Part 3: Independently Owned Restaurants Series

Tessa Burg (00:00): Hello, and welcome to another episode of Lead(er) Generation brought to you by Mod Op. As a reminder, again, Tenlo has been acquired by Mod Op, and we’ll be bringing you the same great interviews around how to generate high-quality leads, create demand for your products and services, and really everything related to digital marketing and retention. Today’s guest, very excited to have him is Chris Nguyen. He is the co-owner of Superior Pho located in beautiful Cleveland, Ohio. And this is the third part of our three-part series running in parallel with The National Restaurant Association Shows conference. The National Restaurant Association Show runs from May 21st through Tuesday, May 24th. And if you’re lucky enough to be visiting Cleveland on May 21st, May 22nd, the Cleveland Asian Festival is also happening. So check that out. Cleveland Asian Festival is May 21st and 22nd. You can find out more by visiting their website at clevelandasianfestival.org. So let’s jump into the interview, Chris, thanks so much for joining us. We’re excited to have you

Chris Nguyen (01:20): Thanks, Tessa for having me.

Tessa Burg (01:23): So first, you are our third restaurant owner interview, and we’ve been fascinated and following the creativity and resilience that has come out of specifically the independent restaurant owner space. Tell us a little bit about your journey, and a little bit about Superior Pho.

Chris Nguyen (01:46): Well, Superior Pho was founded by my father in 2002. Before that, he was working a steel mill as a corporate Metalographer. I joined the company after undergrad in 2010. I had a short stint in commercial real estate for Michael Chessler, who used to own a bunch of the historic mansions downtown. And so, in 2010 I joined Superior Pho. It was supposed to be a short, temporary thing until I found another job. But we were in the middle of the recession so that was pretty hard. And then within a couple of years, we just had so much momentum. I felt like I didn’t want to leave while we were growing so much. And the rest was history.

Tessa Burg (02:42): So you stayed with Superior Pho coming out of a recession because of the momentum you felt. Tell me what were the factors that created that momentum at Superior Pho

Chris Nguyen (02:53): Well, social media was a huge part of it. Word of mouth. We had a good amount of success from word of mouth, at least within the Asian community. And then probably for the greater part of the first decade, the primary clientele was mostly Asian and some American folks here and there. But we had huge, huge support from the broader Asian community, which included Vietnamese, Chinese, Korean, other Southeast Asians, like Filipinos, Laos, Thai people. And then social media happened in 2010. I finished undergrad. We were still very much in the recession and businesses weren’t using social media that much in 2010. I remember on Facebook and Twitter, I had heard rumblings of how useful it could be for business. And there weren’t that many other local restaurants using it.

Chris Nguyen (03:57): And I was like, you know what, let me see what traction we can get just by creating a Facebook page and a Twitter page. And I had already been promoting our business just on my personal Instagram andTwitter and all that stuff. And I think one of the huge catalysts was one of our own local hometown heroes, Michael Simon. And Jonathan Sawyer at that time with the Greenhouse Tavern. They had been coming to the restaurant pretty regularly. Oh, and Adam Richmond too from Man vs Food. And at that time, social media was still such a small world that you could actually reach out to these guys and your tweet or your post wouldn’t get lost among the tens of thousands that they get every day. So I would tag them in posts and I would thank them for coming out whenever they did just almost on a very personal level. And they would tweet back and they’d post on their social media. Like, “Hey, Superior Pho’s the best Vietnamese restaurant.” And I would thank them and invite them back. And before we knew it, probably thanks to those three guys there, we got invitations to participate on different shows on Food Network and Travel Channel and that sort of thing. So coming out of the recession, word of mouth and social media were huge for us.

Tessa Burg (05:35): That is absolutely a fascinating story because, that’s right. When I started eating at Superior Pho a little over 11 years ago, it definitely was from the word of mouth. At the time I was at American Greetings. And we would have Pho Fridays, which we also carried on to two other companies I worked at <laugh> on Friday. We would go get Pho as a large group. But I love that you used social media and influencers to really make your food more accessible. And for people to even discover what it is when the pandemic hit, were there some other tools or other types of communications that you did or use coming out of the pandemic that you think will carry forward in a similar way as social media presence did for you coming out of the recession?

