#14 From $52K to 17 Locations: Rakesh Chandiramani’s Blueprint for Restaurant Success

Rakesh Chandiramani, Co-Founder & Owner of Vin sur Vingt Wine Bars, Jack’s Coffee, and Il Fiorista in NYC, shares how he transformed a $52,000 investment into 17 successful locations. From scaling with purpose to crafting unforgettable guest experiences, Rakesh dives deep into the challenges and triumphs of the restaurant industry. Learn why authentic leadership, team loyalty, and a human-centered approach are at the heart of his success. This episode is a masterclass in building a lasting legacy in hospitality.

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Transcript

(0:00 - 0:06)

It's a very human exercise when you open up restaurants. When you open up that door, you throw away the spreadsheets. It doesn't matter anymore.

(0:06 - 0:24)

It's really around the execution of the concept and delivering that value to the guest and making sure that your ambience is exactly the way that you envision it. And that's quality of your product, your food and beverage, your services delivers the highest sort of level of hospitality that you hope it will. It doesn't matter at that point, but you do open those doors.

(0:25 - 0:47)

Welcome to the Restaurant Leaders Unplugged podcast, where real talks with restaurant leaders take center stage, discover the challenges and victories that define success in the culinary world, dive into essential strategies for marketing to operations and gain insights that will transform your approach to your restaurant business. Don't just keep up, lead the way. Join me, your host, Sebastian Stahl on this journey to excellence.

(0:47 - 0:51)

All right, everyone. Welcome to the Restaurant Leaders Unplugged podcast. My name is Sebastian.

(0:52 - 1:08)

And today we had a really special show with Rakesh Chandramani, a true restaurant visionary, starting with family retail roots, he's built a thriving New York City wine bar scene and taking a bold move to coming up with emerging brands. And Rakesh knows how to create a memorable dining experience. We're going to talk about a lot of those things here.

(1:09 - 1:15)

Can't wait for him to share on his insights and his journey. Welcome to the show, Rakesh. Sebastian, thanks for having me.

(1:15 - 1:18)

Excited to be chatting with you today. So it's a pleasure. Thank you.

(1:19 - 1:23)

All right, Rakesh. So let's start at the beginning. I know you have quite a bit of a journey.

(1:23 - 1:41)

So to kick things off, can you share a little bit of your story and your journey? How did you get started in the hospitality world? Yeah, I mean, it's, I wouldn't say it's, it started really at the first day and straight into the restaurant business. It was really an inspiration that developed from childhood. You know, my parents came to this country as immigrants.

(1:42 - 2:01)

They settled down in upstate New York, in a city called Rochester, New York, in between Buffalo and Syracuse. And to kind of sort of make it through just the general milestones of life, they found a way to open up retail, just clothing stores and retail stores just in the downtown area of Rochester. And that's really what put me through school and paid for the meals on the table.

(2:02 - 2:13)

And so, you know, in my summers, I just, I worked in their stores. And so just got a knack for that entrepreneurship, working in a retail setting. So I knew in the back of my mind that I wanted to start a business at some point in my life.

(2:14 - 2:43)

Granted, I was the first male in my family to go to college and actually complete it. Obviously it made sense to kind of get that corporate experience, but throughout that journey, just at least think about, well, what could I do potentially off the side of my desk and what can I invent to, you know, hopefully do something as great as my parents had done to create such a great life for myself. So after college, I ended up working and doing some management consulting at a couple of different firms, mostly sort of in the role of a financial analyst.

(2:43 - 3:19)

And then after I moved to New York in 2005, I got pretty inspired just by the restaurant scene because there was just so much creativity, there was so much passion, so much enthusiasm that I know I noticed people all around the world were just coming here to bring their ideas to fruition. And I used to frequent this bistro at Midtown East called the Beto Ivre. And the manager there became a good friend of mine and now my business really just, I guess, brought the experience to sort of life, kind of transported me to a place that was just not New York at that moment when I was within those four walls.

(3:20 - 3:33)

And so we became good friends, went into wine. And then one day I said, Hey, would you ever be interested to kind of do something together? Because me jumping into the restaurant business didn't make sense. You know, it made sense to actually go in with an operator.

(3:33 - 3:47)

I've seen it many times where you sort of have that, that dream and you envision it. And then unfortunately you get into that driver's seat without that operating experience, you know, it's, it's a road that you just can't anticipate in terms of the bends and the curves. I did that.

(3:47 - 4:06)

And it wasn't a good idea. The road I hope is less taken these days, but nonetheless, everybody's entitled to live their dream. But the way that I decided to go about it was to actually partner up with Sebastian as his name, and he was born and raised pretty much in the restaurant industry, hailing from Paris, working for Coupa Trend.

(4:07 - 4:22)

And then also he would work with a chef, David Boulay. So he had a, he had quite an experience and just, he's like a composer, a conductor, he's just amazing when it comes to someone who's just knows that business really from all functions. And so I just thought that this is the right partner.

(4:22 - 4:42)

And most importantly, we just, we got along, we recognize each other's skill sets, and so we went in with the lethal level of trust. And so we, this was around 2009, if you fast forward, and then we spent actually some time just writing a business plan, literally wrote like a full-on business plan that was like 30 some odd pages long. Which never goes according to plan.

