The Lease Trap That Kills Restaurants Fast

Alistair Levine [00:00:00]:

If you have a bad lease, you're never going to be successful. I don't care how great a business you operate, the lease will kill your business. And if for some reason you are not successful and if you have, have a great lease, you do have some ability to salvage some value by potentially selling or assigning that lease. So yeah, I think getting that, that right attorney who's going to be part of those lease negotia.

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Angelo Esposito [00:00:35]:

Welcome to another episode of Wisking It All. We're joined today by Alistair Levine, CEO of Vine Hospitality.

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Alistair Levine [00:00:43]:

Yeah, thanks for having me. Always a pleasure to come and talk to people about what we, what we're doing.

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Angelo Esposito [00:00:49]:

Yeah, I always like to start with, you know, how people got into the hospitality industry. I think it's always fascinating to see. So I'd love to hear your story, you know, what brought you towards hospitality in the first place?

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Alistair Levine [00:01:02]:

Yeah, I mean I grew up in a, in a family that was in hospitality. So at two and a half I was making pizzas on the counter at IL for now and where my dad was the CFO and you know, he was there for a bit. Then he went to Gordon Beersch and so, you know, you just kind of grow up. I then went and did other stuff. For a good period of time I worked in luxury audio and home automation. Look at a completely different industry and, and then ultimately got dragged back in through the pandemic, you know, ended up back in sort of restaurant tech and back office side of the business and then ended up taking over the restaurant side in October of last year. Wow.

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Angelo Esposito [00:01:44]:

So I'm curious to hear, so for people that haven't heard of my hospitality, tell us a bit about blind hospitality, specifically the different concepts, all that good stuff.

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Alistair Levine [00:01:53]:

Yeah. So we've got eight restaurants in the San Francisco Bay area. We've got a French brasserie concept called Left Bank. The oldest one of those is 31 years old, but three of them are older than 20 years old now. So it's like a really long time brand. Then we've got LB Steak, which is a steakhouse and we've got two of those and then we've got Meso and Rollotti. Meso is Mediterranean and Rollotti is kind of contemporary Italian American sort of concept. So you know, a wide range of, of of concepts currently, which, you know, certainly is, has good and bad to it in terms of scalability on that side, but definitely, you know, means that we're in a lot of different sort of consumer buckets and have a, a variety of sort of, you Know, guests that we're talking to on that.

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Angelo Esposito [00:02:52]:

Yeah, yeah. No, it's. A lot of people don't realize the complexity of, you know, let's say a 10 unit, 10 hospitality group with 10 venues that have, you know, six concepts versus, you know, just 10 of the same concept. It's. It's night and day.

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Alistair Levine [00:03:07]:

Yeah. It's funny, when I was doing the back office, you know, we were outsourcing some of the financial preparation labor, and, you know, one of the companies that we evaluated, they. They, you know, their sort of claim to fame was that they were doing all the CPKs, and pretty quickly in the process, they were like, there's more variation between two locations of. Of the concepts that you're supporting. Because we were doing all independent restaurants. We did about 150 independent restaurants at the time on. On bookkeeping, payroll and hr, et cetera. All the, all the.

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Alistair Levine [00:03:43]:

All the unsexy back office stuff. And they were like, yeah, between two different versions of your two different clients you're supporting, or even two of the same clients, different locations, there's more variability between vendors and coding and all these other things than. Across the entire portfolio of cpk.

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Angelo Esposito [00:04:03]:

That's great.

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Alistair Levine [00:04:04]:

So that just, I think, encapsulates the challenge that independence oftentimes have.

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Angelo Esposito [00:04:11]:

Yeah, totally agree. I know. I read and correct me, I'm wrong, but that you invested in your first restaurant at eight years old.

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Alistair Levine [00:04:19]:

Yeah, it was. It was seven, but. But who's counting, right? Yeah. So, you know, the first restaurant my dad did by himself was Left bank in Larkspur. It took him two and a half or three years to raise the money to open the restaurant. Your first is always the hardest, not surprisingly. Right. But it's.

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Alistair Levine [00:04:39]:

Yeah, it took him a couple years to raise the money, and I was, you know, doing bake sales and lemonade stands and all the other stuff that you kind of do as a kid and, you know, felt bad for him and so, like, was like, hey, here's $200. I don't know if that gets you any closer to, you know, having no concept at that age of like, oh, is this gonna have any real impact or not? But yes. It's kind of funny that it started there and who'd have thought, you know, 30 something years later, I'd be back running the group. Right. Wouldn't. Wouldn't have been what I would have guessed at the time. But, yeah, I mean, I think to me, like, you know, when you grow up in the business, you sort of realize just how much stuff you kind of inherit osmosisly. Just like sitting at a dinner table.

