Study Hall: Blueprint To Build A Restaurant Empire

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My graduates from my school being forts bad drop bag drop or Mike drop bag drop drop.

You know from the time when I was young, like you're killing the guys, familiarize you what you know my story about when we're being young always had a model of cutting out the middlemunth right. So like, if you take my restaurant, I sell breakfast and brunch. How many times have you been to brunch on a Monday morning?

Never?

Yea.

So now I'm in the industry in which seventy percent of my customer base is gonna come Saturday Sunday, right, And then I'm in a white neighborhood, so a lot of my clients I was black, which means that they drove to the restaurant, right, I don't have parking, so you drove, you had to go out of your way, you know. And then from when you finally get in there, you're looking for an experience and that can't happen in

To really focus on just a small nation audience. So most people can admit they have.

A mental brunch on Tuesday nless you live in LA you're like wealthy issue, you know what I mean? You know what I'm saying, So like it was easier for me to be able to figure out what really miss.

I'm also a several pieces to it. I don't have to cut labor.

Everybody coming on the same time, everybody get paid the same amount of things they can go home and kind of gazing labor in that way, no food goes the ways we run everything a small bash and when we're out of things, we're out of things because people understand the concept, right, So those things really made sense. And then also I knew that it would create in the loure in a sense that people would want to come

That's really remarkable.

It's like a limited quantity of Yeah.

It's limited quantity.

Yeah, you know that approach, that model is pretty pretty brilliant.

The fact that y'all is doing it, because.

One of the fastest growing chains in America is called First Watch. It's like this restaurant Cheam, and they have a similar model where they've specialized just in breakfast and brunch, but they only open from seven to two thirty and their thing was like the same thing.

He says. It's like the work quality of it, Like everybody.

Loves coming because it's notices one shift, and then the employee retention rate is great because people have work home balance where they can get home, they great kids up, and they can still make dinner and everybody loves it. So like, that's interesting that you guys are doing because it seems to be a trend that's them to start happening in the country.

And also all right, so because in this show, so a lot of shows I'll watch in YouTube, like I'll watch these Gurules quote unquote Gurules on YouTube for forty five minutes, and I don't I don't know what I actually watched. It's like they talk in circles for forty five minutes and then it's like, Okay, subscribe to my private YouTube channel premium nine hundred dollars.

I'm more for go to my seminars.

So it's like, we're going to give you the straight blueprint of how to be successful. Whether you're taking the eyes up to you, but we want to give you all the two that you need to be successful. So can we talk about as far as like revenue, like how your revenue model actually works, because the thing about it is that, especially in the black community, how I see it is that entrepreneurs, we have three types of businesses that we always aspire to be right.

To our say, let's do the list.

Barber shop here, salon number one, that's number one, right, and then clothing store yep, and then a restaurant. I don't know why, but everybody is like everybody's dreaming to have a restaurant, right, and it's one of the hardest businesses to actually be successful.

And like I think like ninety five percent of restaurants.

And kind of came to the conclusion that it's a status thing.

But yes, your model, but Joins is actually worked, it's working, and it's still a status yeah yeah, yea.

So it's about revenue, and like, how yeah, can you in the restaurant industry, just specifically in my industry, you have three general costs, which is you have label costs, you have food costs, and then you have overhead, right, it's overhead or the fixed cause, which is the cost of the building operating expenses, whether it's trash and mobile, greational, moval, gas, electric, you cable things like that.

Those things won't go away. They're fixed, right.

And then you have labor cause, which is obviously the cost of having people on STAB that can officially execute whatever it is.

That you want to do. And then you have food costs.

So I scaled the model in a way in which the profit was already built in. So it was I like to call it winning at the table. So I went at the table. Like for example, with me, my highest price selling item is a chicken and waffle, but

Already won at the table. I don't have to make an assumption.

But then I might add a two dollar margin on it and sell it for twelve dollars a while, because.

Now you're gonna take you ten souls. You're gonna want syrup to go.

You know, it might be a situation where they might burn your chicken the off and now you gotta make another, so you have to win at the table.

In my industry, the margin is about five to.

Six percent for the owner of what you'll typically make, which you'll typically net. I'm netting, I mean twenty five thirty percent. So I'll break the model down as real simple. My fixed costs weekly at seven hundred dollars between the supper club and homemade bunch, with grows anywhere from fifteen to twenty grand. My full cost is twenty percent. So let's take the twenty grand, which is the tying number. Right,

Right.