(4:43 - 4:57)

Exactly. I mean, some of it, when I look back on it, it's funny, before this interview, I looked back on it and I was like, boy, I wonder if, I just want to cross reference like how much of it really came out for ish. There's actually some pieces of the story that we stuck with.

(4:57 - 5:19)

And some we unfortunately had to divert from, but nonetheless, it was fun to just look back and be reminded of part of the journey, but we put that business plan together and at that time, I only had a couple of years, if you will, of working experience coming out of college, I saved up about $40,000. And then our CFO, we were also brought on as a partner at Delapare. He put in a little bit money, Seb did as well.

(5:20 - 5:27)

We kind of pounded the pavement. Took us about two years or so to kind of get this plan. Cause we were just sort of passively working on it.

(5:27 - 5:36)

But until the time we felt like, Hey, this is it's go time was around 2010. And so we pounded the pavement. We found a location in the West village.

(5:37 - 5:50)

And unfortunately the location didn't work out. There was just, I think just some nuances at the end of the road that just didn't work in our favor. Nonetheless, we just dropped that location and ended up finding some, a new location on West 11th street and seventh Avenue, 425 square feet.

(5:50 - 6:06)

It was formerly a real estate office. So we ended up to just signed a lease and for like $52,000, we opened up the first Vinci Event. We worked with an architect who didn't speak a lick of English nor any language that we, you know, were familiar with, but we thought a way to communicate.

(6:07 - 6:19)

Our design was literally what we drew on an eight by 11 sheet of paper. And we just found a way to cram 25 seats in there, you know, in July 6th, 2011. I remember that day we opened up the first Vinci Event.

(6:19 - 6:28)

I think it was a really memorable story from that day onwards. Well, that's quite a story. And I think that's how many of us start right with just kind of figuring it out as we go along.

(6:28 - 6:36)

We have really no idea what we're getting ourselves into. The good thing is that you had a partner that knew operations. So that's a big thing, especially even if you're running a 25 seat restaurant.

(6:36 - 6:42)

It's incredibly important. I couldn't emphasize that more. It's not only finding the partner, but it's also finding he's actually my best friend.

(6:43 - 7:01)

I mean, I know a lot of business relationships can sometimes break down over the course of business, but nonetheless, we found a way to kind of respect each other's sort of knowledge and way of thinking. And to this day, we not only remain business partners on an equal level, but we also are great friends. It was a really meaningful window.

(7:01 - 7:02)

It was meant to be. Yeah. Yeah.

(7:02 - 7:30)

And you talked about having a business plan. Did you guys anticipate in any way, you know, or what strategies did you have in mind where you had the business plan together to be first in such a competitive market like New York? In a bistro, which is also quite common in New York city, it's competitive. So what did you guys have in that business plan in terms of your competitive advantage, or how did you guys were going to position yourself to be different? I mean, obviously you are successful.

(7:30 - 8:19)

So how did you guys go about that? Yeah, no, great question. It was really nothing, I guess you can call it like unique in the sense of, but sticking to really true hospitality motivations, wine bars were generally few and far between back then. When I say back then, let's call it like around 2010, 2011, but they were just becoming something as an exciting, differentiated sort of destination alternative to sort of your neighborhood pub as such, but we, as we were developing our business plan, I mean, Seb was born and raised in Paris, in French, and so obviously it made sense for us to kind of specialize or develop a concept sort of in a culture where we as a team could collectively know the product and also the level of quality of service, as we know, you travel to Europe, especially to France, like the hospitality and the experience of the concepts that you get out there are just amazing, right? Right.

(8:19 - 8:31)

And so Seb knew French wines, he knew the distributors. And so, and he was French, so he knew how to kind of recreate that experience. Second was we wanted to transport people into that ambiance as if they were in a wine bar in Paris.

(8:31 - 9:08)

And so we could kind of develop that scenery for them. Then the last touch was, well, not last, but one of the more important touches was making sure that we connect with the community. So to make it that local neighborhood wine bar, we hosted a lot of complimentary wine tastings, just to invite people in, just to get them in the space to feel that ambiance, you know, the music, the lighting, get to know the quality of service, get them to taste and experience that wine, as well as the food that we had, you know, once you transported them, once you got them sort of out for the space, you deliver that value, then you hope that that relationship will continue and they, you become that go-to destination.

(9:08 - 9:33)

And so we just kind of focused on those elements and we knew it was going to take some time because to your point, yes, it's a very fragmented and very competitive environment and less than 50% of restaurants we know seed. So we said, Hey, listen, for, we just have to kind of be as genuine as possible as we're making this work. Not thinking of a bigger story of, Hey, let's just open this just to be the next Starbucks.

(9:33 - 9:43)

We said, even if this is just the only destination, let's just make sure that it becomes a labor of love. And that's what we went in with the idea. That's a hundred percent true.

(9:43 - 9:54)

I mean, it is a labor of love, but there's so many components. And I think you guys, obviously you've done a lot of things right. Cause I know you've expanded and I know you guys have grown also since that first location.

(9:54 - 10:01)

Yeah. So you've gone through this. If you can share with us a little bit of your growth story, how you got opened the new locations.

(10:01 - 10:33)

And in terms of advice for other restaurateurs that are listening in location selection, what are the things that you look for? Yeah. You know, there's a lot of, I guess you'd call specific criteria and attributes that I think anybody could put down on their checklist to make sure like demographic, household income, mix of residential, commercial, like all those things, yeah, they make sense, but as a founder, perhaps I'll speak for myself, it's very instinctual, like you walk by the space. You can envision your setup.

