To build a great business, it takes not only a clear vision but a relentless pursuit to stay ahead of your competition.
As restaurateurs, we are competitive by nature, and to play our best game, we need to always strive to stay fresh, innovate and dazzle our guests.
In this week’s episode of the Restaurant Rockstars Podcast, I’m speaking with Mark Setterington, the Co-Founder and CEO of Island Fin Poke Co. Mark is a 35-year industry veteran who has managed some of the world’s leading restaurant brands.
As you listen, you’ll see what it takes to build a unique innovative brand and unified culture while targeting rapid growth.
Listen as Mark shares:
- The meaning of the Hawaiian term “Ohana” and company culture that is not only embraced, but shared and practiced company wide
- How to create a universal Vibe that translates the brand no matter the location
- Launching a new concept where the food and experience sells itself
- The guest service experience and how it is consistently delivered
- Repeat business and what brings them back for more
- The importance of keeping operations simple and efficient
And of course, one man’s journey that brings intuition and broad experience to bear on founding and operating a dynamic concept.
Listen on, then go out there and Rock YOUR Restaurant!
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Unknown Speaker 0:00
Give me a couple of for instances we don’t have trash cans in the dining room when you go down the line. And Seth is building your bowl. When you get to the end of the line my team members run your bowl to a table. If you didn’t get a drink, we bring you a glass of water, we pre bust your table. Every guest that sits in the dining room gets a Dole soft serve sample at the end of their meal. We come over we bust your table, we throw it away in the trash cans that are not in the dining room because we want you to come in like you’re a guest at our house.
Roger Beaudoin 0:35
This week’s episode is all about innovation, staying relevant and creating a dynamic concept that is based on a very strong company culture. You’re not gonna want to miss this episode. And if you haven’t already, head on over to restaurant rockstars.com forward slash profits. Because I’m giving away three ways you are killing your restaurant profits, immediately actionable information that may transform your bottom line now, on with the episode.
You’re tuned in to the restaurant rockstars podcast powerful ideas to rock your restaurant, here’s your host Roger Beaudoin.
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Roger Beaudoin 3:25
Hey everyone, it’s the restaurant rockstars podcast with me today Mr. Mark Setterington he is the co founder and CEO of a fast growing concept. It is called Island fin poke a welcome to the show Mark. How are you today?
Unknown Speaker 3:38
I’m doing great. Thanks for having me.
Roger Beaudoin 3:40
Awesome. So I am familiar with Poke, I have not yet tried it. I’m interested to try it but very first thing let’s talk about what it is what exactly is okay?
Unknown Speaker 3:51
Well, the word itself is a Hawaiian, it’s a verb, though, you know means to slice or to cut. Oh, gotcha. So it would be you know where it came from was the fishermen would go out and they would catch fish and basically the okay was the scraps, and they would slice it or they would cut it up and mix it with a little soy sauce or sesame oil and somehow we onions and green onions and that’s what they would snack on when they were when they were fishing and it just became you know what it is today. And for us, you know ours is mainly in pokey. So what I mean there is if you go to Hawaii, you go to the grocery store you’re buying, you know they’ll have 8, 10, 12 Different kinds of pre marinated fish. You buy it by the pound. You eat it out of the tub with chopsticks. Well, that really won’t fly on the mainland because we like choices. So to describe ours would be saying we are we’re like Chipotle, but different. So you come in you walk down the line you choose your base why? At rice, brown rice spring mix, we have eight proteins, five mixing vegetables that we have five House made gluten free marinating sauces, you know, another 15 to 20, toppings, five more housemade, finishing sauce things, fishing sauces. And then we have crispy toppings and and you just sit down and it’s delicious.
Roger Beaudoin 5:24
So it’s a customized sort of a curated experience where similar. You mentioned the chipotle concept. Everyone knows what that’s about. But you’re literally picking your fish and picking your toppings and picking your sauces and your marinates and all this stuff. And then you end up with is it all in bowl form? Is it served any other way?
Unknown Speaker 5:42
Nope. Just in bowls, we can. We know exactly who we are. Yeah. And we do that. And we do it very well. We’re just poker tables. That’s it.
Roger Beaudoin 5:52
Right on. So you mentioned the origins and being out on the fishing boat. Perhaps you talked about cutting and fish pieces. That tells me that it’s similar to sushi in that it is a raw fish. Is it still for the mainland? Raw fish? Is it prepared in any way?
Unknown Speaker 6:09
No, we have. So we have tuna, spicy tuna and salmon that are all wrong? Yes. And for us, we have chicken that’s cooked. We have octopus that cook we have shrimp that is to Vijay. Yes, we have tofu. And then of course we have spam because well, you got to have spam.
