Interview w Rita Iskenderian

Rita Iskenderian, president of Zankou Chicken, knew next to nothing about the ins and outs of her family business empire when her husband Maridos suddenly died in 2003. With four sons who were too young to shoulder the responsibilities that their highly creative and entrepreneurial father had almost single-handedly shouldered, Rita found herself thrust in the day-to-day affairs of her small but vibrant chain of restaurants in the Los Angeles area. Overnight, Rita went from never having worked a single day in her life to slogging 14 hours every day of the week. How she managed is an inspiring story of mind over matter—of persistence over frailty—together with the realization that struggles and sacrifices have always been the bedrock of her family business.

Dikran: You’re a mother and the president of Zankou Chicken—what do you like most about being a leader?

Rita: I usually ask wise people around me for advice. I don’t like making decisions by myself. I would say that I am a democratic type of leader. I don’t enjoy making all the rules. It’s all about teamwork.

 

Dikran: But what do you like most about that position?

Rita: As I said, what I like is … . To tell you the truth, I wish your father were here to be the leader. That would have made me more comfortable. I always depended on him to make the right decisions. All of a sudden I was left with a lot of decisions to make, a lot of load to take. It’s not easy at all.

Dikran: You are loved by our employees. They approach you and love to see you. What is it about you that makes employees love you so much? What’s the secret to having that kind of relationship with employees?

Rita: I think the employees have such a relationship with me because I love them and I respect them. A lot. That’s why they love me and respect me. They are the reason I am here. They are the reason to make this business grow. I always respect what they do. I want to help each one of them. I want to be there for them and do whatever I can to make them more comfortable—to give them health insurance and other facilities. I love my employees. Without them, the business will not grow. It will not be there.

Dikran: A lot of people are interested to know about the origin of Zankou. We came here from Lebanon. What was it that helped us succeed? A lot of immigrant families fail. They try to open a business but it doesn’t work.

Rita: It’s the persistence to keep working hard. Sometimes you don’t make any profits. Instead, you have to invest your own money into the business. We struggled when we came here. For the first three or four years we didn’t make any money.

In fact, on the first day in our first store in Lebanon, we sold only one chicken. The second day we sold two. But we persisted. On our first day in Hollywood, your dad was so busy that his feet got swollen from standing up. At the end of the day, he had to walk with the help of two people. But it was one the happiest days of his life.

Dikran: You didn’t make any money, and everyone kept putting money in so that the business would survive?

Rita: Yes.

Dikran: People don’t know that. They think we succeeded right away. When the Hollywood Zankou opened in 1984, it was very busy.

Rita: Yes. It was very busy but then slowly it [the number of customers] went down. We had to struggle to make things better.

Dikran: That’s very interesting. People don’t know that.

Rita: Yes. I struggle at the house, but your father and your grandparents struggled a lot. They were stressed a lot. They weren’t making any profits. At one point, your father had to let employees go.

Dikran: So dad was making the food instead of them. I remember that.

Rita: Yes. He was the cashier, the cook—he was the one carving the meats.

Dikran: He said he didn’t have time for a bathroom break.

Rita: Yes. So, to go back to your question, when people keep losing profits it’s very hard to keep going. They close the business. But we believed in what we were doing so we kept struggling and slowly—very slowly—the business caught up. We put different items on the menu. Seven years after our first store in Hollywood, we opened in Glendale in 1992.

Dikran: You have a great palette. You know a lot about food. You cook a variety of dishes. How does one build on that tradition and make it succeed on the restaurant level?

Rita: I was not the one who put all the ingredients together. That was your father. He had a better taste in his mouth than me. He was very good at that. He changed the menu all the time. He changed the ingredients.

Dikran: He kept changing the ingredients until they got to what they are today.

Rita: Yes. I’m not the one who put those ingredients together. I added the tabouleh to the menu—it was my idea. I added the ingredients. I also added the rice and the ingredients to the kebabs. The rest was all your father’s doing.

Dikran: So dad was constantly making the dishes better.

Rita: Yes. But to make things better and better you have to use the best ingredients.

Dikran: High-quality ingredients.

Rita: Yes. For example, you can’t use “Chinese” garlic—low-quality garlic—in our menu. You have to use the highest quality garlic and the finest meats. We get our garlic fresh from Gilroy every day.

Customers are not stupid. They are not fooled by cheap ingredients. They will taste the food and go somewhere else. To keep customers, you have to use the best ingredients and be consistent in the way you prepare your food.

A stingy person can’t be a restaurant owner; you have to be generous. If a dish goes bad, you throw the whole thing out and start afresh. If you suspect that the meat or chicken tastes just a little different than what it should be, you have to throw out everything. You may have a lower profit margin of course, but it’s worth it because if your food is fresh and has high-quality ingredients and you will sell more of it. The profit will come from the volume of sales. That’s our secret—our profit margins are small, but we sell a lot.

Dikran: A lot of times when people look at our dad and at what happened to him and our family, they tend to judge him because they didn’t know him. You knew him very well. What part of our father do you want people to remember?

Rita: What happened [in our family] was because of his sickness. If he weren’t sick, nothing like that would have happened. He was a very generous, giving person. He had a heart of gold. He gave to Armenian schools and churches. And he gave without making his contributions public—he didn’t want people to know. If you compare his earnings to what he gave, nobody we know gave as much as he gave to the community. In fact, the more people came to know that he was a giving person, the more they came to ask him for money.

All the writers and singers—a lot of different kind of people. They came every day. And he just kept on giving more and more. At one point he said he couldn’t go to the store because people are coming and asking for money all the time. He said, It’s better for me to sit at the house because I can’t say no. He couldn’t say no to anybody. He gave everything he had. I never saw a more generous person in my life. That’s how I want people to remember him. He was very smart and very giving.

After we got married, the first Christmas that we were together, he didn’t want to go anywhere. He said to me, I’m going to take you places. We were in Lebanon back then. He took me house by house, knocked on the doors of people I didn’t know, and gave them money. That was our first Christmas as husband and wife. The whole evening we went from house to house, giving people money. He had a heart of gold—maybe diamond.

Even before he opened the Glendale store, we used to go downtown on Christmas and give money to the homeless. From the car, me and him. Our Christmas was like that. We did that two or three times. Then I got scared because the people hung onto the moving car and put their hands inside.

Dikran: You’re a very persevering person. How did you overcome a lot of difficult circumstances both in business and in life? Our house caught on fire, business went up and down—I can’t even name all the tough situations.

Rita: My husband taught me to be strong. Whatever happens in life, he said, you have to be strong. God forbid, even if you lose one of your sons, he would say to me, you still have to be strong. Because life is for strong people. You can’t be weak in life, otherwise …

Dikran: People will walk all over you.

Rita: Yes. That’s why I’m very strong in personality. Look at Armenian people in general. They survived the genocide. And look where they are now. We have that instinct to survive—and thrive—in our blood. Every Armenian likes to work.

Dikran: Armenia is famous for its mountains. An artist who once visited the country said that no other place has mountains of such striking colors and textures. And he compared Armenia’s mountains to its people: Armenians are as strong and hard as the mountains in their motherland. Do you agree?

Rita: Yes. But look at it this way. All over the world, when the parents pass away they leave their belongings to their children. Armenians were massacred so heavily during the genocide that they lost everything. Even those who survived couldn’t leave anything to their children. They had to work hard. They started from zero. So it was not that their strength came from hundreds of years [of history]. They had to persevere. And they had a dream of succeeding. That’s the difference between Armenians and people of other countries, as I see it.

Dikran: One other country that has been through a lot and whose people are famously tough are Koreans. And the two things that Armenians and Koreans seem to have in common are the emphasis on family and food. Food is a big part of Korean culture, as it is among Armenians. Where, in Armenian culture, despite all of Armenia’s historical crises, do you think that emphasis on food comes from?

Rita: The emphasis on family, I think, comes from the fact that Armenians were separated from each other over much of recent history—in the 1800s, and then again in 1915 [the year of the Armenian Genocide]. So the family was an institution that was almost worshiped, and it became a source of strength because Armenians wanted to keep their families together. The brutality of the genocide prompted Armenians to develop stronger bonds with each other on the level of the family.

My husband’s grandmother, for example, survived the genocide and was living with us. She lost her younger brother in the genocide and she never stopped dreaming about him. She believed he was in another country. She never saw him again, but her bond with him and other members of her immediate family was very strong. When my second son was born, she implored me to name him after her brother—Stephan.

Dikran: Do family and food also have a bond in Armenian culture?

Rita: Yes. When family members get together, what else are they going to do? They’re going to eat! Just the other day, for example, I wanted to see the mother of my “bride” [Dikran’s wife, expectant at the time with their first child] so I decided to cook. Food brings people together.

Dikran: What kind of food did you grow up eating?

Rita: Armenian food, Middle Eastern food.

Dikran: Name a few dishes.

Rita: Sarma—or dolma—grape leaves. There are also some traditional foods that Armenians brought with them. Each village in Armenia had its own food—or a typical dish. For example, your father was from Hajian, which had its own speciality food, such as jidabour. Hajian is in Turkey now—it was one of the villages that Turkey took from the Armenians. My family was from Aintab, which also had its own dishes. For example, we made an eggplant dolma. Other villages had a cous-cous dish cooked with tomato and lemon, without meat.

So when Armenians went to other countries, such as Lebanon and Syria, they took with them their culinary traditions. And there, they began making dishes from other villages as well because they were next to each other.

So Armenians began cooking tabouleh, which is a Lebanese dish. Or shawerma, which is an Arabic dish. But nobody would cook a dish better than the people to whom it was native. People from Aintab, for example, cooked the best dolma. And nobody could cook jidabour better than the people from Hajian. It’s a meat-and-grain dish that has to be cooked for hours.

Dikran: Was your mother a good cook?

Rita: Yes—but my mother-in-law was a better cook. They had different ways of cooking. When I got married, I didn’t know anything about cooking. Afterward, I learned everything about cooking from my mother and my mother-in-law. I mixed their methods and came up with my own!

Dikran: What’s it like to preside over a family business—what are the ups and downs of the process?

Rita: I highly value my family business because I witnessed all the struggles that went it making it a success. My husband struggled at the business, and I struggled at home, where I was alone all the time, seven days a week. I didn’t drive at the time. I didn’t see my husband day and night. We didn’t go out, we didn’t do anything [together] for years.

Dikran: Which business owners do you admire?

Rita: The restaurant business is a very difficult business. I admire all the people who, without franchising, have made it to the top. I can name a couple, such as In & Out Burger and Panda Express. Panda Express started at the same time as us, in 1984. They have something like 1,500 restaurants and are in a better position today than we are. I want to be like them one day. But without franchise—I don’t like franchises.

Do you sometimes think the owners of Panda Express have a level of stress 10 or 50 times more than yours?

No, I don’t think so. I think they are in a position now where they can relax and where their business manages itself. But our business is different. The food is different. It’s not like In & Out, where you serve hamburgers and French fries. It doesn’t take much to make hamburgers and French fries.

Dikran: Panda Express can train a cook in two weeks. At Zankou, a cook needs to be talented as well as a master of technique.

Rita: Yes. Our food, on the other hand, takes time to cook. It has many ingredients, multiple spices. It’s marinated. To cut the food, put it together, make the sauces, it’s a lot of work. That’s why it’s not easy for us to that way [like Panda Express or In & Out Burger]. But that doesn’t mean we don’t want to grow. My dream is that one day we have 1,000 locations—without franchising—preserving the same quality of food. Day and night I think about it, I dream about it. I saw my husband and mother-in-law and father-in-law struggle a lot. And I want to grow my business to such a point that when I meet them one day I can tell them, Look what I did with your business.

Dikran: When you took charge of Zankou Chicken after dad passed away, what did you find in the first few days or weeks?

Rita: All of a sudden, when you and your brothers came to me and said, Mom, you have to work, my reaction was, Oh, wow, until now I didn’t have to work, and now that I lost my husband I have to work! I felt bad about that.

Fortunately, my sister was there to help out. She worked as the manager for our Pasadena and Van Nuys restaurants. I watched what she was doing. For two or three months I watched while helping her. At that time, in 2003, we didn’t have credit cards—the business was all cash. I used to count the money with my sister, and it was a lot of money. When we made a mistake we had to count the whole lot of money again.

And all the while, when I started working, I couldn’t look at the employees’ faces! Gradually, I got to know them one by one, and I was there for them. Some of them needed financial assistance, so I would give them cash and they would return it little by little. I helped them every way that I could. I became friendly with them. Little by little I opened up to them and they opened up to me. And that’s how the bond started between me and our employees.

With time, and with the advice and help of my sons, I changed the management system and made it more efficient so I didn’t have to go from store to store every day. But for 10 years I didn’t go for even a one-week vacation. My sons were free but I was not free. The first time I left was when my brother got sick in Germany. He had cancer, so I had to go and see him. And the second time I left was when he died. I went to his funeral.

Dikran: Would you have preferred to continue living the way you always had—not involved in the business at all?

Rita: No. Your dad gave me a very different view of life. I was a mom, I was cooking all the time. I didn’t get involved with the business and didn’t have a business-oriented mind. I wasn’t meeting people.

Dikran: Suddenly your life opened up to the rest of the world.

Rita: Yes. Sometimes I wish I hadn’t change the system so I would still be going from store to store.

Dikran: Who did you turn to for advice?

Rita: I asked my sons. I didn’t do anything without their approval or opinion. I didn’t act alone at all. But then again, the business teaches you things that you don’t know. When you are there every single day, you think of ways to do things better. And because you are there every day you notice things nobody else notices. You also learn that where there is a will there is a way.

Dikran: What advice would you give to someone—another businesswoman, say—who is compelled to follow the same path that you did?

Rita: Value your business. You have to really love what you’re doing—don’t go into a business if you don’t want it and don’t love it. Be persistent and give the best to your customers. If you give good value to your customers and value your business, your struggles will be rewarded one day.

Dikran: Our family business is now in its third generation and doing quite well. What advice would you give to the fourth generation?

Rita: Do what you love to do. Value the business you are in—don’t take it for granted. And if you’re still in the family business, remember that your grandfathers and grandmothers struggled to make it work.

Dikran: What are your top three words of advice for people reading this book?

Be strong. Eat healthy. Love people.

Time Management

Let’s start with the most basic: Write down your goals every day using one-hour blocks of time. I use my iPhone calendar but you can use a simple notebook, a software program, or anything else you want. Typically phones work best as they now come with ping reminders to help you finish tasks. Some say doing this the night before is best. Here are the others:

  1. Plan the week in advance. For example I speak on every other Wednesday. On Thursdays we have company meetings. On Friday and Saturday nights I work my other job, and on mornings I try to write a little each day. On weekends I edit my book…etc

2) Try to plan for even fun evenings or dinners in advance. Planning saves time and makes life more pleasurable even for leisure.

3) Use deadlines. This will force you to finish tasks, and will help you get things done before you start any new projects.

4) Use Google calendar. This can sync with most smart phones and reminds you when things are due. It’s a great way to sync phone tasks with your desktop or laptop computer.

 

5)  Use lists and organize tasks with priorities. Remember to get the most important tasks done first and then tackle the medium to low-level priority tasks.

6) Learn to say no. I refuse to answer any calls on my phone I do not recognize. I refuse to answer Facebook messages that ask me for money, donations, or my own involvement in events from people I do not know and from people that have done nothing for me in the past. It goes back to my talk about reciprocity. People I know and high value people in my life are of course, completely different.

7) Finish tasks early. Never procrastinate and leave the important things for later. As you do this more often, your tolerance for other people wasting your time will decrease as well.

8) Restrict the amount of time to complete a task. Parkinson’s law states “work expands to fill the time available for its completion”. Give yourself all the time you need to complete important tasks, not all the time you want.

9) Listen to music and crowd out noise. I find that listening to classical music in the background helps me relax but also gets my mind focused on finishing one task. This is how I was able to write 600 pages in 18 months. I did it using timed blocks each morning and evening, using the Lord of the Rings soundtrack from Howard Shore to help my imagination sparkle.

10) Tell people about your goals and deadlines. I told many people about my book I was writing with Brian Tracy in 2014. It is now completed and available on Amazon. Now I am telling people about my next book, and that it will be available by March 31, 2016. This will force us to finish what we start because the result will be embarrassing if we don’t.

 11) Do only one thing at a time. Multitasking is something cell phone manufacturers created and doesn’t work for difficult, meaningful projects that make a difference in your life.

 12) Remove time wasters. If you waste too much time on Facebook take away the Facebook window while you ware working or shut off the internet. If you love checking your phone for text messages or browsing Instagram turn it off during important tasks.

13) Be an exceptionality expert and not a perfectionist. Perfectionists never get anything done while someone aiming to simply do exceptional work finishes tasks and moves on to the next thing.

  • 14) Prioritize and use the 80/20 rule. The 80/20 rule states that 80% of our income and quality of life usually comes from about 20% of the good work we put in. Find this talent and work more on that.

15) Delegate any task that others can do better than you. Nothing will help you fail faster than trying to do everything yourself.

16) Time things so that you can get things done quicker geographically. For example if you are visiting the post office why not buy a few stamps you may need later? If you get one thing from the market why not get everything you need for the next 3 days?

 17) Get everyone ready before you arrive. What I like to do is set up meetings before I arrive so that the printouts are ready, the papers are printed, the computers are set up, etc. When I am going to a restaurant I call AHEAD AND MAKE SURE THE ORDER IS READY BEFORE I GET THERE. Little things like this make a big difference.

 18) Reduce meetings. Many meetings are time wasters. To make meetings meaningful, make sure the agenda is prepared in advance and everyone does their homework. Nothing kills time faster than being in a room full of opinionated people without getting anything accomplished.

 19) Use automation. I use Gmail to block many unwanted spam mail and I use a program called TrapCall to help me filter phone calls and also text me voice messages. It’s probably saved me dozens of hours because I never listen to voicemail.

