Welcome to Chopping It Up Episode eleven. I'm your host, Mike Hallen. I'm the senior restaurant and food service analyst here at Bloomberg Intelligence, and it's my pleasure to introduce today's guests. Marvin Albali, CEO of Franchise Global Brands and author of Restaurant Excellence, the Ultimate Guide to Success in the Food and Beverage industry. Thanks for doing this, Marvin, Thank you. Thanks for inviting me to the show. You
got it so You've had a unique career path. Can you share a little bit about your journey in the restaurant industry? Sure? So I started my career. The first thing I started with was that I pursued education and hotel and cattering management. I studied that for four years, and after graduation, I took my first job with Chiles as an assistant manager. Made all my way up to a training manager and I was awarded the Operator of
the Year by Bricker International. The same franchise Z that operated Chile's was also the master franchise of Food Ruckers. So I was promoted to an operations consultant and supported twenty twenty two restaurants for about four years. And then one of the another franchise Z approached me. He was a franchise of six restaurants food Ruckers Restaurants and approached
me to become a company director. He wanted to grow his company, so I joined the franchise Z and I opened Carribook Coffee, Marble Slab Creamery, and the Great American Cookie and two more food Ruckers. In total, we grew from twelve restaurants to twenty two. It was an incredible experience. I was only twenty two years old and I had to learn everything from designed to site selection all the
way to opening. After that, I joined Applebee's, the largest car will dining chain in the world, as a company director for one of the franchise franchise Ease. And then I had a great opportunity to support sixty six restaurants Burger King Restaurants in North America, and so I joined the corporate office of Burger King in Miami and supported sixty six restaurant in British Columbia and Alberta in Canada. It was my only fast food experience QUSR experience, but
it was amazing. And then I joined one of the most iconic restaurant companies in North America and one of the oldest actually, it's called White Spot out of Vancouver, about one hundred and fifty restaurants in total. They have two categories. They have a fast casual brand called Triples and they have sit down restaurant family dining called White Spot. A fantastic company, they won Best Managed Companies for about seven years in a row an amazing culture. I just
fell in love with that company. But then a huge opportunity came my way through a recruiter to move to Dubai and lead four hundred and forty five restaurants for the Innercinental Hotel group. The Intercinal Hotel Group also operate Indigo Hotel, Indigo Regent on the luxury side Crown Plaza on Holiday Inn. So I couldn't refuse that opportunity, so I moved with my family to Dubai and worked for
the Intercinal Group for five years. During that time, Mike, they also gave me the opportunity to lead Europe in Japan as well, so in total I ended up managing seven hundred and seventy six restaurants and a year ago.
About a year ago, I joined Franchise Global brands. I'm one of the shareholders, and we've been doing consulting, franchising, creating concepts, improving performance for several restaurants, Boston Market, the Great Harvest Bread Company, for Mosso, we consulted for a Wingstop at one point, and several other restaurants in the region.
So that's it and a nutshell. Yeah, very cool, and not many people that I know, excuse me, in the industry that have experienced from QASR to fast casual casual dining all the way up to find dining, which which is very cool. So can you talk a little bit
about what motivated you to write your book? Yeah, So, as you said, one of the reasons actually was, you know, I look back at my career and I see that I worked both for the hotel business, the luxury side, where you learn finesse, culinary innovation, design, luxury, and then from the franchise world I learned marketing, consistency, financial discipline. So one of the one of the reasons I wanted to write a book, I said, you know, I have really great exposure and I want to share that experience
with people. And the other reason, and the more important reason is, as you know, the restaurant business has one of the highest failure rate in the world, and it's sad to see people invest all their life savings in opening a restaurant for it to fail after two to three years. And I really wanted to help. So I thought, maybe if I write a book that will help people in every aspect of the business, we can avoid all
that business failure that happens with new restaurant owners. As you know, in the industry, if you look in the industry to if you search for books about the restaurant business, you can find a book on culinary on recipes, you can find a book on marketing, but you really don't find a book that covers every aspect of the business. And that's exactly what I've done. Yeah, the book is great. I think all our listeners should go out and grab it. I really appreciate the level of detail in the book,
you know, especially for a guy like me. You know, I mentioned to you before, I have a little bit of experience as a short order cook, a little bit of experience making sandwiches and working the cash register out of Delhi, but that's it. So it definitely opened a nice window for me into into how a restaurant should be run. So I really appreciate it, and I was really impressed by the amount of input you received before publishing.
