Welcome restaurateurs, GMs, and hospitality professionals. This is the Restaurant Rockstars Podcast. So glad you’re with me. Today, I’m speaking with a celebrated restaurateur, He is the CEO of a Chicagoland institution called Giordano’s. And they started with a single location, now have grown over 60 different locations

 Yorgo has a track record of doubling restaurant sales and profits. He has the keys to employee retention, and different successes that have made this place just not only grow, but deliver amazing experiences to guests. And if you have any interest in expanding from one location to more, We’re also going to talk about that.

 this episode has all the ins and outs of running a truly great restaurant. You’re not going to want to miss it. Speaking of doubling restaurant sales and profits, I have a mini course called the Restaurant Profit Maximizer. It is a short course of about 40 minutes, but it’ll give you immediately actionable ideas that can not only increase your sales, but also increase your profits.

So check it out at restaurantrockstars.com/ProfitMaximizer. Now on with this episodeYou’re tuned in to the Restaurant Rockstars Podcast. Powerful ideas to rock your restaurant. Here’s your host, Roger Beaudoin.

Your restaurant menu is your most important and effective marketing tool. Check out Terra Slate. Terra Slate offers waterproof, rip proof, antimicrobial menus that are easy to clean and last. Terra Slate leads the industry shipping menus to every state and over a hundred countries with a super fast one day turnaround and free overnight shipping.

Try Terra Slate. Your team will love them. Go to terraslate. com. That’s T E R R A S L A T E dot com.

I know from my experience that growing your business can mean big time logistical challenges. Like, how are we going to keep up with all these local deliveries? Believe me, when I owned restaurants, this was a challenge for me. Let Uber Direct offer you a helping hand. With Uber Direct, you take orders on your website, app, or by phone.

Then, drivers from Uber’s courier network pick them up at your place and deliver them right to your customer’s door. Sounds simple, right? Delivery just got better with Uber Direct. Learn more at uberdirect. com.

Welcome back, everyone. This is the Restaurant Rockstars podcast. So glad you’re here. And Yorgo, welcome to the show. Thank you very much for having me,

Roger.

You have an extensive background in restaurants and hospitality, and there’s just so much to talk about, so I’m really happy to have you.

You’re going to be a great guest. Can you tell us your restaurant story? I know you grew up in Greece, you’re a Greek native, you came to America, got a college education, and then somehow you found this business called hospitality. What happened next?

Yeah I will give you a brief history. I arrived in the United States in the late 70s, and I had another graduate degree from the University of Athens and I pursued and earned a master’s degree at SMU, Southern Methodist University in Dallas.

And I had some relatives that were involved in the hospitality business. That gave me an opening right after graduating to test my managerial skills and people leading skills. Those people were based in Chicago and they were all involved in in, in, in a very successful, restaurant by the name Greek Islands. It’s still in business, many decades later. So they invited me to join the management team there. I had no, no barriers to keep me in Dallas or anywhere else because I was alone in the United States and I had just finished my studies. I delved into it with very little experience in management, especially restaurant management but it was it was an opportunity that I will never ever forget because they provided me, the owners of the restaurant provided me with a broad opportunities to delve into the business and also allow myself to apply what I had learned in theory from my studies in the business.

It was a family business when I started. But as I evolved the business and I grew myself, I expanded their business, I became a managing partner, they invited me into the executive suite because of some successes that I had early on with the business, and I opened the second Greek Islands, which is still in business, many decades ago, and I had a very successful run.

It was a family business At its core and at some point, although I was at the top of the business, I was the managing director, I realized that if I were to stay, it would be the most I could expect what I already had. And I was a young person with ambition and vision of growth in a country that affords those opportunities.

I unilaterally took the opportunity to apply without responding to an ad. I applied to Let Us Entertain You Enterprises, which at the time was a fledgling young company, I’m talking about mid 80s, based in Chicago. That had only a few restaurants, but it was known at the time, and I knew that from experience because I was visiting the restaurants, as a very innovative, very cutting edge restaurant operator.

So I applied to their human resources department, but my letter was addressed to the founder of the company whose name is Richard Melman. And, I said, whatever happens. I told them in my letter I, Which was addressed to Richard Merman that I’m doing what I was doing at the time. I am of a Greek background and I wanted to involve myself in their new department, which was opening at the time, ethnic restaurants.

They had opened a Spanish restaurant by the name Café Barbariba. And they had some Italian restaurants and I said to him, or in my letter, I would like to be involved in opening a Greek restaurant because I know the culture, I’m passionate, I love food, and I want to be part of a team. I didn’t hear anything back, they didn’t even respond to my letter for several months.

And one day, six months later the phone rings and I answer and The person on the other side was a lady and said, hello, is this Yorgo? I said, yes, I am the executive assistant of Mr. Richard Melman, who wants to talk to you. Excellent. So here I had the chairman of the company that I had applied for.

