Since new developments are the products of a creative mind, we must therefore stimulate and encourage that type of mind in every way possible.   George Washington Carver

If you look at, you know, the limitations of creating new products, you’re only limited by the technology that you have to work with.  Homaro Cantu

(insert customer made illustration of chart showing a typical new product life cycle.)

The new product cycle is a very interesting thing. Usually it all begins with a small team within the organization developing a new idea. Sometimes in smaller organizations it’s not a team but just one person. In the case of small, family owned restaurants like ours that person is usually the chef. This person is the member of the team that loves experimenting for hours in the kitchen trying out new recipes, new sauces, or cooking up new ways to present menu items that already exist. Sometimes it’s the marketing people like myself that comes up with a new idea. I can tell you from experience that this sort of thing s just one of those things you have to do all the time in order to get good at it. It’s a matter of practice, experimentation, and open-mindedness.

Right now my brother Steve is experimenting with a whole new way to cook and present the falafel plate and wrap. The falafel plate now comes with 5 pieces of falafel patties, hummus, tahini sauce, tomatoes, pickled turnips, lettuce and pita bread. For those of you reading that aren’t familiar with Falafel it is a globally recognized dish that is made with garbanzo beans (chickpeas). We grind these beans after cooking them rest every morning with tahini sauce and fresh spices. The patties are then deep-fried in order to produce the falafel. After trying fresh-made falafel in Lebanon a few years ago my brother was inspired to make our recipe better. Right now we are experimenting in Pasadena, and if all goes well the new recipe and presentation, now coming with 6 pieces in the plate, will be introduced at all our stores.

And such is the way we conduct business in small family-owned restaurants. One person is inspired by a trip to Europe or another local restaurant and an idea is born. As perfectionists we won’t rest until we improve on the concept until it’s good enough to launch. In my case I recently created 3 new items: The “Big” Family Meal, The Mediterranean Feast, and the Mediterranean BBQ Special. All of these brand new items are set to launch with the re-designed catering menu. This new catering menu took me about 10 months to make. I worked on it every day, little at a time, and almost every single week. We did a grand total of 5 photo shoots, takes and re-takes, about 60 hours of post-production photoshopping, and about 30 hours of graphics and font production. As you can imagine, this takes a tremendous amount of brain fuel and patience to deal with.

The way this all started was through experimentation and research. I looked at the numbers and the Family Meal was doing so extremely well compared to the other items. Usually that’s a good thing, however it was performing disproportionally  well when compared to the other items, to the point where it was skewed at about 85% for the Family Meal and the rest of the gross sales of the entire catering menu consisted of the other 11 items. When the one most popular item is eating up 85% of the sales, you have to ask the right questions. In this case, the right question would be why? Why is one item so popular when compared to other items? The answer was that this item was priced at under $20 and gave a family a lot to eat. It came with a whole chicken and sides and was an amazing deal. Why not build on that concept and build a few more items that are around the $20 or $30 mark and expand on that?

The real art of creating such menus and new items is the patience required to wait until he right time in order to launch it. You have to show it to the food department, the kitchen people, the wait staff, the cashiers, and the line cooks. You have to get everyone’s opinion slowly and gradually, as the process moves along. We do this because you have to iron out all the kinks before you launch the product. You never know how the cooks might have an issue with a particular product. You should also run it through your managers as they often have great ideas on improving the product. For example, my original idea for the Big Family Meal consisted of 2 whole chickens and just 2 sides. The developed product eventually featured 4 sides and was basically a “double” portion of the Family Meal we already had. The Family Meal is a whole chicken with 2 large sides. So the thinking was that the “Big Family Meal” has to be a double portion of the current Family Meal so as to not confuse our customers. Now I never thought of that when I was developing this product. My thinking was to make a 2 chicken combo product with as few sides as possible, because I figured people can simply add sides but can’t take it away. My team members and brothers convinced me otherwise.

So you may not end up with the exact menu item you imagined, but you will often end up with something better through collaboration. The problem is we don’t have patience. It’s so easy to get angry when people keep giving you advice and direction about a concept you originally thought of. It’s hard not to take it personally, like an attack on your idea is somehow an attack on your person. We have to learn to distinguish between the two, especially if we ever hope to have peaceful teamwork.

Another example is the Mediterranean BBQ Special. My original idea for that was simply a whole chicken and a kabob plate. After speaking to one of our managers I was convinced it might be much better to offer customers any 3 kabob skewers they wanted and any sides they wanted with the whole chicken. The result was a beautiful new product we now have that combines our two current best-sellers: the chicken and the kabobs. I’m very proud of the catering menu. Not because it took 10 months to finish but that to me, it’s a symbol of effective and symbiotic collaboration amongst our team.

Sometimes, people will love the product you help create much more if you simply involve them in the creative process. You can come up with the idea and ask several people to help you make it better and better. The new product life cycle can start when you reach a certain point where people just can’t make it any better with their ideas and revisions. When does that point arrive? I don’t know because it’s difficult to say. Don’t expect perfection because perfection will never come. If you are aiming for perfection I can promise you that the project will never be completed. Aim to be exceptional rather than perfect. The time comes when the ship has to set sail. In the case of our new catering menu revision, my project began in January of 2014 with the first all day photo shoot at our beautiful store in Burbank, and ended with technical work in downtown LA to add digital files to my work, followed by printing it in a where house in west LA.

The introduction must be as smooth as possible. Make sure you have a few training photos of the food will actually look like, not just what it looks like in the promotional material. Do a practice run for a week before you officially launch the product. This is necessary for the cooks and cashiers to be able to learn all about the new product and iron out any glitches they may run into. It’s also important they learn the product by heart, so that they won’t be caught off guard when the receipt machine spits out the new product in the middle or lunch rush. That would be a catastrophe, not least because you don’t want customers’ first experience with your product to be a complete mess, with wrong orders or if the cooks make it the wrong way. So practice, practice, practice. Have the cooks make it for you and send the food to a friend or have a customer try it for free. Not only is this fun but it’s great practice for everyone.

The growth stage of the product occurs naturally when the product was the result of good customer surveys. For example, many years went by when customers would continually request us to make fresh-steamed rice for them. So what do you think happened after we introduced steamed rice a few years ago? You guessed it! It’s now one of the most popular side orders, with multiple families ordering it every day, especially with the whole chicken. The same with the tabouleh: we introduced it after multiple requests. Any time this happens you can expect to find it difficult to keep up with demand. Customers are so great because they are predictable. If they are requesting a food item repeatedly, you can expect them to be buying it from you once you launch.

The growth stage can be much higher on the curved graph if you push the new product with radio ads, video commercials on YouTube or television, and magazine or newspaper ads. The graph can also be extended. So after you launch the product  follow up the launch by advertising the product. This will extend the growth stage and assure a successful launch. You don’t want to be embarrassed by a product failure.

The maturity stage represents that stage when it’s at the top of it’s success and is likely to start falling. This is true for most technology companies. Take the example of Apple and the iPhone.  Every version of the iPhone peaks at popularity during launch, and even shortly thereafter. The curve goes up, up, up! Right now as I write this in September of 2014 Apple just finished it’s record-breaking launch of the iPhone 6, which sold over 10 million units. It is now selling in the Chinese black market for $2,000 each, a 500% mark-up. Eventually it will decline slowly, at which point Apple will launch iPhone 6.5 (likely called iPhone 6S) and then the iPhone 7. So the cycle goes on and on. But in the food industry the product does not have to decline so much after launch. It can be something that is high on sales, steadily, for many years after launch. Our kabobs were launched about 10 years ago and to this day are best sellers! They continuously rank in the highest grossing items of everything we offer. people simply can’t get enough of delicious, fresh and hot kabob that is made-to order!

So consider all of this on your next product launch. Hopefully it will be a very successful one. I wish you the best!

The Pros and Cons of doing Delivery

Give your clients the earliest delivery consistent with quality – whatever the inconvenience to us.  Arthur C. Nielsen

Delivery is such a huge aspect of the restaurant business that we could probably write an entire chapter just on the different methods and concepts within the realm of delivery. There are so many more option today for restaurants to engage in different types of delivery services than there were just a few years ago. Technology has also made delivery super easy and fun to use, offering customers apps that track their delivery and send them text message. Some restaurants even have their version of a food truck going around town and serving their fares to sidewalk employees. The restaurant industry landscape has changed a lot.

Before we talk about some of the great things delivery entails let’s get the negatives out of the way. Driving in California, particularly driving for employees, carries a huge liability. Insurance for these types of vehicles and drivers is very expensive, typically more expensive than regular car insurance. It’s an added premium on a business that is considering running a delivery service to better serve their customers. Many accidents occur every day on our streets and freeways here in LA, and presumably all over the United States. So far, in the entire history of Zankou Chicken, to my recollection, only two people have passed away while in the “line of duty”.

One was about 20 years ago, my father had asked one of our employees, let’s call him Frank, to go to our Anaheim store and fix a leak. Apparently the sink in the men’s bathroom was leaking pretty bad, and Frank was one of our managers who also knew how to fix a sink. This was during the time Caltrans was fixing the aging 5 Interstate freeway. There is this huge intersection as you get closer to Disneyland on the 5 south. There are bridges, byways, highways, and tall lights everywhere. It is a dangerous area because the freeway quickly “spreads” out just as people seem to be going faster. It’s a place that opens up right after heavy congestion, so often people just accelerate to dangerous speeds in that area.

On this particular night, it was dark and Caltrans was working on the onramps. “Frank” jumped on the freeway and he did so with great speed. A truck driver was entering from the onramp quickly as well. Sadly the truck driver did not consider how fast he was going, and just as he was entering the freeway from the onramp did not negotiate the turn very well. The truck tipped over to its side and fell directly on top of Frank’s car. The truck was an oil rig, so the gas it was carrying exploded immediately.

Frank was burned so badly they had to use dental records to recognize him. They say he did not suffer much because the impact would have killed him immediately. The truck driver was burned very badly. He died the next day. The crazy thing about this story is that night I got home and a CHP officer was outside our house. He said to me, “Are you Steve’s brother?” I said yes, why. He said “He may have died tonight in a terrible car accident, I’m sorry.” Now when he said this immediately my mind just shut off what he said. I just told myself my brother was all right.

I ran upstairs and Steve was sleeping. So surely he must have been mistaken, I thought to myself. I went back down and told the officer Steve was fine, he was fast asleep. See the car was registered to my brother’s name so he just assumed it was Steve, but it was Franck. I will never forget that night.

The second time was another unfortunate incident where an employee died while driving to work in the early morning on the 405.