Can you talk a little bit about that process. Yeah, sure, So you know, I really raised the bar so high that it took me three and a half years to complete this book. So after I wrote it, I sent each chapter to three or four top professionals in the world from that subject. So let's talk about the kitchen management for example, the kitchen manage and chapter nine, which talks about recipes improvement. Both chapters were reviewed by actually nine chefs. Some of the chefs were trained by the
best in the world. So some of the chefs that shared their input and feedback and added value to the book were trained by Gordon Ramsey, Jason Atherton, Pierre Ganying, and Paul Bukuz. The same thing I've done with the
design chapter. Brian Tappan the former former designer of the Cheesecake Factory and designed several Apple these restaurants and currently works with a company that has six hundred restaurants and being a Pollack who designed more than thirty five American brands, restaurant brands and two so really that's the methodology that I took for each chapter, and there's a ton of value out of that for sure. Early on in the book, he posted a picture of a viral linked in tweet
that you had. Basically it said, most people think they know the restaurant business because they eat out a lot, and that really resonated with me. I feel like a lot of restaurant stock investors think they know restaurants because they eat out a lot, So I definitely connected with that. What are the biggest pitfalls for entrepreneurs that are taking
their first stab at owning and operating a restaurant. That's a great question, and there are several answers to that, But what I for the past twenty five years of experience, what I see is the following. So new restaurant owners typically in the beginning are very much focused on service, food quality, atmosphere, on the top fundamentals, team training. But after about a year they lose focus and the focus turns on marketing, revenue, cost management, and administration work a
lot of computer work. And when that happens, when you lose focus on what matters to the guest, you start losing guests. So that's one aspect the other aspect. Some of them get really excited and open another store, but the second store is not even near, it's very far from the first store, So then they dilute all their effort and then they spend a lot of time between the first store and the second store, and then lose
focus as well. So if you want to expand, I would say expand carefully and don't go too far where you require a lot of traveling time, which is a time lost on the road. Other operators I see the ones that fail fast and fortunately are the ones who are running restaurants by calculators. So they're obsessed with cost management. They're obsessed with profitability, and it doesn't work that way
in the restaurant business. And the restaurant business you have to serve quality, deliver quality, quality of experience, and quality of food. Once you impress your guest and earned their trust, then you'll be successful. Very cool. So for those listening in that haven't read the book, Marvin equates restaurants success with levels of a pyramid, and exceptional food quality is
at the base. So can you speak to the importance of consistency, crevability, and signature dishes at a restaurant, right, these are three different elements, so consistency. The reason I put consistency there. I remember watching a Netflix show for Anthony Bourdaine. It was called The Last Magnificent, was about a chef called Jeremiah Tower, and he said a phrase in that show. What he said, the beast the religion of any restaurant is consistency, and it resonated with me
a lot. Now, I don't see a problem in consistency in the franchise world, but I see a huge problem in Alans with independent restaurants and hotels. So that's why in the book there's about five to six pages explaining in details, how do you achieve consistency because, Mike, you know, as they say, consumers trust or the lack of it,
comes from consistency. That's one aspect. The other aspect, which you mentioned, craveability, and where in the book I talk about having at least two appetizers, two main course items, two desserts where people would crave. Because if people don't crave your food, it's gonna be you're gonna have a hard time with repeat visits or with creating loyalty. Think of cinnamon, A lot of people say, oh, you know, I'm craving I would like to have a cinnamon roll.
