Owner’s Roundtable: A Taste of Changing Trends at 5 Seasons
By Christy Simo
The past few years have been challenging for restaurants, and 2012 is shaping up to be no different. From the ripple effects of the recent immigration law to the skyrocketing food costs this past spring, the restaurant industry continues to adjust to new challenges.
Restaurant Informer recently sat down at 5 Seasons Brewing Company in Sandy Springs with several industry veterans to talk about these hot topics and more.
Participants were: David Larkworthy, owner of 5 Seasons Brewing Company, which has three locations throughout metro Atlanta; George Frangos, co-owner of Decatur-based Farm Burger, which recently celebrated its second anniversary and opened a second location in Buckhead; Archna Becker, co-owner of Bhojanic in Decatur that is also opening a second location later this year in Buckhead; and Ron Eyester, owner and chef at Rosebud and The Family Dog in Atlanta.
Following are edited highlights of the conversation.
What are some issues you’ve encountered over the past year?
George: [The immigration law] has created so much needless paperwork. I don’t know about you guys, but every license I do, a citizen before I get my tax license and my business license and my alcohol license.
Archna: And a lot of the licenses have gone up a lot. I looked at my numbers, and I spent $100,000 for one location for just permits. This isn’t payroll taxes. The City of Atlanta, DeKalb County, federal. It’s just so much stuff.
David: It’s the same way for us. If we have a party out here (on the patio), we have to have a separate license for here, because it’s a separate facility, and we have to have a separate license for the second bar because it’s a separate bar.
Archna: When I look at it monthly or quarterly, and even annually, it’s so much money. Every year it’s increasing. I got a permit expediter this time. We will never deal [directly] with the government again because of these problems. There’s no system.
Ron: You would think some of these government agencies would embrace the fact that people are trying to start new businesses that are going to generate more tax revenue and jobs.
How do you find an expediter?
George: Some are law firms, some are people who used to work in the government and know how it works, so they can help you move everything through better.
Archna: It helps because you don’t have to wait in line. You could open up today, get the paperwork signed, and it’s done. Wher as if you went yourself, it would take 3 months. It’s way better to do that, if you can afford it. You can’t afford them in the beginning though.
How has the immigration issue affected your restaurant?
David: There aren’t enough employees available for the positions. We have positions open at all the restaurants, we’ve taken out ads, and we’ve had very little response. There are fewer applicants.
George: I’ve seen a little bit of what they call reverse immigration. We’ve had some people who have gone back, or they go to Florida, Alabama or Tennessee or someplace else. Sometimes it’s their spouse or uncle that causes them to leave, rather than themselves.
Are you doing anything as far as employee retention with your staff?
David: We offer shift beers. There are some people who have been here for 12 years.
Archna: I feel like the level of people who come to work with little experience and no education, they just expect so much from a job. They expect it should be given to them.
David: You can blame the Food Network for some of that.
Ron: That’s one of the challenges of being an owner, is that you have to step back and realize that not every one of your employees is going to reflect the level of ownership that you do. When I worked for Food 101 and I was just a sous chef, and I would occasionally touch tables in the dining room. Some people would be like, “Are you the owner?”
Archna: No, its because I care about my work, and I care about my place.
Ron: Exactly. I used that as a building block. I had a level of ambition where I knew where I wanted to go. And yet, every day we have to motivate people who don’t see it as a big deal.
George: The best thing that we can do is to just get rid of [bad employees]. We don’t have patience for them in the long run, because they can infect like a cancer your whole staff. Everybody gets unmotivated. “Why should I try if he’s not?”
Archna: That is so true. It pulls everybody down.
George: As an owner and a manager, it’s up to us to do our best to keep that apathy from being there.
Food costs keep going up. How are you adapting to that?
Ron: Nothing ever goes down. Thankfully, I’m the owner. If I was just the chef, I would be fired, because my food costs are brutal.
Archna: How do you deal with that and the end user? Do you just raise prices every so often? That’s something that I’m dealing with now.
Ron: I’m trying to learn better how to utilize every part. Trying to utilize byproducts. Food costs just aren’t a pretty situation.
David: And we use local, sustainable products.
George: We do, too. It’s our choice to, but it’s expensive.
Archna: We use a lot of lentils and things like that, but since 2008 when the crash happened, we haven’t been able to raise our prices. Things have doubled and tripled, things like chapati flour, things we don’t charge for.
So do you pass that on to the customer in the menu price?
Archna: When 2008 happened, we were about to get a new menu with new pricing. And we were like, we can’t do this now. Then we remodeled in 2010, and we said, if we do it now, they’re going to say, oh you remodeled, now you’re charging us more. So we didn’t do it then. So this week we’re getting a new menu out. It’s not a lot. Lunches are still $7.50 to $12.50. It’s not crazy, but we just added 50 cents or 75 cents to different things. But the disposables are out of control. Our to-go plate that is a meat and two vegetables, you don’t want it all over the plate. You want it in a nice container, and we don’t use styrofoam. It’s like $120 a case.