20) Sleep early and wake up early. Those hours in the morning are best for getting things done, and if you can work out or do something else productive before 8 am, you are already ahead of 95% of the population

4 Parts to a Legal Contract

In common law legal systems, a contract (or informally known as an agreement in some jurisdictions) is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them. The elements of a contract are “offer” and “acceptance” by “competent persons” having legal capacity to exchange “consideration” to create “mutuality of obligation.”[1]   (Wikipedia)

 

 Here are the 4 parts to a contract:

1. Offer – One of the parties made a promise to do or refrain from doing some specified action in the future.

2. Consideration – Something of value was promised in exchange for the specified action or non-action. This can take the form of a significant expenditure of money or effort, a promise to perform some service, an agreement not to do something, or reliance on the promise. Consideration is the value that induces the parties to enter into the contract.

The existence of consideration distinguishes a contract from a gift. A gift is a voluntary and gratuitous transfer of property from one person to another, without something of value promised in return. Failure to follow through on a promise to make a gift is not enforceable as a breach of contract because there is no consideration for the promise.

3. Acceptance – The offer was accepted unambiguously. Acceptance may be expressed through words, deeds or performance as called for in the contract. Generally, the acceptance must mirror the terms of the offer. If not, the acceptance is viewed as a rejection and counteroffer.

If the contract involves a sale of goods (i.e. items that are movable) between merchants, then the acceptance does not have to mirror the terms of the offer for a valid contract to exist, unless:

(a) the terms of the acceptance significantly alter the original contract; or
(b) the offer or objects within a reasonable time.

4. Mutuality – The contracting parties had “a meeting of the minds” regarding the agreement. This means the parties understood and agreed to the basic substance and terms of the contract.

When the complaining party provides proof that all of these elements occurred, that party meets its burden of making a prima facie case that a contract existed. For a defending party to challenge the existence of the contract, that party must provide evidence undermining one or more elements.

 

The 30 Best Ways to Motivate Employees and Boost Morale

1) Encourage involvement. Your employees would feel more like owners if they helped make decisions and come up with ideas. Involve them in these processes and initiate their participation.

2) Shared responsibility. Each employee should share responsibility. No one is above their duties and it should not be beneath anyone to help clean dishes or wipe down tables. We had one employee who refused to clean since she was hired as a cashier. She was quickly dismissed from her duties. Humility and hard work form the bases of any solid restaurant crew.

3) Fairness and Clear Instructions. Employees feel really bad when they are scolded for not doing things right when they were not trained well in the first place. It is on owners and managers to consistently train employees. Likewise, you should reward performance based on behavior and results and not based on whom you like more. Favoritism destroys morale.

4) Offer technical support. We created training videos and showed each employee how to properly wear chain-link gloves while dicing tomatoes and lettuce. It helped reduce injuries because the videos were easy to watch and had Spanish subtitles. Always offer employees training from videos, manuals, posters, and whatever else they need to make their jobs easier.

5) Have some fun. Organize birthdays and other reminders to employees that you actually care about them as people. Celebrate new births with cakes and spread the good cheer. It’s contagious. Small expense gifts like birthday cards. balloons, cakes, and coffee go a long way toward increasing morale.

6) Monthly Sales Goals. You can offer rewards like $100-500 for whoever does the highest sales. You can even up the ante and offer $25 gift cards to all the members of the team of the location that tops the charts in sales for every month. This will help the sales charts climb higher and higher.

7) For many people it’s not just about the money. Their picture on the bulletin board or framed on the wall alongside an “Employee of the Month” badge would mean a lot. They can be proud of their hard work and feel good in front of their peers.

 8) Longevity Bonus. Not long ago I created small pins and badges for people that have served our customers for 10, 15, or 20 years or more. I am sure you have seen this worn on supermarket cashiers. This may help reduce turnover, as people are proud to be part of a company for so long.

 9) Extracurricular Activities. Things like hiking, rowing, or playing sports create a bond between people and makes teamwork stronger. For our 50th anniversary we held a huge soccer match at a park in Glendale and had each location play against each other. It was an entire day of fun, sports, free food since we brought steak and BBQ, and the entire families of associates were thrilled.

 10) Free meals. Offer the meals employees eat at the restaurant for free. If you can’t afford to do that at least offer them a discount. We recently went from a discount to completely free. I am not sure if we will be able to continue to do so with the minimum wage increases coming, but that’s a topic for a whole different chapter.

 11) Allow naps. There are many studies done showing that taking small naps increases productivity for the rest of the day. Do not let anyone get in trouble for sleeping on their breaks, and allow for a nice, comfortable area where they may do so if space permits.

 12) Identify Employee Expectations. Employees can’t do their job well if they don’t even know what to do. Spell this out for them by having written policies which is the next point.

13) Have Written Policies. Employees should know what is expected of them and what rules not to break. You will often see managers upset at employees regardless of the fact that employees were never told about all the rules. This rulebook can be updated and should get better with time.

14) Reward good behavior and punish bad behavior. It is not enough to just reward good behavior; we must also hold those that break the rules responsible as well. While you should not overdo it, appropriate rewards and punishments go a long way toward showing everyone that fairness is being practiced. Document bad behavior and take appropriate and timely steps to correct it.

15) Consider bringing in a coaching service or individual. This can do wonders for improving performance and boosting morale, specifically in the short term. The best coaches are worth their weight in gold and will make you 10x whatever you pay them.

16) Lead by Example. The people get inspired when their leader puts on the same gloves and uniforms they do and gets into the heavy-duty work. I often prepared food myself alongside our crew. I still help take orders and answer the phone, so if you call one of our restaurants that may very well be my voice on the other end of the line. Let the crew see that the boss is not above the fray, and also let them watch you being kind and generous to customers so they can mimic this behavior.

17) Communication is Key. Keep the lines of communication open between the owners, managers, and employees. Nothing is worse for morale than shut doors and owners who never visit or care about their restaurants. And yet you see this happening in so many franchise locations, where owners drop in less frequently than Santa drops down your chimney.

18) Pay them well. Often in the restaurant industry you will find it difficult to find truly excellent managers or especially fast and effective cooks. When you do find someone like this, pay him or her better than the competition. Losing key team members can be a major blow that is not worth the extra money you stand to gain by being cheap.

19) Hire the Motivated. Motivation and having an upbeat personality is not something that is easy to teach. Many say that it’s not even teachable at all. Hiring people that are already motivated to excel and having an optimistic disposition makes your job as a leader much easier.

 20) Use deadlines. Nothing motivates people more than deadlines. Taking myself as an example, I start out projects with clear deadlines that I place on my phone with alerts a week and a day before the actual deadline, so I can work backwards. Try to be an exceptionality expert and not a perfectionist.

 21) Refuse to listen to people’s limitations. People that are unable or unwilling to walk into the future create excuses. As a leader, your job is to motivate people and give them the tools to overcome their weaknesses. Accelerate growth by consistently introducing new technologies and tools for your employees and customers. Fight resistance with training and consistency.

 22) Set high expectations. You’ve heard many people say this. That old quote of shooting for the stars and you may get the moon still holds true. If you write down goals for every month, communicate them to everyone and give your people the tools to get it accomplished, they will get it done

23) Don’t major in minor things. It would lower morale of the leader of a group doesn’t even know which set of problems to approach solving first. Target the most important things and let the small stuff take care of itself. Focus on team building, food quality, and service.

24) Use Secret Shoppers. There is nothing like objective analysis to tell help tell us what we are doing right and where we can improve. Consider hiring a secret shopper program facilitator to help get your locations back on track. Provide the feedback during corporate meetings and let managers know where improvement is needed.

 25) Use visual aids. The posters on how to prevent injury help the cooks not cut themselves or get a serious finger or hand injury. The counter cards we use show customers and cashiers alike the top selling catering menu items. These subtle things help employees feel great because they make staying safe and performing well easier.

26) Create a vision and mission statement. This is a long-term solution for the entire organization to stay motivated. When the team goes off-course, people can look to these vision and mission statements like a map. And just like a GPS, they will guide you back to the right path.

 27) Be stable. Nothing kills a person’s spirit faster than being around a person that acts like a bipolar dictator. Be consistent, and fair-minded toward your decisions. Reward employees publically but scold them privately. Be a person that shows patience and is reliable.

 28) Participate in charities. People feel great about a restaurant that is about much more than just the bottom line. Participating in charities and fundraisers boosts morale of customers and employees alike.

 29) Hold Effective Meetings. . A company without any meetings is like playing soccer in the dark. Nobody knows what anybody is doing and everyone looks clumsy. Have the meetings be organized with a clear timetable; allow people to speak only during their allotted time, and set clear expectations for the meetings. Email everyone the topic beforehand so they know what to expect.

 30) Hold a pre-shift cheer. As the owner, you are the cheerleader in chief. Hold a meeting before the start of the day and motivate everyone to do his or her best! Have them at their stations and ready to tackle the day by being proactive and having their stations stocked, and fully ready for attack! This is especially true for those days with large catering orders, huge catering parties or charity functions.

Sources:

The Steve Iskenderian Interview

Steve Iskenderian is the culinary brain behind many of the new menu items at Zankou Chicken. Blessed with a terrific palette, he is in charge of the restaurant chain’s recipes and food quality. Steve studied culinary science at Glendale Community College as at the renowned Culinary Institute of America in St. Helena, a city near Napa, California. Steve is also an avid martial artist, a skill that he believes is immensely valuable in running a restaurant. In this illuminating interview, he talks about everything from cooking to fighting—fighting to be the best in business, that is.

What are the most important ingredients in making food taste great?

For food to taste its best you have to have your recipe right. You have to have a good recipe—something that’s palatable to the masses, the majority. Then you have to execute the recipe—you have to have the right group of people who care about what they’re doing and pay attention to detail. So it’s not just the recipe about a dish but the recipe as it applies to the restaurant.

In order to come up with the best recipe you have to spend a lot of time researching. These days we have a lot of online resources for doing that. But any recipe you find is almost never perfect. It can be a recipe from a top chef and you can make a dish exactly according to that recipe, but it may not come out good. That’s because there are always subtle things that are part of the recipe but are not mentioned in the written recipe.

The most important ingredient I think, overall, for making the best-tasting food is wanting to be the best. You have to want to be the best. Most people who come up with the best food are after recognition of that—that they are the best. They’re not after the money. What’s most important to them is recognition from their peers and from the rest of the world that they’re really good at what they do. Any professional always wants to get that recognition from peers. And the best way to do that if you’re a chef is to have a successful restaurant.

What are the essential team qualities of a kitchen staff?

First, you need experience. You need people who have worked in the business before. That’s definitely the biggest quality. Also important is the desire to excel. Some people just want their hourly pay and want to be gone, but then you have others who want to impress the boss, who want recognition. You want to have employees who feel like they have to prove themselves to you with their work ethic. That’s always good.

Team qualities can be developed by rewarding employees who try hard. You don’t start with the team qualities. You start with the personal qualities that people have, like the desire to work hard. For the most part, the Hispanic population has a really good work ethic. They work hard. Because they came here from nothing and they’re always afraid of going back to that. They’re the ones who also really appreciate the nine or ten dollars an hour pay, which the average American doesn’t.

If you start with an employee who has a lot to offer, he can go one way or he can go the other way. He can end up being the worst employee if you mistreat him—you don’t pay him what he’s worth, don’t give him opportunity. I’ve seen that happen. Or, he can turn into a really good employee because he had the personal characteristics when he started out—the work ethic, the loyalty and honesty—and you (the owner or manager) nurtured those qualities. A really good employee will not last if he doesn’t have the support from the top.

Our dad used to say that the smoky flavor is really important in a kebab. Is there a secret ingredient in making kebab taste good?

There are three things that are the most important for good kebab. Number one is the quality of the meat. Number two is the way the meat is treated and marinated—certain meats have to be cut against the grain, for example. Number three, the way you cook the meat. You could have the finest beef in the world—$100 an ounce, let’s say, or beef from Kobe, where the cow has been massaged its entire life—but if you overcook it, it’s going to taste the same as the beef you buy from Vons or anywhere else. If you don’t cook beef right, it’s over. Chicken is different. It has more moisture and is less likely to overcook. You can still overcook and dry out chicken, but you have a little bit more room for error.

With beef, your margin for error is in the seconds—between overcooking the meat and getting it just right. Thirty seconds or a minute could make or break beef. That’s because when you take beef off the grill, it actually continues to cook, and that has to be taken into consideration. And you can never do this by the watch because the temperature of the fire is different at different times, depending on how long you’ve had it on. If you’ve had a fire on for a while it’s going to be hotter. Besides, the cast-iron in a barbecue is another heating element. There are some new, flattop grills that come with thermometers. But they’re not respected by chefs who know their stuff—who know how hot the grill is from the moment they put a piece of meat on the grill by the sound of the fire or how fast the meat starts to cook. They may be bought by some fast food chains who want to remove the margin for error by their employees. No one with any real restaurant experience will purchase these types of gimmicks.

Is cooking food an art or a science—or a mix of both?

Food is both an art and a science. When you talk about baking, it’s more of a science. Anytime you bake, it’s lot more of a science. When you cook, you’re making something that comes from the heart. The science part of it is what you learn—the recipe, the experience and all that. You heat a dish, you wait till it gets hot, you flip it around once, you check the temperature. The art part of it is what you do that distinguishes your dish from all the other dishes. The right question to ask is, “Can your dish be better?”

Who’s your favorite chef and why?

My favorite chef is the chef who taught me, whose classes I took. He’s not the best chef in the world. His name is Andrew Feldman and he’s in charge of the culinary department at Glendale College. He’s the best because his classes were fun. My favorite restaurants to go to are the ones that only the locals know about. Because there you don’t have the expensive tickets, the long waits, and you’re most likely to go back. If you go to a fine dining restaurant run by a celebrity chef you’ll probably go there once. But look at Zankou Chicken. You could eat there almost every day. The price is right, the food is quick. I’m more interested in the bang-for-your-buck type of places. One of my favorite celebrity chefs is Morimoto, a Japanese chef, an Iron Chef. He has a restaurant in Napa that’s really cool. Mario Batali is really good chef. He has restaurants in New York, Vegas, everywhere. I like his character. I always used to watch his shows. And I loved the ‘Frugal Gourmet’ show too, by the late Jeff Smith. I used to watch it when I was a kid.

Martin Yan is another one. He’s Chinese and one of the first celebrity chefs, sort of like a pioneer. He had his own TV show. His cookbook—‘How to Make Chinese Food Easy’—was the first cookbook that I bought. To this day, it’s the best cookbook I’ve ever had in my life because the recipes in it are so easy. You can easily make really good Chinese food. Chinese food is one of my favorite things to cook. It’s healthy and it’s fast.

The key with Chinese food is to get the heat really high, right?

Yes, you need a special wok in which the metal is very thin. And there’s an art to cooking the food. The hard part is to cook the meat and the vegetables simultaneously so that they’re both done right. What Panda Express does is boil their vegetables. When the meat is ready, they toss the vegetables in and they’re done.

You took a lot of cooking classes; wine-making classes, bread-making classes. Do you recommend that restaurant owners take such classes? How much of cooking is learned and how much is raw talent?

A restaurant owner who’s successful is likely a chef—or there’s a chef somewhere behind the success—who’s already taken classes and doesn’t want to take any more of them. Or, you have a restaurant owner who’s failing and doesn’t have time to breathe and therefore doesn’t have time to take classes. But do I recommend taking classes? Yes, absolutely. If a restaurant owner doesn’t have a formal education already, then they should get one. You learn a lot. I took a course at CIA—the Culinary Institute of America—in Napa. I also took a bread-making course.

How was the bread-making course?

Kicked my ass, that bread-making course! It was a five-day course on artisan bread. I don’t even like baking. Why I took the course I don’t know, but to be honest, it helped me a lot. I know how to spot good bread now when I shop. Every bread-baking company that’s an artisan bread-baking company—meaning they bake sourdough bread and things like that, they usually have a mother starter—a mixture of flour, water and yeast that’s fermented for years, decades. The one they had at CIA was over 50 years old. They’d take a little piece of it and throw it into a batch of bread about to be baked.

They also do the same thing with cheese. The first time I saw one was at the restaurant at the Ahwanee Hotel in Yosemite. The cheese starter there was about 100 years old. Whenever there was a fire or an emergency in the kitchen, the first thing that the staff rescued and spirited away was the starter.

There was a bread company there once that got burned down, and the only thing the owner wanted to save was the mother starter.

You recently changed our falafel recipe. Tell us the story about what happened and why the falafel tastes so much better now.
In 2009 I took a trip to Beirut, Lebanon. There’s a famous falafel place there called Falafel Arax. It’s a little place in a neighborhood that hasn’t changed much in the past 50 or 60 years. And this restaurant’s been there for about 50 years. The restaurant is no bigger than, say, the combined size of three booths in a typical American diner. All they make is falafel. I tasted their falafel and loved it. I came back inspired. I didn’t know falafel could be that good. So I started trying to make better falafel back then. It took a long time. I changed our fryers. We used to fry the falafel in woks. And the reason our father chose the wok was because it heats up fast, and every time you add oil to cook the falafel you have to heat up the oil. So I wanted something that kept the wok hot. And I noticed in Lebanon that the fryers were shallow and wide. I came back and looked for the same kind of fryers and found them. What we use now is a funnel cake fryer, which has a flat bottom that enables the heat to be distributed more evenly.

I still don’t know how they do it. The funny thing is, I made it once and got it exactly how they did it. But I couldn’t do it again. So our falafel is different.  What makes it better is the ingredients we use. We make falafel fresh every day in every single restaurant and it’s fried to order—it doesn’t just sit there. Earlier, it used to sit there for 30 minutes or an hour. That’s the biggest difference. The falafel we used to have were in the fridge for days. That’s why they were so salty. The reason they had so much salt was because they had to be preserved for days. The other difference is that before we used to blend the ingredients in a huge food processor, which used to create a mush. Sometimes there would still be a big piece of something that hadn’t been processed. Now, we grind the ingredients in a meat grinder. So every single piece is cut the same way and the consistency is always the same. And the falafel is crunchier because the texture of material is a little bit coarser. Also, I changed the spices and made them more balanced. There are about a dozen different spices in the falafel. Things people have not even heard of. We also add fresh ginger, parsley and cilantro.

