2087 – Mastering Restaurant Entrepreneurship with John Felico

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1:05With us right now is John Felico. John, you are a restaurant consultant. You're an author. Your book is called Drafting a Dream, the only restaurant guide you'll ever need to stop screwing up and start winning. Your website is johnfelico.com. John, thanks for joining us. Thank you for having me. Yeah. All right. Well, give us a quick introduction to your work and who you serve and what you do. Well, my latest piece of work is, as you mentioned, I wrote a book on the restaurant industry. Of course, as you know, we all sit with that book kind of sitting in the back of our minds for our entire life until we're able to start writing it.

1:41Recently, I opened up, my latest creation was a bar that I opened up in downtown St. Augustine. And at the beginning when I first opened it, it was a sports bar. At the beginning, when I first opened it, it didn't hit all the numbers that you would expect. And you being an entrepreneur, you know that kind of your business never ends up being what you thought it was going to be at the beginning. So we started making adjustments to it and we started making started dealing with, you know, for example, the people that were outside of my restaurant were not the exact customers that I built the restaurant for.

2:13And in the restaurant industry, it's important to know that you really you can't you have to make those adjustments for a restaurant to succeed. Unfortunately, there is no one size fits all that I can give any one of your listeners or your viewers. This is how you could succeed in the restaurant industry. The truth is most entrepreneurs, most natural born entrepreneurs like myself, when we open up a new restaurant, it never really does necessarily take off the way we want it to. And I'm talking about a new type of concept, unless we're lucky. And I've been lucky over the years. In this particular case, it wasn't exactly what we wanted.

2:50We only grossed about$200 ,000 over the first six months. Fast forward two years later, after the adjustments that we made and everything that we did to the business, it was grossing$2 million a year. And I thought that this would be a great case study to write a book, to kind of show people how you take your failing business, first how to develop a business, and then start recognizing where your business might be falling down or the challenges that you have and how to overcome them. And it gave me the opportunity to kind of put in all of my rules to be a success in the restaurant industry, which I've been sharing with people forever.

3:25And it allowed me to kind of take those rules, apply them to Augie's Draft Room, which is the name of the business, and how I would have some actionable solutions to fix those things. And the book will take you through a ride on exactly any type of problem you might have in your restaurant is addressed in the book. And I do it in a way that you can actually look at it and say, oh, this is how to fix it. And I'll give you a great example of that. My daughter, it was always planned that my daughter and my son-in-law would take over the restaurant after we completely developed it. And about three or four months into it, my daughter Rebecca looked at it and she said they were having some food cost issues.

4:02The food cost was coming out around 36%. And she opened the book to the chapter that's called Controlling Controllable Costs. And unfortunately, you can't just look at one thing and say that's the food cost problem. The truth is food cost problems are like death by a thousand cuts. The truth is there's problems all over the board. And the only way to fix food costs is to fix everything. She was able to take the book, put a solution to every piece of the debt that could potentially be the problem. And within two months, her food cost was back down under 28 percent. And that's the kind of solutions that are in that book.

4:36I go one step further. Our new concept, Augie's Draft Room, without question, has been the greatest concept I ever created. And I've created dozens of concepts over my career. In fact, I grew one of them to 150 stores, 175 stores. But Augie's Draft Room, if I was a little bit younger, I probably would franchise it. But instead, at the end of the book, I just tell you how I did it. everything that you would need to own your own version of an obvious draft room, which is a self-serve tap house and sports bar. Yeah. So getting to, so I think a lot of times when we think about when we come up with concepts, I wonder how much of that is, you know, the person sitting on their couch, scheming and dreaming, thinking about, you know, what I really love is dot, dot, dot, dot, dot.

5:24That's our brilliant. And then everyone kind kind of high fives each other at the nerd table. That's a brilliant idea. You should do it, right? So that's one way. And I'm not going to tip my hand too much about where I'm kind of going with this. But another option might be one where you are doing a lot of research, due diligence, surveys, conversations, gathering data, and maybe realizing that as brilliant as we are, maybe we're not smarter than the market. What's your take on this? No, you are, I can't, you are 100 % right. In the first chapter of my book, I actually, I don't even go into the restaurant industry at all.

6:06I talk about entrepreneurs and the different types of entrepreneurs. When I had my franchise company, we had 175 locations out there. I interviewed or worked with literally thousands of people. And it became clear to me that there are different types of entrepreneurs. And I kind of broke them down into four different buckets. And the first being like somebody like yourself would be a natural born entrepreneur. And what makes us different, although people think that entrepreneurs are risk takers, a natural born entrepreneur, our risks are mitigated by how much we think things through. You know, when I when I start telling people, they think I move real quick when I open up a restaurant or I open up a business.

6:45The truth is, by the time I'm starting to tell people, the restaurant has been completely thought out. And that's why I think I move so fast. And I really don't. We think about everything and we don't just stop before time. I run the processes and systems and checklists and customer experience through my head 24 hours a day. We just can't stop. I'm sure you're the same way. You just never can stop doing that. And then as you start going down the different types of entrepreneur and the reason why I do that, people people don't have to be necessarily a natural born entrepreneur to succeed. but you do need to understand your own limitations.