Ron: Yeah, that’s why I don’t do to-go food at The Family Dog.
Archna: But we do so much to-go food, we lose out if we don’t offer it. So if you want a to-go platter, we charge 75 cents a plate. It still costs me a dollar, but we charge you 75 cents.
David: If it’s $1, you need to charge them $2.25.
Archna: But I can’t. People will start complaining.
George: For us, everybody wants gluten-free buns. We sell gluten-free buns, and we make a nickel. It costs us like, $1.30 for each bun, and we do an upcharge of like, $1.35. Because people aren’t going to pay an extra $3.60 for a gluten-free bun.
David: On Mondays, we do all gluten-free specials. We also do a lot of organic stuff. So a lot of people with special dietary needs come here. They say I can’t have this or I can’t have that, and it’s good. It’s good for the kitchen to challenge them. It’s good for everybody to stay on top of their game and provide people with a wholesome meal. But at the same time, it’s a really small percentage.
Archna: It’s also hard for the kitchen to execute when it’s slammed. And then the servers have to be educated. They can’t just say “Oh this is gluten-free.” It could kill someone. Then a blogger comes in and writes about how you gave the wrong information. That’s not good.
How do you guys handle that now? It’s not just food critics, it’s bloggers and people on Yelp and Twitter.
Ron: I started the Angry Chef (@theangrychef). Honestly, for some people, it’s like they came to this realization that they have the ability to get in the car and go eat a meal, and they have a computer, so now they’re a food writer. But I think people think twice now before they post, because I will respond to a guest.
Archna: Do you respond to everyone?
Ron: Oh, absolutely. I will respond in a very professional and sincere manner. I respond to all reviews, whether they’re good or bad. Obviously it’s a lot easier to respond to good reviews. We have to manage our staff and all those different personalities, and then you have to deal with your guests, and now you have this other different demographic, like these cyber guests. At least twice a week I go on Yelp and OpenTable and read the reviews on there.
Archna: Some of them are good. I learn a lot from them.
Ron: Yeah, it’s useful because there definitely are a lot of valid comments.
George: I don’t choose to respond in a public forum. I don’t want that public back and forth. If there’s a way that I can get that person’s email, I’ll respond to them. What I think it’s done is it’s taken away the person’s common sense just to talk to the manager.
What about Living Social, Groupon and Scout Mob — do you participate in these?
Ron: I was the first person to do ScoutMob. I didn’t hate it. One thing I like about ScoutMob is I think they have very good branding. The way they engage with their clients, they take the time to invest in their clientele the way I do mine. So I can appreciate the symmetry there. The newest thing that they’re going after, it’s called the hand-pick. It’s not a discount necessarily. It’s like an offer that’s exclusive. And here’s the good thing. You get to cultivate and create what you really want to do.
Archna: What do you think about Groupon? I did it, and we had a lot of positive answers.
George: We never did it because there was never any restrictions in terms of days and times. I don’t need 500 people coming in on a Saturday night giving me nothing. What I don’t like is sales people who say, look how much money you’re going to make off of this deal. I’m like, well you didn’t factor in food costs, labor costs, china costs, linen costs. That’s not my profit. That doesn’t factor in any of those things.
Archna: We’ve only done these things in the summer since we’re near a college. Our catering is really strong, and we do a lot of weddings to help compensate. Since it’s near Emory, for that one month, it’s dead. We were comparing our numbers from last year to this year. We used the HalfOffDepot people last April. Our gross was way higher, our net was way higher and our net profit was way higher.
We don’t do a lot of advertising. It gets a lot of new people in the door for a niche restaurant. People who had never heard of us came and liked it and came back. We saw a lot of increased sales. I did it to pay for my remodeled floors. It gave me $18,000. I sold something like 2,400 of them, and maybe 1,400 of them came in. It was over the course of six months. I was pretty impressed with the fact that a lot of new people heard about us that didn’t even buy the coupon.
Ron: Sometimes you have to be careful, too, because the first question I would ask is who else is doing it? Not that you want to jump on the bandwagon, but I think you want to be cautious about what other brands you associate yourself with. I’m sorry, I will never do something that says 50 percent off. You know why? Because it devalues my brand. It makes people question your integrity.
Archna: I didn’t do a big 50 percent discount. If you do a 50 percent off and you only make $5 off it, then it’s foolish. But all of them spent more, because at lunch, they’d bring another person.
George: That’s the point. It’s up to the owner to make the time to look at the deal and make sure it will work for them.
David: We’ve done a bunch of them, but we’ve never done one off the shelf. Every time it’s been a custom deal. We did a brewery tour and then a tasting of three beers and three appetizers. We did that with Groupon. We sold 4,000 of them in one day. We only scheduled it for two times a week, 6-7 p.m. on Tuesdays and Thursdays. So we took 30, 50, 100 people — as they got closer to the expiration date, the groups got huge. They’re huge at the beginning, huge at the end, and it dips in the middle.
