Why Chain Restaurants Are Collapsing

We dig into why the chain restaurant model is collapsing and why the causes run deeper than inflation or a few bad quarters. We argue that authenticity, craft, and real hospitality are pulling diners toward chef-driven and independent restaurants as costs and expectations collide. 

• nostalgia for the peak era of chain dining and how consistency drove growth 
• how corporate systems and franchising pressure quality control over time 
• prefabricated food, rising supply costs, and why “bagged” menus backfire 
• labor costs, cost of living, and why staff tolerance has changed 
• delivery app commissions, credit card fees, and shrinking restaurant margins 
• how chains trained customers to expect freebies and low prices 
• why social media levels the marketing playing field for independents 
• the shift toward experience-driven dining and away from malls and movies 
• predictions for regional franchises and reinvention over mega expansion 

Start focusing on paying attention to the small independent restaurant tour and really focusing on the fact that if that's the only thing that's gonna be left, capitalize on it and get in it before it happens.

Welcome to the show! Burnt Hands Perspective

Transcript

Welcome And The Big Question

SPEAKER_00 0:24

Listen up here. The restaurant industry is gruelling and unpredictable. Just like this show from the front of the house to the back of the house and all in between. We will turn up the heat, you turn up the bargain. I'm Chef Antonio Carijuana. Welcome to the Tel Av podcast at Burn Hans Protective. 321 go. 321 go. Fall of the Chain Restaurant is the name of the exact time. This is the Fall of the Chain restaurant.

SPEAKER_01 0:48

Well, you've seen it in the news lately. People are, you know, we see all these restaurants closing, and not just chains, but we're gonna focus specifically on kind of the chain restaurant model and why it's failing right now.

SPEAKER_00 0:56

Yeah, big time. So if you look back, I remember being young. I mean my 51 now. So looking back 20 years ago.

SPEAKER_01 1:03

Way back.

SPEAKER_00 1:04

Way back in the day. So we're talking about way back in the day. We used to ride horses to these places, and what happened is you know, if you remember back when TGIF started, that place was all the rage. Olive Garden, uh, Benigans, Chili's, um, Applebee's was huge. Everything was Applebee's.

SPEAKER_01 1:22

We had Big Boy, Big Boy was Midwest. I had a big boy. That was the fanciest restaurant where I grew up.

SPEAKER_00 1:27

Up north, they have 99. So the bottom line is what we're getting at is all these chain restaurants, ground round, where you used to pay what you weigh as a kid. These places were pumping, right? And that goes into all different genres, too. You had Italian places, Mexican places. It was all based around this chain thing. And it was typically one big restaurant group who would own it. They turned it into a friggin' uh just a complete business, right? So now here we are, and you're starting to see these places fade away. Red lobster's going through a huge problem. You know, even fast food places, Wendy's, all these places that became um uh basically corporations.

SPEAKER_01 2:05

Well, they were systemized, they're a business. They weren't really a restaurant anymore. I don't know if that makes sense.

SPEAKER_00 2:09

Is it they're more of a business? No. It was it was definitely it took or corporate corporate model, right? And at the beginning, everything started with the best intentions, right? So somebody had a great restaurant concept at the beginning of all this. Yeah, Red Lobster at the beginning was a really good restaurant once, right? It had to have been to create a franchise, and then your next one, next one, and next one. So it was okay when you had 10 of them to maintain that, right? Somebody would buy the control. Quality control. Yeah, well, somebody would buy into the franchise. That person had this dream of being a restaurateur, and with that being said, they would be able to have some sort of pride, right? However, once you had 20 of them, 40 of them, 50 of them, 60 of them, hundreds, now consistency becomes an issue. Yeah, everybody wants consistency, and that's what happened. The blue-collar layman, uh, when it comes to food eating, the layman, when it comes to that, they want consistency. They want to be able to take their$20, get the two-for-one deal, make sure the steak is perfectly done, medium, every time every time, the potato is done, loaded the way they want, whatever it, whatever it may be, right? Everybody wanted that. Yeah, so they put the fancy stuff everywhere. The music, the flair, the flash, going out to eat became something very simple and very easy for most people who don't have a big exquisite palate to understand and appreciate. True. So as time went on, that wore the fuck out, Jack. Right? That wore out.

SPEAKER_01 3:34

Well, there's a lot of blame right now in the industry as far as, you know, dining habits, consumer habits, inflation, you know, taxes, um, quality. Like, there's so many things that can go into it. So, I mean, you're saying a lot of these chain restaurants aren't just going under because of one thing. I mean, it's not just inflation, it's not just like what do you what do you think is some of the main reasons that they're really starting to go away? Do you think consumers are waking up like they want more?

SPEAKER_00 4:03

I think consumers are waking up number one. I I think that's the case, but I think it's become such a business that everybody involved with the business is in the same mindset. Okay. The food purveyors, the little bags of food they make in their prefabricated factories. Um, you know, some a lot of these restaurants don't have their own little factory. Let's just say Tony's Tony B's, right? Is out there, and I have 75 locations along the Middle East Coast.

SPEAKER_02 4:33

Yeah.

SPEAKER_00 4:33

Um, or 175. Let's say it's that big, okay? How am I gonna produce that much food? There's no factory of Tony Bees. I don't have my own kitchen somewhere and I'm supplying. I have to source these places out regionally, and they're gonna follow the recipes like you would make a jar sauce, and then you would end up dumping it in and stuff like that. The bagged foods, the olive garden, you know. It goes all the way down to that friggin' detail. Yeah, so the bagged person's gonna cost more, the person who's making your food's gonna charge you more, the trucking goes up, the packaging goes up, the ingredients go up, so now you have to cut ingredients, so now that changes everything. And as time goes on, that's what happens. It becomes a serious issue. So I don't know if the business model holds anymore, is what the thing is. So I don't know if there's so much of a demand from people. I just don't think that business model belongs in restaurants anymore. It's not feasible. That's what I think. You know, being a restaurateur and a restaurant owner, I know damn well that it's it's almost not feasible. There's no way to make money anymore in that in that style, you know? It's just not a it's not a smart business.