Think of Krispy Kreen when they first started and they were extremely popular. Shake Jack as well. So you all hear that, you know, I missed that burger, I missed that donuts. I would love to have a cinema role. If your customers are not saying those words, if you're not hitting those phrases, you have a problem in the R and D department. And the last part signature dishes and very simple. If you know you cannot succeed by
fitting in, you can only succeed by standing out. And if you don't have signature dishes, which goes hand in hand with cravability, and you don't have unique items, then if you have a Caesar salad like everyone else, if you have a burger like everyone else, I wonder how do you create a following? I wonder how your marketing
department will be able to market your brand. So I think your cheft, your R and D department need to come up with few items with specific marinade, a special way, special sauce, special cooking procedure that no one can match in your city. I think that's really important. Yeah, for sure. And getting back to cinnabon man, I think the best marketing ever is just the smell of a cinnabon right. You can smell it if I feel like, from halfway
across the mall, and it smells fantastic. Definitely something that creates creavability. Superior service in hospital hospitality obviously are crucial next level of the pyramid for you in the book, Hiring well and the importance of menu knowledge. Those are two things that you mentioned in the chapter that really stood out to me. Yeah. You know a lot of people talk about challenges with hiring the right people and they say, you know, we're not competitive enough from a
salary standpoint to hire the best people. I slightly disagree because in my career I did hire people that minimum wage who are brilliant. So what I coach about in the book, especially for front of the house service employees, you really need to look for personalities. So when I do my interviews, I'm looking at the smile, the attitude, the positive vibes, the teamwork attitude. I'm not so much obsessed with the skill, because I can teach you how to open a bottle of wine, I can teach you
how to serve food. I can teach you how to prebus a table. That's not really difficult, but if you have the wrong attitude, it will be very difficult to change that. So if the hiring and recruitment is based on that, you'll have an amazing team, very positive that you know, people that help each other, very friendly, and you'll do well in that department. On menu knowledge, I talk a lot about it in the book for two reasons. First of all, there is a food safety aspect and
there is customers health aspect. About three to four months ago, there was a guest in Mexico, a British customer in Mexico who's got allergy from sesame. Order the salad and ask the food servers if they're sesame in the in the salad and they said no. Obviously they didn't know, but there was sesame in it. The customer ordered the salad, had the salad, and unfortunately, Mike, the customer passed away.
Oh wow, the allergy was so strong. So when I coach and train restaurants in the region and internationally, I tell them nine many knowledge doesn't work, and that's one of the reasons. Now someone might say you're exaggerating. You know, no food server will know well. The other aspect, we know that confident food servers sell well. If you want to do an up selling program, suggests a selling program without great many knowledge, you will not be able to
achieve it. Someone might say, listening to this podcast, I know all of that. Yes, many restaurant owners know that, but very few of them do whiz is or tests or training on daily basis, so they end up going nowhere with them. It's really really crucial from a sales standpoint and from a customer satisfaction standpoint. Yeah. And speaking of training, I mean it's really been It's really woven throughout your book. I was. I was almost surprised a
little bit. I probably shouldn't have been. But how much you talk about training throughout the book, and how much you recommend restaurant tours train their employees. I mean, whether it's daily, monthly, who you recommend does the training? Can you can you talk a bit about your process and how you recommend restaurant Sure, Mike, I talk about the training a lot, because from my experience, the best operator
in the world trained well. And I'll give you last year I was in New York with my family went to Danny Myers restaurant Grammars Tavern, and I was impressed. I was wowed with the food server training. Actually, on that day two food servers came to the table because one of them was shadowing a trainer. And we here in Dubai we have Zooma. You're familiar with Zuma, it's a big brand globally and another brand called Lepetite, Mizone and or Fally Brothers. The training is incredible and they
have high volumes. They're always fully booked, so there's a direct correlation between training and success. The problem is with many restaurants that they get busy or because they have hourly employees, they don't believe in training or high turnover, saying Inston, I have a high turnover. By the time I train an employee, they leave, But there's no way out. You're going to train them because the other option is having untrained employees serving your people or cooking your food.
So I offered two solutions in the book, Mike. One of them is really easy with the daily shift briefing. Pre shift briefing, you have at least ten minutes for the front of the house and ten minutes for back of the House. So what I would do and what I put in the book, just take a menu item and describe it well with the food servers, ask about the ingredients, ask how do you upsell it? And share one training tip. I'll share one with you right now.