(10:33 - 10:50)

You can envision the D4, you can envision the ambience, you can envision the people enjoying the, in that destination. For us, it was just the motivation and the enthusiasm around a potential location was really instinctual, you know, cause our footprints are rather different and it's hard to get. Yeah.

(10:50 - 10:54)

Instinctual in a way for you, Osho Rakesh, cause you know the city so well. Yeah. Right.

(10:55 - 11:25)

Because when you're opening a new markets, for sure the feeling is it needs to be there, then that's the right location, but besides that, there's particular things that you look at in terms of traffic, walking traffic or access or like, what do you look for with those things? Yeah. I mean, obviously you want to ensure that there is good density in the neighborhood and that you're also looking at the potential for not only the system development, but future developments and what type of development is on sort of the horizon within that vicinity. Right.

(11:25 - 11:46)

I'm not looking 10, 12 blocks away from that place. I'm looking within at least a two, three block radius within that location to understand what is in the future and what's the potential in terms of the type of guests that we'll be able to attract and what are also the surrounding businesses? I mean, it's because you have another wine bar that's next door. It does not mean that you shouldn't open up there.

(11:46 - 12:02)

Sometimes, you know, competition is also good competition. It just brings more wine drinkers into the neighborhood. You know, I remember this with our second location where we had just opened up and then there was a large restaurant that was just planned at the next corner and they also had a wine program, but much bigger food offering.

(12:02 - 12:21)

And for the longest time, we were unsure as they were developing what this would potentially do for our business. But then we later realized it actually boosted our sales by 30%. You know what I'm saying? And there was some crossover with our fare and our cuisine, but nevertheless, it actually brought a lot more people into the neighborhood.

(12:21 - 12:40)

It added to the neighborhood being a destination. So having a complimentary neighbors, other food and beverage concepts and personalities is actually a good thing. And so we also made sure or try the best to get an idea or an insight into could this be a destination for like concepts? Right.

(12:40 - 12:47)

Those are the attributes we generally look for. And then, you know, the reality also is we have to be able to afford it. And that's my next question.

(12:47 - 13:06)

So let's say you open your first location, that location is doing well. Then you think about the possibility of opening the next location and the next one, and of course you need to be able to afford it, that's one of the main things. But to scale, what are the factors that you consider? Because I mean, how many locations do you guys have? Across our portfolio, we have three different concepts.

(13:06 - 13:28)

We're about 17 locations, but within Bain-Sylvain, we have eight locations plus one retail one shop. Right. So imagine going from one small place to eight locations, of course, multiple concepts, how did those decisions come into play? What are the things that you guys looked at to make that decision? Because sometimes either we, restaurants owners, you grow too slowly or too quickly.

(13:28 - 13:34)

And when you grow too quickly, it's an issue. And if you're not growing, it's also an issue. So how'd you guys go about that? No, great question.

(13:34 - 13:54)

And I have to admit that and preface the fact that just surely for the law of numbers, like, you know, some spots just didn't work out and that's, that's completely normal and acceptable. The hard part is making that decision to close down because you love, you love that story so much and there's some meaning there, but sometimes, you know, everything goes back to numbers. And if the economics just don't make sense, it doesn't work out.

(13:54 - 14:10)

But the way that we made the decision to grow and how we grew. So with the first location, we put our own money in, in that time, like I said, for building it out for $52,000, keeping a small budget for decor and then having some working capital available. I think all that, we were probably about $80,000.

(14:11 - 14:27)

But then, so we use all of our capital. And then once we started to see some momentum after about six to eight months in terms of just looking at our financials, we said, Hey, we think we have something that can work, meaning that we're actually generating profit. There's more money in the bank this month than there was last month.

(14:27 - 14:39)

Granted, we had gone through just two quarters, so we didn't necessarily understand the seasonality, but nonetheless, we felt like we had the momentum. And so what we did start to do was two things. Number one, I said, let's just at least start looking for a new location.

(14:39 - 14:46)

You're not going to find it overnight. It takes time to get to know the market. And then number two, let's see if we can open up a dialogue with our bank.

(14:46 - 15:00)

Right. And so what we did was we started to package up our financials and then we approached our bank at that time. We would think we were working with JP Morgan Chase and we said, Hey, listen, we'd like to apply for just a conventional term loan for a small business.

(15:00 - 15:12)

We have a little bit of a track record, at least for six months, and this is what we're looking to build. And we want to maintain our banking relationship with you. Will you extend us a small business loan? And with restaurants are obviously pretty risky.

(15:13 - 15:31)

I guess you can call it assets to invest in mainly because of the collateral is just not as strong as other types of businesses. So after a bit of banking and pleading, we finally got to a point where they said, okay, we understand what you guys are looking to build and we see your deposits are growing, blah, blah, blah. So we agreed to approve a service, small business loan.

(15:31 - 15:40)

Granted, we did put our first money in. So we used operating cashflow from our existing business to reinvest it into the new business. So that was the first money in.

(15:40 - 15:58)

And then we got approved all business loan, not an SBA, but actual conventional, a retail bank loan or commercial bank loan. And then we drew that to open up our second location. And we kind of use this sort of wash, rinse, repeat model where we would reinvest the NOI from our existing businesses into a new one.