What’s your philosophy of food and restaurants in general?

My basic philosophy of the business is that restaurants are something that are tied to immigrants. When they come to America, the first question they need to answer is, What can we do to make money? And almost every household knows how to make a good dish. So they open a restaurant. A lot of times they fail because they don’t have restaurant experience or the support. They’re missing a lot of ingredients necessary for being successful—and that’s why restaurants have a high failure rate. But it’s funny—the first business immigrants traditionally think about when they come here, to this day, is the restaurant business.

My philosophy from the point of view of food as a business is that it’s very interesting right now because our food tastes are changing. The Food Network has changed the food business. People are more food savvy. In the years to come we’re going to see the fast food chains either going out of business or evolving.

Yes, MacDonald’s is closing 700 stores and Quiznos is going out of business.

That’s right. Because these fast food chains developed when the supply did not meet the demand. There were so many people in this country and there weren’t enough restaurants. Everyone cooked at home. When the fast food chains went public and began to grow, they sacrificed the integrity of the food. Now, businesses that put the integrity of food first are killing these fast food places. People would rather pay a little more and eat good food. Another thing that hurt fast food chains is the calorie count that they had to post on their menus. As of a few years ago they didn’t have to do that. Now, if you have more than 20 restaurants, you have to post the calorie count for your menu items. Who wants to eat a 900-calorie burger?

People also know a lot more about food because of the Internet.

Exactly. There’s that also.

What’s your favorite quote?

It’s by Babe Ruth.

“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” Babe Ruth

You’re a big practitioner of mixed martial arts. What are the similarities between business and mixed martial arts?

I’m glad you asked me that because I think about this all the time. In business, every day is like a fight. And how you perform in the fight has to do with how well you’re trained. As a fighter or a businessman you always have to practice, always have to learn new things, new techniques. There are so many ways to become a better fighter. You have to think outside the box. In that way, the restaurant business is very similar. To be good in the restaurant business you always have to adapt to the changing times. The UFC champions of five years ago would get murdered by the new fighters right now. Part of the reason for that is that there are more people getting started earlier in mixed martial arts. They’re more athletic. It’s a harder game now. And the restaurant business is becoming a harder game as well. If you’re not learning, adapting and getting better, you’re finished. Thank God, we’ve been learning and adapting a lot. I don’t think there’s a restaurant business out there that’s changed as much as we have so fast.

So, every day is a fight, and you’ve got to train. I was working on rice yesterday for three hours straight to make our rice better. I made batch after batch, tasted the rice, and then did it all over again. After you’ve done something like that you feel like a fighter. You say to yourself, “Wow, this is tough.” You need a lot of patience and resolve to be good.

So is the fight not so much against your competitors but against yourself? You’re trying to master yourself.

Any good restaurant is always in competition, whether there’s competition out there or not. There’s always someone ready to come and take your head off. If there isn’t a contender now, they’re on their way. You always have to assume that. You always have to be ready. Just like a fighter, you have to be ready, always training to be the best. The vision I have for Zankou Chicken is to have the best food, to be competition proof. If you expand too much, go too far, sacrifice the quality of food, you’re going to get taken out by the competition sooner or later.

Better to be lean and mean.

Exactly. Better to be lean and mean. Protect what’s yours and be untouchable.

What are your top Do’s and Don’ts for success in the restaurant business?

Number one, don’t open a restaurant because you think you’re a good cook or you have a good dish—the best lasagna. Go and get an education first. Take a few culinary courses at your local community college. There’s no difference really between the courses offered on the community level and those offered by the finest culinary schools. That’s because when you’re starting out you have so much to learn that it’s going to take you a while to get to the point where you’d want to go further in your education. You’re going to learn a lot at your community college.

Number Two: Have partners, so you split the liability and responsibility. That way, you have more help. It’s so hard when you’re on your own. Pick the right partners, obviously.

Number Three: Don’t pay high rent, especially if it’s your first time in the restaurant business. Don’t spend too much money. Find a place that’s already ready to go and doesn’t take a lot of money to start.

But people say that location is everything.

Not when you’re starting out.

What’s a typical day at work like for you?

To be honest there’s no typical day at work for me. Every day is different. I like going into our office to see what’s going on and I like stopping in at our restaurants to see what’s going on there as well. There’s no substitute for spending time at your restaurants. And I’m always working on new recipes—new ways to make things better. I enjoy doing that, and that’s part of the recognition I want. Every chef wants recognition. Every chef. I want people to say, Steve did a good job. That’s all I want. And of course, the thing that drives me is my family. I want to provide for my family and make them happy. I want us to have the good things. I want us to win.

What’s the difference between someone who has a refined palette—someone who makes great food on weekends—and someone such as you who makes food on a professional level?

You used a very interesting term—refined palette. To have a good palette you don’t have to be a professional chef. You just have to have been cooking a long time. I have a good palette, but there are other people, like my mother, whose palette is a lot better than mine. She’s been cooking and tasting food her whole life. When she says something I listen. On average, women have better palettes than men because women have been cooking longer than men have over the millennia. But there are also people with strong palettes are used by companies to taste their products. There are actually scientific levels of palettes.

Can a good palette be turned into a refined palette—or are there limits?

The palette refines with time. It gets better as you go, the more you practice it. Just like a fighter—the more you train the better you become.

Is it advantageous in the restaurant business to work with food scientists?

No. They can’t help. Food scientists are not used in the majority of restaurants. The only time scientists are used when you send wholesale food to labs to get nutrition facts. If you’re in the food manufacturing business—for example you make hummus to sell at grocery stores—you have to have nutrition facts about your products.

How would you define passion from the point of view of food?

For me, passion comes, first of all, from being humble. You have to be humble to have passion. Everyone who’s great at what they do have a certain modesty to them. For passion to continue, you also have to have a sense of curiosity in making something better. You always want to be better. And that’s where I think modesty comes in. You don’t want to think you’re so good already that you don’t want to become better.

I also feel like passion is either inherited in a certain way or developed over time. People are born with a passion for certain things. I know I had a passion for food since I was a kid. I had a curiosity for food and cooking and I enjoyed it. It was also nurtured in me because my family is in the restaurant business. So, you also have to have the right environment for passion to develop.

What’s the best part of your job?

The peace of mind that comes from knowing that I’m doing my best for my future and making my family happy.

What’s the worst part of your job?

Because we’re a family business, sometimes the business gets in the way of the family. We’re business partners and family at the same time. Sometimes we disagree, feelings get hurt, and you don’t want to hurt your brother’s feelings or your mother’s feelings. But on balance, when we disagree, the end result is better because we’ve argued about everything. We’ve covered all the ground there is to cover. Sometimes there’s no escape. You go home and you talk about it. It’s late at night but you talk about it.

Learning how to compromise and not always get your away is another element. To go back to the rice example, I’ve put a lot of time and effort into trying to come up with a better rice recipe for our restaurants. I was thinking recently that my next step is to make a presentation—to make my case for why we need to change our rice recipe. But I thought to myself that the next part of this project is not to convince my family to change the recipe. Rather, it’s to put the information out there and walk away. Never try to convince people. The truth is convincing enough.

END

Restaurant Lease Lecture

This article is copyright 2015 Dikran Iskenderian. You can share this post on social media but please do not reprint, reproduce, or copy and paste without written permission from the author. Thank You

The Top 30 Things to Consider Before Signing a New Restaurant Lease

1) When the location was an existing restaurant that failed or the owner sold the location to you and moved on, consider that it may have to do with that area not being so great. This puts you in an advantageous position during bargaining with the landlord. Whether it was the fault of the leaders of the existing restaurant or the economic situation in that area is irrelevant. You can negotiate better, and you should use the fact that it failed before to ask for these terms:

a) No charge for the first 3-9 months during construction. Extend the lease commencement date as far as possible.
b) Not paying rent until the doors open for business
c) Rent increases start on year 5-7, not on the first year.
d) The landlord pays for part or all of the requirements to get a new restaurant up and running.
e) The landlord pays for large signage and includes it in the lease, free of charge.
f) Get plenty of parking. The rule is you need at at least 10-15 dedicated parking spots for a busy restaurant. You don’t wantto argue about this with your neighbors later on. If the rule for the shopping center is shared parking for all, get that in writing and make sure they post signs forbidding all employees to park there as well. Here in Los Angeles not having enough parking is a sure way to kill off your restaurant even before it starts making money.

2) Check the area for any damages. If there was a fire,it is usually considered a total loss for the area the fire consumed. Make sure the city’s fire department inspects it and clears it as safe for a new restaurant. If not, the landlord should pay the fixing costs, after all what happened before you came into the picture is not your responsibility.

3) If you are not 100% certain the restaurant will succeed (and how would we know unless we try, right), make sure you include a break clause in the lease contract. This can be worded in multiple ways. Some people write it as a clause that if the restaurant is not profitable within the first 1-3 years, you can move out without any penalties.

4) If the space is in an indoor mall, or a large outdoor shopping center, consider an exclusivity clause. For example, if we opened a Zankou Chicken at the Grove, we wouldn’t want another chicken restaurant or kabob restaurant to open in the exact same shopping center.

5) Make sure the wording of the contract does not overt penalize you for missing a payment. A lease contract for a commercial restaurant can be written in a million different ways. There is no standard contract, so make sure that it doesn’t have writing in there allowing for your eviction within 3 days of non-payment. Your check can default for a variety of reasons, and you would need at least 30 days to get your finances in order.

6) Make sure you hire a licensed contactor to measure the restaurant space with accurate tools. This is common practice, and these experts have the tools of the trade in order to do this effectively. Make sure you get the square footage in writing, and present it to the landlord as an objective, third-party measurement of the location. Often landlords miscalculate the square footage of their property. Sometimes they include exterior walls, and other areas you can’t use. More often than not, it tends tobe in their favor (overestimating how large the space is).

7) Your “Pro Rata” share of expenses is determined by dividing the size of your store by the total size of the property. For example, a 2,000 square feet (your restaurant space) divided by 20,000 square feet (total shopping center) equals ten percent(10%). If you are the only occupant you will have to pay 100%, but sometimes if your restaurant is very popular landlords tend to charge you even higher than the pro rata share. Never let this happen under any circumstances.

8) Make sure you ask to see what the triple net is being paid towards. Do your due diligence and see if the landlord is actually paying his or her taxes. We had one situation where we were paying the property taxes through the triple net, only to find out the landlord was a crook and pocketed the money and ran. We had to pay an entire year’s worth of property taxes, which was over $100,000. It was a disaster.

9) Speaking of the triple net, if the landlord is charging for area maintenance and not actually conducting any real maintenance, the responsibility is on you to remind them to do so. Trees need to be trimmed, lights need to be replaced, and broken floor tiles must be replaced. If you ask the landlord to fix it and he/she doesn’t, this can become a problem. You may have to speak to an attorney and send legal letters unless they fix it. Take pictures, send letters, have witnesses, and do everything you can to build a case.

10) What will the landlord be responsible for? Items that should be addressed include the size and capacity of the HVAC system, the capacity of the electrical system and whois responsible for making modifications to hoods and ceilings.

11) Will the landlord make any necessary changes to have the place be ADA compliant? Have it all in writing. You should get a professional contractor that specializes in ADA to let you know if you need to add a ramp, change the doors, and have a wider hallway or a lower counter. These things can cost tens of thousands of dollars.

12) Make sure you have a well-worded assignment agreement. What if you want to sell the business?If the lease doesn’t have a nicely worded assignment clause, you may have no choice about moving out or you may be forced to sell under the landlord’sconditions. The worst-case scenario is that you sell your own business and the landlord pockets part or all of the money. This is how many crooked landlords have the contracts written, so be very careful.

13) Make sure to include extensions to the lease if you feel the place will be truly profitable.Here in Los Angeles, we often include a 5 year or 10 year (2x 5 years) terms of extension. Make sure the option to extend the lease is not tied personally to you and your business, such that when you choose to sell it, the new owner would also have the option to extend. Otherwise, selling the business may prove difficult.

14) Limit the personal guarantee. If you are signing a 5 -15 year lease, you can negotiate to have only the first 2-3 years under the personal guarantee. Otherwise, having an LLC or corporation will not protect you should you default on your loans and the business goes under. The landlord can come after you for the entire duration of the lease, depending on the wording of the lease and the personal guarantee. Many people assume that just because their business is a Limited Liability Corporation they are off the hook, when in fact they’re not.

15) Give yourself time to do homework before the lease is about to expire. Typically, you should be thinking about and renewing your lease 1-2 years before it expires, before the landlord tries to not respond to letters, or avoid you during this process. It is in their best interest to delay this as much as possible. You need to see the new market rent rates in the area, and see other market conditions like vacancies in the vicinity.

Prepare a lease expiration schedule that lists all your locations, when the leases expire, and which locations have extensions, including how many years the extensions are for. Work backwards and start negotiations to renew the leases least 4-6 months before they expire. I prefer one year. Give a copy of this schedule to your real estate attorney, your lease advisor, and all partners.Remind each other so that everyone can be held accountable. Speaking of lease advisors, you should get one…

16) Use a professional service like the Lease Doctor™. Please read and carefully study the chapter on this, and remember that lawyers are not good at helping you form these contracts. They are good at only reading over them (see#30). A professional commercial lease negotiator will do the heavy lifting for you, and you can come in and iron out the details. They will typically earn you 100x, sometimes a 1,000 x what you pay them for the life of the lease. There is no better investment.

17) Choose a corner location or a drive-through. Many major restaurants and coffee houses like Starbucks are now exclusively signing corner leases or locations that can afford a drive-through. City laws that allow drive-through locations vary, but are usually very strict.

18) Pick your battles. Don’t try to negotiate every detail of the entire lease. You will annoy the landlord very quickly with that kind of strategy. Choose the few,very important details that matter to you most and push for those. It can be an exclusivity caluse, corner signage, a nice patio, negotiating for the drive-through spot in the shopping center, etc. The devil is in the details,but not during the beginning or middle of negotiations. Be reasonable.

19) If you care about certain things you want to take with you at the end of the lease, write it down in the contract. Anything that is bolted to the ground, the fixtures and hoods,all belong to the landlord. Any fixed improvements like tiles and fixed furniture also can’t be taken. So if something really matters to you make sure you make a point of having it in writing.

20) Research the comparable rents in the area and show the landlord. Third party, independent research is difficult to argue with. This does not guarantee that the landlord will listen or bend, but it’s much better than your opinion of “This is tooexpensive”.

21) Have your architect inspect the premises before signing the lease. Make sure that the place is up to code on structure requirements with the city. Any city code requirements and mandatory updates that are the landlord’s responsibilityshould be paid for by the landlord and/or deducted from the lease.

22) Inspect the bathrooms. Every city has code requirements for space in the bathrooms,typically for your handicapped guests. Some cities require two bathrooms, and some are OK with having just one. In older establishments and tight spaces,restaurants used to be able to get away with having NO bathrooms, although this has become exceedingly rare with any new construction.

23) Make sure you have a grease trap. Here in Los Angeles, a restaurant is required by law to have and maintain a grease trap, which is basically a small-car sized steel box that traps grease and doesn’t allow it to flow through the cities pipes,clogging sewers. It usually costs thousands of dollars. If the restaurant has no grease trap, you will be required to create one. Will you pay for this or will the landlord? Even if you will pay for it, asking the landlord to pay for it can be used as a concession in further negotiation. By the way, if you open a restaurant without a grease trap, it will cost you $10,000-$15,000 MORE to doit later because the entire ground has to be removed and dug, in addition to steep city fines.

24) Construct a clean, well-ventilated garbage disposal area. Many neighborhoods are now very well organized, and it’s a good idea to carve out this area in stone and make sure there is a brick wall surrounding the dump. If not done well, vagrants can come and pick at the food or remove plastic containers, creating a mess. Our landlord at one of our locations paid her own construction company and didn’tallow us to do it ourselves. The cost? $17,500 for a simple brick square around the dump. We had to pay for it along with the other renter. So consider this in the lease and kindly ask the landlord to pay for it beforehand.

25) Do a criminal background check on the landlord. This is especially for people you know nothing about. One of our landlords was a crook, who had loan sharks looking for him and a sheriff showing up every few weeks asking about his whereabouts.You need to know whom you are dealing with.

26) Don’t feel pressured by the broker. Most brokers make deals every week, so for them you are just another commission. For us restaurant owners, however, we are in it for the long haul. So always be ready to walk away and act as though you have the upper hand.

Don’t getemotionally attached to the property just because you signed a letter of intent. Always remember that the broker’s best intentions are only to themselves, not to you, since they work off of commissions. That means the higher the rent you pay, the more they make. Depending on their contract they can also make a slice off the deposit and other fees as well. Negotiate the deposit down to as low as you can, because most of us never get that back.

Don’t fallfor lines like, “There is someone else willing to take it next week?” Ask many questions to the broker about the landlord, and when they refuse to answer ordon’t have an answer do the research yourself. The more you know about their positions, their strengths and weaknesses, the better off you’ll be.

Really, well then let them take it. Nothing bothers me more than people who don’t have along-term interest in your business acting like they care more than they actually do. So take your time, play your cards right, and always act in the best interest of yourself and your family business. Let the broker wait. Always have one foot out the door if it doesn’t go your way, which leads me to the next point.

27) Have a strong BATNA. BATNA is negotiation terminology that stands for “Best Alternative To a Negotiated Agreement.” It’s another way of saying that you have many good options. Which bring up another question. Do you have many options?

Have you looked at or talked to other landlords in the area? You should have at least 2-3 other option in that area you are willing to give rent to. If you don’t, you don’t REALLY have a BATNA and this will show during negotiations. You won’t be able to always fake your hand and pretend you have better cards than you already do. Just like in real poker, the stakes here are really high. So have well-researched and measured alternatives.