Roger Beaudoin 6:26
So okay, that’s an eclectic mix. But it’s a diverse mix. So people can literally custom craft their bowl with a variety of proteins, fish, sort of the traditional, but now you’ve added other things because we are of course in America and people like choices like you said, awesome. So now we know it. Okay, is let’s talk about your backstory and hospitality and how did you come to co found and lead this organization so you can take us back wherever you are. It really started
Unknown Speaker 6:51
for you. So my first job at 16 years old, I was a dishwasher at an alias Brothers Big Boy in Grand Rapids, Michigan. I was a dishwasher for about 30 days. And I got promoted to cook. That was the first high school kid that franchise only owner had ever promoted to cook. And I thought it was the greatest thing. So I graduated high school, I went to Michigan State University. And I put myself through college, working in restaurants and working in the cafeteria. So I came out of college debt free. Probably couldn’t have had better grades. But coming out of college debt free was important to me. So my degree was in purchasing. But all of my experience was in restaurants. So restaurants is where I graduated gravitated to my first real out of college job was at a company called the Ground Round.
Roger Beaudoin 7:42
I’m familiar with that. I used to hang out there when I was in college. We had 115 minutes down the street, throw the peanut shells on the floor and all that kind of stuff. Yeah, gotcha. Keep going. Remember it?
Unknown Speaker 7:53
Yep. That was awesome. And then I you know, I worked my way around I you know, spend time at you know, Applebee’s back when Applebee’s was super small. And, you know, Ruby Tuesday’s Darden with Bahama breeze, so all very corporate jobs. So the last 11 years pre Island fan, I was in Las Vegas, working for big companies Margaritaville strip, which was, you know, huge. 40 plus million in volume and 27,000 square feet just enormous. The
Roger Beaudoin 8:29
Jimmy Buffett concept Margaritaville. Oh, yeah, gotcha. I think I you know, I went to a Margaritaville on Maui long time ago. So I remember that concept as well. Awesome. You’ve got an extensive experience, but keep going.
Unknown Speaker 8:43
So when we decided to do this, we decided to do something for ourselves. And it was obviously going to be a restaurant because it’s what I know. And it also was going to be easy. Because this was about a lifestyle, not about buying a job. Right? I mean, if I’m going to have a job, and just worry about a paycheck, then I’ll just work as a W two team member for for another company. So this was about lifestyle. But what we did when we started it is we built it as a company. So you know, prep lists and checklists and everything. Even when we had won that one, that first restaurant in winter Springs, Florida. When I remember the first time our department guy came in, he came in and he was looking at our, you know, our prep lists and our temperature checks and all that stuff. And he’s like, where did you work before? Because he was expected Mom and Pop. And we told him Dart and he’s like, okay, I get it. So, when we decided to start franchising, we opened up first restaurant, march 2017. We decided late 17 to start franchising. So we began the process sf creating the FTD. We sold our first franchise in September of 18. We opened our first franchise, July 10 of 2019. And now we’re up to 24. restaurants open, and we just closed a two unit deal yesterday. So we’re up to 56 locations sold.
Roger Beaudoin 10:22
Nice. Wow, that’s, that’s amazing. Are there company owned stores or all franchise models?
Unknown Speaker 10:28
We have we have one company store that’s in Lake Nona. Yeah. And that’s where we do all of our, you know, training, of course, any kind of research and development for menu items, etc.
Roger Beaudoin 10:38
Okay, what’s the average square footage of a store?
Unknown Speaker 10:42
Our smallest restaurant is 11 175 square feet. Our biggest restaurant is 1734. And that’s Lake Nona. Our sweet spot is 12 to 1500 square feet.
Roger Beaudoin 10:52
Right. And it’s all fast, casual quick service. Yep. Yeah. And we already described the concept of how you go down the line and pick your obviously your items. That’s fantastic. How would you describe the vibe and the ambiance and the feel of it, bring us to walking in the door, and what you hope your guests will experience and take away from it in addition to the food, which is really why they’re there. But what is the whole? You know, what’s the vibe that really gets people say, Hey, this is cool. I want to come back. I want to tell people I want to pull up my camera phone, the social media stuff. Tell us about how you design that. And if it’s bringing the whole Hawaiian culture thing to life, you know, what is it?