(15:58 - 16:25)

We would refinance our loan to a point where we could maintain our debt ratio. And like, we weren't trying to overextend ourselves and putting too much bet on saying, Hey, listen, let's just pile on the debt and hopefully it'll just work itself out. Got to be super careful with how much you assume or you anticipate making, because you just have to plan for the fact that there's going to be a wrap up period or you know what, sometimes things just don't work out, right? This is a risk.

(16:25 - 16:41)

And so we had to be thoughtful around it. I'm not saying every decision, like I said, was carefully underwritten. There is a lot of risk assumed in it, but the rest of it is around execution and hoping that by the grace of God, it does work out the way that you want it to work out.

(16:42 - 16:56)

Yeah, no, I think you guys have a great partnership because you're a finance guy as well. So you were able to figure these things out and know not to get yourself in this position where you were in a lot of debt and being a really high risk business. So the way you were structuring that makes a ton of sense.

(16:57 - 17:06)

Yeah. I mean, sometimes I could put together as many models as I want around the financials, like at the end of the day, it comes down to, it's a very human exercise when you open up restaurants. A hundred percent.

(17:06 - 17:19)

When you open up that door, you throw away the spreadsheets. It doesn't matter anymore. It's really around the execution of the concept and delivering that value to the guest and making sure that your ambience is exactly the way that you envision it.

(17:19 - 17:30)

And that's quality of your product, your food and beverage, your services delivers the highest sort of level of hospitality that you hope it will. It doesn't matter at that point once you open those doors. A hundred percent.

(17:30 - 17:51)

Rakesh, you just mentioned value and I think that's a huge, huge thing in restaurants, right? And it's not just the product that you're delivering, it's everything. Yeah. And understanding that there needs to be a product market fit and then the value perception needs to be there a hundred percent from the customer to what you're providing.

(17:52 - 18:15)

What is your value proposition in terms of your concepts and what have you found the sweet spots to be? This is a loaded question, by the way. And then the next question that leads into that as restaurant, especially full-service restaurants, everything has been shifting, right? Because everything's so much more expensive with labor costs, food costs, all that stuff. So the value proposition is shifting.

(18:16 - 18:30)

There needs to be an added value to be able to sustain these types of full-service restaurants. And what are you guys doing through that? Yeah, no, a great question. I see the expectation is a lot higher these days in terms of delivering that value proposition.

(18:30 - 18:46)

I mean, you were asking the guests to take time out of their day, perhaps bring a significant other, a good friend, enjoy it. Obviously in your setting, the hard-earned cash and hard-earned money is going towards paying for that product. And so there's a lot of sort of high expectations to meet.

(18:47 - 19:14)

And granted, once you have them at the door, it's just this half the battle, right? The value proposition has to be really geared towards delivering that experience to them. And that experience is becoming a lot more important these days because we're asking more and more from the guest. Not only at their time, but given some of the challenges that all businesses are facing in terms of inflationary expenditures and such, and just obviously working in a very dense restaurant market, we inevitably, we have to raise prices.

(19:14 - 19:29)

And so you're just continuously asking for more and more and more. But in return, we have to make sure that we are improving and continuously innovating on the product. So it's not just giving them the same old thing, but ensuring that we're also improving on the quality and the selection.

(19:29 - 19:53)

So back to the food and beverage, the experience has to be sort of top notch. So whether it's for our sake, whether we're transporting somebody to a Y bar in Paris or to a nice beach hut coffee shop in the Hamptons, you have to make sure that experience that we deliver is top notch and then also incorporating other aspects into the concept as well. So for us, we do wine and cheese tasting classes.

(19:53 - 20:13)

We have an e-commerce sort of wine program. Now we have a retail wine shop. I know with some concepts, like with the El Fiorista, for example, flower decorating classes, pasta making classes, you have to incorporate these things to be able to deliver an experience and that experience, if priced right, the customer and the guest will recognize that as value.

(20:13 - 20:55)

And that's very competitive because there's a lot of smart restaurateurs these days that are either enveloping that into in-house experiences or they're using technology to also deliver that value, whether it's through loyalty or gamification and so focusing on your value proposition, but continuously innovating or improving on that is like a very important, I can't emphasize enough important aspect to making sure that you're in this for the long run. You're, you play the long game because for us, it's not like we're looking to price anything super high just to make sure that we pay off our capex for opening up that restaurant is that we signed a 10 or 15 year lease. We want to be here for 10 or 15 years.

(20:55 - 21:15)

So price yourself fairly, deliver exactly what you said you were going to deliver, but just listen to the guest feedback and then improve, improve on the mistakes, improve and continuously strengthen the things that you are doing well. Some point you'll right size it and hopefully things will go well and you'll you'll be there for the long run and be able to sign that extension as well. Yeah.

(21:15 - 21:22)

Yeah. Makes sense. And Rick is talking about all these things that's happening, all these trends and of course, adding the experiences to the restaurants to deliver that value.

(21:22 - 21:53)

Where do you see the restaurant industry heading? Because you see the middle of the road, full service restaurants, a lot of them going out of business and that being able to sustain, where do you see it going to make our business, our restaurant business sustainable with the current marketplace and everything that's going on? It's a good question. Again, I'm asking a lot of good questions. I keep saying that we're kind of in a tough period right now, right? Cause you know, coming out of COVID it's just been a little bit of a sort of up and down wave in the sense that when the doors all shut, we call it middle of March.