Many months ago, and I had even forgotten about it, and he responded to me and said, listen, I read your letter and I would like to meet with you. So we met in one of the restaurants and the rest is history. He liked what he heard from me and he invited me to join his company. So I left the Greek islands organization, who to this day I love and I owe I’ve learned a lot in my early, from my early education and evol evolution into the business.

I left it, with really very little promise on let on the let us entertain you side because I was at the top of the management team in the company that I left, and I started at very entry level management at, let us entertain you. But I had the conviction and self discipline and passion that drove me to take that risk and believe that in a few years I could prove myself and I would You know, rise through the ranks.

So that’s a fascinating story and that’s a leap of faith, but you knew that this company was going to go places and that it was innovative and that they were going to keep pioneering different concepts and become very successful. And so many decades later, they still are with so many billion

dollar company today.

150, 160 restaurants all over the country, they’re still revered as one of the top hospitality players in the service business. Yeah, I’m I was lucky and my bet Paid off because in two years time from the day I was hired, I became a partner, that was a very elite group of people who were given carte blanche within the company to open their own concepts.

And that’s, that led me to open not only the Greek restaurant that was a fantastic experience and success, but also be involved in the development and The founding of Maggiano’s Little Italy, which is still today operating with 52 units and owned, it’s owned by Brinker International, a publicly owned company.

I’m glad you brought that up because that is one of my favorite restaurants, and I travel quite a bit speaking across the country, and every year I end up in Orlando, and across the street from my hotel is a Maggiano’s Little Italy, and I go there religiously. And I find it interesting that three years in a row, I sit, I try to sit at the bar, because it’s an interesting place, I’m by myself, and the same bartender has served me three years in a row, and he’s always there, and I say, you know what?

I sat at the same stool a year ago, and the year before that, and you’ve served me And I always, the food is great, the service is great, and that is an outstanding concept. It’s one of my favorites. It’s wonderful.

It gives me immense pleasure to hear your story about your experiences with Magianas.

It’s a great restaurant. It has, because it’s owned by a company that is publicly owned and, uses a different approach to hospitality, although they have kept a lot of the core elements that we had put together.

Yeah.

The let us entertain you core competency is an entrepreneurial spirit.

When we delve into a project, We applied ourselves from multiple, disciplines to create something unique and special. And we did not try to put it in a box, check the boxes. When a publicly owned company takes over, They try to streamline operations.

They try to simplify things. Complexity is not, it’s not something they feel comfortable with. And I, and my partners with within the let us group we loved complexity. We loved nuance. We loved, doing things that they were intense and unique and special. So as the group was sold and after it was sold, because I followed the sale of that.

Group of restaurants to bring her because they didn’t have at the time expertise in, in running a full service restaurant with complexities like carry out, delivery, banquets from scratch cooking and all that. I saw this happening, over time. And that was one reason that I pulled myself back and I did other things because that was not very representative of what I believed and I still believe.

Let me ask you a question. That leap of faith we talked about where you left a high level position that you did amazing things in terms of sales and profit increases and you dynamically drove that business forward. Did, was Lettuce entertain you aware of your skill set and your track record of achievement and, or is it just normal you’re going to start at the bottom and you’re going to prove yourself here even if you’ve proved yourself elsewhere?

Let me ask you a question.

The fact that in a very short period of time, which was the first in the history of the company at the time, a new person, a new manager went through a very speedy process from manager, GM, regional, to become a partner. I think would support an explanation along the lines that you talked about.

In other words, they recognized, something in me. Of course. To give me that kind of attention and elevate me to the, top tier of leadership within the company. When I think the pivotal moment was when I met with the founder of the company in response to my letter, an application, and I had a two hour conversation with him and we didn’t talk about restaurants really.

We talked about the philosophy of hospitality as I knew it and felt it at the time we talked about culture and people and the leadership in an organization such as diverse as Let Us Entertain. And I think that had an impact, a positive, I think, had a positive income impact in his thinking about me.

And he from a distance, after I joined the company, because I joined an organization with a lot of rules, a lot of, structure and he was the chairman of the board. He didn’t spend time with me every day. We didn’t have coffee, but I think he kept an eye on me. He wanted to see if his own bet.

Paid off. And I think that benefited me because he kept an eye on me and as he saw me perform and he used his own metrics or his own methodology, he felt increasingly as the time went by that he made the right bet on me. And I did not disappoint him. He wrote me, he’s following me and I stay in touch with him over the years.

And he keeps sending me some notices. Oh, Yorgos, I’m so proud of you and all those wonderful things that make you feel that beyond the business. interactions beyond the practical aspects of working for a company. There is the human side that is heartwarming when it continues over decades.

Absolutely. This is a business of passion and pride and it runs deep and hospitality people are like minded people. And when there’s that Team, where everyone’s you talk about culture, let’s talk about that. Culture is such an important thing, and I guess the way I look at it is it’s so much different than just having a mission statement that hangs on the wall.