I already told you that my fixed costs was seven hundred, right, which leads me roughly at forty seven hundred. That leads me at fifteen to three.

Right. I run a seven man band.

I pay all of them a salary, So all seven people get seven hundred.

Dollars a piece. It's forty nine hundred. Right. They'll leave me with ten grand gross.

By the time that now that is extracted, maybe I might walk away with seventy five hundred, maybe eight grand, you know, considering that I got stay taxes, and I also got my personal income tax. So now how is it that I'm able to make three hundred and fifty thousand dollars a year when we only gross a million dollars? But in a technical restaurant for me to make a undred fifty thousand dollars a yeah, I had to gross five million dollars. It's a winning model. Why because my

Blueprint, that's that's what I take. We appreciate.

First of all, I want to thank you for saying that, because a lot of times people they don't give the blueprint right, or they don't they're like, stink you with their numbers, or they're like it's hit, it's hit a secret.

So I want you to fully appreciate store with you. They don't believe the trucks, that's.

Not even I want you to fully appreciate somebody just coming in and laying it on the table, right, Like I said, we want I don't know what else we can do. Try to help you out the best way we possibly can. But it's important to have a plan. That's the thing I like when we spoke on the phone. You have a plan in place.

Right.

Then, another quick piece I will advise people to really focus on, too, is play small ball for a while. Don't get so caught up on perceptional what people think. So like, for example, if you were to say, Derek, well, how would you scale your brand if you had no money? Let me give you that right?

So all right?

For example, if I had no money, I had the same food, what I would do is I would do a pop up and I would do collapse.

You see what I'm saying. Like say, for example, you guys have a podcast.

I'm sure you gotta eat eventually, and I would say, well, let me pop up at the podcast.

Bring some attention to my brain and I'll make you guys chicken and waffles.

Right, pop ups create collapse because now your attention to who you are, So the things that you can focus on what you're free, which is your content that you can produce and put out right.

The image of your brand.

And the projections and the messages that you convey, and then the relationships that you can create based off of the that you created, which can allow you to a further part of your brand.

That's the reason why I'm here.

So now those collapse create situations where now you can generate enough money to maybe not get a restaurant, a brick and mortar, but maybe a food truck, maybe a car, and then the car generates flow.

You have to understand that flow is data.

So all the customers who come into my restaurant, I make sure that they're aware that I have a separate club. I make sure that they connect with me through social media. I make sure I got your phone number and I make sure I got your email.

So now I'm texting you pictures of the chicken and waffle while you at work all day. You know what I'm saying, And I'm creating that flow.

There's another concept that we execute from time to time called a brunch and go, a brunch pop up of which I can show pictures of my meals right and I can send them out a mass text them.

You guys can order them through the cash app, and then you can come pick them up from my house.

That's a very effective, very efficient, very clean way in which you don't have any weights, you don't have any overhead, you don't have any labor.

It's easy to scale a brand that way.

And that's like one of the things that again that we're starting to see the restaurant industry grow to is like these ghost restaurants, so they stay at home restaurants, but people are making them based on their orders, you know what I mean. And Chick fil A actually just created two fulfillment centers where it's just delivery, so you order and they just ship it to you again and saves money on food costs because we're only making it when somebody orders it.

Yeah, and the data, like you said, that's important.

The data you said, data is you said something.

Data is information, you said.

So I'll say it to say this, be interested in the people who are interested in you, so like casing for them.

You and your wife come into the restaurant, right, it's full of you guys.

So I've already brought you in so it's easier for me to sell laterally, which means that now I could feel like data from you and say, look, I know you're.

Interested in the brunch. How would you feel about a sell, how would you feel about a wedding? How would you feel about an event?

And then grow your business latterly with the people who are coming in. I learned that my first store, and just being ron being real that, you know, I thought I had all these great products and I thought that people needed them, so I would go outside to the people who I felt needed them, and they weren't interested in them. But you guys are sitting here right now and you want them, and it's easier for me to be able to.

Grow my brain.

Also, in terms of wealth accumulation, it's always easy to grow loud only so that you can accumulate.

Well, what do I mean by that?

Meaning like, as opposed to me getting seven stores, I can find seven streams in one store. So now you got to realize that I can, I can coach, I can consult, I can speak. I got the restaurant, I got the food truck, I got events, I got the brunch and go. That's seven streams of income. The average manionaire got six to seven streams of income. I don't need anything else for me to get wealthy. I just need to perfect the things that I'm doing, all right, So.