Unknown Speaker 11:32
It Well, we say it’s a five star b check. So our brand speed check the time you walk in. Yeah, everything is experiential. We have a custom channel, a custom music channel for Island pink, okay. And it’s, you know, Jack Johnson and the like, so it sends you to the islands. Every restaurant has a TV. And we’re playing surf idioms. And it’s, you know, mostly competitions in Hawaii. So again, transported to the island, every guest that walks in the door, gets a warm welcome. Every guest gets a fond farewell on their way out. Every restaurant has a four foot sign that hangs on the wall that says no friends, just family ohana. And it’s not about, you know, cultural appropriation. Right. What it’s about is a respect for the culture of Hawaii. And for I spent nine weeks in Hawaii opening Jimmy Buffett’s at the Beachcomber. And what I fell in love with in Hawaii was the culture because you’re not greeted with a handshake, right? It is always a warm welcome and a hug. It’s not a handshake. And hi, how are you today? It’s very, it’s warm. It’s inviting. It’s family. And that’s how we treat you as a guest. So everything we do is experience. So we don’t want anything about Island fan to be transactional Chipotle. God love them. I’d love to have 1000 restaurants. But Chipotle is transactional. It’s about the burrito. It’s about the food you go there, you get your food, you leave you don’t think twice about an island fitness like that. Because when you come in, you’re coming in to see Taylor or Zoe, or SAP or your favorite team member. And a lot of times these team members remember what you eat, just like your favorite bartender at the pub, right? So it really makes you have a hard choice when you’re deciding where to go and eat.
Roger Beaudoin 13:41
That’s a powerful concept. You mentioned the word ohana. So please first explain what that means. I think it’s got a relation to family, and that Hawaiian culture of greeting and hugging and being part of something immediately. So I want you to define ohana. And tell us about that. But then also, there’s a huge training and onboarding aspect to obviously transform your staff in all the locations to provide that Ohana feeling a consistent experience and really care about the end experience of your guests. So take us through that whole concept
Unknown Speaker 14:15
of Ohana is is all about family. And it’s not blood family. It’s your extended family. Okay. And in Hawaii. I mean, you’re gonna you have people that are family that are not blood related. And that’s how we treat people. So when we’re going through the franchise process, right when you come down to Florida, you’ve gone through the sales process. You come to Orlando, you spend time in Lake Nona for your discovery day. As much as you are they’re interviewing us to see if you want to buy the franchise. We’re doing the same to you. And it’s about do we want to do we want to sign this 10 year deal with you Do we think that we could break bread with you over the next 10 years, and that’s what it comes to we have to get that personality trait from you. Because if you don’t treat your team members like that, and your vendors like that, etc. Your team members aren’t going to treat your guests like that. And it’ll show the franchisees that are wildly successful, like Jim and Marilyn way in Worcester, Massachusetts, Jeff Garrity in Sarasota. Jeff and Brenda Sproat, they understand this. And it’s very evident how they take care of the guests in their restaurant. Right. So it’s, it’s culture and it comes from, like, I worked for Bahama breeze with Darden and tart and being such a huge company and you hear, you know, military and whatever. Well, when I was at Bahama breeze, the thing that made Bahama breeze great was it was a culturally driven restaurant. And every decision was based on this little book that we had called the bottle breezeway, in every decision you made as a manager, as a team member, as a president of the company, had to be based in the Bahama breeze way so that everything stayed within the guardrails of the culture of the restaurant. And yes, I want Bahama Island from Polk a to feel because without the culture, we’re just like everybody else, you know, and you don’t hear anyone say that about Chick fil A. Right? You go to Chick fil A? And it’s Yes, sir. No, sir. My pleasure. And that’s how we want people to think of us.
Roger Beaudoin 16:47
Okay, so we’re talking about a culture of a restaurant that comes from a culture based on ohana. And I’m totally getting this whole family extended family thing. And that that is a beautiful thing, because that is a competitive advantage. And that is true caring and attentive service and treating people even if they’re a first time visitor as if they were a regular or loyal customer. And then you’re mentioning that your people are getting to know people and what they eat and all that sort of thing similar to like you said, the bar or pub experience, I think that unto itself, is a really powerful thing. So now that culture is so deeply ingrained, it’s practiced on a daily basis. And it’s not just some mission statement that hangs on the wall that everybody forgets about. And occasionally you’ll look at it. And I’m like, Yeah, whatever. This is actually practice, because it’s based in the culture of island fin and what you’re all about and what your goals are, and what you what the end result you want your guests to experience, and then how that leads to positive word of mouth and the reviews and all that stuff. That’s great. Let’s talk about Poki as, as a as a dining experience, and how well that is being received and how that message is being disseminated to guests who may have never tried it much like myself, how are you getting word out? And how you know how our guests receding? Once they first experienced it? Are they immediately wiped? Wow, is it a certain target customer that is a health conscious person that’s for, you know, non processed non fried foods that are really good for you, in addition to enjoying the experience of islands, then?