28) Make sure you can afford to pay the rent before you sign. Typically, the rent should not be much more than 10% of your projected sales. If you expect to make $150,000 per month, the rent should not be more than $15,000 per month. Can you have a place that charges much less but also makes you a lot of money? Sure. You can have a restaurant that pays $4,7000 per month in rent and pulls in $270,000 per month. It’s all in how you plan it, where you open, and how rich the landlord thinks you really are. If you have a strong brand name or are negotiating on behalf of a well-known franchise business, consider opening an anonymous sounding LLC and negotiate under that name.

Walt Disney was smart because he negotiated and purchased miles of empty land in Florida many decades ago. There was were nothing but dead land, swamps, or dry open fields. Him and his brother Roy were buying all this land under anonymous names. Here’s a fun fact:many of those names are now on the windows in Disneyland’s Main Street USA. After people found out that Disney was going to combine all the purchased land together and make Disney World, the prices for all the surrounding land immediately skyrocketed.

Anyway, the point is you are much likely to get a better deal if people don’t know who you are vs. using a well-known name or brand.

29) If you are investing a lot of money in the building, consider a longer lease. A 10-year lease is not that long for a tenant that has spent $800,000 in renovations. For example on our Burbank store, that’s how much we spent. We have a hand-painted dome,hand-made tiles, beautiful lighting fixtures, and a $100,000 glass dome on the patio. That’s not easy to walk away from. So consider doing a long-term lease if this is the case. Cheesecake Factory is known to spend upwards of $6 -$12million on some of their locations, and they routinely sign 30-year leases with extensions.
30) Finally,make sure a qualified commercial real estate attorney goes over your contract before you sign any lease. Make sure it’s not a clown who doesn’t know anything about real estate. We once worked with a guy who charged us $50,000 and made us sign a terrible lease that was still 99% favorable to the landlord.

Some lawyers are great at pretending they are good at something when they are terrible at negotiation and know little to nothing about real estate contracts. Remember,they don’t teach them this stuff in law school. They only teach them how to not get in trouble, which is very different from solid, aggressive tactics you are going to need.

To determine whether they are right for you, get referrals of previous people they have worked with, and call these people up. Ask them questions such as “should I need sublease clause (to allow you to sublet the space to another business if necessary)?”

Should I get a break clause?

Should I add a paragraph detailing co-tenancy (if the landlord has an anchor tenant that is extremely popular and draws in a lot of foot traffic, this clause allows you to break the lease if this tenant is not replaced within a certain timeframe)?

Ask that the lease be put in the name of your LLC and not your name personally. Ask if they know how to structure it like this.

Do they know how to word the lease so that you are not obligated to pay the landlord any legal costs should there be litigation down the line?

Do they know how to deal with a default payment?

Ask the lawyer how they intend to help you make the lease better. If they say you can’t make it better,fire them on the spot. They should find out weaknesses in the contract, outline line danger flags all over the place, and save you from potential trouble.That’s their job. Their job is not to pat you on the back, praise you, and wish you good luck on your restaurant.

52 Ways to Increase Restaurant Sales

Watch the online class videos we created and try to match the order of what I said and the spirit of what I said to this list as accurately as possible. This list itself can be longer but should match that order. Get rid of any repeats and replace them with new methods for the book.

1) The three most important ways to make more sales are obviously the following:

  1. a) Reduce costs
  2. b) Increase Price
  3. c) Add to the number of customers.

Here we will focus on attracting new customers. The method I found that works best is to set it up and have it run automatically on your business card. In my case, I have an American Express Platinum card and I run small ads, social media campaigns, Google Ad words, and mobile application ads all on this account. It’s set up to charge my credit card and is paid by my business automatically, every month.

This insures that we reach people every day, every week, and every month. Just like us, your business needs new customers all the time. Once you automate the system, it works for itself. The results are amazon:

  1. a) a growing social media presence
  2. b) a growing email list
  3. c) more faces in the door, new smiling customers, a happy base of people and a happy accountant because you will (hopefully) become more profitable.

2) Encouraging more visits; a greater frequency of existing customer purchases.

Provide incentives to your core customer base to come back, and come back often. Remember those coupons on Starbucks receipts giving customers $2 off  any drink after 4 pm the same day as long as they made a purchase? That was smart because it encouraged people to visit Starbucks twice. They may have had a coffee in the morning and visited to Starbucks on the way home from work. They may purchase a sandwich on the second visit.

3) Increase overall spending.

This goes beyond up selling. There are many ways to encourage customers to spend more on the same visit. The creation of our catering menu took me over 2 years. Now, we are blessed enough to have many $300, $400, and $500 orders daily. We helped the customer to spend more; and we made their order processing easy.

We used beautiful, bold pictures and a super-easy way to order. It translated to increased sales, happier customers, and a healthier bottom line. The incredible thing about it is it doesn’t take us that much longer to prepare a $500 order than it does the other orders. We work on it while we are making orders for single order customers.

Take care of your customers and they will take care of you.

4) Control food costs.

This goes back to what I said on number one. This is one of the three most important ways to make more money. Increasing price may or may not have a drawback from customers not wanting to spend too much. But reducing your food cost is always a win-win.

Granted, technically it’s not a way to increase sales. Your sales would remain the same. Arguably sales may increase because as a result of reducing cost, you may not have to increase price. So in that sense it may increase sales, but generally this method is a great way not to increase sales but to increase PROFIT, which is more important than increasing raw sales figures.

Shop around for different distributors. See and talk to other beef and chicken distributors, talk to a different dry goods distributer, and find a different produce person. You can use negotiation tactics to reduce your cost. Even if you stay with the same people you’re working with now, you will put them on check. They will think twice before they increase your costs all the time.

Make sure your menu highlights the items that are lower food cost to you, and ones that will increase profit. High profit margins on your menu should have preferable photo treatment and possibly more real estate on the physical menu itself. This will encourage people, subliminally, to purchase those items. For example, a steakhouse probably makes much more profit from the win list than the steak itself. This is why they bring you a huge wine list and appetizers first. Their cost for high-grade meat is very high.

5) Consider a price increase.

In the food industry, we are dealing with commodities. These commodities, things like tomatoes, potatoes, chicken and beef prices, they often fluctuate. Depending on weather conditions, government regulation, political turmoil, and the price of oil, our food costs can increase dramatically. Educate yourself on IBP and commodity prices so you are in a better position to negotiate.

The only way to deal with this is by doing incremental price increases. Well, there is one other way, one which we never considered at Zankou Chicken for over 50 years. And that is to reduce quality. This is what every big box fast food chain has done, reduce the quality of the beef and chicken they serve you, add fillers like protein to the beef to increase its weight, etc. We will never go down that road because for us, our customers deserve the best. You should never go down that road either.

Always maintain the line of quality. Customers will understand that we need to adjust prices every once in a while. My advice is to look at the cost of everything and to look at it often. Always evaluate the market conditions. The moral of the story is customers can swallow a $1 increase every year much more than they can $3 once every three years.

And with the recent minimum wage hikes making $15 and $16 minimum wage a reality in the next few years, more price increases will be inevitable.

One man’s wage increase is another man’s price increase.Harold Wilson

6) Consider having a Specials menu

Having a happy hour menu isn’t just for bars or Mexican restaurants. Everyone from coffee shops to sit-down restaurants now offer some kind of happy hour specials. This generates a lot of free word of mouth advertising and goodwill from customers. It also increases first time customers.

7) Concentrate on creating a sales culture. 

Every person on your team has to have sales engrained in him or her. A solid sales culture encourages the waiters to sell, the cashiers to sell, the managers to sell. This requires constant, quality training. Give employees incentives and rewards for selling by tracking their individual sales on the POS system. Everyone from the cleaning person to the owners much be trained in selling.

8) Write juicy descriptions

You don’t have to be a professional wordsmith to come up with colorful descriptions of your food. You can hire a talented writer or marketing firm to help with this. The words should make your mouth water; the descriptions should make you hungry. if they don’t, consider re-writing them immediately. Don’t underestimate the power of words and stories to increase sales. Words are very powerful.

9) Use window decals

I am not talking about cheesy ones the fast food places use. You can now create high quality graphics on see-through vinyl posters. This makes people driving by hungry. Thousands of cars drive by our locations every day. The right kind of window dressing can make them hungry. Use great shots of your food, and of people enjoying life eating it.  Remember, many of them are driving home from work and are already hungry, so if done right these posters might be the only encouragement they need to pull over and make a purchase! I can hear the jingle of the cash registers already.

10) Do motivational, pre-shift meetings with the entire team.

Huddle the team together and do a small motivational speech in the morning. I have done this many times, especially on days we know we had huge catering orders. The team needs to know you are there and that you care. The team needs to be motivated and they all have to work together in order to make the day successful.

A successful, cheerful team provides a great presentation to the customer. Having an amazing staff can make any restaurant look beautiful in the hearts and minds of its patrons. There is nothing more important than teamwork and positive energy to make a restaurant successful at selling.

Make your motivational speech short and sweet. Keep it positive. When I do mine, I always buy them coffee or sweets.

Remember the pep talks from the movie like Wall Street (Gordon Gekko) or the Wolf of Wall Street (Jordan Belfort)? It doesn’t have to be earth-shattering drama like this; it just needs to be honest and effective at mobilizing the team and increasing morale.

11) Conduct an In-House Brainstorming session

I have been in many of these and they always produce great ideas. This is where you sit in a circle and take turns producing ideas to help push the marketing of your brand to increase sales. There are a few key rules to follow when you do this.

Make sure no one is allowed to say the words “No, can’t, won’t, costs too much, too much money, illegal…etc. Remember, this is not something where the company has to do anything people are suggesting. It’s just a positive and motivating way for the team to participate in marketing. Allowing everyone’s voice to be heard is good enough for me. But when people know their ideas won’t be shut down, they are much more likely to speak and come forward. Don’t negate anyone’s ideas, just give people an equal amount of time and let them talk about their ideas.

You’ll be surprised with the great amount of fantastic ideas that will come from this. This idea alone is worth so much if done effectively. Conduct a subsequent meeting where you discuss the validity of these ideas, vote and agree on the best ones, and write out specific plans on how and when to achieve them. Don’t wait more than a week from the previous meeting to do this, lest the ideas grow cold and die. Keep the momentum going!

12) Do Live Music

Consider featuring live music performances at your restaurant. Just like a nice work of art, good musicians attract a lot of people. Seek out local artists and see if they would agree to perform for free in exchange for allowing them to sell their CD’s that day and pass out business cards. If not, pay a nominal fee and make have them post your restaurant on their web site. Cross-promotions will allow new people to hear about your brand by increasing your exposure.

13) Run Contests

Right now we’re giving away 4 tickets to Disneyland and a Family Meal. Participants have to give us their email, and no purchase is necessary. It’s allowed us to collect hundreds of emails. It was done to commemorate the inaugural launch of our new email program we’re conducting with Mail Chimp. It’s important to have a growing list of emails so you can let people know about contests or other important news like the opening of new locations. Contests are very exciting and provide the following advantages

  1. Amazing word of mouth advertising for your brand; people are excited to win something so they tell their friends and family! Especially if it’s something like a Disneyland trip where they can bring them along.
  2. It gets the fans and customers excited and energized about your brand more than any commercial ever could. Basic human psychology teaches us that people are inherently selfish (they want to win something or get something). This is where we use that to our advantage.
  3. Besides getting the fans excited, it gets YOU excited. Imagine being there and giving away prizes, taking pictures with your customers, and posting it on social media. That’s usually not how your typical day goes.
  4. It’s usually viral on Social Media, where people love to share other people’s victories and celebrations.

14) Pass out Samples

I always tell our cashiers to never let anyone walk in the store and leave without at least trying something. We often pass out samples of our best-selling chicken Tarna™ and beef shawerma. Passing out free samples is always a great idea. If you’re reading this and you own a restaurant in the mall and not doing this, you’re missing out on a great opportunity.

In places like malls or beaches, there are a lot of people that are bored and just walking around hungry. A free sample passed out in this situation can easily turn into a quick sale. You can even up the ante and have someone stand in the hallway, wearing the company T-shirt or uniform and pass it out there. Be creative and adventurous. We once had a person do this in west LA wearing a chicken costume on the corner of Santa Monica and Sepulveda.

15) Invite Charity participation.

We get tons of calls and emails every week about charities that need money, so we created a new program where we help them do this. Local charities participate by handing out fliers and having people eat at our restaurant. In return, we donate up to 20% of the total receipts to their non-profit organization if they can bring over $1,000 in sales.

Think of what this does. It helps student try our food for the first time. In turn, their families and parents are now introduced to our food. In addition to this, our restaurant looks like someone is throwing a party. We have balloons, ribbons, confetti, face painting for kids, and all around happy campers everywhere. This increases the morale of the entire store, makes us look busier to new customers, and more people hear about the program! It’s a win-win because at the end of the year you can use the donations as a tax deduction. As an added bonus, we are making the community better!

16) Offer delivery

There are a host of new delivery-based companies using apps and drivers to help you take your food to potential clients. These include the local company LA Bite (in Los Angeles) and the national brand Grub Hub. Even Uber is joining by allowing people to be paid drivers to take food for restaurants. It’s an amazing and exciting new stream of income we are looking into right now, so it’s something to consider. It broadens your customer base because many people cant drive and want to avoid traffic, especially the corporate clients ordering during lunch.

17) Offer an Express Check out lane for Take Out

This is a much-requested item from this list by many customers. If you have a separate line for takeout, they will call ahead and use it more often. People hate to wait.

18) Offer Online Ordering

Consider using your web site or apps for ordering. The Chipotle app makes this easy, and many restaurants are experimenting with this. One caveat: you have to make sure the company and system you use if foolproof, lest you upset people by getting the orders wrong (or not getting the order at all). So make sure to do all your homework before you proceed on this one.

Also consider, to make online ordering easier, creating an exclusive app for your restaurant. Branding your business is important. Many people now are online and on iTunes and Google Apps, and you have to be where your customers are. One issue with this is it has to be done well. We had a situation where I created an app with a company based in Florida and the app was not functioning very well. The design was poor; the orders were not coming through, and instead of wowing customers with new technology we had upset and hungry people with wrong orders.

I quickly learned that if you want to make an app, it has to be done with excellence. That means it has to be designed well, easy to use, and orders placed on it have to come through. Chipotle has done this well and so has Starbucks, with their newest app update allowing orders directly from your phone without having to talk to anyone. So do it right or don’t do it at all.

19) Consider the Yellow Pages.

This is a must if you own a Pizza place or other delivery-heavy industry. Many people still use this, and many log on to YP.com and other yellow-page type businesses such as AOL’s City Guide, ZAGAT, and Trip Advisor. If your area is heavy on tourists, you should be doing this.

20) Upgrade the Décor.

Every once in a while, we have to beautify the atmosphere. Some of our older stores need a facelift. When considering one, think of refreshing and exciting colors, higher ceilings, better acoustics, more comfortable chairs and tables, and big-screen TV’s. In the old days, my father used to say the furniture shouldn’t be so comfortable that people sit for hours because we are in the fast food business. A lot has changed since those days.

Nowadays, people want to be comfortable and the environment is much more important than it used to be. Better-looking storefronts, better signage, and new awnings can attract people like moths to a flame. When people see the new designs, they will love it and feel revived. The business itself will see a jump in sales. The use of trees and plants has been known to add a relaxing vibe to the atmosphere. Also consider better colors, a better menu board (even a digital one), and better bathrooms.

21) Bring in outside advisors

If you are a family business, like us, you have been doing this many years and are often closed minded about new ideas or outside influences. Family businesses tend to be tight-knit, holding our cards close to our chest. The problem with this is, often we become tone-deaf to our own problems and issues. Sometimes it takes an outsider to come in and fix things.

Consider using outside advisors when it comes to how to grow the business. You may be surprised how much they can help, bringing in fresh ideas the family never thought of.

22) Participate in blogs.

Create a blog and write in there routinely. Have a blog on your company web site. Make sure the marketing team is in touch with what is going on the social realm. Follow the trends on Twitter and on Facebook which are usually hash tagged and found on the bottom right corner. Many people may end up reading about your business on a blog. Does your restaurant offer senior discounts or special corporate client rates? Blog about it! People want to know.

We created and run our own blog on our web site now, and we have to come up with a whole new blog post every month. This forces us to be creative and come up with new ideas to post to our web site. Thrillist is a great blog right now, which has already featured us twice. LA Weekly has a great restaurant reviews section, as does LA List on Facebook. I will list my top 20 favorite food blogs in the word document so check them out, get inspired, and starting writing your own food and restaurant blog. If you want to check out my own blog, head on over to The Restaurant Marketing Expert™ on WordPress.; I will post that link as well.

23) Create or fix your Google Places profile

Google Places is catching up to the other sites like Yelp and Facebook pages in terms of importance. Check your location page on Google Places. Do they have the right address and phone numbers listed? Sign up and prove that you are the owner with Google (often they verify this via email or regular mail followed by a possible phone call). This is important so people know all the facts about your location. No other site is as important as Google for people searching your business, so do this right away because this is how Google classifies your restaurant. Consider buying Google Adwords and further up your rankings. for this page.

24) Get active on Foursquare

Foursquare is a great platform where people check-in your location and can get deals and information about your restaurant. You can offer something simple like a free drink or other promo, and every time they check in their friends can see where they were. Increased check-ins to your location will rank you higher to others and increase your restaurant’s popularity. Make sure the info is correct on your Foursquare page and be active on their app.

25) Fix the Patio

The patio is a place where people love to congregate and eat. Here in Los Angeles, we have beautiful weather and since it’s usually so hot people love sitting outside. Many of our customers have dogs and can’t bring them inside, so they prefer the patio and they feel their dogs can sit and enjoy time with them. A more beautiful patio will pay for itself many times over. Consider getting heat lamps, better lighting, better seating, weather-resistant furniture and umbrellas with your logo on them. All of this attracts an amazing amount of passers by and will increase foot traffic and therefore, sales.