Yeah, so all right, so the next topic we're want to go to is scaling your business and taking your business to the next level. All right, So now you have the backstory, you have the current story, or we're gonna take it to the next level. Before I even start, we were kind of being whether we're going to do the last segment on some other stuff that's in the news right now. It's entertaining, but this is more important, Right, We're gonna we're gonna get back to that next week.

All right, So for me, it always starts with the end in mind, you know what I mean. So the only way that you can scale is no where you're trying to go. Always related to like if we get out of here right now, we're all going somewhere, whether it's a real light, whether deer run across the road, whether it's stop shine, you continue to go. A lot of entrepreneurs are just starting, so it's like you start the ignition up to the car and.

Like now you're waiting.

No one's going to give you direction because we don't have any mentors. Speaking from an African alnment perspectives, I say so in terms of the scalability of the brand, you have to have a vision as to how you see opportunity in your industry for you to be able to grow in perpetuity.

So it always starts for me with my grandkids.

So like we say, I don't hustle for my first name, my hustle for my last right, So like why get the trucks because the stores already told you the store model, right, So the trucks are for my grandkids. So when it comes to scaling your brand, you have to you have to be focused on a handful of things. You have to have low overhead. You know what I'm saying. You have to know how to grow to your brand laterally in a way in which that you can generate multiple

Club, may you right?

I got Lamb Shops broccoli and asparagus, right, but it's the same Lamb Shops that's where eggs and potatoes.

At the runch. So I'm not selling anything else. If you don't buy that brunch, I'm gonna dim the lights down. You're gonna buy to night.

Yeah, you know what I'm saying. It's like we have to understand what it's gonna take. So I think low overhead is key. I think bringing in partnerships, Creating partnerships is definitely key for black businesses. If you don't create partnerships, the days of being self employed and sitting in your house doing someone's taxes and think you're gonna be on a fortune five.

Hundred, it's over with.

Yeah, that's yourself partnership collaboration. A lot of times in.

Our community we are so hesitant to work with each other because it's like I want to make it out. I want to make it out, not knowing that if we look across like that person trying to make it too.

Yeah, like I told you, Like with the Supper Club, it's Randy Problay, who's a partner of mine, and Kevin Vaughan.

These gentlemen come on and endoor the stresses of starting up something new.

But I've gotten better and better at you so constantly challenging myself. Like when I built out the first restaurant ever six months, the second one was four months. I built out the Supper Club in forty days. I'm talking about we had no MENIU, we had nothing. We just had a general feeling them.

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Ernest What's up?

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So in order for you to scale your brand's going definitely take collaborations, especially if you be it's definitely gonna take a minimum overhead, doing as much sweat equity as you can to make sure that everything kind of remains intact in terms of financing. But then also coming under the fold is someone who's greedy in yourself. Like for me, I'm in a rare space because it's no black five star restaurants in Baltimore, so I kind of set the

And hills first.

So like always equated to like cowboys and Indians, where like you know, the cowboy will look out and all the Indians will shoot them with the going arrows.

I gotta get shot first.

But I'm willing to do that if it provides a gateway or a path for you So it's more specifically when it comes to scaling businesses, I think that you have to have a plan in a way in which you see yourself in that business years from now. So always think about your grandkids and then reverse engineering. So like, that's what I do when I solve problems in my business. I don't focus on the shit that's good, Like, oh, the food is nice, and you know that the core

So it all goes into how you say it. So in terms of my business.

Model, we all know I like the real estate peace. So it's a mixed use property. It's commercial downsta talk about that. I don't let me talk about that, Okay, So it's real something with my piece, you know what I'm saying. So I have a mixed use property right, which means that it's commercial slash residential.

There are tennis upstairs.

The tennis pay the run upstairs, and now I have to deal with the rest of it downstairs, which leaves me with a minimum to no overhead because now you have people who've leveraged the cost. So I speak to entrepreneurs who have a brick and mortar. Find other ways to use what you already have outside instead of going outside of the scope of what you're doing. So like say, if you have a beauty salon and then you can allow someone to double it and use the space as

You know what I mean?

Maybe I might not want to just stuff the lamb chops with lobster this week to save it.

Out, you know what I'm saying. So those things are extremely important.

