People love the visuals.
Our new versions going to have slow motion video, and you can send us a slow
mo video of one of your bowls after, and then we'll see.
You got to.
Look at that slow motion.
Oh yeah, that slow mo baby.
Slow motion.
Slow.
Welcome to restaurant three.
65% behind the numbers show where we talked to restaurant owners,
operators, chef's kitchen managers, CFOs, everybody involved
in what makes restaurants tick and how they do it so well.
Before we get started, just a quick reminder.
Don't forget to like and subscribe to the show wherever you're watching.
And please consider leaving us.
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helps us continue to bring you all these great guests and conversations
while growing and supporting our amazing restaurant community.
And with that, I'm your host for training,
and I'm Marc Cohen, and we're with a great friend of the show today, Prakash Carmen
Johnny, the CEO and co-founder of Ohio's Balanced pan-Asian grill.
PK, as we love to call him out,
why don't you go ahead
and tell us a little bit about yourself and your organization?
Yeah, absolutely.
So I'm a co-founder of balance.
We got started all the way back in 2010.
Started with a college, roommate of mine,
and we started our first store in 2008, right
when we graduated, kind of the height of the financial depression.
Fun fact I always like to share
because it was kind of risky, but we didn't have any actual capital.
So we used nothing but credit cards and landlord to, to pay the contractors.
And, we got up and running.
But here we are.
We're coming up on our 16th year.
We have four corporate locations.
We've done a little bit of franchising as well
and have a little more coming up this year.
And, yeah, that's a little bit about us.
How all great restaurant empires are built on some debt and a dream.
Right? Hopes, dreams.
Lots of credit cards, lots of tears.
Well, thanks for joining us.
I'm behind the numbers.
Let's, let's dig in.
Yeah. That's.
So we always like to, we always like to start asking everybody, you know,
what is the one thing that you think is the most important thing
that you want your operators to be doing every single day in the restaurant, right?
What should somebody always be
focused on to make sure the restaurants are going to do really well?
Listening to customers, listening to employees.
So we spend a little bit of time building and feedback loops.
We use a platform called slack for day to day communication and we have,
also like feedback collection from employees.
But all of our customer feedback comes ported in the slack
so employees can see it in real time and get an idea of what's going on.
And, what, you know, what our customers are saying.
I love that sense of urgency that creates that's that's fantastic.
And that that, you know, we've talked about that before.
That feedback loop is not just it's critical with obviously our guests,
but getting it from the employees is equally as critical.
Also really important.
Yeah, absolutely.
Yeah. They're not sure where they're at.
Yeah absolutely.
The best way to raise revenue.
Listen to your and listen to and dial into your, customer experience.
And then if you want to increase longevity, reduce overall labor costs
and improve again
guest experience listening to your employees makes a huge difference.
And so since the, since the college
dream was born, how many locations do you now have?
We have four corporate locations.
Okay, awesome.
Now just starting to grow corporate now.
We have about 130 employees.
And how long have you been using restaurant?
365 2022.
So we're coming up on our fourth year. Awesome.
Okay. And I love I love it.
They found us at NRA Rich.
I don't know if you know, I was there that year,
but I had a great sales guy.
You probably don't know this.
His name is Ben and he chased us down for like 18 months.
And, we had everything worked out.
But I wanted to come and meet the team.
And you guys are great because you bring your whole team out.
And I remember that year because you guys all had these Red Jordans, and, Right,
I got the last of my contract in, and I was like,
I'm also going to need a pair of those Jordans.
So I still have. That's right.
We see that was a signing bonus a lot, right?
Yeah.
I'm in.
Just get me some shoes.
It's just it's a lot to your guys's culture, too, though,
you know, it's clear you guys are having fun.
You're building a great product,
and your generally you're having a good time with it.
And we're restaurant guys.
We like to have a good time when we go to work, so I like to see it.
One one of our core values is love, good food.
So yeah, I mean yeah we do.
We have a good time, especially in an era.
Although there were no hot dogs this year, which was a big controversy.
Everybody was freaking out that Shrinkflation is hit
the National Restaurant Association show and they'll never be hot dogs there again.
Well, we'll see what happens this year.
Do you still go to the show? Fingers crossed they're back. Yeah.
I go every three years.
You do, tuned to the show.
We've been lucky and honored enough.
There's a fast casual.com ranking of fast casual concepts,
and, we've ranked every year since 2016, so you've got to go out there
and see where you rank.
So I do go to Chicago for the weekend, but to actually walk the show,
I only do it like probably every three years.
Other than that, I go out, meet with vendors and go to the award ceremony
and smart, you do the fun stuff instead of, you know, just pacing around on the.
That's fairly padded concrete floor.
No, man, you need a fresh pair of shoes just for that.
Well, that was the for that was the year we got the Jordans,
and that was not a fun place to break those shoes in, I will tell you that.
Yeah. No.
Yeah.
So, I want to talk a little bit about you got 104 employees and what's your
what's your average tenure right now with your group?
Our average tenure is something that we track very closely.