When Restaurants Became Corporations

SPEAKER_01 5:35

Well, and you said, I mean, so we want to kind of go through like four different like different bullet points today. And you said the old chain restaurant formula, so like old chain versus new chain. Like, I mean, what's the major differences that you're seeing?

SPEAKER_00 5:49

Um, people.

SPEAKER_01 5:50

Yeah.

SPEAKER_00 5:50

I think people are are the difference. There's a much lower need for people to tolerate a lot of shit. Yeah, and I'm talking about from the employees. Let's start in the restaurant, okay, like in the kitchen, in the kitchen or in the front of the house. There's a lot less need for people to tolerate shit anymore. You know what I mean? That that's the biggest thing. And I don't I don't think it's so much the industry as much as it is the people.

SPEAKER_01 6:13

Do you blame? Yeah, I mean, we've talked about kind of um that mindset, like new generation mindset. Yeah. So I mean that's affecting that mindset. Well, you know what?

SPEAKER_00 6:21

And and the more I'm thinking about it, and the more we talk about it, the more my mind kind of sways now that I'm looking at life, you know? Because there's only so much water you can squeeze out of a rock. The problem is everybody wants the most water out of every rock that's in front of them. So you can't the the restaurant industry is getting so difficult now to make money or put more water into that rock that it's almost impossible to squeeze. So there's only so much margins you can put up. There's only so many times you can bring a steak up or a bowl of pasta up in cost. There's only so many people are gonna pay so much for it. Yeah. So, with that being said, there's only so much tolerance, also, that you know, this the staff that comes in, it's not like it used to be. Their living conditions are different. Yes, it costs so much money now, and there's a lot more people staying with their parents, and there's a lot more younger people allowing their 18, 19-year-old kids to stay home.

SPEAKER_01 7:11

And not even have a driver's license yet.

SPEAKER_00 7:13

Well, and you know, I used to think that I used to kind of blame that on the parent, right? But now I'm looking at society as a whole and I'm thinking to myself, if I was 30 years old and I had an 18-year-old, right? Or whatever, right? 35.

SPEAKER_01 7:26

30 with an 18. No, let's let's let's go up a little bit.

SPEAKER_00 7:29

Okay. If I was a younger adult, right now.

SPEAKER_01 7:31

Yeah, like late 30s with an 18-year-old, yeah, 40, something like that.

SPEAKER_00 7:35

Well, there's some young people out there right now, believe it or not. So you're 30 years old. Yeah. 35. Let's say 35. You're 35, you're making a decent wage, you have to come in. Now your kid's 18, 19 years old, getting ready to leave the house. All right. Now, I'm looking at parents now, wondering, is it the kid can't go leave? How the hell is my kid? My kid right now is gonna be 17, right? How's my kid gonna leave and go pay? Gonna afford how I could barely come on, how are you gonna expect my daughter right now to go pay for everything that they're supposed to pay for? What is she going to do? Make a hundred grand a year at that age? It's impossible. But the society demands it. Or is it easier for me as a parent at that age, younger age, to you know, not everyone has a not all people my age have a 17-year-old. You typically they're younger, right? Yeah. So it's easier for me to say, all right, you can go out and pay$1,800 a month for rent, or you could pay me$600 a month and stay. Now you're helping me. Yeah. Now I'm helping you. And that that's what's that's where society's fucking going.

SPEAKER_01 8:36

Yeah.

SPEAKER_00 8:36

You know what I'm saying? It's not that kids don't want to get up and leave. I can't. You know, I have people all the time that want more than$20 an hour to do a job and they haven't even been in a workforce for two years ever. And it's impossible because it's like, yeah, there's just not enough overhead. There's not enough there. There's not enough left over to the city.

SPEAKER_01 8:53

Well, and even in the state of Virginia, raising the minimum wage right now, I mean, that's been on the table on and off for years, and they're, you know, but again, cost of living has gone up exponentially. But I think that a lot of the generation, in the sense of why some of these they are demanding better things because they have more access to it online. So they're able to see better restaurants, better food, better drinks, and they they kind of want that part of it, but they can't afford it, so they make their time. It also kind of taught you online that you could make money doing a lot of different things, like selling things online, doing other stuff. So a lot of people at JRA making way more money than we made at that age.

Bagged Food And Rising Costs

SPEAKER_00 9:28

I mean, we survived on ramen noodles and you know, well, you think they are, but I think one of the biggest things they sell online is a fucking idea or dream. Yeah. Yeah, yeah. And a lot of kids get lost in that too, right? So therefore, they're never gonna make that money you want to have. But let's talk about the explosion of this thing. The whole difference is the question you asked at the beginning was um restaurant models, like restaurant models, old to new, right? Yeah, so the labor costs are up, the insurance is higher, utilities are higher, property taxes are fucking ridiculous. Crazy. You can't even buy a damn building anymore, you can't even purchase a restaurant building, so you have to rent that out. Uh, delivery apps take 20 to 30 percent of your sale if you let them, right? They do. Credit card fees have to go on the customer now. It's not even a matter of, you know, a lot of people be like, why am I why is a credit card fee? Because I'm not paying for you to use your card. We're talking about four percent. It's crazy. Thousands and thousands of dollars, ten thousand dollars a month that we're paying for.

SPEAKER_01 10:21

Just in fees for you to use your credit card.

SPEAKER_00 10:24

Yeah. And it and it's it's not even feasible. It's not that we don't want to, but we're losing. The cost has to go somewhere. The cost has to go somewhere, and if you want to use a card, it needs to go to you, right? Back in the day, at 1% or 0.2%, it didn't matter to the restaurant. They just stroke a check and thanks for the community.

SPEAKER_01 10:38

And a lot of restaurants, I mean, you get a cash discount now, so I don't know if a lot of chain restaurants are doing that too, or they're just they're just sucking it up and paying it with these lower prices. Right.

SPEAKER_00 10:47

So what it is is what these with these big chains, right? The reason why they're falling is because it was quantity, quantity, quantity. Their margins were small, but they were doing so much of it that it was that it was beneficial.