Unknown Speaker 18:19
Well, I think what happened was, we only had a couple of restaurants open pre pandemic. And honestly, I feel like we were a little bit ahead of our time, because it is healthy. And what the pandemic showed people is that you really need to start thinking about what you’re putting in your body. So we were a little ahead of the curve. So one of the things that we really preach to the franchisees is through drops. So what we mean by that is, three, four days a week, we take five ounce samples, and five ounce doll soft serves. And we go to local businesses, and we introduce ourselves and who we are and where we are. And we take a chicken bowl, a salmon bowl, or tuneable, a spicy tuna bowl, so they get to taste a variety of our food and our sauces and our topics. And what we tell the franchisees is, realistically, once we put our food in your mouth, we own you. And I know that sounds cocky, but our foods that good. So if legitimately when you taste the food, and it’s it’s flavorful, it’s colorful, there are so many different textures. It’s amazing what’s going on in your mouth. And every time we do food drops we get guests in. And once a guest comes in, you know 80 85% of the time they turn into regulars. So you don’t generally come into an island and one time is there
Roger Beaudoin 19:58
a business to business component out there where your franchisees can then do catering does this product travel? Well? Can they do lunches at doctors offices and all that kind of stuff is an additional profit center is that happening now
Unknown Speaker 20:10
100%, we, you know, in the franchisees that embrace it, are doing very well with it St. Pete, the franchisee, and St. Pete has, you know, pharmaceutical rep, that’s a regular now, and every, every other week, every third week, she’s doing 30 bolts for a doctor’s office. So these things work, we’ve got a franchisee, who has an in with, with Chase. And he does one of their corporate offices, and sells many bowls, you know, to the tune of a couple $1,000 A couple times a month. So there’s a lot of catering opportunity, that we’re just scratching the surface. You know, people are tired of Panera or the same old same old that these pharmaceutical reps and whatnot are bringing you so Island fitness, a great change of pace, and people are really falling in love with it.
Roger Beaudoin 21:05
Would you say that there is a very well defined guest demographic in terms of age? Is it all over the place? Is it masterly appealing to all age groups?
Unknown Speaker 21:15
It’s funny, because when we started this, you’re thinking millennials and skewing female and whatever. But if you came and sat in a restaurant, you would be amazed you see, six year old kids eating kids bowls with raw fish, not chicken, you see, I’ve got a couple that come into Lake Nona. And, you know, they’re 70 plus years old, and we’re their gate spot. And they just, they love it. And it’s about, you know, they’re not elderly and concerned with eating raw fish because they trust the quality of the product that we’re bringing in. And we don’t sacrifice on product quality.
Roger Beaudoin 21:57
Right? So I’m getting the sense. This is clearly a very unique concept that stands apart in so many different ways. But do you and you don’t have to name any names of other competitors, but who do you or what do you consider to be competition for poker and your concept Island fin?
Unknown Speaker 22:16
For us? It’s you know me fast, casual. Okay, because we’re, we’re reasonably priced. I mean, you know, if you go to McDonald’s right now, and get a value meal, it’s 10 bucks. So a three scoop. Bowl at Island famous 14. And you’re not putting, you know, processed, right? garbage food in your mouth.
Roger Beaudoin 22:40
Yeah. So I’m always on all the other stuff that goes into all those other fast casual or fast food restaurants that obviously lead to all those problems with, you know, obesity, and, and addictions and all that kind of stuff. But yeah, you’re you’re offering a very healthy alternative, it is all natural, which is, which is a wonderful thing. And let’s talk about the pandemic because you said perhaps the timing was ahead of its curve, and then you launched and then all of a sudden, the pandemic hit yet you were were very uniquely positioned with a fast casual concept. But there still had to be some pivots. And you had franchise, franchise operators that are franchisees, I should say, within your fold that everything went sideways. And then you guys had to quickly damage control and come up with a plan for the future. And what did that look like? And was it complicated and less so than a full serve sit down restaurant that had to close entirely? You know, tell me about that. What what, what was that? What was that transition like for you? And how quickly did it recover? And then I want to talk about the phenomenal growth you’ve had, because literally sales are exploding here.
