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In today's issue, be sure to check out the Tip Jar section. You'll learn about "ghost kitchens", get great advice on rents, the different types of business models and find out about a terrific resource for finding a mentor.
But first, you'll learn about how Carlos Gazitua is innovating in the restaurant industry with robots and virtual reality.
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ALL ABOUT TECH
Robots, virtual reality glasses and ethnic food for outer space? This CEO isn’t your grandfather’s kind of restaurant owner.
He’s Carlos Gazitua. And he’s the man behind Sergio’s chain of family-owned Cuban restaurants. His mission is to transform the restaurant industry.
He says, “The question is, how can technology help us gain our purpose of why we’re in the industry?”
The day I interviewed him, Gazitua had just signed a deal to bring even more specialized robots to all of his family’s restaurants. He already has more than half a dozen robots in his restaurants.
STARTED BUSINESS: Family bought restaurant in 1975
Mother and Father - Cuban
Stetson University – Juris Doctor of Law
Stetson University – Master’s degree in Business Administration
Georgetown University – Bachelor’s degree in Finance and Management
DREAM JOB AS A KID: “Probably a baseball player. I mean, I played baseball… since I was 4 years old. So, to me, having fun and playing baseball was always a fun profession.”
BIGGEST GOAL YET: “If I can change the industry to make it more sustainable and economical, and make it where people are making more money… I would be really happy... But I have other things that I’m [also] working on.”
“I don’t know what the future will hold, but I do know that I’ll be moving… I’ll just keep moving, adapting and having fun with it. I think that’s the key.”
HOW TO BECOME MORE HUMAN
Of course, you mention robots and the natural concern is that that's code for future job cuts.
Gazitua says the robots in his restaurants are not being used to replace people. Instead, they’re being used for functional work. In other words, taking the dirty dishes to the dishwasher and taking the food to the servers, freeing them up to spend more time with the customers, increasing customer service. And he says tips have gone up. As he puts it, “What can they [robots] do to help us become more human?”
THE EARLY DAYS... AND LATE NIGHTS
Gazitua grew up watching his grandmother and mother in the kitchen working to build a following for Sergio’s. His family bought the restaurant in 1975 and transformed it from what he described as a hole in the wall for sandwiches to a Cuban restaurant that started making headway around lunchtime with the high school crowd in the 80s. “I remember, people would just line up just to get, you know, your steak sandwich and your Cuban sandwich and your coffee.” At night, they grew their following in the community.
It was decades in the making watching his grandmother and mother persevere in a difficult business. “They used to have a saying that they couldn’t cry at the same time – because they always had to motivate each other.”
A LEGACY ON THE LINE
Gazitua wasn’t pressured to join the family business. He just took a roundabout route back to the restaurant industry. He got an undergraduate degree in finance and management and also earned his MBA and law degree. He also got his real estate license and is a realtor and broker.
“But something just kept pulling me back into helping the restaurants because of our family business. It was a legacy business.”
He wanted to make sure the legacy continued.
THE BUSINESS SIDE
While Gazitua loves cooking, he quickly realized he could contribute in other ways. “I can never be as great a cook as my grandmother. But what I can do is work smarter and work more efficient[ly] on how to grow the business side of the model.” And he’s been doing it.
DON'T CALL IT "PALEO"
Eight or nine years ago, he noticed the CrossFitters of the world wanted “paleo-friendly” dishes. “My Latin demographic would not buy into that on a new trend because that’s not something they were interested in.”
But he knew he could get them interested if he never mentioned the word “paleo”, substituted cauliflower rice instead of rice and called the special, healthy menu offerings the “La Flaca” menu. That means “the skinny” menu.
“My volume, my business of women, particularly moms, 2nd generation, 3rd generations coming into our business was growing tremendously.”
CHANGING THE BUSINESS MODEL
Lately, he’s been working on helping the industry become more profitable by hoping to change the model which, in many cases, is unpredictable. The restaurateur has a budget and estimates revenue and costs but doesn’t know how much business they’ll make in a day.
He envisions a subscription model where you could, for example, pay $10 a month and come in with a QR code on your phone. In exchange, “You don’t have to wait in line during busy times or you have a special menu based on your category of items that you buy a lot.”
He also wants to improve operations with virtual reality glasses that restaurant operators would use. “And then you can, on your iPad… you can circle and tell them what to fix in the restaurant as you walk through restaurants to ensure operations are successful.”
He says this would work especially well for virtual kitchens and operators of multiple restaurants. For example, if he has a restaurant in Orlando and can’t be there, “I can tell my operations [manager], put on the virtual glasses, and I’m visually seeing what he’s seeing.”
CROQUETAS IN SPACE
You can tell his mind is always thinking with the end goal in mind of how to make the “out there” ideas accessible, like using his USDA facility to create frozen croquetas ready for any future adventure to Mars.
“Because, at the end of the day, ethnic food will probably be up there in some way or fashion. So that’s kind of us both having fun, but at the same time kind of being serious about it.”
GOTTA KEEP MOVING
The pandemic has wreaked havoc on many in the restaurant industry and left them overwhelmed. As a result, Gazitua says many restaurateurs are “not willing to take on… risk to make and change the industry for what they envision it could be,” especially when it comes to technology. He says his mission is to find ways to make the industry more profitable.
But Gazitua finds it interesting that it’s taking a Hispanic, a small minority restaurant, to champion new ways through technology to help the industry. He chalks it up to the life lesson in America: “You always have to keep moving to be successful.”
THE TIP JAR (tips passed out courtesy of Carlos Gazitua)
STARTING OUT: “Go to restaurateurs. Learn about the P & L (profit and loss statement) – the prime cost (food, beverage and labor costs) in order to know how to make the model work. Because you could have the greatest idea of a restaurant, but if you can’t work on the … P & L and figure out how to make money from an operational perspective, then it’s all in vain.”