There are a lot of people who aren’t going to do anything other than shop and buy with the coupons, and you do get a percentage of them. Another percentage of the people, they found the place. People came in on the tour and tasting, and it resulted in a $20,000 wedding. Then they brought 200 people with them for the wedding. So you do get new customers.
Ron: You want to be careful not to alienate your regulars. I’m a neighborhood restaurant. I’m very grateful for the fact that I see the same people – they keep us alive. I tell you what, when they come in and the place is packed with people seeking a discount, they get upset. “What do you mean there’s no tables? There’s a 20 minute wait on Monday night?” So you’ve got to be able to manage that. My philosophy is when you take care of the people, they take care of us. I’d rather go up to a table that I’ve seen in the restaurant three times over the past four weeks, and say, “You know what? Tonight, dinner’s on me.” That’s got a lot more impact.
David: One of the biggest problems with all those [online services] is that it develops a relationship between your customer and a third entity. Where you want the relationship is with you and your customers. So almost all of those, the way they’re designed is that they’re the ones who get the credit for giving the deal. People think they’re getting the discount from the other company, but it’s you who’s doing it.
Archna: That’s why we do a lot on our Facebook page, which is directly with our people. We cater for a lot of bands, so we get a lot of tickets. So we’re giving away Phish tickets, Dave Matthews tickets. We have music on Wednesday nights, and we tie it all in together so we can get more people to like us on Facebook. We do competitions – what’s the spice in the Bhojanic shrimp? The first person who responds gets free Bhojanic shrimp for the next two weeks. That kind of stuff is really great for the people who are your clientele. They’re into it.
Most of you here use local and seasonal products. How does that play into your
Ron: That is my business plan. I think for us it’s not a trend. I hate the fact that sometimes I have to embrace the trend, because to me, it’s second nature. But I’m always glad to see more ordinary people get excited about it.
Archna: I’m sorry to say, but again it goes back to the economy. Nobody wants to pay $18 for a veggie plate. Only 20 percent of people can afford that. The other 80 percent cannot pay that much for a meal. Or they can maybe do it, but much less often, like for a special occasion. They won’t go to your establishment as often if they have to pay $18 a plate.
There’s a whole Georgia initiative with the agricultural department about Georgia Grown products, and that would really help if they could drive the price down and do local stuff for everyone, not just the 20 restaurants that can afford to do it.
David: There’s more now than they had a year ago or five years ago, or 10 years ago, but it’s still a very small percentage of the total.
Is participating in special food events helpful for your business?
Ron: They can be good, but it can also be debilitating. When we sign up for an event, 99 percent of the time I like to be there, because I want to represent my concepts. But it takes you out of the restaurant.
George: They may charge you $2,000 for the table, and you gotta supply this, or maybe you gotta supply that. At the end of it, you might break even, and you might gain a customer out of it, you might not.
Ron: I try to do a bounceback when I go to them, so I can monitor who came. We did a $5 off card.
Archna: I think my feedback on doing those events, and we do a ton of them, is you’ve got to have a product that’s low in food cost that has a lot of bold flavor. Because it’s a very quick shot. It doesn’t matter what’s in it, it needs to be good. It can’t be expensive, and it can’t be too elaborate to cook. I’ve got it down to a science we’ve done so many of them. We do stuff that can be prepped the night before and tastes really amazing, but it doesn’t cost a ton. We don’t cook anything there. We show up 10 minutes before; it’s ready to go. It’s in the hotbox or the coldbox. We have little ramekins, and two people can do it. If you need six people to execute, it’s going to be too expensive.
It’s always been good for us to participate in these events because we have a niche. We’re one of the only Indian restaurants that does it. We get a lot of press, and people end up coming.
What are some other trends?
David: Surviving. Take food costs — we’ve never seen rising food costs this great. At the same time, everybody’s got less disposable income.
You’ve also got an increase in awareness and hopefully an appreciation for locally grown food, but the appreciation isn’t there yet for the base majority. We’ve got an organic pork sandwich on the menu that we’ve had since we were open. And people are like, “Oh, that’s funny, organic pork. You can’t have organic pork.” They don’t understand the idea of a vegetable versus a meat that isn’t all jacked up on chemicals.
George: I get called into schools, and they’re doing all this gardening. Schools come to our restaurant and they’re like, we want to know about your cows that don’t do drugs. Now the parents want to know, because the parents don’t know and they’re trying to learn. If there’s a trend, it’s that there’s a lot of your kids and my kids, we’re feeding it back to them where they’ve missed it a little bit.
Ron: We’re seeing more concepts that are committed to staying true to their identity. Sometimes you get trapped where you want to make everybody happy, but you gotta realize, you can’t be everything to everybody. Some people are going to come into your restaurant, and they’re never going to come back. You gotta accept that.
Not that the recession is a good thing, but I think it wakes people up, and it also kind of filters out. Just because you can open a restaurant doesn’t mean you should. It’s like survival of the fittest. A thinning of the herd. It’s like, OK, now we’ve kinda cleaned the landscape. The smoke is clearing away a little bit, and I think now we’re hopefully gearing up for the next phase of what restaurant growth in Atlanta is going to be.