Advice | KRG Hospitality

March 13, 2023by krghospitality krghospitality No Comments

Do Goals Have an Expiration Date?

Do Goals Expire?

by Jennifer Radkey

A compelling question came up in a recent coaching call with a client: When is the last time you took inventory of your goals?

Like many other people, my client is a goal-setter, and not just small goals but big life goals. These goals follow all of the “rules” of goal setting: they are clearly written, attainable, and measurable.

Some of the goals are achieved and checked off the list and new goals have been made. And yet there is still a feeling of dissatisfaction.

So where is this feeling coming from?

We are always changing and adapting to the world around us. We are changed by life circumstances. We’re influenced by the places we visit and the people we meet. We grow, and over time we come to deeper understandings of what we value and want from life.

As we grow and change our goals do as well…but what do we do with our old goals? What do we do with goals that are no longer applicable to our life?

Do goals expire?

The answer is yes. Goals can expire. What you wanted for your life when you were 16 is most likely not what you want for your life now. The career goals you set in your early 20s probably do not apply to you in your 30s. The goals geared towards interests you had in your 30s may not apply in your 40s, etc.

This doesn’t just apply to personal goals, either.

If you own a business, the goals you have for your business can expire as well. It’s why business plans need to be revisited yearly.

The goals you had when you first opened may have changed in the year(s) since. A business can be likened to a living, breathing entity. It grows and adapts and interacts with the environment surrounding it.

Targets will be hit, new objectives will be identified. So, what do we do with our old goals?

If old, unmet goals are not recognized and processed, they will sit as unfinished business in the back of your mind. You may be acquiring all kinds of levels of success and achieving new goals, but if you are allowing old goals to remain without acknowledging them, it will show up in your mindset.

This can manifest as dissatisfaction, disappointment, confusion, anxiousness, a general feeling that something is “off,” or a never-ending quest for perfection.

So, what do we do with expired goals?

It’s time to sit down and take inventory of all of the goals you have for your life or business. The new and the old. The unmet and those in progress.

If you are like many of us on the path to success and self-improvement, this may be a lengthy list. Try categorizing goals to make them more approachable.

Once you have listed all of your goals it’s time to get real with them and ask yourself some questions:

Why was this goal unmet?
Why was it important, at the time, to have this goal?
What feelings are associated with this goal?
Most importantly: Does this goal serve me now?

If the goal no longer fits in your life, if it no longer serves a purpose, it is time for that goal to expire.

It’s okay to let go and move on.

Make peace with the fact that a goal can belong in a previous part of your life but does not need to be a part of your life now.

Accept that it was not completed, give yourself compassion, and move on. That goal does not need to take up space in your thoughts anymore.

If a goal still serves a purpose now and you would like to keep it, ask yourself why it is so important to you to keep that goal. Then ask yourself why it hasn’t been achieved yet.

Is this goal important enough to keep it and strategize new ways to break it down and make it achievable? If the answer is yes, great! Sit down with that goal, rewrite it, and come up with a new action plan to achieve it.

If the answer is no, let that goal expire, and let it go.

This process will take time and introspection but will provide you with overwhelming relief and a new sense of clarity.

Life is too short to hold onto expired dreams and goals! Give yourself freedom to be present and future focused, without unfinished business holding you down.

Cheers to personal and professional growth!

Image: Daniele Franchi on Unsplash

January 30, 2023by David Klemt David Klemt No Comments

Focus: See Your Business for the Trees

Focus: See Your Business for the Trees

by Jennifer Radkey

It happens to us all: Sometimes we get so caught up in the small details of our day-to-day lives that we fail to see the bigger picture.

So common is this element of the human experience there’s a popular saying about it: “Sometimes it’s hard to see the forest through the trees.”

Today, however, I’m going to suggest that the opposite can also be true: “Sometimes it’s hard to see the trees when immersed in the forest.” In other words, when walking along the same path in a forest every day, we often stop seeing the individual trees.

Okay, forests and trees, nature and walks along paths—what does any of this have to do with operating a successful restaurant, bar, or hotel? Stick with me.

The forest is your venue. Your path is your daily routine from the minute you step into your venue until the minute you walk out the door at the end of your day.

The trees? They’re all the little details that make up your establishment: your team, the signage, tables and chairs, music playing, lighting, decor, food, drinks, website, online reviews, social media posts… These, plus many more, are the little things that add up to create your “forest.”

You walk through your venue daily and have become, for the most part, so used to your surroundings that you’re almost blind to them. This can sometimes lead to a false sense of everything being “fine.” You miss small details you need to improve, and also things that you and your team need to celebrate.

What I would like to challenge you to do is to take a step back, clear your mind, pretend you’re experiencing your venue for the very first time, and really notice the details. Walk a new path through your forest and see the trees.

How do you do that? Pretend you’re a guest visiting your establishment and follow the guest journey.

Here’s a list of five places you should stop along your path to gain a fresh perspective.