When people are using company cars, or doing anything at all for the company, we must make sure that there is adequate insurance. One bad accident or situation can potentially set you back tens of thousands of dollars. Trial lawyers don’t care about our businesses, or that owners may not even survive if they have to pay thousands of dollars in bullshit settlements. They only care about themselves and how much money they can suck off businesses. The onus is on you as the business owner to do everything in your power to make sure you are protected.

Besides bad things happening and insurance, there are other issues related to delivery:

• Food theft from employees and /or delivering free food to their friends and family without charging them for it
• Drivers with potential fake ID’s that don’t REALLY have driver licenses. They are putting you in a huge potential liability. The law doesn’t care if they have a driver’s license or not. If they are driving YOUR vehicle and/or making deliveries directly for YOUR businesses, then guess who is liable? That’s right, you.
• The quality of the food not being as hot or as fresh since it takes longer to deliver during rush hour.
• The food is not as hot because there are too many orders with too few drivers.
• Accidents, freeway closures, terrible traffic, and general mayhem on the streets. In Los Angeles we call this Thursdays and Fridays.
• Bad service on the part of the delivery person.
• Delivering it to the wrong address, or the address is potentially difficult to get to because of shut gates, locked doors, or inaccessible lobbies in apartment buildings. In Los Angeles call this Beverly Hills and west LA.
• Getting the order wrong. Now they drove 30 minutes and have to drive back another 30 minutes, then another 30 minutes to bring back the correct order. This is gas money that comes out of your pocket.

These are still not all of the problems and issues that can arise out of offering delivery. This is why so many 3^rd party delivery businesses have sprung up all over the country recently.

Usually these companies, like Grub Hub for example, take this entire headache away from restaurants in exchange for a fee. Typically this fee is a percentage of the sales and also some added service fees. In the case of LA Bites, a specialty service delivery company that operates mostly in west LA and Santa Monica but has branched out to most of LA County, this fee is now about 30%. That is pretty high. I told them this and they told me their profit margin is about 7-8% of that number. So their cost is about 23% and their profit margin is 7%.

Since food profit margins are very thin for restaurants, some can afford this 20-30% markup while others cant. Places like Cheesecake Factory, California Pizza Kitchen, and Granville can afford the markup. Places like Chipotle or Urth café do their own delivery. Everyone follows a different model, one that suits their business best. It’s difficult for businesses like ours that have such thin margins to deal with such a high cost working with these third party delivery companies entail.

Which begs the question, what do their costs entail and why is it so expensive just to deliver food?

Well, consider what these third party companies are doing for us:

• Paying the cost of gas
• The cost of the drivers, their wages and bonuses
• Liability insurance (expensive premiums in LA county and I am sure other heavily congested counties as well)
• The cost of live operators to receive calls and orders via phone
• The cost of creating and maintaining their web sites
• The cost of software that helps them receive orders.
• Their marketing and advertising costs as well as additional overhead and rent of their office

Remember if these companies don’t spend money on these things, we do. That is to say, if they don’t spend money on gas we will. If they don’t make and distribute fliers offering delivery to local residents, you have to do that.

So essentially you are not just buying a delivery person, you are purchasing your way into a partnership. It’s effective because these companies like Grub Hub and LA Bite have their own clientele, which will be happy to order from you.

Just as in everything else, it boils down to teamwork. Our job is to make the food in a high quality way., as fresh and delicious as possible. Their job is to get it to the hungry people that need it during lunch who don’t want to drive. In many heavily congested neighborhoods like west LA and parts of the valley alongside Ventura, people don’t have much of a choice. Driving is very inconvenient. Bosses are happy to pay for their lunch if it increases productivity and no one has to leave the office.

Everyone wins, but for a price. Just remember to use the market and supply and demand to your advantage. There are many companies you can do business with that offer delivery. Or you can do it on your own, or as in the case of many restaurants, not at all. The choice is yours. Just remember to use their own competition amongst themselves to your advantage. Stake the claim that you will negotiate the best price for your business. For the amount of time we used LA Bite to offer delivery in west LA, we had the best price. For the sake of future negotiations and because of the sensitivity involved in these types of negotiations I will not say exactly how low I negotiated their price, but I will say this: It was lower than anyone else’s price they were getting. How did I do that? The 21 important steps in the process of negotiation, which is its own entire chapter.

“We use competitive markets to arrange for delivery of our food supply.”
Kenneth Lay

Questions for Review

1) Name a few of the bad things that can happen during the course of offering food delivery.

2) Why must business owners have the best insurance coverage for their drivers and their employees during the course of a delivery? How much does a business owner stand to lose in case they are open to liability?

3) Name a few of the things customers love about getting their food delivered.

4) What are a few of the costs associated with delivery? What is your plan to offset these costs?

5) By not offering delivery, do you stand to lose customers that want to order from restaurants that ONLY offer delivery? Why or why not?

6) Would it make sense to offer delivery even if the profit margin is a bit lower? Why or why not?

LA Times Article

This is a reprint of an LA Times article we hope to include in the book. It will later be altered to only include a few quotes under the fair use clause. My Notes and writings are in bold italics. http://www.latimes.com/business/la-fi-fast-food-workers-strike-20140903-story.html#page=1 Dozens of fast-food workers from Los Angeles to Manhattan were arrested as they escalated a fight for better pay Thursday with strikes, rallies and acts of civil disobedience. Police took 10 people into custody after the protesters linked arms and sat down in front of a McDonald’s in downtown Los Angeles. The sit-in capped a midday march through the urban core by hundreds of workers and their supporters.

When this was happening the reaction on the streets and on social media was mostly negative. Sure, these people who protested had a few supporters, namely their friends and family. But the people that were inconvenienced by their protest were not happy. They were interfered with hours more of traffic in their daily commute during rush hour in Los Angeles and New York, both cities that are already heavily congested. On social media people were angry at protesters, not least because they broke the law by disturbing the peace, standing in front of traffic, and not obeying police officers’ instructions.

They were also making life more difficult for commuters, people that had nothing to do with the involved parties. Most people understand that a major increase of the minimum wage would only accomplish 3 things, none of which are what these people want to happen and all of which are the unintended consequences of minimum wage increases we have to endure over the years. 1) An increase in food cost to the customers, thereby decreasing the total amount of customers we serve, or at least decreasing the frequency they visit us, both of which would translate to less employees needed and people being fired and/or not hired.

2) Decreased hours in work. Managers and owners would have to slash their hours.

There is no way owners of businesses or restaurants can stay competitive and keep the same low prices if these workers keep getting minimum wage increases. If the hours are not cut back, the weakest employees will be let go. These are the unintended consequences of these laws. Restaurant industry profits are already extremely slim as it is. The quote you will shortly reads from them saying “the restaurant industry is doing great” is just a simple show of ignorance on their part. Since they don’t own restaurants they are completely unaware of the costs and risks associated with running these businesses, and just because we are busy doesn’t mean we are printing money, as that statement suggests. 

3) If mimiim wage keeps going up, the cost of living will go up along with it. Any savings or additions in wage will be met with equal force by the laws of inflation. The alternative is that people work hard and go to school. Increase your skill level, work hard, and work your way up the ladder just like the rest of society has to do. You’re not special. This attitude of “take more by force” is an extreme put off for most.

In San Diego, 11 marchers were arrested for blocking an intersection in the blue-collar neighborhood of City Heights. They were cited for unlawful assembly and released. Rallies and sit-ins occurred outside McDonald’s restaurants across the country, including Rockford, Ill.; Hartford, Conn.; Boston; Philadelphia; Atlanta; and Miami. Elsewhere, 19 fast-food workers were arrested in New York; 42 in Detroit; 23 in Chicago; 11 in Little Rock, Ark.; and 10 in Las Vegas. Fast-food workers rally Fast-food workers seeking higher pay rally outside a South Los Angeles McDonald on Thursday. (Bob Chamberlin / Los Angeles Times) In downtown Los Angeles, protesters seeking wages of $15 an hour staged a lunchtime march before converging in front of a McDonald’s on Broadway.

To the sounds of a beating drum, they cycled through chants such as “We want 15 and a union!” and “Si se puede!” After police warned the crowd to stop blocking traffic lanes, nine fast food workers and a minister remained seated. They were arrested and led away, their hands bound with plastic zip-ties behind their backs. It was just one of several demonstrations that were planned in the Southland. Before dawn, more than 100 workers converged on a McDonald’s in L.A.’s Exposition Park to join the nationwide protests. They went inside the store for 10 minutes as workers stood stone-faced behind the cash registers. The protesters held up signs and chanted slogans like “Get up! Get down! Fast-food workers run this town!” near a scrum of media trucks outside the McDonald’s.

Fanny Velazquez, 36, said she was participating in the protest to fight for better wages to support her family. A single mother with three children, ages 11, 14 and 16, she said she struggles to make her $9.34-an-hour pay cover all the bills. The South Los Angeles resident has been working at McDonald’s for eight years doing a variety of jobs, usually working 20 hours a week, she said. But lately, Velazquez said, the company has often cut her hours to 15 a week. She also qualifies for welfare and food assistance. “It’s difficult, it’s not enough to pay my bills,” she said. A series of protests funded in part by the Service Employees International Union and local activist groups have sought to spotlight the plight of low-wage workers and push for higher pay by staging protests and walkouts in more than 100 cities in the one-day demonstration.

Fast-food workers protest in Los Angeles Fast-food workers protest at a McDonald’s in Exposition Park. In San Diego, several hundred fast-food workers and their supporters marched past McDonald’s, Burger King and Jack in the Box restaurants. The protesters are “fighting for what we believe is right,” said the Rev. Lee Hill of the United Church of Christ. The San Diego protest comes as business leaders there are attempting to qualify a measure for the ballot to overturn the City Council’s recent decision to raise the local minimum wage to $11.50 by 2017. In New York, a crowd of about 300 converged outside a McDonald’s near Times Square at the height of morning rush hour, briefly blocking West 42nd Street. Police arrested about two dozen of the protesters.

And in Chicago, almost two dozen protesters were arrested near a McDonald’s where 150 gathered. McDonald’s said in a statement that it respected “everyone’s rights to peacefully protest” and supported “paying our valued employees fair wages.” The fast-food chain said the minimum wage discussion affects the entire country, not just one company, and should be considered within a broader context of issues, including the effects of the Affordable Care Act. “We believe that any minimum wage increase should be implemented over time so that the impact on owners of small- and medium-sized businesses — like the ones who own and operate the majority of our restaurants — is manageable,” the company said. McDonald’s pointed out that it does not set wages for its more than 3,000 franchisees in the U.S. Burger King also said it does not make wage or scheduling decisions for its franchisees, which operate nearly all of its restaurants.

