The Incredible Story of MUJO [Michelin Star] SUSHI

Federico Castelluci was introduced to me by Randy Cross' son (episode 6), Brendon. "Hey Jeff, you should talk to my friend Federico. He's young and turned around SUGO, built Cooks & Soldier and Iberian Pig then the most incredible restaurant called MUJO. The whole place sells out on the 1st of every month. You won't believe his story!" Brendon certainly nailed it. This interview chronicles the full story of Federico's humble beginnings (ups and downs, failure after failure, and the break he needed to launch his career) to running Michelin-starred restaurant Mujo.

Some highlights of the episode:
✔️ His early years in the restaurant industry
✔️ Growing Castellucci Hospitality Group into a multi-unit, multi-state powerhouse
✔️ What it takes to earn a Michelin Star
✔️ Lessons learned from failure and perseverance

Federico’s story is a masterclass in hard work, creativity, and resilience. He serves as a mentor, advisor, and investor in hospitality tech companies and is a recipient of several prestigious awards, including the GRACE Awards and Atlanta Business Chronicle's “40 Under 40.”

Transcript

SPEAKER_03: 0:00

I opened the original Iberian Pig in Decatur in 2009 on a shoestring budget. I had a you know, a hundred grand budget. And that was all we had to our names. And I gave 25 grand to a general contractor to start doing the work. And he did some demo work and took the 25 grand and left town. And left. Yeah. So this was 2009. So I had to figure out how to open a restaurant for$75,000. And we had legitimately run out of money. All the inventory in the restaurant was unpaid for, including the alcohol, which is illegal in the state of Georgia. You're not allowed to do that. Then on top of that, we had overdrawn all of our bank accounts, negative 10 grand. So it was like a do or die situation. The day we got the certificate of occupancy that said we can open, I told my chef, I was like, dude, we have to open today. It doesn't matter if it's going to be bad. I understand that, but we have to do this.

SPEAKER_01: 0:52

You're listening to The Jeff Opec Show, conversations with interesting humans.

SPEAKER_00: 1:00

All right, folks, welcome back to another episode. I have such an interesting guest with me here today. His name is Federico Castellucci. He's the CEO of the Castellucci Hospitality Group. And folks, today is about so, so much more than just food, restaurants, and the industry. Four major things that are just so intriguing that Fred's going to talk about today. So the first one, COVID hits. The world shut down. We don't know what's going to happen next week. This guy right here gets the idea to open not just a restaurant, but to open a restaurant that's going to be$240 a plate, right? I cannot wait for you to unpack that. What? What did that look like when you brought that to your advisory board? I'm dying to hear what that whole situation looked like. So the second one, I'm intrigued by this. So all your siblings are on the executive team. And if they were scattered throughout different states at different restaurants, that's one thing. But y'all are like together all day, most of the days. That says a lot. about upbringing. So I want to unpack that. I can't wait to hear how you all like, how you interacted as children and then all the way through and just what that looks like today. Um, third, your, your restaurant Mujo is Michelin star. And, uh, I'm dying to hear under the hood of that because I know two things about restaurants. I know how to order food and I know how to pay a bill and really don't know much more than that. So I'm going to encourage you to go as deep under the hood as you possibly could. And then lastly, you all have a stronghold in the Atlanta and the Atlanta Metro. But when I heard. the projects you have going in other States and the vision and where you're taking this restaurant group. It's fascinating. I'm going to have you unpack some of those. So, uh, so let's get right into it. You, you took over a small family business. So in the beginning, this was a small business. You didn't take over 15 restaurants. You had a plan to grow. What were your fears early on?

SPEAKER_03: 3:13

Well, when I took over, it was a single business. I just got not a, We had a handful of these loose franchise agreements, if you will. And so we had the original family business, which was in, uh, Roswell, actually. And then we had a couple franchises that we had put together while I was actually in college. And I wrote the franchise manuals and signed them up. That was really my first entrepreneurial endeavor was starting the franchise company and then selling the franchises. And that was actually, you know, there's going to be a number of failures we'll talk about today. But that was really a very much a initial failure. It was out the gate. terrible idea. And the restaurant itself, the original restaurant wasn't that successful. It wasn't really making any money. And so we franchised a business that wasn't really making money. And so big surprise, the franchisees never really made money and didn't pay us franchise fees. Uh, so all of the franchise has had gone out of business or we're going out of business right around that time. And so I took over the failed location of franchise, which was Sugo, which is the same restaurant that's there today in Johns Creek on the backside of a shopping center on 141. So a terrible location. You can't even see it from the street. It's on a four lane divided highway, 45 minutes outside of Atlanta. It's not exactly what you would call a plus real estate. And then to add onto that, the restaurant had just failed with the same name. And so most of the customers in that neighborhood had already written it off as not very good because it wasn't very good. And we basically had, you know, an empty restaurant and I had to figure out a way to reopen it. That was my first project out of college. And so I called up a regular guest of ours and I said, Hey man, I need 10 grand and I got to reopen this restaurant. I'm going to need five grand for the liquor license and probably another five grand just to like spruce it up. And he was like, meet me in my house in 20 minutes. So I literally go to this guy's basement and he pulls out 10 grand in cash. I owe you. He's like, pay me back whenever you can, monthly installments. And eventually did pay him back. But that's how I got the restaurant open. But shocker, it was really, really slow out the gate. It was dreadful. I mean, there were legitimately nights where we had zero customers on the books and we In order to not roll a zero, I'd call in a friend of mine and bring in a few people. And there were nights where we did six people, four of which were friends of mine. Oh, my goodness. And there is nothing more demoralizing as a business owner entrepreneur than to work a 12, 16-hour day and the next morning have less money in your bank account than you did the day before. The year that I took over the business, we had bounced, it was$36,000 in overdraft fees that was essentially a management salary back then, is generally what a manager was getting paid. And it was just the fees for the banks to bounce your checks. And so it was just like a very, very stressful time. And I'm trying to figure out how do we save this business and grow this business? And so the fear element was, not really, not really there because we were already in the trenches. You know, it's like when you're, when you're fighting the battle and the bullets are flying, like the fear isn't there. It's only like in retrospect or like, you know, when you're not in the action of it. And so, uh, every day it was just like, how do we, how do we battle through this? And to me, they're really only two ways out when, when it comes to like salvaging a businesses. Um, and, A business that is not making money has to either cut costs or grow sales and ideally has to do both of those things. And growing sales is very challenging to do. Cutting costs is a little bit easier to do. And so I tackled the first piece was cutting costs. And that meant cutting costs on everything. That means our family went on the austerity plan. I said, you know, we're not... eating food outside the restaurant. We're eating the food that's about to go bad. The customers haven't eaten it. Okay. And we're having, and, and no more trips to Starbucks. We're doing coffee at wholesale in the restaurant, you know? So, uh, but ultimately, and that's really where I cut my teeth on, on our business philosophy and how we've grown the whole business is this, uh, attention to detail of each individual guest and the relationship that you can build with an individual guest, one customer at a time, night in and night out. And so, uh, I didn't know it back then, but after we had grown the company and we were starting to open new restaurants, I was trying to think of like, what was it that got us from zero or negative to one? And a lot of that was that individual guest experience and relationship that we could build. And so our mission statement is passionately pursuing the perfect dining experience, one guest at a time. And so that is kind of like the ethos of the company. And we build a lot of cultural elements around that, but ultimately that's like the guiding North star. And that's kind of how we galvanize the team around trying to create these excellent dining experiences for people and so you know six customers turns into 20 turns into 50 turns into 100 turns into 300 and then thousands you know and so it just is a it's a one person, one guest at a time mentality that, you know, not everybody makes it because you can run out of money or, you know, before you get there. And so that's why the cost, the cost control piece is important. But I also did some really, you know, shady financial stuff to try to get us there. You know, like I, um, took out high interest credit card, receivable loans from all those, you know, crazy credit card loan shark people. And, you know, I was, I was in the hole, like half a million dollars to various people, uh, just to try to keep the business afloat in those days. And so it was tremendously challenging. But once you start getting a little bit of results, you can start getting people excited and galvanized around positive results. That's when things can start to grow a little bit. But it's certainly challenging. But that ultimately led to us opening the original Iberian Pig in Decatur. Today's