Chris Nguyen (06:32): Yeah. So, and it’s funny you use Pho Fridays. By the way, I came up with that term back in 2010.

Tessa Burg (06:40): Oh my God.

Chris Nguyen (06:42): Yeah. In response to Taco Tuesday. I was like, what can I say to engage our users and keep them coming back?

Tessa Burg (06:49): Yeah, it works. <laugh>

Chris Nguyen (06:51): Thanks. Thanks. It makes me happy that people still use that. <Laugh> Talking about the pandemic, you know, we didn’t have any digital ordering presence whatsoever going into the pandemic. We just didn’t have any platform. So we weren’t able to take orders through our website and we were definitely behind on that. We weren’t at the forefront of that movement by any means. But we started using a platform called Chow Now because they were way cheaper in terms of their commissions and fee structure than Uber Eats and Skip The Dishes. I would advocate against those companies all day because they charge their restaurants anywhere between … Well, when they solicited our business, anyway. They charge 25% to 30% of revenue which would kill any small business.

Chris Nguyen (07:56): I mean, that’s really a marketing expense. Cleveland passed some sort of law, I believe, where they’ve limited commissions to 15% now. But I also know that the majority of restaurants are operating off of a 7% to 15% margin. So, you know, even 15% … it’s still killing businesses. But Chow Now was great. Chow Now, I think they were around right around 7%. So if your margins 15%, you get to keep about half of it, which is better than nothing at all. Because the pandemic hit so many restaurants, so hard, us included. And Chow Now allowed us to aggregate all of the traffic from our social media platforms, Twitter, Instagram, Facebook … all of them. And then also, have like an ordering component to our website.

Chris Nguyen (08:59): And we ended up doing substantial revenue from them, you know, through their online ordering. And that helped us get through the pandemic along with, you know, some other government assistance. And then, moving forward, you said, would we keep them? I think so. And I think what that really did for us was put us in the mindset that we need to constantly be searchingfor new tech and incorporating it into our process and our operations. Just find out how we should welcome tech into the restaurant industry. I know a lot of sort of older, restaurant owners aretech averse. They don’t wanna complicate a good thing. Why fix something if it’s not broken sort of mentality. And the more I find out about what’s out there, the more I realize these technologies can make people’s lives easier, not only for our customers, but for us as operators as well.

Tessa Burg (10:15): Yeah, that’s really interesting cuz that’s, I feel like a topic restaurant owners are split on. Like is now the right time for new tech when there’s still these huge challenges facing all businesses, but especially independent operators? What tech have you seen that you think you want to start incorporating to either better the experience better operations or how up with sourcing, ordering or staffing?

Chris Nguyen (10:42): So, I just wanna speak to this cuz I feel like a lot of small business owners and entrepreneurs, restauranters, operators … we are overwhelmed by the volume of different things we have to handle. And the different hat we have to wear. One of the big things is, we have to worry about our supply chain and staffing, just like you mentioned. And then we still have to worry about marketing and bookkeeping. And I think one of the greatest tools that’s now available to us, and they’re becoming more and more intuitive, are the services provided by point of sale systems. So they’re the point of sale systems. You know, we already know they collect data. And that’s great. But the marketing integrations that come with these platforms that are being updated with the newer platforms as well as the bookkeeping integrations, it’s like, I don’t have to close out my books at the end of the day and then spend another hour or soinputting them into QuickBooks, you know, maybe like I did in the past.