In order to fully understand and appreciate this statement from McDonald’s we must first truly understand who McDonald’s REAL CUSTOMER is. McDonald’s is no longer in the business of making extremely high quality food or serving the customer as best or fast as possible. They are in the business of selling FRANCHISES and renting out REAL ESTATE. Since they own the land and they do not pay these people (the franchise owners do), they really are not a key player in this transaction at all.

The key players are the FRANCHISE OWNERS. Since they are the ones that will pay these employees, they are the ones that set wages, and they are the ones that will ultimately be affected by minimum wage increases. Mc Donald’s Corporation will not be affected at all. They will still make money from franchise owners and collect rent, month after month, regardless of what happens between the owners and the employees. Their REAL customer is the FRANCHISE OWNER. Think of that next time before you complain about the quality of food. 

Sue Hensley, spokeswoman for the National Restaurant Assn., said the Thursday job actions were part of a “multimillion-dollar campaign” orchestrated by labor groups that are trying to boost their “dwindling membership.” Fast-food workers protest Fast-food workers block the driveway to a McDonald’s on Martin Luther King Boulevard in Los Angeles as part of a nationwide protest for higher wages. (Bob Chamberlin / Los Angeles Times) “The activities have proven to be orchestrated union PR events where the vast majority of participants are activists and paid demonstrators,” she wrote in an email. “Restaurants continue to be a critical employer that trains America’s workforce and provides a pathway towards upward mobility and success.” Many fast-food chains and independent restaurants have said that a $15 hourly wage would lead to big price increases on their menus or make it impossible to eke out a profit.

Some industry watchers say that restaurants may try to cut costs by slashing hours for employees or reducing their workforces, ultimately hurting the same people who are fighting for better pay. Edgar Gonzalez, 22, of Inglewood is hopeful that the protests will help ensure a better future for his family. He and his girlfriend both work at McDonald’s — she is a manager, while he works in maintenance.

Together, they can still barely afford to cover all their expenses, especially with a 4-month-old daughter, he said. “Sometimes we find whatever change there is to buy formula, wipes, diapers,” Gonzalez said. He said they often make the choice between paying rent and buying healthy food to eat. Workers at Burger King and other fast-food eateries in Los Angeles were also planning to walk out Thursday to demand the $15-an-hour wage, organizers said. “Fast food is an industry that is doing exceedingly well, and workers feel they are in a good position to bargain for $15 an hour,” said Marqueece Harris-Dawson, president of Community Coalition, a local advocacy group in South L.A. that is participating in the local protests.

“Workers of different stripes have been pressing to raise the conversation about the low end of the wage scale.” Home-care workers are also joining in some Thursday protests in an effort to widen the movement, although none are participating in Los Angeles. Hours after the morning protest in Manhattan, marchers gathered again on the busy corner of 8th Avenue and 56th Street, where several were swiftly arrested and taken away in a police van after they lay down on the pavement and blocked traffic. Naquashia LeGrand, a KFC employee in Brooklyn, said she works 12 hours a week and earns $8 an hour. In three years on the job she has gotten one raise, she said, from $7.25 an hour, which was the previous state minimum wage, to the current $8.

“Full-time or part-time, we deserve a livable wage,” said LeGrand, who added that she would love to work more hours. “I’m here today, honestly, to better the future for the next generation,” she said, accusing big corporations of taking advantage of workers like herself. Lunchtime diners at a nearby open-air bar watched the protest and arrests, which lasted no more than half an hour. “Good for them,” one man in a business suit said who was weaving his way through protesters as they chanted and disrupted traffic.

“Everyone deserves to make a living. ” The fight for a living wage and higher minimum pay has gained steam this year as rallies, sit-ins and strikes have raised awareness of the issue. In June, Seattle leaders voted to raise the city’s minimum wage to $15 an hour, the highest minimum of any metropolis in the country. The Los Angeles Unified School District signed a contract in July to raise its minimum wage to $15 an hour by 2016, which will boost the earnings of its lowest-paid employees, including custodians and cafeteria workers. Los Angeles Mayor Eric Garcetti is pushing for a $13.25 minimum wage for all workers in L.A. by 2017. California’s current minimum wage is $9 an hour. On Labor Day, President Obama touched on the fast-food movement during a speech in Milwaukee.

The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.
— Henry Ford

The Minimum Wage Hike

There’s a lot of talk lately about raising the minimum wage. It’s been all over the news since McDonald’s and other fast food outlets’ workers staged a huge strike from New York to California. Here in California we raised the minimum wage back in January of 2008 to $8 per hour, then $9 per hour in July of 2014. It is scheduled to rise again to $10 per hour beginning on January 1 of 2016. The way we deal with these things in the restaurant industry is typically we will raise prices a little bit just to be able to afford the minimum wage increases.

The is actually the only choice restaurateurs have in these circumstances: either to raise the prices a little like I just mentioned or to somehow decrease quality. As most ethical and sound businesses will refuse to reduce quality (like us), prices are raised. The philosophical question is this: Do minimum wage increases really raise the standard of living, or are they just a mechanism that makes living more expensive for everyone and thus reduces the price of the dollar thereby exasperating the situation for the poor? I mean if we all make more, doesn’t inflation make up the difference? Perhaps minimum wage increases are necessary sometimes and do help the poorest of the poor, but if I was in their position I would not go in strikes. I can give you 7 reasons why strikes are terrible ideas and almost always backfire for the American workforce.

• The economy and the general income level of restaurant employees is not restaurant owners’ fault. Just imagine if people had to pay $20 for a burger and fries. Most consumers are not willing to do that. Starbucks has made it a point to pay for their workers’ health care, which is great for them. Starbucks does this by charging us $5 for each drink. I am a fan of Starbucks; I drink their coffee every day and I am also a stockholder, however having said that their “formula” by charging a steep premium to be able to afford health insurance is difficult to replicate for restaurants.
• If people want to make more money, they need to go to school and work hard to increase their skills. Don’t expect to make more money when you are at the same skill level for 20 years. Nobody is going to do this for you. You can go to night school, take online classes, read multiple books and audio books, and so on. It’s entirely up to you; but don’t blame your employer if you are unwilling or unable to do this. Most people are just not willing; the real issue is not ability it’s the lack of desire to excel.
• The reaction from the media and the general public is extremely negative when it comes to labor disputes and walk-outs, particularly when services and transportation is negatively affected. If you want people on your side, try to do it the nice way. Ask for a raise. If the ownership says no, ask why not. Show the owners through determination and hard work that you are producing 10x what they are paying you, and chances are they will be willing to pay you more. Why does the CEO of Disney take home a $75 million salary? Because he is making Disney a $1 billion more in profit per year. Is that a fair amount to pay someone for helping make a company $1 billion per year? Yes it is. You too can work smarter not harder. Same amount of hours per day, only more skill involved.
• Think of the customer more than yourself. We do this as owners all the time. If you think I am being facetious or hypothetical I am not. Many restaurant and café owners live on very meager means. They work so hard for the customers, pay off all of the employees fairly, and often don’t have much left for themselves and their families. This was true of us for the first few years. Even to this day this is true of every new restaurant we open. Typically they don’t make a decent profit until after year #3. We absorb that cost, the employees don’t. And just as you won’t see owners protesting on the streets in situations like these, employees should also take heed and make sacrifices for the organization.
• Labor disputes and long legal battles only benefit one class of people; the lawyers. As anyone that’s been involved in a protracted legal dispute will tell you, there are no real winners. It is much better to negotiate and come to terms through mediation than to fight long legal battles over salary and such.
• Public labor disputes tarnish the brand long after the dispute is over. Think of Ralphs and the other supermarkets with their long dispute with cashiers and other employees in _________________________(find date). The dispute took years to resolve, and by that time many of the customers had moved to Whole Foods and Trader Joe’s for their grocery needs. One estimate put the total loss to Kroger and Ralph’s at over $1.2 billion. After the dispute was over, most of those that had walked the picket line were either fired or never rehired. Ralph’s simply hired temporary staff that were so unskilled it was truly pathetic and a sad site to behold. I recall old ladies with tattoos and fake gold jewelry coming to work at Ralphs in slippers. I’m not sure if it was funny or sad. Needless to say they lost customers forever. It’s not a good place to be when both sides dig in their heels and will not talk to the other side based on emotions or stubbornness. Both sides lost in that dispute

(get more facts and figures)

• As business owners it is our duty and responsibility to allow for growth within the company. If the owners are fair and there is adequate room for growth, there should be no reason to protest.

Protesting against owners for low wages is like protesting against God for the rules of gravity. Just as there are rules in science in terms of gravity and that those rules cannot be broken, so too are there rules in economics. In economics, you are not being paid for your time. As Jim Rohn famously says, you are being paid for your skill and contribution to the company. Increase your skill level and you will also see your income rise. Raise it exponentially and your income will rise exponentially. Stop blaming others, especially your boss, for your problems. We all need to look in the mirror and realize we are exactly where we are in this life because of the decisions we have made. Blaming others will only prolong your pain and misery. If you are not happy with what you are doing, your boss, or even working in the food industry at all, by all means move and do something different with your life.

An empowered organisation is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organisational success.
Stephen Covey

Questions to Consider

1) Do you think personal growth and education is important? Why or why not?

2) Do you think the minimum wage should steadily increase every year or every two years? Why or why not? Would you feel the same way if you were the employer?

3) How do you think people can form a positive opinion about this topic in the future without getting into these negative positions? Is there a possible “win-win” scenario when it comes to this issue?

Are Grand Openings Worth Doing?

One of the grandest visions people have about opening a restaurant is doing a huge and beautifully staged Grand Opening. This is when the city leaders come, the family poses together with a bunch of well-dressed politicians and employees behind flowers and balloons in a glamorous photo. This is the picture of success, and what many people dream of. All the hard work is seemingly paid off. Friends and family visit, bringing flowers, gifts, cakes and candy. It’s joyous celebration for sure, just like when a baby is born. Except this “baby” is a new business. It’s easy to get infatuated with the glitz and glamour such an occasion elicits. But we often ignore the simple question one must ask as a business owner: Is it all worth it? And what’s the ROI of throwing such a party? We’ll discuss the return on investment a bit later, but for now I want to show you a few things we have done in the past to promote the opening of a new restaurant.

Here are a few ideas to help you throw a successful Grand Opening ceremony.

1) Post a few inexpensive signs and flags on the lawn outside your business, preferably on a busy corner of the shopping center where the most cars with people will be able to view them.

2) Distribute small fliers to every customer a few weeks before the event.

3) Send out an email blast to the entire list of emails you have gathered. If you don’t have customer emails consider hiring a local press and/or customer relations company to email an invitation to their people. Just make sure it’s a reputable company. Ask for referrals and call their previous customers to see what their experience was like before you decide which company to go with.