It's one of our key KPIs.
Last year we had 4.6 years.
Wow. Which that's first, hourly level staff.
Our leadership team is, longer.
But for hourly staff is 4.6 years.
And I mean, the industry standard is well below 12 months,
like, you know, like that is that is it is our our top competitor.
And, fast casual is Chipotle.
I, I'm sure everybody is aware that they're kind of a market dominator.
But they, they count their tenure in days.
Oh okay.
Oh wow.
That that sort of skews it a little bit.
Right.
That helps pad the numbers a little bit there.
But and so in addition
to sort of this feedback loop that you provide for the employees,
we're like what's what's the secret sauce here.
Like 4.6 years for hourly employees to be engaged.
That's that's incredible.
Yeah.
It's a it's definitely it's a long time.
But I think it starts with great hiring and just being very selective
about who we bring in.
There's always going to be a natural turnover rate.
Whenever we're employing a certain age group, they're going to go off to college
or they may move or get married or life circumstances change.
But when we do look to hire somebody and we primarily hire them in
based on personality, cultural fit, values,
and then from there, we're strong believer that we can train anybody on any skill.
And so our formula or our methodology is that we pay for cross-training.
And the more positions that you learn, the more your cumulative pay rate increases.
And so we have a very well built out, training system with video training
and day by day checklists and, quizzes,
as well as having feedback built into that.
And then by incentivizing cross-training, allowing people to add and remove
these different positions as their life circumstances do change
if they're not moving geographically or, graduating college and moving on to,
you know, a different, industry or whatever it is,
if they stay at balanced, they're able to kind of flex,
they're able to build their job the way they can build a bowl that balance.
I love that, and that's like, that was good.
You practice that one day you were practice that was smooth.
Thanks man to employees how to flex I love it.
And then so like smooth like my hair line there's it sounds like there there's
there's for those of you that are listening,
Pike's got a very nice shaved head.
Yeah, I, it sounds to me like you've got a pretty transparent system
across the board with your employees.
Like, everybody's understanding what the cross training
looks like, what the pay rate system is like.
Nothing's hidden behind a veiled sort of wall or anything like that.
Yeah, it's an open formula.
So everybody knows what everybody else makes, and they understand
why it is, like very clear meritocracy of that.
And, and is there any sort of gamification in it.
Can can we like, do they earn badges.
Do they earn rankings?
Yeah, that's what we call it.
So we call it the badge system.
So the formula is pretty simple.
We have an artificial minimum,
wage that we hire and and it's above our state minimum wage.
Wherever it is that we operate.
It's pretty clear above it.
For that, we train everyone on how to market the brand.
So how to do guerilla marketing, how do you educate your neighbors,
your friends, your classmates all about balance, because now you're working here.
You might work multiple positions, but you're part of the team.
So we want you to be able to promote the brand.
For that, they get the artificial base wage
and that it's whatever positions you train into.
There are a total of 11 positions, and,
you can max out at 24, 50 per hour.
And our average hourly wage is, just over 20.
I think it's just over 21 right now, average across
everyone else, because there's also a ten year raise at the end.
So every year that they stay.
So that's essentially the formula base wage.
How many badges you have, how many years you've been here.
And that's a lot of people are taking notes right now.
Yeah.
It's such a great way to it's a great way to look at it
because it's not only like, you know, that ten year base
piece, I think is a really nice, you know, instead of just,
a standard, you know, year over year, you're like, there's race.
But then it's also it's getting people to be more invested in
and be more valuable to the company. Right.
It was cross-training people makes makes them more valuable to us.
It makes, you know, us able to utilize them more
so that they're not kind of pigeonholed in just one role.
So I love the way that you guys do that
and be able to get that buy in from the team.
Yeah, I mean, you hit the nail on the head, right?
Ultimately, an employee can make within a range
as much as they want, as long as they provide
that equivalent value back to the company.
So if we can be as open and transparent with them
as to how they can do that, and there's a lot of collateral benefit
to cross-training for one and allows them to fit into their preferred schedule.
A lot better because a badge.
I didn't say this earlier, but a badge is a body of knowledge that qualifies you
to work a specific shift on the schedule that has a race that's associated to it.
So it's those three components.
We title all of our coursework the same as we title those shift blocks.
So I shift blocks obviously change throughout the year, seasonal sales
and whatnot. That's really what we're adjusting.
And then we just go in and fill in based on who's qualified to work those shifts.
The more shifts that people are qualified to work for,
the more benefit they can hit, because that system works excellent.
The majority of the hours that we are open
and the hours where it really requires everyone just to pitch in, which
are our peaks during lunch and dinner, where we're doing upwards of $2,000
per hour in the fast casual segment, throughput is key at that point.
Badges matter less, bodies matter more, right?
But everybody can kind of do everything.
If you've got a very cross-trained team,
you can stretch that a lot more and you can get a higher SPL, which is how
we ultimately get a lower, labor cost and still run,
you know, like sub20 4%.
So we can literally track ROI on a daily basis.
Right?
I can see like I've got this many badges on the floor today.