SPEAKER_01 11:00

Okay.

SPEAKER_00 11:00

And then they would spread the cost or loss amongst all the different places.

SPEAKER_01 11:03

They had more places to even it up.

SPEAKER_00 11:05

So it's a m a level uh it was a matter of percentages. So when your percentages start falling below uh sensible friggin' business, then you have to shut it down. It's obvious, right?

SPEAKER_01 11:14

So your other restaurants are giving you cash flow that the other ones aren't, so you can't.

SPEAKER_00 11:18

Then you start with the weaker ones go. So this we're gonna shut down these places and these locations, we're gonna shut down that. Now you're left with a smaller group. Now you're gonna see that now there's less quantity, yeah. So now you have less fucking stuff, so now you have to shut down two more. Then two more, now you're left to three and you can't do it no more, right? You can't even pay your franchise fee anymore, right? So now you've got to shut it down. That's the difference between what it is there. So basically, it all comes down to is the business model that was set up for restaurants back in the day feasible anymore. And I don't think people are understanding that. That that's where the people who are opening restaurants are not learning, is is that the cost side of it. Um independent restaurants are dealing with the same thing. Okay? Yes. The difference is though, we can regulate better because we don't have corporate thumbprint. We don't have a corporate person telling us what to do. Our standard operating procedure can change daily. If it happens, to comedy, right.

SPEAKER_01 12:13

You have you have room to pivot. Like you don't you don't have to go through the red tape and you don't have to stick to whatever is being shipped or delays or those type of things. I mean, you guys can pivot if you need to go pick some vegetables, you can go get some damn vegetables, like that kind of stuff.

SPEAKER_00 12:25

So that's why I think that the chain restaurants are struggling because they have set up a foundation based on one system. And when that system is now failing, yeah, there's nothing they can do because that system has already have a price tag on it. All their fucking buying power, all their things have all have a price tag on it. So now when all these corporations, you know, all these chain restaurants, they go to their purveyors, whether it be Cisco or PFG or whatever these big ones are, these buying houses, right?

unknown 12:56

Yeah.

SPEAKER_00 12:57

So you you have buying power. Take away your locations, down goes your buying power. Means the fucking prices go back up. It's a never, it's a vicious cycle. And I'm not, I don't know who the fuck's gonna win in the end of it, to be honest.

How Chains Trained Customer Expectations

SPEAKER_01 13:11

Nobody, I mean, economy in general. I mean, we know it's a cycle and it is secular. And if you look back over the past 20, 30 years, I mean, you can see the trends, and nothing stays the same for long, but prices consistently go up, and that's something everybody has to they have to fucking deal with. There's nothing you can do about that. But I mean, when you look at the cost of their you know, systems, also you've trained your consumer to expect two two meals for$20 or cheap, you know, easy, fast, you know, kind of quick service type food. So when a chain restaurant raises their prices to five, ten, fifteen dollars, people are like, I'm not paying it.

SPEAKER_00 13:44

Chain chain restaurants, without a question for me, my opinion is chain restaurants ruined restaurants in America. Really? They ruined the dining experience, they ruined chefs, they've ruined everything. All these things you hear about chefs being mean, horrible workplace ethic, um, throwing pans around, screaming, yelling, being drunk, being high, a lot of that really stems from that type of restaurant. It starts at the chain level, where people are just going in there in masses, working their ass off, half of them are delinquents, you know what I mean? They're just trying to get by, they're cooking the same thing over and over, they don't even have chef pants on. If they do, they're just tattering.

SPEAKER_01 14:19

They just don't have pants on.

SPEAKER_00 14:20

They don't have pants on at all. But but you know what I mean? The chef, the the and then what the customer expected out of them is what ruined restaurants, because they're giving shit away. You go to Olive Garden, you get the best thing in there. Everybody will say the best thing in that place is the free shit. Breadsticks. Right? The breadsticks. And Alfredo sauce. Oh, you can eat pasta, bottomless pasta. Now, people come to my restaurant where it's nothing even close to remote to that. You have to buy the bread because we don't give anything away because we can't. Nobody gave me the ingredients. I don't have the buying power. So people come in my restaurants like, why don't we get free bread? Well, you wouldn't get free bread anywhere if you didn't keep going to those chain restaurants that gave it to you to get you in the door. Well, and that's the problem.

SPEAKER_01 15:03

So you weren't right.

SPEAKER_00 15:04

So you're happy. You left happy.

SPEAKER_01 15:06

You left fat and happy.

SPEAKER_00 15:07

It was easy for them chain places to buy all the flour to make the bread knots that they stick their garlic butter on and you shoved in your face for free. That that was different then. They can't even do that now. That's why they're closing because they keep demanding it, but they can't tell their customer now you have to pay for it, they won't come back. Yeah, so they it it's it's a they do it was a disaster from the get-go.

SPEAKER_01 15:26

Like you said, they created that vicious cycle. They created a vicious cycle and you can't get out of it. I mean, it makes sense. And I mean, again, they they had more buying power commercially with space, having restaurants, you know. I mean, again, working with leasing companies like national leasing companies to find spots that they could put them in cheaper, and they just they just had more power to do it. But now, I don't know. I mean, I think it's the good and the bad of like kids, you know, we have kids that are teenagers, they have a more experienced palate than we did at that age, too. Like they expect good food. Like a lot of them, and they're less, and again, they've shown those studies recently on you know, less drinking of that that generation. Like they're not consuming as much alcohol where we were like shit faced six nights a week.

SPEAKER_00 16:05

We didn't have nothing else to do.

SPEAKER_01 16:06

Yeah, they're they're just online, they're entertained, they don't have to be social things, yeah.

SPEAKER_00 16:11

They can be social without physical connection. They can be social sitting in front of their TV. Yeah, whereas we, I mean, in their computer or their screen, like you said, we had to be social, we had to go out. So you had to go out to dinner first, you had to get your buzz on, you had to go out and be, you know, you didn't show up to the club until 11, you got home, and then and then after all that bullshit, you got home at three and ordered a pizza.