4) Promote the event on the restaurant’s web site. Make sure it’s a banner on the home page, as many people will miss it if it’s hidden on the locations page or elsewhere. Of course you also need to promote it on your social media presence. Make sure the way you do this is coherent and done in a well-organized way.

5) Join the local Chamber of Commerce. There is usually a few hundred dollars in the form of a fee to join them. They will be happy to email all the businesses in their portfolio (usually people like you that have done grand openings themselves in the past). Just be aware this will increase the number of uninvited solicitations as well.

6) If you have the resources and the grand opening is especially important, consider a radio ad the morning of the grand opening. Radio ads are very expensive, and we have usually steered clear of doing them, but there is nothing wrong with a very small, targeted campaign specifically for a gran opening. Mention something like a free drink to those that hear the ad and mention the radio station. Choose one with music you like.

7) Rent a billboard. We have done this in the past, and it has brought a tremendous response. We rented a billboard in North Hollywood during the opening year. It helped us increase gross income by about 10% every month we had it up. Needless to say billboards are very expensive in Los Angeles. They range from a few thousand dollars a month to over $20,000 a month in west LA and century city. Who would pay $20,000 a month for renting a billboard? A range of businesses can make their money back quickly. One expensive watch company I know of has done this and made their money back with 3 watches sold. The rest was pure profit.

This strategy works great if your restaurant or business is located in close proximity to a freeway or major intersection. People can’t tune out billboards like they can TV commercials.

8) Purchase TV commercials. My father purchased many TV ads years ago for our store in van Nuys. He must have spent $200,000 on TV ads in total back in those days. Was it worth it? Yes because ultimately it pushed that store to a very successful place ever since. TV ads are important if you know how to target your audience, at the beginning of a business. And inviting them to a grand opening is a nice way to start. It can be the beginning of a larger strategy in which you continue the campaign later.

9) Prepare a press kit. This is a small packet that describes what your business is all about. It can be just a nice folder packed with your restaurants menu, the catering menu, your business card, and a nice one page invitation to the entire staff of the local newspapers and other media companies. Offer them all free food. Not only might you get free publicity if they come and tell their friends, but you may score a well-written review by their staff. Nothing compares to a juicy article in the food section written about your restaurant. We have had the honor and privilege of being featured in LA Weekly, LA Times, LA Daily News, and just about every local newspaper of the cities we have opened in.

10) Try to have a theme for the Grand Opening. Is it a wedding hall? Is it a steak house? Choose a nice theme and also choose 2-3 colors. The balloons and flowers will be these colors. A nice theme give stye place a great, cohesive look. Let people know what the theme will be so the dress accordingly. Even if there is no theme your employees should dress their best for this day. And the owners should all be in suits and ties. People don’t always do this, especially in laid back California, but dressing formal is how I think a business will look professional.

Your strategy doesn’t have to be just one of these things or all of these things. We have done many of these, and often at the same time. Which of these ideas you use is up to you. They are tools to use that can benefit your business if done correctly. You don’t even need to have a grand opening if the timing is not right. If you are going through financial or other problems, people may not be in the mood for a grand opening.

There have been times we have thrown these grand openings and there were times we didn’t. In the early days, when we first opened the Hollywood store for example, it wasn’t about such extravagant things as grand openings as much as simply surviving. My parents and grandparents sold the old Zankou Chicken in Lebanon, what is now called “Halwa Chicken” in Beirut, and came here without much money. My grandfather was considering opening a dry cleaning business, but my dad hated the smell of detergent so he was against that idea. My father pretty much hated all scents. He would not wear cologne because it would give him headaches. My dad convinced his father and mother that opening a Zankou Chicken in the heart of Hollywood would have much better chance of success than starting a dry cleaning business, something they knew nothing about.

And so Hollywood Zankou was born out of such humble beginnings in 1984. It was a hole in the wall on Sunset and Normandie, a place where artists and hipsters could grab a bite to eat that was fresh and healthy. As you know, even to this day, fresh and healthy food does not exist in Hollywood, so when we arrived on the scene it was a huge hit. My grandfather came up with this idea of passing out coupons for chicken. It was printed on very simple, pink paper. I remember how cheesy it was, but people still loved it and used it. “Buy one get one free” it said for a whole chicken. In 1984 our whole chickens were $5, so to get two chickens for $5 was a deal people could not pass up. It also came with bread and garlic. Those cheesy pink coupons were a hit!

They didn’t ever throw a grand opening in the sense we know of today, but on opening day there were huge lines. People that had emigrated from Lebanon to the United States were so happy to see Zankou in their neighborhood. It was like a family child that was gone and had now returned. And the Armenians from Russia and Armenia learned about us very quickly and became life long customers. It was Armenians, Jewish people, Arabic people, and Persians that came first. After a while they brought many friends and family, and our customer ethnic makeup grew in diversity. Today, our customer base is as diverse as the ethnic makeup of Los Angeles itself, a rainbow of different peoples and cultures and religions.

Back in those days people didn’t think of doing Grand Openings as much as they just prayed to God the business survived after opening. Think of the consequences if it didn’t! It’s easy now to look at it in retrospect and assume it was easy but it wasn’t easy at all. My dad and grandfather were usually very stressed out. My dad used to work 14 hours a day, often going 3-4 hours without a bathroom break at the peak lunch hours. My dad used to make the shawerma and cut the meat himself. He also made the plates and sandwiches himself, sweating profusely in the heat and hard work. We often take for granted now everything they did to bring this business where it is today, but having seen what they went through firsthand I can tell you that it was very difficult. They gave a good chunk of their life for this business to succeed.

One thing you will notice if you ever do a Grand Opening is that you will find a lot of new people coming in. You might spend a few thousand dollars on balloons, flowers, and presentation. You may also need to get a nice cake for the photo opportunity, as well as paying for a press release. You can hook up with promotional and other publicity related companies. That can put you in touch with a celebrity for a few thousand dollars. What does a celebrity bring to the table? Word of mouth advertising, social media explosion in terms of people talking about your restaurant, and also they offer your brand to their followers. It might be worth doing if the price and timing is right, especially if this celebrity has some kind of relationship with either your brand or your customers.

In Burbank we had a beautiful grand opening. The city leaders from Glendale came because we knew them better than Burbank. The mayor of Glendale came, as well as a few dignitaries from Burbank and some employees from Burbank’s Department of Water and Power. We also had amazing flowers and balloons everywhere. It was a joyous occasion. Burbank’s Zankou is the most beautiful building we have, since the landlord spent millions of dollars and has won numerous architectural awards.

The Burbank Zankou and that entire property is the most beautiful building in Burbank. It looks like an Italian villa, with huge columns, a grand exterior, a $150,000 tall dome with a blue glass top ceiling, and has the busiest drive-through Starbucks in all of southern California. We went all out with that location, hiring an artist to hand-paint the dome ceiling of our restaurant. It was modeled after a church dome painting in Turin, Italy. They bricks were hand-layered and the interior design was created by a professional design firm. No detail was overlooked. So this combined with a sweet Grand Opening in which we spent a few thousand dollars on balloons and flowers made for a beautiful site. People that came that day were flabbergasted. One guy told me, “Wow, this is the most beautiful restaurant I have ever seen! It looks better than a sit down restaurant! Can we buy a franchise?”

I said, “ No sorry, we don’t franchise, but thank you so much for the compliments. We actually worked hard to make his place look great for you guys.”

And we did. We had worked 4 months on the design alone, working with the designer, Eddie Bitton of the Bitton Design group. My brother Steve, my mom, and myself had picked out the tile colors, the lamp colors, and the wall stones. We made sure everything was a nice, earthy tone and that everything matched. It was important that we got it right because we were only going to do this once. What we did with Burbank would set the stage for all future stores. It would be the model to follow in terms of design and branding. We figured we would work very hard to set the standard, and once the standard was set, it would be easier for future stores to just copy that mold.

It was fun and we had a great day in Burbank during that grand opening. For many of us it was a dream come true to have helped create such a beautiful restaurant. We finally had the high ceiling we wanted, the excellent design and sophistication we always felt Zankou customers deserved. But along with all the hype and hoopla you often get needy characters that show up at these events. So many people come just to pass out their business cards.

Dealing With Uninvited Guests

Air condition companies, furniture suppliers, food vendors, soft drink manufacturers, delivery people, credit card merchants, printing and sales people, the local newspaper advertising department, the local coupon book company, and many more of these sorts of people will show up. You can expect them all to be there, and only hope they will not be too pushy. Maintain your calm and composure, always smile and be as polite as possible. As with most business, the best people are hard to find so I don’t suggest you do any business with uninvited people that show up just to hand you business cards. This is especially true if they come only to hand you business cards and don’t have the common courtesy to order something.

To me this is like someone coming to your house during a party, without bringing a gift, only to pass our promotional material. It’s rude and inconvenient, particularly when you have to say no and they are pushy. These people need to realize the principle of reciprocity. You can’t have something for nothing, and showing up and acting like that is just not how business is done. So keep on the lookout for that.

If you think in terms of pure ROI, throwing a grand opening may not be in your best interest. If you think of it like a great party you throw to celebrate the work of your team, to increase morale and boost your spirits, and just as a general occasion to have a great time with your team, it’s worth doing. Ultimately it’s about what you expect out of this event. As far as marketing goes, grand openings are not a good long-term investment. You need to do a lot more than a simple grand opening. But sometimes they go a long way to generate word of mouth advertising, to energize your employees, and also to help the business get off on the right foot. Just don’t expect it to be more than an extravagant party with a few uninvited guests.

And that’s the funny thing about LA. We love our celebrities, we love random guests (that are nice and cool, not ones that come just to pass out business cards and not buy anything), and we love new beginnings. We are very grateful Zankou has had such humble beginnings in the City of Angels. Our hope is that it grows from these humble beginnings and branches out all over the United States, in every great state and city across this beautiful country from New York to Florida. We hope to have the excitement and curiosity in those other cities and states one day, and be welcomed by its inhabitants just like we were welcomed by the awesome people of LA.

People don’t live in Los Angeles because we are tied to the same old, same old. We live in Los Angeles because of the intoxicating energy of new beginnings that permeate our city.
Marianne Williamson

References

1) http://www.entrepreneur.com/article/56200

Organizing and Creating Exceptional Menus

I have been thinking about and redesigning our menu from the bottom up for almost a year now. I believe that in order for a menu to be truly exceptional, it must go beyond the food. The menu is the #1 most used paper item and promotional material we have. We print thousands of them each year. People take them home and use them to order takeout dozens of times. Business executives take them back to the office, where many of them keep the menu in their take-out folders, always ready to be used and re-used time and again. It goes without saying, then, that the menu is perhaps the most important “physical” marketing tool we have, ranking up there with the web site.