It’s how people feel about working in a place. It’s how the guests feel when they see the team working together in symbiosis and delivering amazing experiences and having fun doing so, and building relationships with the guests. That’s all the culture of a really strong restaurant, or at least it’s a big.

What would you say about culture? And in all of your different experiences, the cultures must be overlapping to some extent, but different because every concept is different.

I thank you for the question because it gives me an opportunity to talk about my personal philosophy, too.

Please do. Culture It’s very difficult to endure, especially in the business world talking specifically about restaurant, the restaurant business, hospitality, because of the known fact that we deal with tremendous turnover, by the time a leader feels that they have made an impact moving the culture of the company in a positive direction.

In the hospitality business, being selfless, taking care of the guests. Being proactive, being, caring about other people’s experience, those elements of the culture and hospitality, you need to work on every day because by the time the group that you finished with, has gotten it and, absorbed it, some of them leave the company and they’re replaced with new people who have no idea as to what your culture is all about.

So it takes Continuous ongoing commitment by a leader or leaders at the lower level, at the restaurant level to work on this culture phenomenon that is so important. I come from a country that hospitality is ingrained, in our personalities, I took a team. When I was building a restaurant in my years with Lettuce, I took them to Europe and we went to Greece and we were in a village in an island Sifnos small island, and we were walking through the narrow streets.

We were going to go to dinner and we see an older lady sitting outside of her small, beautiful adobe style white, I love that.

And

She said to me, are you Greeks? Because she heard us speaking in English. She’s yeah, I am Greek, I said, and I’m bringing these friends of mine from the United States to enjoy the good food of your island and enjoy Greece.

She said, come over. I said, where should we come over? She said, in my house. I’ll make you the best Greek coffee, and I’ve made this dessert. So this is the essence of hospitality that I grew up within, and my friends many years later now, when we talk about travel in Greece, they always tell me about that experience that how much impacted their thinking about spontaneous hospitality, not planned, not trained hospitality, just A hospital that comes from your heart.

This woman, there was no quid pro quo. What did she expect from us? Nothing. Nothing to expect. She saw us one time, it was the last time she saw us, and the same with us. And yet she invited us in her home, opened her beautiful little home. Sparkling clean and made coffee for us, gave us some sweets and made the lasting impression of what hospitality is all about.

That’s what I tried to do with my role, among other things as a leader of a company to instill that spirit. You should not always. Start the conversation or do something for someone expecting something in return. What I said earlier with Procvost, you just do it. Good things happen, I’m telling you.

Do the right thing. From the

heart I’m hearing.

Exactly. Do the right thing. Take care of people. Give them what they wish that they have. And trust me, good things will happen. In the case of a server, a 20 percent tip or 22 percent tip instead of 15. In the case of a manager, a letter or an email to me, oh, I was in your restaurant, such and such, and this manager took care of me, called a taxi for me, and opened the door for me, and gave me an umbrella as I went out because it was raining.

Thank you so much, you run a great organization. This is what

it’s all about. I’m really glad you shared that. it’s almost a lost art, that word hospitality. When I grew up as a child you’d pull into a gas station, and they’d wash your windows, they’d fill your tires with air, they’d check your oil.

All these things were part of the service. And you’d go into a restaurant, and I remember to this day, restaurants we would go to as a child, and they would pull, the maitre d or the person greeting with the door would take a lady’s coat and hang it up and pull the chair out for her. That’s Hospitality that doesn’t happen anymore, but that doesn’t mean it can’t or you can’t find ways to touch guests in a personable way from the heart that’s meaningful and genuine without expecting anything in return other than you’re going to give them a great experience and they’re going to come back again.

They’re going to give you a positive review and that’s just one small piece of the experience, but it’s so important today and I’m really glad you shared that story because Wow that spoke volumes of what that word hospitality really means. Thank you for sharing that. Yorgo, you mentioned retention you actually mentioned the high turnover that this industry experiences, and there are restaurants everywhere that are really struggling with that.

The labor shortages and the people they do have. How do we get the best performance from the people we have? And why are they calling in sick? And why are they not showing up? And they show up when they want to, and sometimes they do a good job, and sometimes they don’t. You have some keys to employee retention.

What have you learned in the past? And what have you implemented in your experience that, that leads to retention? Because that’s a big one.

My restaurant sold tons of fried foods, but what a hassle dealing with the fryer oil and cleaning hoods from all that grease. Restaurant Technologies handles everything end to end. They deliver, filter, monitor, collect, and recycle your waste cooking oil. Their AutoMist system reduces the fire risk with automated hood and flue cleaning, hassle free.

As 10 15 percent on insurance premiums and even get bonuses for new customer referrals. Go to rti inc. com or call 866 399 3639 to get started.

