Talent issues dominate most business discussions these days, and that’s certainly true among entrepreneurs in Grand Rapids’ restaurant scene.
Chef-owners and executives at restaurant groups alike say they’re struggling to find people at a time of low unemployment, a challenge compounded by the many new entrants hitting the market and scooping up some of the best workers. At the same time, they’re at the mercy of a culture in Grand Rapids that’s still slow to embrace culinary experimentation and to dine out often enough to support a seven-dayper- week food scene.
That’s according to a group of restaurant industry insiders MiBiz gathered for an executive roundtable. Restaurateurs participating in the discussion were:
- Kevin Farhat, co-owner of Garage Bar, which has two locations in Grand Rapids; Graydon’s Crossing; and 741, formerly Kuzzins Lounge
- Meagan Freriks, managing partner of One Bourbon
- Geoff Gaskin, a partner in CDKI Holdings, which operates Zoko 822 and MeXo in Grand Rapids and Sandy Point Beach House in West Olive
- Paul Lee, co-owner of Winchester, Donkey Taqueria, What the Truck food truck and the in-progress Hancock on Wealthy Street
- Rick Muschiana, co-owner and manager of The Sovengard
Here are some highlights of the discussion.
From a 30,000-foot level, what’s your perspective on the Grand Rapids restaurant scene?
GASKIN: I grew up here. I moved away 32 plus years ago to Florida … and I just recently came back home as a partner with my cousin, Peter Krupp, in CDKI Holdings. … So what’s interesting coming back to Grand Rapids is how the scene has really (developed). … It’s interesting seeing Grand Rapids from a fresh set of eyes and seeing how cool this city is and what a food-centric city it is, thanks to obviously people in this room. I think it’s really just very cool that somebody can come to Grand Rapids, Michigan and have a Chicago-level style of food in this city.
LEE: I would echo that, but I kind of feel like we’re still five years out from really, truly being that everyday food scene. I think we’re still very much a Thursday, Friday, Saturday food scene, but what we’re really lacking is what happens on Sunday, Monday, Tuesday, and Wednesday. There’s a lot of great concepts and great restaurants in this town, and where they struggle is that they don’t have that seven-day-a-week business that a major city would have, even though our food and our concepts are on par with some of those big cities.
FARHAT: I worked for corporate restaurants for almost 30 years. But the independents are very strong here. … With the new, innovative food that they brought to the market, it’s become a food town. … I’m still amazed by the breweries. I’m just amazed by the fact that so many are still popping up. There’s a lot of young people now. Our sales are up and we continue to grow. And I don’t know about anybody else, but it’s just an impressive city, but it’s independently driven, which I think is pretty cool.
FRERIKS: What I think is really neat about the growth is that it seems to be restaurants that are pushing the traffic. We’re not seeing the housing. We’re not seeing so much of anything else. It’s really the restaurants that continue to grow. And the breweries and distilleries are coming in, and it’s making this city more and more desirable for those young people to come in. And we’ll get housing for them, and we’re doing all this construction for them. And I think it’s neat. But it’s also cool to be just the one pushing it. ‘Hey, we need more people.’
MUSCHIANA: For us, we’ve made it to almost two years, but it feels like we’re pulling and we’re fighting for every dollar, for every person, just because there are so many great places around right now. And I think that’s something that’s worth discussion: As more and more places in Grand Rapids pop up, what does that mean for the places that are established? We’re sort of in the third generation here now, in terms of restaurants.
Why does Grand Rapids struggle compared to the food scene in larger cities?
LEE: I think part of it is housing. … I think there’s going to be more people moving in from outside of Grand Rapids, whether it’s through the hospital or some of the other businesses coming here. And they’re coming from major markets. And then what’s happening is they’re going to start seeking out what they’re missing where they came from. … While I think we’ve got some great restaurants, there’s all that stuff in between that we’re kind of missing. And we’re a few years out from that.
FARHAT: I’m partners with Third Coast Development. You see the cranes all over the city. And they’re rapidly trying to build, and they’re getting a pretty good dollar for what they’re offering. So those guys are in a very fast growth rate, and it’s a boom time right now. I’m friends with guys from Pioneer Construction. This is some of the best time that they’ve had.