SPEAKER_01 16:31

And then you ate again.

SPEAKER_00 16:32

Yeah, you ordered a pizza. Or you go to a restaurant, right? It was it was just going on and on and on. So food and drink is just not the way it used to be, period. The good news is, okay, fuck the chain restaurants. I I don't like them. I I have no business for them. I think they've destroyed the culinary scenes for a long time, and and they're starting to fade away. The food is garbage, they promote garbage, they are the biggest reason why we have a lot of the GMOs and all the crap we have is because we need to mass produce it so fast and keep up with these fucking chains. I agree and everything else. So to me, the chain restaurants going away isn't gonna hurt my feelings whatsoever. It's also gonna open up the door for some of these people who were good in the chains. You have really good chain restaurant purveyors, or you uh what do you call them? The proprietors, right?

SPEAKER_01 17:18

Proprietors. So when they yeah, they break it down to local.

SPEAKER_00 17:21

But let's face it, if you own an outback steakhouse, right? You're not stupid. You're not dumb. I mean, the food is there. I mean, you understand steak, you understand meat, you understand quality, you understand uh the technical stuff, the money, the finances, the all that stuff. You understand the banking, you get it. So you have skill. Now, take them outback steakhouses away, and that person is left with somewhere having to go. They just don't realize that if they went to a restaurant where it was owned by a chef, chef driven, someone going for awards, they could be a huge asset on that team. See? Remove the fucking problem, and those people have nowhere else to go but to chef-driven or um restaurateur-owned operated restaurants where they can now become something and part of a team they never even knew existed. So that would open up the doors for all of us smaller, you know, individual, independent restaurateurs, because it opens up the the committee, man. It lets them in. Um being a kitchen manager for a very high turnover restaurant, whether it's chain, fast food or not, it doesn't matter. Fast food, not so much. But if it's a chain restaurant, right, you you still have a capacity of understanding and level and ticket times and all that shit. Imagine taking one of them people and grooming them in an independently owned restaurant. They've already dealt with all the nonsense. Now they're coming here and actually honing in.

SPEAKER_01 18:41

They can turn and burn and they well, they operate at a different capacity because they have to. I mean, that's any job that you do. If you're in a high-paced, you know, that kind of environment, going back into a more controlled, organic environment, you still have those skills. And a lot of those managers, yeah, and the proprietors in general. I don't think a lot of people realize that, like a lot of those chains, um, you know, it is locally run, even though it is a national chain. So a lot of people, you know, like we supported our friends that were proprietary of these of these local places, but they ran it like it was their own place. I mean, they had standards and they had the buying power, but they still ran it like it was, you know, they had regulars, they said hi to everybody. So they have the skill, yeah. I mean, if if they could come into more and support more like independently owned, I think that would elevate what has been trying to happen in the past few years with the industry.

Authenticity And The Experience Shift

SPEAKER_00 19:27

I think so. And you know, it's um the the biggest thing that happened with chain restaurants, like I said before, all of them started with great intentions. Somebody had to sell an idea to somebody. So it whether it be a higher-end legal seafood or a yard house, whatever it may be, these big these big chains, right? They had to sell the concept to somebody, and somebody had to finance this idea of a franchise. The problem they can never do is replicate authenticity.

SPEAKER_02 19:54

Yeah.

SPEAKER_00 19:55

That's the problem. That's where they all go wrong. And right now, authenticity is at an all-time low on most things, not even just food or restaurants. We're talking about most things. Businesses. Businesses. Authenticity is is a dying breed, right? Not for long. I think it's coming back.

SPEAKER_01 20:10

Well, I think we talk, yeah, you want to talk about like kind of the experience economy and how it's shifting for people who now are spending more money because again, they're connecting online all the time. They're not doing interpersonal, like, you know, like interactions as much, but when they do, they want them to be meaningful. So they're a little more direct in how they want to spend time with people, like trips, experiences, spending more money on food and and nicer restaurants. So I mean I've seen it shifting. I mean, I've seen it in our our own kids, like their culture, like where they're really like they're not afraid to spend the money.

SPEAKER_00 20:42

Right, and that's exactly right. But here's why, here's another reason why, too. A lot of people don't think of this. And and another reason why the chains are falling is because one thing they always had over somebody like me was fucking money. So they could burn us out by advertising, reaching the masses, being on friggin' uh NFL halftime shows as advertising, all these things where they just keep pumping their image and name into your soul, whether you like their food or not, you just had that. Now I can do the same fucking thing. Because my reach right now is more than most because of social media, AI, um, all these things that that are now free for us. Whereas before it was a huge thing for them. You take that out of the picture, now they only have to rely on one thing. It's not an image anymore, now it's quality. So people are going there, now they have a choice. I'm I'm reminded every day that Luce Secundo is wide open tonight. Or it I'm driving down the highway and I see uh Texas Roadhouse signs everywhere. Now I'm getting the same exposure, which one is better, right? So now I'm on my phone all day and I keep seeing these private chefs come up or these individual restaurants. You don't see more than you don't see the change flying through.

SPEAKER_01 21:50

You don't not as much, but I mean it and it depends. I mean, you're looking at targeted demographics too. So you're looking at demographics that vary vastly on the type of restaurant that you're going to. So I think those restaurants, like we said, you just said it, with advertising and AI, they have to pivot in a sense of targeting the demographics that want to go there. And you don't want the same demographics because private and independent restaurants want people who are truer consumers. Like they're loyal, they come back, they spend money. Those are two different breeds online. So can they still outspend you in ad sets? Yes, because they can run 50 ads, running A B tests. On 10 different levels on six different platforms and be managing all of this like somewhat with AI at this point. So they're gonna be faster than you. But you have the people that's not the people you want. So I do think that it's split in online, like as far as act socioeconomic status, too, where people aren't gonna be coming in as much. But I mean, we see it all the time when we're looking at different ad sets and testing stuff, and they still can outspend you in advertising, but now people really want true UGC, like user, like UCG, like where they they just want people to actually tell them it's good and they want quality and they want to go there and it's good.