How we look is extremely like it's a very big thing to us, Whereas for me it was like, yo, when I first started my brand, like I told you, I came into the game with one hundred grand, right. I could have gotten caught up an ego and been like, well, I'm not gonna clear this plate or I'm not gonna watch these dishes because this is not what count. But

Now that's meant well, just one minute before you go choice because what you said was very important. I don't want to think over people's heads. So you're making money from the tenants upstairs, and that's pretty much covering the cost of the restaurant, so that saves you.

Yeah, the tendants up says cover about roughly sixty percent of the note.

So that's important to understand because you have to find creative ways to leverage.

And that's the scaling model in general.

So when people come to men and they say, well, dork, I think you look great in the strip mode of shopping, so it don't fit them out. So the only way I could grow my brain is the mixed use properties, that of townhouses or apartments in which I'm at the bottom. That's what that looks like. So now now let's really think about it and break it down. It's no longer a restaurant play. It's a real estate play. Yeah.

That's so.

Some of the things that people want to know is like, what are the qualities you need to be an owner? So we did a little research and likabilities one being able to multitask, being able to delegate, And one of the most interesting things I read was being able to thrive under stressful conditions. And I think that gets overlooked. You want to talk about some of the setback stress, the stress.

No, but it's never all good. It's never all good. It's never all good for me.

Yeah, I mean, especially as a black person, because you know, my restaurants all black.

You know, the staff is black.

We hire any and everyone's qualified, but I focus on black, you know, because we need it.

So they the hardest to work with, you know, Yeah, they the hardest to work with.

And the reason why is because we don't have models, so like when you have, when you got models, you could buy any things. I always speak. I generally, I mentored,

To focus on today.

It's very difficult as a as a black entrepreneur because we get the.

Most resistance from our people.

So I'll explain to you how what I mean when I say that, let's talk about consumerism. So that's something that's big to me, right versus support, Well, I support black business.

Well support is more of a philanthropic thing. So if you see that I'm doing what I'm doing.

Or you decide to cash at me or you or you know someone that might be in my industry who can help provide an additional service or more mentorship, then that's support. But if you come to me and you pay for a chicken and waffle because it's great because you like it, then that's consumption. And we really have to educate the consumers on what consumption really means. Support doesn't mean that because you came to my restaurant and you spent some money, you supported me. No, because I

You know you don't, right, Yeah, but with us, it's a certain level of life. You owe me, Yeah, you owe me.

You know, entitlement, entitleed, it comes with it s So with that entitle we have to understand what that looks like to you. Because, okay, this is another way in which you can scale black businesses a robust top line. You gotta make sure that you funnel any and every doubt or not. Just you come by the checking the while keep doing your thing. Bro, Hey appreciate you since y'all have a governa really piler. That shit on your mother's birthday, valentized day, your anniversary, add to your kids

Yeah, anything else ty that you want to but a lot the last thing before we before we wrap it up, is that I want to talk about. So you have a unique story and you have a unique look too, right, yeah, all right. So you're in the Inner Harbor.

Are you not in the harbor? Or outside? You on the other side of the harb. So it's two pieces.

It's the tourist side of the harbor and then this is the more exclusive side of the Harbor that's based on residential So I'm right across the street from the Risk Cold.

Okay, all right, So if anybody's not familiar, I said, I used to live in Baltimore.

But if if anybody's never been to Baltimore, Baltimore is an interesting city, like most cities, you know, still say g yeah, exactly. So the Inner Harbor is a wealthy neighborhood. It's right on the water, very affluent businesses. You have the risk calls and stuff like that. So you're a black Are you the only black honed restaurant in Harbor in that area? The only black home restaurant in that in that area? And I'm assuming a lot of your

No?

No, it's definitely been an issue for me specifically, not for them. I personally don't give you know what I mean, just being honest, like soho, No, it's it's been an issue.

I think I've always remained treated myself.

My mother taught me at a young age to stay grounded and who I am and my beliefs.

I knew what I was doing was different.

I knew when I did, Like, for example, like I knew when I was doing a black business in the white neighborhood that not only was our black man getting out of prison and doing something that was new, but the likelihood.

Of me surviving with slim to none. I'll explain something to.

You, because when you got a black business, y, I got a black restaurant in the black neighborhood, right, I immediately come out of the doors of my establishment.

In the community, embraced me. They're looking forward to me.

They're gonna stop and get me at lunch, then a breakfast after they get off work.