Your Online Presence

Start with your website.

When did you last update it? Are pictures fresh and eye-catching? Is the website easy to navigate on mobile devices? Is the menu easy to access? Can you make a reservation easily? What story is your website telling?

Next, scroll through your social media (if it exists).

When did you post last? What content are you sharing? Does it tell a story? Does it make you want to visit your venue? Are people engaging with your content? Are you engaging with others?

How about online reviews? See what people are saying about you.

Have you responded to reviews, good and bad? How are you responding? If you were a potential new guest would these reviews and your responses keep you away or entice you to visit?

More often than not, the first impression a guest has of your business happens long before they actually step foot inside your venue for the first time. What impression are you giving them?

Curb Appeal

The next place you want to stop on your path is right in front of your venue.

As you drive up, what do you notice? What’s the condition of your signage? Is it welcoming and attention-grabbing?

When walking up to the entrance, look for things that you may overlook but a first-time guest may not. Cleanliness of the front entrance area, proper lighting, current signage, these should all be checkpoints on your list.

Also, how does it feel to enter your venue? Is it welcoming? Exciting? Does it feel safe?

If you have stellar curb appeal with awesome signage are you celebrating and promoting it through great photos for your website and social media?

These are all things to consider when viewing your venue from the curb.

Interior

Next up on your path is the interior of your venue.

Is it clean? Are there any minor repairs that need to be done? Is the lighting just right?

Have a seat in a few different places in your venue. What’s your customer’s visual experience when they come to visit you?

You want the interior of your venue to represent your brand and its values, and you want it to appeal to your target market. Is it doing those things?

Again, if you have an amazing interior design element, are you showcasing it to its fullest in person and online? Make any notes of things you would like to change or improve upon.

One more note on the interior: Do not forget the washrooms. Nothing turns a visit into an unpleasant experience faster than an unclean washroom.

Service

As you’re viewing your venue with clarity, take a few minutes to step back and watch how your staff engages with your guests.

Whatever your brand’s values are for the guest experience, are they being conveyed through your staff’s engagement?

If you’re promoting a fun, energetic vibe, is your staff upbeat, positive, and energized when communicating with guests? Are the pillars of excellent customer service in place? When your guest leaves are they going to say, “Wow, our server was so friendly/nice/funny/knowledgeable,” etc.

Or are they going to leave saying nothing at all?

If staff appear unmotivated, what can you do to help inspire your team? If they’re stellar employees are you recognizing their incredible work?

Food and Drink

When was the last time you sat and really enjoyed a meal at your own establishment? Before you answer: As if you were a guest and not the owner.

Is food coming out in a timely manner? How does it look, smell, and, of course, taste?

Would you grab for your phone before taking the first sip or bite to snap a photo for Instagram? If you would, have you done exactly that for your own social media feeds?

As an owner you can become very attached to your menu, but pay attention to see if your guests and staff are raving about your food and drink.

Final Steps

The final steps of your path will be the same as your guest’s final steps.

Is your bill brought to the table when you’re ready to leave? Is payment easy to make? What are the final last impressions you’re left with? How is your team bidding farewell to guests? What will entice them to return?

You want your guests to feel satisfied and to tell their friends and family about what an amazing experience they had.

It can feel strange to step back from the forest and to notice the trees, but it will lead to improved clarity and perhaps even a roadmap for change and improvements to take your hospitality venue to the next level. Stepping back will also improve your overall mindset as you experience your business through the eyes of another.

So step back, clear your mind, and see what you may have been missing all this time.

Cheers to professional and personal growth!

Image: Lucas Parker on Unsplash

January 16, 2023by David Klemt David Klemt No Comments

5 Toxic Mindsets that Hinder Success

5 Toxic Mindsets that Hinder the Success of Your Business

by Jennifer Radkey

Your frame of mind matters, and if you want a team and business that’s thriving and growing, it’s time to examine your own mindset.

How you show up day to day in your business and in your life will either hinder or promote your success. Like the popular phrase goes, “It starts from the top.”

You can set the tone for the day with the energy you bring. As Anese Cavanaugh, author of the book Contagious You, states, “Whatever we put out there and whatever we take on affects our ability to influence, lead, and create the impact we want.”

A positive mindset is contagious: it can inspire, motivate, and make others feel good. A toxic mindset is equally as contagious: it can halt growth, increase unhappiness, and lower productivity.

Here’s a list of five toxic thoughts that lead to a negative mindset and can hinder success.

Blame Game

Always looking for someone else to lay the blame on when things go wrong is a surefire way to a toxic team environment. If you’re quick to blame others when things go wrong, perhaps it’s time to take a step back and examine why something went wrong in the first place.

Was there inadequate training provided? Are there no clear systems to follow? Do you have an environment that’s hostile to asking for help? Fault rarely lies in one person only; there are typically several factors in play.

A positive mindset will examine facts, look at all potential causes, and then come up with solutions. Blame never enters the picture.