(21:53 - 22:04)

In 2020, we had no idea. I mean, everything, everybody thought that, well, it's going to happen. Like I've, I've dealt my entire life work on this, my family, and I might just lose this overnight.

(22:04 - 22:30)

Then obviously there were some relief extensions available, which helped get through the pandemic, you know, some years beyond more recently, especially in the restaurant industry, the capital markets are a little bit tough. There are some alternative lenders, but things are not getting underwritten, not getting valued and even funded the way that they used to. So, you know, as restaurateurs, we have to look for alternatives, ways, methods, strategies to grow.

(22:31 - 23:07)

And so there's a couple of different avenues, obviously, if you have something good that you've built and it's making money, even coming out at this time, God bless you, and you're getting funded by institutional investors, amazing. Like that's kudos to you and they deserve everything that they're getting in, in a good way, because, you know, this is a very challenging time and we have a lot of creative people, you know, opening up some great businesses. If you know, you've kind of ridden that road for a super long time and you just need that, that funding for growth or for hiring up or any other expansion of your business model, that's tough because there's money out there.

(23:07 - 23:15)

It's just competitive to sort of get your hands on that. I don't think that you can rely on that being available as a restaurateur. And that's really the point that I'm trying to make there.

(23:16 - 23:54)

So where I see the future in terms of, you know, I think the capital markets will open up in the next couple of years. I think there, as we hopefully cross after next week, we'll get an idea of really what at least the next couple of years will look like and directionally we'll, we'll see some opportunities when it comes to availability of cash start to hopefully open up for all sectors and all industries, but we hope that it'll lend itself to the restaurant business. But given the density and fragmentation of our market, I think that perhaps there could be some consolidation that happens in the future in the sense that it could be hospitality groups, kind of, you know, emerging concepts, emerging balance sheets, and perhaps joining forces, if you will, in some sort of JV format.

(23:55 - 24:05)

We'll do two things. Number one is that it will sort of overnight, you can obviously create a larger hospitality group. Number two, converging cash or emerging balance sheets will create a little bit more cash.

(24:05 - 24:51)

And number three, I think, which I'm seeing a lot of people start to consider is that it can help kind of create a common operating platform. What I mean by that is that, you know, when you're building a business into a company, into a brand, et cetera, there's a lot of overhead expenditures that you invest in your tech stack, in your management team, in your training and in other functions, such as finance and HR, and perhaps that joint venture, that acquisition or that merger, where the consolidation will create a normalized platform where the brand can operate off of to maybe operate a little bit more efficiently. I do see some consolidation happening, not format of call it cash buyouts, but perhaps, like I said, small cap and mid cap or mid cap and large cap kind of coming together to create larger groups.

(24:52 - 25:03)

And then they obviously can take, there's an expansion model that perhaps can be considered from there. And, you know, that will write the story for the next couple of years and see where it goes. Right, right.

(25:03 - 25:21)

Well, you've actually done some of that stuff already internally, because I know you've incorporated a shared service model across your brands. Can you share with us a little bit of what that looks like in your business? Cause I know of course, go back to talk about different brands that you guys manage, concepts, and how you share those efficiencies. Yeah.

(25:21 - 25:31)

For us, like the brands that we have, they can't necessarily be cross-marketed together, if you will, because they are somewhat different concepts. Cause yeah, so Pocket Shop, right? Yep. That's correct.

(25:31 - 25:54)

We have Fancy O'Bara, which is obviously a chain of French wine bars and bistros and the retail wine shop called French Wine Shop. We have Jack's Stir Brew Coffee, which is a 21-year-old, you know, homegrown, small chain of coffee shops that was sort of born here in New York. And then we have Elision La Vista, which is just a single unit for a polished, casual Italian restaurant as well.

(25:55 - 26:26)

And so for us, really the sort of the normalization of the overhead really existed in a sort of a few different functions, right? Which was finance, sort of executive leadership team, when it came to events and catering and party, parties, if you will, HR, and then there was just some technology efficiencies that we saw. And then also just pricing from vendors that we were able to take advantage of just through that consolidation. So it was little pieces here and there, but it did translate to savings in the bottom line for all the concepts.

(26:26 - 26:31)

It doesn't happen overnight. It takes time. This year was the first year we actually realized those efficiencies.

(26:31 - 27:03)

And the only way we realized this, Sebastian, this is the first year we decided not to open up any stores. And that's when we were able to focus on how do we kind of sweat the asset? Let's go back and take a look at some of the areas that we didn't get a chance to extend this platform across, you know, some areas that just opened up a little bit of a leak and let's really tighten up our screws a bit, add that patch, replace some things that need to be replaced and understand what is the most efficient way to kind of run this organization. The way we did it, it's easy to kind of put some of those pieces in place.

(27:03 - 27:43)

But I think one of the, the first areas that we focus on, we continue and prioritize is our existing team is our staffs, you know, just kind of goes back to your questions around the value proposition is that you cannot, it is impossible and you should never, ever deprioritize the amount of time and training that you put into your team, the team on the floor, the team in the back of house, they are the most important and crucial components and sort of aspects of a business because you come in and don't deliver that value proposition to the guests and it takes continuous training, time, nurturing. You treat them like your own kids. I do, they are number one, without that, it's impossible.