SPEAKER_00: 9:39

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SPEAKER_03: 10:14

That was 2007 to 2009. And then 2009, my sister graduated from Cornell in the hospitality program. And so I pulled her in and she ended up GMing the store out in Johns Creek. And then I opened the original Iberian Pig in Decatur in 2009 on a shoestring budget where legitimately I ended up being the general contractor Yeah. Wow. Yeah. Yeah. you know 100 grand budget and that was all we had to our names and i gave 25 grand to a general contractor to start uh doing the work and he did some demo work and took the 25 grand left town and left yeah so this was 2009 so i had to figure out how to open a restaurant for 75 000 in 2009 so that even to even then was very challenging number right and so that's how i became a general contractor one time incredible you know but we did ultimately get that restaurant open is still the fastest we've ever opened a restaurant restaurant I signed the lease in July and we were open September 25th and my gosh opening night we had legitimately run out of money. I, all the inventory in the restaurant was unpaid for including the alcohol, which is illegal in the state of Georgia. You're not allowed to do that. And then on top of that, we had overdrawn all of our bank accounts, negative 10 grand. So it was like a do or die situation the day we got the certificate of occupancy that said we can open. I told my chef, I was like, dude, we have to open today. I, it doesn't matter if it's gonna, it's gonna be bad. I understand that, but we have to do this. And so we did, and it was the worst shift I've ever, I mean, ever worked. And to this day, we've been through some rough times, but that was all time. I mean, he was having a nervous breakdown. I pulled my sister and I was like, hey, I need you here. Leave the restaurant in charge of whoever's there in Johns Creek because we need some help here. And none of the customers got anything that they really ordered that night. But I know that they did get something because I was giving them whatever free stuff I could find in the kitchen. But ultimately, I know we did bring in revenue because we were able to go out the next day with some cash and buy the pots and pans and all the stuff that we needed to cook the food because we didn't have any of that stuff because it was all left over from the restaurant that had failed before us which was like you know piecemeal stuff so anyway that's a long story of you know how we kind of like got out of that you know very challenging early environment of you know one struggling restaurant to kind of get to that that second one that was really a big hit because that opening night was 200 people showed up we didn't expect anybody to be there That's why we opened. I was like, maybe we'll do 20, 30 people. Who knows? No one will be there. And it was 200 people opening night and it never stopped. And it just kept growing. It never stopped. And it's been 15 years later now. So your startup experience. That's really what, you know, launched the whole company.

SPEAKER_00: 13:19

Yeah. Was that, okay, that Decatur experience. So we'll come back to that. That whole experience of getting started. Isn't that more the norm? Not your exact story, but it's messy. It's challenging. It's great and rewarding five years down the road. But when you're in it, right, it's just a disaster. the startup of, of most businesses, some people.

SPEAKER_03: 13:44

And especially restaurants, especially restaurants, because, you know, restaurants are like one of the last kind of bastions of the American dream where, you know, somebody that came up from like working as a dishwasher or a line cook and like work their way up to management and ultimately ownership and try to, you know, get a location of a failed restaurant that has gone out of business and, you know, with a little bit of money and reopen it with, you know, just a new sign and, you know, just some, some passion And so, you know, that's why, why you see a lot of those, those restaurants out there and, but they make, they make TV shows about this, like the bear. And, you know, it's very, very stressful because it is like, it, it's, it combines a lot of elements that are really unique that are like, you know, I, I like to say the, the most stressful businesses are the ones that are governed by minutes and seconds. So, you know, as you start getting beyond that, whether it's hours, days, months, weeks, years. Yeah. those businesses are not very stressful. You know, like when you're a commercial real estate person and you don't do anything for six months, like does anybody really know? Right. Like not really, you know, like you could go a long time without really doing any work. But in restaurant business, if you go a number of minutes and seconds without certain things happening, like there are some major problems and they become very major, very quickly. Wow. And so that's why it's stressful. I mean, literally, I mean, just like if the power goes out you know what I mean like yeah you can't cook like or it's very hard to cook and the fans the hoods aren't working so smoke starts billowing in the restaurant you know so they're just like or the dishwasher stops working you know none of the plates are clean and you know none of the glassware or there's a host and the hostess decides to take a smoke break and isn't at the front door and people are piling in and no and everyone's looking at each other like where where is the person that's supposed to take care of me that's a that's a minutes and seconds issue

SPEAKER_00: 15:35

yeah the things that I know as a consumer, I don't even– I'm not thinking of those. Like the dishwasher, wow. The hood, like I never thought of that. That's incredible. So then something happened. Something happened where you go Sugo, Iberian pig. What happens when you start getting that like– I guess you got a feeling of victory. Like, okay, this works. Maybe you were six months in a year. Where's the next one? What happens next?

SPEAKER_03: 16:04

Yeah, and so I think– At that point, I had a lot of hubris. I had turned around something that was not successful, made it successful, came out with something original and new, and it was very successful. And so now I kind of had this feeling like I can do anything, you know? And so, you know, anytime... you get cocky, you get humbled. Like in this business, always. And that's one of the things actually I love about the restaurant business is like it is constantly humbling, you know? And it is constantly challenging and it's stressing my faculties, all of them, all the time. That's one of the things that I come back to that I love so much. You know, tech entrepreneur, Ben Chestnut, that, you know, sold his company to Intuit and MailChimp. I listened to him speak once and he said, don't do what you love, love what you do. And that resonated with me because he said, when you do what you love, you're basically deciding you're going to make your passion, your work, and your business. And that's really something that you love. And that's a great way to kill the thing you love. and kill your love for that thing, you know? But when you learn to love what you do over time because it's challenging and it's meaningful work and you're able to, you know, constantly test yourself and test your abilities and try to get better. And, you know, that's where I think you really gain deep sense of meaning in work, you know? And so that was for me that moment when I said, okay, I can do anything. So then I signed a lease for a 12,000 square foot restaurant and I opened the original Double Zero, which is still open today, Not in that location. We ended up moving it. So it wasn't a total failure, but it definitely was a very much a failure in a lot of ways when we opened because it was a massive space. We'd never operated a restaurant that big. And so it's a totally different skill set. Like we were talking about earlier, there's a, there's different skill sets for different types of businesses. And I didn't realize that, you know, a 12,000 square foot restaurant is almost as different as like, okay, now go run like a gas station or something like that. You know, it's, it's a, it's really like, Or run a drive-thru, you know? Yeah. There's still restaurants, you know, but it's a totally different skill set. And so we... We bit off this big space, and then the menu was super ambitious. We were making all of our own breads, pastries, gelatos in-house. We had a cafe with a barista and a coffee program. We were making our own pastas in-house. We had a meat and cheese program. We were doing entrees. We were doing handmade Neapolitan pizzas. I mean, it was just like this such an ambitious project. Yeah. We executed those elements well, but it was extremely costly to execute all of those elements. Oh, sure. And then when you try to do that level of specialty products from scratch and then doing them across such a big space, all of our systems broke. And so it just took us so long to get our hands around how to make that work. And it was just extremely challenging. And then I tried to bootstrap it just like I did with the And, you know, a hundred thousand dollar budget didn't work in a 12,000 square foot space. So I ended up getting in way over my head and we were at like, you know, over a million dollars in the, in the deal. And I was broke again. So I was like, I've got these three successful restaurants and I'm broke again. How did that happen? I need to figure out how to make that not happen anymore. And so I took two and a half years off of doing anything new. And so I said, we're just going to fix what we have and make it better. And that's when we rolled out kind of this system for incentivizing our managers around specific metrics that we felt like led to success in the business. That was really when the businesses got just more well-run and then going into cooks and soldiers, which opened in 2014, which, you know, I just told you we had the 10 year anniversary party last night. It's, uh, that was the first restaurant where we really put it all together. I was like, I knew what size we needed to be. I had a vision for a cuisine that I wanted to bring to life that was new for Atlanta and different. I hired a real general contractor, a real interior designer and an architect group, AI3 in town and built this beautiful restaurant. And then I actually got a real business loan from a real bank. And that was the moment we put it all together. My brother had just gotten back from working at three Michelin star Arzak in Spain and he came in and led the culinary program and it just all the elements together clicked and that was the first time you know we had a real critical acclaim in addition to the commercial success and so we got the James Beard nomination that first year eater named us restaurant of the year Atlanta magazine had us in the top 10 of all the restaurants in Atlanta at that time and we just got this incredible outpouring of support when we opened that in a neighborhood that was just really coming alive in West Midtown. So

SPEAKER_00: 21:20

what year is that? That was 2014. Okay, so you're at the six-year mark now. It's incredible because the entrepreneurs and groups talk about the five-year. It takes five years of just slaying it around, and you're at year six now, and things are– that's so incredible. All right, so you got– backtracking. You got Sugo and John's Creek. You got Iberian Pig. Now you got Cooks and Soldiers. And Double Zero. We're close. Okay, and Double Zero. That's right. With all the big offerings, the coffee and all that other stuff. When does the thought cross your mind about Mujo? Have you even thought of it yet?