SPEAKER_00 22:59

So what's the difference is now is if I start advertising on the same platform as them, they come into my place, right? And they and and what I can do is replicate what I'm advertising. The other people can't. They can't. They're using the same power, but they don't have the same thing.

SPEAKER_01 23:14

I've been on food shoots. I can tell you this in Chicago when I did that. You know what they actually I mean they're they're using Windex. Yeah, of course. And they're spraying things and like you can't eat any of the food on set because it's all contaminated with chemical, and that's how they're getting you in there.

SPEAKER_00 23:26

I mean it's a toothpaste, they're using all kinds of things.

SPEAKER_01 23:33

It's because it's fake. Like all of it is fake.

SPEAKER_00 23:35

You know, coffee grinds on the beat.

SPEAKER_01 23:37

But your food actually looks like you can't replicate quality.

SPEAKER_00 23:42

You can't replicate what you're fucking trying to put out there to what walks through the door. No. So that's one thing I have over all of them, and I'm saying me, but I mean all of us independent people, we have that. We have authenticity, and the chain restaurants don't have it anymore. And like you said, the youth is starting to catch on. They don't give a fuck about that. They're not going to Applebee's having a 16-ounce or or whatever, a 32-ounce beer, you know what I mean, in a bucket of damn Miller Whites or whatever.

SPEAKER_01 24:07

Like that's something sometimes you want to do. More power to be able to do that. No doubt, no doubt. I'm not saying that. When it comes to supporting, like they're more consistent with supporting loyalty. And I mean, again, we've always been big on service, so I go where I am treated right. I go where I I have people that pay attention. I mean, most of those places, they're, you know, they're not making as much money as they used to, so they got shit employees. Like they're not, they're not checking you, they're not filling your water, they're not seeing if you're like, you know, your fried fish is frozen in the middle still. Like they don't.

SPEAKER_00 24:34

I don't think that see what what's going on is it's uh we're getting a shift back to the craft, right? I think so. So we're going back to um these chain restaurants grew out of the craft. They're doing exactly what you said. They're just they're they're trashing their way through the damn day, right? And people are catching on, so the dining rooms are less full, they're less full, they're less full, they're less full. People would go to Applebee's before a movie. Well, guess what happens when there's no more movie theater because no one goes to movies anymore? And there's no more reason to go there. So all that level of genre, type of that type of date night no longer exists, right? Um, the cooks, the cook's cooking for people, that's coming back slowly. Hospitality, that's coming back. Technique, definitely coming back. As you see on every frigging you look through, just scroll through Instagram and everyone's trying to sell you their technique.

SPEAKER_01 25:19

Everybody wants to be a chef, yeah.

SPEAKER_00 25:21

And that's fine, that's great. Seasonality, so you know, seasonable product or or what's indigenous to your region is more important now. So if you have a chain restaurant in this area, cracker barrel doesn't work so good up north because north people eat northern food. So it's it's a fun concept, but you only go there once in a while. Whereas down south they go all the time because it's their style. That's their style of food.

SPEAKER_01 25:44

Um do you think uh with that, do you think some of those chains are, I mean, they're continuing to scale back now? Do you think they'll scale to where they originally started, kind of like where they came from?

SPEAKER_00 25:55

I don't think they can afford to. Really? I think the people who own those chains and the people who are invested in them, in the stocks and all the open market and all that stuff, wouldn't allow it. They would probably just rather buy it out and see it go away and move on with something else. I think the finances behind it all won't allow it. The passion doesn't exist anymore enough to over outweigh the finances. I don't think you're gonna find one guy who's willing to save it all. You know what I'm saying? There's no that guy's not there anymore. So the founder of KFC is not around anymore. So the corporation is involved with the money. They don't give a fuck about the food. Yeah. Right? So all the people who started this nonsense are no longer around. Now we're left with a corporate mindset. Now we're a board, a board of directors. Yeah, we're not a person. The financials, the go to any one of these corporation things, you're gonna see a guideline of every fucking seven ways to save money, cut money, cut spending, cut this, cut that, but they're not even cutting a fucking onion, right? It's coming out of a bag. So that's the problem. Um so unless they're gonna go back to chef-driven ideology or a clean kitchen type of mindset, they're gonna fight away. Everyone. I think you're gonna watch them all just fade away.

SPEAKER_01 27:01

Okay. Well, let's talk about what it means for chefs then. So with the shift, if it's going back to chef-driven and chef maybe owner operated or giving people more things, like what do you think for I mean, for chefs in general, what's the what do you think is gonna happen in the next couple of years?

SPEAKER_00 27:17

Um I think you're gonna see a lot, there's gonna be two, I have two versions of this story. So one of them is the version I know and understand, and that's my work ethic and what it takes to do what I do. I think if those people are around, you're gonna see a lot more opportunity and a lot more things pop up. The other hand is the less places people have to work and experience things, you're not gonna have people like me or other people who are motivated, and you might see a decline there because there's no avenue for them to go.

SPEAKER_02 27:45

Okay.

SPEAKER_00 27:45

So they might just find another, totally different area of life to work. Yeah, not even go down that path. Yeah, right. So I think what the best part is for chains going down, people who are invested in the restaurant industry, like myself and other chefs or restaurateurs who own restaurants, it's gonna be really beneficial to them because I'm starting to see it. People are getting pissed off when they're going now because of the pricing. They're going to a major steakhouse, spending just as much money for the standardized meat being dished out to everybody.

SPEAKER_02 28:16

Exactly.

SPEAKER_00 28:17

And they're coming to mind paying$10,$13 more for prime meat. Yeah. Right?

SPEAKER_01 28:21

Even Chick-fil-A. I mean, you go there now and feed a family of four, it's like$50.$60.$50. Easy.

SPEAKER_00 28:27

Chinese takeout,$80,$90. Instantly. We used to go there because it was affordable, quick, and cheap.$30,$30, you feed a whole fucking.