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Alistair Levine [00:05:23]:

You know, we ate out two or three times a week. My dad was unable to switch off and so it was like, okay, well, oh, they have too many people on or oh man, that's nasty. They're putting fingers in the glass or oh, they should have done this or oh, this is chintzy in the way they're doing this or whatever it is. Right. There's just so many, so many little details that you know, as a kid you don't necessarily like, think about consciously, but you know, you learn to sort of look and examine the operations of a restaurant in a way that, you know, I feel super fortunate to have sort of grown up in. And I think it's why you see, you know, a lot of successful restaurateurs, oftentimes despite them being slightly nepo babies, if we will like, you know, there is some benefit to that or can be if it's, if it's harnessed correctly. And a lot of, you know, like, like Will, his dad was, you know, Will Guardiera, his dad was a restaurateur and now he's done all these incredible things. I think like there's a, there's, it's not an uncommon story because I think the businesses a.

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Alistair Levine [00:06:25]:

It's, there's not a lot of like formal education that really is successful for the business. A lot of hands on education. And so depending on when you start learning that it can, it can really be this, you know, huge competitive advantage. I, I sort of look at working in other industries as the same way. Right. Like, you know, I think so many, so many people in restaurants sort of look at the industry with sort of blinders on. Right? Because it's like they've worked in this industry and to their credit, they've worked in this industry all their life and, and you know, have been wildly successful on that side. But I think having some understanding about how other industries function because we're a fairly siloed industry I think is really helpful, especially tech or sales or any of the hr, any of the areas that I wouldn't say restaurants are like thriving at in a macro basis.

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Angelo Esposito [00:07:13]:

I love that. I think there's like two, two good takeaways on what you said there that are really powerful. Just kind of reiterate to the audience is, is one, is that idea of just, you know, surround yourself by the right people. Case happened to be your dad, so you were automatically with him a lot. But you know, if you surround yourself with the right People and spend, you know, the, the, the, the closest five friends was the saying that the closest five friends will probably show you who you are kind of thing. So that osmosis thing is a real thing. And then I think the second ticket, which makes a ton of sense is sometimes being able to work in adjacent industries and come back gives you a different perspective as well because you see how different industries might do things that it might give you a different perspective. So I really thought that came to mind was you were mentioning how, you know, the first restaurant is always the hardest and I've heard that before for, for many people.

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Angelo Esposito [00:08:04]:

But I'd love to hear from your point of view to kind of, you know, we have a lot of restaurant operators listening in. Maybe you could shed some light on what is that turning point from first restaurant to the next hump and then the next hump. Like where do you see kind of the stages from X to Y to Z?

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Alistair Levine [00:08:22]:

Yeah, I mean I would say still learning every day. So there's going to be a bunch of stages. I won't know yet, unfortunately. Right. That the goal is always to get there. Right. But so I think raising money for the first restaurant, if you have to go and raise the money is always really hard. Right.

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Alistair Levine [00:08:37]:

Because it's a high failure, high risk industry. Getting people excited to give you money and get it. Having them have confidence that you're going to give them their money back and generate a return, which is what investors want is not easy. I mean my dad prior to that was the CFO of both ILO and Gordon BE two very well known, well regarded things, had a Stanford mba. So like, you know, very well educated on the finance and business side, which I think is where a lot of operators fail. Not just in our industry, but the reality is any, in any of the creative professions, most creative people are not necessarily the best at operating a business. I would say depending on what type of operator you are or what type of owner you are, if you don't know the business side, either find a partner that does or find a great outsourced provider that you're going to be really confident in. But you've got to, you've got to at least be capable at the business side.

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Alistair Levine [00:09:26]:

Otherwise the creative side can only take you so far. But I think, you know, so obviously the first one's really hard, then 1 to 2 is hard because you're basically like doubling everything. In general. I have the philosophy that anytime you double the size of your business, you break all of your existing systems. So what works well for one, no longer works well for two. And then what works well for two no longer works well at four. And what works well at four no longer works well at eight. And then, you know, somewhere in the 1216 range, you're going to break those same systems.

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Alistair Levine [00:10:00]:

And then I would guess at sort of 25ish, you start to break the same systems. And I don't know where it goes beyond that, but you can assume 50, etc. Right. I think at some point you just sort of have the systems. And I'm not sure that, you know, if you're going from 300 to 600, you're materially breaking things in quite the same way. So I would imagine that would, that would fall off. I just don't have the experience to say specifically, but I think, you know, it really comes down to, you know, you think about at one location it's just figuring out how to get everything up and going. Then when you go from the first to the second, it's okay.

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Alistair Levine [00:10:33]:

How do I get confident enough in my general managers or my managers at each of the locations, at least we're in full service fine dining. So some of this also is going to be a variable based off scope and scale of the business and the type of segment. At least in full service fine dining, where we're doing 3, 4, 5, 6 million or more in an individual location, that 1 to 2 becomes hard because you need to basically create a whole second team. How do you get the culture from the first team to the second team? How do you make sure that's successful and you don't yet really have above store management to like there's no director of ops, there's no right, like all of that infrastructure does not exist yet. Only with two locations that starts to come in at 4. But now you're starting to have middle management, which you start to have then you know, the door open, at least in California for litigation and employee claims. Because I generally have the philosophy people don't sue people unless you're really heinously bad. But like they do like suing companies because it's sort of this nameless, faceless thing and it's like, well, the owner's never here, so like screw them, they're just getting rich, right? Or whatever that, that, that, that thing is.