SPEAKER_03: 22:01

No, because I'm still kind of exploring the Atlanta various restaurant neighborhoods okay and i still am trying to figure out kind of what i want to do next the the impetus for mujo was actually a trip that i had to tokyo back in 2015 and i was just blown away by japanese culture Did

SPEAKER_00: 22:30

you go to the famous one? I did. Jiro

SPEAKER_03: 22:32

Dreams of Sushi. Yeah, Tsukibashi Jiro. I was just talking about it last night. Awesome. And that guy really, you know, he's one of the most famous Japanese people, period. Period. I mean, think about that. Period. As a sushi chef. Yep. And he brought that style of sushi really to the rest of the world in a lot of ways through people like me. And so he's had a tremendous impact. But I went to Tokyo for the first time and what really like floored me was just like the culture, the people. It's just like absolutely amazing. And as successful as American culture is, Japanese culture is equally if not more successful and yet they're so different. And so for me, it's so cool to go to another place and this is what makes travel so amazing. You go to another place and you see culture that's totally different than the one that you know. And a lot of the values are totally different, yet equally successful. So, you know, it just opens your mind to that. They're like successful ways to approach everything. And a lot of times those successful ways can be totally at odds. Totally different. Yeah. And so that's what really got me excited. And it really kicked off just like a passion for Japanese food and culture that really lasted for many years. And so But after having that experience, there's no like, Hey, I'm going to go open this restaurant because it was so above anything I'd ever done ever from a culinary perspective, you know? And I just, I was, I literally said after the meal, I was like, this is incredible. There's no way I could ever do this. Like I would, I would never even try, you know? And then we went back to Atlanta and We kept opening other restaurants, and I had another failure after that. I opened in Crog Street Market, Bar Mercado, and Recess, two separate concepts. Recess is still successful today, but we pulled it out of our restaurant group, and I have a business partner that runs Recess without our direct involvement on a day-to-day basis. Okay. Because I realized, again, back to the skill set thing, a fast casual restaurant, like a Chipotle or a sweet green is a totally different skillset than what we do with hospitality and high-end dining experiences. And so it's really about focusing. And then, you know, the other piece of it, you know, with the failure of Armicado and Crock Street Market is I took a piece of real estate and I worked backwards, which is something I'd never done before, which was a mistake. I usually, if I have an idea or a vision or a passion about some product or product, chef or team that I want to bring to life, then the results have been good. Whenever I've said that's a great location, I wonder what would work there. That's typically product market. It's trying to product market fit your way into success and that, you know, and reverse engineer it. It doesn't work. I mean, there's like the Steve Jobs thing, you know, where it's like, Customers don't know what they want, you know. Build it first. Yeah, exactly. And you can't you can't reverse engineer it. And so I made that mistake one time and hopefully not again. And which one was that? And that was Bar Mercado. That was Bar Mercado. And so we never really had a strong vision of what that was going to be. And it didn't work for the market. And the customer that was visiting the market was never going to pay us the dollars that we need to make the number of seats that were in their work. And so you asked me about like advice for a struggling restaurateur or someone that's just starting out in the business I'd say that's my number one is you have to have a really really strong idea of not only the business and idea and vision you want to bring to life that's unique that's you know unique to you and authentic to you but you also have to have an idea of like in this square footage how many people can fit in here reasonably, and how many people are reasonably gonna come here on a Monday night or a Friday night, and then know those numbers, and then how much are those people gonna pay you to be there? And have a real good idea, like, is this a market where the people can afford to pay me what I need to be there? And so you put those two numbers together, that's gonna give you your sales. And you can work backwards from there if this business is gonna work. That's kind of how I look at any new business. And even Mujo's like that too, because the average per person is very high, but it's a very small restaurant. And so- I knew in order to make this successful with only 15 seats plus a, you know, six seat cocktail bar and a six seat private dining room, people are going to have to spend a lot of money for this business model to work, you know? And so, but we knew that, and that was the, you know, the learning from that. Um, but then after all of that back and forth and success and failure, and I just felt like we needed to do something that. I knew would work and try to do it in a new way. And so that's when I duplicated Iberian pig because it was still our most successful restaurant to that date. I mean, cooks and soldiers was right there with it, but it was just, you know, 10 years old and still doing great. And so. That's when I signed the lease to do the one in Buckhead and we did new construction and which was fun. It was like a, a way to take something that is in a hundred year old building on the Decatur square and translate it for Buckhead, which is a totally different community, different people, different vibe, everything. And so how do we translate that in a new construction, um, tower that had just been built in a luxury apartment tower there. And, and that was, you know, day one became our most successful restaurant. Until we opened Nashville more recently. And so that was 2019, but we really didn't get to even enjoy the success of that business because COVID hit shortly after that, you know, and so it was challenging, but is an understatement i know a lot of restaurants went through it and it's a cliche at this point about the pivot and all of that but when we were there at that moment yeah and the whole world is changing very quickly i took a moment to say okay we've been through some really hard times at this point we've been through those nights where you know no one shows up right and we built a really strong business and we have all of these successful locations. And, you know, at the time it was, it was really very like strong group. And I said to myself, I can, we can figure a way out of this. And I knew there was a number to each restaurant closing. It was the inventory laying off the staff, not just the, the, you know, collateral damage, but the actual hard number of burning all the inventory, laying off the staff, having to pay utilities and a few of those little expenses that were going to linger. And I, you know, I'd run restaurants where, you know, the cash hits on a Monday and that money needs to be there in order to pay most of the bills. And if you turn off the lights and that cash isn't there on Monday, we're talking like, you know, 20, 30, 40,$50,000,$100,000 was like a minimum. We knew that would get burned. within a couple of weeks for each location. And so I said to myself, we got seven restaurants, that's$700,000. I mean, that's a lot of money. I was like, I would bet on us to figure it out. And I'll light that money on fire a little bit at a time every day for a year if I have to, but I'm not gonna light it on fire day one. So- We're going to keep the restaurants open. We're not going to lay our people off. We're going to figure out a way through this. We didn't even do takeout. We never done takeout at any of the restaurants. We literally built the whole business overnight, our own e-commerce stores. We built ourselves. We did all of our own delivery in the first few days when everybody was trying to get on Uber Eats and nobody knew what to do. We were running our, we had our servers literally doing deliveries in the neighborhood. And so- That was day one. And while, you know, every other restaurant group, and I, I say this in Atlanta, specifically every single restaurant group, close their restaurants. We were the only ones that had multiple locations. They were all trying to make it now, individual restaurants decided to, you know, stay open individual mom and pops, but no one that had a number of restaurants decided to do that. And, and I think there's a lot of reasons behind that, but, uh, ultimately for me. as a family business, we're not like, we don't have investors, it's just me my brother and sister and so we have the ability to make these decisions unilaterally without input from outside sources and investors that tell you hey you need to protect our investment you've got to close and you got to do what everybody else is doing and we also have the emotional component which is you know we have to be the ones to go and tell our employees like they're out of work you know and like they trust us and the you know the What we've built up over many years is that we have integrity. Like when we say we're going to do something, we actually do it and we follow through on it. And you lose that integrity when you talk about how great your company culture is and how much you value your people. But as soon as times get tough, like what do people remember? They remember the things you do, not the things you say. It's easy to have great corporate culture when things are going great to be saying, look how great we are. We're making all this money and we're treating our people great. But like, What happens when shit hits the fan? Then people actually find out what you're made of. And do you have integrity? Are you going to follow through and do what you say you're going to do? And so for us, that was like a defining moment because the staff galvanized around us, the communities galvanized around us. And within a few weeks, we were almost breakeven. And I knew that 350 million people in the United States weren't going to be able to essentially eat only at supermarkets. So it was like, restaurants have a role here. We have to provide food to the community and the role that we have. And so we were able to right the ship very quickly. And that gave me a line of sight for the next few years that I was like, oh, this is our time. We need to be thinking about what we're gonna do next. And so- And what was that? Well, I had this relationship with a friend of mine, via dining at some of these omakase sushi restaurants in new york and you know new york was shut down and everybody didn't know what to do and so i we had a pop-up scheduled because it was already something I was working on with him that I wanted to bring him to Atlanta. I wanted to show him Atlanta and show him the culinary scene here. And we had a pop-up scheduled to be at Cooks and Soldiers for eight guests a night for a weekend. And we were going to do an omakase pop-up. And we had already bought all the equipment to do it. And he was already scheduled to come down. And that was April 2020. And so March hit. And we're like, oh, man, this is definitely going to change things. Let's try it in May. And it didn't exactly work out. work that way. But eventually I was like, look, why don't we try it as a takeout version of the omakase? And I've got all these people that are working in this restaurant. This restaurant's struggling because there's not a big neighborhood around it. So there's not a lot of takeout sales. And so how can we bring another revenue stream into this business? And I was like, so just come down anyway. So he came down and a friend of mine has a hotel in Alpharetta, put him up for 35 bucks a night because no one was in that hotel anyway. And so he lived in that hotel for like months basically while doing the pop-up and we launched the pop-up and it was just a tremendous outpouring uh of support for the pop-up on that um first first night and i mean it was dramatic it was may 2020 my wife's pregnant with our second kid and she goes into pre-term labor at 24 weeks which is like not a safe place to be right and she's in the hospital i can't even visit her and the doctors are doing everything they can to save the baby and she's on a laptop launching the mujo site for the first time and the orders are flowing because my wife is our director of marketing and the orders are just like flowing in and there's a backup at the restaurant and you know the sushi's not coming out super fast and but i did um when i tried it that opening night i mean It literally was an emotional experience because I didn't know that he was capable of hitting that world-class level until that moment. You know, I just knew him from the restaurant that he was at in New York. And, you know, you never know if people are who they say they are, you know, and so you can actually see it. And when I had it that first night, I was like, this is, this is truly world-class. This is, this is at the highest level I'd ever had it. And it was in a takeout format. So I was like, you know, let's go. We'll figure it out. Let's, let's find a space. Let's sign a lease. Let's let's do this. Um, but. You know, it was that, you know, the fear creeps in though. on all these projects. Because the excitement in the initial phase, you get there, the concept, the idea, you want to bring it to life, you sign the lease, you start to get into it, and then it gets hard. It's like the money, the budget, the contractors, the designers, getting people to work together to figure all of that out, and then doing it with all the supply chain issues of COVID, and then all the crazy personalities that are involved, and opening a restaurant, all the creative people that are involved. It was just... the most challenging restaurant opening we've ever done. And it was a sign of the times too, just getting contractors to do anything right at that time was really hard. It's mid-COVID. You're opening a restaurant. Yeah. I mean, we signed the lease in July, 2020. And we had so many delays from supply chain and contractors messing up and all this other stuff. And we didn't open until beginning of 2022. But if you remember, that was when we were all back in mass because of Omicron again. So we're opening this 15-seat intimate sushi restaurant where the chef is literally touching each piece of food and handing it to you and you eat it with your hands you know and uh we're like this is the most expensive restaurant atlanta we're back in mass everybody's freaking out our sales have just tanked in the holiday season when it's supposed to be you know the best time yeah and i was like uh wow we're totally screwed and um but then you know friends and family we're In opening, you know, those first few friends and family opening nights and we sent the press release out and it was like a flood of reservations came in. And within a few hours of working that first shift, we had sold out three months of reservations. It was just like, there are a few moments in my career that are, have been as good as that. Like one of the early days of Iberian pig where we were just like, the place was packed and the energy and the lights and the music. And it was just like, I had that moment in my head that I'll never forget of like when we first kind of made it. And like that, that moment was like basically as close as it's ever been to that. That's incredible.