26) Create a Social Media Poster

This is where people see how they can find your brand. Make it easy for people to find you on Foursquare, Instagram, and Twitter. Ask people to check in. We are not supposed to ask people to rate us on Yelp (as per their guidelines and recommendations), but you can also have the Yelp logo on there. This can be small and attractive with a nice “Welcome” sign. For example for us it can be, “Welcome to Zankou Chicken”.

Connect with us on ZankouChickenLA (our Instagram Handle) and on Twitter at Zankou Chicken LA and on Facebook at ZankouChickenInc. Notice these addresses are somewhat different. That’s because each social media channel has different name requirements and often times, simply using the brand name was taken by E-squatters. So do the best you can and choose handles appropriate for your business. Increase your online visibility by making it easy for customers to find you where they are.

27) Put Yelp on your web site

We have our designated Yelp pages attached on our web site to each location. When people are visiting our site, our Yelp location that corresponds to that location they are looking at is only one click away. This will increase your overall score because now you are sending your best fans to place reviews for you. Of course, we are not overtly asking them to place reviews for us, however that is exactly what’s going to happen. Having a high score on Yelp is important, no matter what your opinion of Yelp may be (and I know for many of us business owners it’s negative and that’s OK.)

28) Participate in Video-based Marketing

There are many channels where you can make creative and cheap videos, such as YouTube, Vimeo, Instagram (they do videos now as you know), and Vine. The younger crowd is heavily using SnapChat, so if you own an ice cream store, hot wings place, or candy shop consider creating a channel there. People love videos and they love interacting with videos in the social space. If you don’t want to do it yourself there are many marketing companies out there now producing videos for cheap.

Make sure to keep creating and posting videos. Not only will you become a better video producer and videographer, but also you may end up with a hit! You never know when one of these videos may go viral. For example once we had former laker Metta World Peace participating with us at a dodge ball tournament. I took my Sony camera and recorded the entire event, which was to help raise money for his charity. Well, guess what, ESPN ended up posting my video on YouTube and linked it to their web site! They even mentioned it on the air during their live television broadcast. My video shot up to over 250,000 views! I will post that video here as an example. So be creative and adventurous! You never know what’s going to happen.

29) Don’t underestimate the power of celebrities.

Here in LA, we treat our celebrities like kings and queens. But with all the magazines and trash talk about many of our gifted artists, it’s easy to take many of them for granted. As far as marketing goes, it’s important to have some celebrity contacts and make sure they visit your restaurant. Never underestimate the power some of these singers, actors, and artists wield on their fans. Some of them have super fans, and these people will follow their every move and read their every tweet. Try starting small, and follow many of your favorite celebrities’ Twitter profiles. Re-tweet them and invite them to try your restaurant for free, in exchange for a simple shot out. Let the positive word of mouth about your new place spread like wildfire!

We’ve been fortunate enough to be inside a song from Beck, be featured twice on Saturday Night LIve, multiple times on New York Times and LA Times about all the actors and artists that eat with us. More recently Hillary Duff was photographed eating at our north Hollywood store by TMZ. Justin Timberlake, Tyra Banks, and many others have been known to tweet about us and eat regularly at Zankou Chicken. Now are these people better than the rest of us? Of course not, we are all created equal, but they undoubtedly carry jour clout.

My dad used to smoke cigars with Rick Dees. He would help him during Christmas and they would both pass out food and gifts to the homeless shelters in downtown LA. In exchange, Rick Dees would give us shout outs and even once invited us to speak on the air at 102.7 KIIS FM. I was terrified! The point is make new celebrity contacts and don’t be shy from these industries because they matter.

30) Do Customer Appreciation Days.

We did this in 2012, when we reached 50 years in business. We gave away $5 whole chickens, $10 family meals, and other door buster deals. We had lines out the door and record attendance.

The only problem was many of these people never came back. So while I do recommend doing Customer Appreciation Days, I also want to make sure we follow up and do our best to make these people customers for life. That is difficult when they are people that just want to take advantage of an unbeatable deal. Sometimes throwing events like this is great just to generate word-of-mouth advertising and raise brand awareness. They are not great for long-term strategy.

31) Frequent buyer cards. These work great for car washes and juice shops, so why not make them a staple at your restaurant? Not only is this a great way to give away something small and reward your loyal customers, but imagine your beautifully created business card sitting inside a customer’s wallet. It’s a constant reminder for them to visit again and again, sitting beside the credit cards like a permanent billboard. Speaking of billboards…

32) Rent a billboard. As I mentioned earlier, if your restaurant is at a major intersection or beside a freeway this can bring in so much foot traffic it will easily pay for itself in 2 weeks and make you profit for the other half of the month. Go for it!

33) Choose a colorful paint job that stands out from adjacent buildings. This has to be done in a way such that it’s not tacky. Get a designer and make your building stand out! It will be noticed 365 days a year and you won’t have to pay for it like you do a billboard.

34) Create or add better signage. In most cities, signage rules require that only one side be allowed on a building per side of the building (or facing the street). As signs have proliferated signage rules and regulations have increased and cities are making it more and more difficult for restaurants and bars to have huge signs. It’s come to the point that in expensive parts of town like Hollywood or Century City, you have to pay thousands of dollars in city fees for permit allowances on any sign that’s out of the ordinary. In some cases these fees exceed $30,000 or more on tall buildings. For rich landlords or expensive restaurants, paying tens of thousands in fees and building permits is still a great deal if that sign can increase gross margins every month. If you have a wall facing a busy street or intersection, consider adding signage or replacing old signage with much better, well –lit replacements.

35) Purchase web site SEO. There are companies that specialize in helping people find your restaurant on Google. They do this buy placing key words and phrases throughout your web site, optimizing it for Google search engine’s robots to make it easier to find. This increases your web site’s rank, and in theory will also increase sales. Consider which key words to add, and use a web site optimization company to help in this effort. It really is a specialized task so I don’t recommend you try it alone.

36) Revise your web site. I am just finishing up a huge revision of our web site. How long did it take me? Over 18 months. Now why would I work on a project almost every week for 18 months before I even launch a new web site? Because that’s how long it takes. Writing this book was a long process with many twists and turns that took me over 4 years. Was it worth it? You bet. Your web site is your online hub, and it’s very important to make it shiny and looking as nice as possible. I recommend re-designing your restaurant web site every 7-8 years.

37) Create amazing paper menus. Paper menus are like walking billboards. People love taking them back to work, back at home, and often pass them out to friends and family. At the office, people look over them and order together. I can’t stress enough the importance of a beautiful, well-made paper menu. It is vital that it’s aesthetically pleasing to the eye, with multiple photographs of all your food items. I worked for over 8 months on the recent revision of our catering menu. I took my time and re-took many of the shots from the previous menu, sharpened up the descriptions, and added many new items customers were asking for. Just like the web site, the paper menu should be revisited and re-created every few years with new pictures and an amazing new layout.

38) Make powerful business cards that stand out. Business cards are important for your patrons to be able to grab before they leave. Sometimes menus are too large for purses or wallets. Place business cards just beside the POS system. Make sure it has the company logo, the name and phone number of the local manager, his or her email, a map of the location showing major intersections so people can use it for directions, and of course the phone and fax numbers. I would also put a small catch phrase. Right now we are simply using, “Ask us about fundraising” on the business card bottom left. You can also place a nice quote from a third party newspaper or famous source. This increases customer’s perception of your brand and establishes respect in those that do not know the brand well. Business cards are easy to keep, easy to pass out, and easy to hold in wallet sleeves.

39) Place downloadable PDF menus on the bottom of the food section of your web site. I also encourage you to place it on the footer. This is the bottom part of web sites that permeate every page. This will help people, in impulse, to download the menu and place orders. Even if you don’t have direct online ordering this will increase sales because your menu will become easy to find and easy to use.

40) Add a drive through. A drive through permit is notoriously difficult to get, but if it’s in the right neighborhood with enough room for vehicles to maneuver inside the parking area they are attainable. A location with a drive through will beat the sales of one without a drive through any day of the week. Many Starbucks locations have seen double-digit sales increases due to having a drive through. It’s been so effective that their corporate office now seeks out only drive through and/or corner locations.

41) Make up-selling easy for the entire team. Train employees, place posters near the POS system, and use the paper menu to list the expensive items as most alluring. This is called 360 Selling™, where the entire team from the cashiers to the cooks is trained to sell to the customer in a professional and courteous manner.

42) Buy radio ads.

43) Purchase TV ads

44) Use gift certificates to give away to organizations at raffles.

45) Rent booths and festivals to increase brand recognition.

46) Purchase banners at baseball stadiums, basketball stadiums, and football fields in every high school in your vicinity. Not only are you encouraging students to be involved in sports by helping their sports’ program, you are probably purchasing the best “bang for your buck” advertising. The students and parents will be viewing your banner all year, getting hungry, and buying from you whether they like it or not. Put a picture of food on the banner to make people hungry, not just the logo or name. Names don’t make people hungry, amazing food photography makes people hungry. Trust me.

47) Purchase advertising on Yelp. Not only will your competition be barred from advertising on your page, but you will get more hits on your restaurant’s Yelp location page.

48) Put Yelp deals on your page. People already use Yelp every day. Why not put in an offer for a free side, a free drink, or “buy one get one free” (BYGY) wrap? People go crazy for these Yelp offers and love to use their mobile phones to get them.

49) Place nice awnings outside beside the patio. A bright-colored awning is it’s own beautiful sign. Notice how almost all the coffee shops use them, particularly the green ones Starbuck’s uses. Use a color familiar from your brand or logo, one people will easily recognize. A beautifully made awning is like a stop sign for moving eyeballs and is sure to garner attention.

50) Rent a blimp. This is a bit extreme and expensive, but if you have many locations and there is a huge sporting event, there is no better way to get people’s attention. They have no choice but to see your “message in the sky”. Just like what Good Year did to tires, we can do to our restaurant brands.

51) Use coupons and deals like ValPack and Pennysaver. When you do this make sure the deal you offer is not so irresistible that it creates a demand for coupons all the time. You want them to try it once, and pay full price thereafter.

52) Rent a small plane to fly your banner. They often do this beside the beach. In places like Santa Monica and Miami, it’s a daily occurrence. We see famous brands like Bacardi advertised all over Miami, or for buying tables at clubs like Mansion and Liv. Liv is a small but famous club at a resort called Fontainebleau a few miles north of Miami Beach. They use small planes to get their message out to club and beach goers every weekend, particularly around spring break.

One time, I will never forget, we were in Miami when my friend Kevin yelled, “Come outside and look at this you guys are not going to believe it!

He yelled in such a dramatic way that caught me off guard.

What is it? I said.

After we went outside the balcony I saw something I had never seen before: A helicopter suspended above the amazingly beautiful, blue Atlantic Ocean. It was in the middle of an amazing light show it was conducting for a party beneath, on the patio of the world famous Fountain blue Hotel. Bacardi had rented out the entire Hotel pool area as well as the bar. Dangling from the Helicopter was a DJ spinning above the ocean inside a glass cage. It was surreal. We could not believe our eyes. Why would anyone rent a helicopter, have it take a DJ up above the ocean, only to spin and conduct a light show for a few people and the fish? The cost, we later found out, was over $1.5 million. Chump change for Bacardi. It was a sight we will never forget, as long as we live. It was so unique and wonderful, a true spectacle of sight and sound few have ever seen or will ever see.

So dare to dream and advertise in different, unconventional ways.

The Lease Doctor™

The Lease Doctor™ Interview
“We are what we repeatedly do; excellence, then, is not an act but a habit.”
—Aristotle

Most restaurants operate on properties that are rented. Unless you’re fortunate enough to own the land where you want to build your restaurant, you must enter into a lease agreement with a landlord. A lease is the most important  document a restaurant owner will ever sign, one that will have immediate consequences on the success or failure of your venture.

For more than 30 years, Todd Dorn has specialized in reviewing leases for tenants and making sure that they work to his client’s advantage instead of the landlord’s. Too often, landlords’ leases tend to be one-sided. Dorn, now better known as “The Lease Doctor™”, is the head of Dorn & Company, which has successfully reviewed, redlined and modified more than 2,000 leases. He’s worked with such well-known brands such as Pinkberry, Mathnasium, Miracle Method, Auntie Anne’s and Zankou Chicken.

In this interview, Dorn explains all the ins and outs of signing a lease and helps to level the playing field for tenants.

What kind of homework should a restaurant owner do for negotiations to renew a lease? We have more than a million restaurants in the United States, so there are more and more people renegotiating leases than signing new leases.

The very first thing restaurant owners need to do is they have to know when their lease expires. They have to review the contract and look at the “option language” in the lease to see what their rights are. Sometimes you have options, sometimes you don’t.

If you don’t have an option to renew your lease, it gets a little tricky. In a hot market where there’s a lot of leasing going on and there’s a lot of demand, the landlord can tell a restaurant owner that he’s got other people interested in the space. So if you don’t have an option, you have to deal with that.

Landlords typically don’t want to kick out a restaurant owner. They might not renew a lease if they can get way more money from a new restaurant owner. They can go, “Gee, I can get a dollar more per square foot—if you can give me a dollar more per square foot you can keep your place.” The negotiations are hinged upon supply and demand. If you’re in a market where there are many vacancies, the landlords can’t dictate harsh terms.

So, looking back at the contract, you either have an option to renew your lease or your don’t. If you don’t have an option to renew, the best thing to do is to start negotiating about a year in advance because you have to have a backup plan if the landlord’s not going to work with you or not going to be reasonable.

Options in the Lease Contract 
But let’s say you have an option, and it requires that you give the landlord a minimum of nine months notice or a six-month notice. That’s the notification period, and it’s very important to pay attention to it. Some leases only give a 30-day window. There’s no such thing as a standard lease. It’s all custom-made; written by the landlords’ attorneys for their benefit. The key is to know what your rights are.

If you do have an option, it’s better before you give notice to exercise that option, to do research so that you can understand what the market’s doing and what your alternatives are. There are two kinds of options. There are options where the lease is based on market rate, and there are options where the lease is based on a fixed amount of money you pay in a given period. Generally, when there’s a recession and the market’s less active, landlords are more likely to give you a fixed rent because they tend to be concerned about where the market’s going to go. When landlords think the market’s going straight up, they’re hesitant to commit to a price. They’re more likely charge rent according to the market or greater.

But what the market valuation is tends to be subjective. A landlord can think his rent is worth $5 per square foot, even if there’s a landlord right around the street who’s charging only $4 a square foot. Landlords tend to have the perception that their space is better, so that they can get charge money. In the end, it’s all about the money. Unfortunately, landlords don’t look at tenants as people, to them it’s more like a spreadsheet.
Practically every lease that a tenant signs has some terminology that the tenant’s not aware of because nobody’s pointed it out to him. There are no laws that require a broker or landlord to state specific terms in an option relative to language. So one of the key points in an option that can be very deceptive is that the tenant’s thinking that he has the right to extend his lease for another five years at market rate.

Let’s say you’re over market by $1 per square foot, and you’ve got 2,500 square feet. So you’re over market by $2,500 per month. The landlord loves it. The tenant doesn’t. And the tenant thinks he can negotiate the lease based on the market—because, let’s say he’s got a five-year option based on market rent. The problem is that there might be some language in the lease that says that in no event will the option rent be less than what the tenant is currently paying. Big trap.

How come the tenant doesn’t see that?

Because he typically doesn’t know to look for it. Leases are very verbose. They’re written in legalese and there’s a lot of onerous language. Tenants by their very nature tend to be busy running or knowing their business, dealing with employees and a whole bunch of ancillary factors. They don’t sign leases every day—it’s unfamiliar territory for them. So their only choice is to either read the lease themselves or give it to an attorney. And a lot of tenants are hesitant to give the lease to an attorney because it’s an open-ended situation in which the attorney is to an extent working for himself—the longer he takes to read the lease the more money he makes. Few, if any, attorneys solely specialize in commercial leases so you end up paying for their time to research language.

Besides, attorneys typically don’t deal with business points. They deal with problems or points regarding potential litigation. For example, they might introduce language in the lease that protects the tenant from issues arising out of construction that the landlord does—that in no event can the construction interfere with the tenant’s business. Stuff like that.

So, to summarize, landlords typically tend to hold restaurant owners hostage because they know that restaurant owners have a lot of money to put into the business. If you’re an insurance agent or a nail salon owner or running a UPS store, you don’t require all the fixtures that a restaurant does. It’s easier to pick up and move. You have more leverage with the landlord because the landlord knows you can find another space that doesn’t require infrastructure such as the grease trap, the plumbing, the gas. The amount of fixed investments in a restaurant are very expensive. So a landlord knows that when he rents to a restaurant he’s gotcha! He knows that the likelihood of you picking up and moving is slim to none.

So, does real estate drive the economy or does the economy drive real estate?

They kind of have a symbiotic relationship. As the economy thrives and more people have jobs and more money is available, a lot of people may want to go out and open businesses. And the more business that open up the more vacant spaces get leased. And that drives the real estate market. The higher demand in the market, the higher the rents. And as the real estate market gets hot, there’s more money available, and more businesses thrive. So both real estate and the economy work hand in hand.

What are the fundamental differences between a residential lease and a commercial lease?

Basically, residential leases are standard leases because there are laws that regulate what residential landlords can and cannot do to homeowners. A residential lease could be a very basic two-page or three-page form, with disclosure laws. By contrast, the commercial sector, since it’s not regulated, is everything else. Landlords can put anything they want into a lease, and it’s legal. Anything goes.

Location, Location, Location 

What kind of homework should prospective restaurant owners do when looking for a new location to rent?