FRERIKS: It goes back to: We need more people. That’s the problem. I mean, we’re all slammed Thursdays, Fridays and Saturdays. It’s the Sunday through Thursday. We shut down Sundays and Mondays. It wasn’t worth it for us.
MUSCHIANA: There is a Grand Rapids mentality that ‘I’m not going to try something that’s weird or different.’ Here’s where we’re stepping off from Chicago, New York or Los Angeles. (We want patrons) to have an element of excitement and surprise at what we’re doing — something that’s new, unique and fresh, and has these great complexities and flavor combinations. (We want them) to not be so scared about it — or not want, at the end of the day, the same West Michigan meat and potatoes type stuff. We’re never going to get away from that. And at our core, we are excited about being a Midwest restaurant. What we’re about is joining that movement, and pushing the ball forward, and seeing how far you can take stuff that only grows around here and things that grow in season. But I think you throw in some words that might accurately describe something or be very culturally relevant … and suddenly people are just like, ‘Whoa, what?’
LEE: I think a lot of it is building trust with your patrons. And once you build that trust, you can kind of throw in some stuff. I take Donkey, for example: It’s been doing its thing for going on almost four years now. But a couple of weeks ago, we had crickets on the menu in tacos, and it sold extremely well. I think we sold like 40 of them as a special one night. People know that ‘I can come in here, and I can trust this place. I’m going to try something different.’
A lot of the growth in Grand Rapids has focused on the downtown areas, but your companies are more out in the neighborhoods. How does that work out?
LEE: Downtowns are great, but it’s really the neighborhoods that make up a city. We look at it as, ‘Let’s work within this neighborhood.’ We want to drive our traffic from the neighborhood. If we can become a destination, rather than somebody coming in maybe like once a month, if we can get people to come in two, three, four times a month, that’s where we are, and that’s where we try to align our client base.
FRERIKS: Exactly. Our business is based on your mentality. We want it to be in the West Side. We want it to be in the neighborhood.
MUSCHIANA: It almost feels like the West Side is a little microcosm of where Wealthy and Cherry Street were five, six, seven years ago, before places like The Winchester, Brewery Vivant, and Green Well paved the way. It’s still really building over there. The one unique thing on sort of the plus and minus side of the West Side is that we don’t quite have the neighborhood surrounding some of the business corridors like you do in Wealthy and Cherry. But I think the city developers are trying to push that through these condos and apartments and things like that. To me, that type of building is more conducive to a younger demographic. That’s probably not geared towards people who have three or four children. It’s probably geared towards the doctor who’s moving in from out of state, or the young entrepreneur, or the tech person that wants to be close to downtown.
From a business standpoint, what are some of the challenges your companies are facing?
LEE: Right now, one of the most difficult things that we’re running into is the HR part of running a business. When we opened up, it was 25 to 30 employees. We’ve grown into over 120 employees. And it’s an HR nightmare, from insurance, to 401(k), to maternity leaves. It’s just all of these things. You got into this business because you didn’t want to sit in an office at a desk. And then the irony is that this is what you do: sit at a desk doing the things that you hated. But then you start thinking: It’s not just about us anymore. Now we’ve got 100 other people that we’ve got to take care of. I don’t want to say it’s a burden, but it’s every day: What can we do to make sure we keep our doors open? … Whether it’s utilities, whether it’s insurance, whether it’s the cost of food, everything is costing more. So the only way to keep going is you have to grow. That’s kind of where we’re at right now. We have to keep growing if we want to keep our doors open.
GASKIN: (The costs) and just the labor market, it has really pushed … the athlete syndrome. Because of the industry we’re in and the employee market that it is, it’s pushing these salaries to (new heights). A year ago, when we’re talking about cooks being hired in at $16 an hour, I’m like, ‘Holy shit. You’re paying someone $40,000 a year to work broil.’ It’s just amazing. But if you’re not paying them, somebody else is.
If everything is costing more, why not just raise prices? Has the market hit a price ceiling that forces you to grow to survive?
LEE: Absolutely. For our concepts, where we want to be this approachable place where we appeal to the masses and not the classes, we have to keep our price point at a point where people won’t walk in and say, ‘Gosh, that was expensive,’ or ‘That wasn’t worth it.’ … I would love to do a high-end restaurant, but I know that that’s not what we are. We’ve got to be this thing that can be approachable and appeal to everybody.