SPEAKER_00: 37:51

So what does that mean? If you sell out three months of reservations, are you talking like lunch to dinner every day for three months? Well, we're only open to dinner. Uh, and that's,

SPEAKER_03: 37:59

and that's, uh, two turns of the, um, sushi bar every day, uh, the nights that we're open.

UNKNOWN: 38:06

Wow.

SPEAKER_00: 38:07

All right. So now, so now Mujo is going, where are you physically during all of this? Do you bounce? Do you, what are you doing?

SPEAKER_03: 38:17

Yeah. So over the years, my role has changed. And that's one of the things I love about what we do is, is that I'm constantly figuring out ways to challenge myself and those around me. to grow into new roles. And so, you know, there were many years where I was a GM, you know, where I was literally running one restaurant. And then there were years when I was managing a couple of GMs. And then after COVID, we didn't have, my sister was still a GM and I was still managing GMs. And that was, you know, when our systems really started breaking a little bit. And so I brought in Our director of operations, Ryan Butner, who's excellent. He worked for Daniel Balloud in New York City and was truly fantastic and brought him in to be the manager of the GMs. And then my sister, who was a GM at that point, she took on the role of HR because we had almost 300 employees and no HR. True. And so, uh, what better role though, for a family member, you know, than to be the HR person. And so she took on as head of HR and then ultimately my brother who was. Chefing restaurants individually started with cooks and soldiers, but then moved throughout the company. As we opened new stores, he ultimately, uh, we needed some more oversight on the culinary side. So he elevated to culinary director. And so he oversees all the non-Japanese restaurants.

SPEAKER_00: 39:52

Okay. All the European

SPEAKER_03: 39:54

stuff.

SPEAKER_00: 39:55

Okay. And that's what I want to talk about next is the siblings. What were you guys like at birth? Were you close? Did you ever have distance? Did you all move off to school at any point? Because you don't see it a lot where siblings are in a family business.

SPEAKER_03: 40:11

Yeah.

SPEAKER_00: 40:11

Help me understand that.

SPEAKER_03: 40:12

Yeah. So I think that... anytime you go through something challenging together, it brings people closer together. And I mean, you just think about like a fraternity and pledging and that whole process, it's like artificially creating that, um, those, that closeness and those relationships. And so, you know, growing up, we watched our dad, you know, succeeded and fail as an entrepreneur and, you know, that had an impact on the family. And, you know, we went from, you know, living in a big house to live in an apartment with my grandmother and all three of us were in one room. Um, And my mom and dad were in the other room and my grandmother was on the couch. But like those years like brought us close together, you know? And then as we were all kind of like growing up in the family business, we all had that same shared experience of, you know, working every weekend because we had to, there was no one else to work the key roles in the restaurants, like line cook and expediter, you know? So, and it was like, every weekend, you know? So it was like, we didn't have the normal childhood of like, Oh, you know, you get to go to the Friday night football games with your friends and things like that.

SPEAKER_00: 41:23

Um,

SPEAKER_03: 41:24

exactly. Yeah. Fridays and Saturdays nights. So we had that, that, those challenges growing up and we all went through it. But then after, uh, I got out of school and started the turnaround, brought Stephanie in two years in, as we kind of were just getting off the ground, it was just like, I needed, I need help, you know, I just needed somebody else to help me kind of take it to the next level. And I, and I knew she was obviously great at what she does and could run a restaurant really well. So, you know, it was just a necessity and, you know, it's like, kind of like, you know, when your family asks you for something and they're like, I need you, you know, and like that to me. And, you know, I mean, it goes back to my dad kind of saying that to me, you know, when I was 13, we opened our first restaurant in Alpharetta called the Roasted Garlic. And we first opened my my dad and I were the only kitchen employees, like literally he and I. We didn't have anybody else at that time. And so, but I was complaining to him. I was like, you know, I was like, well, when am I going to see my friends? You know, like 13 year old kid, 14 year old, like, what am I, what am I gonna have any fun? And he was just like, I need you. I have nobody else, you know? And when you, you know, that's, that was the kind of the same situation I was in with my sister at that time. And so she joined and then, you know, John's a little bit younger than us. And I realized that, you know, we had a, this hole on the culinary side and he had already spent time growing up working in kitchens and had passion for the culinary piece of it and had gone to culinary institute of america and so he started going out branching out and working at some of the best kitchens all over the world and so that was really you know sick he's six years younger so six years in to the the business, he came in at a critical time when we really needed that culinary talent to take us to the next level. And so he did that when we opened Cooks and Soldiers.

SPEAKER_00: 43:24

Cool, makes sense. Tell me about Michelin. What is it? How did you get it for Mujo? Did they approach you? Did you approach them? And then deep under the hood, how do you operate and how do they hold it accountable to make sure you're still there? I'm fascinated.

SPEAKER_03: 43:39

Yeah, Michelin is a fascinating thing. So When we first opened Mujo, really, at the end of the day, Michelin didn't exist in Atlanta. Oh, it didn't? It didn't exist in Atlanta. So there was no even idea that we could be a Michelin star restaurant. It was not possible. So Michelin has to be brought to the city. And a lot of times it's the CVBs, the Convention Visitor Bureaus, that bring them in. And there's public-private partnerships, typically, but mostly public money, but depending on how they're all set up. But Michelin has been trying to grow in the United States for a long time, originally, uh, from France. And, um, of course, Michelin tires, the same company. And, uh, you know, it's been around for over a hundred years and the early Michelin guides were really about trying to get people in their cars to drive around Europe and to tell them the great hotels and restaurants of Europe. And that was, that was the initial, uh, impetus behind it. But, It's grown into this tremendously influential rating system over 100 years that has definitely influenced the way restaurants operate. Sure. And it's, I think, undeniably great because Michelin holds... restaurants to an extremely high standard to even get a single Michelin star. Yeah. Very, very hard and very small. I mean, only five restaurants in Atlanta and the original guide got a Michelin star. And so it's just a, and, and zero, two stars, zero, three stars. And so it's just like rare air for sure. And so I think people appreciate the level of, you know, the challenging level that they, they hold restaurants to. And so for Mujo never thought about Michelin because really all I was thinking about was like, how do I bring this idea to life with this incredibly talented person? And how do we find an audience and make sure that we're delivering an experience that people want to come back for? The first thing I thought about was with that restaurant was like, Hey, you know, it's like only, we only need 40 people a night to be successful.

SPEAKER_02: 46:00

Yeah.

SPEAKER_03: 46:00

Yeah. So there's 40 people in Atlanta at any given night that are celebrating a special occasion. And I think we'll be okay. That thesis is incorrect. There aren't 40 people a night that are wanting that for the first time to come to a restaurant like Mujo for a special occasion. What makes Mujo successful is wild. It's the insane regular customer. It's the person that will dine at Mujo forever. Monthly, if not more frequently than that. So we're talking about guests that have in the two years we've been open 30 plus visits. Oh my goodness. Over that period of time. What's an average ticket? 400 per person before tax and tip. So, and, and, and we've created this audience of regulars that basically fill our dining room nightly. Before tax and tip. I mean, I want to make sure that nobody missed that part. It's basically 1,200 a couple is the average all-in number. That's incredible. And because these people understand what we're doing and they see the value and they know that this is a world-class experience on par with some of the best sushi restaurants in the United States and all over the world. And so they have that in Atlanta. And so we have those regulars that are just like, Amazing. And keep us in business without them. It would, it would be a failure even with the Michelin star. You know, we see, we saw, you know, the restaurant was already full before the Michelin. We got the Michelin star waitlist increased, but ultimately the waitlist came back down to where it normally was before the Michelin star. So it really is. You have to create a successful business that resonates with an audience regardless of accolades.