Restaurants everywhere don’t take inventory. It’s not about placing next week’s order. Inventory is calculating the value of your food and beverage, which can be thousands of dollars every week. Taking inventory determines your true food and beverage costs. Why leave your restaurant profit to chance when there’s a powerful inventory system?

Sculpture Hospitality are the restaurant inventory experts that make it simple. They don’t just manage your food and beverage inventory, they give you a clear picture of your restaurant’s profitability. Get a no obligation free consult at SculptureHospitality.com/rockstar​

I think what applies to every human? It’s not unique to the people who devote their professional years or time to hospitality or restaurant service.

I think it applies to all humans. We all crave attention and recognition and a pat on the back. You did a great job. Yes. Unsolicited. In other words, you seek that kind of affection, attention from your spouse, your significant other your kids do the same in social settings, with friends, the same experience is a desirable, outcome of relationships.

So when it comes to the business, Specifically, the restaurant business. When you make your teams or the people who work for the organization feel that they’re safe. In other words, you have a platform for them that they can express themselves. And that goes as far as diversity and all the other things that are important in today’s very diverse world.

They feel safe. They feel also that their work is recognized. In other words, you are a busser, you are a dishwasher. Someone, from time to time, comes by. Your station where you work and pat you on the back and say, great job Yorgo, I truly appreciate it. I don’t have enough time to tell you this, but I want you to know that I recognize what you do.

This surpasses the importance of monetary compensation, surpasses everything else. And I think it’s an essential element of what keeps people in a business and makes them loyal to what you set out to be the mission of that company. So in my view, recognition and creating a safe environment for your people is a key driver of retention.

Definitely. Our business is a business that is opportunistic for a lot of people as far as how much time they are willing to invest in. Historically, The turnover in the restaurant business is higher than a lot of other businesses in the service industry because students, for example, while they’re at school, what is more convenient?

You can work hours that you don’t have classes, you come in, you make relatively easy money. To pay your rent and have some spending money you make tips, the money is real and happens in real time. In other words, you collect the same day that you earn it. You don’t have to wait for two, three weeks, to get a salary.

So it’s a business that attracts a certain demographic de facto, and then others who see it as beyond an ephemeral, just for a year or two business, they make it a profession. But those people in the second category are a minority, especially today, because after 2020, a lot of things have changed.

Unfortunately, Not for the better. So we have challenges that we always had, but not to the degree that we have them today. That it’s a different operating environment and we have to adjust as leaders, as managers, because if we believe that 2019, 18, 2079 will come back, They will never come back.

Wow. Yeah. Everything that’s happened since has been so many restaurants failed during the pandemic. So many restaurants have slightly recovered, margins have shrunk, inflation, labor. All these challenges suddenly made a difficult business that much more difficult. So to stand out. The people are the foundation of your business, as you said, and I do believe that people, everyone works for a paycheck, but people work to know that their opinions matter, that their performance is valued and recognized.

And you’re absolutely right. It’s they can go somewhere else and chances are, they’re not going to get paid. That pad on the back or the recognition. And there are still bosses out there that aren’t leaders, that are just managers that treat them like, just do your job and keep your head down and keep your mouth shut kind of thing, which is sad, but I’ve seen it.

But really valuing your people. Is the key and you made that pretty crystal clear. We

all, irrespective of what business you are in, we all appreciate that recognition, because at the end of of the day, as we say, you want to know that what you do in a relationship or in your job is viewed as something that adds value, or makes a difference, don’t I sometimes take out a team from my office here to lunch. Okay. And I give them a small token of a gift, nothing materially very big, but it’s a gift. I put a lot of thought into it. It’s personalized and I take them out, not on specific celebratory occasions, like holidays, A regular Tuesday, a regular Thursday, and they’re all taken aback because they say, oh, why are you doing this?

Because I want to tell you that I love you and I care about you, and I have a chance to do it often. So I want to make sure I force you to be around the table and express that gratitude I have for you. And instead of asking from them to do something for me, I’m doing it for them because I truly believe in that, and that expression of affection And care goes a long way because they know for a fact that for me to plan it, take time out and take them, make a reservation.

I worked on that. It’s not something that, okay, let’s go out to lunch and go to a fast food restaurant and buy you a burger. Of course. So that’s more from the heart. Those are the things that unfortunately we don’t do. A lot of, because we’re all very busy, family, kids issues with personal development or health and demanding jobs.

And we delve into all that and we apply ourselves a little bit here, a little bit there. And we forget that our lives can be much easier and hopeful and rewarding if we share more with others. And rather than keeping it to ourselves.

I think your philosophy is almost the key to keeping more people in hospitality versus this is just a stop on the way to some other career or some other job in a different industry.

I hope.

I absolutely believe that because what you’re talking about is what instills that pride and passion in someone. And suddenly this is a really enjoyable business. I love the people, both the guests and the fellow team members. It can be lucrative if I’m recognized. And if I Apply myself, I can go to the very top of the business like you did.