Unknown Speaker 23:46
So the beauty was, we have a great partnership with our POS company toast. And back then our toast wrap was local. And so what happened was when everybody got shut down to takeout and delivery, only Justin sent me a text message and he said, what restaurant are you in? I said, Right? No, no. He said, Do you want curbside pickup for all your restaurants? I’m like, hell yes. Right. 10 minutes later, Justin was in my restaurant. And 10 minutes after Justin got to my restaurant, curbside pickup was turned on for all of our locations. That was it boom, fast. It says something about who our partners are, and how our partners feel about our business. And that was the pivot. So we only had four restaurants that had any runway pre pandemic, and that was Mr. Wesley Chapel, Lake Nona and winter springs. So those four restaurants actually did very well. During the lockdown And I say that because during the lockdown, what people would do is they would bypass the big corporations. And they would buy from their local restaurants. And that’s where we tell our franchisees that you need to be involved in the community because they need to look at your island fan, as a neighborhood join, right. And when your guests feel like Island finish the neighborhood join, you’re going to be successful, because people are really conscious of where they’re spending money. For sure, right. And they want to support the little guy. So we had four restaurants opened pre pandemic, we ended 2020. Oh, man, we probably opened eight restaurants that year. And now we’re up to we just opened our 24th and we’ll open another three to six this year. So it’s the great thing is that 2022? You know, supply chain and inflation. On the side, this is our first real year of normalcy, if you will, yes. And we’re seeing it. In the year over year sales as a company, we’re 40%, same store sales, growth in general, were 105% year over year, counting the restaurants that were not open last year. It’s just It is phenomenal. We’re, we’re growing and we’re going to continue to grow.
Roger Beaudoin 26:41
So different food concepts in different cuisines obviously have different profit margins attached to them, can you, you know, state what the profit margin a typical profit margin is in the menu that you’re serving for the average operator.
Unknown Speaker 26:57
Our cost of goods, you know, varies anywhere, we have restaurants that are running at 27%. Okay, and we have restaurants that are in the 35%. It all it all comes down to the operator. You know, I can’t even say that my restaurant is the best because we’re not like known as running at 29.5 year to date. And I have four restaurants that are running better than me. So it’s a little all over the board. And what I mean by that is, if you’re a franchisee, and you embrace the process, poor testing, the Ws are the way that we purchase, you’re going to run good cost of goods. And if you stray, or don’t want to take advantage of the tools that we have in place, you’re not going to do well. And every one of those 6% that you’re running high in food costs is money out of your pocket.
Roger Beaudoin 27:46
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Roger Beaudoin 29:12
You mentioned the importance of partners, suppliers, vendors, that sort of thing and the loyalty that comes with the service that obviously you provide them with great business and they obviously in turn provide you with great product and service systems, that sort of thing. You mentioned a great relationship with toast are you running into obviously there’s economies of scale with with large scale purchasing. And obviously you’ve got vendor relationships for your food and beverage products and all that sort of thing. Have you run into any problems with supply chain issues and rising prices and how have you counteracted that has it been somewhat insulated because of your volume prices have still risen Have you had to raise individual store prices? Take us through that whole thing.
Unknown Speaker 29:53
It’s been it’s been all over the board. I mean, the supply chain is what it is right now. Yeah, we’re We are blessed to have, we have a great partner for our salmon. So we have contract pricing. And we have a great partner for our tuna. So we have contract pricing, and those who are too busy biggest expense items, but you’re talking about everything. There’s not one item that hasn’t increased in the last year. So finally, we took a $1 price increase up to $14 for most restaurants in April on April 1. So that’s how you know we’ve done it. But it’s, you know, not not a single guest has complained. It’s all about making sure that that $14 is still a value. And if you look at our bowls on social media, that’s what our bowls look like. I know a lot of restaurants have taken all of the price increases, they have they can. And now what they’re doing is they’re reducing portions on plants. And we’re not going to do that. Our portions are what they are. Three scoops or three scoops, it’s you know, three and a half to four ounces of protein and all the other toppings are included. And we don’t we’re not going to nickel and dime you a lot of potay places are, you know, you get three or four toppings and after that there’s a charge. And for us, every topping is included except for our premium toppings of Cerini, masago and avocado. So other than that, if you want 20 toppings on your bowl, get 20 toppings on your bowl, we’re we’re more than happy to serve you.
Roger Beaudoin 31:38
So it’s been a benefit to have extensive variety and choices. In your locations. Have there ever been a time where the supply chain literally limited your availability of certain items like what happens if suddenly tuna you just can’t get it on the volume you need it has that happened to any extent or
Unknown Speaker 31:56
it’s been it’s there have been a couple of weeks where it was sketchy, we’ve still been able to get it. But the supply has picked back up. So our partnership with Philips, every day produce Watermans reserve for us. So every ounce of fish under this label that they produce comes to Island from Pokey, so we’re lucky. Now there’s been times when we can’t get gluten free Masako, you just run without gluten free masago for a week or two. But it’s never been an issue where we have five holes on the Mega top, it’s, you know, you might struggle with one ingredient for a week or two ingredients for a week. But never, you’re out of four or five, six things at a time.