SPEAKER_04: 47:52

Right.

SPEAKER_00: 47:52

What on a daily basis do you have to do that's different than another restaurant in order to keep that Michelin?

SPEAKER_03: 47:59

Well, so if you read the Michelin guide, what's online about it and Reddit and all those places about Michelin, what it takes. It's published that it has to do with, you know, the originality of the chef, the quality of the sourcing of the ingredients, the quality of the execution. Nowhere it talks about hospitality. Nowhere it talks about the interiors, the environment, the china glass silverware, all those elements. But ultimately what it is, is you're being graded on two things, basically. Your ability to execute the vision night in and night out, and all the details around that vision. So every little step of service and every little detail of each dish that goes out, making sure that it's to the same standard that you set in the beginning. And so how no one's 100% on anything, but what are you? Are you 98? Are you 99? Are you 100 on the execution nightly of that business. I like to say the culture that it takes to execute a hundred percent, very different than the culture it takes to execute, you know, at Iberian pig, like an, like 96% is success. That's like, you know, if we're a 96% satisfaction of the guests, pat on the back job, well done. Right. Yeah. At Mujo, anything less than a hundred percent is failure. And so if we're not hitting a hundred percent, you know, satisfaction with all of our guests, then we're we've done something wrong, you know? And so the culture it takes to get that extra 4% is tremendous, actually. Like it's a chasm, you know? And it takes like a really, really intense focus to detail. And, you know, some people would say it's probably not very fun, you know? But to do that, so you're talking about the execution night in and night out, you're getting judged on that. And then the second piece of that is you're really getting judged on your taste. Like as the chef, right? and restaurateur all the decisions that have been made in that business uh thousands of them to open it from the all the environment the lighting the seating the all the countertop all of the you know china glass silverware yeah every little detail you know down to the food that you're serving and the wine list and the cocktail program is all a measure of your taste you know like what you think is good

SPEAKER_02: 50:25

yeah

SPEAKER_03: 50:26

and uh you're going to make thousands of those decisions and they're rating you on that. Wow. So those are the two things. Did they, did they contact you? Cause if you look at like a two Michelin or a three Michelin compared to a one Michelin, you go in there and you're like, yeah, there's a difference between these restaurants. Um, but it's everything. It's every detail. It's not just with the Michelin guide. Like they say, Oh, it's the inventiveness of the chef and a couple other things, you know? No, it's, it's not really that it's all of it. It's all of it. Every detail matters. Sure. And so they're, they may not say that they're grading you on the glassware you're using, but I've never been to a three Michelin star restaurant that doesn't have handblown glassware. Oh,

SPEAKER_00: 51:07

so like, yeah,

SPEAKER_03: 51:08

those are the things you have to think about.

SPEAKER_00: 51:09

Yeah. So it's holistic. Did they, did they contact you?

SPEAKER_03: 51:15

So they ultimately did contact us after they had already rated us. So the, uh, ACBB brought Michelin guide to Atlanta the year after we opened. So incredibly fortuitous for us, obviously that the Michelin guide is coming, but you know, it's luck, but it's also like, it's only lucky if you're in a position to take advantage of the luck. Yeah. Right. So like, had we not opened that restaurant, you know, we wouldn't have a Michelin star restaurant because none of our other restaurants are trying to be Michelin star restaurants. That's right. That's not, that's not the goal, you know? And the, the, The goal is different for each restaurant, but it's not that. And so, uh, it was fortuitous that Michelin was coming, but we were in a position to take advantage of that.

SPEAKER_00: 51:58

Yeah. So they come in, is it like, I know when they rate golf courses, they come in, they play it. I mean, do they come in and secret shop

SPEAKER_03: 52:05

you? They do. So there's a number of inspectors. It depends on the different market, but it's, you know, at least three or four, if not five inspectors in Atlanta that were full-time eating in all of the restaurants in Atlanta going multiple times. And my understanding is that if one inspector goes, felt as though a restaurant was Michelin star level, they would send all of the inspectors in and they'd all have to agree that that restaurant was Michelin star level. And so you have to be able to consistently do it. Now, what I've also heard is that if you get re-reviewed every year, so we just retained our Michelin star like this month, past month, and they are out dining and re-reviewing you theoretically every year. And my understanding is that if they have a bad experience, all of the inspectors will come back. And if they all have a bad experience, you'll lose the star.

SPEAKER_00: 52:59

That wouldn't be good. That'd be pretty devastating. That'd be devastating. All right, so I wanna pause here in your career because you have done so much more after Mujo, but I wanna freeze right here and have you as you're standing in Mujo and it's open and you're successful. I want you to think up until then, What was your favorite thing that you've done? Because there's many. Before that. Just there. It could be Mujo, but just nothing Mujo till right now. Just up until that point, what was your favorite, whether it was Iberian Kid, whether it was a particular night?

SPEAKER_03: 53:41

Well, I think for me, there's a few of those moments that you look back on. And I think that first moment, when you get success after struggling for so many years to try to attain it, uh, that you can never create that high again, you know, like you always chase that and you'll always like keep going for more and more and more. And, you know, maybe it's a, you know, a bad thing, but ultimately, you know, when that, that first moment when you got over the hump and you got there and you for me, I, you know, I remember it was like, I'm coming down the stairs of the mezzanine level at Iberian pig and the Decatur location. And I mean, it was just like throngs of people. It was just so, so packed. And it's just like, the lighting was just right. The staff is like buzzing around, smiling, engaging with the customers. The kitchen is moving is, is like flying. It's super, super smooth. And the lighting's just right. The music's just right. And like the playlist was great. Like I always curate the playlist. And so I love music. And it's just like, it was the, the, the right song was on. And I was just like, we, we finally did it. Like we're good. That's

SPEAKER_00: 54:58

not going back. I felt that actually, as you were explaining it, I was feeling that. That was so cool. Yeah. Like you, all this, all those nights and all those, we're not gonna make payroll and just the, it's all worth it to have that one experience. Ah, man, that's, that's awesome. I'm gonna take a quick, uh, five second break here and just ask everybody out there. If you'd please hit the like button, uh, on our channel, it would help not only us significantly, but it'll help you as well. Get, uh, new shows and new episodes as they come out. So thank you for that. Let's go back to the show. Um, all right. Touchy subject in the restaurant business, reviews. So you got the marketing companies out there struggling and trying these little hacks to be able to incentivize and get more reviews. You got Google out there going, well, if you get fake reviews, we're gonna know it. If you incentivize, we're gonna know it. I wanna get under the hood and know how do you get your reviews? And I also wanna know what's your philosophy on reviews? Are they as important as the world's saying they are?

SPEAKER_03: 56:03

yes but not for the reason that people think they are i think really in my opinion okay so i went through some soul searching you know probably six or seven years ago now and we had restaurants in various neighborhoods that for one reason another restaurant more restaurants open competition comes sales go down a little bit Or the neighborhood isn't as popular as it once was. People aren't going there. Sales might be down a little bit here. They're up way up over here. And for no particular rhyme or reason. And we're incentivizing our managers on sales growth. Like lots of companies do.

SPEAKER_00: 56:43

Yeah, sure.

SPEAKER_03: 56:44

But now it's starting to demotivate people. Because I've got restaurants where we have general managers and chefs that are operating excellently. And we can see they're operating excellently. But sales are... flat or down a little bit