FARHAT: With the Garage, there’s nothing over $13 on that menu, but I make sure that the contributions are in line, so that when the guest comes in, the gross dollars per transaction is going to be X. I have a $2 draft, a $3 well drink or a glass of wine. Those are loss leaders, and we try to trade people up, if and when we can.
Getting back to the talent issue: What kind of incentives do you offer to try to stand out from other restaurants and attract workers?
FARHAT: Crew meals. Tickets for just about anything you want. Time off. Because when I was growing up in the industry, you didn’t get a vacation. But now it’s like, ‘OK, go to Electric Forest. Get your shift covered, but go.’ My kids, they take off, they go up north, but they get their stuff covered.
LEE: Every employee of ours that works over 30 hours is eligible for health insurance. And we cover half. And also if you’ve been with us for a year, we have a matching 401(k). And so these are tools that we have to do, partly because we want to do them. … When my wife and I opened up our place, we were like, ‘What are we going to do to make ourselves different, so we’re not just a bar or restaurant?’ We made a commitment to close ... on Christmas Eve, Christmas Day, Thanksgiving Day, New Year’s Day, Fourth of July, Labor Day, Memorial Day. We want our staff to have a normal life or feel like they’re able to have a normal life. … The service industry is a profession, we’re trying to make it be a profession.
FRERIKS: And I’m trying to get there, eventually. My business will be offering health insurance and 401(k).
MUSCHIANA: We have a lot of those same shared beliefs, albeit a little bit more cerebral in terms of the Sovengard. We really pitched the idea that if you are concerned about our food system, where your food comes from, you are interested in what’s going on with our agriculture system, in our farms, this is the spot for you to come work. We really try to connect on sort of a philosophical and moral level with our employees, and, in addition, really try to push these cultural things that we’re all talking about. And that equates to people staying around longer, to them being happier. I think we haven’t yet achieved the goals that we’re able to do things like insurance and things like that, but we want to. That’s part of our plan to be able to do that.
Is the talent challenge forcing you to think differently about your business model?
LEE: With the restaurant that we’re doing next, we’re working on making that completely tip-free. What you would normally tip is built into the prices already, and so what we want to do is be able to provide a living wage, and also kind of get creative on how we hire. Whether it’s working through citizen re-entry programs or being able to essentially train people. In order for us to grow, we’ve got to find staff, but one of the most difficult things that everybody’s talking about is finding staff. This has the potential to be essentially our farm program, our feeder system. We’ll bring somebody in that has very little restaurant experience, someone that can show up on time, has a positive disposition, is easy to get along with, and is motivated. We’ll train you to do the job. And then as we grow, we can move them into other restaurants.
FARHAT: That builds loyalty, it builds your culture.
LEE: We look at it as like a minor league baseball team. So our next restaurant is kind of like that for us. Our vision is this minor league baseball team, and as we find the people that are really, truly excelling at it, then we get them into some of the other restaurants, if they want to.
FRERIKS: Keeping them happy, that’s really where it’s at. And that’s how you develop a team member. For us, our cooks have kids, and they want to spend more time with them. So we work four ten (hour days). … So it’s also trying to hire the staff that fits in with those parameters as well and doing it that way.
MUSCHIANA: We’re trying to do something that is progressive, and forward thinking, and things that excite people. Everybody in this room is trying to do that, and that all comes at a cost, and it all comes from an angle of you can’t just keep repeating the same things over and over again if you want to cultivate people within your ranks and within your organization. And I think it’s time for a change in the restaurant industry, to treat their people better. That just creates a better work environment. That creates the intangible stuff from when a guest steps into your place.
How well do the local culinary schools around the region do in training the next generation of workers for your restaurants? Are you recruiting from them?
GASKIN: (Chef Oscar Moreno) went out and spent a lot of time with the Secchia Institute at GRCC, and we have three that came from there that work at MeXo. I will say, they have stood out a little bit more than the others. Their chef coat’s a little buttoned up more. … They’re coming out now and describing the food.
FARHAT: I haven’t talked to too many students over there, but I’m hoping that they don’t have this sense of you graduate culinary school and you get a restaurant.