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Alistair Levine [00:11:42]:

And so it's what you see claims start to rip up on, on sort of more of the ticky, tacky side around that 3, 4, 5 location as you start to have that, you know, do some of the above store infrastructure starts to come in and that sort of three to five location range. And then, you know, you go to multiple D OS and you start to have these layers of management as you get closer to the 8 to 10 unit range. But you're also, you know, needing to start thinking about, depending on how quickly you're growing, do I need a director of construction or a head of construction if I'm going to open a restaurant every year? It's probably worth considering some of those other pieces of infrastructure. How do you start thinking about private dining, sales or marketing or any of these sort of things that oftentimes at one or two units, you might have just simply outsourced or not even considered. And now you're starting to bring on additional people on your team. So who, who are they reporting to? How does, how are you managing them? You need to, you know, start thinking about really building out process because from one to four, you're sort of, hey, you're relying on whoever the employees are in the building. From 4 to 8, you're sort of thinking about, okay, you're still only relying on the, like, above store leader levels. Beyond 8, you really need process and systems.

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Alistair Levine [00:12:55]:

Otherwise you're going to. It doesn't matter how awesome your team is. It's just too much stuff and too much things to keep track of to do successfully. So I think those are, at least from where we've been, where we see that there's real hurdles. And, you know, the people that I'm actively talking to now, who are further ahead than me in that 12 to 16 range that they indicate that that's yet another sort of. You start thinking, hey, you might have restaurants regionally, you're no longer within driving distance to all of your restaurants. Or you, you know, you may have other challenges that start to pop up in that range and those systems really start to be tested and you've got to sort of continue to double and triple down on them.

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Angelo Esposito [00:13:39]:

Well said. Really well said. And, you know, there's a lot of people that maybe only have their first restaurant, maybe second. So if we zoom in a little, what are some lessons you learned going from those that first and second to maybe that next big jump that you can maybe share or things to avoid?

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Alistair Levine [00:13:54]:

Yeah, I mean, so I can'. I can't take too much credit because I wasn't the one who grew it. My dad grew it from 1 to 5, and we had a different CEO grow it from. From 5 to 10. And then I've pared it back a little bit as we had Some deals that weren't successful. Look, I think fundamentally that you could never redo your lease if you're, if your landlord relationship's not great, they're really a partner in your business. If you, unless you're going to own your own real estate, which is a whole, well, we'll just set that aside in a separate bucket for right now. Right, but if you're not going to own your own real estate, your landlord really is a business partner and you need to think of them just as if you were validating any other business partner.

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Alistair Levine [00:14:33]:

Like if you have a bad lease, you're never going to be successful. I don't care how great a business you operate, the lease will kill your business. And if for some reason you are not successful and if you have, have a great lease, you do have some ability to salvage some value by potentially selling or assigning that lease. So yeah, I think getting that, that right attorney who's going to be part of those lease negotiations, making sure that you manage them well so they're not just racking up a massive legal bill for you, but like do not sign leases with personal guarantees. Do like, do not, do not sign leases without an attorney reviewing them. There's some basic things that I certainly, both on the back office side and, and seeing what, what, what you know, competitors or other industry peers have done, those are some like huge missteps that can be like relatively easily avoided. But I think a lot of people are like oh whatever, we'll figure it out and it's a great spot and right. And it's like you can end up in just an absolute world of pain where if you've personally guaranteed something, you know, that landlord, if you're unsuccessful and look, businesses fail all the time and sometimes they fail for totally non rational manner.

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Alistair Levine [00:15:43]:

Right. Like we all the time will put a menu item on and be like, oh, this is going to crush and then it doesn't the same thing happen with a business or you can just be the wrong thing for the wrong people at the wrong time, no matter how good, how experienced you are. So don't forget to do that. Like it's really exciting to open new stuff. Don't forget to do the downside risk mitigation step and really think about okay, if all of this blows up, what is the worst that will happen? And make sure that the worst that will happen isn't, especially if you're going from one to two units or two to three or four, isn't that the entire thing goes away. Right. Because you will have lost all of that foundation that you have built rather than, and we all take missteps. We all, hey, this is a new concept or this is a new thing, right? So that's where I stress like, like again, it's really about building your team, right? Sort of back to, hey, you're sort, you know, you're the sum of the five closest people to you, right? Like you should have a great attorney that you really trust that you have a great working relationship with and they, they should feel empowered to tell you, hey, this is a bad deal or these are provisions that you cannot say yes to.

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Alistair Levine [00:16:55]:

And don't sort of put on the rose colored glasses and be like, oh, this is going to be amazing. And then it's not, right? And so I think from the one to two unit range, that's a critical piece. I think the other critical piece is talk to your guests. Like I think the reality and staff, truthfully, like they're all, they all generally want to provide feedback. And the way you're going to grow the business is you're going to get passionate guests coming in repeatedly and consistently. And if that's not happening, you should be asking people, hey, what can we do to get you in one or two times more per week, per month? Whatever your sort of frequency might be for your average guest, you know, I think those are really critical. And then sort of the last sort of pillar I would say is going back to sort of the business and finance side is you got to look at the numbers. Don't, hey, once in a while maybe we'll get, you know, somebody on the family to create a P and L.