Second Guessing

Not being confident in the choices you make hinders growth. Uncertainty in your decision making leads others to question or doubt your role as leader.

If you don’t have the utmost confidence in making decisions, and it’s your business, how can you expect your team to have confidence in you or the work that they do?

This doesn’t mean that you have to make snap decisions without thinking them over. Planning and deliberating over the right move to make is critical to success. But once the decision is made…it’s made. If it doesn’t work out you can then problem solve to get back on the right path.

Second guessing your decisions along the entire way is only going to slow you and your business down.

Absolutism

“It’s my way or the highway.” Absolutism is the inability or refusal to consider others’ ideas. This toxic thought process destroys team culture and growth.

As an owner, you’re heavily invested in your business. Therefore, it can be challenging to let go of how you think things should be done and consider different approaches. However, failing to listen to the ideas of others on your team will build walls and possibly create resentment. That’s definitely not a positive atmosphere to work in.

Be open-minded to doing things differently and show interest in the recommendations of others to promote instead of hinder success.

Hyper-negativity

Sometimes when you want to succeed it’s easy to zone in on the negatives: “This isn’t good enough.” “We aren’t making enough money.” “We don’t have enough followers online,” etc.

The desire to do well can make you hyper-focused on what isn’t right in order to fix it, instead of noticing what’s really great and celebrating that instead. Yes, you need to be aware of areas that need improvement, but you also need to be equally aware of the positive and promote it.

Think of a conversation with two random people you meet at a party. The first person grumbles about the weather, complains about the food, music, etc., and scowls. The second person is smiling, laughing at jokes, and genuinely interested in getting to know you.

Who would you rather be around?

Settling for Average

Nothing will kill growth and success faster than settling for the way things are because “that’s the way it’s always been,” or because “it’s working.” You want more than just “it’s working.”

You want to thrive, to make more money, to gain more followers, to hire more team members, to open more locations. If you aren’t living your absolute best life, if your business isn’t performing at its absolute highest level, then there should be no settling.

Settling for average teaches your team to settle for average, and that means your customer is settling for average. Avoid this toxic mindset by continuously setting goals (even small ones) and looking for ways to do better, feel better, and be better.

While it’s completely normal to fall into these toxic thoughts from time to time, it’s refusing to allow them to become you daily mindset that’s important.

The amazing thing about the human mind is that it can be changed—you can work on improving your mindset. Trust me when I say that you will not regret it.

Cheers to professional and personal growth!

Image: Nathan Dumlao on Unsplash

September 21, 2022by David Klemt David Klemt No Comments

Will Virtual Kitchens Persist?

Will Virtual Kitchens Persist or Go Brick-and-Mortar?

by David Klemt

Virtual kitchens and virtual brands are back in the headlines after a record-setting grand opening in Rutherford, New Jersey.

Well, I should clarify: A restaurant may now hold a specific record.

The restaurant in question is the first brick-and-mortar MrBeast Burger location. And the record it may hold claim to is most burgers sold in a single day by a single restaurant.

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A post shared by MrBeast Burger (@mrbeastburger)

Now, if you don’t spend much time on YouTube, you may not know MrBeast. So, here’s a quick rundown: He’s Jimmy Donaldson, a YouTube personality known for “expensive stunts.” In fact, he may be the pioneer of that type of content.

Right about now you may be wondering what this all has to do with virtual kitchens and brands. It’s quite simple, really. MrBeast was among the highest-profile virtual brands to launch during the pandemic.

Incredibly, MrBeast Burger boasts more than 1,700 virtual kitchen locations. And now, one brick-and-mortar MrBeast restaurant.

Leveraging Demand and Popularity

So, you’re an influential YouTube content creator with tens of millions of subscribers. Obviously, your channel is monetized. What else can you do to leverage your popularity?

Well, if there’s a pandemic crippling the globe and people are stuck at home, maybe you notice the demand for takeout and delivery. And perhaps you learn about something known as a “virtual kitchen.”

If you’re a foodie or maybe just a savvy businessperson, maybe you’d jump into the virtual space. It is, it goes without saying, much less expensive than opening your own restaurant. And if you perform well, that’s an excellent way to collect data and guest feedback.

Also, an efficient way to hone your brand without a lease, buildout or the overhead of a physical restaurant. In a way, a virtual brand is akin to a pop-up restaurant, only you can test hundreds of markets simultaneously.

Okay, so now let’s say you reach a rare milestone in the creator space: 100 million subscribers. MrBeast did just that in July of this year. Do you think you’d want to leverage the support of millions of fans willing to support you and your brand?

The first physical MrBeast Burger opened last week at the American Dream mall in New Jersey. Reports claim that over 10,000 people waited in line for the grand opening.

Oh, and that’s when the location may have claimed the aforementioned record: 5,500 burgers sold in one day. After just one day of operation, MrBeast wondered if the brand should franchise:

should we… franchise? @mrbeast

— MrBeast Burger (@MrBeastBurger) September 15, 2022

Virtual to Physical

This (potential) record-setting event brings virtual kitchens and brands back into the spotlight.