SPEAKER_01 28:34

I'd rather go somewhere for happy hour that's like locally owned and get like two appetizers and a drink for$40,$50. And you're you're done. Like you have good food, you don't feel like shit afterwards, you're not sick.

SPEAKER_00 28:46

No one's charging any more for the quality. We're charging for the ingredients, right? So that's a good way to put it. Because I put my stuff together properly, I'm not going to charge you more for that. They're going to charge you more for that because they're paying for the ingredients like I am, but they're not giving you the quality. They're just going off, well, it's 30%. This is what we need to make. That's the American standard. Well, you know what? 90% of that needs to be quality, asshole. You know what I mean? Not just, not just the money, money, money. So, you know, things that aren't, you know, things that aren't assembled on a quick turnaround in a bag, things that aren't reheated. People don't want that shit anymore. They're they're onto it. They really are. You go to the bar at these chain restaurants too, you're getting fucking robbed by drinks. Oh, okay. You're paying$14,$15,$20 for a drink with a half ounce of friggin' alcohol in it because they're so corporately chained. Yep. It's it's wrong.

SPEAKER_01 29:33

It's and even when you're looking at like um like juice on the gun, like they're using, like, it's not real, like most of those places, you get juice on the gun. So if people don't know what juice on the gun is, I mean you're like, it's it's literally a bag of syrup mixed with water. It's a bag of syrup. It's not juice and it tastes sugary and it's just like.

SPEAKER_00 29:49

And somewhere along the line, when you push that button, it finds the water and pours in your in your drink.

SPEAKER_01 29:55

But there is a difference. And I think that once you, you know, like same with like if you're flying a on a private jet, once you fly on a private jet, you don't want to go back to sitting in basic economy. Like you want to you expect that.

SPEAKER_00 30:06

Once you fly in first class, you don't want to do that.

SPEAKER_01 30:09

You can't go back. So I think in people experiencing or opening up their landscape and saying, Okay, I'm gonna go try, like just try a locally owned place a couple times a week versus going somewhere else, then your palate should, and then you're like, I can't do this anymore. Like it's just it's gross. You you feel shitty afterwards because of all the GMOs and all the shit in the food.

SPEAKER_00 30:29

Right, and there's no way around it. No, the chain restaurants, chain restaurants are tied, they're trapped. Yeah, they're they are locked in and there's no way out because everything, the whole food industry from the purveyor all the way up, has made a living off of them. They're the big guy, they're the money pot, they're the honey hole. So, are you gonna go? Is your rep gonna go worry about um uh the one little restaurant down the street who's bringing in a minor percentage compared to when in even this restaurant's gone and starting to lose out. Remember when Golden Corral was hot? You had 10 of them in your city.

SPEAKER_01 31:04

They're gone now.

The New Reality Of Thin Margins

SPEAKER_00 31:04

Think about how much, how huge of a fucking that was a cafeteria on steroids. Yeah, and trucks would be in and out of that place. That's a huge account for reps, a huge account for the purveyors, and your little chef guy got the shit over here as far as service. Now that's flipping. Now the reps are relying on guys like me because we're the ones actually going to be there in the long run. And there's no more of those big corporation shits no more. Yeah. And they're all, you know, it's it's crazy.

SPEAKER_01 31:28

So well, so let's let's talk about the shift back to the craft. So when restaurants, you know, like looking at how chefs are treating it now, you are going back to the craft. You are going to go back to, I don't want to even say it's old school. I don't know the right way to say that.

SPEAKER_00 31:44

It's it's not it's it's everyone. I've never left it.

SPEAKER_01 31:47

Yeah, you stayed in it. And most independent owners stayed in it.

SPEAKER_00 31:51

We stayed in it. So we there was no, there was no um corporate corporate mindset, or there was no corporate um opportunity for us anyway. Yeah, you didn't get in there. We had to literally, I'm I'm up against it all the time. The only thing I can ever get for a hundred percent guarantee is less profit. Every year that passes is less profit. That's the only thing I can guarantee. We're not getting richer, it's getting less. Okay? Because we still have the same amount of tables, the same amount of seats, the same amount of customers, hopefully. And if you're doing everything right and perfect all the time, you're gonna consistently have that same flow.

SPEAKER_02 32:27

Yeah.

SPEAKER_00 32:28

But the prices keep going up. So if I'm doing my job every day here, the way I do it, and the way my staff and my team does it, right? We're gonna be full out of capacity every fucking night that we can be for that what that night calls. Everything's perfect and beautiful. So therefore, the only thing I'm left with is less profit every year. There's no way to get more unless I put more tables outside or on the roof or something else. There's no way for me to make more.

SPEAKER_01 32:52

Raise your prices to a point where people aren't going to pay them.

SPEAKER_00 32:55

So the only guarantee for me as an independent restaurant owner is to make less profit because the world around me keeps fucking soaking, soaking, soaking, soaking to the point where we can't even sell fucking food no more. People are gonna have to come out some point in time and spend$100 per person on food. And it's not gonna be our fault because we still just need to operate in our margins. Yeah, we can't make no more profit. The profit days are done. You know what I'm saying? It's it's just done. Now we're getting by. Yes, you want to make a profit, but we cannot show gains anymore. It's hard. Yeah. You know, when the world around you is costing more than you are allowed to make, your gains go away. So even if you had a more profitable year on paper, with sales, you break that down to what it took to make that, you're fucking right back to square one.

SPEAKER_01 33:37

Still percentages are percentages.

SPEAKER_00 33:39

Now the chains are feeling that even heavier because they were what I said at the beginning, they were making all that money off of quantity. So that quantity starts shrinking, now you're fucked.

SPEAKER_01 33:47

They don't have any way, and they they can't get people in unless they actually go lower on pricing because that's what they they've taught their consumer to want cheap things.

SPEAKER_00 33:55

And they're the reason why the prices are so fucking high. You know what I'm saying? Because without that, it wouldn't have been that way. They're making deals with these purveyors so they can be sole owners of this one ingredient, and now they've put they put a cap on it, and now we're all screwed.

SPEAKER_01 34:08

And you guys have to pay more for something similar or different. You can't get the same thing as them.