As long as you’ve got that drive and appreciation for the business, you can go anywhere without a formal education. I’ve seen it happen over and over again, but more restaurants should take that advice and really nurture your people. And I think that’s where leadership comes in. I do believe that leadership is recognizing something special in other people, inspiring and encouraging them, giving them opportunities to take on additional responsibility, and when they really take the business to the next level, there are rewards for that.

There are incentives for doing so, and that’s a powerful thing. Let me ask you about training philosophies and the different career positions you’ve had. Different companies do things differently, but training is so essential. Can you talk, can you speak to training at all and onboarding people and how you put, give them the best foot forward to deliver great hospitality?

We have obviously programs in place that are very structured. To teach our newcomers, people who come join the organization from the outside, to teach them about our service, the POS system, accounting, P& L, the technical aspects that apply to service. Then, we have another aspect that applies to the soft qualities, the emotional intelligence, which we hope People skills.

Exactly. Yeah. We hope during the interviewing process, people demonstrate and give us confidence that they possess. Because, unfortunately, I can’t pitch you, I can’t pitch Iraq, all the technical aspects and make them the best service managers that they can be. I can do it in six weeks, four weeks, eight weeks, whatever the length of the program is.

I cannot teach you to be kind, to be selfless. To be empathetic, to care about others, to have a sense that it’s okay to give and not expect something in return. That is, you either have it in percentages, of course, or you don’t have it. That’s the 51%, the 49 percent is the service and all that.

The 51 percent is what is applied to hospitality and it takes a mature. So we spend a lot of time with seminars, successful people in the industry, giving talks to our people who are young in the management, in their management careers about exactly that. So the training we have for the technical aspects is Like any other companies, fantastic.

By the time you graduate, you know how to work, how to comp, how to void a check, how to correct something, how to make the food, how everything. No, no problems. The other piece This is a work in progress. Even if you possess a high percentage of emotional intelligence and maturity, you never stop. I myself still learn every day, the finer aspects of human, the human condition, you never stop learning that.

So we try to be a mechanism through these ongoing seminars of. of helping the people who have already enough of that aspect of maturity to improve on it and become better leaders and better people for themselves and for the team that they lead or work with.

Absolutely true. That’s wonderful.

You talked about PNLs and financials briefly. Can we speak to KPIs and what you would expect the Listener of this podcast to really focus in on, to pay attention to the bottom line. What’s really important, tracking prime costs and all these things. I come across so many restaurants that think inventory is figuring out next week’s order.

It’s not calculating your true food, beverage, and labor costs and all these important things. And I know you’ve seen it all in your extensive career, but don’t you think that’s vitally important to improve your margins, to know where your numbers are? And it’s as important as the hospitality piece if you want to make money and stay in business.

The business of business is business, oh, yes. So yes. At the end of every day, you need to have to show profit. In our case, EBITDA or, however someone defines, profit if you’re a single operator. of one restaurant, your cash register cannot be empty every night, after you pay your bills and everything else.

So I agree with you, it’s an essential aspect of the business to, no matter how you run the business, at the end of each period, each week, each day, you need to be profitable. This is a very difficult business, because the two key costs The cost of goods, which applies to food, beverages, and those things that are categorized as key goods.

And most importantly, the labor costs are taking sometimes 50, 52, 55, 56, 60 percent of what you bring in.

So the

margins by calculating these two costs to be 50 plus become very thin before you even start, your month. No matter all the other

expenses, you’ve got 50 cents on a dollar left over to pay, everything else, your lease on the property, the insurance, market,

paper goods, rent occupancy as we call it, because it includes other things.

So you’re talking about A business that is very volatile if you don’t have your eye to the bottom line and all the costs that get you to the bottom line. Absolutely true. So one of the key focuses is labor management, labor cost management. In today’s environment, post 2000 the costs of labor have accelerated by double digits.

In, in a span of 24 months or maybe a little less, so things that we used to take for granted that you can hire someone at minimum wage, let’s say, whatever the minimum wage, because the federal minimum wage is nothing to be concerned with because every city, every municipality, every state has different numbers.

So what used to be an entry level wage, whatever that was. Pre 2020, right now is almost double. And you cannot double the prices. You cannot, you can’t Yeah, the value is

lost to the guest.

Exactly. So Now, the other sad thing is, not only the labor costs have accelerated way above inflation the quality of available talent has gone down, because during that period of black talent.

The black period of having restaurants not operating as such because we were forced to close our dining rooms for extended periods of time and lay off key people like servers, bartenders tipped people. Those people were forced, of course they collected most of them unemployment but they had a period to do soul searching and Reflect on all.

Should I go back to that career or should I become X, Y, Z?

So

when the market started opening up and the restaurants started reopening and other businesses in the service sector started reopening, we had a shift. of very large numbers that were devoted to restaurant hospitality to moving to other industries.