My sales are up X amount versus, oh, I had this many badges on my floor this day.
And sales were sort of, you know, you're as mileage was a little bit lower.
That's that's incredible.
Yeah.
And immediately rewarding right.
It's not we're not waiting at the end of the month to see how we did.
We can literally see it on a daily basis because you set them up.
That's fantastic.
It's rewarding for everybody and it's got to be rewarding for the employees.
Otherwise you know they're not going to stick around.
And so you're
using your leveraging restaurant 365 on the accounting side
on the operations side on the training side as well that your training platform.
Yes for a lot of this cross training.
Yeah.
We were actually on expand share before we were on restaurant 365.
So big fan of expansion.
You were happy when you got that announcement? Yes.
And what's what's the what's the missing piece now?
Is it just scheduling we're missing?
Yeah, I'm looking to move into it this year.
I've been in conversations.
I know you guys are working on developing that out.
You know, without giving away too much, I know that you guys have a lot of,
capital allocated towards developing out your product and workforce
is like a major area for you guys, so I'm super excited about it.
I love, love the way you guys seek feedback.
I talked about,
like, the importance of feedback from our customers and our employees.
But I love that you seek feedback from us.
And I was able to kind of cite out some of the things that are important,
such as employee feedback, but also some of the KPI tracking.
And, my understanding is you guys are in progress of of
doing that and we're excited to try it out,
sort of align with your badge system.
Right. We need to we need to catch up to what you're doing.
It sounds like, oh,
you got to have the right technologies for what we want to do.
You know,
I think you guys have a very flexible piece of software that people can apply
a number of different ways, depending on whatever their business model is.
Not everything needs to be applied the exact same way.
There's a lot of flexibility there.
So I definitely appreciate that.
Yeah, it doesn't have to be a one size fits all.
You know, really comes back to what do you need?
What are the pieces that are going to make the be the best fit for, you know, each
individual group that's coming up?
Yeah, yeah. That's true.
I think like too often
just because I shop for technology a lot, a lot of different areas,
you know, like you'll have these like restaurant tech guys who come in
and I've never run a restaurant before, never worked in a restaurant before.
And they'll want to come in and say,
here's a piece of software that solves the solution,
but you have to run your business this way.
And you guys don't take that approach, which is right.
Which is great.
So I, we stuck around with you guys for a while,
and you look forward to the end.
Our solution, you can sometimes break it if you want, but yes, it's very but
I haven't
broken it yet, at least on the accounting and operations side.
But, I'll take that as a challenge, Mark.
I'll try and do a great.
Yeah.
You know, I mean, you know, but workforce is is hard
just because, you know, state by state it's it's a different set of rules.
Right.
So trying to it every you know I, I much prefer when we're trying to adapt
to what you need. Right.
Like there are very specific things that you need in the product
and that that that's the kind of work we love to do.
Because, you know, the way
the fact that your ten years, 4.6 years in the way you've you've set up
your sort of infrastructure for your employees, I think is something
if we can back that up with, with some software, I think that's
that would be incredible
for sure.
Yeah. You guys are close.
We're good.
Yes we are.
We're going to give it a try this year.
Awesome. And then you're. And then you're done.
Then you're all in.
You've got the full suite
to close. Close. Yeah.
We're doing VIP with you guys too.
We didn't mention that earlier.
But we're doing the AI with you guys.
Is is really helpful.
And I know you guys are working on, like, other things that I think
are tied to workforce, not payroll.
But you're doing some stuff with your ATS applicant tracking.
Yeah, things like that.
So yeah.
The, watch
people hate that we got I call it this, but the hired a fire solution.
Right.
So I hire the lifecycle of the employee hired
to retire, hired to retire, hired or retired.
They swear that's gentler.
That's kind of that's, that's that's how you know, I lost my job
being the main chef when I was just to check back.
Yeah.
And when I was a restaurant manager, I never fired people.
They fired themselves.
They fired themselves. Yeah, man.
That is.
That's a line to live by, right there.
Well, I,
I want to shift gears a little bit and sorry,
I but one of the unique things about your organization
that it just fascinates me is you actually, you have a farm,
so you're sourcing a lot of your own produce.
Yeah.
Specifically three days aren't like wind up.
It's it's been a journey.
Just like everything else.
You know?
And also, I would say we're we're very idealistic.
People are kind of like big dreamers, and don't feel like
we have a lot of restrictions.
But when we first started, you know,
we wanted to source locally as much as possible.
We started out the basics.
One store going to a farmer's market, talking to them.
Found out pretty quick.
That's difficult. They like to sell at a high price.
They have limited quantities.
So then we tried, CSA, I don't know if you ever done, like, a crop share.
That didn't work, because that could get us surprised,
but we couldn't get the product, so not really working out.
And we kind of evolved through that.
Ultimately, we just wanted to try it.
One day, my co-founder started sourcing,
lettuce and microgreens from an indoor farm.
And, essentially, we took that concept with that operator, and scaled it,
and then we scaled it again into an independent,
building and operation that's up in Detroit.