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Alistair Levine [00:17:50]:

And we're going to do that once a year and oh, we've got money in the bank account. Like look, it's just if you don't look at the numbers on a regular basis, you can't manage to them. You will not have an idea when, you know, labor costs go up or food cost goes up and you won't be able to like, this is an incredibly agile business. What happened two weeks ago might not be what's happening today. And if you don't know what's happening even two weeks ago, you can go a long period of time where you're just lighting money on fire. Unlike other industries like if, if, if you were, you know, if you worked in manufacturing of something, if you made way too much product, that product still has value. If you ordered way too much food or you spent way too much on labor, sorry, in a week or two, it's Gone, like, and the labor's gone basically as soon as you spend it. Right.

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Alistair Levine [00:18:37]:

So I think that's where it's. It's just so critical to be looking at that information and to be empowering your team with that information. Because the reality is, sure, if you have one restaurant, you're just an owner and you're the owner and you're the owner operator and you're there every day, sure, you might need to be only person looking at this information. But as soon as you go to a couple and you have managers, empower them with the information. Like, and if, if they're going to just leave or if they, you know, like, oh, I want a huge raise because I see you making all this money. If you're truly making all this money, like, and they're a critical portion of that success, well then you should consider that that might be a good use of funds. Right. And not saying to just pay anybody, whatever, but this is ultimately a people based business.

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Alistair Levine [00:19:25]:

And if you've got people who are critical to your success, you know, figuring out what that looks like is, is, is super critical.

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Angelo Esposito [00:19:32]:

Yeah, can agree more. The team around you many times make or break you. And then with the lease, that's some good advice. I've had friends that have, you know, in the industry that have been burnt that way and you know, first time restaurateurs and you know, didn't then take the advice you just gave, which is, you know, double checking, not leading too much with the emotion, having an attorney review things. Actually where I live, I live in Miami. Miami. It's super common for restaurants that take on crazy expensive leases because it's Miami and they're excited and it's like, well.

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Alistair Levine [00:20:03]:

Just everything's going up and then all of a sudden like there's way too many restaurants and Miami's a little bit. Got some headwinds at this point, right? Like so yeah, and you got.

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Angelo Esposito [00:20:13]:

And back to your point is like, is like, yes, okay, you could be somewhat emotional, but you got to look at the numbers, right? If you start doing the math on the ren and what you got to sell, you know, you look at your percentage points, average labor costs, average food costs, depending on your industry, whatever, and you start doing the math. You got to also be realistic and be like, okay, you know what, sure, there may be a lot of foot traffic here, but can I actually hit this amount of sales consistently?

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Alistair Levine [00:20:36]:

It's like, well, I think you always got to start with building a model before you take it on, right? How much? If I Need rent to be between 6 and 10% occupancy cost.

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Angelo Esposito [00:20:47]:

Yeah.

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Alistair Levine [00:20:47]:

How much do I have to sell for that to be true? How many seats exist in the restaurant and what does that mean? The check average poor per person. And how many turns might I have to do to hit that number? Right. The reality is, if you're modeling three turns a night, you're probably going to be unsuccessful. Like, if you're modeling two turns at lunch, you're probably going to be unsuccessful. You could have the hottest restaurant, but those are like extreme outliers. You can't build a model that only shows that being the case. And then back to sort of the risk mitigation or downside. Like, you gotta look and see.

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Alistair Levine [00:21:22]:

Okay, well, if sales are down 20%, can I still make this business make sense? Maybe not at a wildly profitable level, but at least at a break even. And subsistence. Right, right. And sometimes you're gonna have. Hey, we've had recessions, weirdly enough, right. Like they, they happen. Right. And so I think, to me, so much of it starts there.

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Alistair Levine [00:21:42]:

And I think that doesn't take away from the fact that the food needs to be awesome and the beverage program and whatever the other pieces of the puzzle need to be. But those are actually all easier to solve than a lease. A lease is not an easy to solve problem. If the food sucks, it's pretty easy to hire a new chef and completely redo the food. Now, consumers may not immediately notice that, but it's a relatively solvable problem compared to if your lease sucks. Like, guess what, you're, you're signed to a legal contract. This is not an easy to solve problem. Right.

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Alistair Levine [00:22:16]:

And so I think that that's the way at least we look at it is like, okay, how do you figure out what needs to be the most? Like, what are the things that you can change the least? You know, the build out of the space. If you mess up the build out of a space, it is incredibly expensive and time consuming to change the build out. Right. That's not something you're like, oh, yeah, no problem, we'll just do that tomorrow. Right. It's so it's a matter of like really, really digging into those pieces.

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Angelo Esposito [00:22:41]:

That makes sense. No, really well said. And this is good advice. Like I said, I'm a big fan of just helping our restaurant and bar audience just kind of think about these things and hopefully shed some light from people who have lived it. And so thank you for that super sound advice. One thing I want to pick your brain about that again I think can help them is KPIs. You're running many restaurants. What are some KPIs that you think of when looking at an individual, but also then looking at it at a group level to understand how are my managers doing, how my restaurants performing? Obviously I got some ideas, but I want to give you a chance to share it because you're living it right now and it could probably resonate more.