Chris Nguyen (11:58): And in fact, some of these point of sale systems, not only collect the data, automate the bookkeeping, but then they’ll also forward those documents to like a third-party payroll company or accountant. And I really, can buy up, free up rather, a lot of my time now because I don’t have to spend an hour doing that. And then the extra 30 minutes doing linens at the end of the night, like a lot of small business owners have to, cuz it it’s no joke, you know. Restauranters, I think, very easily spend 16-hour days. Especially when you’re a young restauranter starting out. And I think that’s why there’s such a high attrition rate among restaurants. You know, you’re doing 14- to 16-hour days. Sometimes those 16-hour days become 18-hour days and you can only do so many of those a week before …

Chris Nguyen (13:00): You’re just totally burnt out. But, point of sale systems and their new integrations and the apps that come out that integrate with the existing point of sale systems. I mean they’re a real game changer. How do they help with inflation? How do they adjust, you know, how do we adjust for inflation? I mean, look. If you, as a restauranteer or an operator, know your baseline costs and you’re able to input your suppliers costs and update those weekly into your point of sale system, then you know what your margins are. So as your supplier costs go up, you can super quickly and easily, adjust your pricing to maintain those same margins that you had before. And then also, if you notice that your business is taking a hit and you’re seeing less repeat business or less volume, then you know that your margin can’t be maybe what it was before because your customers aren’t adjusting to the price changes as quickly. You know, that real-time data is just something that we didn’t have 10 years ago.

Tessa Burg (14:13): Yeah. It really allows you to be more flexible and respond to change faster, especially when change is outside of your control. Are there things that you’ve seen from the relationships that you have from either distributors or just suppliers that have also helped support you as you’re wearing these many hats and trying to navigate the continued changing landscape?

Chris Nguyen (14:42): I’m trying to think about our own personal experience and I think the short answer is no. I think that, I mean, I maybe. But we haven’t seen that. And I think the reason is because everyone suffered through from supply chain issues, and everyone’s sort of figuring it out. Now, one of the cool things that people don’t know about Superior Pho is that we use local beef. We use Ohio beef as often as we can. We use local produce as often we can. We don’t market it as well as we should. But I think people know, sort of inherently, that our product is a cut above our competitors and they can’t put their finger on why. And that secret is our produce is fresh. I mean, super fresh. You know, grass-fed cattle in a lot of cases. Our slaughter houses, they use just old fashioned hand-chosen cattle.

Chris Nguyen (15:50): And we, we definitely don’t make it a point to market that, and I think we should. But with that said, our smaller producer suppliers, they’re not gonna be able to adjust as well as major corporations when it comes to their supply. If they take a hit, they take a hit, and we have to adjust with them, you know. So what we’ve done, in some cases, is we’ve entertained business from suppliers that we would not have entertained in the past to adjust. Whereas a supplier in the past may have solicited us and we would’ve said, we have this relationship with this supplier. And we’ve had to entertain supply from different sources just because our smaller suppliers, they can’t keep up with everything going on.

Tessa Burg (16:59): So you’re making some changes to how you source for specific things. Has any of that moved online? Like when you were looking for these other alternatives, did you start ordering differently as well? And have you found that useful?

Chris Nguyen (17:18): We didn’t go online because a lot of our stuff can’t be bought online unless it’s restaurant equipment, in which case, restaurant equipment has to be sourced nationally now instead of locally because local supply is just either nonexistent or exorbitant in terms of cost. But with food suppliers, we had a lot more suppliers solicit us maybe than the past. You know, I think a lot of folks realize like, hey, this is an opportunity to take advantage of shortcomings from other places.

Tessa Burg (17:59): Yeah. When you think about like what the next big decisions are on the forefront, how are you staying or keeping on top of trends? Like what’s changing in either, what different generations of customers expect to what economic factors could be coming into play? Like what sources do you tap into to stay on top of that?

Chris Nguyen (18:23): I don’t know that we are Tessa, in the sense that we have a low-cost product that’s reliable. It’s sort of like a hamburger. How much can you change a hamburger? Right? We could add some, maybe some additional menu items. But the staple of our restaurant business, is gonna be Pho. It’s a low-cost street food from Vietnam. That’s it. It’s just a comfort food. But in terms of trends, we’ve always, or at least historically, have tried to not be a trendy restaurant. You know, we’ve tried to be a staple of the community with a reliable product that you know what you’re gonna get when you go. But that’s not to say that that won’t change in the next 10 years.