So the question I asked myself is this: How can we make the menu better? Well, you should include the story of how it all began. You should include the mission statement briefly, and summarize what we stand for and what the Zankou Chicken brand is all about. You can invite people to join our team in a brief section, since we are always hiring. You can also mention how we give back to the community every month through our 20% fundraising program. This is where we invite people to fundraise with us and donate up to 20% of all receipts that exceed $1,000 in sales. We can advise them to speak to a manager for details so that we can keep the look of the menu clean and efficient. We used to pass out fliers for these fundraisers, but including it briefly in the menu illuminates the need to do that, saving us time and money in addition to giving our brand more exposure to schools and other non-profits that may be interested in working with us.

Since the paper menu is a 24/7, practical marketing tool, it can do all of this for us while at the same time helping us up-sell to customers. This is called “pull” marketing. It is not “push” marketing because it is done in a subtle and beautiful way, being suggestive but not overbearing. All of this will make a menu that is a go-to device for all things, being rebuilt from the “ground-up” to be an amazing method to get our message across to the consumer. We can also distinguish the fact that not all Zankous are made the same. Our team only operates the locations listed on they menu, and pointing this out would assure people to only visit those locations. These are the locations listed on the paper menu and our web site, the one stat assure consumers the authentic Zankou experience people have come to trust for over 50 years. Since many people never visit the web site, it would benefit us to list this fact on the menu.

 

Over the years we have been consistently improving our menu. We recently created a catering menu from scratch. How did we do it? In order to create a beautiful and useful menu, you need to use both your analytical (left brain) and artistic (right brain) skills. You can use your own vision for the project, but I highly recommend you don’t do the photography yourself but hire a professional. I like to take my time and make the menu as aesthetically appealing as possible, using photography first and leaving the complete layout for later.   There are three things you should do for effective menu marketing:

• Make it easy for people to buy more often from you, and to purchase the high-profit margin items more often. Train staff to always upsell the high profit margin items.
• Keep customers both entertained and educated as they are making their purchasing decisions.
• Use a lot of photography. People are visual creatures; you will find that those items with photos will outsell those items without pictures.

 

 

Because love encompasses everything, nothing is unimportant, including tonight’s dinner menu. Think about it for a minute. If you were pure love, the loving parent of all life, how would you want people to eat? —Victoria Moran

One of the first things I did at Zankou Chicken many years ago was to take the POS system and organize it better. About 12 years ago, we used to use those old Casio cash registers. They didn’t have anything like the sophisticated computers inside the POS systems we use today. Those old Casios had very limited sales and printout menu, where they basically just gave you a breakdown of sales and how each menu item contributed to the sales in the form of a percentages. This is how we determined what was selling most and least, and in those days, having that much information was enough for us. Now we use sophisticated POS systems that help us monitor sales per hour, see which cashier is using it at any given time, monitor sales charts specifically tied to the catering menu, keep tabs on food and paper costs, as well as helping the cashiers to upsell.

Like a Puzzle

One problem was that on the Casio, we had items organized in a completely random manner. You would have a whole chicken on the top left, half chicken beneath it, and then the half chicken plate was way off to the right. The vegetarian dishes like falafel plates and wraps, hummus, and mutabbal were all over the place. The reason for this was that we were just adding items to the menu as they came along. No one had stopped and asked the question: “Why are these items placed on the cash register in this order?”

A haphazardly created menu system is sure to anger customers, create mistakes in the ordering process, and creates a bad system that potentially loses customers. Imagine that you have hired a new cashier; she has to train for 2 weeks just to learn all the items by heart, and not having them categorized into families of similar items makes her training take longer than necessary, losing efficiency.

The first thing I did was to take a physical printout of all the menu items. I cut out each item on the menu, and spread it across the table in small, square boxes. At the time, it was about 72 menu items total. I took my time placing them all together in families of items grouped by similarity. The sides were all together now: hummus, falafel, mutabbal, tahini salad, tabouleh, cabbage salad and garden salad.

Then came the meats: Shawerma plate, shawerma sandwich, shish kabob and luleh kabob (ground beef). Then I placed all of the poultry items together: whole rotisserie chicken, half chicken, the quarter white and dark plates and so on. It took me a few hours. When I was done I looked at the entire new picture I had carefully pieced together. It looked beautiful, like a grand painting with small pieces of the puzzle glued together.

Making it well Organized

I made it as organized as possible, having the drinks and extras placed right next to the “cash” button for making upselling easier. Then I placed all the random items we don’t sell often like the T-shirts and items from the secret menu. Finally, it was easy to use and easy to train new cashiers.

The last thing I did before we implemented this new layout was to color-coordinate the items in separate categories. I painted the menu items their corresponding colors, which are easy to distinguish. Yellow was for all the chicken items, green for the vegetarian entrees, red for the meats, orange for the marinated chicken, and pink for the pickled turnips.

We began to use the new layout formula as soon as I was able to make it and re-program the Casio systems. A nice old man named Roy Jensen helped me organize and implement it. Roy would spend hours helping me get it right and carefully programmed the POS systems in the late evening hours, after we had closed up and everyone went home. I remember feeling so accomplished once we had completely streamlined the menu.

Customer Feedback

The feedback we got was awesome. The cashiers were punching out orders faster and, as a result customers were getting their food quicker and with fewer mistakes in their orders, with upselling becoming easier. Everything was streamlined; we were able to fix an old and antiquated system nobody had bothered updating for decades. Does this sound familiar to you? Maybe it’s time you looked at your menu and made some changes.

Upselling Made Easy

Maybe you can program in some questions that pop up to aid cashiers as they sell. One example can be, assuming a customer orders a whole chicken with sides, the POS system can remind the cashier that there is a “Big Family Meal®” that comes with these items and can offer the customer a discount. This is a great upsell because the customer will be thrilled to get the deal and will become more loyal. Someone that was thinking about ordering only one side might order two since that’s what the “Family Meal” comes with. Someone ordering two chickens with sides will simply order a Big Family Meal®, since they know it’s a better value. Consider spelling out how much they would save; at the very least include the words “value” or “savings”. Ordering more should be made easy for your customers, and selling more should be simpler for the cashiers.

Creating a Catering menu

The most important ingredient of the new catering menu was the implementation of customers’ feedback. So many customers would call us every day asking if we had a catering menu. Since customers and fans would also do this regularly on social media, I decided to do a meeting with the family and proceed with the creation of an all-new catering menu. This was in 2011, when we had no catering menu to speak of. I studied sales charts, looked at all the numbers, analyzed the data, and then laid out a plan. I would focus on the highest selling items first, but I would not ignore the vegetarian items like the salad and the sides. The catering menu would have to accomplish 5 things.

• Make it easier to order items in bulk
• Save us time by illuminating the need to creatively put together large orders on the phone for customers. Now, customers would just order directly from the catering menu, and the cashiers can be more productive because they would not need to be creative.

One request I’d always gotten over the years was for a catering item that included everything on it. People would call and the conversation would go something like this:

Me: “Thank you for calling Zankou Chicken How may I help you?

Customer: “ Hi. I have about 20-25 people here and we’re just wondering, what can I order?”

Me: That depends on what everyone wants. Do they like chicken, or beef, kabob, or falafel?

Customer: “ I don’t know that’s a good question. Let me ask them hold on.” (5-7 minute wait)

Customer: “We want a little bit of everything. What do you have on the menu like that?

And that’s when I would say we have no such thing on the menu. We would go on talking for another 15-20 minutes just so I can help them figure out what they want. You can see how the catering menu saves us so much time now.

• Save the customers’ money. Each item on the menu has built-in savings.
• Help us upsell. By having a detailed catering menu, the cashiers can easily upsell to every customer. For example, if a customer asks for a variety of kabobs, they can offer the Kabob Party. If they are ordering one of practically everything, the cashier would offer them the Mediterranean Feast™.
• Help introduce our brand to new customers. By ordering from us and using the catering menu, we helped introduce Zankou Chicken to hundreds and perhaps thousands of new customers. By creating an exciting and new catering menu, you can assure that your food reaches more people. Think of all the new people that will try your food at office parties or family gatherings.

Draw Out the Menu on Physical Paper

I went to the art store here in west LA we have called Blick, and bought one of those huge art pads. I drew a hypothetical catering menu, starting with just 6 items, which later became 8 and then 12. There’s something about drawing and writing by hand that gets my creative juices flowing. You can easily add to it, make notes on it, draw on it, scratch it out and write over it, or even put post-it notes of new ideas. It’s just something that will never, ever be replicated for me on any computer experience.

When we finally launched the catering menu in 2011 it was a resounding success. Remember the #1 rule of marketing: Always listen top the customer. Listen to what they are saying and implement it as best you can.

The catering menu took me over a year to make, and another year to perfect. I have recently finished a redesign of this menu, a project that started in January of 2014 and was launched in November of that year. That’s right it took me 11 months to re-design it. First I took a lot of pictures when we did 2 consecutive weekends of photo shoots in January. Then I did multiple meetings with me Photoshop illustrator when we decided which of the 300 shots were going to end up being used. Once we agreed on which shots to retouch, it boiled down to 8 new photos. Why would someone take 300 shots over two long weeks only to end up using only 8? Because that’s what it takes to gain mastery.

We focused on these 8 pictures and took about 2 weeks on each one, photo-shopping them to perfection. Only then was I ready to put them all together and create a beautiful front cover and back cover.

Menu Design

The menu is not just a piece of paper. It should contain as much powerful information and as many beautiful pictures of food as possible. Every inch of real estate on the menu is extremely valuable. Having said that, let’s look at all of the aspects that make a menu great and what should and shouldn’t be included in the menu. I have made this list as detailed as possible to help potential restaurateurs leave very little for guesswork. These are the various ingredients that make for an excellent menu:

Amazing Photography

The photos should be as beautiful as they are accurate. Don’t be like a lot of the fast food places that show succulent, plump burgers and serve customers microwaved junk. The photos have to be similar to what you actually serve the customers. This is called truth in advertising. Of course, you can hire a professional photographer and should also hire an expert Photoshop artist to make the pictures stand out, but they should be identical to what is being given to customers.

The Written Section

Consider hiring a copywriter or other professional storyteller to come up with a short background of how this restaurant began, what it believes in, and your company’s motto. All of this should be considered to be included in the menu. Remember, the menu is also advertising for your restaurant, one that people will take everywhere and consistently talk about.