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Alistair Levine [00:23:22]:

Yeah, I mean, I think KPIs are going to be different based off different concepts, but at a core level I can speak through sort of full service fine dining. What we look at, right, for us, it's very much what are sales and then how are we comparing those to the prior week and the same, same week, prior year. So you know, we, we think that those are, what we always want to see is are we growing sales year over year and are we are. And what, what direction are we trending in? Are we, are we down week? Are we an up week? Are we a flat week to compared to like where we're at, you know, right now? Because, because hey, you might have an economic change or portions of the year are busier or slower. Those are, those are things that all naturally happen. The other piece of that is we look heavily at guest counts. Because what I don't want to end up with is, and that could be transaction count if you're in the sort of QSR space, et cetera. But what you don't want to end up with is just ranking, you know, ratcheting up price.

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Alistair Levine [00:24:19]:

So your sales are going up, but you're actually serving less guests. That's not the sign of a healthy business. That's the sign of a business that at some point you're not going to continue to be able to take price and you're going to watch that sort of bubble pop and you're going to see these, these, these major sales declines as you sort of price your consumers out of their, their value band that they think you're at. We then also really closely look at prime cost, which in our world is basically half of that is cost of goods sold. We look at that not just at the overall level, but then on a category spend basis. Because what we want to understand is, hey, did we spend more as a percentage of sales on meat last year or this year? Thus we can be a little more targeted. And if we do need to take price where that might happen, if we need to look at different suppliers, what we need to look at right, gives us a little bit more granularity because to me, all of these KPIs are awesome. But the reality is it's all about what can I learn from this information to make an operational change to drive a better result.

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Alistair Levine [00:25:22]:

And if I'm not doing that last step, none of the KPI's matter. So, so yeah, it's like, so how do we figure out how to sort of align that as closely as possible? And then we look at labor, we look at front of house and position type labor. We have targets and so we have budgeted numbers for all of these things. So we can also comp against budget as well as well as prior year. So, so you know, those, those are sort of the, the key starting point KPIs. From there you can kind of start to peel the onion back into things like server productivity and performance for us. What's the number of items they're selling? What type of items are they selling? So are they selling beverage, which is more profitable for us and not selling food? Like what, what might that look like? Right. So that we can identify where best practices might be and who our best servers are and give them the best sections and the best periods of time.

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Alistair Levine [00:26:19]:

So we can drive as much incremental business as we possibly can. Because you know, generally on Saturdays you're going to be busy and full. Hey, you want to have your best servers on, on Saturdays so that they can make the most money that they can possibly can. But you can also sell the most stuff you possibly can. That's very much sort of where we net out those. Those would be the high level KPIs. From there you can start looking at guest sentiment, turn times, sales per labor hour, both front of house, back of the house. Like there's a lot you can start to dig into.

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Alistair Levine [00:26:50]:

But I would say at least if I was setting up new KPIs for a restaurant and I was a brand new restaurant operator, I would challenge them to understand, okay, what is the operational action that this KPI I'm hoping to have drive? So, hey, labor's too high. Okay. I need to look at how our costed schedule looks like in our. Is our sales forecasting good to determine where the problem is? Is it just people showing up when they're not scheduled? Okay, well why are we letting them clock in then if that's the case or whatever that might be? Right. I think those all give you some, some clear like ability to sort of drive from that, that point in time.

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Angelo Esposito [00:27:32]:

Makes a ton of sense. And I know, you know, you touched on your father. I think One thing that's always interesting is, is the learnings you can get. You know, watching your father maybe start the business and grow, you know, Vine, I think it's fine dining and Vine Solutions. But just in general, seeing him kind of start the business and grow, what's maybe one lesson from him that still guides you today?

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Alistair Levine [00:27:55]:

I mean, the lease thing is a huge one. He was a, like, ferocious lease negotiator and did a lot of it as a consultant, like on. As a consultant. So that's certainly one. Yeah. I think, look, the core to me is like, these are businesses. And so, you know, he was focused on running them as businesses. And I think that's a huge.

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Alistair Levine [00:28:13]:

Still core for us, right? I think, again, like, they're a business, they need to be run like a business. Business need to make profit. You measure what matters. And when you highlight and have those discussions there, there's an emotional and sort of science. Like, there's a science and magic portion of, of hospitality, right? Like, there's a certain vibe when you walk into a restaurant that you can't. Doesn't show up on a P and L, right? But you're like, oh my God, this restaurant feels hot. This feels awesome. The food's amazing.

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Alistair Levine [00:28:43]:

Those things don't show up on a P and L. So you. We've always got to be balancing both the sort of P and L worldview, which is the very business, like, financial standpoint, with remembering that, like, we still got to provide great hospitality and memorable experiences for guests to get them to come back over and over again. And so. And that's a hard thing for restaurants to sort of manage because we don't. We have so many people coming in that we don't actually know who are coming in, right? Like, unless every single person is making a reservation and we have all of their contact information or they're on our loyalty program or any of those types of things. There's so much information we don't know about. So many of the people that we, we inter, you know, we interact with.