Tessa Burg (19:11): Yeah. And it sounds like you are not really looking to shake up what’s on the menu and how it’s delivered in the experience. But you are very in touch with what’s happening in tech and how can technology and that data help you operate more efficiently to deliver almost like the same thing to stay true to the core of what makes Superior Pho special?

Chris Nguyen (19:39): Right. And without giving too much away, I would say that our goal is always going to be to improve our customer experience. Whether that’s the delivery, packaging, convenience for our customers. And then also for our employees. We want our employees to have a positive, enjoyable experience … one where they can leave the restaurant and say, Hey, that was good experience. For that part of my life, we’ve been paying quote livable wages, since before it became a thing

Tessa Burg (20:24): Mm-hmm.

Chris Nguyen (20:25): And that’s one of the proud things. One of the things that we’re proud of. We’re also really proud of embracing diversity and mindful hiring. I think we were one of the first Asian restaurants to hire non-Asian faces for front-of-the-house staff and back-of-the-house staff. So we’ve been very progressive in that way. And we’ve been very proud of that. Sorry, that was tangential.

Tessa Burg (20:51): Oh no. It’s very noticeable and it makes everyone feel welcome and comfortable coming into your restaurant, especially cuz you know, it is tucked away. It’s a little hard to find <laugh> but once you get there, it’s worth it. And you know, it feels like everyone’s welcome. The food comes fast, it’s warm, it’s comforting. So yeah, I mean, I love that answer. Like your business is very centered on its values and that’s what drives the decision-making as to, you know, the tools you use. And even the people you hire. That’s lovely. Thank you. What do you think is next? So, how do you want to see the community come together more? Are there opportunities for maybe businesses you haven’t worked with to engage with you?

Chris Nguyen (21:48): Yeah, totally. As for what’s next for us and what are some opportunities for businesses to engage with us? Yeah, I think moving forward, if we are to stay true to our values in improving the customer experience and improving the employee and staff experience. I think there’s a lot of opportunity where, if a company has a value-add. Like one of the things that we’re looking forward to working on in the near future is the customer experience with the packaging. So, one of the pain points I think for our customers is when you take to-go, you have to assemble it. You know, put it all together. And then there aren’t really instructions on how to do that. It’s like its own little journey, which is fine. But I think for a lot of new customers, that can be frustrating.

Chris Nguyen (22:53): So we definitely wanna make packaging and assembling of your meal more intuitive, more fun and more engaging than just trying to figure it out when you’ve never done it before. And there are no instructions. That’s one of the ways. And then we are on the lookout for new delivery partners. We want to be at the forefront, this coming decade. We want to be at the forefront of delivery. So one of the things we’re already looking into is drone delivery. What that looks like for robotic delivery services? What that could look like? Services that make sense. Services that aren’t charging us 30% of revenue for getting our food to our customers. So, yeah. If there are companies out there that can help us improve our customer and employee experience, we’d love to have that conversation.

Tessa Burg (24:03): Yeah, that’s really exciting. I can’t believe drone delivery is so close on the horizon that you’re already looking at it. If people did wanna get in touch with you, what is the best way to reach you?

Chris Nguyen (24:15): Probably by email: [email protected]. Or, follow us on any of our social media Instagram, Twitter, Facebook. Just shoot us a message because I manage those social media. And if you wanna engage directly with me, let’s start the conversation there.

Tessa Burg (24:44): Awesome. Well, thank you, Chris so much for being guest today. You can hear all of the restaurant show episodes in this three-part series by visiting Tenlo.com and just click on the word “podcast” and we look forward to having you join us again soon in the future. Thanks, Chris.

Chris Nguyen (25:03): Thanks, Tessa. Take care.