7:19And a lot of times you have to work on those just to actually become an entrepreneur. You know, and you can read my book to kind of, it's called Know Thyself. And you really want to understand who you are before you step foot in it, before you step foot in this type of business. If you're the person on the couch, just kind of great, I'm coming up with great ideas with your friends. You really have to understand is this career, is this lifestyle for you? It's like nothing else anybody else has ever experienced. It is all-inclusive, all-encompassing type of a venture. So that's where you stand. You have to.

7:56First thing I'll tell people to do is you need a business plan. And when I had my franchises way back when, I would get so much pushback on young entrepreneurs that didn't want to draw up the business plan. I wouldn't allow them to move forward. It wasn't so much having the business plan as it was writing it so that you can understand it, so you know what you're getting into. So you're right. All of that planning, all of that has to be done. Otherwise, you're going to fail. I mean, you are. You're just going to fail. Yeah. Well, let's break down maybe some of the biggest components of, you know, if we were to do John Felico's restaurant makeover.

8:37By the way, I'm sure you could think of a couple of tv shows that are out there that uh that you may or may not agree generally with what they do i think usually they they have pretty good great advice but i'm thinking a lot of times you know they'll obviously they're taking a look at the menu a lot of times the aesthetic is really maybe under appreciated or undervalued um but i think for me like a vibe is is everything and And that comes down to not just what's on the walls, but how does the menu look? What is the branding, the external physical branding of the concept? I can tell you, I watch my wife.

9:21I'm a little too nerdy on this. So I think I'm a little bit more introspective or self-aware when it comes to how I respond to branding. But it is fun to see someone that might be not as conscious about that and kind of how they, oh, I like that. And meanwhile, I'm kind of smiling to myself like, yeah. And of course, I think we all, especially for those of us who have been in a partnership for a long time and we get to know our partners so well. And so like it's like you see something, you see like a brand or you see like the vibe of something. You're like, oh, yeah, my wife's going to like this place.

9:57Like you just you start to get a feel for that. And all of that is quite intentional, I think, is what you're saying. Oh, no, no question. And food to me, when I'm developing a concept, the food is almost my afterthought. I never. Wow. Wow. That sounds weird. But I can I can basically copy any menu unless it's really super high end because I'm not really into gourmet type of cooking, like high end types of places. but I could copy any menu that's out there. There's no doubt in my mind. I can grab pieces from different menus and piece together a really well thought out menu that satisfies all the customers.

10:38I'm never, I never even think of that first. The first thing I always think about is I don't create restaurants, I create an experience. I'm looking to create experiences for people. The food can actually then, I can then adjust my food to be with what the experience is. That's always the way that I look at it. Even when my first restaurant, you know, I grew up in a family of entrepreneurs. And the entrepreneur, the venue of choice that we had was food trucks, way before food trucks were a thing. We're talking about my grandfather was doing food trucks. They weren't actually trucks. They were trailers and maybe wooden stands before that.

11:15But that's for the first time I opened a restaurant was a food truck. And you grow into that environment and it becomes, even with the food trucks that we had, people came to us because of the environment that we built. Not as much the food at the beginning. It sounds weird, but that's the kind of experience that we grew. So much so that Lowe's actually, Lowe's Home Centers, they signed a deal with me to open up 175 locations in front of their stores. They wanted that, this was in the 90s. They wanted that vibe. They wanted that experience in front of their store. And it really worked well for years.

11:52I sold it about maybe 12, 13 years ago, but it was a great concept. i you know i love that line and i hope someone heard it just like i heard it right i i don't create restaurants i create experiences i think that you restaurants right that's the word you'd which i think is just is just um it's brilliant um and again um you know we talked about this a little bit um about um how we gather this information um are you how do you control the like how do you get that information from the audience like if you truly want to know other than, okay, well, we put up this sign and foot traffic went down. So that would be a painful way of learning this.

12:31How can we figure some of this stuff out? Well, it goes across the board. You start out with your best foot forward. I have enough experience that I think that I could create something that'll create interest. From there, it just becomes different types of adjustments. If your ticket average is too small, you need to start working on ways to either upsell or to create an experience where people want to spend more money and think they got value for it. It could be the flow of the traffic coming through your place. There are so many things to look at when you're trying to build that business, especially if it wasn't right.

13:10And I'll give you a great example. Again, we'll talk about Augie's Draft Room. When I opened up Augie's Draft Room, my plan was I thought St. Augustine was a vacation town. Everybody thinks St. Augustine is a vacation town. Unfortunately, it's not a vacation town. It's a tourist town. We were just talking before the interview that we traveled two hours to come visit St. Augustine. My plan at the beginning was to open up a self-serve tap house with some finger foods and stuff like that. And I thought I'd make kind of a daddy type of daycare with some sports on and things like that. And the problem with a tourist town, there's two problems.

13:44And I didn't recognize this at the beginning. The first problem is tourists do not power drink. They're not going to sit there. You're not going to come to Augie's draft room after you drove from your house two hours away and drink for five hours because you've got to drive back home. They'll have one or two drinks. They'll hang out for a minute and then they go off to the next place. That's the first thing we're not going to have. And that is St. Augustine for me. That is exactly right. The second thing is people that come to St. Augustine, if they're just day tripping it, they're not making reservations.