Roger Beaudoin 32:45
Let’s talk about service, in terms of what guests expect. And in a fast casual concept, especially when you’re busy, you have limited time to make suggestions really interact with guests yet you are also stating that your staff are brand ambassadors for your business and that people are asking for them by name. Are there certain things that they do that they as a natural course of providing that ohana, that they can touch a guest in a personal way in a short period of time? Build a relationship, serve them great product and then get them back? Is it all about the personality? Is there more to it than that? Like how do you make that connection in a short period of time with a new customer that walks in the door that you suddenly convert? You mentioned the food does it the food is selling itself and people are coming back because of the food. But it’s this magical combination of your people and your food equals success. Right?
Unknown Speaker 33:39
Well give you a couple of instances we don’t have trash cans in the dining room. So when you go down the line, and Seth is building your bowl, when you get to the end of the line, my team members run your bowl to a table. Well, if you didn’t get a drink, we bring you a glass of water. We pre butcher table, every guest that sits in the dining room gets a doll softserve sample at the end of their meal. Can we come over we bust your table, we throw it away in the trash cans that are not in the dining room because we want you to come in, like you’re a guest at our house. If you come to my house, you’re not carrying your dishes to the kitchen. Right? I’m taking that take that that dish from you. So as the guests go down the line, it’s never you know, you go to restaurants that are set up like this and that the team members never look up. It’s eye contact. It’s a smile on their face and it’s engaging you down the line and a description of the food and the description of the process and a description of the sauces. So what Taylor tells you when she comes to train your team is you have 15 feet to form a relationship the MACD the service line is 15 feet long, and we can’t get serious and our kids, these kids make tips, you know, I know in Lake Nona that kids can make anywhere from $30 in cash, up to I’ve seen kids make $120 in tips on a shift. And the guests are just blown away with the service. And that’s what they do. That’s why I’m a very bad person to go out to eat with. Because right now, full service restaurants are using COVID in staffing as an excuse for poor performance. Yes,
Roger Beaudoin 35:36
Unknown Speaker 35:37
It’s not acceptable, because I’m still coming to your restaurant and spending my money. And I expect that I’m going to get the experience that I deserve. And that’s what we don’t do an island thing. We don’t use staffing as an excuse, we don’t have to, because it’s only ever, two or three people on a shift. And the way that we’re set up the efficiencies of this restaurant, two or three people are able to execute the model and give this level of service
Roger Beaudoin 36:10
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Roger Beaudoin 36:42
Okay, that’s a wonderful point. Now, everyone works for a paycheck. And obviously, restaurants are a competitive industry, there’s been a huge obviously, exodus from this industry, lots of restaurants are struggling with this labor crisis thing. However, besides offering people reasonable wages and incentives, and all that kind of stuff, it’s really the culture of the restaurant where people fit. And they say, Wow, I can make a difference here. I like the people I’m working with here. And that counts, in some cases for more than what they’re earning. And the gratuity opportunity is on top of that as a bonus, but I’m getting that sense. It’s as a real advantage in the way your business is operated, and how fun it is, perhaps, to work there, and how it’s so much fun to interact with the guests that walk through the door and see them having a great experience and enjoying the food and you feel like you’re part of something bigger than yourself. And it’s more than just the paycheck. Would you say that’s true.
Unknown Speaker 37:35
It’s a fact that we’ve had our best success with high school kids, that it’s their first job. Nice, right. And I say this because, you know, during the school year, we close at nine o’clock, you’re out by 930. And you can still go home and do homework and you’re not up till midnight. Want to. You don’t smell like a french fry. So you can change your clothes after work and go out with your friends. Right? So I like to pick kids up when they’re sophomores or juniors so that I can get them for two or three years. You know, I have 1718 year old kids doing prep in my restaurant, making the sauces opening the restaurant counting the say, and they like to have the the the challenge, or be asked to do more than just the normal building bowls and whatnot. They like to have the authority to open up the safe and count the money. Yeah,
Roger Beaudoin 38:39
I remember that feeling when you’re young, and you’re given that kind of responsibility. You take it seriously and you feel like you’ve you know, you’ve you’ve earned that sense of responsibility. 100% Yeah. And that’s pride involved
Unknown Speaker 38:50
there. Yep. Great. Yep.