The first thing is to zero on to which location you want to be. You don’t want to end up in a poor location, even if you get a good deal. You want to be in a shopping center or a freestanding building that has a lot of traffic. On the flip side, depending on what type of restaurant you have, you may want to be near an area that has a lot of high-rise office buildings, where people have to go to lunch. And in that case you won’t get a lot of business during dinnertime. In general, you’ve got to study the demographics. There are demographic reports that are universally available.

The next thing to do is to look at all the vacant space in the prospective center as well as the competition—what sort of businesses are already in the location where you want to be. Generally, you should look at a reasonably broad range of space sizes. If you think you need 2,500 square feet of space, you may also want to look at spaces as low as 1,800 square feet and as high as 2,700 square feet. The space maybe bigger than what you want, but the rate per square foot might be less than some other place. And you can get all this information in one of the commercial real estate subscriber-based online databases such as LoopNet. You can do your own searches for properties or you can hire a broker to do the searches for you.

Once you’ve captured all the available vacant spaces that fit your location requirement, you can start looking at prices. And always look at vacant spaces where there used to be a restaurant—a failed restaurant, say. If you move into one of these spaces, you save a huge amount of money on the infrastructure. On the flip side, the landlord already knows that you’re going to be saving money on infrastructure, so he may want more money on the rent per square foot. So you have to weigh the pros and cons there. Generally, if a landlord has a vacant restaurant, he can only rent the space to another restaurant. Otherwise he has to spend money in tenant improvements by ripping everything out.

With very few exceptions, leases are always on a triple-net basis, as opposed to a gross lease. So it’s important to ask the landlord what the triple-net cost is. For example, is it $.60 per square foot? The landlord’s not going to tell you unless you ask because he wants to get the tenant wheeled into the deal. Unlike in residential leases, where there are disclosure laws and consumer protection laws, there are no legal requirement for landlords or brokers to make specific disclosures about financial terms in a commercial lease.

The presumption is that if you’re in business you should know this already. But the problem is you probably don’t. You don’t learn it in business school and you generally don’t learn it in specific trade schools. If you try to learn it on the Internet, there are no specific books or classes on the subject. And it’s kept that way for a reason. The landlords control the ball—they control the property market, which is huge. The largest amount of wealth on the planet comes from commercial real estate. If you look at big shopping malls and office buildings, they’re all owned by billionaires, pension funds, publicly traded companies. Wall Street controls such properties and Wall Street’s in the government’s pocket. If, God forbid, the commercial real estate industry was changed, and tenants had rights and there were disclosure laws, landlords would be less profitable.

Why do brokers and landlords do business this way?

I’ve been in this business for over 35 years; you can figure it out by connecting the dots. The only material difference in the industry from 1980 to 2015 is computers. You’ve got software to figure things out. But as far as what’s contained in the lease contract, and what’d disclosed, nothing has changed. It’s all the same—it’s the Wild West.
So given a choice, landlords would rather keep tenants ill informed. That way, the negotiations are easier, the tenant makes less demands and the landlord might have more opportunity to collect more dollars.

Why is it so difficult for restaurant owners to negotiate with landlords even though restaurant owners typically raise the value of a given property? Why do landlords always tend to have the upper hand? As valuable as restaurants are, they don’t get respected. How can restaurant owners mitigate this phenomenon?

It all goes back to the money. It’s not about respect and it’s never personal. Taking advantage of the situation has been around forever and a day. It’s always difficult to leverage against a landlord in a tight marketplace. The only way to have leverage in a market where there are not a lot of vacancies is to pay attention to the language in the lease so that you can protect yourself. At the end of the day, everything is controlled by the lease and by the landlord. So the only way for any business owner to protect himself as a tenant is to have the lease contract carefully read, reviewed, redlined and modified so that the tenant doesn’t have an open-ended situation where he sees the rent going up, say, 30 percent over market, while his profits aren’t going up as quickly.

Is it a good idea for a restaurant owner to rent a space in a market that’s down or in recession?

It always makes sense to negotiate a lease for as long as possible in a market that’s down or temporarily down and you can see in the future that there’s going to be growth where the prospects for your business look good. I recommend that restaurants and dental practices, which are also substantial in infrastructure, negotiate a lease that’s at least for 10 years with one or two five-year options. If you can get two five-year options, the better.

But what if the restaurant owner doesn’t do so well in the first few years?

That’s a business risk. It’s a crapshoot, whether you sign a 10-year lease or a seven-year lease or a five-year lease. In any case, you generally can’t sign a lease that’s less than five years. But I recommend longer because if your business is going to go bust it’s going to do so sooner than five years. A landlord can force you to pay the remainder of the lease, but he has to mitigate damages. Most tenants have to personally guarantee the lease. But when a tenant is in default—he can’t pay the rent, goes into bankruptcy or is going out of business—a landlord is legally required to mitigate the tenant’s damages and re-rent the space. To an extent this is like consumer protection. It’s more or less like an implied covenant in the lease, even thought it’s not specifically said in the lease.

So if the landlord re-rents the space, the tenant is responsible for the re-letting leasing fees, tenant improvements and so forth. The thought process at work here is: how long will it take the landlord to rent the space? If the tenant has rented a good space to begin with, and let’s say after two years or two and a half years the business failed, the likelihood that the landlord will be able to re-rent the space in the next 12 months is probably pretty good, especially since it’s got the infrastructure there. And so the tenant is off the hook anyway. The fact that he signed a five-year or seven-year or 10-year lease is not going to matter. The only instance where it would matter is if the tenant has a long-term contingent liability on a long-term lease.

So you’re betting one way or the other. You’re going into business probably betting that there’s a 50-percent chance that you’ll succeed. If you fail, the likelihood of your space being re-rented is probably pretty decent. So if you sign a short-term lease, thinking you could fail, and things are going well, you back yourself up. If the business fails in two or three years and you signed a five-year or 10-year lease, the landlord still has to go through the same process to re-rent the space. And once it’s rented—after sitting for vacant for eight months, let’s say—and you’ve accumulated eight months of accrued rent in liability, once that space is rented you’re done anyway. So you’re better off giving yourself the chance of not getting stuck after a short term lease and having the landlord stick it to you.

That said, you have to be careful about the five-year or 10-year lease you signed. There are rent increases, cumulatively compounded. Typically they’re 3 percent per year. It depends on the market. What we try to do is stagger the increases—spread them out more—or minimize them. Because when you get to year seven, eight or nine in a 10-year lease, for example, on a 3-percent a year increase a lot of tenants will find themselves paying an over market rent.

Give us some tips on negotiation tactics.

There are quite a few, although everything depends on what kind of market you’re in. Generally, you don’t want the landlord to think that he has your business and that you’ve got all your eggs in one basket and you’re stuck. You always want the landlord to think that you have other options. You don’t want to give the impression that you want to rent a space really badly. Because that makes the landlord think that he doesn’t have to come down on his price, doesn’t have to make any tenant improvements.

So whether it’s re-negotiating your lease or finding a new place, and you’re speaking with either the landlord or a management company, you always want them to think that they’re not the only ones. Because at the end of the day, whether they think you have other options or not, whether they know you have other options or not, is one thing. But if the landlord doesn’t rent the space, it’s costing him money. Brokers are highly incentivized to rent spaces because that’s how they make a living—by getting a commission. But if the broker or whoever you’re dealing with has the perception that you want the space so bad—that you want it no matter what—they’re not going to come down on their price and not going to offer other incentives, such as tenant improvements. It’s kind of lying buying a car.

When talking to a broker about a space, it’s important for the tenant not only to give the impression that not only does he has other options, but to stress the benefits that his business is going to bring to the shopping center (or area).

If a tenant has been in proven business for a long time and has high credit, it’s always a good idea to impress upon the value that his business is going to bring to the property. The tenant should indicate to the landlord that renting the property to him is a much better bet than getting a new business out of the gate, which is probably not going to be so successful and where there’s some risk.

That way, the landlord knows that he has less risk that the business will go bust. So you have to sell your strong points. But the key is to not let the other side think that you’re so desperate for the space that you’ll pay anything the landlord wants.

Should a tenant customize his lease by writing what he wants into the lease? And if so, how does a tenant know what to write what not to?

That is critical because a customized lease dictates a tenant’s finances. A lease is typically a business owner’s first or second highest fixed expense. And it’s all controlled by the language in the lease. As I said earlier, there’s no such thing as a standard lease in commercial real estate. They’re all custom. And they’re all written by attorneys, modified over and over again at the behest of landlords who ask attorneys to change leases around so that they can get more money by making the leases more open-ended. Landlords will say, “We want to charge the tenant more for making capital improvements or ADA upgrades. We want to be able to have a merchants association fee, even though we don’t have one now.

So it’s the most important thing to ensure that once you’ve negotiated the lease—the rental, concessions, basic improvements etc.—to have that lease gone through with a fine toothcomb for all business and legal points. To give you an example, we recently did a lease for Utility Board Shop, a retailer that has about six or seven locations. They were opening up a new store and they sent us the lease to review. And they sent us the final Letter of Intent, which contains all the final terms agreed upon between the landlord’s side and the tenant’s side. We make sure that all those terms are contained in the lease, because sometimes there are concessions in there and free rent offered. But when you look at the lease for free rent, the free rent all the time doesn’t include the Tripe Net CAM charges. For example there’s four months free rents during a build out, but the lease says that the tenant pays the CAM charges, even when he’s not doing business.

So a tenant thinks that he’s getting free rent, the Triple Net is considered a rent, so why isn’t that free—why am I paying rent? It’s a contradiction that’s glossed over by everybody. If a tenant brings it out, the landlord’s side usually counters that what they’re doing is standard—that you always have to pay Triple Net during free rent. The tenant doesn’t know if it’s standard or not. And so the tenant goes along with the lease—he’s not going to walk from the deal over such an issue.

But neither is the landlord going to walk away. So we tell the tenant to say that while I’m not paying rent while the space is being built out, I want the free rent on my Triple Net CAMS as well.

What are CAMS?

CAMS are Triple Net expenses. The best way to understand it is to say that you own the building, but you don’t have a title. Let’s say you’re part of a complex. You, the tenant, must pay all the pro-rata (proportionate share) costs of operating the complex, no matter what. That’s why shopping centers are popular—because landlords have no expenses. When the expenses go up, they get passed on to the tenant. Every possible element of ownership that it costs to operate a shopping center—taxes, insurance, maintenance, improvements, repaving of parking lot, landscaping, gardening, redecorating, new signage, ADA compliance, replacing HVACs, anything—all gets passed on to the tenant.

So going back to the Utility Board Shop, the company was about to sign its lease and didn’t know that there was a merchants fee in there. Nobody told them—it wasn’t in any prior documentation. And it was $400 a month for 60 months.

What’s a merchants fee?

It’s an association or membership fee set up by the landlord. We believe it’s just like a profit center—like a homeowners association. Landlords will tell you that it’s to promote the center, but it’s very vague, very grey, containing language such as, “We do this in the best interests of the tenants ..” It doesn’t have any specifics such as whether the landlords is going to run ads, have a billboard, things like that.

Wait, so the bit about the merchants fee written in the lease—how come the tenant didn’t notice that?

It was in the lease contract but not in the final offer. When a tenant signs a final offer, he looks at things such as his rent, increases in the rent, how long the lease is, how much it’s going to cost per square foot to do tenant improvements, and the fact that he got five months free rent. Nobody is required on the landlord’s, broker’s or management company’s side to tell the tenant, “Oh, by the way, there’s a merchants fee in there for $400 a month you’re responsible for.” It’s left up to the tenant to find it—in the lease. If the tenant doesn’t find it and signs it, oh well, too bad, you’re stuck for it.

So in this case of the Utility Board Shop, there was no mention of the merchant fee in the final offer. Nobody ever discussed it. Sometimes there are merchant fees in leases that are not currently being done but the landlord has the right to do them later—and they can charge whatever they want. So, when we talk about customizing a lease, we always recommend that the tenant scratch it out, redline it. Most landlords, if they’re not collecting merchants fees presently will scratch it out because they don’t want to blow the deal over it. In the case of the Utility Board Shop, we told them that the merchants fee was not disclosed to them in the final offer. And they were able to go back to the broker and when all was said and done, the landlord chopped the fee in half. The tenant still wanted the space—didn’t want to lose the deal—and the landlord didn’t want to lose the deal. Keep this in mind—that landlords don’t want to lose deals, even though they want everything they can get. And a lot of that is buried in the lease contract, which the tenant usually has no way of getting at, let alone understanding. And, unless the tenant already has maybe 80 stores and a real estate department that’s been dealing with leases for 20-30 years, the tenant has no way of knowing what’s standard, what’s normal, what’s customary and what’s not.

And that, mind you, is just the tip of the iceberg. There are numerous provisions in a lease contract that have to be changed for the best interests of the tenant to be protected. For example, assignment subleasing, which involves the tenant selling his business. Most contracts will say—in fine language covered under the subject of rent—that the landlord has the right to share the profits from the sale. That’s because rent has a definition—and it literally has dollar signs all over it. Consequently, anything with a dollar sign on it is considered rent. Leases will say, for example, that rent is considered as base rent, CAMS—and any other financial consideration. So if a tenant is receiving money from a prospective purchaser, the landlord, in most leases, will have the right to highjack that consideration. Moreover, the landlord often has the right to recapture the lease in a lease assignment. So, one of the very important things to read carefully, or have an expert go over, is to ensure whether the landlord has the right to take 50 percent of the profits from a business if and when the tenant sells it. Attorneys are not well-versed in this subjet matter because they don’t do it every day and don’t learn it in law school.

How can prospective restaurant owners find someone such as you who understands leases?

Unfortunately, they don’t. And that’s all by design, because the industry is controlled by landlords. It’s their property, their power, their money. And brokers and real estate advisors support this structure. The only way tenants can find help is to search on Google. That’s where the Lease Doctor will show up. Now that we’ve built up a critical mass of clients, we’re marketing ourselves on databases like LoopNet and other mediums, making people aware that these types of services are available. Before a tenant signs a lease, we charge a flat fee of $395 to review the whole contract. It’s a fraction of what attorneys charge, and we cover all the business aspects. Plus we turn the document around in a few days. An attorney can hold up a deal for two or three weeks, which upsets everybody.

Talk a little bit about how tenants can protect themselves against Triple Net charges. We have a landlord who charges Triple Net, which is around $1,700 per month. But they do no gardening—there are no plants except for a few cacti. And they don’t do anything to the parking lot—there are no lights, yet they have maintenance charges. So how do people fight back against such charges?

There are only two ways to fight back. The best way is to have protection in the lease contract. Make sure that there’s a cap on expense increases in the lease. A lot of landlords will do this. So you have to control what currently is being paid and what goes up. What we always look for while reviewing a lease, even if it’s not in the final offers, is that increases on Triple Net are capped at 5 percent per year. Sometimes landlords won’t agree to cap everything, but they’ll cap the controllable items, such as maintenance, landscaping and management fees. These are items landlords have control over, and they can’t just increase them to make more money off the tenant. The other thing to do is to ask for exclusions in the operating expenses. There’s a whole list of exclusions.

Remember, there’s no such thing as a standard lease. The language in a lease is often open-ended, such as: “The landlord may charge including but not limited to …” We recently reviewed a lease for a retail franchise that said each year the landlord will make a determination of what the expenses will be the next year and that the landlord will tell you how much it is. We always say that the landlord needs to give a detailed and itemized statement of Triple Net expenses, such as taxes, insurance, maintenance, replacements, parking lot, landscaping. That way, each year a tenant can track what it is going on each year.

Let’s say you sign a lease in which the landlord says that his Triple Net expenses are 60 cents per square foot. We always say that should be fixed for the first year of the lease because the tenant can come in thinking his Triple Net expenses are 60 cents per square foot but three months later they could be 80 cents per square foot. Triple Net is like a black box. Unless a landlord is required to itemize the expenses, it remains a black box.

Can the tenant ask to see receipts?

Usually a lease will contain language that the tenant has the right to conduct an audit of expenses. But a tenant usually doesn’t know what to do in an audit. He has already run into enough trouble trying to get the deal done; now he’ll spend more time trying to unravel the black box. You could have a landlord who owns a shopping center. Let’s say it’s a shopping center that has been owned by a family for 20 years and the landlord wants to sell it. Over the years, the taxes on the shopping center have gone up astronomically. And who pays that tax increase? Not the landlord—it’s passed on to the tenant.

How important is it for tenants to measure the space they want to rent, given that landlords can overestimate how much the square footage is? Should tenants get a third-party estimation of the space measurement before signing the lease?

We always recommend that a tenant do that. But the key is to know how to measure a space. It takes very little time, and there are a lot of tricks to do it. Many ceilings, for example, have two by four tiles. You can count the tiles each way. Walls are usually six inches thick. Take half that, add it to the width. If you’re being told before you sign a lease that the space is 2,000 square feet, for example, and indeed it is 1,700 square feet and you can make the argument for it by telling the landlord that you field-measured the space and that it’s off by 300 square feet, it’s well worth your time and effort.

There are some reasonable standards. For example, the thickness of the walls is always included in the square footage. Let’s say you’re renting a space and you’ve got a tenant on each side of you. Let’s say the wall on each side is a foot thick. So the tenant would pay half the thickness of the wall on both sides. Now, you also have the rear and the front of the space. The tenant will usually pay up to the exterior glass line of the space and the exterior wall. That’s what it should be.

Sometimes landlords use standards such as BOMA, that is, Building Owners Management Association, which are generally geared toward office buildings. Just the other day we reviewed a lease that stated that the tenant accepts the square footage the way the landlord states it. Which means that if the square footage of the space a tenant is occupying is actually 300 square feet smaller than what the lease specifies, that’s too bad.

So yes, sometimes landlords do exaggerate their square footage and prefer not to have the tenant measure the space. Or a landlord may think he’s got a space that’s 1,500 square feet—he purchased the space based on 1,500 square feet—but in reality it’s 1,200 square feet. They don’t want to collect rent on 1,200 square feet. But if a landlord doesn’t agree with your reasoning, try to get something taken off the rent in exchange.

