Khanh Nguyen of DaLat on Lessons He Learned During His First Year as Restaurateur (Hint: Think Location)
This is the first of what we hope to be a semi-regular feature here at the City of Ate, in which we talk to restaurant owners one year out (or there about) to see how the restaurant business is treating them.
We interviewed Khanh Nguyen of DaLat when he first opened his late night pho spot on Fitzhugh Avenue last year. This is his first venture into the restaurant business, one for which he left a successful career as a lawyer. He was admittedly pretty green, but had a passion for pho -- a dish that essentially saved his life. (That's another story.) But one year out, Nguyen has some strong thoughts on the tipping system, location, location and ... what was it ... umm ... oh yeah, location!
DaLat Owner Khanh Nguyen on the Power and Problems of Pho
What was the hardest aspect to learn? The food, staffing, sourcing products, etc.? All of them?
It was all hard, but staffing is the hardest. When you come out of nowhere and you don't have a reputation in the industry, it is very difficult to find skilled workers. On top of that, service industry workers are notorious for having crazy issues. It's just unbelievable the personnel stuff I've encountered this year.
I've been saying to non-industry folks all year that I really don't understand why the TV food shows bother contriving drama (angry chefs, restaurant makeovers, etc.), when they just need to record the actual facts that go down at any restaurant or bar. There is so much more unbelievable drama that goes on behind the scenes that it would be the most interesting TV ever.
What have you learned about serving the late-night crowd?
Two a.m. drunks are good; 3 a.m. drunks are bad.
Tell me about time -- I know you used to be a lawyer and you worked a lot of hours. But has this restaurant taken more of your time than you expected?
It's been a tremendous amount of time. Luckily I have a very understanding spouse who's been very supportive. These are not the hours I would like to be putting in at the end of next year, but I was prepared for the initial long hours.
The first couple of years of any business start-up is just intense, no matter what. Someone has to put the project on their shoulders and make sure that you keep pushing and pushing until you make it. The metaphor that I like to use in thinking about starting a new business is that it's like trying to light a wet match in the rain. You better be prepared to keep at it for a long time. At our software start-up, we didn't turn a profit for the first three years. DaLat was profitable after five months, so we're ahead of schedule as far as start-ups go.
I know there are restaurants that explode out of the gates, but that was nothing that I was counting on. I was prepared for a long battle. It's just my software sales experience -- you keep going and going until the customer buys. My customer is the city of Dallas. I plan to keep going until Dallas buys.
Is it harder to maintain cohesiveness in the front-of-the-house (wait staff keeping people happy) or back-of-the-house (consistently good food)?
Much harder for FOH. For food quality, if all else fails, a manager or owner can stand at the pass [window where the servers pick up the food from the kitchen] and ensure that every item meets the restaurant's standards for quality.
But, you can't be at every table and hear what each server is saying to the customers. A big problem with FOH quality is our whole tipping system. I hate the tipping system. As a business person, just imagine having a crucial group of employees where you pay the smallest part of their salary and the customers pay for the largest part AND the customers DO NOT VARY what they tip to match the quality of service.
With some exceptions, a 20 percent tipper tips 20 percent no matter what. Unless the service is just world class horrible or world class fantastic, they leave the same percentage. That means that your servers and bartenders are really worried about just two things in making their money, volume of customers and total sales price. This puts the restaurant or bar in a horrible position in terms of leverage to ensure quality of service. I would have no problems with the tipping model if customers actually varied their tipping appropriately, but because they don't, there is no financial incentive to ensure quality. The only leverage that a restaurant has is through discipline and terminations, which pales in power to actual financial incentives.
If you could give three pieces of advice to someone planning on opening a new spot, what would they be? (Let's assume it's someone you really like and want to see them do well.)
I just need to give them one: Know what they really mean when they say LOCATION, LOCATION, LOCATION. If you don't have the backing of the food critics (i.e., written up every week in the papers so that you get free advertising), you better put your restaurant on a street that will hand you customers. That means people in your demographic doing business with the businesses located next to you, be it other restaurants, bars, grocery stores, etc. If you don't have that, someone has to get in their car with the intention of going to your restaurant every time. As opposed to driving by on the way to their pharmacy and seeing you and remembering that they liked your place the last time they were in. The street giving you business is the single most important factor to the success of a restaurant. That's why so many mediocre places do well and so many great places fail. The street must feed.
When was the last time you took a vacation?
Actually, since I spend so much time at the restaurant, I knew how important it was to have quality time with my family. I made sure that I was able to get away for vacations this year. I'm thankful that I have some very trustworthy and loyal managers who have been with me since the beginning. Without them (and my eight security cameras that I can access on my cell phone anywhere in the world), I would not have felt comfortable enough to be away for a few weeks.
Any regrets or things you'd like to call a "do-over" on?
Yes, I would have chosen a smarter location than a geographically desirable and "up and coming" street like Fitzhugh. Fitzhugh is going to make it for sure, but an experienced restaurateur would have chosen a street that has already made it versus banking on a street that will be great several years in the future. The street must feed you! We've been successful, but it has been through sheer determination and word of mouth from our great customers. Fitzhugh has yet to feed us. It will soon, though.