I’m not going to name any because there are plenty of businesses that benefited from people that used to be committed to restaurants and now they’re working for others. So that put tremendous pressure on us because we had to replace those people. The available people were fewer, because of the unemployment being 3.

9 to 4. 2 percent, so there were very few people available with the skills, minimum skills, communications, primarily that they could speak eloquently and understandably with the customer, and then, all the other things. So we had the smaller pool of people draw from and the competition was fierce because my restaurants competed with the restaurants across the street for the same exact people.

So that pushed the labor wages upwards. Because everybody was bidding for the same one person available. Waiting

for people. So we got

to that point. So now that it’s a given that labor cost is way out of what we used to consider normal. So every restaurant businesses labor cost plus Plus cost of goods is north, way north of 50%.

So 24, 25 percent average on cost of goods. And then 32, 33, 35%, if you take into account, of course, the benefits and everything else we pay. So here you go with only 40 percent or 43 percent remaining to pay for everything else and by the way at the end you have to make a few dollars as profit. So now companies that are considered to be successful are talking about 10, 11, 12 percent profitability.

It didn’t used to be the case. We used to make 20, 22, 23 percent EBITDA. And now, you are making 12, 13 percent. Let’s celebrate.

And What you’re saying, Yorgo, is that It’s such a powerful statement to fact, but the one thing that you mentioned earlier is almost the key, because the retention is so important because the turnover costs you even more money than the high labor costs.

So if you’re constantly turning people over It

costs us 10, 000.

Yes. Is

that If we lose a manager within 90 days from when they graduate from our training program. And they produce nothing because by the time we lose them, we have already invested in them 10, 000 and it’s poof, out the window.

No gain,

no benefit. Yeah. And you’ve got economies of scale with so many units, but talk about the independent operator with one, two or three units. It’s it’s almost can they survive? Is this a broken model? What’s the key to the future?

Very difficult. That’s why the businesses that truly disappeared, and it breaks my heart that they did because they did nothing wrong, were those businesses that they were run by individual proprietors, one restaurant, two restaurants.

They missed a couple of pay periods. They couldn’t make a rent for a couple of it. Done. Finished. That’s it. Disappeared. Tens of thousands of restaurants disappeared and they did do, they didn’t do nothing wrong. They served great food, they had good hospitality, caring management, caring ownership they supported families, they supported themselves, and it breaks my heart that now they are They’re finished.

I can speak to that experience, Yorgo. I sold all my restaurants in 2014, but as I’m quick to point out, I bought another restaurant just before the pandemic because I can’t see around corners. And I went through that two years of pain and we had to shut down and transform our business into something entirely different.

And that happened multiple times and we survived, but you’re right it pained me to see any business go out of business. I have a. Special place in my heart for restaurants, but you’re right. Tens of thousands, hundred thousand restaurants are wiped out and gone. And like you said, nothing they were doing wrong.

One minute everything’s fine. The next minute the switch goes off and poof. It’s what do we do? And yeah. And the landlord wants his rent but I can’t pay and oh it was just a nightmare. And we hate to talk about it but it just speaks to the bottom line performance and knowing the numbers and adding value and delivering amazing experiences and getting loyalty from guests and all these things.

talking about what we should pay attention to because you asked me that question. And we talked about a lot more than that. I’m going to go back to the original question, please. For example, when it comes to managing labor, we have being a sophisticated business and structured As a corporation, my, my company, we have predictive models, labor scheduling and this and that and the other, and we forecast and we try to be ahead, in terms of looking at forecasts, weather forecasts, for example and looking at the prior year, prior week, prior period sales and trying to build schedules.

that reflect the data points that I’m talking about and the knowledge we have about our markets where we operate. And we still miss it because it’s not a science, you plan for something and then a riot is happening because of the war. somewhere else and there are people against it and people for it and they, it happens in front of your restaurant and the police blocks the streets and then you have no lunch and no business for dinner and everybody is scheduled to work and you pay them and you have nothing to show in terms of revenue for the day.

So there are so many variables that In this business that make it fluid, completely fluid and unpredictable, no matter what tools you have. So you need to be sharp, you need to be on top of it. Have managers and leaders who are reacting and responding quickly to situations that emerge without any prior notice.

And make adjustments now. In one market where we operate, the local municipality has put an ordinance out that you have to publicize your schedules two weeks in advance. In other words, you work For one of my restaurants in that market, you should know that you work Monday, you’re off on Tuesday, you’re off on Wednesday, Thursday you work, Friday you work, and the rest of the week you’re off.

Now, so we have to comply because that’s an ordinance. So we make those schedules using the best judgment we have and things happen. Something happens and we have weather that changes dramatically. We had scheduled people to work in the outdoor space, the so called patio, and those people need to be called off.