(27:44 - 27:47)

Like you can't run these businesses being an N of one. It's impossible. No way.

(27:48 - 27:54)

Right. I mentioned something super important of course, and it's, we're all dependent on people, right, and it's a people business. And so now you're talking about leadership.

(27:54 - 28:37)

Because that's a lot of what this podcast is actually about, besides all the stuff we're talking about. So, Rakesh, through all these circumstances and different highs and lows that you've gone through in your business, what do you think are the aspects of leadership or the things that you've learned, your experience that really have helped you push the business forward and get that buy-in from your team to be able to provide that value, that experience that we need to deliver on to be sustainable. Everybody has a different style, right? Like, you know, for me, I try my best to be a good listener and to learn and be curious in my leadership style is a bit more that, and I learned a lot of my leadership style, even from my business partner, Seb, is that he always mentioned that you, you kind of, this half don't work for you.

(28:38 - 28:44)

You have to work with them to gain the trust, to build that camaraderie. The team doesn't work for you. You work with them.

(28:44 - 29:13)

And so from day one, you know, we still have team members that are with us from the very first day on that July 6th that we opened up, number one, the first they're still with us when I definitely attribute a good amount of that, perhaps devotion and continuity to the fact that we always worked with our team, never gave them an indication that I'm your superior or, or never established layers between us and them. We were always there to help us. You need to go and go wash dishes.

(29:13 - 29:20)

We'll wash dishes. If we need to, you know, sit there and bus tables, we'll bus tables. If we need to sit there and prep and help out, we'll do that.

(29:20 - 29:32)

No problem. We'll do whatever it takes to the point where we show, Hey, I'm, I'm in this just as much as you are. And just because we're 17 restaurants now, it doesn't mean that I still won't pull a shot of espresso if I need to.

(29:33 - 29:35)

It's okay. I got your back, you know? Right. Right.

(29:35 - 29:50)

So you, you listen to your team, you work with them. And that's really the core sort of principle that at least Seven and I tried to stick with in order to keep that sort of culture maintained. We've had a little bit of an easier job doing that, you know, we're not sort of institutionally backed.

(29:50 - 29:59)

There's no private equity money that we've taken, you know, we've been able to kind of work at our own pace to some degree. So that's helped, I guess, helped out a lot.

(30:00 - 30:20)

We know it's hard to get a night check one day, but at the end of the day, it's also been a little bit nice not to have all that pressure and still, still try to grow in the way that we think is the right direction. And where did you learn all of these things about leadership? And I think you're right on with that type of style of leadership, but I think I share the same style as you. I think it's where you're working with them.

(30:21 - 30:40)

They're helping you build a business. So they're just part of you, part of the business. Did you learn this through trial and error? Or was it something that was instilled by your family? How did you come across these concepts or is it just hard knocks of life kind of business? As I mentioned at the beginning, my parents were entrepreneurs and so it was my parents and specifically my mom.

(30:40 - 30:52)

Like I saw my mom open up three businesses on her own, three stores. They were jewelry stores in the inner city of Rochester on her own. And she had an employee base and like I said, I used to go to her store all the time and also work there.

(30:52 - 31:08)

And I just saw the way that she treated her employees and her staff and how she developed that relationship. As a result, like I just saw how devoted and how committed they were to working at the store and how much they really appreciated and loved her. And so that style like really stuck with me.

(31:08 - 31:21)

It wasn't any sort of dictatorship. It was nurturing of, she had a very sort of soft style, but at the end of the day, people still respected her role. They still knew who she was, but at the end of the day, she was an incredible leader and she owned her businesses.

(31:21 - 31:43)

Right. And Rakesh, of course, this is the style, this is how you run things. For operators visiting out there, how do you cultivate this type of culture, this type of leadership and what type of practices do you recommend for restaurant owners? Because one thing is what we talk about at the top, right? When we're directing a business, this is the way I want it to be, I lead by example, whatever it is.

(31:43 - 32:07)

But when you grow and you scale, you're at 17 locations, how does that trickle down all the way to the bottom? Yeah. I mean, spend time with your team, you know, like we can't be everywhere all at once, but when you have the time and you have the opportunity, spend time with your team, even if it's just for a moment, popping in to say hi, asking about their family, asking about their spouse, children, et cetera. Recognize the moments, you recognize the aspects of their lives that are important to them.

(32:08 - 32:21)

Obviously you're going to have to spread yourself a little bit thin at times, but that's part of the investment, right? That's part of the value proposition. It's not only delivering that value proposition to your guests, it's also delivering that value proposition to your team as well, because that's a commitment. That's a promise.

(32:22 - 32:43)

They work with you at your establishment because yes, it's a job and everybody has bills to pay and whatnot, but it's also an opportunity where they're saying, perhaps there's another opportunity here too, that I can grow into. And we've also demonstrated that. And so for our staff members that have been with us or have come in working as a porter and dishwasher, they're now, you know, lead servers.

(32:43 - 32:51)

And so they've seen that growth in the organization. And so you can demonstrate that growth and show examples of it. I think that motivates a lot of people.

(32:52 - 33:11)

Nobody's just satisfied being in one position forever. Some people may, but at the end of the day, we, we have to make sure it's incumbent upon ourselves to not only spend time with them, to demonstrate the fact that this is an organization that we can grow in, listen to their feedback. If they have it, still be adamant and stick by your concept because it's our vision.