When they see me cleaning up outside my store, they salute me. It's a level of support there that's just obvious.

Right, it's built in.

Yeah, it's built in. But how many just not even not even restaurants, how many.

Black businesses are in influent white neighborhoods that make it period, you know what I'm saying. And then let alone we open on the weekends, and then let alone, I don't have any partners, you know, in terms of my anomics and things like that. And then let alone, like we don't have the cheapest costs. We show everything allaka you know what I mean. We're not offering any.

Deals, you know. It just it just built off a quality.

So it was a strong belief system for me specifically from the beginning that allowed me to stay the course.

We want to thank you for coming in and to to to being so honest and opening up you know your playbook, right, because you didn't have to do that, right. And this is something, like I said, with this show, we're taking a unique approach to it where we really want to educate, you know. And I think that entrepreneurship is something that's very important and even in college, right, Like they don't teach you this certain stuff in business school and stuff like that.

So to hear it from a real world perspective, is.

Somebody that you know, people can relate to, somebody from the community, somebody from the neighborhood. Is uh, it's encouraging and and it's also it's important. It's important and for those.

Of us who are in culinary school and then like can't figure it out, like this is we built this.

We built this from the ground up.

Yeah, there was no formal school that you went to and built this from the ground up, from based off experiences. Yeah, and one avenue just resonating to another one, you know what I mean. In one medium, you took some some ethics and some some mobils and you brought it to a different one.

And that's powerful and it's all don't have to cut you off. But it's also can be related to any business, not just restaurants. Right, So we're talking about the restaurant business today because you're on a restaurant, but the business model and the ideas and the general principles of business can be applied to anything, Like you said, whether it's a hair salon, whether it's a restaurant, whether it's a sneaker store, no matter what it is. You see, I

And you gotta respect the entrepreneur too, because that's another thing I don't really feel I touched on enough.

Like black people, you know, to speak to them.

Yeah, so black people, like you know from the consumption style, understand what it looks like when a black person is establishing a business or entity and what it's gonna take for you to grow them. But more specifically, young black people who work for black people.

Know what that takes to be able to build out that brand.

Dedicates your sweat equity to those companies because they need you more than a white entities. Right, we talk about it all the time, Ruth, Chris rich enough, nor Strom's rich enough, Macy's rich enough. So it's so crazy because like when you're speaking about the Color Night School, the young black kids come out to Color Nighted School, they gonna work for the fucking four seasons.

And you're like, Yo, you ain't never think that.

Allocate even my customers, My customers come in the store, right, your son or come out of Culorinize school. You'll let him work for the four seasons. But your cousin who getting out of jail. You pulled me straight up, You pulled me straight up. Yeah, look, min just to let you know, you know, my cousin just got all the joint he need a job.

Or what about your daughter, she got a.

Master's degree, She need a job. Yeah, she need a job. Stop sending out. In some cases, I would say verse potentially at your best talent, because we don't do that with Lebron and all that. When we see that a young black kid, is he fifteen years old and he's six y nine and he could dribble.

We gotta make sure he yo.

We clambering like, keep him out of trouble and make sure he get home.

But when you see the young black entrepreneursh's twenty years old, who's selling nachos? You know, like my young man killer for nacho mag he selling nachos, You throw him to the walls.

Oh you know, my cousin, my uncle, my cracking uncle. Can he sweep the steps up?

Nah?

Stop doing that, because they do that all the time.

They tend to undermine the value of our entrepreneurs where and essentially our entrepreneurs and our creators all the future. Because I don't get fuck how high he could jump. Eventually he got a battalire. I only fuck how fast he runs. Somebody gonna run fast. That business is forever. It could last in perpetuity. The dualation of a business can go on for generations. It could go on for decades. So a person could do business up until the time

They're like at Jerry Jones. That shitn't go on forever.

So you know, the musicians, the creatives, the entrepreneurs, they have to be supported the same way the athletes are support. I'm not taking anything away from the athletes, but to me personally, I feel like my son could read, and he could he could he could assimilate information, and he could impart that information out and he could get his ideas out.

Of the world, and he could make more money than Lebron James.

He could create more opportunity for people than Lebron James, and he could give more back.

Because that's not really talked about either.

That that whole yo would have looked like to work for the black man, would have looked like to beat a black man who owned it, and then wouldn't looked like the consumer from the black man ate three different perspectives.

My graduates from my school being Forts back drop drop or Mike drop back drop.

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