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Alistair Levine [00:29:24]:

We've got to make some of these educated guesses. So I think those two, like, it's, it's, it is a business. But then how do you, how do you blend in some of that magic of like, oh, the lighting is incredible, or the music playlist is like. And what I would encourage most operators is most people are going to sort of make a restaurant in their vision, right? So, like, if you're a culinary person, the food might be awesome, but some of the other pieces are Going to be weaker. Right. If you're more of like a nightclub promoter getting into restaurants, of which there's plenty of that. Like, I'm sure the music and the lighting and like the scene should be on point, but the food and some of the other stuff might be missing. Right.

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Alistair Levine [00:30:03]:

It's really hard to do all of it really well. And I think, you know, for us, we've still got a long way to go. But this is where you start to think about how you build your team. I'm awesome at this thing. If I spend more time doing this thing, we're going to be wildly successful at this thing. How do I start to find people who are great at the other pieces of what it is we're doing as you build and scale the business so that you can have a more well rounded, balanced sort of experience.

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Angelo Esposito [00:30:31]:

Yeah, well said. Totally agree with that. Switching gears real quick. You know, we're obviously in tech at risk. I know you were in. You were in tech as well, in the restaurant tech. But I know it could be overwhelming for restaurants, right? There's a lot out there. There's too much.

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Angelo Esposito [00:30:49]:

There's POS and this and there's companies like, what's doing inventory and there's staffing, you name it, right? There's something. There's a lot. So I'd love to get your perspective from the operator standpoint, because you've lived a bit of the tech side too. But from the operator standpoint, what would you tell them? What would you tell operators that often resist tech? Because I know there's some truth to resisting some of it, but like, what. What advice can you maybe give them?

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Alistair Levine [00:31:14]:

Well, so I'd flip it a little bit, and I feel like restaurant tech has sort of dug their own grave on some of this stuff where there's a lot of over promise and under deliver across the industry. And a lot of the tech's just not very good because you sort of have restaurant people and tech people. And I sort of have joked that never the two shall meet because you have like tech people are like, well, yeah, your chef will just go in and spend an hour entering data into this system. It's never happening. So like, yeah, we can just stop the conversation right there. And then a lot of the operator side that really have these problems that need to be solved where tech could really have an impact, they don't know how to develop technology. And so you have, like, you have this problem. So I think that's historically how that's worked.

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Alistair Levine [00:31:57]:

It is moving in the Right direction. Like, the reality to me is we have to as an industry become find ways to become more efficient. Labor is not getting cheaper, cost of goods is not getting cheaper. Like, all of these things are going to continue to put pressure on the P and L. And that's not to say like, oh, go just spend a ton of that money then on tech, etc. But I think the reality is figuring out how to utilize technology as a force multiplier is critical. And so to me, oftentimes that starts with, what is the problem you're trying to solve? And I think this is where operators at some times just sort of hope and pray that it's like, hey, there's this silver bullet and if I sign up with Wisk, all of a sudden my inventory is going to be amazing. I don't have to do anything for it or whatever the.

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Alistair Levine [00:32:46]:

Whatever the answer might be. Right? I've seen it over and over and over again. And we're guilty of it, you know, internally, even. Even at times. Right? So it's, what's the problem you're trying to solve? How is this going to make your team's life either better, more efficient? Like, are you saving your team time? If you're not, you better really be delivering a lot of value because they don't have a lot of time, generally at the store level. Right. And so what is the problem you're trying to solve? Once you've determined the problem you're trying to solve, it makes it way easier to go shopping for what it is you might think a technology solution should do and then really beat up that technology solution. The other thing I would always say is figure out who's using the product that isn't on the tech company's referral list.

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Alistair Levine [00:33:33]:

And that oftentimes is just, hey, have some conversations with other operators in your market. I know that as an industry, we're a little bit insular and we don't talk to our peers often as we should, but this is a great area where, hey, how is this going? Because the reality is most tech salespeople will tell you the product is perfect and there are no warts and whatever. And the reality is there might. There's. There's a lot of inventory products, just as an example out there. Some are going to work really well with Toast for this segment of the market. Some are going to work really well with Aloha for this segment of the market. Right.

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Alistair Levine [00:34:07]:

And so again, having clarity on, okay, where are you today, where might you want to be tomorrow, and what Is the problem you're solving, you can start to ask really specific questions about, okay, well, how well do you integrate with my POS of choice? Do you integrate with my General Ledger software? Do you like whatever the, again, whatever the problem solve is. Right. Like, I think that's such a critical portion of technology. And then I think the other piece for me is technology should enhance hospitality, not diminish it. And this is an area where restaurant tech really could some expertise themselves on that side because so often it doesn't, it takes away. But the reality is like, there's a lot that technology can enable, whether it's, you know, tracking consumer preferences or other things like that that should allow us as operators to deliver a far superior outcome for our guests and for our employees and empower them to deliver those great experiences. But again, if we don't know what problem we're solving for and we're not, we don't sort of keep that for, at the forefront, that that's critical. The other thing I would say is there are very few companies that are master of all, but integrations are also challenging in the space.