Of course, most virtual brands don’t have the same origin story as MrBeast. One hundred million supporters? That’s rarified air.

At any rate, virtual kitchens do offer potential physical restaurant operators a less expensive method of testing their concepts. Couple data collection and feedback with an accurate feasibility study and taking the next step may make sense. And it may make a tidy profit.

It’s possible we’ll see MrBeast franchise off the success of two years of operating virtually and opening a physical location. And it’s possible we’ll see other virtual brands expand beyond the virtual kitchen.

However, it’s important that virtual brand owners keep a few things in mind. One, online success doesn’t always translate to brick-and-mortar success. Two, the restaurant space doesn’t care about your subscriber count—the KPIs are entirely different here. Three, potential operators need to perform the proper studies—or retain an agency with experience performing them—rather than rushing into the restaurant space.

It’s highly likely we’ll see more virtual brands enter the physical restaurant world. How many will do so successfully remains to be seen.

Image: Eiliv-Sonas Aceron on Unsplash

September 5, 2022by David Klemt David Klemt No Comments

5 Books to Read this Month: September 2022

5 Books to Read this Month: September 2022

by David Klemt

This month’s engaging and informative book selections will help you develop next-level leadership skills and dial in your drink menu.

To review August’s book recommendations, click here.

Let’s jump in!

Your Restaurant Culture Sucks!: Stop surviving. Start thriving. Escape mediocrity

Donald Burns, the Restaurant Coach and friend of KRG Hospitality, completes his Your Restaurant Sucks! trilogy. For the third book in the self-improvement and hospitality industry leadership series, Burns tackles culture.

In Your Restaurant Culture Sucks!, Burns helps owners, operators, and leadership team members understand the importance of workplace and company culture. Instead of complaining that “nobody wants to work anymore,” look inside and find out why perhaps nobody wants to work for you. That kind of honesty helps implement real change, change that sets you apart and improves recruitment, hiring, and retention.

“All restaurants can buy from the same vendors and hire from the same labor pool. What separates the good, from the great to the outstanding is culture!”

Subtract

Sometimes changing our outlook and improving our leadership skills is about streamlining.

“We pile on ‘to-dos’ but don’t consider ‘stop-doings.’ We create incentives for good behavior, but don’t get rid of obstacles to it. We collect new-and-improved ideas, but don’t prune the outdated ones. Every day, across challenges big and small, we neglect a basic way to make things better: we don’t subtract.”

With Subtract, Leidy Klotz explains how changing how we approach solutions can be life changing. Maybe we need to stop adding and start subtracting to improve our strategies.

Cure: New Orleans Drinks and How to Mix ’Em from the Award-Winning Bar

If you travel to New Orleans and you’re in this industry, you probably make sure to include Cure on your itinerary. For more than a decade this 2018 James Beard Award winner (Outstanding Bar Program) has been integral to the city’s craft cocktail scene.

Whether you’re after a deceptively simple beer and shot or a cocktail made with a rare, allocated bourbon, Cure is there to elevate your French Quarter visit. And soon you’ll be able to bring Cure home with you, and to your restaurant or bar as well. Available now for preorder, Cure includes 100 cocktail recipes that tell the tale of NOLA from past, present, and future.

Craft Beer Design: The Design, Illustration and Branding of Contemporary Breweries

Anyone who pauses to consider beer can design knows that it’s becoming nearly as important as the liquid. With thousands of breweries all over the US alone, how does a brewer stand out? How does a small, independent craft brewer grab a potential new customer’s attention in a sea of options? In part, through their can designs. Of course the beer itself is crucial and the most important element. However, a consumer has to be motivated to try a beer before they learn how good it tastes.

Craft Beer Design dives deep into craft beer design, featuring real-world examples and interviews with the designers themselves.

Think Again: The Power of Knowing What You Don’t Know

Curiosity keeps us learning. The pursuit of knowledge keeps us sharp. Learning helps us improve ourselves, our leadership, and our operations. The belief that we’ve learned all there is to know, however, prevents us from learning to our own detriment.

Much like Subtract teaches us how to remove rather than add, Think Again proposes a new approach: unlearning and rethinking. Why do we get defensive when we’re wrong? Why are we so afraid of challenges to long-held beliefs? Admitting when we’re wrong and seeking facts is a strength, not a weakness.

Image: Mikołaj on Unsplash

April 25, 2022by David Klemt David Klemt No Comments

Hiring Struggles? Engage These Age Groups

Hiring Struggles? Engage These Age Groups

by David Klemt

Staff turnover rates are still above pre-pandemic levels and there’s no silver bullet solution. However, two companies have some helpful advice.

Both Service Management Group and Technomic shared their tips during Restaurant Leadership Conference. Interestingly, each company has a different approach to the current hospitality industry labor problem.

