of the links:
Restaurant Marketing
· Marketing ideas from 18 experts
· How to advertise on Facebook in 10 easy steps
Being ahead of the curve
· Japan restauranteur looks to stay ahead of the curve in virus battered industry
Non-traditional benefits being offered to employees
· What restaurant employee benefits should you offer
· A guide to restaurant employee benefits
Sourcing take out packaging as well as PPE
· Restaurant operators get creative with packaging
· Meeting the increased demand for packaging
Named partners that support the panelists
· Chow Now
· SlickText
· JAAC
· RSI
· Toast
Andrew Parr is Best Served Creative’s “Herald of How,” AKA Chief How Officer. Understanding why we do what we do and who we serve, Andrew digs into the nuts and bolts of how we get it done. He craves one-on-one interactions and thrives with the written word. The ability to contribute to our Read channel by penning articles covering a variety of subject matter and running down rabbit holes for research quenches his desire to learn.
Andrew has over 25 years of restaurant and hospitality industry experience and his education includes a BA in Psychology and History from the University of Wisconsin along with a JD from Mitchell Hamline School of Law. Andrew was born and raised in Milwaukee, WI, and currently resides in Denver with his wife Jody and their dog Cooper.