If there's a customer complaint, what I teach is don't justify. Always rectify. So someone says my fries are cold, don't say I just brought them from the kitchen. Just say I'm sorry. I'm gonna bring you a fresh portion of fries. So this is a training tip, So think about it. In ninety days you would have taught ninety tips. You will notice that the team's skills have improved significantly because
you're training every day a new thing. And if you use the service chapter, the service chapter was designed in a way where you can use it from each section of the book of that chapter. So that's one aspect for Back of the House is the same way, or I'd like to call them Heart of the house. The same way you take your recipe. So imagine this, Mike, You've got a grilled cook, salad salad cook, an expeditor, a fried cook, and you're talking about an item from
the growth station. When you're talking about an item from a growth station, you're indirectly cross training the salad employee and the frye employee. So that's the beauty about training every day during appreciative briefing and the other The other solution is at least once a month classroom training but not lectures is full of role play, role play and role play because that what makes the real behavior, and that's where you see the mistakes and you can correct
the team and coach them. So these are a very very brief way some of the things I mentioned in the book about training, I thought that was I think you mentioned too that the gms and the assistant gms aren't doing all the training correct. Yeah. So when I worked for Chili's and Applebee's, we had food server trainers, we had hostess trainers, we had a grill station trainer, a prep trainer. So these are our employees that run a regular shift, but they were trained on how to
train others. And when we have a new employee, they'll learn the best behaviors, the best standards from those guys. So we just don't put you with a senior employee, because sometimes you might have a senior employee who's got a lot of bad habits, so you create a problem for yourself. Yeah, and i'd imagine it creates a good pipeline for potential managers down the road. Right, Absolutely, Sorry,
I forgot to mention that. So those trainers that you were training at least once a month become the backbone of the operation and become part of your succession planning. And actually one key point here, Mike, become the protector of high standards at your restaurants. When they see something wrong, they stop it. When they see a short cut, they stop it because they're the ones who are leading high standards. I like it. In your experience, is there pushback from
employees about that much training? How are you and how are your gms taught to lead and motivate your hourly workers. I have never experienced or faced and employee who doesn't want to learn. Be it. Nowadays there's a lot of online learning. It's all on a cell phone, gamifications and quizzes and all of that. I've never experienced someone saying no, I don't want to learn. But I've seen managers who were too busy to follow up with the trainers to
ask about employees and see what they've learned. And that's counterproductive productive, to be honest, Cole, and I appreciate your willingness to seek suggestions for operational improvements from your teams, and it seems like you did it on a regular basis, and I'm sure the employees appreciate that as well. Do you have examples that were especially successful, maybe something that you recommend everyone thinking, thinking, everyone think about doing. Yeah,
so one of the that's a great question, Mike. At one point in my career, I was managing a restaurant company of twenty two stores, and I came up with an idea of I want to I heard at one point that the big Mac came either from a franchise z or from an employee, and it became the number one sandwich for McDonald's worldwide. So I said, I want to ask the employees, even the dishwashers, about what could
we do better? So what I would do every quarter, sometimes every month, I would ask for questions to every employee. What are the top your top ideas to drive sales? What are your top suggestions to reduce cost? What are your top three challenges at work and any other concerns or suggestions. So I remember doing that, and at one point we had an employee who noticed that we have no curtains in all of our walking coolers and freezers.
And you know, I always knew that when you work in a place for a long time, your eyes get used to it. So I was like, that's a great idea. So we bought the curtains. We put them everywhere, and here's what we achieved, less insects going to the walking cooler, better temperature of food, so less spoilage, and the compressors of the walking cooler and freezer would work less, which
means less electricity cost. So we took John, took his picture, gave one hundred dollars reward, and circulated his image this photo throughout the company. Then next month, when we did the same exercise, guess what, we received a ton of suggestions and ideas. And that point that was a turning point, Mike, because I was no longer leading alone. I started leading with everyone and everyone who was putting their ideas. So you changed the game completely. So that's one of the
best things that I ever happened in my career. Actually, very cool um. In the book, you also advocate advocate for monthly bonuses. So, um, you know, I'd imagine there's some benefit there because it's it's a high turnover business, right, so people are motivated to actually see that bonus money. But are there any other benefits to monthly bonuses that you like to speak of. Yeah, so I don't believe in any in an annual bonus or quarterly bonus. So the way I structured the bonus at my company was
on monthly basis. And this is how it worked. So if you were a restaurant manager that worked for me, Mike, you would res one third of your bonus if you achieved the sales target for the month, and two thirds if you achieve the profit target, an additional one third if you achieve the guest satisfaction target. And the reason I had those three because if I say only profit, you can cost and kill guest satisfaction and get your bonus.