14:11And unfortunately, if you go to St. Augustine, you try to go to a restaurant, it's a three hour wait. Yeah. And so to me, it became clear after I realized, put that kind of in my calculation that saying we needed to add a quick service restaurant to my bar as the work. And sure enough, it just exploded. You know, I decided to go with burgers again. Like I tell you, I can make I could copy anything. I went to some of the best burger chains in the United States and looked how they did it. Fast food chains, you know, like the five guys of the world, the things like that. And I took it, I localized it, I made it my own.

14:47And that's the menu that we're serving today. And we serve thousands. I mean, last year we sold over 80 ,000 hamburgers. I mean, it just becomes crazy what you could do if you hit the right customer at that. You know, I mean, I'm sorry. If you know the customer that you're serving and you give them what they're looking for. John, there's so many questions. I wish I had time to ask you. I do need to talk about how you work as a consultant with other restauranteurs. But actually, I will I will come in and if a restaurant is failing and they have no way out, unlike the shows that you were talking about.

15:21Well, you know, you did say something that was right. Those shows are they are great shows and they have great ideas. Unfortunately, what they don't do is they may change the physical store, the physical restaurant and what it looks like. But the space between the walls isn't the first thing that you need to fix. It has to be the space between the ears of the person running it. They have to understand why these changes need to be made. If they don't, they're going to go right back to the way they were before. Yeah, absolutely. They have to understand it. And that's what I'll go in and I'll work with the operators.

15:50I'll work with them to, you know, obviously I'll give them my 16 rules. And that's the most painful thing with them because it actually shines a light on areas where they're falling down. And it's always the most painful part of our conversation. But once they start understanding this is where you're falling down and here's how to fix it, then we could start going down that road of fixing it. Yeah, it's harder to change culture from the outside in, right? Just putting motivational posters on the wall is not how you do it. It starts with, you know, kind of, you know, again, that introspection and looking within and, you know, who are we?

16:26What do we stand for? What experience are we committed to providing and why? You know, why are we doing this? Like those types of questions, I think, are just fundamental. John, share a bit about your book. Your book is titled Drafting a Dream, The Only Restaurant Guide You'll Ever Need to Stop Screwing Up and Start Winning. I wanted to create a book that was just, it's plainly spoken. I'm not necessarily a writer, but obviously it's been edited so people can actually get through it. But I wanted to create a book that first spoke to people in a way that telling them, explaining being an option entrepreneur to begin with.

17:07In the first chapter of the book, like I mentioned before, I break different types of entrepreneurs into different buckets just so that you can understand this is what's expected of you. And if you can't do this, you should not do this. If you can't see yourself living 14, 15 hours a day at times in your restaurant, you need to understand that this is not for you. The restaurant industry, unfortunately, you want to be home with your family on the weekends. Most people do. You want to go out to restaurants with your family at night. Unfortunately, those are the times other people want to go to the restaurants and you have to be in your restaurant.

17:42You have to understand all of that is part of it. You know, the public facing side of a restaurant is sexy. Everybody looks at it and says, I'd like to have that restaurant. I have this great meal that my mother used to cook and I think I'll make a million dollars doing it. That's just the sexy, the fun part of it. The hard part is, you know, when you walk in and everybody quit in your kitchen. And this is like this with almost any type of business. The hard part is that it's hard to keep employees in this industry. It's a difficult business. And I want people to understand that before they move on with the book.

18:16From there, I'll actually, a lot of people aren't qualified to do a startup. So the franchise route might be the best thing for them. And I explain to them exactly what a franchise is. Most people don't have a great understanding of that. So I go through it with them so that they can understand, here's a franchise. I'm a fan of actually going into a franchise. I think that's great for a lot of people. But they do need to understand the financial cost to get into it. They need to understand what the franchisor expects from them. From there, I'll go into my rules. I break down, this is 40 years of everything that I've ever overcome in my career, broken down in my 16 rules on how to be a success in this industry.

18:55From there, I actually then go into all these draft rooms, explain to people what a self-serve tap house is, why I thought it would work great in St. Augustine. And then of course, I actually put in my business plan, copy it, use it as a guide to create your own business plan. And then I'll take them through the downs of all these draft rooms, actionable problems. I mean, problems that had actionable solutions to and exactly how I fixed them and how it translated into getting it from 200 ,000 to 2 million. And then lastly, I'll tell people exactly how to do an obvious draft room on their own, their own version of it.

19:35Love it. John Felico, again, your website is johnfelico.com. We've got the uh link uh in that on your podcast app uh again you're a restaurant consultant author and of course uh the uh founder of augie's draft room i do appreciate you do you have uh do you have anything other than beer on the tap there i'm a cider guy we we have beer we have wine seltzers ciders okay good cider i'm there we'll see yeah we have a full we have about eight ciders on the wall oh my gosh seriously well i'm coming up to visit then john felico thank you so much for joining us. We'll see you soon, my friend. Thank you.

20:11It was a lot of fun.

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