So, that's been quite a process.
It's a lot of fun. It's definitely cool.
Independent part of the business.
We essentially it's it's another LLC,
so we just buy product from it, a vendor, we go directly to our restaurants.
We also go direct to other restaurants as well as foodservice distributors.
And our experience, working with produce distributors
gives us kind of a unique advantage to understanding
how difficult their business is,
because the distribution business is not easy on the produce distribution.
It's also not easy.
Yeah.
But I think that that gave us some good.
Those contacts as well as context as to what it takes to be successful.
There.
And I
love that you're running the farm through the Po module in restaurant 365
so your operators can order from the farm
in restaurant 365 and it sends a purchase order out to the farm
and then their producer and it's like it's might as well be
it's it's your main broad line vendor. And and you own it.
It's it's just it's it's got to be great for I mean, controlling inventory levels,
controlling food costs, I mean the ROI on that,
you know, as much work as it probably took to get up and running, I'm
sure that the payback has been, you know, pretty pretty amazing.
Yeah, it's definitely, it's a cool business.
It's not as profitable as a restaurant.
But it's beautiful, and and, I do like it,
but I
like that you have a little bit of empathy for your vendors now that you're playing
both sides of the, just, on just the smallest amount,
tiniest little sliver of it.
Yeah, yeah.
And then in terms of, of revenue streams where, you know what,
what's the breakdown for like a balanced grilled dine in versus, you know,
first party, third party.
How does that how does that shake down for you?
Yes, we're heavily digital.
I mentioned earlier we're fast casual.
So to give you kind of a visual, our stores are about 20 400ft².
AUV is around the $3 million range, and we do about
70% of our business through our first party mobile app.
There's about a 15% comes in through kiosks in the store,
and we run about like 6 to 8% depending on the location.
If it's downtown areas, we do more, but about 6 to 8% in third party.
So pretty limited.
We have, really good, pickup and conversion to our mobile app,
which then allows us to control our marketing costs, drive traffic,
even out the traffic flow to become more profitable.
Yeah, that's kind of the the high level
and first party.
Yeah. That is your app.
Yeah.
Yeah, we've we've had an app since 2012.
And then we developed 1 in 2017.
And we are in the process of developing the third and iteration of that.
That's releasing this summer.
That's going to come out as an update. It's
gonna have a series of other features, in it, but as of today, correct?
Yeah. It's our own first party mobile app.
It's fully branded to us.
It has the entire, wireframe and workflow was designed by,
by an agency that we worked with, and it was customized to the brand.
We don't have any, like, fee structure that's involved in that.
So there's not no per order fees or percentage fees or anything like that.
No margins.
If I knew what an app was in 2012, rich like way,
way, way ahead of the curve.
Like, you know, I clearly put something on here.
Yeah. Right. Yeah, yeah.
I come from a tech background, so my background is not restaurants.
I have always been doing,
work in the technology space ever since I was, like very young.
My first job was 14, and I was building computers and doing networks and stuff.
So always been a bit of a nerd.
But, one of my best friends in college, his family did own restaurants.
He's also a personal trainer, and he grew up in his family's restaurant.
So that's kind of the, skill set that came in initially.
So I've always been involved in technology early
on, adopter of, iPod based, cloud based POS.
Had an app direct integrated very early.
We were very well set up for, Covid
built our curbside system like overnight, never closed a day.
Increased our same store sales more than 60%.
And, we've had positive same store sales since Covid.
Now there's some years that have been
minor, like, I think we had a year that was in 23.
That was like sub 1%, but it was still positive.
So we did not see any drop off since Covid and we were able to retain that
market share.
That's awesome.
To be able to not only see that even if it's little
growth, incremental growth, it's still happening year over year.
To not have any kind of a backslide is is killer.
And I mean, I think a big part of that, I would imagine it's got to be,
return guests repeat, you know, kind of raving fans.
Have you figured out, like, what the what's the magic number for
you guys that you you go from being like, you know, a casual regular
to being like, a rabid, raging fan.
So we look for guests
in our heavy user cohort that are visiting twice a week,
which is, you know, like forex to pull average.
So they're, they're looking for people to get in once a month
and trying to drop that, you know, from once a month to once every three weeks.
But we do have a pretty large, heavy user cohort.
That's, that's in our, first party app ordering experience.
And when did you you mentioned also kiosks.
When did you start using those at the store level?
Because I'm, we're talking when we reopen from Covid.
Yeah.
We we played around with one, as far as menu offerings,
we do have like kitchen menu offerings, bowls, tacos, snacks.
And then we sell bubble tea, which is an entire bar.
It's kind of like a self branded kiosk inside of the store.
Okay.
Which accounts for about 20% to 22% of our gross revenue.
So we do a significant amount in our beverage program.
And we were experimenting with a kiosk solution, pre-COVID.
And then during Covid, we were closed for a long period of time with a lot of
other people were we were also not necessarily in a rush to reopen.
As I mentioned earlier, we started with 100% debt.
