What's Working For Restaurants Today With Kyle Inserra (Ep 138)

whats-working-restaurants-today-kyle-inserra

Great wide-ranging restaurant biz conversation in this episode as Kyle Inserra of Sabre Advisors joins Jaime Oikle from RunningRestaurants.com. Kyle is also the host of the National Restaurant Owners Podcast. They talk about a ton of different things -- really a conversation not to miss as Kyle shares loads of valuable nuggets along the way. Check it out...

Find out more at https://www.linkedin.com/in/kyleinserra & https://www.runningrestaurants.com

---

Watch the episode here

Listen to the podcast here

What's Working For Restaurants Today With Kyle Inserra

Coming up on this episode of the show, I interview Kyle Inserra of SABRE Real Estate Advisors and also the host of the National Restaurant Owners Podcast. We cover a lot in this episode. It is a good one for sure. Check it out.

---

I have a great episode featuring Kyle Inserra of SABRE Real Estate Advisors and also the host of the National Restaurant Owners Podcast. There's a ton of things we could talk about. I'm interested to see where the conversation is going to go. Let's start with your background. French Culinary is on there. Cornell University Hospitality is on there, a restaurant owner, real estate stuff, and podcast stuff. Talk a little bit about the journey.

Kyle’s Journey

Thanks for having me on. I appreciate the time. This is cool. The journey might be longer than the amount of time we have, but I have been in this space for a long time. I owned restaurants for the better part of the last decade or so. I’m operating my restaurant and I began working at SABRE as a commercial real estate advisor focusing strictly on emerging restaurant concepts and helping them build out their pipeline. It was a little bit of a rough 2020 as you can imagine. Not a lot of expansion going on for restaurants but it seems to be turning the corner right now.

Growing up, did you know you were going to be around restaurants? Was French Culinary right out of school? Did you jump right in? What happened?

I went to school at a Liberal Arts college in Pennsylvania, the Franklin and Marshall College. I studied Finance and Marketing. I graduated college and went to work. It was a couple of different places. I worked on advertising and Wall Street, doing financial advisor stuff. Right after 9/11 when those two planes hit the World Trade Center, I was like, “I don't want to be doing this anymore.”

I walked off my job and called my dad. He thought I was completely insane. A month later or three weeks later, I enrolled in the French Culinary Institute. I always loved it. I thought about it. I always loved the restaurant. I love the vibe. I like to cook and it seemed like the next thing I wanted to do. I want to do that passion. That's how I wound up there.

We were outside of New York at that time. That was a crazy time around there. That was a life-changing event for a lot of folks. In your case, it brought you into hospitality which is different from the finance world. It’s probably much like when the whole country shut down for a while. That has a big impact. I remember it. There's no way to describe COVID. Everybody knows the story. It was a shitstorm.

We did a show called the Opportunity and Optimism Show, feeling that we're coming out of that with vaccinations and trending in that way. I hope that is the case. Even before we started the episode, you talked about a backlog of what you're doing. Things are starting to move. You said you're working with emerging brands. What’s a typical situation for you? What are restaurants looking to do?

There Are Opportunities

It's a mission to watch it and develop over time, but what we thought was going to happen is people are going to realize that there's an opportunity. I spend so much time trying to talk to people during this time. I know it was tough. I was living it. I was working three nights a week at my restaurant. I was coming to work during the day, talking to restaurant operators across the country and telling them, “I'm doing exactly what you're doing but I'm telling you, this is going to turn around and have some opportunity here.”

In the restaurant industry, let's face it, there are a lot of people in this industry who probably should not have been in the industry. I like to put a silver lining on that and say this is going to be the best thing that ever happened to you. You're going to be able to get off from under your leash. You can be able to do whatever you have to do to walk away and find something that you want to do. That's going to present a lot of opportunities for operators who are in this business as a career choice or as a passion for what they do.

Find something that you actually really want to do and that's going to present a lot of opportunities.

That has been the case. At least in New York, a lot of restaurants have shuttered. It has presented opportunities for an operator who maybe previously could not have afforded a rent or because the space was occupied. It wasn't available. They'll take advantage of the situation and roll their brand or acquire new concepts.

