Ahead of September's Restaurant Development Conference, GulfHost speaks to Sergio Lopez
Co-Founder & Board Member, Bull & Roo Hospitality and Investments
“When we started our first concept, Tom and Serg, four years ago, people would ask us “Why are you opening in Al Qouz?” But it made sense to us because it’s right in the middle of Dubai’s two major residential areas. We knew that DEWA (electric and water) costs would be more expensive if we opened at the other side of Sheikh Zayed Road – where the rents were also higher. We took that into account and took a punt on the Industrial area Al Quoz becoming the ‘Soho’ of Dubai. I still see it fulfilling that potential.
When opening a restaurant, you have to get your rent at the right price. For example, Mall rents could be more than double that of areas with less footfall, so it’s important to be clear on your concept and consider if your customers will come to you. Tom and Serg is a destination and people go there for the experience. That was always part of the plan.”
“The Tom and Serg concept evolved from its position as a unique, independent outlet. We channeled a rough, industrial look because we were playing with what we had. Funds were limited and we wanted to break away from everything you might have come to expect from a franchise. That vision drove the exposed, slightly edgy café interior you see today. Not everyone was convinced though. Dubai Municipality struggled to believe the restaurant had reached its completion and we had to produce an official letter to confirm that this was truly the finished concept!”
“Today’s menus are becoming more specialized. But my advice is to stay simple, clean and to keep an eye on the number of ingredients you are using. Large menus with lots of ingredients will see your costs rise significantly and you will need to invest more time in order to produce and deliver them. But if you work smart you can pull off a small menu made up of versatile ingredients that you can easily change and use in different ways. It is important to evolve with the times, whether that means changing your menu with the seasons or something bigger. Even established chains like McDonalds and Starbucks are evolving in terms of healthy ingredients and positioning. That doesn’t have to signal major change, it might just be a simple tweak. But remember that you can’t please everyone. If you want to, you might as well go and sell ice cream. I see the size of some restaurant menus and it feels like you’re reading a book. That’s not for me.”
“Your food costs ideally should be around the 25-27% mark of your recipe, as it is essential to maintain good margins. For that you need to have really good relationships with your suppliers who may be prepared to give you a deal and provide favourable payment terms, ideally within 60-90 days. Be inventive, use local produce instead of importing or substitute high cost ingredients for something cheaper that is similar in texture, color and flavor and see the effect it has on your bottom line.
If I had AED10 Million to spend on a startup I’d spend AED 5 Million on fit-out and equipment, AED 2-3 Million for staff and contingency and I’d invest the remainder on new projects. People underestimate the importance of investing in staff, but when it costs around AED 12k to recruit a new person, you need to make sure they are up to the job.”
“I believe in investing in people. If I see potential in a person then I’m happy to pay a higher rate to retain him or her knowing it will be a long-term investment. Every time we have recruited for a new opening, we have tried to search for candidates from abroad to suit the origin of the concept being launched. But that is a risk, because you can’t stop people from moving on or going back home. There is a small pool of talented individuals in Dubai and that is why is hard to prevent your staff from moving on to bigger roles when these are offered, even though they may not be ready to take on that position. Nevertheless, that can’t be used as an excuse not to invest in the future and growth of your employees. This will create loyalty and respect as well as motivate them to keep working hard towards your company’s goals.
The point is that when you find someone good, pay them the salary they deserve and keep them happy. I believe it is more effective to give someone a higher salary if they are good enough to cover the workload of a few average employees. It is cost effective, because you’re not paying for several visas and everything that goes with it. In other countries like in Spain, restaurant serving is a career and it shouldn’t be any different here.”
“Social media is really important, especially in this region. Customers will come in and say “I want that” pointing to a post they’ve seen on Instagram. But you need to be consistent, you need a strategy. There should be three distinct streams – your social, your PR and the marketing strategy that underpins everything. And you need to keep an eye on new trends.”