You have to pay them because the ordinance says that whoever is scheduled for these two weeks that you have published the schedules for. No kidding. Yeah, you cannot change their schedules, you have to pay them even if they don’t work. I’m not making a judgment call here and say good, bad, good, bad.

Intelligent or not intelligent decision. I, as a business person, I’m left with no choice but to speculate and play conservative and deprive some people of an opportunity to make money because if I am to hedge against something happening, I will schedule less people, I will do some things to make sure that I don’t find myself in the difficult situation of having to pay for someone who is not working on a given day in a specific shift.

That’s one very powerful, specific example of what it means to be a leader. But you’re also talking about being a strategic thinker and planning ahead. And I think if there’s a message out there, it’s like so many operators are caught the day to day trenches because of the labor shortage, because I have to do everything, because I have to be in my restaurant seven days a week.

I don’t really have the bandwidth or the time to plan ahead. I just want to get the food out. I just want to deliver great experiences. And I can’t afford to pay a leader or a manager. So many operators are caught in that trap. The systems aren’t in place. They’re just tied to their businesses in a hope of a prayer of making a 10 percent margin,

yeah.

Know, that’s the reality.

There is a lot of technology today, that didn’t exist even four or five years ago, that provides us with tools to manage aspects of the business that used to be completely left to intuition, okay. Yes. Now, you can do that. We forecast sales with tremendous accuracy. We forecast, and yet, at the end of the day, it’s a people business.

The personal intelligence of the people who use those tools, the technologies, the personal knowledge, experience of the individuals involved in running the business as managers or as supervisors is the key to success. It’s not the technology.

I agree. Look

at what happened with technology like tabletop ordering systems, bang, poof, failure.

Look at what happened with Ghost Kitchen, poof, failures. Hundreds of millions of investors money were lost because they missed on key points. That there is no human impact. Interaction, you make food that is generic, you make food that doesn’t have a personal touch, no artisan aspects whatsoever.

It comes from a central kitchen, nobody knows whose other food is done there, are they applying sanitary conditions, it’s behind walls, failure. Tabletop technologies, big publicly owned companies invested millions and millions of dollars. Oh, that’s the next thing. We’re going to eliminate the servers because the customer will sit down, we’ll have a little screen, they will navigate the menu, push buttons when the time comes to pay.

But they forget what I just started with when we started talking here. Hospitality gone. Crave attention. People. I wouldn’t go to a restaurant if I didn’t want to be taken care of. I would cook at home. That’s why you go out. You go out because experiences you want to be taken care of Yes to be, to, I agree, to enjoy hospitality, to enjoy someone else’s attention, so they put a, a black box in front of you.

I don’t want to deal with a computer. I have a computer at home. I have a computer at work. I have a computer in my pocket. I’m done with computers. When I go out, I want to interact with other humans, people, emotional connections, so it failed. So technology that we have in some ways is very helpful.

Like I said, scheduling and other technologies, in managing inventories and recipe, calculations, and costs, and everything else. But! There are technologies that were far above the reasonable expectations of people when they go out. And they failed.

Let’s talk about your current position. Now we’ve already talked about some of the amazing impacts you’ve made on this industry and the companies you’ve worked for.

And then suddenly this company called Giordano’s appeared on your radar and you said there’s an opportunity. Yeah. World famous deep dish pizza. What was it about that concept where you said, is it innovation? Is it growth? Now you’re 60 plus locations, but tell us about that story and maybe tell us a little bit about your current company.

The company is celebrating its 50th year this year. So it’s a milestone for any company in this space, because as a lot of companies come and go in the first couple of years of their existence. Definitely the company has a history. And a kind of a place in the spectrum of brands that they’re respected and recognized in the Midwest primarily, where, the pizza that we do and we focus the Chicago style pizza is very well known.

Although we have an e commerce business. that is very robust and successful and reaches all 50 states and we ship to all 50 states are our physical presence through brick and mortar. operations are primarily centralized in the Midwestern states. So when I was brought in at the end of 2011, it was a pivotal moment for the company because The previous ownership and the company has had only three ownerships, the original founders, then they sold it to an employee who kept it for 20 plus years.

And then the current ownership. So when I was brought in the company through the previous ownerships, mismanagement of their finances. Not the business, but the finances was involved or part of a bankruptcy. The previous owners who were very successful with operating fewer restaurants than we have today, but very successful with a smaller group of restaurants they invested a lot of money, the proceeds of the company, plus a lot of borrowed money, and To businesses that they were unrelated to restaurants, and unfortunately they did not have any expertise in those businesses.

So when the crisis in 2008, 9, 10 real estate and financial crisis occurred they were unable to meet their obligations, especially in real estate payments because the real estate was devalued dramatically, as you remember. Yes. And and their banks started demanding accelerated payments.