The Introduction

Here we can talk about how the story began. For Zankou Chicken the story starts in Lebanon in 1962, where my grandfather opened a small chicken outlet in downtown Bourch Hammoud in Beirut’s Armenian quarter. From these humble beginnings we grew and came to the United States in 1982 and opened the Hollywood store in 1984. What’s your story? People want to know.

Trademark the food items

Consider getting trademarks from Washington, DC with the Patent and Trademark Office. You will protect your investment and ideas from potential predators who are always stealing ideas from the internet. For example our Trademark Tarna ® is the term we use for the marinated chicken shawerma. Can others make and sell chicken shawerma? Of course but they can’t call it Tarna®. This gives us the edge in that we have educated thousands of customers to look for this over the years.

Trademarking your items protects your concepts from the cheesy copycats out there too lazy to work hard on their own ideas.

List the Ingredients

Describe in detail what the food comes with, and what it’s made of. For example in our Mutabbal (Baba-Ganoush) we use organic eggplants. We use all natural spices and oils in the marinating of the tri-tip shawerma. We use USDA Choice or better quality meats. People want to know what’s in the food they’re eating.

Use Cool Logos and Stamps

Consider creating official looking logos and stamps custom made for your menu. For example all of our side dishes and salads are 100% vegan. This may sound boring if we are simply describing them as vegan. So we created a nice-looking stamp that is green (matches the perception of what is typically vegetarian or vegan) and we place this stamp alongside our side order section of the menu. Consider making stamps like 100% USDA quality steak or similar descriptions that are both easy to read and descriptive of the food.

Include the Web Site and Social Media

We just finished a 2-year, multi-phase update of our web site. When your web site is both inviting and beautiful, you really want as many people to visit it as possible. Social media is very important nowadays for customer conversion. You want more engagement, a greater amount of emails, and a high amount of shared content. Sometimes it’s hard for people to find your social channels, so now we list the addresses of our most important social media channels. For us right now it’s Facebook, Instagram and Twitter. We list our handle on Instagram and Twitter, which is ZankouChickenLA, and more people can easily find us so we can generate more leads.

Make sure the menu matches your brand

Many aspects of the menu design including the colors, fonts, stock photos, logos and backgrounds should all match the creative platform of your restaurant and web site. For example our logo colors are red and blue. Our uniform is a yellow T-shirt that simply says “Zankou” in a red font. We matched the catering menu to these colors. We used a lot of yellow and red, so now our menu matches our uniforms! It’s important to have consistency in the minds of your consumers.

Place the Menu Items Strategically

It is a good idea to know what are the highest profit margin items. This is determined through your accounting department. The best menu will be the result of the various departments in the organization working together. Here are a few things we can do to sell the best and most profitable items more:

1. Target eyeballs to this item by placing it around a frame or a special color
2. Make that photo a bit larger
3. Place the items you want to upsell on the top left. People’s eyes travel to that area fastest and most. We know this because English readers read from left to right, and in almost every internet study we have determined that people look at most on top left-hand corner.
4. Make the description for this item extra special

Use a Talented Graphic Artist

Every company needs a talented small team of full-time marketers and at least one excellent graphic artist. You don’t have to go to design school yourself; you just have to find the people that already know how to do it. I come up with most of our marketing ideas, but I am never the one that sits on the computer and creates the images on illustrator files.

Consider Menu Inserts

If you are running a bar or sports grill, this is especially true for you. The insert can be your margarita or martini list. It can be easily shareable and removable from the menu. You can get really creative here. It can also be an order form.

The Menu Cover

This should be so appealing that anyone who sees it should want to pick it up. Then they should be two things: hungry and curious. If the cover does not achieve this, start over because no one will want to order from a boring menu.

Size and Shape

There are many considerations when you are calculating the size of the menu. The menu should match the descriptions inside. For example, our catering menu is physically larger than the regular menu. I don’t like menus that become too gimmicky, like a coffee cup shape for a coffee bar. Stay away from gimmicks and focus on quality, readability, and a clean design instead. I would stick to a normal, folding rectangular shape.

Thickness and texture

We use what’s called “soft touch” in the industry. This gives it a velvety feel, where your skin slows down a bit as you touch across the paper.

A soft-touch finish is achieved by applying either a soft touch coating or a laminate film. These are usually applied in liquid form through an inline process, after the printing ink has been applied. The coating then dries, giving it a smooth feel. I highly recommend you try this or other quality processes versus only UV coating.

Redesigning the Menu

Once every year I look at the menus and see where we need improvement. Once every 2-3 years I start making design changes. Once every 5-10 years we make major changes, changing all of the photos and completely overhauling the entire layout. Do this to always keep things fresh.

Prices

Remember that in our industry price fluctuations are the norm. There has to be a small section that says something like, “These prices are subject to change without notice.” You have to coordinate this price change effectively, making sure it’s changed online first and then follow that up with the menu board and physical paper menus.

 

Placement of Plaques

One thing I like to do besides the menus is to place a small plaque beside the POS system. These can be framed upright or glued flat to the surface of the counter. I use high quality acrylic, and this lasts for many years. It’s a last-minute reminder to the customer about certain items we wish to upsell, and they work great.

Using lots of fresh foods, fruits and vegetables, helps to keep the menu buoyant – I don’t know if that’s the right word, but it keeps a balance of freshness and health. — Sally Schneider

 

Source:

http://www.foodservicewarehouse.com/education/restaurant-marketing/menu-design/c28066.aspx#sthash.WjYFOTk2.dpuf

 

There are many different pricing strategies businesses utilize. Most of these we have come to use over time, albeit unwillingly. Many business owners use one or more of these pricing strategies as a combination, whether they know about these terms that define them or not. I have laid them out in alphabetical order for you convenience and have also provided a real world, restaurant industry or other industry example to help you better understand these strategies. I hope light bulbs go off for you as you look at these, and perhaps new doors can be opened for a better pricing strategy for your business.

1. Absorption pricingis a method of pricing in which all costs are retrieved by sharing the fixed costs between all the products that are sold. The fixed costs are absorbed into the price of the goods because the price of the product includes the variable cost of each item plus a share of the fixed costs.

So a restaurant example of this would be, since we roast all our chickens fresh, we use a lot of gas. This natural gas is burned up roasting our chickens, and since it is extremely difficult to determine exactly how much each chicken uses since we continue to heat the ovens even when chickens are not roasting. So the fixed costs of the gas burning is factored into the price of each chicken sold.

2. Incost-plus pricing, a company first determines its break-even price for the product. This is done by calculating all the costs involved in the production, marketing and distribution of the product. Then a markup is set for each unit, based on the profit the company needs to make, its sales objectives and the price it believes customers will pay. For example, if the company needs a 15 percent profit margin and the break-even price is $1.00, the price will be set at $1.15 ($1.00 x 1.15).

It would be good to point out here that healthy profit margins in the restaurant industry are usually 20% and up. 35%-40% is excellent profit margins, provided other costs are being well managed and maintained. That is to say, if your rent and other fixed costs are too high the business won’t survive even with healthy profit margins. You would just be slave to the landlord, a form of legal indenture. Keep a keen eye on fixed costs always so that the profit margin pays off.

3. Price skimming: In this strategy we sell our highest quality, high in demand items at higher prices so that fewer sales are needed to break even. This is a situation where it’s a specialized product and you aren’t trying to sell it to everyone.

An example of this is rib eye steak. This is a special dinner that takes a long time for a chef to prepare. Not only does it have to be cooked perfect but the meat that is used (ribeye) is a very expensive raw material for the restaurant. Does everyone want a rib eye steak? No but that is not the point. The point is, for those who do, the specialized crowd, they get to have what they want and they are willing to pay a premium for it. Another example might be lobster tail. If you ever go to Red Lobster, many of their dishes are fairly priced. They are not very expensive. However for those that want a Lobster tail and steak (surf and turf), these are usually customers that don’t mind paying extra.

4. Decoy pricing: Method of pricing where the seller offers at least three products, and where two of them have a similar or equal price. The two products with the similar prices should be the most expensive ones, and one of the two should be less attractive than the other. This strategy will make people compare the options with similar prices, and as a result sales of the most attractive choice will increase. (Wikipedia)

So an example of this would be showing a few products and making the expensive one help make the cheaper one seem like a better bargain.

5. Freemium: This is a business model that works by offering a product or service free of charge (typically digital offerings such as software, content, games, web services or other) while charging a premium for advanced features, functionality, or related products and services. The word “freemium” is a portmanteau combining the two aspects of the business model: “free” and “premium”. It has become a highly popular model, with notable success.

What would a Freemium pricing strategy in the restaurant world look like? Well if you’re going to open a cafe, you may wish to offer premium wifi service free to paying patrons. In exchange they will pay a high price for premium coffee and high-profit margin baked goods. If you are running a bar or club, you may offer entrance free without a door charge, but the drinks will be expensive. In the example for Zankou, garlic sauce and extra pita is “free”. The customer doesn’t mind paying a premium for the best quality food, knowing that the side condiments, garlic sauce, hot sauce, chills, etc are free.

6. High-low pricing: Method of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors, but through promotions, advertisements, and or coupons, lower prices are offered on key items. The lower promotional prices are designed to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.

An example of this might be Whole Foods. They routinely charge more than their competition, but they offer a few items on sale and have limited coupons distributed through their small, magazine-like publication. Customer may come in to use those few coupons, but the vast majority of their other items are premium-priced, so the customer always ends up spending more on the high-priced products.

(References: http://en.wikipedia.org/wiki/Pricing_strategies; http://definitions.uslegal.com/a/absorption-pricing/)

The Other Pricing Methods soon to be expanded on. This was from wikipedia and my additions to the definitions are in bold. I give examples and other stories taken from the restaurant industry. 

Limit pricing: A limit price is the price set by a monopolist to discourage economic entry into a market, and is illegal in many countries. The limit price is the price that the entrant would face upon entering as long as the incumbent firm did not decrease output. The limit price is often lower than the average cost of production or just low enough to make entering not profitable. The quantity produced by the incumbent firm to act as a deterrent to entry is usually larger than would be optimal for a monopolist, but might still produce higher economic profits than would be earned under perfect competition.

The problem with limit pricing as a strategy is that once the entrant has entered the market, the quantity used as a threat to deter entry is no longer the incumbent firm’s best response. This means that for limit pricing to be an effective deterrent to entry, the threat must in some way be made credible. A way to achieve this is for the incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not. An example of this would be if the firm signed a union contract to employ a certain (high) level of labor for a long period of time. In this strategy price of the product becomes the limit according to budget.

Loss leader[edit]
Main article: Loss leader
A loss leader or leader is a product sold at a low price (i.e. at cost or below cost) to stimulate other profitable sales. This would help the companies to expand its market share as a whole.