(33:11 - 33:22)

So we have to own that mission. We have to stand by it. And we also, but we have to be open and listen to the feedback that we have because our staff is at the front lines, right? And so there's some things that, yeah, they're right.

(33:22 - 33:37)

We can change, improve on. And then there's other things which we have to ensure that great idea, but it might just be outside of our concept. So we're going to have to just make sure that we don't lose touch with what our true identity is, which is let's maintain our concept as a French wine bar.

(33:37 - 33:43)

You know, we can't put Spanish wines or Italian wines on it. Admitted to being a French wine bar, let's be a French wine bar. Right, right.

(33:43 - 33:53)

No, a hundred percent. And I guess switching gears here to talk briefly about marketing. I know you guys are doing a collaboration with J.Crew. I think you're doing something interesting there.

(33:53 - 34:32)

Could you speak to that, exactly what you guys are doing and what value do these partnerships you think that can bring to a brand for people who consider these type of ideas? Yeah, this is a fun topic because there's really, in the restaurant industry, going back to your growth question, there's this convergence of industries kind of coming together, like fashion and food is not just starting to come together, but it's starting to materialize at a higher frequency. With Jack's Strawberry Coffee, the original founder, Jack Mazzola, did a really good job of kind of creating this brand is in terms of crossing the barrier of into the sort of lifestyle coffee ring. It wasn't just about the good quality coffee being fair trade, organic and shake growing.

(34:33 - 35:18)

It was the fact that this could also be a really cool and sexy product that outside of just the coffee itself, it's like, I want to hold that cup. I want to go visit that coffee shop. He was able to create this identity for Jack's that allowed him to be cool and hip, even if he didn't visit the coffee shop itself in the sense that if you partnered with Jack's, which we've done a lot of partnerships in the past, even prior to our to our collaboration with J.Crew, but with Gucci and with Kiehl's and we have some upcoming, Derrick Lamb, we have some upcoming partnerships coming for the Christmas season, but nonetheless with J.Crew, since we've been able to kind of cross into this sort of lifestyle realm in the sense that we were kind of getting these unsolicited requests to partner up, just makes a lot of sense for this convergence to just to get a little bit more permanent.

(35:19 - 35:32)

Just early this year, we, you know, we received a sort of a, I guess a blind inquiry from J.Crew saying, Hey, we're opening up a new store. And I monitored all that, all the incoming corporate inboxes. I thought right away, I just picked it up and said, Oh my gosh, this would be amazing.

(35:32 - 35:47)

It doesn't matter. It doesn't have to make the most economic sense. It can be an incredible loss leader, but the amount of eyeballs that will be on the brand and the fact that the identity of the brands in terms of style is definitely hits the same demographic.

(35:47 - 35:56)

It seems like a great opportunity to see if this can work. And we opened that up in late July of this year. And so far it's been a great partnership, at least from my point of view.

(35:57 - 36:15)

I'm meeting with them next week to find out how they think about it, but all indications are that they're super happy with it so far. And I, I see a lot more of these happening, not only potentially for us, but for all sort of food and beverage and fashion, whether you're technology, there has to be this convergence of these industries finding a common vertical together. Yeah.

(36:15 - 36:49)

That's very cool, man. And I see that being more of a trend now, especially with trying to add more to the experience and the value purpose that we were talking about. So besides all of these, of course, these collaborations and these things, when it comes directly to strictly marketing, what have you found to be most effective in creating a loyal customer base beyond experience, of course, that we've already discussed? Is there any particular things that you guys have done in terms of marketing that has worked for you that would advise other restaurant owners to start practicing? Where we kind of settled right now is a combination of sort of new school and old school.

(36:49 - 37:10)

We were sort of late in the game when it comes to adopting your technology per se. Like we're just reevaluating our tech stack when it comes to like our loyalty programs and putting everything sort of like in a virtual digital way. And that's, we're going there, which is all in development, but it comes to marketing outside of just the sort of traditional channels of social media and just show marketing.

(37:11 - 37:34)

One of the more humbling and responsive, I guess, methods and actions that we've been able to recognize is the fact that when guests either come and dine at your restaurant, it's adopting a very old school method of giving them a call. You know, the day after, right? So, you know, au revoir madame, thank you for coming, to va se voir, blah, blah, blah. We hope you enjoyed your experience.

(37:34 - 37:56)

Just wanted to call and just extend our gratitude and hope you had a great visit and hope you'll join us again. Again, it goes back to the human sort of interaction element of it, but at the end of the day, so there's two sort of types of these interactions. One is you're calling a guest that had a great experience, but you're also reaching out to that guest that maybe didn't have that great experience.

(37:56 - 38:25)

And I will tell you, it's more meaningful to make that phone call. It's, and granted, nobody likes, but I would guess, you know, nine out of 10 people don't want friction, or if they read their reviews, they're like, yes, it didn't go that way, you know, I guess they were picky and blah, blah, blah, and like, you already developed that defensive narratives in your mind. But at the end of the day, everybody's entitled to their own opinion.

(38:25 - 38:59)

But it's a more, I will tell you for the phone calls that I've made and the team has made times for the unpleasant experience, the words on paper don't match the tone on the other end of the line. I mean, the tone is way more pleasant and they want to be heard and you listen to them and like I said, nine times out of 10, you can convince them to give you another shot and you listen to their feedback and you say, thank you for the feedback, it obviously wasn't our intention for you to have that type of experience, but I want to invite you. I read exactly what you wrote and I care.