Now it's borderline a little, I don’t want to say it’s too late, but landlords are starting to realize that this is coming to an end. “I don't need to knock 40% off my rent. I don't need to give tremendous TI dollars. I have a good piece of real estate. If you want it, this is the price.” People are now getting it. They go over their pipelines. It's interesting to watch it play out.

We talked from day one. I always remember before Saint Patrick's Day last year. It was the day that sat in my mind because the panic was off. Many people do the regular same Patrick's Day. It's going to be super spread and so forth. I always think about that. We did calls for the next month after that and everyone said, “I'm not paying my lease. That's the most expensive thing for us. I'm closing,” and it happened. Crazy stuff.

We did a lease session talking about what folks can do and tips and so forth. That was very interesting because usually, the space people are in the driver's seat. They're in control, but people just vacated. Even now, the openings are there. They have never been there before and to your point, opportunity 100%. Maybe you get better deals. It's an interesting time. Your other point which is 100% on is that it got people out of the business that shouldn't have been there.

Business is very hard. Profits are very hard. If you're doing well, you got 10% and there's certainly no cash cushion. It was a devastating thing. Hopefully, everybody who does it comes back stronger. We learn those lessons. That part of it is great. Maybe I'll transition right into some of your podcast stuff and we'll bounce back and forth with the real estate. I'm interested that you must have had so many conversations in your interviews over the last stretch of people that are going through what you went through and what people you're talking to went through. What's the feeling now? In you're most stuff, what's the feeling most recently?

I started listening to my own shows over and over again because of that exact reason. There was so much that we spoke about there. Each week, operators, directors of real estate, chefs, creative people, and people who surround the industry were on. The conversation was we believe in our brand. We know that if we make these adjustments, we're going to be fine when we come out of this.

You see what's happening. The operators have been able to dig in and hold on, made the changes that they need to make in their business, cut back the staff, focus on their delivery, optimize their digital platforms, go on their social media, and stay top of mind. They were coming out of this thing like rockstars. We’re roaring twenties again for this whole group of people who rightfully deserve it. It's been a rough go. If you made it through that, what else is there?

At the beginning of the pandemic, in a weird way, this is the ideal group of people to have this happen to. It sounds awful but when you own a restaurant or you're managing a restaurant or operating a restaurant, you're used to dealing with the unknown. You’re used to dealing with a set of circumstances. Not a global pandemic but it’s like your partner doesn't show up.

Your lead line cook doesn't show up. There's a gas leak or something happened down the street and you have to shut down. Whatever it is, those who dig in and made it happen, made it happen. They're here. They're in a position to take advantage of whatever it is, more business, additional locations, expanding to those kitchens, or food trucks. I like to see that. It's the underlying theme of all those shows. It seems to be coming true.

Where we were, restaurants were doing very well. People were spending. It shut down and it’s completely the opposite, but now with stimulus money, all the funds coming into the restaurant even though there have been challenges. PPP this and round two. Now, the new one is coming out. A lot of restaurants are getting a lot of dollars from those programs, which is great.

Now, the customers are also getting jobs. People are ready to eat. Everyone is ready to eat, drink, and have fun. It could be some flush times coming into these people, which 100% they deserve, and hopefully, they're ready for. Maybe we'll touch on this at some point. I know staffing is the number one problem. If things get so easy again with customers coming in and ready to spend, do you talk to folks like, “Don't forget those lessons you learned when it's lean? Don't screw service and take advantage of the lessons you learn.” What do you think about that?

I was talking to somebody and he was one of the guys who was hesitant to go out. Even when things were going up a little bit, he didn’t want to eat outside. He didn't want to eat inside. He didn't want to do anything. He went out with his wife and he said, “I feel like this place lost something. I feel like they're operating in that mode where they're not used to having people in the restaurant anymore.” That's a great point.

You have to go back to the good things that work like the hospitality, the things that you were known for, providing great specials, going over the top, and exceeding expectations. All those operational customer service standpoints are always going to be important. It's just been go mode, deliver food, get it done, and get it out, and people will be grateful. That's a fantastic point. We’re going to be shifting back now. You have to be grateful for the fact that they're coming back or that you were able to sustain the business at this point You have to make sure you treat them right. It's a tremendous opportunity to go over the top and exceed expectations.