So when we went into Covid, we had a lot of debt,
and our stores were built using materials that you could buy at a Home Depot,
including the floors.
All of the furniture was built out of Ikea.
It was it was it was not not good.
So we also took the time during Covid while we were serving nothing
but curbside and only taking orders into our app.
That was a great model for us, as you would imagine.
Like the
the margins on that were excellent and we wanted to take our time to retrofit
and kind of update our stores, same look and vibe.
It just polish it up, you know, at least put some tile down,
put some commercial grade furniture in there.
So we went through
we did that whole process, and when we did, we realized, you know,
there are a lot of benefits to having customers order themselves.
One, if you factor in packaging into your food cost, you can really control it.
The same you would with the rest of your inventory.
And a lot of people, like, they keep their cogs
and their packaging separate, and they don't look at it,
they don't incentivize managers and things like that to control it as much.
But when you're doing 100% takeout, super important.
Right?
Another piece of it is just the order accuracy components.
You don't save a ton because you do have like,
some, upsell and exploration.
And obviously there is like encouragement when you are dealing and talking directly
to an employee who can explain the menu in different ways.
Now we're working on that with the app through things like flavor tags and,
just smart recognition machine learning on when customers are new,
as well as linking them to other products for smart recommendations.
We have ultimately increased our average ticket through the first party mobile app.
But really what it comes down to is that accuracy rate.
If we can nail accuracy for customers, it's excellent.
Customers can obviously check their own order and, CDs like customer
facing display on a POS system is okay, I'll be honest with you,
if I go out to eat, my brain is pretty turned off.
Like, I'm not like putting a lot of mental energy into that experience,
and I've screwed that up myself, you know?
But when it's on an app,
if there is a mistake, you can always go back and leave a receipt.
You can see it.
And like so much of the time, people are just using the reorder feature.
So they're,
you know, just coming in the creatures of habit,
they're just coming to get the same thing every single time.
So, that's really helpful.
We did build that into the kiosk, which is through a separate integration.
We use bite right now for kiosks in our new tech stack.
It is 100% native vertical up from the POS.
So meaning the POS runs the same software that the kiosk and our mobile app runs.
So that is going to really clean things up.
But we do have our app in our CDP
that's linked to the app integrated to fight kiosk.
And it can recognize you can authenticate yourself on the kiosk.
Obviously earn points and get your recommendations that way.
So we're kind of there, but, we'll be like
way ahead later this year once we get the stuff out.
Yeah, it sounds like a whole, whole other pool of data to dive into, right?
In terms of like all that guest frequency
and how they're ordering and how they're spending.
I think everybody we talked to about kiosks,
they've all their check averages have all gone out
because of that, because just the ability to customize and modify
to your heart's content, they just people seem to love to do that.
It's I think it's that, I think it's the visuals.
People love the visuals.
You just don't get that, you know, you can put it on a print menu.
It doesn't come alive the same way it does on a kiosk that this big 27 inch
yellow screens, high quality professional photography.
Our new versions going to have slow motion video in it.
So it's just going to like, really pop off.
And you know, all of that.
It does.
So we have photos for all our modifiers so people can see what they're getting.
Yeah. It all helps.
But I mean, absolutely, we're on a podcast about about the numbers.
But man, data sets CTV one day for you guys.
Could could be huge.
Just putting it out there.
You're not wrong.
What are we going to say, Rich?
Oh, I was, just because it's the idea of, like, you know,
the the not just pictures, but then adding in the slo mo video.
So it's like the, it's it's the old adage that sex sells,
but sexy food sells way more, you know, so
to be able to have something that looks really great like that visual catches you.
You see it.
You didn't realize that you wanted it
until you saw it in front of you,
and then you're like, oh, well, now I've got to get it.
So now I think it's awesome you guys are doing that, playing with it
and and kind of just leaning into into that even more.
I mean, you said like everything now
the tech stack is going to be kind of built from, from the outside.
You know, kind of we're looking at this as like,
you know, a big, a big transformational year.
What what are some of the things with the tech stack
that really helping to transform for for balance, grow?
Really one of
them is, the new customer journey.
So even though we've been around for a while and our existing stores
are kind of, they are mature, we obviously still do get new customers.
And in order to identify that,
we really want to automate at least the initial parts of the experience.
So it's the difference between like segmentation and cohorts. Right?
So like being able to define a cohort
and then define the events that cause people to enter those cohorts, as well
as all the marketing that's automated when people trigger those events.
So we want to be able to identify a first time customer,
we do that because we do require everybody to enter their phone number
when they order, which I know sounds crazy, but I promise you,
and you don't get a lot of pushback on it, because you also get a text
to get your receipt and you get a text when your order is ready.
So people know that you then capture it.
And we do, in our new system, we are doing a process called soft
registration.
So soft registration just means we may not even have anything more than that
customer's first name and their phone number and their very first order.
But then because they're coming back and using that same unique identifier
as their phone number, we then get their second time customer.
So we will send an automated text on the first one,
and that will give them an incentive to come in for their second visit,
as well as, in a way, collect their email address.