Marginal-cost pricing[edit]
In business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output. By this policy, a producer charges, for each product unit sold, only the addition to total cost resulting from materials and direct labor. Businesses often set prices close to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of $1.00 and a normal selling price is $2.00, the firm selling the item might wish to lower the price to $1.10 if demand has waned. The business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.

Market-oriented pricing[edit]
Setting a price based upon analysis and research compiled from the target market. This means that marketers will set prices depending on the results from the research. For instance if the competitors are pricing their products at a lower price, then it’s up to them to either price their goods at an above price or below, depending on what the company wants to achieve.

Odd pricing[edit]
In this type of pricing, the seller tends to fix a price whose last digits are odd numbers. This is done so as to give the buyers/consumers no gap for bargaining as the prices seem to be less and yet in an actual sense are too high, and takes advantage of human psychology. A good example of this can be noticed in most supermarkets where instead of pricing at $10, it would be written as $9.99. This pricing policy is common in economies using the free market policy.

Pay what you want[edit]
Main article: Pay what you want
Pay what you want is a pricing system where buyers pay any desired amount for a given commodity, sometimes including zero. In some cases, a minimum (floor) price may be set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can also select an amount higher than the standard price for the commodity.

Giving buyers the freedom to pay what they want may seem to not make much sense for a seller, but in some situations it can be very successful. While most uses of pay what you want have been at the margins of the economy, or for special promotions, there are emerging efforts to expand its utility to broader and more regular use.

Penetration pricing[edit]
Main article: Penetration pricing
Penetration pricing includes setting the price low with the goals of attracting customers and gaining market share. The price will be raised later once this market share is gained.[6]

Predatory pricing[edit]
Main article: Predatory pricing
Predatory pricing, also known as aggressive pricing (also known as “undercutting”), intended to drive out competitors from a market. It is illegal in some countries.

Premium decoy pricing[edit]
Method of pricing where an organization artificially sets one product price high, in order to boost sales of a lower priced product.

Premium pricing[edit]
Main article: Premium pricing
Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. The practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation, are more reliable or desirable, or represent exceptional quality and distinction.

Price discrimination[edit]
Main article: Price discrimination
Price discrimination is the practice of setting a different price for the same product in different segments to the market. For example, this can be for different classes, such as ages, or for different opening times.

Price leadership[edit]
Main article: Price leadership
An observation made of oligopolistic business behavior in which one company, usually the dominant competitor among several, leads the way in determining prices, the others soon following. The context is a state of limited competition, in which a market is shared by a small number of producers or sellers.

Psychological pricing[edit]
Main article: Psychological pricing
Pricing designed to have a positive psychological impact. For example, selling a product at $3.95 or $3.99, rather than $4.00. There are certain price points where people are willing to buy a product. If the price of a product is $100 and the company prices it as $99, then it is called psychological pricing. In most of the consumers mind $99 is psychologically ‘less’ than $100. A minor distinction in pricing can make a big difference in sales. The company that succeeds in finding psychological price points can improve sales and maximize revenue.

Target pricing[edit]
Pricing method whereby the selling price of a product is calculated to produce a particular rate of return on investment for a specific volume of production. The target pricing method is used most often by public utilities, like electric and gas companies, and companies whose capital investment is high, like automobile manufacturers.

Target pricing is not useful for companies whose capital investment is low because, according to this formula, the selling price will be understated. Also the target pricing method is not keyed to the demand for the product, and if the entire volume is not sold, a company might sustain an overall budgetary loss on the product.

Time-based pricing[edit]
Main article: Time-based pricing
A flexible pricing mechanism made possible by advances in information technology, and employed mostly by Internet based companies. By responding to market fluctuations or large amounts of data gathered from customers – ranging from where they live to what they buy to how much they have spent on past purchases – dynamic pricing allows online companies to adjust the prices of identical goods to correspond to a customer’s willingness to pay. The airline industry is often cited as a dynamic pricing success story. In fact, it employs the technique so artfully that most of the passengers on any given airplane have paid different ticket prices for the same flight.[7]

Value-based pricing[edit]
Main article: Value-based pricing
Pricing a product based on the value the product has for the customer and not on its costs of production or any other factor. This pricing strategy is frequently used where the value to the customer is many times the cost of producing the item or service. For instance, the cost of producing a software CD is about the same independent of the software on it, but the prices vary with the perceived value the customers are expected to have. The perceived value will depend on the alternatives open to the customer. In business these alternatives are using competitors software, using a manual work around, or not doing an activity. In order to employ value-based pricing you have to know your customer’s business, his business costs, and his perceived alternatives. It is also known as Perceived-value pricing.

Other pricing approaches[edit]
Other pricing strategies include Yield Management, Congestion pricing and Variable pricing.

Ah, price. This one topic brings sweat to the brow of any restaurant owner, brings the heart rate up, and is often cause for many heated debates around the dinner table across this great country. Almost every family business, whether they own and operate restaurants or not, has to decide on price at some point. I can guarantee you that every single time, it is a contentious issue that is seldom easy to decide upon and resolve quickly. The reason is quite simple: there are so many variables to discuss when it comes to pricing strategy.

The price has to be attractive to the customer. It can’t be too high, however by the same token it can’t be too low because that could easily bankrupt any business. How do businesses decide on price anyway? For large hotel chains they invest in millions of dollars of the best research and software money can buy. They routinely check on their competitor’s prices and they do it daily. If one hotel is charging $500 for one night stay in New York and another, similar hotel is charging $450, guess where most people will decide to stay? In the past customers often stuck with one brand due to loyalty, however today many consumers are fickle. They will quickly change hotels, change restaurants, change supermarkets, if the quality is similar and the price is lower.

Let’s take a look at some of the factors to consider before setting price. These questions will help determine setting price:

1. What the competition is charging for a similar item?

2. What is a high-end retailer or other restaurant is charging for a similar item in a different setting?

3. What is the cost of the product? This is the raw materials and paper cost of putting it all together. Of course you also have to factor in the cost of heating it, the labor cost, etc. But for the sake of simplicity it’s best to just stick to the raw cost of each item since factoring in everything can easily complicate the entire menu.

4. What is the cost of gas and/or transportation fees for the truckers to bring the product and for your delivery service to take it to the customer? Has the price of gas gone up or down (it’s usually cyclical). Large businesses often relay on complicated software to help them plan for this. If you’re a small business just keep tabs on the price of oil.

5. What is the cost of paper goods associated with selling your product? They often go up and down with the price of oil, since oil as petroleum is the raw ingredient in plastic and is used in the manufacturing process.

6. Has the price of natural gas (that you use to heat your food, not for driving) gone up or down? Are you keeping tabs on the utilities? Has the price of water gone up or down? Is your state in a drought? Often food prices spike up considerably in a drought. California is in the middle of a megadrought as I write this book. It is the worst drought we have seen in decades, and the price of almost every major food item has gone up as we all wait and pray for rain in the state.

7. What grade is the beef or chicken you intend on using? Of course, the use of organic food will drive your cost up. You have to determine the desire on behalf of the consumer in your area wether or not that bet is worth making. How many customers are asking for organic beef or chicken? Often a few people may ask but are they willing to pay the $1-2 per unit difference if you make the switch? These are difficult questions to ask with complicated answers.

8. What state is the economy in? If it’s anywhere as bad as it was the last few years during the Great Recession, you may want to think twice about increasing price at all. If the markets are up, jobs are doing OK, and other restaurants are doing well it might be OK. Just remember: No one will argue with you if you find many ways on saving costs (more on that in an upcoming chapter), but there might be resistance to a price increase if it’s done in an inopportune time. This calls for wisdom and patience.

9. Are you increasing the quality of the raw ingredients and/or packaging? If you are going from a decent produce distributor to gourmet, top of the line organic produce that is hand-picked, it may call for a price increase. What if you switch to a higher grade beef? How about if you are using a container for the chicken that is much more presentable but at a higher cost of .15 cents per unit? You can only absorb those costs for a week or two before they really eat into your profit margin. A small price increase may be the right choice at such a juncture. Ask your customers if they re OK with that. Is the tradeoff worth it? Ask 20 customers you love and trust. Ask friends and family members who also are paying customers. They won’t be shy to tell you their opinion. Listen to them when they speak. Listening to customers is the #1 rule of marketing.

In our case we use the highest quality, freshest ingredients. Not only is our produce fresh from the farm, never frozen, so is our beef and chicken. We are unique in an industry where most fast food and fast-casual chains use frozen dough, frozen meats and vegetables. We don’t have a single freezer in any of our locations. We also don’t use canned foods, stabilizers, MSG, fillers, artificial flavors or colors. Everything is all-natural, 100% fresh, and of the highest quality. As you can imagine, this is why I always said we should never try to be the “price” competitor. Not only does it not mix well with our brand, but Zankou customers have now been accustomed to eating the freshest cuts of beef and chicken, with the freshest, raw garlic and other ingredients for over 55 years. They are used to is and they expect it. Anything less and they will walk out the door, regardless of price.

That is not to say we strive to be overly expensive. We use the above listed criteria in making difficult pricing decisions. But as someone who has been doing this for over 25 years I can tell you that determining the price is not just a numbers game. There is more to the story than just seeing what the competition is charging and looking at cost. There is a psychological  factor that plays into all of this as well. You really have to know your customer and see what they are willing to pay. Just to give you an example, after listening to our customers complain about the garlic price (we would charge .50 cents for additional garlic beyond the first extra garlic being free) for a long time we decided to make it free.

We no longer charge for garlic, whether the item comes with garlic or not. If the customer requests it, we provide it. It’s just as simple as that. It’s made a huge difference in terms of customer satisfaction, although it has come at a price. We are now going through much more garlic than we ever did before, and many customers have realized this and routinely ask for garlic not just with plates but with wraps as well. This has driven our cost up; but to us it was worth doing if it would make our loyal customers happy in the long run. You have to factor in the Yelp situation where many angry customers can just go and give negative reviews if/when you don’t provide them with what they ask for.

Our customers would probably skew to the more educated, well-to-do crowd. They completely understand that food costs go up, and they are willing to pay for the best food. I don’t think they mind the charge up front at all; I just think many people had an issue with being charged for garlic if they wanted an extra one since they had to wait in line again. It’s a huge inconvenience, so we made it complementary. You just really have to know your customers, what they are willing to put up with, and what they won’t. If you don’t know, ask them! We have created so many products over the years from just asking customers questions and coming up with solutions from the results.

“Customers don’t know why, but they love the food,” says Abel Uribe. “They’re addicted to the garlic and the chicken.”