SPEAKER_00 34:13

Yeah. Or they put their name on it, we can't even get it anymore, some instances. You know what I'm saying? So we have to go to smaller purveyors, it costs more money. I get my lamb from Colorado from a certain farmer who does works just for me and a couple other restaurants, and it's amazing. But it costs me, that is my lowest. There is no margin there.

SPEAKER_01 34:30

You have no profit.

SPEAKER_00 34:32

I have zero margin for error. Meaning, if I get 12 racks and one of them fail, my profit's gone. That's how tight the margin is. So you send back one, you don't like it, you send back two, you didn't like it. That's that's now we're in the hole. That's how tight.

SPEAKER_01 34:47

It's costing you money to serve it now.

SPEAKER_00 34:49

The only reason we have it is because so many people want it.

SPEAKER_01 34:51

And if they want to come in your restaurant, it's one of my favorites, so I'm not gonna say anything.

SPEAKER_00 34:55

But it's the least margin thing. So that's just an example of the many uh things. I get Waigu beef. That's how I make my meatballs. People are like, are you crazy? No, I'm not. You're crazy for not using it because it's only a couple dollars more now a pound. So I'd rather give the couple more uh uh uh dollars in quality while you're trying to save two dollars on a minor fucking quantity. You see what I mean? So that's the difference. So it's to the point now where the some of the higher end products are now being matched by the low shit is coming up. So I'm working, it's working out for me.

Five-Year Predictions And New Models

SPEAKER_01 35:28

Like I said, I know chains can go away. So do you think the chains like, yeah, I mean this is how quickly do you think that will decline with chains? It has.

SPEAKER_00 35:42

I mean, it's already happened, but I mean I don't know how fast you now what do you mean by that declined? Are you talking about all of them being gone or just a few left?

SPEAKER_01 35:48

Yeah, I mean it's gonna there's always gonna be some because there it's there is a demand for it from people.

SPEAKER_00 35:53

I I think it's gonna be I think in the next five years you're gonna see all the chains that you're used to seeing growing up and being comfortable with are gonna be gone.

SPEAKER_01 35:59

They're gonna be gone.

SPEAKER_00 36:00

They're gonna be replaced. There won't be as many coming back, but they'll be replaced with people who realized it and figured it out. Newer concepts. Newer concepts, newer people, people with understanding, younger generations who have a franchise background are coming in with a new idea and reinventing it.

SPEAKER_01 36:14

Um back to the drawing board.

SPEAKER_00 36:18

And now let's say you have them. You got Bubba's 33, right? That's the name of the place. Okay. Good, good spot. They have it figured out. Yardhouse, they're figuring it, they're figuring it out. These are the new places that are coming back. Their menus are bigger, they're more fresh, they're more um, they're a lot more, you're seeing the ingredients being used multiple times in different ways.

SPEAKER_01 36:37

Mod and drink driven in the sense of quality, a little better than that.

SPEAKER_00 36:40

Quality, there's a lot more freshness, uh, there's a little bit of uh you know, fresh tuna. There's a lot more, you're gonna need a little more technical hands on the product now. And that's what's gonna be replaced. Doesn't mean it's gonna be cheaper or a lot of them, but you're gonna see a lot of the old models going away being replaced with new models. And they could even be the same companies undercover. But they're there, that's the only way it's gonna work.

SPEAKER_01 37:02

But they have to, I mean, they have to kind of reinvent it.

SPEAKER_00 37:04

I think you're gonna see a lot of fast food chains going away too, which is uh which I hate to say, but you know, there's only a couple of them that could really withstand because they have their business model was based on real estate and everything else. Yeah. But right now you're gonna see a lot of them. Wendy's, these places are gonna start chipping off because kids and people aren't eating it. It's just not healthy.

SPEAKER_01 37:23

Yeah, they're they're like I said, I mean, you know, online access to being online has its his good and bad things with it because, you know, you are the one good thing is is that people are more savvy on what they're putting into their body or they're they're focused on longevity or a little bit more on their health. Not everybody, but it is a growing percentage. I think more people now are are talking about food and ingredients and pesticides and all the crap more than we have ever did. And it's been in the past what five to ten years. We've seen a lot more of that. So that generation is gonna expect like again the collage farm to table, whatever you want to call it, they're expecting it, even though a lot of it we've discussed that in an episode before. That's not even true half the time.

Regional Franchises Replace Mega Chains

SPEAKER_00 38:03

My my projection or my um, yeah. What do you think? My my my thoughts or my uh prophecy. Oh, prophecy is you're gonna see a lot of people, I think, in the future, still with the franchise mindset, but using it in one locality. Local franchises, meaning if you have an area like Hampton Roads, where we have seven different cities in this whole area, you're gonna see one restaurant in each one of those cities, almost like a borough, and that's gonna be the end of it. And then that person won't move on, but maybe a franchise group will grab that in an area, they'll put a franchise locally, then they'll move on with a whole nother name concept and franchise that locally, and then they'll go to that region, like where you're from in Michigan up there, yeah, find out what's indigenous to what they like, and then they'll locally put franchises there. Regional, regional franchises instead of what works there might not work all the way on the other side of the coast. You see what I'm saying? Because that now you have to get your food from there to there, your concept from there to there. If you work regionally, I think they're gonna capitalize on the region, really knock it out of the park, and then they'll move on as a group and start a new franchise in a new group.

SPEAKER_01 39:11

So shifting more from the franchise mass conglomerate to more of a like restaurant group model.

SPEAKER_00 39:18

I uh a restaurant group model in essence of location. I think that if I were, you know, maybe I'm giving away ideas here or maybe I'm giving away my thoughts, but you know, if it was up to me, I would own a restaurant group international or nationally, but you would never know that, you know. I would divide the groups into regions.

SPEAKER_01 39:35

I think some do that. I mean, there's you know, I mean, even in it most major cities, like I know in Richmond there's a group, you know, they own like 13, 14 restaurants. They're all vastly different models. I mean, they have Asian, they have like Alpha.