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Alistair Levine [00:35:18]:

And oftentimes they'll be like, oh yeah, we integrate. And then it's like not fully, deeply, completely integrated. It's sort of ad hoc. And so those are areas that I would, I would push on. Again, I think a lot of it goes back to talk to your peers. Like you're gonna know who are the most savvy tech operators with, you know, within a, within a market, like have the conversation with them about what's working, what's not working, where might you want to see something, where might you not want to see something, and then don't try and do all of it at the same time. Pick a thing, figure out how you're going to roll it out, get it rolled out, determine is it delivering the success you thought it was, and if it is, great, then you can do more of, of either the same thing or look at a different category. But, but don't try and do it all at once and don't.

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Alistair Levine [00:36:13]:

Generally, I don't think all in one providers are not moved in general. So.

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Angelo Esposito [00:36:17]:

Yeah, well, no, super. Well said. I could tell you've lived it because I, I very much feel very, very similar. So it's, I can tell you, you live this experiences and it's tough. You know, on the flip side, on the, on the tech side, it's tough because, you know, you want to stand out. And I agree with you. I do think most companies totally over promise and under deliver. And it's like, how do you convince people you're not the same? And for us, one thing we did is like, okay, let's just put our money where our month is.

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Angelo Esposito [00:36:45]:

Let's give people a 60 day money back. So don't, don't take my word, don't take the testimonial. Obviously the testimonials are going to be good. I'm not going to put a bad testimonial on my website.

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Alistair Levine [00:36:53]:

Of course, I mean no one would be like, oh yes, we suck, let's put that on the website. Right?

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Angelo Esposito [00:36:57]:

Like, you know, so I'm always like, at least this way you judge for yourself, you got 60 days. But you're. And I totally agree with the sentiment of like, there's no catch. All right. Like if someone's coming in, they're full service. That's actually what we do really well. Their full service, their beverage program is important. Will be like top one or two.

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Angelo Esposito [00:37:15]:

They're coming in and they're, I don't know, thousand unit qsr. I'm not gonna lie and sell them and then put ourselves in a pinch, you know.

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Alistair Levine [00:37:22]:

Well, and I think that's where restaurant tech's got to do more of that. Picking the right clients. But it also goes back to that. This is sort of the flip side on the restaurant side is every edge case is not a critical thing. Right. And you know, I think where restaurant tech gets itself in trouble is like, yes, yes, yes, yes, yes, yes, yes. You actually as an operator look to work with some of the people who tell you no occasionally, right? If they tell you yes to everything, actually I think that's a red flag now. They need to tell you yes to the critical pieces of what you're trying to solve for.

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Alistair Levine [00:37:55]:

But you want to get some no's or you want to get someone to say, hey, let me go look into that. I'm not sure. I don't know where that's at. Is that in the development Sprint or whatever that might be. Right. And look for somebody who's looking for feedback and wants to get better. Because ultimately tech as a product, it's not fully baked. It's always evolving.

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Alistair Levine [00:38:19]:

And what features tech is going to add is going to be driven by consumer feedback. But restaurant tech gets itself in trouble when they just want to say yes to everybody. And like, it's like, oh, this one operator does this slightly weird different thing that no other operator does. It's like that one operator probably should be a little flexible and like, unless they've got a really compelling reason for why whatever the way they're doing it is the way that like the industry should do it. There's going to be things you got to be like, both parties need to be somewhat adaptable and I think that's where both parties get themselves in trouble with each other. Is, is there too? Well, this is how I've always done it and then this is a tech, I need to do it the same way I've always done it. Well, the way you've always done it might not actually be good. Like let's, let's, let's, let's preserve that, that might be an option and think that that could be potentially the case.

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Alistair Levine [00:39:12]:

Right. And I think if that's the case, then you can be a little more open minded and again it goes back to what's the problem you're solving? Who are you solving it for? What's the stack? You know, I think there's a lot of, there's a lot of ability to figure that those portions out. But like both parties have to be working together and figuring that out.

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Angelo Esposito [00:39:32]:

Totally agree. It's funny sometimes when you know, restaurant partners ask me, Angelo, like, come on, just, just be transparent. What POS do you recommend? I'm like, I can't tell you what pos because you got to decide number one, are you a qsr? What type of venue are you? How many venues do you have? What's your main thing? I'm like write down. So the best advice I typically give them is like write down your top five non negotiables that you need from this POS system and focus on that. Because if you just start getting demos, you're going to get confused because then you just start seeing random things that you don't even need. They might be selling you on online ordering or on loyalty and all of a sudden you're like, oh, they got loyalty when it wasn't even in your top five. So that's my biggest tip to people is right now top five, top ten, whatever it is. So if POS doesn't have that, I'm saying pos, but any tech company doesn't have that thing.

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Angelo Esposito [00:40:19]:

You don't get lost in the bells and whistles and you're totally.