And then on their third visit,
we will also collect other information, specific demographic information.
And the entire time they have been accruing loyalty points.
So by the time they get to prior to their fourth visit,
that message is like, finish this up.
You have 84 points waiting for you.
You know, you can download the app or you don't have to download the app.
That's another key thing is I'm trying to separate out.
So we talked about like first party ordering,
but I'm trying to separate out having to have an app.
So having a lite version, being able to order through the web
and having your loyalty card have both points and stored value balance
and have that live within your digital wallet
so that you can authenticate
on the app that way, or to authenticate through checkout online.
And you don't have to necessarily have to have an app to be able
to participate in the program.
Ultimately, is the data that is the most valuable to us.
To understand how many total customers do we have?
How many one time customers do we have?
How many repeat customers do we have within the repeat customer category?
How do they fill in? Are they new meaning?
Are they one, 2 or 3 visit?
Are they light, medium heavy, you know, super loyal.
And being able to know how many are the numbers
that are in there, and being able to dive in like super deep.
So one of the things that we're doing with
the new POS system is treating modifiers as products.
That's super important for, analyzing data, right?
Because,
people,
we sell the symbol like, I'm eating one right now.
I'm going to hold it up because I already ate half of it.
If it was full. I'll show it to you right now.
But I'm eating one of our bowls right now,
and you can get this bowl, with chicken.
With fried chicken, you could get it would stay.
You could get it with tofu.
There's so many different options.
And all of that's at the modifier level.
So really what we need to be doing is not analyzing the products people are buying.
But what are the products and context to the modifier
that they're buying to establish a total profile?
We're also starting to store key information within products.
So allergens as well as dietary preferences,
and then also storing those two things within the customer profile
so that we can create like dynamic menus specific to the customer.
You can, you can send us a slo mo video of one of your bowls after,
and then we'll see how you got
that sequence.
Important.
Yeah, I love what I did.
I it's kind of it's it's hilarious to me.
You're talking about customer journeys and cohorts.
You sound like a SAS company.
Like this is this is the language we speak at restaurant 365, right.
Like, what is it called? What is the customer journey?
I love that you're when you're attacked and you're building 70% plus,
digital ordering order ahead, 80% takeout rate.
You kind of have to.
And like, our customer supports the same way we have customer support
that's ticketed like a software company would.
Yeah.
I mean, it's we have to because there's
there's no way somebody is going to come back to fix that, that issue.
You know, if we did make a mistake, we're human.
We're going to make mistakes.
If we screwed up your bill,
I want to be able to send you that bill back,
and I want you to be able to get it right away.
And so we can just land that onto your phone.
Yeah, I'm calling it bounce
grill is a technology company.
That's really for for you guys.
It's great.
I mean, I love I love playing all the martech stuff.
We got to be profitable.
So I appreciate that.
And one of the other things that, that, that I know you care about
and I'm passionate about.
So because you're, you're, you're the your main revenue stream is delivery, right?
I always tell people like, if you're doing a ton of third party
packaged food up, drive it around the block for 15 minutes and then eat it
because that's, you know, and I know you, you think about this a lot like I.
Yeah.
Are you planning on attacking like,
I know I think you're going to attack like you're packaging, sort of.
You know how the food was arriving to the to the guest on the other side
you've been looking into that packaging is always a challenge.
It's part of our menu development process.
So, I keep giving out like little dribbles of what our concepts like.
But we do have semiannual menus, so spring
and summer menu, we launch them on the Equinox.
So our next one's coming out.
The spring equinox is coming up on March the 20th, so we're gearing up for that.
And finding the packaging has been extremely difficult
because we do have to test everything you're talking about, right?
Has to be esthetic because if it's not an Instagrammable product,
people are not going to buy it and we don't have the luxury.
When you're in a restaurant, sit down restaurant, casual restaurant,
you have the luxury to take your time to plate it.
Now, not everybody does.
It's not a priority for everybody, but the option is there.
We do that.
Most of our customers 80% plus order takeout, and that means
they're eating the product between 10 to 30 minutes after they order it.
And so yes, it has to be packaged properly.
But more than that,
from my marketing background and like what I want our product to look like,
it has to be Instagrammable when they open it up
10 to 30 minutes later.
And that is insanely difficult.
It drives my co-founder nuts because he is the chef and it's super
limiting on him, but somehow he still comes out with cool stuff.
We do find it. I will say it's been easier.
2012 man was just it was so bad for packaging paper and packaging goods
and the fact that most of all, you can't even buy it.
You know, you couldn't buy it.
The price was insane.
But I, you know, going back, looking at the numbers,
getting behind the numbers and being able to find another supplier
and at least know what is my average use on this item, you know,
so I can quickly and efficiently shop for my other options,
because at that time it's like, do you have this?
Okay, great.
Do you have 15,000 cases a year?
Because it's not.
And you know, I said this is not worth it.
I don't want to keep switching it because we do have to.
Yeah, we have to photograph, you know, all this stuff.
It has to look like what you're getting.