SPEAKER_02: 56:57

you know

SPEAKER_03: 56:58

and And maybe it's because we're not the hottest new restaurant anymore. You know, we opened and we were the hottest new restaurant for two or three years. And now we're in the sophomore slump, you know, where it's like, you got to get through that to become a classic restaurant someday, you know, and it takes time to get there. And, but how do you get there? And is it incentivizing people on sales growth? That's not happening so that they do things to try to bring in more sales, like overbook the restaurant on the weekends or, you know, do things that are ultimately going to impact the guest experience. And, and that is at odds with the missions. statement about, you know, one guest at a time and taking care of that and building those relationships. And so for me, I was like, how do we, and I'm not able to be in seven restaurants every night, not even close. And so how do we know that we're actually executing on this mission? So we have to figure out a way. And so I took a look at the review landscape and I said, what's the most like statistically relevant measure of how well we're doing in a given restaurant like how can we measure this better yeah and there's you know there's a lot of different ways you can try to measure the guest experience but what we found is we're getting more review traffic through open table than anywhere else google yelp all these other places you know people have you know you get the the top 10 of people that are really thrilled about their experience they'll go on google write your review then you get the bottom 10 you know people that are pissed off and you know write a bad review and but We want all those people in the middle because those are our average diners. And so how do we know if they're having a good experience? And so OpenTable was where we were getting the majority of our reviews from. So I said, let's take a look at all the restaurants in Atlanta on OpenTable. There are like 400 restaurants, plus Resi. So we're talking like 500 restaurants. So I basically mapped them, all of the restaurants, in-town neighborhoods, suburbs. And what I found was that Pretty much all of the restaurants that were undeniably successful all had like, you know, over a thousand reviews and 4.8 was like the number. It wasn't 4.9. 4.9 was basically like three or four. It's small, small, rare. Yes. Very rare for 4.9. Very hard to achieve. 4.8 was where the vast majority of successful restaurants were living. 4.7 was like a coin toss. It was like, could be successful, could not be successful. Four, six, almost all not successful. Four, five, almost all not successful. Four, four, definitely going out of business in a year, basically. So I thought that was interesting. So I said, let's stop incentivizing people on sales. Let's incentivize people on the guest experience. Let's use this metric. to focus people on that as a measure of how well we're achieving the mission as opposed to sales. And so that was kind of like a change for us and it's been very impactful and it gets everybody at all levels focused on what we think is most important, which is like the individual guest in the seat and the relationship that we build and how well we execute on that. So that is constantly what we're monitoring and now, I'm trying to figure out as of really next year how we're going to even take it further. And so Sunday is a platform that we use for mobile payments at the table. And they ask for a review after the experience. And so they kick you over to Google if it's a five-star. If it's less than four, it's internal. It's internal, yeah. And what we're going to be doing now, because not everybody uses those mobile payments, now we're going to focus on getting those mobile payments more frequently in the restaurant so we can actually get a way larger data set on how well we're performing on a given night. And we can drive down onto like, who is the server on these experiences and what's their average rating and things like that. But ultimately it gives us a much better idea of the health of the business when we can make that data more statistically relevant, not just OpenTable. So we're gonna be basically combining OpenTable with Sunday data to try to create a weighted average that's gonna be a much more accurate idea of how well we're doing with the guest experience. Really, from a marketing perspective, yes, it's good to get Google reviews. Yes, it's good to get Yelp reviews. But why? Why are people going on and writing reviews? Because you had to do something excellent in order for somebody to be like, I need to go out here and take that effort to go review this business. I would rather focus on the things that are producing that excellent experience, trying to get as much data on whether or not we're doing that or not in the store and then incentivize people around it. And so we're also going to add an additional incentive to any one that achieves the, any store that achieves the four, nine, because what started happening is, is now we started more easily hitting the four, eight everywhere. And so now it's like some restaurants are hitting four, nine and there's like, 12 restaurants in all of Atlanta on resi and open table that are at that level. Right. And, um, you know, we've had three or four of our restaurants hit at any given point in the last year in, in that, you know, top, you know, 10 or 12 restaurants in Atlanta. And so we feel like that is something that should be incentivized. That's so cool. So you're

SPEAKER_00: 1:02:29

building like your own internal algorithm more or less is what it is. A scoring system. Yeah. I love that. Really cool. Really unique. Do I understand it where like if I was at one of your restaurants and you said that you would really like for me to do the mobile payment because you can get that data, it'd be like, hey, next time you come back, here's a free appetizer if you do mobile payment today. Did I understand that? No. You really want them to come back. We

SPEAKER_03: 1:02:59

do want them to come back. We do want them to do mobile payments. The mobile payment. But we're not like incentivizing it because really it's just a– it's an it's ease for the guests at the end of the day because it's a qr code and they just click it and it's auto apple pay and it just like allows you to split the checks and all that and so um we just pitch it as like it's a it's easier but we're happy to do the traditional method as well

SPEAKER_00: 1:03:24

yeah so we talked about this a little bit before the show is what google has the ability to do is to score the to like override the review score so somebody can leave a five Let's just say you had one review and it's a five star. We've gotten calls from clients that go, hey, but it says 4.7, but they left a five. And that's all the evidence we need. They'll override a star if it says great place, go back. Because that's evidence of an incentive review, right? So while we're talking about that, it'd be interesting to see, like, I'd love to see your score go up to 4.9 or even higher. Review quality itself could be a metric to add into your own internal team where there's some things that will define that. Is the waiter or waitress's name mentioned in the review? So we'll have businesses actually bonus, which is legal to do, they'll bonus their team if they mention. So like a lot of dentists and doctors and the business will... incentivize the hygienist if they say tell the patient hey make sure you say my name in the review because they get an extra five dollars bonus but that what it really helps is the score in google that and then the food that was eaten or the service that was consumed so anyway it's all all yeah cool neat stuff i love talking about all those things um one thing i forgot to mention And I think you know this, the crosses that come in a lot. Randy Cross, football player, he was in- Of course, great. I think he was my third or fourth episode ever. It was his son, Brendan, who texted me that I need to have you on the show. So I like letting the people know, how did we meet and how do I know you? Yeah. Because people go like- do you pay these people to come on? Where do you find all these people? I'm like, I've got a big network and this is a passion project and people are really sending people my way. And I'm grateful for that. Yeah. Yeah. They're amazing family. And

SPEAKER_03: 1:05:30

we see them a lot, right? Yeah. We see them. And we met him through the restaurant and all, you know, all the kids, you know, grew up and most of the kids are my age yeah or around my age and uh so i kind of grew up you know taking care of them in the restaurant you know and so cool and then brendan um you know recently got married uh to his wife shelby and they had their wedding um at uh iberian pig and decatur and you know so we've got a lot of special events for them and the family over many years going back to our original restaurant before sugo which was the roasted garlic and alpharetta and So we're talking 20, 30 years at this point.

SPEAKER_00: 1:06:10

Wow. So cool. Well, I'm grateful for the introduction. So, I mean, this story is so, so cool. I love this. I could talk about it all day. Let me move into a topic that I know I can't be the only one out there that just gets, I question the business when I go in the bathroom and it's nasty. I don't want to question the business. I don't want to. It's not my intention. But when it's a disaster and somebody clearly hasn't been in there to like service the restaurant in hours, I immediately go to the cleanliness then of the kitchen. Like, are they doing this back there? And it's like, are they cross contaminating all this stuff? Help me and the people out there that I know have the same question. Help us understand that. What's going on? Well, so a couple

SPEAKER_03: 1:07:00

of things. First of all, yes. Attention to detail cleanliness certainly matters. Yeah. The best businesses do it really well. Right. Regardless. What I will say is the reason why maybe you see it with more regularity is there's a whole cottage industry of lawyers that sue restaurants for tip law violations. And so no one that's a tipped employee is allowed to clean a restroom by law. So no servers or bartenders or bus people that has to be an hourly employee employee making at least minimum wage without tips that part of their job duty responsibilities is cleaning. Oh, my goodness. And so now you've got very few people in that business that will do that job. And typically in most restaurants, because most restaurants are small and labor costs is expensive. And so there's not a lot of people on staff and they're only really staffing exactly what they need for that night. Oftentimes you have one dishwasher that's washing all the dishes all night long. That person is also the only person in the building that is essentially allowed to clean the restroom other than the managers. So a lot of times you have the managers going in there cleaning up Yeah. Tidying up the restrooms. Yeah, yeah, yeah. And in most successful businesses, that's actually what you see is the owners and managers are in there cleaning the restrooms, tidying them up because the dishwasher is very busy. So the waiter,

SPEAKER_00: 1:08:34

waitress, if you're making tips, cannot. Yeah. All right. So I noticed that on one of your websites, or actually on the Mujo website, it mentions perfume and cologne. And I'm done thinking logically because I had a logical thought about the bathroom, but I was clearly wrong. That blew my mind. I'm not even going to give my opinion. What's against perfume and cologne?

SPEAKER_03: 1:08:59

Well, specifically in that experience, it's a very intimate dining experience. And you're sitting next to... other guests directly next to other guests that are not part of your party. And the perfume and cologne is going to impact the sensory experience for other people at the bar. And when you have a really high-end dining experience where the nuance of the fish and the rice is a big part of it, it's only two ingredients. There's a lot of nuance and detail that goes into those two ingredients. And so in order to really savor it, most of what you taste is olfactory. If you don't have any sense of smell, you're not really tasting very much at all. And so try to do that. Try to taste something with your nose closed. It doesn't work very well. And so basically, it's to preserve the dining experience for everybody else. And so fine wines, most of what you're tasting is the nose. That's why you smell wine before you drink it. And so we're trying to preserve that experience for everybody at the bar. And so that means that perfume and cologne is not recommended.

SPEAKER_00: 1:10:13

Yeah. Okay, good. Again, one of those really cool things, the failure rate in the restaurant business. I see online it's anywhere 65% higher. Yeah. Why is that in your opinion?