When a potential tenant approaches a lease specialist such as you, how important is it to ask whether that specialist also represents landlords to determine if there’s any conflict of interest involved?

It’s very important for a tenant to know who they’re dealing with and which side they represent. Our mantra is that we strictly represent tenants. Generally a tenant won’t ask us if we represent landlords too because we make it clear on our website that we strictly represent tenants. But it’s so important for tenants to know who is on their side.

Given the obvious importance of lease specialists for tenants, why hasn’t there been an organization over the years around which lease specialists have coalesced to represent tenants?

You have to go back to the basics of real estate. Most people start out as brokers and then might branch into other areas. And the only way a broker can make a living is by having listings of property. That’s what I was taught when I went to real estate school in the late 1970s, and the same is true today. It’s harder to get business from a prospective tenant because you don’t have anyone calling off a sign posted on a property.

So that becomes the direction and focus of the business when a broker first starts out. That’s what’s drilled into prospective real estate agents before they get licensed. And after they get licensed they’re taught that they need to cold call landlords to get listings, and that when they finally get listings they need to cold call tenants to try to fill the listings. So the broker’s income is derived from the landlord because that’s who has the money. Almost the entire 100 percent of the industry is driven, controlled and run by the landlord side of the equation. So the idea that there can be a body to represent tenants has been drained by default from the industry’s inception. And there’s nowhere to go.

We once had a situation in which the landlord wanted free food for up to $30 a day. And I obliged because I wanted more parking from the landlord.

That’s a good example. A commercial lease can have anything and everything. Once you agree to the terms and sign the lease there’s nobody there to protect you or help you out because you’ve already signed it.

On a side note, we were once called in on a case in which there was a major school district that had rented 65,000 square feet. They had a lawyer and a broker representing them. But the lease was full of holes—it was open-ended and left the tenant with multiple and potentially terrible legal exposures. This was a public institution—a school district—and there were many things it was not aware of in the lease. The school district signed the lease, and some tax payers got wind of it. It became a highly political and controversial lease because it was public information. Long story short, about four months after the lease was signed, I was contacted by a political tax-payer group in the district to see if I could help.

So they brought us in to see if we could renegotiate the lease, get the tenant out of the lease, anything we could do. There was serious misrepresentation on the broker’s side because it was a dual agency and all the broker’s loyalties went to the landlord. The tenant was not aware of all the details they were signing. There were things even in the final offer that never made it into the lease. We felt that at the minimum the brokerage firm that represented the tenant but also represented the landlord had exposure and liability for misrepresentation and negligence and potential DRE ethics violations.

The school district didn’t want to get into litigation over such an issue, but it knew that was an option. What we ended up doing was red-lining the lease and brining it out in a public meeting attended by more than 200 people. The landlord and all his lawyers and brokers were there, and they weren’t happy. But I had to expose what I saw. We went through the whole contract and discovered that there was a huge hole in the lease that actually worked against the landlord. If we navigated the lease going forward according to the terms of the lease, intelligently, without breaching, there would be a potential out for the tenant.

Now, the landlord didn’t know what we knew. It was all kept behind closed doors. Several months after we were hired, we were able to use the out clause in the lease for the tenant because the landlord was not able to commit certain obligations he was committed to. And that would be determined a breach of the contract, leaving the tenant with the right to cancel.

Even the landlord wasn’t really familiar with the language that would have exposed him legally in the lease. We exposed it and we forced the landlord to come to the table to either renegotiate the lease or the tenant was going to kick out—cancel—because the landlord wasn’t going to be able to perform certain obligations. Just as a landlord can go after a tenant who doesn’t pay the rent on time, we were able to go after the landlord.

But all along, we advised the school district not to indicate to the landlord in any way how reliant the district was on the 65,000-square-foot space it had rented. We told them to let the landlord know that the district had a Plan B in case anything went wrong. And the landlord didn’t want to lose the tenant—he already had the space vacant for a significant period of time before the school district moved into it. So again, going back to what I said earlier, it’s always important to let the landlord know that he doesn’t have you, that he’s the only game in town.

What’s the difference between a Triple Net lease and a Gross lease?

In a Gross lease, the landlord pays all the expenses, but each year, as those expenses go up, that component gets passed through to the tenant. In a Triple Net lease, all the expenses are paid by the tenant. So if expenses in a Gross lease go up by $1,000 and the tenant has 10 percent of the building, the tenant pays 10 percent of the $1,000. By their very nature, therefore, Triple Net leases are more expensive than Gross leases.

Let’s say you’re paying $2 per square foot gross. Besides your $2-per-square-foot rent, the landlord pays for all the taxes, insurance, maintenance, repairs, replacement, landscaping etc. After a 12-month period of time—and this has to be negotiated ahead of time—the tenant has to pay any increase in expenses over the base year in which the lease was signed. The rub is that if the tenant signs a gross lease at the end of, say, October 2015, he’s going to get hit with what’s called an operating expense increase in three months. So we advise tenants to make sure that the lease specifies that any operating expense increase doesn’t occur for the first 12 months.

What are some of the elements of accountability or responsibility between a tenant and the landlord regarding repairs undertaken in a leased space? What are some of the key issues to watch out for in grey areas such as not just who pays for the repairs but who actually gets the repairs done?

Again, everything in the lease dictates what is and what isn’t. Verbal understandings don’t mean anything. In a Triple Net lease, the tenant is responsible if anything breaks, such as the roof or HVAC air conditioning. A lot of times the landlord will make the repairs and bill back to the tenant. Most of the time, the tenant is required in the lease to maintain a contract with a certified company that comes out periodically and tests the HVAC system and maintains it. Typically, in a Triple Net lease, the tenant maintains the HVAC system, although the landlord has the right to do this himself. Like everything else, it all goes back to the way the lease is written.

What are your top three Do’s and Don’ts for signing a lease?

The Do’s: First, review your lease and final offer very carefully. Make sure everything you bargained for is included in those two documents. Have a knowledgeable third-party go over your lease so that you can be aware of any potential financial exposure to you. Check all the math because mistakes that work in the landlord’s favor do happen.

Second, do your research carefully as to what the market conditions are relative to rent rates, additional charges and concessions. This will help you negotiate with the landlord intelligently.

Third, arrange for an independent, unbiased third-party negotiate on your behalf instead of letting the landlord’s broker represent both sides. This will help you avoid any inherent “Dual Agency” conflict of interest in the negotiation.

The Don’ts: First, don’t rush or feel pressured into signing a lease quickly, even if you’re told that other people want to rent the same space you’re interested in renting.

Second, don’t make assumptions based on verbal representations from the landlord’s side. Anything verbally communicated to you goes by the wayside once a lease is signed.

Finally, don’t sign a lease unless you understand the full and actual costs, including tenant improvements, associated with leasing a particular place. Far too many tenants underestimate these costs.

END

Book Proposal and Biography

Read Book Proposal Books again and re-write and add to much of this for month of June. For June and July finish the 5th Edit and, as I read EACH chapter from first to last I write the summary of that chapter, 1-2 paragraphs for each summarizing EVERYTHING in there.

Book Proposal

 

  1. Mission Statement

My mission statement as a speaker and instructor is the following Trademarked motto: “Inspired Learning Through Cohesive Education™.

 

The mission statement for the book itself is: To provide the potential restaurateur with all of the tools, knowledge, ideas and experience they need in order to successfully open, manage, market and grow their own restaurant enterprise.

 

 

  1. Overview
  • Biography
  1. Promotion and Competition
  2. Marketing Plan

 

I plan to use targeted ads in niche markets by placing advertising in trade journals and magazines. Entrepreneur magazine has many issues devoted to franchising I would love to place small ads for the book in. Among other magazines I will advertise this book in is Success Magazine; Trade journals such as The Nation’s Restaurant News provide us with a window of opportunity to reach readers that are already interested in opening restaurants. Restaurant-centric magazines such as Los Angeles magazine also require small ads to reach my ideal clientele. I plan to get small ads in the classified section of the New York Times and LA Times.

  1. The Chapter Outline

Introduction

 

Table of Contents

 

  • Seven reasons why I wrote this book (put briefly inside part of the introduction as a nice narrative; this does not necessarily have to be a chapter
  • The Moment Where Everything Changed (likely the first chapter or the prologue). The story starts with a lot of action, and not necessarily having to do with restaurant marketing. This makes it fun to read and an exciting way to start the book.
  • Which Came First, the Chicken or the Garlic? This chapter deals with the humble beginnings of Zankou Chicken in Beirut, Lebanon, and how it grew to become the American business with ethnically diverse variety of fans and customers it is today.
  • Hollywood in 1984. This chapter looks back at the wonderful year of 1984 and what our pop culture looked like that year. This year is important to the history of Zankou Chicken because we opened our first American branch that year on the corner of Sunset and Normandie in the heart of old Hollywood.
  • O Lord Give Us This Day our Daily Pita . This chapter looks at the sanctity of food in general and its importance in our daily lives. It looks at the rich history of Mediterranean food in particular and how it’s evolved over the years. This chapter illustrates in great detail the variations within what is considered the healthy “Mediterranean” diet and what it consists of.
  • Zankou’s Famous Chicken is a Triumph of Technique: Interview with Abel Uribe. This chapter looks at why how you cook the food is as important as what the food is comprised of. It talks about running and managing a restaurant since we interview someone that has managed restaurants for years. This chapter shows what managing and running a restaurant entails.
  • How It’s Made: Your Passport to Fresh Mediterranean Flavor . Here we talk strictly about the food. Nothing is more important than the food, so in this chapter we speak of how we take our time marinating and spicing the food. A lot of what we used for this chapter ended up as descriptions for the food on our web site zankouchicken.com
  • Teams- Not Money- Make the World Go Round: How to Hire and Keep the Best Employees [add and read book for TIPS to motivate employees section of this chapter]. This chapter talks about the real secret that is in the sauce: teamwork. Nothing gets done in the restaurant business without a powerful team working hard behind the scenes.
  • Writing the Business Plan (make sure it’s a bit more detailed before publication). This chapter is important for people to read before they open a restaurant. It will help them write their business plans and (hopefully) get the funding they need from banks or private lenders.
  • Mission Statement and Vision Statement. This chapter helps people come up with their own mission statement and vision statement. This is very important because it sets them up for success in the future.
  • The Importance of Food Safety. Food safety is very important. This chapter points out the detailed facts people need to know such as the safe cooking temperatures for beef and chicken, how to avoid harmful bacteria growth, and other important food safety facts. We researched the governments’ web site and many other places to neatly and carefully put all of this information in once place.
  • To Franchise or Not to Franchise with Anthony Le. This is an interview with someone that owns branches of the Robek’s Juice franchise. It’s an insightful chapter that talks about why you should (or shouldn’t) consider franchising as an opportunity.
  • 10 Ways to Throw a Great Grand Opening (add 2-3 more ways and change the name to 12) . Here we list useful ideas on organizing a grand opening. Everyone dreams of throwing an opening with glitz and glamour, but you have to do your homework if you want it to succeed.
  • The Different Pricing Strategies Explained (Re-Write Chapter as an Easy to read narrative). This chapter talks about the various methods businesses use for pricing strategy. It is not limited to the restaurant industry. Any business can and does use one or more of these methods.
  • The 9 Questions that Help Determine Price Strategy. This chapter is different from the previous in that it lists helpful hints and advice for any pricing strategy. These are things people should consider before pricing their items.
  • Organizing and Creating Menus. This chapter speaks in great detail about creating and showcasing a beautiful menu. There is nothing more important as a marketing tool inside a restaurant than having a beautiful (and useful) menu board.
  • The 12 Methods that help Reduce Ordering Errors. When customers get their orders wrong and they are hungry, they tend to get very angry. This chapter looks at all the ways we can prevent this from happening.
  • How We Do it at Zankou Chicken: The “Zankou Difference”. Any restaurant should point out what makes them different than the rest. We use this chapter to illustrate what makes us different.
  • SWOT Analysis: A Case Study. A SWOT analysis is something a business does before having a huge change in strategy or releasing a new product line. This chapter shows them how to do this.
  • The Pros and Cons of Delivery (add statistics on insurance and injuries). Offering delivery services is not without its pitfalls. This chapter looks at the pluses and minuses of such a decision, and shows how to carefully weigh all the facts before making any decision.
  • Having a Legacy Business. It’s one thing to have a working restaurant; it’s something else to have a legacy This chapter shows us in the middle of a transition from slow growth to becoming a fast-growth enterprise we wish to be. It’s inspired reading for any entrepreneur.
  • Creating an Amazing Web Site: Interview with Maxine Torosian. Creating a web site is usually timely, costly, and extremely difficult. It doesn’t have to be. This chapter shows how anyone with a small budget can be creative and make a truly excellent web site for their business.
  • Ideas on How to Make your Existing Web Site Better (talk a bit more about how it can always get better). For those that already have a web site, this chapter shows how to make it better.
  • How To Create a Great FAQ Section. The FAQ section is important because it helps us avoid redundant and repeated questions.
  • The Yin and Yang of Yelp. This chapter begins to tell the story of Yelp. Yelp is a very important web site for restaurant and this book goes into grater detail than any other about the intricacies of Yelp.
  • Yelp Analytics . It’s not enough to know the story of Yelp. You should also be aware of some analytics and how to effectively use Yelp and this chapter shows you how.
  • Yelp Talk: What Makes us want to Review: The Addictive Psychology Behind leaving Reviews. This is a very interesting chapter that goes deeper into why humans behave in certain ways. For example, why do we love to review restaurants? There are thousands of people that want to know more about Yelp: for example they want to know how to market well on this platform, how to respond to customer complaints…etc. This section answers their questions and allays their concerns.
  • The Elite Squad: Yelp’s Secret Army of Social Butterflies . The Elite Squad is Yelp’s Secret Service. They are the secret to their success. This chapter blows the lid on this secretive society and includes tips on how to get in, how to rise up the ranks, and even how to possibly join Yelp as a full time community supervisor.
  • The Secret to Exponential Growth. It’s one thing to grow as a business; it’s something else entirely if you wish to grow exponentially. This chapter talks about the missing ingredient that helps make that happen: teamwork.
  • Why the Customer is King. The customer is the center of our universe. Here we talk about why that is. This chapter takes the customer-centric approach to marketing and provides insight about the importance of treating our customers well.
  • Customer Relationship Management (CRM). This technology helps us keep in touch with customers, use analytics to figure out who they are, and shows how to keep numbers organized to figure out how much they spend. This chapter talks about how to get and keep the best customers, something every restaurateur should know how to do.

Manuscript Part II

  • The Customer is Not Always Right: What to do when things go wrong.

In this chapter we talk about the benefits of firing the worst customers. Here we examine what’s known as the 80/20 rule, or the Pareto Principle, an often overlooked method of thinning the ranks so we can focus better on our prime customers.

  • The New Product Lifecycle (add an original graphics from Dreamentia)

Everything that goes up must also come down. But is that always so? Here we look at a few things we can do to assure a new product launch, and we study the different stages it must go through in its lifecycle.

  • Ethics in Marketing: How to Effectively Market (add a few guidelines from the American marketing Association)

It is not enough to do effective marketing. We must also follow some basic ethical and moral guidelines if we are to succeed with our spirit intact. This chapter covers some specific examples, such as refusing gifts, supporting all the claims made in your advertising, and being careful with the words we use in our print ads. It’s a timely chapter, especially nowadays when so many food companies and restaurants are marketing unethically. They advertise delicious food but serve microwaved junk. This chapter will certainly not alleviate all these problems, but it will provide timely advice that’s easy to follow for anyone in our field.

  • The Definition of Marketing

This chapter looks at the American Marketing Association’s definition of marketing, as well as my own take on it. We talk about the 4 P’s of marketing and much more.

  • The Power of Reciprocity

Reciprocity is concerned with the idea that whatever we put in people, we can expect back. It’s like the old scripture says, whatever we sow we will surely reap. This chapter examines the mechanics of Reciprocity, specifically relating to the restaurant space.

  • Strategic Marketing with Vartkes Iskenderian

This interesting chapter looks at the lifetime value of customers, perceived value in their experience with your brand, social conformity, and cognitive dissonance. These are all $400 words but the basic premise of the chapter is very simple: how to attract and keep the best customers for life.

  • 22 Ways to Increase Restaurant Sales

Many of these are basic, but they are all essential toward any effective marketing campaign. Examples include using radio ads effectively, Yelp, upselling existing customers, adding a drive-through, and creating amazing-looking menus.

  • 12 Tips on How to Increase Satisfaction in the Restaurant Industry

This chapter looks at different, down to earth ways we can increase the happiness of the customers we have. Most people know that it costs a lot more to get new customers than to keep existing customers, and this chapter intends on helping you do that.

  • Are Coupons Good for Business?

This chapter looks at businesses like Groupon and asks an important question: Do coupons hurt your business in the long term?

  • Radio Advertising 101 with Bill McBee
  • The Importance Brand Positioning
  • Is Great Leadership Just Another Marketing Role?
  • Leadership Lessons from the Indian Tea and Chinese Steamed Buns

(make sure this article doesn’t copy too much from HBR for copyright purposes) Replace this with how to motivate employees.

  • The 12 Characteristics of Great Managers with Ara Iskenderian (make this 21 and add a few characteristics from different articles and re-write them)
  • The 12 Different Styles of Leadership (add some nice graphics, one for each style)
  • The 12.5 S’s of Leadership: How to be a Super Leader
  • The Business of Leadership: Chapter from Brian Tracy’s Success Today [make sure it is the latest edition from May, include name of this book]
  • Maximum Wage for Minimum Skill
  • Dikran Iskenderian Interview (rename this chapter for 4th Edit) Re-organize chapters for the 4th edit after a full read-through and place this chapter in the first 5 chapters of book.
  • The Scorpion and the Frog
  • Locations, Landlords and Lawyers [Lease Doctor Chapter to follow]
  • The Lease Doctor: Fixing Broken Leases
  • The Art of Negotiation with Jack Nasher
  • Risk Management: Interview with Dennis Healy
  • Let Them Eat Cake: Interview with Damon Wallace and Sevada Markosyan
  • Morgan’s in The Desert: What Makes a Leading Waldorf Astoria Restaurant Tick? Interview with John Healy

 

The Appendix

 

On the Los Angeles Times articles and other media/ the best things they say about us. Remove the old / negative workers strike article instead put the very BEST of what people say about us from all the menus and our web site.