Digital Real Estate

People come back. We happened to be a family that was very tentative going out and dipped our toes in slowly. We're in Florida, which didn't have many restrictions but we've continued to be very on the conservative side of that aspect. A lot of digital orders in the beginning, more so now, and starting to go out and so forth. The digital lessons have been extremely important for folks who say, “We don't even need to do takeout.” A lot of folks didn't do takeout before. Find me a restaurant that doesn't do takeout now. What have you heard people say about the digital part? Third-party it is. I know that's not great but learning how to do a takeout order well. What do you think?

It's beyond critical. The only thing that stood in the way of people wanting to do that was ego. It’s like, “My salmon has to be plated like this. The sauce can't go on the side. The sauce can't go on the top. It's going to crack.” or whatever. We were at a point where it was survival mode. Fries were an issue being transported. Calamari or crispy things. Certain seafoods are not great delivered. I get it, but you're going to need to optimize to a certain extent.

Maybe have a delivery menu of some of your favorites. Maybe you can't get the lobster roll or you can't get certain things that can't be delivered. As important or almost as important as brick-and-mortar retail is going to be digital real estate. Where you are showing up on people's little screens is going to be very important and how you deliver on that experience. The days of the tin containers with the plastic lids and the black Sharpie mark are over. You have to deliver on some experience now. That's a major takeaway from this whole thing.

Some people have learned how to do a good job with takeout, whether it's the bins, bags, or the notes. It's done well now. We've been ordering out a lot now, much more than in the past. How many choices do I have when I go to order out? A shitload. We’ll play softball practice or whatever. I swear we’ll order somewhere and who's it going to be? There are 5 to 10 choices we usually make. How are you going to be in my mind that it's going to be you versus the next guy? Someone is getting my money, I can guarantee. We're not cooking at home.

There are millions of people like me running around. Getting that digital mindset, whether it's a text here, an email there, or a social media post, whatever. You have to do that stuff well and then a good ordering face. I can't believe so many, especially the local ones by me, do such a shitty job with their digital ordering stuff still and it's very disappointing. You want to give them more dollars and they make it so hard. Why do you make it hard to give me your money? You can talk about that aspect of it. I want to go to your recently-owned restaurants. How do you think about making it easier because you are independent? How did you make it easy for people to do business with you?

We made it a priority. We shifted to native delivery at the beginning of the pandemic primarily because of the fees. I learned so much about what was going on to the point now where I'm on a committee. We speak to the Federal Trade Commission on a regular basis about the practice of these third-party groups. Not to dive into that whole thing, but the reality is you have to own the whole experience. You have to own the ordering process, however you're going to package and deliver it. You have to stay top of mind with your marketing.

You have to own the whole experience.

One of the things is fantastic or what's fantastic during the pandemic were these things like chefs cooking their favorite meals or showing the recipe. Letting people pick them up and do that thing. I remember thinking, “I hope this doesn't go away,” because it's a fantastic way to be front of mind and be top of mind for the restaurant.

If you are on those platforms, I hope you're not, but whatever platform you may be on, you have to be top of mind. Your marketing has to be on point. All the big guys are on those same platforms. If you're a burger place, you got McDonald's, Wendy's, and Burger King. Old that crap is there. You're going to be somewhere where on that line? You have to spend the money. You go to the market. No one is calling down the 20th burger place in your market.

Think three top of the mind and say, “I'm not eating these fast-food places. What's the one? Harry's. He has great burgers. Let’s order from them. I remember him because the chef showed us how they make the caramelized onions for that burger that everybody loves on a video.” That stuff is so important and so easy to do. There's never been more resources and more information for people to say, “How do I do this?” This phone here, you can make the content and post the content. You can take all your orders on it. I think it's laziness if you're not implementing that stuff. It’s so good.

Here's a video studio for you. I get that you couldn't do that twenty years ago when it was fancier and expensive. That ability to look real in your kitchen is super easy. Some people are great at it. They have the personality and could say the right words. Some people are awkward or feel like you're awkward. You don't have anything to say. You certainly have stuff to say. You have a restaurant and people want to know what you're doing and so forth. When you first become a restaurant however many years ago that was, what the heck was out?

It was a learning experience for sure. I'll say that. We had no budget. We had no money. We had a great concept and a great product. We fought our way through it. My whole business and my content are based on that experience. I did this all the wrong way. I knew how to cook. I run restaurants from an F&B perspective for other people, but the ownership piece is different. There's the partnerships, interpersonal relationships, and the business side of it.