(38:59 - 39:28)

And that I think has been a very, very effective in sort of marketing, if you want to put it in a, it converts, it converts into visits. What platform are you guys using for that to get somebody's number, first of all. So you guys are collecting internal feedback with a different way so you can get that information from them and be able to reach out or do you connect them to the reservation? How do you, is it an open table review? Like how are you guys? Yeah, we, we connect to them through our reservation platform.

(39:29 - 39:57)

So generally the email, the phone number is available. And then also just, you know, from Google reviews, he'll email them. If you didn't have a great experience to try to just get ahold of them and say, Hey, is there an opportunity for me to give you a phone call and listen to your feedback or I guess we'll also just, whether good or bad, they'll, you'll also send us an email just to our general mailbox, but we, we do our best to pick up on that and that phone call is almost everything, just like you hear now when it comes to reservation books, like some people are actually, I think you wrote a nice article about this the other day.

(39:57 - 40:21)

They're going back to just the actual books themselves, just that there's a warmth that, you know, it's not saying that I give the stiff arm to technology. There's so much coming out there because of my antiquated technology was in the restaurant industry. It's like, yeah, I can probably gain a lot of efficiencies, but at the end of the day, the restaurant experience is a human experience and it has to be that way, at least for our business model.

(40:21 - 40:48)

So we need to ensure that we balance it out in the sense that we have humans available that are touching tables and interacting with the guests and even post-visit in a way to get them back into the door to say, you know, that positive experience with them, but that really a long answer to your question was those phone calls in my mind are the, one of the best things you can adopt into that daily routine is to give them a phone call the day after. No, I love it. Love it.

(40:48 - 41:13)

I mean, in a way it's more work or whatever you want to call it, but that human touch and really speaking to another person and to your guests is just, you can't match that with anything else. You can send a beautiful email, you can post great things on social, run ads, all that stuff, but that personal one-to-one is irreplaceable. And you can't never be dissuaded by what you anticipate to be a conversation that can be contentious.

(41:13 - 41:32)

Is that just be okay with it being uncomfortable. But like I said, we're humans, like we, there's an ounce of compassion in us at the very least. And generally speaking, if you say, Hey, I'm sorry, it will turn into a pleasant conversation on whoever exchanges that, that apology first, but it generally works out.

(41:32 - 41:41)

Yeah. So I guess to close, this is my last question. Let's say you're going to reimagine and come up with something completely new.

(41:41 - 42:14)

So if you're designing a dining experience that represents your philosophy in hospitality, what would that experience look like? And what do you hope your guests would take away from it? Yeah. You know, for between what we have at Jax and Mount Silvanio, I have to just give you a boring answer and said, I wouldn't change a thing, you know, I really wouldn't because we haven't changed our concepts to a point that has like gone away from core principles that I had mentioned today. So I would still design our spaces the same.

(42:14 - 42:34)

And I would still with my team, of course, are there some materials that we would probably change up? Certainly, of course, some tones and whatnot, but the aesthetics for the most part will remain the same because that familiarity is important to our guests. You know, we don't want to give an impression like, Oh my God, these guys must have just gotten hundreds of millions of dollars. Yeah.

(42:34 - 43:17)

Hopefully one day, but then they, and we start putting in some Italian marble here, no, we're going to give you the experience that you, you thought or that you expect to have. And that is with the fact that with the, everything from the design of our tables to the tiles that we use, to the tone of the millwork, to the mirrors in the wall, to the music, to the layout, just that intimacy, whether it's a Jax, whether it's a, whether it's an Il Fiorista or any other concept that we hopefully eventually fold into our umbrella, we hope that it will be the same. In addition to that, just the training of our staff to ensure that we're not cutting corners in any capacity to make sure that we still have, you know, can deliver quality service with actual human beings.

(43:17 - 43:28)

You know, working those tables or pulling that shot or teaching you how to make your flowers bouquet or pastas or whatnot. So it wouldn't change a thing. I really wouldn't because I think there's a charm.

(43:28 - 43:37)

There's a style, there's a vanity. There's a cachet to that old school level of hospitality that I think our industry should never, ever let go of. There is, we should not.

(43:38 - 43:42)

Amen to that, man. I agree with you. I think that's what makes us special, what makes our industry special.

(43:43 - 43:49)

And that's why we want to go out and have those experiences. It's that dimension that we seek. Absolutely.

(43:49 - 43:58)

Absolutely. We stood the test of time through COVID, restaurateurs pivoted on a dime and we found ways to make it work and we scrapped, we did everything we couldn't look. We're still surviving.

(43:59 - 44:03)

We're still in it. Yep. A hundred percent Rakesh.

(44:04 - 44:11)

Well, thank you so much again for your time Rakesh and for all your insights. It was a wonderful conversation. I'm sure audiences will enjoy this or will enjoy this a lot.

(44:12 - 44:20)

So thank you again. And when I'm visiting New York, I'll stop by your restaurants. Would love to see you in person and experience all of these really cool concepts that you guys have.

(44:20 - 44:23)

Please do Sebastian. Thanks so much for having me. I really enjoyed this conversation.

(44:24 - 44:25)

So thank you. Thank you. Appreciate it.