In short, both SMG and Technomic advise operators to engage with vastly different age groups. However, they each have information that supports their recommendations.

Service Management Group

Jennifer Grimes, senior vice president of client services for Service Management Group, co-presented a session with Jim Thompson, COO of Chicken Salad Chick.

SMG is a software-with-a-service platform that seeks to the employee, customer, and brand experience. One crucial element of the company’s mission is the reduction of staff turnover.

During the RLC session, Grimes shared several years of hospitality turnover rates:

2017: 72%
2018: 75%
2019: 79%
2020: 130%
2021: 86%

First, some context. The general consensus is that the industry’s average turnover rate has been between 70 and 80 percent for close to a decade. However, in comparison to other industries—10 to 15 percent—that’s stratospherically high.

Secondly, the turnover rate has been on rise since before the pandemic. Per some sources, the rate jumped from 66 percent in 2014 to 72 percent in 2015, a trend that continues to this day.

For SMG, the age group operators should seek to engage—generally speaking, of course—is 25 to 34 years old. Per the SWaS platform, this group was the most engaged pre-pandemic.

One reason for SMG’s suggestion is that Boomers appear to opting out of the workforce.

During the presentation by Grimes and Thompson, the latter shared that Chicken Salad Chick predicts the 2022 turnover rate to be just slightly above the 2019 rate.

Technomic

Unsurprisingly, Technomic had some numbers to share during RLC 2022 in Scottsdale, Arizona.

Per data provided by Joe Pawlak and Richard Shank, 70 percent of operators are still struggling with labor. Recruiting, hiring, and retaining staff doesn’t appear to be getting any easier four months into 2022.

Technomic also pointed out that the US saw the lowest population growth in its history last year: 0.1 percent.

Additionally, almost 17 percent of the country’s population is now at least 65 years old. In 2019, 48 percent of people 55 or older retired. That number is now just over 50 percent for the same age group.

Nearly seven million American consumers turn 60 each year, while four million turn 70 or older.

Logically, one may assume that Technomic is saying a significant portion of the US population is leaving the workforce. So, it’s best to focus on the same age group as SMG recommends.

However, Technomic is recommending a different strategy. Per Pawlak and Shank, retirees (mostly ages 55 and up) tend to have valuable managerial skills and experience.

Obviously, those skills and all that experience can be of great benefit to operators and our industry.

Certainly, all groups should be engaged by operators seeking to recruit, hire, and develop their teams. So, as KRG Hospitality sees recruitment, operators should craft targeted, authentic messaging that appeals to each age group.

Image: Sebastian Coman Photography from Pexels

April 4, 2022by David Klemt David Klemt No Comments

5 Books to Read this Month: April 2022

5 Books to Read this Month: April 2022

by David Klemt

This month’s engaging and informative book selections will help you develop next-level culinary, beverage and marketing skills throughout 2022.

To review February’s book recommendations, click here.

Let’s jump in!

My America: Recipes from a Young Black Chef

This book is scheduled to be released on May 17 of this year. I anticipate this cookbook by Chef Kwame Onwuachi, which includes 125 recipes, to come flying off the shelves. In addition to more than 100 recipes, Chef Onwuachi connects his personal journey to food, culture, and places. Pre-order My America now!

Paddy Drinks: The World of Modern Irish Whiskey Cocktails

Jack McGarry, Sean Muldoon, and Jillian Vose are back with their latest Dead Rabbit book. The trio’s latest release, Paddy Drinks, shares Irish whiskey drink recipes you’ll find on the actual Dead Rabbit menu. However, that’s just one portion of this informative book. Inside are whiskey flavor wheels, tasting notes, illustrations depicting whiskey production, and more. And if that’s not enough for you, David Wondrich provides the foreword.

Founder Brand: Turn Your Story Into Your Competitive Advantage

In Founder Brand, Dave Gerhardt explains why your brand’s story is one of the most valuable assets you own as an entrepreneur.

From the Amazon listing: “This is a tactical guidebook that first shows you how to tell your story, then how to put your story to use as a marketing strategy. You’ll learn how social media provides a bridge between you and your customers, the platforms that are appropriate for your business, and how to measure results to truly determine value.”

Finding Mezcal: A Journey into the Liquid Soul of Mexico

You don’t have to be a veteran bartender or spirits expert to know that mezcal continues to rise in popularity. Written by Ron Cooper, founder of artisanal mezcal brand Del Maguey, Finding Mezcal includes 40 cocktail recipes from bartenders and chefs; photographs; Cooper’s own artwork; and much more.

Bar Hacks: Developing The Fundamentals for an Epic Bar

Industry expert and KRG Hospitality president Doug Radkey wrote this informative and conversational book. This is the perfect read for aspiring or seasoned bar, pub, lounge, or even restaurant owners, operators, and managers looking for that competitive edge in operations. If you’re looking for both fundamental and in-depth planning methods, strategies, and industry focused insight to either start or grow a scalable, sustainable, memorable, profitable, and consistent venue in today’s cut-throat industry, Bar Hacks is written just for you

Image: Mikołaj on Unsplash

People toasting with a variety of cocktails

March 30, 2022by David Klemt David Klemt No Comments

Prepare for the New Rules of Hospitality

Prepare for the New Rules of Hospitality

by David Klemt

Guests are returning to bars, restaurants, and hotels, so you need to prepare now for the new rules of hospitality.