So unfortunately, they filed for bankruptcy. And the most unfortunate aspect of that bankruptcy is they, because they were not very sophisticated they had not insulated their restaurant business from their other businesses, the real estate development and other businesses. And as a result, everything went down in flames.

because the business was collateralized. It was part of their investment. So it became, collateral damage unnecessarily. I’m talking about Giordano’s group. I understand. And They filed for bankruptcy. The bankruptcy process lasted almost nine months during which, unfortunately, the company was run, at the bare minimum base of of attention by some accounting firm.

So when the new ownership stepped in, the company was really in dire need of a lot of attention and care and love. So that’s where they brought me in at that point. And the opportunity to answer your real question, what attracted me was that twofold. One, I was very aware of the brand because I consumed it Oh, living basically you were a customer in Chicago.

I was a customer, yeah. Yes. And also I knew without knowing the details of what brought the company to that point, when I was brought in, I knew that the brand was golden. I knew that because I study, the history of a lot of companies that succeed and also those who fail, and I knew that this company did not deserve the fate that was dealt with.

So that was one reason. The second reason, at the time, I was traveling a lot back and forth between Chicago, where my family and myself were based, and San Francisco. And and Austin, Texas, where I was running another business at the time. So it was also a good thing that this company, Jordanos, was headquartered in Chicago.

So that was going to mean that I was going to be based in Chicago and travel whenever necessary, but not out of necessity. Of course. So those two things. One was, my, my belief in the brand and the other was my own personal, uh, considerations brought me into the fold.

And I was one of several people that the company Private equity group that bought the company out of bankruptcy. Interviewed. I went through exhaustive processes of vetting and all that, and I was chosen at the end and I was fully aware that I had a very uphill battle. What I did in the very, very first six to eight months was to build a team that would align themselves with my vision of resurrection, bring the company back to life from the ashes and There was a lot of deferred maintenance.

I had to fix all the restaurants, replace awnings and chairs and booths and bring new life into the restaurants, hire people start, looking at the menu and trying to tweak it to make it simpler, much more focused on the core business of pizza. Bring in culinary talent. I was fortunate enough that my prior career had afforded me tremendous connections with very wonderful people who liked me.

I liked them and a simple call to them was answered with a yes. I was lucky that everyone that I called from my previous positions in the industry that I needed to bring in to, to build the team, Immediately said, Yorgo will come and join you. We’re excited that we’re going to work together again.

So immediately I build a team, finance, accounting, marketing, human resources, forecasting. On and on.

Yorgo.

You put the dream team together. People who believed, believed in the same things. The brand had a lot of life in it and we could make it back a great a great brand.

So we, the first eight, nine months, we. We invested in all that. Fixed the restaurants, the existing assets. I didn’t even think about opening a restaurant for two years. Two years, it was an introspective process. Let’s be the best we can be with what we have, and then we’ll look at expansion, growth, or whatever is in store for us.

And we’re fortunate because all my bets paid off. We had double digit growth For subsequent years leading to the coronavirus, and we grew the company, doubled its size multiplied its profits by many factors. And at the end, in my view, staying focused on what we know how to do well.

I would say best. Core

competencies. Yes.

The core competencies is what my compass is. That’s my north. Focus on what you are known for and execute it as flawlessly as you can. Of course, we have misses from time to time. We respond in kind to any complaint. We do not argue with customers who do not like their experience, but we make sure they feel that they are righted.

And that’s what has Propel the company to its current position of regaining a leading position as a restaurant group within our markets and being successful. So simple recipe, but not easy to execute, you’re

clearly up to challenges and let me add two other key components to your success, teamwork and mutual respect.

Wow. Yorgo, it’s been fascinating talking to you today, and I can’t tell you how many key learnings that you’ve delivered over an illustrious multi decade career. And I just thank you so much for sharing. It’s such a benefit to our audience to, to speak with someone with such experience, such passion for the business, who just exudes hospitality.

And it comes from your upbringing and your culture, but it’s true to the heart. So thank you for that.

Thank you very much, Roger, for giving me the opportunity to share my beliefs and my experience. I appreciate it.

Thank you, Iorgo, and thank you so much to our audience for tuning in. That was the Restaurant Rockstars podcast.

We can’t wait to see you all in the next episode. Thanks to the sponsors of this week’s episode. Everyone stay well and stay tuned. We’ll see you next time.

People go to restaurants for lots of reasons, for fun, celebration, for family, for lifestyle. What the customer doesn’t know is the thousands of details it takes to run a great restaurant. This is a high risk, high fail business. It’s hard to find great staff, costs are rising, and profits are disappearing.

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. I created a game changing system and it’s filled with everything I’ve learned in over 20 years running super profitable, super fun restaurants.

Everything from creating high profit menu items and cost controls, to staff training where your team serves. From how you serve and sell, to marketing hooks, money maximizing tips, and efficiencies across your operation. What does this mean to you? More money to invest in your restaurant. To hire a management team, time freedom, and peace of mind.

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 restaurantrockstars. com. See you next time.