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Alistair Levine [00:40:23]:

Well look, I think one of the companies I would say is doing the best of like really being clear about who they are and who they're for right now is Q. They're very clearly like, look, we only want to talk to you if you have 35 units or more and you're a QSR and really at 35, it's like you better be a growing brand. But like, right, like, you know, but they're very clear about who they're for and as a result they've been able to go incredibly deep in the features and functionality those operators care about. And what's the commonality across, hey, 90% of them really care about this, this, this, this and this. Well, now I can build a really robust, really, you know, really clear use case for them, but I have to say no to a lot of people in order to focus and have that depth. Right. And I think this is where it's hard. It's like if somebody's telling you they do enterprise and small business really well at the same time, unless it's two completely separate departments, I'd be really suspicious of that.

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Alistair Levine [00:41:21]:

Like, like. And again, this goes back to, okay, well, who's listed on the website? If it's tons of like it's Burger King and, you know, Taco Bell and whatnot, and you're a single unit operator, they're probably not the right pick for you because they're not going to be used to working with companies that have teams and floors of people to just interface with them. Right. And you're going to have like, oh no, I've got 12 minutes right now. Could we like hop on a quick zoom. Right. And so I think that's the, again, it's like, it's just being rational and realistic about that. You know, I think the other thing is, you know, use, use your, use that network.

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Alistair Levine [00:41:57]:

Like if you've got kids, they're going to be more tech savvy than you are. Oftentimes an operator, like depending on their age. But like have them go and validate. Yeah, some of this stuff. Right. Have them be part of the process. Right. I think tech is, as I say, it's gotten this bad reputation within the space.

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Alistair Levine [00:42:15]:

It's not going anywhere, we're going to see more of it, but it's figuring out what's going to be the most successful, etc.

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Angelo Esposito [00:42:23]:

Yeah, I love that. As we wrap up, I got one more question for you and then I want to end off by just plugging so people can find you on LinkedIn, check out your website, learn more about your hospitality group. So went off with plugging you, but real quick, last question for you was just if you had to give one piece of advice to a new restaurant owner trying to stay profitable in today's market, what would it be? Let's let's stick to fsr, I guess.

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Alistair Levine [00:42:46]:

Because, yeah, I mean, I think, I think you got to watch the numbers, right? Like, I think that's got to be the starting point if, if you're not watching the numbers and you're not watching them daily, weekly, like that's the cadence. You got to be watching them at. You're, you're, you're going to, it's really, really hard because it's, you got to be so agile. And if you're waiting until an accountant delivers you a P and L once a month, two weeks after the end of the period, it's gonna be six weeks before you can make a change. And if you're spending an extra $2,000, which doesn't seem potentially like that much if you're doing 5 or 6 million a year, but if you're spending 2,000 extra on labor for six weeks, guess what you just lit on fire. $12,000. Right. And those numbers just get really fast, really big, really scary so quickly if you're not looking at it daily, weekly.

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Alistair Levine [00:43:34]:

Yeah. I think the other thing is, the reality is this is a people based business and you've got to empower and you've got to set your team up for success, especially if you want to grow the business. And I think there's high turnover in the space. There's a lot of, there's a lot of headwinds around that. But I think everybody can feel when you walk into a restaurant and the vibe's right and the staff are happy to be there and they're having a good time and they're, you know, you're going to just have a great time then. Right. And you've also, we've also all walked into a restaurant. We're like, oh my God, this feels like a funeral parlor.

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Alistair Levine [00:44:08]:

And like everyone doesn't want to be here right now.

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Angelo Esposito [00:44:10]:

Right.

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Alistair Levine [00:44:11]:

And that's fine. But like be reasonable and rational about which one you are and then figure out how to fix it. Right. So to me, it's like the numbers plus that piece, if you can get those two things right, you're gonna, you're gonna be pretty well placed as long as you've got that solid lease that we talked about. About.

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Angelo Esposito [00:44:28]:

Well said, well said. This is awesome, Alistair. I want to end off by just, you know, letting people know where they could reach you. So Feel free, website, LinkedIn. Just drop it every, wherever people can find you. Or more about buying hospitality.

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Alistair Levine [00:44:41]:

Yeah. So, so I, I have musings on, on LinkedIn just under Alistair Levine. You'll find me pretty easily. It's fairly unique name. So you know, I have, I have a fair amount of like sort of sort of blog post y LinkedIn posts. Feel free to dig into those. If you got questions, shoot me a DM or reach out. And then, you know, our website is Vine Hospitality V I n e hospitality.com.

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Alistair Levine [00:45:10]:

you can check out the concepts and whatnot. And yeah, I mean, I think we're just, you know, we're trying to figure out how do we build and scale a restaurant group in California, which is not always the easiest thing to do.

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Angelo Esposito [00:45:21]:

So I love that. Well, Alistair, thanks again for joining us. For everyone listening in, this was Alistair Levine from CEO of Vine Hospitality. We'll include all the links so you can find him following him on LinkedIn. Check out the website. So thanks again for joining us today.

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Alistair Levine [00:45:37]:

Yeah, of course. Thanks for having me on.

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Angelo Esposito [00:45:40]:

If you want to learn more about WISK, head to WISK AI and book a demo.

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Alistair Levine [00:45:47]:

Sam.

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