If you’re wondering what those rules are, wonder no more. We have a number of articles addressing them, some of which are here, here, and here.

Phil Wills, owner and partner of the Spirits in Motion and Bar Rescue alum, also has some thoughts. In fact, Wills shared his approach to what he identifies as the new rules of hospitality last week.

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A post shared by Phil Wills (@phil_i_am11)

During Bar & Restaurant Expo 2022, Wills presented “The New Rules of Hospitality: What a Post-pandemic Consumer Wants.”

Below, you’ll find what Wills has to say about hospitality in 2022 and beyond in three categories.

Hospitality

Wills kicked off his session with a simple question: How do you define “hospitality”? And yes, he put attendees on the spot, asking them for their answers.

It’s always at least a bit amusing that even the most outgoing operator gets shy in a conference setting. I’ve never seen so many people suddenly need to check their phones, shoes, or the ceiling tiles as when they’re asked to participate in a class or education session.

For Wills, the definition is “making a guest feel welcome, as though they’re in your home.”

Obviously, the answer is different for everyone. As Wills says, the key is considering how you and your brand define hospitality. If that seems easier said than done, Wills has some tips, presented in the context of a guest visit.

First, guests take in the sights, sounds, and smells of your space. They also consume your menu items, and converse with your staff, their party, and other guests.

Look at your business through the eyes of your guests. Now, this can be a difficult exercise, particularly if you spend a lot of time in your restaurant, bar or hotel.

So, ask team members to do the same and provide feedback. We take for granted what our spaces, food, and drinks look like.

To improve the guest experience, pay attention to ticket times and F&B consistency. This will reduce recovery incidents and phrases.

Finally, Wills recommends engaging with guests (if that’s what they want). However, he also suggests facilitating connections between guests.

Interestingly, Wills also says, “Regulars are old money. You want to get that new money.” Then, you want to convert that new money into old money. Rinse, repeat.

Training

As relates to training, Wills categorizes new hires in two ways: toll takers and moneymakers.

Toll takers take a toll on your business. They cost you money, and if they don’t receive the proper training they can chase guests away.

So, you’ll need to spend time and money to convert toll takers into moneymakers.

Speaking strictly in a technical sense, training needs to provide team members with the knowledge and tools to become moneymakers. To accomplish this, Wills has three keys to making training stick:

Don’t make training too easy. If training is easy, team members won’t retain what they’re taught. Challenge your staff.
Vary your training. There are a number of training methods at your disposal. Use multiple methods to engage your staff. Wills suggests combining shift work, book work, and tests, at a minimum.
Turn training into a competition. At this point, we’re gamifying just about anything. So, Wills recommends the platform 1Huddle to gamify your training.

Labor

Simply put, Wills says we need to find new ways to make this industry exciting to new hires.

According to the National Restaurant Association, we’re still seeing significant job losses in hospitality, foodservice, and lodging and accommodation.

In fact, we’re down 14 percent when it comes to full-service restaurant jobs. For bars and taverns, the number is 25 percent.

For Wills, offering incentives, mental health breaks, and even cash bonuses for staying in role for a number of months can draw the attention of new workers.

However, he also has another interesting idea: making people smile. On average, according to Will’s research, people smile 20 times each day. He wants to find ways to make people smile 20 times during a single visit to a restaurant or bar.

Now, Wills admits he’s still working on how to accomplish this lofty goal. I believe a key component is creating a working environment that inspires team members to smile 20 times per shift.

Image: Kelly Sikkema on Unsplash

March 29, 2022by David Klemt David Klemt No Comments

The Leasing Game: Terms & Conditions

The Leasing Game: Terms & Conditions

by David Klemt

Understanding the ins and outs of the leasing game means knowing the meaning of several legal and industry terms.

Winning at this game also requires a deep understanding of everything that’s in your lease agreement.

I addressed the importance of negotiating your lease (and more) yesterday. Today, let’s go over the terms you need to know.

A Warning

Before I run down a list of terms (as in phrases), let’s go over other terms you need to understand.

Namely, the terms for which you negotiated before you signed your lease. Let me reiterate: You know all of this before you sign your lease.

Do not sign anything unless you understand every word of every sentence in every paragraph on every page. If that seems overwhelming, pay a lease agreement attorney to analyze and advise you on a lease. It’s worth the spend, and please do this before you sign anything.

Why a lease agreement or real estate attorney? Because a lease agreement is a legal document. You don’t sign legal documents without knowing what’s in them.