So if we have to change our bowl, we have to re photograph our whole menu.
There's an entire series of updates
that we have to make and has to go to multiple touchpoints.
Third party delivery, POS, kiosk, app, employee training and just goes on and on.
Right? Isn't
that's a great point.
You know, it's not something you think about when you're sourcing packaging.
Like what's what's what's the tenure on this packaging, right.
Like how
like I'm going to I'm going to need this for the next three to 4 to 5 years.
And if you can't fulfill that then you're probably not the vendor
or the partner I'm looking for because yeah, that that redoing menus
and photograph I mean that is that is not a cheap process.
It's a big cost.
Yeah.
And you can, you know, if you use the usage data,
you can go in even for a relatively small brand like we are,
we can go in and pull that data.
We have huge usage just,
you know, even compared to other brands that are larger than us.
And so we have good buying power, but you have to have that data
to go in and talk to them.
And you can get a purchase agreement, you can get a marketing,
you know, stipend, it can be annual or one time for switching over.
A lot of times they have a separate budget for that.
And you can also get what's called an FSA and floor stocking agreement,
which is that commitment from them that they're going
to prioritize your shipments and you're not going to be shorted.
So lots of things you can get, as long as you can get behind the numbers.
You like that, right?
He said that normally I'm the one trying to throw the punches in here.
You're you're being I am
I'm a funny guy.
Yeah.
But we get along because yeah, I know.
Well, I, you know, I'm.
I'm curious, don't you?
We're talking about transforming 2026.
But but overall, you know,
how's the restaurant landscape looking through your eyes right now?
Yeah, I think opportunity is starting to open up.
Yeah.
We're we're on the cusp of some changes.
I think the real estate market is starting to soften a little bit.
It's gotten more expensive to build out
restaurants, so the ROI calculation is just different.
You know, we continue to have price pressures on margins,
on prime costs, ultimately store level EBITDA does get pressured.
And it's just a ratio between store level labor and startup cost.
And we consciously went extremely slow on growth, triple slow on growth.
These last years since Covid, because you just could not even predict
that startup cost.
And it was you know, you if you're willing to pay the cost,
it used to cost us pre-COVID under 500 K to open a store,
and now it's 800 K to open a store.
The AUV has gone up, but margins
continue to get threatened year after year after year.
And the consumer is not flexible on you taking price. So,
this is a tough combination, but I think that's starting to open up
because you can see it in supply chain availability,
both for products as well as, you know, the the initial stuff.
You're gonna spend CapEx on your furniture or equipment, right?
You're not seeing like massive ten, 15% year on year equipment price changes.
You're starting to see people
get competitive, with pricing again, before it was kind of like,
you know, who has it in inventory, gets the socks or whatever they want.
Now, inventories are good.
So I think it's starting to turn around.
And, you know, once this real estate becomes a little bit more available,
I think it's still a little high, but occupancy costs are going up.
So I think eventually landlords will kind of give em.
And that's our model is to lease and build them out because they cashflow.
So yeah. Yeah.
So does that are we working on a new store right now?
Yeah, yeah.
Yeah, I was going to finish that thought.
So we just hired an a new, operations director.
He just started he came to us from a brand,
that he was at that scaled from 1 to 55 units.
And, before that, my co-founder was running operations
as well as doing menu development.
So this allows him to really focus on the brand
and the product experience and customer experience and dial in on that.
Last year, was challenging.
I think most operators would say that at least in Q1, it was challenging,
but we ended up with good, same store sales at the end of the year.
We rallied through a quarter during quarter four,
and as I look back on it, it's because we very successfully dialed in
on these menu updates with things like on brand, on the on trend food items,
things that are, you know, high protein, have good nutritional content,
and are packaged well.
And that means that customers are able to enjoy them as intended.
So all the things that we just talked about, right.
And we executed that really well twice throughout the year.
So we're looking to improve that,
as well as start to scale corporate stores.
So that's that's kind of my model right now, especially because,
we've taken these last years from Covid and now we have no debt, which is amazing.
And we have cash on hand.
So I can actually play in capitalism.
Wow. Great.
Great system.
If you have capital ducks, if you don't, you know.
Well, I love it too, because, I mean, you're
you're saying all of the, the things that I feel like
a lot of times we hear from like people who are running marketing departments.
Right?
I want to see what's on trend, what's, you know, what's,
what what's the hot new thing right now?
Making sure that everything looks like really great and sexy
and the slo mo videos and things like that.
I mean, you said something earlier that I just wanted
to, like, kind of circle back on that you that artificial minimum wage
is to train your people on how to market the brand.
So, I mean, like,
you were building a whole army of people who are
it's not just representing the brand.
It's really just like now you're out there,
you're marketing the brand on a regular basis.
I think it's just a great way to think about
kind of how you bring your people on and how you get them started.
Working at Balance.
Yeah, definitely.
I think people like they often discount your hourly employees,
when in reality your hourly employees nine times out of ten
are also your customers and they are your customer demographic.
So you've got to be dialed into that.