I can use their logos (fair use) as I am only quoting them.

This is a great way to show people how they can do it too and how third party praise is special.

Appendix A: Yelp FAQ

Appendix B: The Los Angeles Times Article

Appendix C: Complying with ADA—Americans with Disabilities Act

Appendix D: Sample Work-For-Hire Agreement

Appendix E: Sample Copyright Agreement for Web Site Development

Appendix F: Sample Copyright Release Form (not a real chapter can go in the appendix)

Appendix G: Provide an Example of a simple Employment Form Application

Appendix H: Link to Los Angeles Magazine Article by Mark Arax

Appendix I: The LA Times quotes and other 3rd party praise.

Conclusion: Write a New Conclusion for the 4th Edit

About Dikran (from Brian Tracy Book) update this for book on 4th Edit

Epilogue

 

Conclusion

 

 

 

 

 

 

 

 

Introduction (Query Letter)

Every year, thousand of families and individuals embark on a journey to open a new restaurant. The quest to start and run a successful restaurant enterprise is one, which can be gruesome: the odds are stacked against you. Every year, anywhere from 40-60% (depending on who you ask) of these people fail within 3 years. What is the secret formula to follow to ensure success? Some experts say your chances of succeeding are better if you open a franchise, since that is a proven method. Others say to avoid franchising altogether since you would be bound by contracts that are so strict some would call it enslavement.

Who are we to listen to? I wanted to write a book about this topic to help these people. I began this adventure about 5 years ago, in 2011 after I finished my certification in marketing from UCLA. I am a voracious reader, yet I never stumbled upon a book that can help people not just open and run a successful restaurant, but also teach them how to effectively market themselves and deal with all the problems and issues typically arise.

This book is the first of its kind. It is the only book on the market written directly from an insider: someone that owns, runs, and markets a restaurant. I researched these topics extensively for 4 years and wrote this book as a gift to all the authors that helped me along the way all these years. It is my way of giving back to the universe and to the literary world that has given me so much and has enriched my life. I can say for certain that my life would not have been as rich were it not for all the books that made a positive impact in my life. This book will help you avoid the mistakes I have made in my 25 years in this business. We work in an extensively competitive, shark-eat shark environment in the restaurant industry. Consider the numbers:

The National Restaurant Association estimates that there are 245,885 quick-service restaurants in the USA. There are 224,560 sit-down restaurants (with waiting staff), bringing the total to 470,445 locations. About 42,000 new restaurants open each year. Taking this into account, we have over half a million potential buyers for this book annually. This does not take into account the thousands of times each year restaurants do not open but change ownership; this new management is hungry for knowledge about how to succeed in the restaurant space.

There were 4,442 more restaurants in the U.S. in the fall of 2012 than there were in the fall of 2011, according to a recent census conducted by The NPD Group, a leading global information company. The total number of U.S. restaurants is now estimated at over 1 million. The restaurant industry employs over 14 million restaurant employees. Over 1.7 million people start working in this industry anew each year. A study by the National Restaurant Association showed that 9 out of 10 restaurant managers start at the entry level. 8 out of 10 restaurant owners started their career in entry-level positions. These are all people that would love to buy my book.

Researchers at Cornell University and Michigan State conducted a study. They looked at various restaurants in local markets over a 10-year period. They discovered the following:

  • Within the first year of opening, 27% of new restaurants failed.
  • Within three years, 50% of the new restaurants failed.
  • Within five years, 60% of the new restaurants failed.
  • Within ten years, 70% of the new restaurants failed.

Until now, people simply assumed restaurant failure rates are the way it’s supposed to be. But it doesn’t have to be this way. These failure rates are dismal because most people don’t do their homework and open their restaurants without enough hard work, the research, or the team that is necessary in order to succeed. This book will fulfill the role of being the one book in the marketplace that can help these people. No one has ever written a book exactly like that. The emotional, psychological, and financial turmoil suffered by these people every year can be avoided.

According to the National Restaurant Association, approximately $710 billion is generated every year from restaurant industry sales. Restaurants gross a combined average of about $2 billion per day. Our industry employs over 14 million people, making up 10% of the total workforce in the United States. Many of these 14 million employees and managers hope to open a new restaurant every year, and they are the ones that make up the large number of new establishments that open annually.

In addition to this, the Food Network has made restaurants famous with shows like Restaurant Impossible and is credited with starting the “celebrity chef” phenomenon. In 2013 the Food Network was watched in an estimated 99 million (approximately 75% of) US households.

My book is unique because it will teach you almost everything I know. I have gone through great lengths to summarize the best knowledge available in this field, by interviewing all the professionals. I have asked them questions no one dared ask them; I got close to them because I wanted to know and I wanted to learn and grow, not just for this book but also as an individual.

Not long ago I was featured on a Food Network segment titled “The Best of Garlic“, which has been viewed by millions of Americans on TV and has been viewed over 65,000 times on YouTube. That video can be seen here

https://www.youtube.com/watch?v=ZcR2k5gkkqo.

I still get stopped and asked about my appearance on that show all the time. It was so much fun to do that I look forward to being on that network again, and possibly being in the next Zankou commercial as well. We made one here

https://vimeo.com/120767969.

And while I have had my fun with all the people I’ve met in the process of writing this book, my greatest reward will be to know I have made a positive impact in your life.

For those that do not know me, I am co-owner of a famous rotisserie chicken chain here in Southern California called Zankou Chicken. My name is Dikran Iskenderian, nice to meet you. My name is very Armenian, since that was my great grandfather’s name. It was also the name of our greatest King, King Tigran the Great, who made the Armenian Empire stretch from western Turkey to Cyprus to Syria a century before Christ. My father always used to say our lands started shrinking when we stopped making weapons and started making churches. Armenians were the first nation to accept Christianity as a state religion in the early 4th century.

Back to the book: this adventure took me to many places I had not imagined, helping me learn so much about the topics I had not thought much of before. I started with a clean slate, asking myself a simple question: “If I wanted to open a new restaurant and had no experience, what would I want to know?” The answers kept flowing into my mind.

For one, I would love to know what kind of restaurant I should open. Next I would want to know where I should open it. Naturally after that I would love to know how do I find the right location once I know where to open, for example, where would I look specifically to find the right location. As you know, location is extremely important in this business. It can make or break you. I would love to know what’s the difference between a regular restaurant and a catering business.

I would love to learn how to negotiate terms better with landlords and distributors. I would love if someone taught me about the correct marketing methods, ROI, how to come up with a great mission statement, whom I should hire and whom I should fire, how to form the right team, and whether or not I should franchise. I would want to know all the positives and negatives of different ownership styles. I would want to know the different styles of leadership and how I should behave around my employees.

If you purchased this book I want to say: congratulations, because you are holding the only book available that will answer all of these questions and more. I worked hard to make this book fun to read, educational, and immensely informative for you. My ultimate goal is to follow my dreams and become an instructor, where I can teach this material to everyone all across this great country and the world.

Thank you for the opportunity to meet you. If you bought this book please visit my web site and insert the code to get my other book, Success Today, for free. It is my gift to you for joining my family. There you can join my email list and we will keep in touch, where I will be answering many reader’s questions on social media and email.

I look forward to working with you. God bless you and thank you for buying my book.

The Business of Leadership

THE BUSINESS OF LEADERSHIP

Sample Chapter

THE BUSINESS OF LEADERSHIP

BY DIKRAN ISKENDERIAN

Some leaders are born and some are made. We all have God-given talents and abilities. However, if we really want to become awe- inspiring leaders, we must constantly study leadership by reading books about it and attending seminars. We must become what we study and lead by example, not just by words. As one of the leaders of my family’s chain of restaurants, I am always studying the best books I can find on a variety of topics.

Some of the most memorable leaders throughout history have been transformational leaders, like Mother Teresa and Martin Luther King, Jr. They had a profound impact on history. The principles they taught have endured long after their death. Their lives were so meaningful that they changed peoples’ entire worldview. Not everyone can be a transformational leader. That’s why it’s important for aspiring leaders to evaluate their skills and see what kind of leader they are best suited to be.

There’s a difference between being a leader and being a manager. All good leaders and managers treat their employees well. They pay them better than the competition and give them opportunities for growth. The best team members are those that smile naturally and have a great personality. These are important traits because personality can’t be taught. If someone is not smiling or they’re constantly bitter, you can’t change that. As long as people are intrinsically positive, they’ll make great employees. Every good leader and manager should constantly strive to make people better by always training them. This is why it’s important for leaders to never stop learning.

Management implements what the leadership plans. Managers are like car mechanics who make sure the car is running smoothly—that the oil is right, the temperature’s right. For example, a restaurant manager’s job includes:

  • Maintaining great food quality

2) Providing excellent customer service

3) Making sure employees are treated with professionalism

Good managers can help reduce overtime while simultaneously assuring people are paid fair wages. Leaders are responsible for hiring the right kind of people and writing the company’s Vision and Mission Statements, outlining clear goals and communicating them with the team, and dealing with rapid changes in the environment.

Good business leaders focus relentlessly on the customer. Leaders should always be learning, taking classes and making the most of their God-given talents. Managers, employees and customers can’t do that for us.

The managers, in turn, should watch out for the business as if it’s their own. Success for them should be the company’s growth. If they see the company has the potential to grow and they communicate that to the leadership and help them create that growth, that’s the definition of success for them. Managers want to make more money, too, but how can business owners pay them more if the business is not growing and making more money?

It’s best to shift most of your time and energy on serving your best customers. There’s a saying that 20 percent of your customers often provide 80 percent of the value to your business. It’s called the Pareto Principle. In the restaurant business it’s more like the “99-1 rule.” That is, 99 percent of customers are awesome, but you always have the worst 1 percent who constantly seem to be complaining. You have to fire the worst 1 percent of your customers. They are the ones who destroy employee morale and slow down service for everyone else.

CREATIVITY

I am probably more of a conceptual, artistic kind of leader. The restaurant business often tends to be modeled on the military style of leadership. And, just like the military, there is a very well organized hierarchy of positions. There are rigid rules and procedures, methods and protocol that must be followed. Being creative doesn’t come easily in this kind of environment.

Following mundane rules is a responsibility for management, not leadership. Leadership has more to do with vision and entrepreneurship— starting and shepherding new businesses and creating new industries that did not exist before.

Cirque de Soleil is a good example. This Canadian company came in with the revolutionary idea of wanting to launch a circus without animals. At first, people couldn’t understand how anyone could run a circus without animals. At the time, it didn’t make sense. But Cirque de Soleil quickly became one of the top entertainment companies in the world. Its owners became billionaires by asking a simple question: What are the worst parts of a circus?

Many circuses were abusing animals, so animals were taken out of the equation. Instead of animals, live music with staged acrobatics, grandiose costumes, mystery and magic were brought in. That’s what people wanted to see, and the extraordinary success of Cirque de Soleil shows that the public supports and loves the concept behind any business that operates with integrity.

There’s a book that I highly recommend, written by W. Chan Kim and Renée Mauborgne called Blue Ocean Strategy. Their concept looks at what customers want and gives it to them by creating a new industry instead of competing with existing businesses. By creating a brand new niche it destroys the competition because it doesn’t even have direct competition. This book teaches you to come up with a concept, do your research, put together the best team you can to implement the idea and get out of the way.

Suppose that I have an idea for a new kind of nail salon. In doing the research for it, I ask women what they hate the most about nail salons. It turns out that a lot of them don’t like the fumes. They also don’t like the fact that many of the employees in nail salons can’t speak English. They hate the fact that the seats in nail salons aren’t very comfortable. “I wish there were wide-screen TVs,” some of the women say. “I wish I could get a nice cocktail.” Others want comfortable sofa-like seats that give massages. A few even want private rooms in order to host a special event for their best friends.

I also ask what they would want more of and I get responses like: “extended hours,” “dead skin fish treatment,” “friendly and attentive staff,” “better brands of color and organic nail polish,” “fresh smoothies,” and “live music spun by a DJ on the weekends.” I would never be able to come up with these ideas on my own.

After doing the research, we must start coming up with solutions. One way around the fumes may be in an open-air setting or better ventilation. If nobody has done anything like this before, it would give me confidence in its future success.

If I started such a concept and it was based on sound market research, I know it would be a solid place to start. I know that if I get such a concept up and running, I wouldn’t be the one managing it. That’s because I’m not—and can never be—a manager. I’m the person that usually comes up with the ideas but not the best at implementing them.

But even the best idea, the best product, needs to be marketed well and have the right team. It’s safe to say that in business there can be no success without great marketing. Take Apple for example. They display their products on billboards against a background that is a clean, white opaque. In fact, all you see is the product and a tag line—an iPhone 6, say— hypnotizing you to buy it. It’s almost as if the viewer has no choice.

It’s important for an entrepreneur to find a niche and create a culture around it. Look at what you’re good at and try to come up with something no one else has created. If we really do what we are best at, it doesn’t even feel like work and life actually becomes fun and full of adventure. Then figure out your target market—the kind of customers you’d like to sell your product to. I have found that once we do this, the key players and new team members seem to magically appear and help to attain our goals. Success Today, for example, is the product of the hard work and energy of a few key people. Hopefully being part of this book and the publicity we generate will help me become an instructor.

I am at a point in my life where I am very happy with all I’ve accomplished. My new happiness will come from writing books and teaching people, which has always been a lifelong dream. You would find me almost daily looking through books at Barnes and Noble, so imagine the thrill I would feel when one of the books on the shelf happens to be mine! What a dream come true! Through teaching and training others, not only will I realize my full potential, but will make new contacts and meet interesting new people. I want to challenge myself intellectually; making a little extra money on the side is just a bonus when you’re doing what you love.

Having read hundreds of books and articles over the years, the time has come for me to transition from student to teacher. Instead of just reading and listening to books and CD’s, I will be making them. What a joy it will be to know that I am helping people and the books I write can positively impact people’s lives long after I am gone. It’s a true sense of immortality, which is why so many people dream of getting their work published and leaving a legacy.

Since I’ve been doing this for so long, I feel as though teaching is the next evolutionary step in my growth. The best way to learn is to teach, and so I would be learning and growing myself as I teach others. I plan to eventually teach a class at UCLA Extension, having received my own certificate in marketing from there, with distinction. After that, I plan on teaching at seminars and attending various professional conferences.

I have created a new web site:

www.therestaurantmarketingexpert.com

to help me launch this second career. Among the topics I wish to teach are: branding, leadership, marketing and sales, and social media. When I first began our social media page, we had about 120 followers. We now have over 50,000 fans on Facebook and thousands more on Twitter, as well as tremendous growth we’re seeing on other networks. This took years of dedication and interaction with thousands of customers.

So to recap, the keys to real and permanent growth are:

1) Finding your niche and know your audience.

2) Creating and maintaining the right team.

3) Ensuring great service and marketing.

You have to consciously make time for yourself and explore the artistic side of you; we tend to forget the imaginative side of ourselves. If you ignore that side of yourself, you’re not going to be very happy. I keep myself busy through my artistic projects. When I get too stressed working on our restaurant business, I go to my creative side: painting, artwork, and photography.

You have to make time to socialize, meet people and network. We can accomplish this by meeting three to five new people each day. If you don’t network consciously, it will never happen.

A person’s artistic side is tied to their emotional intelligence. Just like leadership, some people are born with better emotional intelligence than others, but everyone can become better at it. The key to improving emotional intelligence is relating to people—talking to them and interacting with them. Taking some psychology classes is also a great idea. Learning about psychology enables us to study what’s behind the human mind and what motivates us. Everyone has a reason for doing things, even if it doesn’t seem to make sense.

To me, one benefit of having a high emotional IQ is that you would be more in tune with people’s reactions. You can’t force yourself on others. For example, if you’re at the airport and people are in a rush, they’re not going to be very receptive to any marketing efforts. You have to know what mood a person is in and what they really want to hear.

Emotional intelligence is about becoming a better listener and showing more empathy for others by acknowledging their feelings. As entrepreneurs, oftentimes we are poor listeners. It’s about letting people talk about themselves instead of talking about yourself. It’s no wonder that the first rule of marketing is to listen to your customers.

It’s also important to look people in the eye, especially these days when so many people whip out their smart phones and start talking or texting in the middle of a conversation. That’s rude. Give your cell phone a break and focus on people during conversations.

Reciprocity is an important principle to understand and practice. For example, if you immediately ask someone whether they would like to buy a house from you, that person would probably wonder who on earth you are and what you’re talking about, given that you barely know each other. Such behavior turns you into the personification of spam, and people hate that. But if you go up to the person and invite them to a free weekend hiking trip, you’re likely to become friends. Do something nice for someone before you ask him or her to buy something from you. These are the things that lead to symbiotic relationships, which is what we want.

As an entrepreneur, I have learned to practice reciprocity simply by showing empathy towards others. I often ask people about their day, their families and their vacations. I’m alert to their upcoming anniversaries. Even if I know nothing about them—or feel they don’t have the time to talk—I just smile at them as frequently as I can. Never underestimate the power of a genuine smile.

Above all else, a leader should always seek wisdom.

Proverbs 3: 13-18

Blessed are those who find wisdom, those who gain understanding, for she is more profitable than silver and yields better returns than gold. She is more precious than rubies; nothing you desire can compare with her. Long life is in her right hand;
in her left hand are riches and honor. Her ways are pleasant ways,
and all her paths are peace.

She is a tree of life to those who take hold of her; those who hold her fast will be blessed. ~Proverbs 3: 13-18and Biography