FRERIKS: I am a graduate. I am a certified executive chef by trade. And I was fully aware when I got out of culinary school that I had a lot more learning to do. But there seems to be two sides. I just hired a young lady, and she was a baker. And she knew full well that she had to work her way up. And she’s doing great. But there’s also the people that come up and they’re like, ‘I’m hot shit. I’ve worked in restaurants now for four years … and I’m going to open a restaurant.’ I’m like, ‘Well, go right ahead, but …’
FARHAT: Here’s your million bucks.
FRERIKS: Right. ‘Here’s a million bucks. And I’ll see you six months when this runs out.’ But it’s really nice to have the old-school chefs and the people that are trying to train people. If somebody in my restaurant would love to open their own — cool. Downstairs I will teach you how to do any kind of menu order. And I’ll teach you how to do food costing, and I will teach you how to do a P&L, and how to do payroll. And that way you’re prepared for when you go out. When I was in school, it was all about food. I had to learn all the numbers stuff with all the rest of the stuff. But if you have a passionate desire to learn that, then you can.
Technology and social media have certainly influenced how restaurants market themselves. How do your companies approach social media and marketing? How do you know which avenue offers the right fit?
FRERIKS: You learn. … I follow all of you on social media, so I know what you’re posting. And I’m like, ‘That did really well with whatever, so let’s borrow that. Let’s copy it.’ … But there’s so many new things going out there right now that I don’t even know if I hired it out, that they would know any more than I would. I think it’s changing so fast. The best thing for us, especially somebody with a very limited budget — being new, being under two years — is (determining) what has worked for us in the past. What is working for people who are similar to me? How can I use that?’
MUSCHIANA: Yeah, I think it’s a must. You have to do it in some way, shape or form. For us at least, it’s part of building our brand and our image, and it’s just almost like a digital extension of what we do. What are you going to see when you come here? What kind of food are you going to have when you come here? … You’ve at least got to be in the mix.
Anyone can be a critic these days given the rise of reviews on Facebook, Yelp and so on. What’s your strategy for monitoring them?
LEE: I don’t read restaurant reviews. I think when we first opened, it was something I was so focused on. It was like, ‘Oh, my gosh. Somebody didn’t like something.’ And if you do that, you’re going to get pulled away from what’s really important. … People that are going to leave a review, they just want to be heard. And so I think what’s important is, ‘Why couldn’t you be heard when you were in the restaurant?’
FARHAT: You know who does something is Jenna (Arcidiacono) at Amore (Trattoria Italiana). She puts on the bottom of her menus: ‘If you ever have an issue, or a problem, or an opportunity, there’s always somebody in this restaurant that can fix your problem, as opposed to putting it on social media.’
LEE: That’s what our job is. Our job is to create experiences and the experience should be a positive one. And if you don’t leave happy, then that’s on us. But there’s no reason to have to go home and sit in front of your computer and type out something.
FARHAT: For 30 years (at corporate restaurants), I ate crow for every guest recovery. So I take a little different approach now. Guest recovery’s important, but I’ve also told guests, ‘I don’t need your money. Don’t come back.’
Also with technology, we’ve seen the rise in third-party apps like GrubHub and Uber Eats for food delivery in recent years. Do you look to leverage that to grow your businesses?
LEE: Do you want that type of business to represent yours? We don’t do UberEats and we don’t do GrubHub because we don’t know what happens when our food leaves that door. That driver could’ve kicked the bag, stepped on it, done whatever, showed up an hour later, and then now that person that ordered the food goes to open up the bag, and it’s like, ‘This is a soggy-ass burger.’ That’s where we’ll rely on technology to a certain point, but if we see this big push in online business or to-go business, then we want to be able just to do it ourselves.
GASKIN: I’ll let you know how it goes. We just signed up to do UberEats. I’m just going to try it. We were against it, against it, against it when people said to sign up for it. We’ll see how it goes.
Outside of the workforce issue, what’s one thing keeping you up at night right now in your business?
MUSCHIANA: Trying to get more customers.
GASKIN: Marketing. I’m just throwing darts right now with all kinds of stuff, trying to figure out what’s going to attract more people. It’s fine-tuning the knobs.
LEE: Too many concepts and not enough money.
FRERIKS: Making sales — just making sales.
FARHAT: It doesn’t keep me up at night, but it’s still a theme about my place to have fun. Enjoy your day. Nobody’s going to die today. It’s not brain surgery. I appreciate that. Enjoy the weekend. We all wouldn’t be in this if we didn’t enjoy it.