Some Context

Based on the number of hospitality professionals that descended on Las Vegas last week, trade shows and conferences are back in full force.

KRG Hospitality attended the 2022 Bar & Restaurant Expo, formerly the Nightclub & Bar Show.

Friends of KRG, Invictus Hospitality (IH), presented a handful of sessions during the show. One of these was “Understanding the Leasing Game & How to Get Ahead.”

As I wrote yesterday, IH principal Homan Taghdiri hosted the informative session. He shared a wealth of knowledge every operator, new or veteran, should know.

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The first bit of information was this: Know that you have the right to negotiate your lease. If someone tells you otherwise, they’re lying or they don’t know what they’re talking about.

As for the second piece of advice, see the section above this one.

Know These Terms

In this context, “terms” means words and phrases. Below is a list of terms that Taghdiri addressed during his session.

Note that I’m not sharing definitions, I’m sharing recommendations from Taghdiri’s session.

Tenant. This is you—individually—if you don’t have a business or other properties for a landlord to go after (sue).
Guarantor. You can negotiate the removal of your personal guarantee. As an example, Taghdiri suggested a clause stipulating if you pay on time for ten years, your personal guarantee is removed. After all, you’ve proven yourself for a decade.
Security deposit. Again, you should be rewarded for proving yourself and your concept. Negotiate a security deposit burn-off, like a month of security deposit removed from every year of the agreement.
Use of space. You need to know the following: current and future use(s) of the space; exclusive and competitive uses; obtaining conditional use permits and licenses. Bake in the ability to pivot, adjust, or modify your agreement. The pandemic exposed how important it is to understand use of space in several markets.
Force majeure. Another element exposed by the pandemic. Including a pandemic specifically as a valid force majeure trigger is a smart move on the tenant’s part.

Moving into the Space

Are you building the space out or is the landlord? Is it a combination of both?

Who’s responsible for delays? Is the landlord responsible for upgrades or refreshes over time?

You need to negotiate for and understand the following:

Premises delivery. When do you get the space? What’s the scope of work that the landlord must complete for delivery of the space? Is there a tenant already in the space? If so, when are they leaving? What if they don’t leave on time?
Landlord’s obligations. Is the landlord responsible for the HVAC, mechanical, electrical, and/or plumbing systems? Are they responsible for the roof on the building, the windows, and maintaining ADA compliance? Who’s responsible for the common areas, such as the parking lot and the lot’s lighting? As an example, how often are they required to repair, refresh, or resurface the parking lot?
Insurance requirements. You need to know what coverage, deductibles, and exclusions you’re agreeing to before you sign your lease. Taghdiri recommends asking for the proposed insurance clause and sending it to your insurance provider. If you can’t afford their insurance requirements, you can’t afford the space and need to walk away.
Miscellaneous. What are the security requirements for the space you’re occupying? For example, if you’re a nightclub, the landlord may stipulate how many security personnel must be working on certain days during specific hours of operation. Speaking of which, what days are you required to be open? What’s the minimum number of hours you must operate each day of the week? Should you find yourself in a shopping center with anchors, what happens if an anchor leaves? Are you required to address sound abatement?

Avoid Pitfalls

Understand the following before you sign anything:

Nobody can force you to sign a lease. Since there’s no such thing as a standard lease, you don’t have to accept whatever the landlord offers. If you don’t like the terms, don’t sign the lease.
Remember, a lease agreement is a legal document. Fully review and understand the terms. Never sign anything blindly.
Brokers aren’t “bad” but they’re not necessarily putting your needs before their own interests. If you’re going to work with a broker, find the right one for you.
Just like you need to find the right broker if you go that route, you need the right legal representation. Legal fees are worth it to understand your lease agreement. Just make sure you’re going to the right person to review it and give you advice.*

Combined with a willingness to negotiate (and walk away if you can’t get the terms you want), an understanding of the terms on this page will put you ahead of the competition. Happy space hunting.

*The information contained in this article does not represent legal or financial advice from any representative of KRG Hospitality, Invictus Hospitality, Bar & Restaurant Expo, or Questex.

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March 28, 2022by David Klemt David Klemt No Comments

This is How You Win When Leasing

This is How You Win When Leasing

by David Klemt

At this year’s Bar & Restaurant Expo, the Invictus Hospitality team tackled a crucial step of any project: The lease.

Invictus (IH), friends of KRG Hospitality, know a thing or two when it comes to leasing a space. Principal Homan Taghdiri is a tenacious negotiator.

Case in point, an Invictus project in Orlando that opened during the pandemic. The space was owned by the city, which can certainly complicate matters. Taghdiri sunk his teeth in and refused to let go—for seven months. That’s crocodile or Komodo dragon patience.

The result? Favorable terms and massive cost savings.

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Taghdiri presented “Understanding the Leasing Game & How to Get Ahead” at Bar & Restaurant Expo 2022. You know this show by its former name, Nightclub & Bar.

Knowing that when Taghdiri smells blood in the leasing water he’ll clamp down and death roll until he gets his way, I attended his session.