SPEAKER_03: 1:10:30

Well, it's funny. I like to say when it's, when it's a new concept, meaning it's a new idea that you're bringing to life, you never done it before. And it, you know, having a successful version of it somewhere else to duplicate, like opening restaurants is not like a batting average, you know, it's, uh, you know, if you're batting 500, you're like all time, you know, um, even, even successful people, you know? And so, uh, if it's a duplication, you want to be much higher than that, like on a, on your hit rate. Otherwise it's very hard to grow a business if you know, 50% of the new ones fail. But when you're coming up with new ideas and testing the market and it's very hard and you know, it's very competitive and people copy instantly successful ideas. As soon as they become successful, there's, you know, 12 omakase restaurants in Atlanta now. And so there's any successful businesses iterated on. But what I will say, when you're like first to market and best with a new concept to a neighborhood and depending on how, high-end it is, you define the neighborhood a little bit more broadly. Like for Mujo, the neighborhood is Atlanta because it's a very high-end concept. But for Spanish tapas, you can have Spanish tapas in all the neighborhoods. So you're first to market in a big neighborhood and you're best at that thing. You can own it for a long, long time, like 20 years. But back to why restaurants fail, I mean, why any businesses fail All businesses and entrepreneurial endeavors are highly risky. And you see them and they fail all the time. And there's a whole host of reasons that they do fail. But I like to think about like the success of a restaurant is like there's this moment in time when the restaurant opens. And you have all the decisions before opening day that you made. And then you have all the decisions you'll make after opening day. And so... The decisions leading up to opening day, a lot of those decisions cannot be reversed. So it's like the choice of location, the deal you sign with the landlord, all the covenants and the lease and everything else, and all the details you choose on the interiors. So a lot of those decisions are very important. And when you open on day one, if you've made enough of those decisions right, you've set yourself up for success. If you made... a lot of them wrong, you're probably dead before you even open. Like there's just no chance. And you've seen these places where, you know, they seem about to open and you're like, that place is never going to make it, you know, no chance. And so that's, that's the challenge of the, of the restaurant business. And, and again, like I said, with the Michelin guide, you're being rated on your taste, you know, like you've made all those decisions and, you know, like, any restaurant, you're hoping to find an audience or any business. You're hoping to find an audience for those decisions that you made and your taste in those decisions. And hopefully you find enough of an audience that, you know, you can be successful. And then all the decisions you make after opening day, that's all operational excellence. It's like execution day in and day out. And, you know, back to what I said, the Michelin guide, it's execution. And then it's those decisions around taste. And so if you're, Any business, I think, is that at the end of the day. So

SPEAKER_00: 1:14:01

like take a Waffle House.

SPEAKER_03: 1:14:02

Well, I mean, take any product. Like what made iPhone better than any smartphone or touchscreen before it? Yeah. Like it was a number of decisions around taste. Interesting. Like just like the bezel, the glass, the experience. Yeah. The feels in your hand, the weight of it, like all of those details. So there were other versions of that before that thing.

SPEAKER_02: 1:14:25

Yeah.

SPEAKER_03: 1:14:26

That's cool. And so restaurants are similar to any, I think, product. And if you put something out there and execute it well for what you're trying to execute it, you can find an audience. What's the hardest part about owning a restaurant? Does any one thing stand out? Oh, man. I mean, the obvious answer is like the people management side of it. But I think we've gone– through so many ebbs and flows of the business over the years. And, you know, I think we have a really good handle on the people side of it and how to, you know, be good operators and good stewards of the community that we've created of our employees. Um, the hardest part about, I think restaurants is the longevity piece. It just takes, um, a toll you know day in and day out you know year in and year out like to do it at a high level it takes a physical mental emotional toll on on everybody you know and so sure you have to figure out ways to keep it fresh and uh invigorate people and and staff and yourself yeah um over the years so I mean, I've been doing this almost 20 years now, which is crazy. Wow. So yeah, 2007. So it's almost 2025. Where'd

SPEAKER_00: 1:15:53

you go

SPEAKER_03: 1:15:53

to school? I forgot to ask you. So I started at Chattahoochee high school here and then transferred to Westminster for my final two years, junior and senior year. Then I went to Cornell, did the hospitality thing where my sister

SPEAKER_00: 1:16:07

went. Like your sister.

SPEAKER_03: 1:16:08

Yeah. Okay. And then my brother did the culinary Institute.

SPEAKER_00: 1:16:11

So that's

SPEAKER_03: 1:16:11

how, yeah.

SPEAKER_00: 1:16:12

That's cool. Awesome. You guys have, some really exciting stuff. One of them, your dad wouldn't tell me. He said, I want, I want Fred to tell you himself. So, cause I ran into him at Starbucks. So I want to hear like now what's going on. You're all, you're set up. You got all these good restaurants. You have an awesome brand. You're rocking and rolling, but you're not done. You're no,

SPEAKER_03: 1:16:35

I'm more excited than I've ever been. I think I'm more excited about, you know, what we do than I've ever been because I love where, where, what we've created up until this point, I see so much more opportunity, uh, to grow a business at a, at a rate that allows for people inside the business to have new opportunities and new challenges as opposed, you know, I think that growth is, um, only really possible at the rate in which you have people that want those new opportunities. And if you grow too fast and you don't have those people, you water down the culture first, but secondly, you take those good people in the organization, you stretch them even thinner, and then they end up burning out and leaving. And so my job as the CEO is I, you know, I recently heard a Ted talk about this and it just like, so hit home for me. One of the primary functions of my job is basically to decide between and toggle between two primary activities. One is, is exploitation and not in the negative connotation, but exploitation is, is doing the same things that are making you money, doing more of it and as much more of it as you decide basically. And then the, the other piece is exploration and that is innovation and new ideas and new concepts. And like for us, it's new restaurant concepts. And so I have to decide between those two activities on one side with exploitation, you know, you put that capital in and you expect a return. But ultimately if all you do is exploitation, all businesses go out of business. Eventually all businesses fail, markets change and you know, products change and people's tastes change. And so over time, eventually of all you do is exploitation. You go out of business. Um, Typically it's very, very rare. And then on the other side, exploration, if all you do is innovation, it's highly risky. Like I said, like a batting average, you know, more likely to fail with each new exploration and you know, it's, it's capital intensive. And so you can't just do that because if you do enough misses, you know, you're totally out on the street. And so I'm always trying to decide like what's next and how can I do the right amount of each, each of these activities. And for us right now, that's really comes down to it's one new one big decision here if i do my job well i make one really good decision and that is you know encompasses a lot of little decisions but it's really you know what are we going to open where are we going to open it yeah what what team are we going to put around it what kind of deal are we going to cut with the landlord how we're going to fund it like all those little details it's just like what's the new restaurant we're going to do this year? And in the previous years, we haven't grown every year a new restaurant, but we're kind of on track to start doing that this year, really. And so in 2023, we opened Iberian Pig Nashville. That was a duplication.

SPEAKER_00: 1:19:24

So Nashville, Iberian Pig, that's number two. And then in

SPEAKER_03: 1:19:27

24, we didn't do anything, which was good because we had a really crazy, stressful 23 for a lot of different reasons, personally, professionally. And Then 24, we took a break and now 25, we're doing a new concept, uh, in partnership with my chef from Mujo. So we're doing a follow on concept. Uh, so we're excited about that. Um, so in Buckhead, um, so we're working on that. So we're excited. Uh, details are minimal at the, at the moment, but we are going to do another kind of Michelin star level idea. Um, so we're excited about that. And then we are hopefully getting relatively close on opening an Iberian pig. And so, um, and now I'm thinking about what's going to be next after those two things. And so, uh, I, one of the things that I think we're excited about is duplicating cooks and soldiers in a new market and Nashville specifically, where we've seen a lot of success in Nashville and bringing a concept that is now 10 years old and, uh, has been really good for a long time now and trying it in a

SPEAKER_00: 1:20:29

new place. Yeah. Do you have anything like way in the back of your mind that might not come out for five years, but you've seen it like any other Tokyo experiences that... I'm always

SPEAKER_03: 1:20:40

kind of thinking and trying to synthesize what I think is going to be good, you know, in the future. And I don't... Like the... concept we're going to be doing the new one in Atlanta is something I'm, I've been really passionate about for a while. And, and I know, uh, Jordan has too. And so we really, we really come together and align on some of these like big ideas. Um, and that's what we came together for Mujo. We really aligned on a lot of big ideas around what, you know, kind of experience was what was missing from the traditional Omakase experience and how we could bring something new and really interesting. And so we've been talking about, you know, this next idea for a long time now. So we're excited about that. But other than that, like I really am very excited about doing more of the stuff that we're doing that works and bringing it to new communities because opening Nashville was like one of the most fun things I've done in years because we get to bring something to a new community and I get to build all these new relationships and get to know all these people and and really expand our network and so back to like the you know one relationship at a time thing that that was like the best part of that like I get to go to Nashville and see this team that we've created it's done this really awesome thing and get to be part of the community there. And so I really love that piece of it. So we're going to keep doing that so long as people want us to do it. Great.

SPEAKER_00: 1:22:09

Yeah, I love it. I want to cover two more things with you. Um, where do you like to learn at podcast books? If so, and do you have actual topics or shows? Oh

SPEAKER_03: 1:22:21

yeah. I mean, I like, I think one of the most important things is that you're just constantly learning and consuming as much content Um, material as you possibly can. So I'm getting like it in every form, basically like traditional books, traditional magazines on tablet. Yeah. Um, traditional news media outlets, wall street journal, New York times, et cetera, et cetera. Yeah. I'm also audible. I listened to audio books, podcasts. Oh, you're getting all of it. I'm consuming an insane amount of content.

