Everyone’s talking about the economy doing well and how people are spending money, but it’s much more expensive to operate a restaurant today than it was 10 years ago. Much more. Everything is more expensive. I think a lot of people think that operating a fast casual restaurant would come with a different brand cost model than full-service. It doesn’t.
We thought the same thing. As president and CEO of Niche Hospitality Group, I’ve been behind opening 10 restaurants in the past 12 years. The last two projects, Nonna’s Pizza & Pasta and Steam Energy Cafe, are quick-service restaurants, a departure from our portfolio of full-service spots.
I started out with full-service restaurants because that was what I knew. I grew up in restaurants. My grandfather was a chef, my dad was a beverage director and my mom tended bar. I got a taste of that life early on, and grew up in that culture. It was always a dream to own a place, but I didn’t really know what that looked like.
I have an entrepreneurial spirit, and I brought on partners to help. We opened our first restaurant in 2005, and it was natural that we would try to expand.
Seven of our 10 restaurants are located in Worcester, Massachusetts, a city 40 miles from Boston. My wife and I had relocated to Worcester from the Boston area, and I really liked the hospitality here in the city. All restaurants rely on repeat business, and I felt a deeper connection to hospitality in a small-ish city like Worcester. I really got to know people’s names. We don’t really rely on tourism, so I found how to build a deeper foundation of hospitality. We pounced on an opportunity to grow in Worcester as the city itself was growing.
As such, we’ve noticed a need for quick-service restaurants, and we’ve pivoted accordingly.
That means adapting to changing needs. I think there’s plenty of room for more full-service restaurants, but we felt like it was time for us to express ourselves through a different style of service. And, because we have families too, we hardly cook. We do sometimes, and it’s great, but everyone’s moving at a rapid pace. With kids and work, you realize, “Whoa! I need to eat!” You can’t always stop everything and take 90 minutes to sit at a restaurant. Sometimes, it has to be quicker than that.
But the expectations in fast casual have changed. People still want nice atmospheres, and they want the same quality of food, but they want it fast. So it seemed like a natural fit for us. We focused on great guest experience, atmosphere in the restaurant and food quality. We would take what we knew in full-service and apply it to a fast casual model that still exceeds expectations on service and hospitality, as well as in flavor, color, texture and the beverage program.
We opened Nonna’s in a new ice hockey arena in town. It’s great to service the folks that are going to their hockey games and practices, but, at the same time, be a destination restaurant for the community. We’re embedded in this community. It ended up being a combination of passion and opportunity.
We opened Steam, our energy cafe, in the same location. The cafe model is typical in that guests order at the counter and either eat in or take their coffee or cold-pressed juice to go.
But switching to a new business model has had its challenges. I think people can get confused because they know our brand and are expecting full-service. It’s not that they’re against what we’re doing, but they can get confused since Nonna’s still has a dining room feel. Even though it clearly has menu boards and a counter, it still feels like a dining room. “Should I sit down? What should I do?” I think there’s still a little confusion about how it works. So we’re trying to be flexible and come over to the table if they seat themselves first. That’s typical of a full-service mentality; that’s what we do. So we find ourselves offering both, which can be even more confusing sometimes. There are still some things we need to flesh out a bit.
It’s definitely a learning experience, nonetheless, in terms of getting into the psyche of why people would or would not dine in a place like this. What are their expectations?
This goes even further and impacts staffing, as well. Fast casual is a different labor model and I think a lot of people think that it’s going to be cheaper and more affordable labor, but you don’t know how many people you’re going to need to be able to pull off the same level of guest experience. Being a full-service group as a whole, we still really want service and hospitality to really resonate.
There were some things I probably would’ve done differently. It’s something we struggle with in the restaurant business. People want better service, better atmospheres, better products, organic products, local products. They want a lot of things that correlate into being more expensive for us as operators, even in the fast casual setting. They want better coffee, but more than that, they want to know the nutritional value and who made it. And they don’t want to pay much more.
So it’s very tricky right now in terms of how we balance all those products and how many bodies we need to prepare, cook and serve. Those are the real struggles in our industry.
With us, we keep falling back on the guest experience. When we look at that guest experience, what we want it to look like, feel like and smell like leads to the fact that it isn’t any more affordable in terms of expenses in a fast casual as it is in a full-service restaurant.
But our business has also seen a number of benefits since switching focus to quick-service.
Fast casual certainly does well with lunch business because people are always on the go for lunch. We also have some private dining space, which works well for private parties. And while people may not think of our Spanish tapas and wine bar for home delivery, they may think of our Nonna’s pizza and chicken parmesan. The other benefit is that my family eats here all the time, and not just because it’s ours. We’re busy and sometimes, like everyone else, we just need a quick bite.
Still, the guest experience needs to be paramount. When we make a decision, the next question is, “How does that affect guest experience?” If it’s unequivocally positive, then we make that move. If we’re not sure, then we figure out how we’re going to test it. Sometimes that’s what we call a mistake. We fail forward and learn. And hopefully we haven’t pissed somebody off enough that they’ll never come back.
At the end of the day, if we make decisions that are just based on expenses and that don’t address guest experience in a positive way, then we won’t be around long enough to talk about anything else.