Roger Beaudoin 38:54
That’s super, let’s go back to the gratuity because some of these people are making really good money. Now, interestingly, if you were to go back in time, you know, even now, okay, so full serve restaurants, obviously provide the whole dining experience. And obviously, they serve you and all that kind of stuff. You’re providing the whole cleanup experience, which is wonderful, and allowing people to be guests in your home that that goes a long way. What I’m saying is fast casual places in the last couple of years have added that gratuity line to a guest check. Or even if you’re on a square point of sale, or whatever it is, and you’re signing. Would you like to do 15% 18 20% Even though it’s a takeout experience now that’s the new normal? Is it? Is it automatic? Is it encouraged? Is it not encouraged? People are doing this on their own? Are they leaving people really good gratuities like 18 20% Are you pooling amongst your you know your your service people behind the counter like how does that whole thing work? Is it all with the people behind the scenes that are actually preparing the will? The whole line really right you got cashier at the end, we got a whole line of people putting the bowls together,
Unknown Speaker 40:03
two or three people on the shift. Yeah, everybody in the restaurant does everything, gosh is restock everything. So they all have the hourly team members, Jeff. So as an example, we’ll have first time guests come in, go down the line, pay for their bowl, not leave a tip, because it’s fast food. And then Seth will run the food to the table. Seth will go back, after a couple of bites, Seth will come out, check on them, see if they need a refill, give them $1 softserve sample go back, they finished their meal, sap comes out free buses, their table and they’re just like looking around, like, what’s going on? They’re being served. Yeah, you will watch people get in their wallet, get a couple of bucks, and come in and put cash in the tip jar. Because it’s not a it’s not expected. But people are tipping based on the level of service that they’re getting. And I know when Lake Nona and others, I can tell you the credit card, the credit card percent is anywhere from 10 to 13%. Which for fast. I mean, my kids are luck, right? It’s like what the heck, man. So it’s not expected, but the kids definitely earn it.
Roger Beaudoin 41:26
Let’s talk about locations and franchisees coming into the fold. First of all, what are you looking for in terms of experience and business acumen and that sort of thing. Versus the training that you provide you recognize potential in someone, they may have never been in the restaurant business before or even owned a business, you can just tell in your first round of interviews that these people have the commitment, they know that they can follow a formula. They’re intelligent people, and they’ve got a dream, and they’re gonna follow you to the end of the earth. I mean, there’s a wide range of people that you’re coming in contact with. So one, how do you evaluate people? And what are you looking for? And then to? Are you looking across the country in any location, and then you you fly there, and you scout out the neighborhood and the geo real estate people on your team that are picking locations or helping them negotiate leases, like, take us through that whole process,
Unknown Speaker 42:23
if you would? Well, we’re very opportunistic. So the development team, you know, they do a lot of outreach to find franchisees, but we’re, I mean, we’re open from Worcester, Massachusetts, to Las Vegas. So it’s what what we really want in a franchisee is there’s, there’s personality involved. Because if you’re real, if you’re not extroverted, you’re not going to go out and do what’s necessarily necessary in the community. And if you don’t, you won’t be successful. If we are not Chick fil A, we are not, you know, put the building in the middle of a cornfield, and you’re busy, you have to work for it, you have to get out of the community, and show them who you are, once you decide and we decide. I mean, we have two different architects that we use nationwide, we have a construction company that we use nationwide, we have a partnership with CBRE, which is the largest commercial real estate company in the country. I’m familiar with that. They work our site selection for us. And they know, you know what our deal breakers are. They look for X amount of population density, traffic, et cetera, et cetera, et cetera. So we don’t strike out on real estate. You know, it’s been surprisingly for you know, people complain about the economy. This year has been really interesting in the fact that there’s a lot of people fighting for that same 12 to 1500 square feet. So you as a franchisee have to be ready to pull the trigger. Because if you’re not, there’s two other companies that are looking tomorrow that are going to be and we’re all looking for that same sweet spot because no one wants a three or 4000 square foot restaurant anymore. No one wants to pay that kind of overhead for wasted space. I mean, we are 60% takeout. So we want to be where there’s hospitals, we want to be where there’s a good amount of data and population for business. You know, if there’s a university like we have in Worcester, Massachusetts, and you know, we’re blocks away in Salt Lake City from the University of Utah, etc. We know exactly what we want. CBRE knows exactly what we want, and we just let the experts do what they do.