SPEAKER_00: 1:22:59

Or you're getting your best trade stuff for your business.

SPEAKER_03: 1:23:02

Yeah, and that's a good one. And then also curating your social feed too has kind of become important now. I've realized is I actually get a lot of my content and learning not in the way you think about with social, but I'll follow– the news outlets and the sources that I think are most interesting, whether it's like wall street journal or Bon Appetit or food and wine. And like, so then they'll give me the content and then the links to their sites that I'm already paying for to subscribe to, but I don't actually have the time to go to their websites to think like, oh, this is their most interesting story that they've got going today. But they are doing that for me via their Instagram feed. So that's one of the things that I find actually most valuable about social now is actually just it curating your feed such that it's bringing you the content that's actually going to enrich you and not stoke the flames of negative content. emotion and behavior, like jealousy

SPEAKER_00: 1:24:07

and comparativeness and all that stuff. Am I better? My rule of thumb is if I take two scrolls, I have to have improved my life. And if I can't prove that I've improved my life, it's the wrong content. I don't care what it is. Yeah. I mean, yeah, it's okay to,

SPEAKER_03: 1:24:22

yeah, exactly. I think it's, you know, it's okay for, you know, things to be a fun distraction too at times. Like, you know, there's a reason that the movie industry has, has been growing for, you know, a hundred plus years is because people love to be distracted and taken away to a different place for two hours or whatever that is. And so there's nothing wrong with that, uh, either. Um, but I think it's all about moderation and finding the things that, uh, give you energy and don't take it away. And so I'm, I'm always looking for that, but yeah, I'm man, I've constantly consuming learning, learning as much as I can. Yeah. Yeah. And when it comes to restaurant stuff, I'm always looking at like, what restaurant tour or chef has written a new book or, you know, learning from those people and, um, you know, learning through travel, dining at other great restaurants. When I go to a new city, I'll reach out ahead of time to the restaurant I'm going to see if I can connect with the chef or the owner, get coffee. Like, you know, I'm always trying to make connections anywhere I go, because I do think that that like beyond, normal monetary success like the value i get like i'm a very extroverted person the things that i love about life is just like getting to know new people yeah and also like continuing to grow and develop the relationships that i've already built like that's what i get the most energy from more than anything that's probably why i'm in the restaurant business because every night i can walk into the restaurant and i can meet 100 new people if i want to or more Yeah, or more. And create a new, like, lifelong relationship. Legitimately, like, my wife's best friend and, you know, her maid of honor, like, they were customers in the restaurant from, like, 15 years ago, you know, that I met. And I was like, oh, these people are awesome. So cool. Like, we should hang out, you know. So, like, that's how, you know. Yeah. It can, it can happen. So that's what, that's another reason I love the restaurant business.

SPEAKER_00: 1:26:23

When you sit in any particular restaurant, not, not one of your own, but when you guys go out to dinner, are you truly having dinner or is your mind going, what did that, can I learn over there? Can I learn from here? What, that's so good. Like, or do you. Yeah. I mean, I would, I would say alcohol is an

SPEAKER_03: 1:26:39

amazing substance.

UNKNOWN: 1:26:41

Yeah.

SPEAKER_03: 1:26:42

As soon as you have a glass of wine, it's like everything just relaxes a little bit. The anxiety and focus on all those things tends to go away. No, but in all seriousness, when I'm in a restaurant, obviously, I'm noticing the details and I'm making judgments about the details. But the primary reason I go out is not for any of that. And I really do turn it off. I don't really care. i'm there to be with the person that i'm with that's it and as long as the meal is helping me facilitate that um i'm happy it can be very mediocre like it doesn't need to be good like it can be just okay as long as the space And the people there are making it easy for me to connect and get off my phone and be with that other person over food and drink. Like that to me is what it's all about. And so I don't have like a whole lot of judgment against a restaurant. Um, if I'm there, I'm just really happy to be there with the person that I'm with.

SPEAKER_00: 1:27:45

That's cool. That's awesome. All right. This is a big one, big last, last and final. And it's a very particular restaurant. person that I want to hear this, that I want to get this message to. So you've been through the ups and downs and the turns, and I'm grateful that you came in with an attitude and a willingness and a desire to really share the struggles. It's not always easy to get that out of people. So I think that's where the best learning happens, me personally. So I want you to give some advice to the young restaurant owner who actually wants to be successful, right? And we talked about that a little bit before. And I say that because they surprisingly don't all wanna be. They are just like, I got it. But then they close in a couple months, whether they don't have the awareness or they just got money from a will and they're just going to run it out after a while. So the person who's young in the experience might be getting their butts kicked. They might be looking for a couple nuggets from you who's farther down the road. What would you say to that person? And it could be a couple things. It could be as much as you want, actually.

SPEAKER_03: 1:28:59

Yeah. I, you know... I was in those shoes not that long ago in the scheme of things. And what I will say is that you try to focus on what you can control each and every day, each and every minute, you know, like, and when, you know, if you open at five o'clock, the lights go on, it doesn't matter what happened in your day, how hard it was, how many checks you bounce, the employee issues, you know, you got a flat tire, you Whatever happened in your life, it doesn't matter. You put a smile on your face and you go out there and if you have to fake it, you fake it. And you do it for the team and the customers and the guests. And each and every night you have an opportunity to make an impact with people. I mean, as long as you're serving more than one guest or more than zero. you have an opportunity to make an impact. And so go out there and make that impact. Like give people a great experience, make their night, figure out a way to make their night each and every night with the people that you, the customers that you do have. Like, what can you do to give people an exceptional experience and how can you make a connection to that person so that the next time they come in, after you gave them an exceptional experience, you actually recognize who they are and they recognize you. They want to be recognized. They know who you are because they were, they're coming back, you know? So how do you remember them and so um and if you keep doing that i do believe that like even like i said earlier about restaurants and the decisions you make before opening i actually do believe if you are tenacious enough and you are have enough perseverance you can make any crappy situation work you can make any bad restaurant work if you're willing to put in the time and effort and Over many years. It's not just weeks or months. And that's also what people, you know, they can do that open at five, put a smile on your face, go out there, take care of some guests, make their night, recognize them when they come back in a couple weeks later. But, you know, can you do that day in and day out, month in and month out, year after year for a long time? That's what breaks people. That's what they don't have. Like that is ultimately what, you know, when you're running a business that's struggling, that people ultimately just give up. They don't want that lifestyle anymore. They don't want the life of having to grind and, and, you know, but I think if you stick with it, you'll see the results they'll, they'll build on themselves. And then you just. you keep going and you know ultimately you do get out of that cycle you know um but that is i think the hardest part because a lot of people just quit and i've seen it many times over the years you know um it's it's you know it's a tough business yeah

SPEAKER_00: 1:31:47

what about the person so same category person that's getting like just so beat up by the reviews happening online. I hear that a lot. Like you can really take that to heart. Yeah. Negative review against your restaurant.

SPEAKER_03: 1:32:03

Oh, I think that, that, you know, it's a really good point because it's very easy to like, you know, get for somebody to come out and judge you and you to take that to heart. What I would say is that you need to take the whole picture in mind, which is how do people feel about my business in aggregate? Like I actually don't read the individual reviews. I only look at the score, the overall score. I look at volume traffic of reviews and what is our overall score. And I tell our managers, I said, don't get hung up on individual comments or reviews or nasty comments at all. Like, you know, we only read them if we feel like there is a consistent trend of a problem that Yeah. Um, but generally what we're looking for is the whole picture and that for the person that's getting hung up on that one bad review. Well, look at the whole picture. Yeah. Are you like a 4.2? Because that's not very good. Right. Like, right. So maybe there is some valid things that these people are saying, but if you're a 4.8 or 4.7, like, yeah, I mean, you're going to get some people that are, you didn't have a good experience. You know, one's batting a hundred percent. Yeah. So don't get too upset about it. Just do better.

SPEAKER_00: 1:33:12

Yeah. Now, Uber drivers that don't even eat in a restaurant, I literally saw a review. They're like, I went in and waited for my order for a long time. I mean, it's just crazy. And they weren't eating at the restaurant. They were picking up an order for somebody else. That's right. So, oh, all right. I'm going to thank, I'm going to text Brendan right after we finish here. I'm so glad he put this together. I could see why. while you're just crushing it out there. I can see it now. Not always, not always. And the

SPEAKER_03: 1:33:42

more success you have, then you get the hubris and then you get humbled. So you have to constantly

SPEAKER_00: 1:33:47

be evaluating. It's Castellucci Hospitality Group and that's where you can get to all the restaurants, right? Okay, so Castellucci Family Group. Federico, thank you for taking the time to be here. And everybody out there, Oh, man, I know I'm blown away, especially by that one, the tip law. I'm just incredible. The stuff that I've learned, I hope you've learned a lot as well. And thanks again for being here.

SPEAKER_01: 1:34:15

Thanks, man. Thanks for watching The Jeff Obeck Show. Be sure to subscribe and follow us on all socials.