SPEAKER_00 39:47

That's that's a restaurant group that's different. I'm talking about a franchise name. If it was one restaurant, yeah, right, and you went into the region, I think you can base it off of the region.

SPEAKER_01 39:55

So you think of tweaking the menu to fit to fit the area.

SPEAKER_00 39:58

Okay, good. Because that gives you hometown advantage, it gives people an understanding of where they are, and it gives people a local pride more so than they would if you're trying to figure out what a Baja taco is when you're not from that area. You know, you're just eating it because you're told how to make it. But if you're cooking something that you're used to eating as you're growing up in your area, you're gonna know how to prepare it right.

SPEAKER_01 40:16

Okay.

SPEAKER_00 40:17

Regardless if you like it or not.

SPEAKER_01 40:18

I like that concept.

SPEAKER_00 40:19

That's that's what I think is gonna happen.

SPEAKER_01 40:20

Okay, all right. Well, we'll we'll we'll put these predictions to a test in like five years. We'll come back to this.

SPEAKER_00 40:25

You got you gotta think about it. You got your you got your music, you got your lighting, you got your ambiance, you got your reason. Up north, if you if you if your theme is sports, of course you're gonna have the more theme, the more themed sports up there. Hockey. You're not gonna have polo lacrosse or down south, you know what I mean? Whatever it may be. You're you're gonna have what's local to your area. Yeah, if you're from the north, you like hockey, there's gonna be a lot more decor of that. If you're down south, you you play what you're doing there, you know. I think that I think the the the regional franchise, if any, is the only way it's gonna work.

SPEAKER_01 40:56

Okay. So the dying of the chain restaurant. I think so. Yeah. Okay. That's I mean, it's it's fun. I'd like to hear it's not, yeah, I mean so, it's proof.

SPEAKER_00 41:04

They're following the fucking thing.

SPEAKER_01 41:06

I mean, the places we worked at, I mean, you know, I worked for like chains back in the very beginning, and all of them, all of them have shut down most of their stores.

SPEAKER_00 41:15

Booters at one point in time is where I worked. So listen, booters at one time was the most one of the most fucking it was it was stupid.

SPEAKER_01 41:22

Oh, the the amount of money I made when I was the corporation made. I mean, we were a chain here, so locally in Hampton Roads, that was a chain that was owned with the the chain here and in New York. So they owned both areas. But it was the same model, same photos inside, same.

SPEAKER_00 41:38

But now you can barely find a hooters.

SPEAKER_01 41:39

Well, they they closed down, I mean, they've closed down multiple locations here. So, I mean, there are there's still, you know, you still have three. So there's three in the area when we used to have, I think it was six, uh six or so.

SPEAKER_00 41:51

But going all the way across the nation, that changed.

SPEAKER_01 41:53

They've all shut down.

SPEAKER_00 41:54

So they file. Now you have other places that are making wings, they're just not interested in the tits so much, but the people are over the tits, and now they just want good wings. So now you have a little tiny 900 square foot place where people are going to get wings and killing it with wings. And they're killing this big restaurant called Hooters that no longer works.

Experience Is The New Anchor

SPEAKER_01 42:09

And I mean it was it it it is, yeah, and that it is a good example because there's so many, I mean, so many changes that happened and so many things that went wrong. And again, you know, just just going through all of it, thinking back on it, I'm like, gosh, like those days were very interesting, but it was a totally different world we lived in.

SPEAKER_00 42:27

It was so different. It was different, and and it was a fast-paced. Everything was quick. You go Christmas shopping all day in the mall, you'd stop over here, you go to Pizzeria because it was next to the mall. Sabarrows. Sabarrows, right? You you eat all this stuff because it was fun, it was part of the experience. Well, no one's going to the fucking mall anymore, so now that fucking whole experience is gone. So now what are they doing? You can't go to the mall, you can't go to the movies, you can't go here, you can't go there because people don't do it, right? They don't do it so much. So now those restaurants that were the anchor of that style of entertainment, now people are going to a restaurant one time. This is the deal. Tonight we're going on a date. We're going to a restaurant, and that's where they're fucking going.

SPEAKER_01 43:03

So, bottom line, that's it. In the end of this, it's experience.

SPEAKER_00 43:06

Experience. And I think that all that other shit doesn't exist anymore. So now people are going on a date, they're meeting at a restaurant for the first time, they'll sit at the bar, or they'll go to another bar at a happy hour, then they'll go to their reservation, they'll sit at the restaurant for two hours, get great food, get happy, get fat, and then they go their separate ways, or maybe they'll go for a nightcap somewhere. Yeah. But the whole movie thing, that that's all a dead scene. The mall, the shopping, the the bowling alley, all that stuff, just people just don't do that as much anymore, you know? And all those fast chain, or not fast food, but all those chain restaurants were the anchor for all that type of lifestyle, that type of fun. And that fun doesn't exist anymore.

Final Call To Independent Operators

SPEAKER_01 43:42

So then, okay. So in closing, can you do like a call out to the the chef and owner community of what needs to happen in the next year?

SPEAKER_00 43:50

I think you need to start focusing on paying attention to the small independent restaurant tour and really focusing on the fact that if that's the only thing that's gonna be left, capitalize on it and get in it before it happens. It's happening. Look, people don't want chain restaurants anymore, they don't want the crap food, they don't want the shit. It's it's all the the it the biggest thing going on right now in the country. Well, one of them is the whole um processed food craze. It's over. Chain foods is over, man. It so is processed food, so is garbage out of a bag. All that stuff is over. If the show is over, people are becoming wise. People are becoming more um. Right? Right. Cognizant. They're all doing that.

SPEAKER_02 44:27

Yeah.

SPEAKER_00 44:27

And if you get ahead of it now as a chef, pay attention to the ones who are successful now while it's happening, because they're the ones you want to be like when it when it's your turn. And it's going to be our turn again. That's it. I think the chain restaurants are fucking.

SPEAKER_01 44:38

I'll cheers to that. Cheers to that, my friend. Cheers. Cheers. Agua. All right. See you later. Thanks, guys. Ciao. Chopping out.