Uribe is the manager of Zankou Chicken’s store in Pasadena, the company’s largest and one of its busiest. It’s where a variety of Zankou’s choicest dishes are prepared every day and transported to other stores in Los Angeles county.

The word “chicken” is of course written into Zankou’s brand name. You could call it the company’s soul. What would Zankou be without “chicken?” Not much. Perhaps nothing. Can you imagine “Zankou Hummus” or “Zankou Falafel” having even a fraction of the allure that “Zankou Chicken” proudly boasts?

Any examination of the age-old fowl that gives Zankou its zing must begin with a brief history of the chicken and the lore that surrounds this noble bird. Chickens belong to the “Gallus domesticus” subspecies of the “Phasianidae” family of the animal kingdom, which includes pheasants, partridges and jungle fowl. According to the Encyclopedia Britannica, the first domesticated chickens in the world came from the Indian Subcontinent. The birds were developed not for meat or eggs but for a popular activity that is outlawed in America—cockfighting.

It is said that in certain ancient cultures, especially among primitive tribes, the consumption of chicken or eggs was taboo. This was evidently true not just in ancient Athens but also among the Romans. With time, better sense dawned on both civilizations—and the chicken became an integral part of Greek and Italian cuisine.

Chicken meat is famously lean and packed with protein. Too often, however, chicken tastes like carpeting—although you wouldn’t suspect that at all from the way that Americans typically consume poultry. Walk into a Costco, especially during the holiday season, and you can see people fighting over the last few rotisserie chickens just before the store’s closing time. If an ancient Greek or Roman were to travel in a time machine to Costco, he would not hesitate to conclude that customers of the discount store’s god-awful chicken are going straight to hell.

“Not everyone knows a good car or a superior mobile phone,” Uribe explains, making an analogy between the average shopper who thinks the world of Costco’s $5 chicken but has no idea what high-quality chicken tastes like—because too many consumers in America have been brainwashed into believing that “cheaper is better. Often Costco uses their low cost chicken as a “loss leader”, a pricing strategy in which a retailer will price a much desired product at an extremely low cost to appease shoppers into coming in and spending more money on other, more profitable items. It’s called “loss leader” because retailers are often willing to price these items so low that they make little to no profit, even at the point of making a negative income on that item, to bring people in the door. This strategy was utilized by Barnes and Noble and other book stores during the launch of the Harry Potter books years ago. Costco, Barnes and Noble, Walmart and other were pricing Harry Potter book titles at cost or below cost during the launch parties, just to get those kids and their families through the door. It’s a long-term strategy that pays off. We will discuss this further in the price strategy chapter.

If Uribe had his way, he would want everyone who eats chicken in America—indeed the world—to try Zankou’s famous preparation of Gallus domesticus just once. That, says the store manager, is all it takes to get hooked on chicken a la Zankou.

Over the years, poultry lovers have speculated ad nauseam that we apply a special marinate of spices to give our rotisserie chicken its outstanding taste. The truth is we do nothing of that sort at Zankou. And while Zankou always uses top-of-the-line ingredients in its cooking, nothing magical is added to the chicken other than common salt.

That’s right—a bit of salt, not even any pepper, is rubbed into the chicken before it’s put on the rotisserie. No oil is applied to the outside of the chicken—nothing whatsoever is injected inside. How, then, a curious customer may well wonder, does the chicken taste so darned good.

The answer lies in technique. Every single chicken at Zankou is cooked slowly and deliberately. First, the chickens are placed on the rotisserie—three or four birds to every row that automatically revolves like the axel of a car in a furnace-like setting. As red-hot flames touch the outer surface of the revolving chicken, the meat oozes a juicy liquid.

The chickens are placed symmetrically on the rotisserie in such a manner that the liquid from the top-most row of chickens falls directly onto the chickens in the second row—and the juice from the second row of birds falls onto the third row. And so on. The order of the rows is then reversed: The chickens in the upper rung, whose juices have been falling on the birds below, get to go lower down so that they, too, can have the juices of other birds drop on them. The entire process takes about two hours.

The juice is what gives the chicken its crispy skin and characteristic flavor. Voilà!

Are coupons, discounts, and working with companies like Groupon to attract more customers good for the long term strategy of running a restaurant business?

This is a complicated question that has a long answer. I can be good, but it can also be bad for the long-term health of your business because it trains consumers to buy your product when it contains a discount. Some people only show up for the Groupon once, and never come again. There is also a perception out there that a business that used Groupon is a dying business. “They must be desperate”, they can say.  You have to consider how you look in the eyes of not just your customers but the general public as well. Running a long discount campaign can definitely give your brand a blue eye in the perception of consumers if you’re not careful.

<—–The Coupons from previous “Customer Appreciation Days” at Zankou

Let’s dig a little deeper and see which coupons work, which do not, and what you should never do as a business. You should never do coupons consistently. There are many big name fast food chains that do this through the mail. They use coupons for “buy one get one free” burgers, free fries, free drinks, and free sides. The problem with this is you are creating a habit in your customers to only shop with you when there is a discount. Consistent discounting works with business like Bed Bath and Beyond, Sears, and Best Buy because these are big box retailers that already have huge mark ups on many products. You are getting a discount, but even with your discount you are spending a lot of money, typically over $250. I just used a 10% off everything coupon at Bed Bath and Beyond. Now do I ever shop there without a coupon? Yes but every time I do I feel like I am cheating myself or being irresponsible. Bed, Bath and Beyond makes sure to send me a coupon every few months or so. You can hold on to these coupons, combine coupons, and some of their locations even honor expired coupons if you give them some kind of explanation as to why you weren’t able to use it sooner.

So you see they have condition their customers to use these coupons, and to feel a sense of guilt sometimes when there is no coupon. I did end up spending $285, however the sales clerk told me because of the coupon and other store discounts (they were closing the store at the Beverly Center so there was a clearance on a few of the items as well…) I saved a total of $65. $65 is pretty remarkable. You can get a new Xbox game or PS4 game with $65, you can buy a few DVD’s or Bluray movies you always wanted, or catch up on your summer reading list. The point is we love these coupons at these huge retailers and we expect to use them almost every time we go.

Now if you have ever owned a restaurant or bar you know our profit margins are already razor thin. Any discount, free item, or any other value added proposition has to be very well calculated and short-term. It’s OK to use these promotions to bring people through the door, gain new customers, or in the first few months after the grand opening of your restaurant. These are special occasions, and a discount can be warranted by the fact that these new customers can possibly be kept long-term. “Let me just get them in the door, taste our delicious product, and when they just see for themselves how awesome and different we are from the competition, they will be sold!” Does that really happen though? Do we get to keep the customers we made or are many people opportunists that come only during promotion and you never see them again?

When I did the “Customer Appreciation Days” at Zankou Chicken in honor of our 50th anniversary in 2012 and 2013, we got dozens of new faces coming in. I did an entire list of promotions. We had a whole chicken for $5, which is pretty much the cost for us to make it if you include the pita bread and garlic sauce. We were basically taking a huge hit in terms of profits for those two hours we were doing the promotion, from 3pm-5 pm.

We agreed to do it on off days like Tuesdays and Thursdays, but I also urged to do it on Saturdays and Sundays because many customers told me they had work and couldn’t take advantage of the Customer Appreciation Days because they simply couldn’t get off work early or make it in that 2 hour window. But we couldn’t do it at lunch because then it would interfere with the busy lunch crowd. These were the busy executives, families, and often huge clients like Disney and Fox Sports that make huge orders during lunch. They were high paying clients, and these are all customers and individuals who were happily paying full price. I didn’t want their dining experience to be interfered by the huge promotion, or that them having to wait longer than necessary to get their to-go orders. You have to remember, these customers don’t care about promotions. They are serious business people that are non-nonsense, they want healthy, delicious, hot food and they want it fast because they are paying full price for it. This is in direct contrast to the discount-driven consumer who is willing to wait in 25 minute long lines, get their $5 discount, and wait another 15 minutes. They usually ask for extra bread, extra garlic sauce, extra whatever is available.

It was a very exciting time, because so many people came that the line was literally out the door in Glendale. In Pasadena the lines stretched out and behind, through the hallway and almost to the bathroom. It was ridiculously busy, and the “Black Friday” -like atmosphere really energized all of us. It was fun, exciting, and really got the word out about Zankou Chicken to hundreds, maybe thousands of new people. But was it profitable for the long term? I honestly don’t know.  I can tell you this: it made thousands of dollars an hour and we broke multiple sales records for every day we had a Customer Appreciation Day. But the sales numbers may be a bit misleading because the values were so high for the customer that it ate into profit margins. But making a profit wasn’t even the point.  I really wanted customers to feel appreciated. I also wanted to use it as an opportunity to bring some new people in, hopefully friends and family of these customers.

Word of mouth went through the roof. Our social media was blowing up with new adds, new faces, and so many shares on Facebook and Twitter about the Customer Appreciation Days. People were sharing with families and friends, particularly with people that were down and out, and could really use the discount. I thought this was an added bonus and something I hadn’t thought of, since the economy was so bad we had so many poor families taking advantage of a rare situation: an opportunity to feed their family good food. Deep down that was spiritually rewarding for me. I had made the coupon to look like a $5 bill, and people found it so much fun to keep in their wallets and pass around. I purposefully designed it to not only be beautiful and fun to look at but easy to use.

I remember seeing so many faces, and many of them were faces and people I had never seen before. Maybe they heard about the discounts because they were so significant. For example the whole chicken is usually over $10, and here we were selling it for 5 bucks. Remember that in Los Angeles, 5 dollars usually doesn’t buy you anything more than a gourmet cup of coffee, whereas here they were getting not only delicious, healthy food, but there was enough of it to feed an entire family. The unintended consequences of this was that there were so many groups of people, so many families that came for the first time, and after the promotion I never saw them again. The line reminded me of the long, crazy lines at the DMV. A few fights even broke out in line with angry customers, people cutting in line, and people becoming inpatient. If you combine hungry people with low blood sugar levels and an unbeatable discount partnered with a limited time offer, it can turn pretty ugly very fast.  I made sure to redouble our efforts, I personally helped maintain the lines, and we had up to 6 cashiers and a beefed up kitchen staff to make sure to keep up with demand.

Thank God a physical fight never broke out, but there were some stressful moments. It wasn’t about quality or brand anymore, it was purely about the discount. Was this really a customer appreciation day? Or was it a bunch of strangers taking advantage of a rare, blue moon discount we had not done in 50 years? It was a difficult question for me to answer. But I can say for sure our morale was up, we were super energized, and we all had a blast. For that alone it was worth doing for me.  Would we ever do it again? If the rest of my team agrees, sure I would do it again. I would love to, but I imagine the next one to be more organized with more reasonable discounts that are more manageable.