“A lot of times, people want to open up and they’ll pay the highest rent. But, unfortunately, rent… is a silent killer.”
STEEPED IN SKILLS (mid-career): “You can open a restaurant on a physical block. But you can also do ghost kitchens or virtual brands that have never been available before… And I would say, look at all the options because you might want to dive into that while you’re working and then see how you like it and see what it is.”
PRACTICAL APPLICATION: “I’m in ghost kitchens right now that we’re looking to grow… I’m shipping all over the United States our products from our USDA facility. I looked at every vertical channel and I said, ‘Hey, this is a seed that I want to grow that may be [or] might not be our money-maker now… but it will be in 5 years.'” Note: Generally speaking, a ghost kitchen is a professional, delivery-only style food business without indoor dining or a public presence.
STARTING OVER: Get involved in an association (he recommends the Florida Restaurant & Lodging Association where he serves as a director on the Executive Committee)… Try to get a mentor if you can…”
Gazitua says you should get your mentor to teach you what key steps they used to make their business successful.
He also says you need to decide which business model you want. There’s QSR (quick-service restaurant/ex. fast food), full-service, family-style, fine dining and hybrid models.
I’LL NEVER DO THAT AGAIN: “Don’t pick a location just because it’s cheap in rent, number one. There’s a reason why [it’s cheap]… If you don’t have sales, you don’t have anything.”
“Don’t overpay just because you love the location.”
BEST ADVICE FROM “LA CASA”/BEST “HOUSE” ADVICE: Gazitua says two quotes stand out to him:
“Money grows when you’re at the store.” In other words, “Be physically present at the store because, when you’re actually physically present… things just miraculously seem… better. And, miraculously, they make money.”
The other quote he remembers is this: “Camarón que se duerme se lo lleva la corriente.”
TRANSLATION: The sleepy shrimp is carried by the current. He says it’s, basically, like saying, “You snooze, you lose.”
PRACTICAL APPLICATION: “You can’t be sleeping because… at the end of the day, there’s always people creating new ideas, new food, new ways of eating it. So I think that creativity also is good for the industry, but I think it’s good for making sure you’re not always relying on what you’ve always done.”
NO NEED TO GO IT ALONE
HELP ON THE OUTSIDE...because we can all use a helping hand:
BREATHE LIFE INTO YOUR BRAND
Branding may seem like one of those abstract topics, but it matters to your business and potential customers. So how do you define it, develop a strategy for it and communicate it? This FREE virtual webinar from the Florida SBDC at FIU (Small Business Development Center at Florida International University) chapter will show you how. From color to font choices, this class will help you walk away with a better understanding of branding in business.
Florida SBDC at FIU
Wednesday, December 1, 2021
1 p.m. EST – 2 p.m. EST
WORKING ON THE INSIDE...because we know our culture has a hard time asking for help:
IMPROVING ACCESS TO PRIMARY CARE
You’ve likely heard, if you don’t have health, you don’t have anything. In minority communities, access to care is not on par with white communities. And that was before the pandemic. The coronavirus has made the disparity even worse. The U.S. Chamber of Commerce is hosting a discussion on barriers, how to increase access to primary care with the goal of improving health outcomes. Here’s the link to register:
U.S. Chamber of Commerce
Friday, December 3, 2021
12 p.m. EST – 1 p.m. EST
INSPIRATION FOR THIS ISSUE: Restaurants have a special place in my heart. My favorite childhood memories go back to being a 5 year old, playing at my grandfather’s restaurant in Bolivia. It was a festive atmosphere where the lively music greeted the guests. There was a main restaurant and then several little private, thatched-roof huts situated on the surrounding land for quiet, intimate dinners.
By day, I’d chase butterflies and watch the small, exotic monkeys that lived there climb up and down the trees. By night, I’d catch fireflies for my sister and watch the rush of people in the kitchen, feverishly preparing the delicacies for the guests. Sometimes, the squash court would be converted to a long table for wedding receptions. The feeling was always of family and happiness.
So in my mind, a family-owned restaurant doesn’t seem like where I’d be talking about tech and innovation.
When I set out to write this newsletter, I wanted to make sure you heard about Latinos’ contributions in business. But I also committed to finding people who are doing things differently and transforming industries.
When people think of businesses that Latinos own, I’d venture to say, many people think of their local Mexican eatery. I wanted to steer away from restaurateurs because it almost seems cliché at this point.
But Carlos Gazitua really stretches the definition of “restaurateur”. And that’s exactly the point. Besides his focus on tech and trying new business models to move the industry forward, he started a media company. The company produced a short documentary (it comes out in December) on his restaurant joining with the community to make the world’s longest croqueta. He also says he believes he’s the first restaurateur to commit to creating NFTs (non-fungible tokens) for the restaurant industry.
These are definitely ventures I don’t associate with the word “restaurateur”. He clearly has a lot of interests and this keeps it exciting and creative for him.
But, in the end, when I asked him if he considers himself a restaurateur or a CEO, he said he considers himself overwhelmingly a restaurateur. It goes back to what he said he was interested in, the hospitality aspect of the industry, and continuing his family’s legacy.
Sadly, my grandfather’s restaurant went out of business not long after he died. The legacy did not continue.
With so many restaurants struggling to stay in business due to the coronavirus, it’s even more important that people find new ways, new models and new revenue streams to keep these family legacies going.
Gazitua says it was even more important to him because of all the heartaches the family business and family had gone through over the years. And he says, once he got involved, “It just stuck. It was fun.” And that fun and creativity is what continues to engage him and strive to keep the legacy going.
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🌴 Above all, I just want to wish each of you a great day!