And I didn't want that to happen. So the way we did it, at the end of every month, when the P and L came out, you would come to my office. The finance manager will come to my office, and as a restaurant manager, you had to take me through your expenses and how are they going up or down from last month. You have to show me your guest satisfaction scores either on Google on open Table. Also
whatever in house program we had, like in Pathrica. And of course the sales targets when I used and I used to issue the check right there and then if you achieve the three even if you achieved only one portion the sales, and it changed everything, Mike, because people knew, oh, in thirty days, I'm going to get my bonus. I'm
gonna work hard for it. I know how to achieve, and I'm going to make sure I don't have repair and manance issue, I don't have waste issues, because I don't want my food costs to go up, which will kill my profit. So I turned the restaurant managers into entrepreneurs, into business managers, not just employees. And I recommend this bonus plan to every single company on Earth because nobody
wants to wait a whole year to get a bonus. Yeah, that's great, And you know, and in the restaurant business, there's a lot of examples that you know, if you get the culture right and you hire hard working entrepreneurial people, and you have that entrepreneurial type structure. You know, think outback Steakhouse back in the day and places like Texas Roadhouse right now, those places humming man, you know. And it's and it's because of the quality of the gms
and how hard they're working at it. So, um, that's good stuff. The top of your pyramid. It's restaurant profits. But you only gave it one and a half pages in your three hundred page book how Come? And that's intentional because throughout the book, the message that I'm trying
to to express the philosophy is as follows. When you have great food, great service, great atmosphere, highly trained, the employees motivated and inspired, and you're active in marketing, and you manage your cost reasonably well, profit becomes a natural outcome. You don't even have to worry about it. That's and that's what exactly all right in the book, because you know, you cannot achieve profit when you have low sales because of bad food or bad services, as simple as that. Yeah,
it was awesome, all right. So yeah, great job on that book, man, I really enjoyed it. I'd like to move on. Ask you a couple of other questions outside of the book. Are there any interesting or challenging projects that you're working on at FGP at the moment, or is there an issue that clients are especially worried about
right now? Yeah. Look, the internationally, franchising slowed down a lot because what I'm seeing globally, Mike, people are going or more entrepreneurs or more in favor of chef inspired restaurants, mom and pop restaurants versus about ten fifteen years ago was all about franchising, at least on the international front. What people are worried about are what you're worried about everywhere, inflation and employee turnover, which been the case for a
long time and for both. Yes, in the US, a lot of people did menu downsizing, they reduced their menus, but it's much more than that, Mike, and sorry, I'm going to use the book as an example. In the cost management chapter, we explain about cross utalization, minimizing single use items. You know, counting how many ingredients you buy,
and questioning why do you buy those ingredients? And not everything should be passed to the consumer because there is a certain point where you can't raise prices anymore, and you have to be very intelligent in your processes and procedures. And again we go back to training, right and the importance of training, so that these are you know, inflation employees, turn over, and slowdown of internationally franchising. This is these
are the top three challenges that I see. Very cool, yeah, And productivity improvements and are you know are something that management teams are talking a lot about. They're also talking about reducing waste and continu continually trying to get better at that aspect to save money on their food costs. So all good stuff. And are you familiar with the
new Burger King US turnaround plan? Do you have any thoughts on the plan specifically or any ideas about what your former employer can do to boost sales and operations right now. It's interesting you asked that because at the time when I worked under Steve Weiberg was the president for Burger King for North America, we were experiencing kind of a turnaround. At the time Whopper, which is the most important sandwich in the burger and the brand we
were doing freshly caught lettuce, freshly caught tomatoes. We reduced the shelf life of Burger holding the burger patties, we changed the French fries, we brought smoothies, we brought digital menu boards. So it was an amazing period, by the way, and I admire what Steve has done at that time. I've read a little bit about what Burger King trying to do now with a lot of remodel and technology
and investing in the restaurants. And that's the right way to go because this it's so competitive right now, and other QSR brands have invested a lot of money in the last few years. So if you're viewed as dated and and and old, you're kind of losing market share. So I support it. But the only thing I would say, sometimes companies spend a ton of money into on technology, not on product. I am a firm believer. I think of Chippotli, for example. Chippotle did not invest a ton
on technology. It was always about great ingredients, great food, and that's what the philosophy of their CEO, Steve, if I remember the name correctly, So I would spend if if it were me, I would spend a ton of time on making sure I serve the best food. Ever, it doesn't matter if it's a digital menu board or a regular menu board. I think I think that what brings people back. It's not the menu board that brings you back, it's the hot, tasty burger that brings you back.
I think that's great advice, and I think that's a great plug for your book because you cover all of that in there. Marvin, Thank you so much for doing this. This is great. How can our listeners get in touch
with you? Well, they can either find me on LinkedIn Marvin Albali also or they can go to our website ww dot Franchise Global Brands dot com and UH and listeners can also reach out to me at m Helen one at Boomberg dot net and I'll be happy to connect you all right, Thanks again for doing this, Marvin, Thank you,