All that stuff that comes in this package that you're not ready to open or you open and everything pops out and you deal with it one-on-one. It's not easy. We were very fortunate to be busy right from the jump which covered a lot of our shortcomings, but that only works for a short period of time. We were forced to figure out each other's roles and expand location, but it was a learning process. My real goal in any way possible is to prevent anybody from experiencing a lot of this stuff that I had to go through.

Here's what I did wrong. Here's what you can learn from it. Don't do the same. You said you sold during the pandemic.

One in 2017 and I sold the other one in the middle of the pandemic. My goal with that concept was to get it up and running to help a buddy of mine from culinary brand it, tighten up ordering, and do all that stuff. I couldn't be their hands-on. It wasn't fair for me to be a partner there. I couldn't afford the time to be there. It was something where it's a passion to do it. It's not a part-time job. You can't do it part-time. I learned a lot by being in it. I created a lot of content and documented a lot of that time there. Hopefully, we never see anything like that again, but it was certainly something that I was grateful that I went through.

Podcasting Connections

You talk about documenting your stuff and I assume you do that through your journey of your podcast. Does that come up for you? Did that look right? You have 62 episodes in. It looks like once a week or even more often. What are you doing here? How do you find these people you talk to? Are they friends or connections? What are some of the derivations of these conversations? What do you enjoy about this?

I started this a couple of years ago. I didn't do too much with it. It's been during the pandemic that I've gone on it. I'm somebody who works very well with the system. Give me the steps of what I have to do and I can follow that if I create a time for it, but I didn't do that for this. I thought I could slap these things up and get us going. I cleaned out the other day, and it’s like 26 steps for each episode. It's been multiple reachouts and follow-ups, and there's the recording of the show.

There's the production, the post-production, the marketing, and the follow-up. It's not easy, but my goal here now that I shifted from being a restaurant owner is to be a digital marketer for my real estate business. People want to get this information on the go. For me, it's about being top of mind. It's about positioning myself with people who have been through it. They're all owner-operators.

It's a blessing that I get to talk to all these people. To get this type of perspective and talk to these types of operators during this time was probably a rare time because they're usually so busy. It's been a great show and people have just been like, “Thank you so much for getting us into this.” As I said, my goal is to provide as much value as possible in terms of what I've been through. It turns out a lot of these people learn things the same way. It's cool to have this library of people who can share their experiences and have been successful.

I notice a lot of your conversations are long format stuff, 45 minutes, 47 minutes, 53 minutes, and 38 minutes. Talk about that decision to get deep and dive in with folks versus the five-minute short taste. How do you think about it?

It's interesting because I have thought about doing that as little rants on my own. I am not a fan of the structured interview questions. I want to know the person. I want to know what's behind there. We can start out and talk about very structured questions start to show, but I want to get more into the back and forth. I want you to hear what about what I think. I want your response or ask me questions. I don't want to be such a me asking you questions and you responding, and go on longer. It turns out people like to talk about stuff.

You probably have to say, “We're wrapping up. Thank you for coming.”

I'm grateful. As you know it's not easy to do a podcast and not everybody wants to talk to somebody. Sometimes they're not so comfortable, especially when you have the camera open.

It's funny you talk about the steps involved. We’ll talk about the show for a second. You don't think about it, but there's the recording piece, the little logos, and things. You can get as fancy as you want. I don't go that fancy. We slap a logo. Sometimes, I don't even touch the audio and put them out. Some people are good with it. We need to be a little bit fancier with what we do.

I used to script stuff out a lot more in terms of what I wanted to ask, but lately, I like to just talk, go back and forth, and know a couple of things about the company. I talk about the story, what they're doing, and why it's important, and then ping-pong back and forth off of that. I think that works out better. It sounds like that's your style.

I don't do too much prep. I've been thinking about it like maybe I'll do no prep other than what I do because it is so much more interesting. It's not like I'm interviewing. It's not a Joe Rogan show. It’s not like Kevin Hart is going to be on there. Everybody knows who he is. It's interesting that instead of me saying, “Tell me about your restaurant.” It’s like, “Who are you? What do you do?”

I know why I reach out to you but other than that, I don't know so much about you. It's interesting to get into your childhood, where you're from, what you do on your day off, and that stuff. I think it's more relatable. I listen to podcasts if I'm going for a walk, if I'm in the shower, or if I’m working. I want it to be entertaining. I want it to be something that I could listen to. It could be something other than I feel I have to write everything down.