Roger Beaudoin 44:50
Fantastic. So let’s go back to the experience or the acumen of people are you getting a highly qualified potential operator, for the most part
Unknown Speaker 45:00
It’s it’s much different now than it was, you know, when we started. Yeah, we’re getting a lot more sophisticated investor, people that are lifetime business people that are looking to, you know, the pandemic has changed the way people think about life. Right. And being an office grown and working from home, and now they want to do a legacy thing for their children. And we’re seeing a lot of that with, like the Blackwell family in Arizona, it’s all about their son, Brett, and doing the legacy thing for him. I love to know, the McNulty family and St. Pete. You know, Matt is on the road, man 50% of the month for his job. And he’s got, you know, these beautiful twin boys. And this is a legacy thing that he wants to borrow for his set himself. So he’s not missing out on, you know, the twins lives. And that it makes a difference between because life is too short. Right? And Tomorrow is not promised anybody and these guys these lifetime, you know, million mile airline mile travelers are starting to think about what do I got to do to see, you know, Stephanie, my wife and my twin boys on a more regular basis. So
Roger Beaudoin 46:30
do you have any type of quote is not the word or preference isn’t necessarily the word. But there are a lot of franchise companies out there that really have favor multi unit operators, people that aren’t just going to start one store, but people that are going to five or 10 stores. That would be my first question. Doesn’t matter to Island Finn, if you have ambitions to be a multi unit operator or just a single location operator.
Unknown Speaker 46:58
You know, it’s we sign singles we sign you know, doubles, Matt McNulty that I just mentioned is he’s the area rep for the the west coast of Florida. So he’ll develop 20 restaurants over there as kind of a sub franchisor the same thing with with Steve kretsch in Miami. So it makes it much easier on me, as people open multiple units. Jeff and Brenda Sproat just opened their second unit in Trinity, Jim way in Worcester, is under construction on his second unit. Matt McNulty is looking for his second unit, those things, because there’s a learning curve with that first restaurant, as people open second locations and third locations, it makes my job much easier.
Roger Beaudoin 47:51
So the magic question that that logically follows that one is, the more stores there are the greater the guest brand recognition, the greater the whole concept works for the individual operator versus the multi unit operator. And based on the location, whether it’s a metropolitan area or a large population center, is there a certain one exclusive territory where within so many miles, there can or can’t be another one operated by a different operator? Is there a proven formula that says within so many miles, we can have so many of these because business brings more business and brings more recognition to the to the you know, to the chain, you know, unto itself? What’s that formula look like? Or what’s your approach to it?
Unknown Speaker 48:41
But yeah, I mean, in the FTD, it’s 100,000 population or three miles. Okay, three, and that would change. I mean, we were in New York City two weeks ago, last week, last weekend, looking at spaces, and the decision is, do I want to build a corporate store up there? Because I know that we would just crush it? Or do I want to be self selfish, and do a franchise for Mark center and, and, quite frankly, that’s, you know, kind of what we’re looking at my daughter’s fell in love with New York City. CBRE found me some homeruns spots. So now I just have to figure out, do I have the time to do it? So and in New York, I mean, you could have Island fins, you know, three blocks from each other.
Roger Beaudoin 49:33
Mark, you’ve given us some tremendous insights into your operational philosophies of this business. We’ve talked about unique competitive advantages. We talked about food that literally sells itself we talked about Ohana culture, magic formula here, four secrets to success. I think you’ve provided tremendous value to our audience today. And for that I say thank you very much.
Oh, I appreciate you having me. This was great.
Roger Beaudoin 49:57
That was the restaurant rockstars podcast. I Thank my audience for tuning in. We wish everyone to stay well. Thanks Mark for being with us can’t Island fin poke a? You know, you brought me to the North Shore of Oahu in this episode and I’m writing that big wave right to the beach where I can’t wait to get a poke a bowl. So thanks again for being with us. Thanks also to the sponsors of this week’s episode pop menu Smithfield culinary sparkplug serve the restaurant training app at SRVNow.com. And the restaurant rockstars Academy. Thanks for being with us. Can’t wait to see you next time. Stay tuned and stay well.
Roger Beaudoin 50:37
People go to restaurants for lots of reasons. What the customer doesn’t know is the 1000s of details it takes to run a great restaurant. This is a high risk high failed business. It’s a treacherous road and SMART operators need a professional guide. I’m Roger. I’ve started many highly successful high profit restaurants. I’m passionate about helping other owners and managers not just succeed but knock it out of the park. You don’t just want to run a restaurant. You want to dominate your competition and create a lasting legacy. Join the academy and I’ll show you how it’s done.
Thanks for listening to the restaurant rockstars podcast for lots of great resources, head over to restaurant rockstars.com See you next time.