Before we dive in, know this: If we disagreed with the IH approach to leases, we wouldn’t share their tips. The information below would cost, as Taghdiri points out, about $2,000 coming from an attorney.

Of course, neither KRG Hospitality nor Invictus Hospitality is providing legal or financial advice in this article. I’m just passing along information, as IH was doing during their session.

Leasing Dos and Don’ts

If you take nothing else from this article and Taghdiri’s session, make it this tip: Do negotiate your lease.

“You have to negotiate your lease,” says Taghdiri. “It is a must.”

Not you should. Not you can. You must negotiate your lease. Neither of us can emphasize this enough.

In fact, it’s your right to do so. Which brings us to our first leasing don’t. Do not believe anyone who says you can’t negotiate a lease.

“Anyone who tells you that you can’t negotiate your lease is lying to you,” says Taghdiri.

And if they’re not lying, they just don’t know what they’re talking about. Either way, don’t listen to them. Walk or run away.

Also, do your due diligence. Knowing what you’re getting into before signing is on you. Taghdiri recommends you ask the following before signing anything:

What generation is the space? Is it brand-new? It’s first generation. Did the first tenant leave? It’s second-generation, and so on.
Is the space totally empty?
Does it have space allocated for gas, electric, etc.?

Ideally, you’ll find a second-, third- of fourth-generation bar or restaurant space. Why? They can provide massive cost savings to you.

Do fight for the terms that are important to you. These include amount of the lease, the length of the lease, and any incentives.

However, don’t over-negotiate your lease. Do put yourself in the landlord’s position. They’ve invested significant capital developing the space and they need an ROI. Pick your most important terms and negotiate them. You risk a landlord walking away from a deal if you negotiate every single item and make things difficult.

Lease Types

So, you’ve found your perfect space. Do you know which type of lease you want? Not certain which is right for you?

No problem, because Taghdiri broke them down during his session.

Standard. This is the easiest to explain because it doesn’t exist. A particular landlord may have “standard” lease, but their isn’t one that spans the industry.
Full service gross is the easiest of the actual leases. Everything is negotiated and clear in the lease, and you simply pay the agreed-upon amount.
Triple net is the opposite of the FSG lease. You pay your base rent. Then, your landlord passes on operational costs to you, which you also pay.
Percentage Rent. Basically, this is a hybrid lease. You pay base rent plus a percentage of sales. For example, you may pay natural breakpoint on top of base rent. This type of lease can be beneficial to newer businesses. However, some landlords do not like percentage rent leases.
Modified gross is, basically, any lease that isn’t an FSG. This is the most common lease, and it’s most easily explained as a modified FSG.

First-time operators or owners entering an unproven market will likely want to first focus on modified gross or percentage rent leases. However, FSGs are certainly attractive.

Length of Lease

Landing on a lease amount that you can live with is only part of the battle. Far too many people overlook the length of their lease, focusing too hard on the amount.

So, let’s take a look at some crucial factors you need to consider before signing anything.

Base Term. Let’s say you’ve invested several million dollars into your project. It’s sort of hard to imagine paying that investment off in two years, isn’t it? So, a two-year lease probably isn’t ideal. Give yourself the time you most reasonably need to open your doors and make money. Again, don’t focus solely on the amount of the lease.
Option Periods. Taghdiri explains term options thusly: “Jump into the pool safely before knowing what’s in it.” The real-world example is easy enough to understand. Agree to a three-year lease but bake one or two (or more, if you want or can) five-year renewal options into the agreement. Doing so means that you can trigger the renewal prior to the term’s conclusion. In other words, the landlord won’t be able to (easily) kick you out if you want to keep leasing the space. Just be aware that your landlord will likely also want to bake new terms into the agreement along with the renewal options.
Early Termination Rights. When it comes to this element, Taghdiri explains that this may be limited to longer-term (ten years or more) leases. Essentially, it’s what it sounds like. You should be confident in your concept before you even get to the lease stage. However, it’s not a bad idea to have an early exit plan in mind. So, you may be able to sign up for a long-term lease but bake in an 18- or a 24-month termination clause. Just remember that if you don’t exercise this agreed-upon right within the timeframe, you’ll be responsible for the original term of the agreement.

The Million-Dollar Question

You likely have a burning question searing itself into your brain right now. It’s a common question: “How much rent should I pay?”

There are a few ways to approach a satisfactory answer. The bullshit answer is, “Whatever you can afford for the space you really want.”

That’s the first step toward blowing a budget, blowing out already razor-thin margins, and skyrocketing costs.

One way to approach the how-much question is due diligence and comparables. What are the comps in your selected area? What are people paying in the neighborhood? What’s best for your business, and is that identified in your pro forma?

That said, Taghdiri did present a general lease amount rule. Try to keep your rent at 11 percent of gross sales, or less. Ten percent is even better, obviously. Anything less than that and you’re a master negotiator.

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