You know, I don't know all the Gen Z slang.
I'm an old millennial at this point.
But it's, you know, I think being dialed in to what they're looking for.
So, like, one of the things that we're doing on our snack menu
that's coming up and super excited about is a Japanese egg sando. Why?
Because it's Japanese that famous through 7-Eleven.
We can help it with just significantly.
Yes. Super Instagrammable.
And we found cool packaging for it.
That's like a little triangle box is clear in the front,
so you're able to see, like halved seven minute jammy eggs
running down the middle with this, like really good egg salad on the outside.
And it's all prep.
It's high protein
and it's hitting like all the key things that people are looking for right now.
I think we're going to bang out with it.
It's just one of like several items that will drop for the spring release.
The kids would say that slaps.
I believe that's what they yes, it will slap.
Oh, that sounds awesome.
And yeah, protein is is having its moment.
So get get on that training routine and everyone.
Yeah.
Oh team water protein dessert
something I really love it when you buy a bottle of water
it tells you it's gluten free on the label.
Well thank you, I, I was aware
that, these trends, they're important, though.
They really are.
I mean, they're it's, I heard this, at a conference one time,
and somebody said relevance is revenue.
And that one hit home for me, and then they follow it up with Profit is Power.
And I was like, I mean, it's got like, you know, but relevance and revenue, man.
The tie in on those two things.
I just thought that was so slick.
And, it is so true.
You got to be relevant to your customers.
Absolutely.
Once you stop being relevant, that's when they stop coming back.
Yeah,
well, I'm excited for your hot take, because I'm sure you have one.
We always like to wrap up with a hot take on the industry.
Something you love, something you hate,
what you got.
Something I love is that we do sell food, but ultimately it's about people.
And so just connecting with people, I just love that.
I mean, people in all walks of life.
As I mentioned earlier, I started my career in it in tech and it's
just such an insular little circle. It's tough to break out.
You're trying to meet the same people all the time.
You're in this little echo chamber and with with the restaurant business.
I meet all different types of people and, I love that.
The thing I,
which is a hot take.
I don't like tipping.
We don't take that.
Now we are fast casual.
I know other fast casual brands take to, I just don't believe in it.
As, like, philosophically,
ethically, in practice and anything about it.
I just think we should get rid of tips.
So at the end of the podcast, when I turn the screen around
and you just got the three off, you're just going to ignore that?
Yeah.
Enrich Yours probably starts at 23% and goes to 28%.
Those of you only two and a half, 22.5.
Yeah. Like to give that option.
And I know I like that.
I mean it's definitely,
that it's you know, I mean, they each their own, right.
I just, I, we do a lot of travel.
My parents were born in India.
I was born here.
If you go to India and you're trying to people, they take it like it's an insult.
They're like, what do you mean? Like, you know, you think I don't?
I don't do a good job. You think I can't support my family?
Like it's the complete opposite? Yeah.
And a lot of the world.
Yeah, is like that.
You know, if you go to Europe, I mean, if you come off like an American,
they know to take your tip
because they know you're talking about you don't mean anything by it.
But if you're from anywhere else in the world, they will take it
like an insult.
They'll be like, look, I'm a professional server, I.
This is what I do.
I don't need your, like, pity money.
That's kind of the way they see it.
And here, I mean, they have to.
I get it because, like, you're not paid a living wage, right?
So, like, you are 100% dependent on tips, but I think at some points
we're just going to have to absorb the fact that in order
to be a scalable, sustainable business, we do have to pay living wages.
And we cannot
allow people to just like, live on tips at the complete mercy of our customers
because it's not up to them and they are not in business.
We are like having an app in 2012.
I think you are once again ahead of the curve on
it's coming.
I love it, but why are you leading the charge?
I'm here for it. Yeah, yeah. Awesome.
Cool. Okay.
Thank you so much for joining us.
And everything that you do to support restaurant 365.
Love seeing you at all the events and getting to talk to you.
And I feel like every time I talk to you,
I walk away feeling like a little bit smarter.
So if you want to feel smarter, you can find PK on LinkedIn and Balance
girls restaurants across Ohio and a balanced grill.com.
And of course, on all social media platforms, look for those sexy slo
mo videos.
Yes, and Instagrammable sando egg sandwiches coming soon.
And of course, thank you for joining us. We hope you have a great day,
a great shift, a profitable Monday, wherever you are.
And don't forget to like and subscribe to the show
wherever you're listening or watching.
It's no small ass there. We really appreciate that.
It really does help us to continue to provide this content.
And of course, you can find us on YouTube, Spotify, Apple Podcasts,
and wherever else you might be listening.
And you can also follow us on, on social media.
We're on LinkedIn. We're on Instagram as well. We're on Facebook.
We're not posting, you know, sexy photos on Instagram speaking.
But we'll get there one day.
You can always visit us at rest of the food out of me. Yes
yes, yes, just a peek PK.
Thanks. This was a this was an awesome conversation.
Always great to talk to you. Thanks for having me on guys. Yeah.
Thank you for joining us.
Today.