Helping Restaurant Owners

“Let me get back to question six momentarily.” That would be awkward if I did that, but we'll start ahead towards the wrap. Tell me about the business. It's real estate, like finding locations. Is that a big part of it? Is that the negotiation stuff? What is the biggest part that you help folks with?

In a lot of ways, it's exactly that. It's traditional. At the core of it, we're going to find a space for you and we're going to negotiate a lease. We're going to get you in there at the best price possible. What we do is a little bit different. I'm fortunate to be part of a team that is more forward-thinking when it comes to commercial real estate. Not to get too much into how we make the sausage here, but it's like you have your flagship store. We have the ability, using mobile data or cell phone data, to track guests coming in and out of your shop, where they live, and where their phone sits eight hours at night, presumably, where they are eight hours during the days or where they work. That was the traditional stuff.

Essentially, you're going to see a bunch of dots going in and out at this location. That helped create a data set of your demographics and your cycle graphics of the type of people who come to your store. That's not perfect, but it's fairly accurate. We've done several of these, hundreds of these throughout the pandemic and no one ever said, “That's not my customer.” It's always, “Yes, it's my exact customer.”

That cycle graphics go beyond male, 25 years old, college, four-year college degree, and makes $100,000 a year. It'll say, “Shops at these stores. Has this type of car.” It tells you who they are. We take that information and we can lay it over the market that you're considering and find those pockets of people that better identify areas of opportunity.

Technology wins again. That's amazing stuff that you're talking about.

It's wild stuff.

What are some of the questions that a restaurant person asks you? They all say, “I want to be there because it looks good. A lot of people drive by it.” You can be like, “Whoa.” Give me 2 to 3 questions you go through to point them in the right direction.

The number one thing is how much are you looking to spend. We pay for rent now because a lot of people will think, “I'm in this space, but if I go to that space over there, I can do so much more.” Maybe. I don't know it well enough. One of those things is helping them to manage an expectation. Let's work with what you do now in finding a space. Maybe we're talking 5% more than we pay. Maybe it's a market-driven rent or a better coach tenancy. Whatever the case is, let's have an understanding of why you want that space from a perspective based on what you think you could do.

A lot of folks are concerned with accessibility. That's a big one. Can we get there? Is it better to be on this side of the street than the other? If you're a coffee shop, is that the way towards downtown or the way coming back? People want to stop there on their way to work. Not so much on their way coming home. There are a lot of factors to consider and every concept is different.

Co-tenancy is a big one. Who else is going to be in the shopping center? Who are my neighbors? Can I complement their business? Do they complement mine? Frankly, where my background comes in handy is operational. Where's the grease trap? How do we take the garbage out of the shopping center? It looks convoluted. Do I take out the front door? Where do deliveries come in? How much AC do you have on the roof? When was the last time the hood was repaired? Things like that.

I truly enjoy finding out about each business and at the core, what they're all about, and then helping them find that great space and maybe level up their store or step into something that maybe was bad and that's in great shape. I like that everybody is different. We have eighteen deals going on and none of them are the same. It might drive some people crazy, but I like that.

You mentioned something there at the end about abandonment. Are you finding that people prefer to go into a location that used to be a restaurant because maybe some of the equipment's there, versus brand new? You have to spend a whole bunch of extra money to make it look like a restaurant.

I took an informal little poll among some friends on Instagram on what was happening with second-generation restaurants across the country. In every major market, New York, Miami, Tampa Area, Dallas, all the way to the Midwest to California. Second-generation restaurants are in very high demand for that exact reason. I'm going there and the hood is there. You have to throw some artwork up. My TV is up and my POS, paint, and my little decor stuff.

I have the infrastructure of the kitchen. I have a parking lot. I have a drive-through, whatever it is. I'll take it. The bottom line is even in New York, those spaces are premium. The suburbs where I'm in Westchester County and Fairfield County, Connecticut are virtually nonexistent. They existed and the people who jumped on them real quick got them. I had a phone call that broke down in Miami and she sent me five sites. It's pretty thin.

I live outside Orlando. Our city, like everything else in Florida, is growing. They are making pads here. People slowly come in. They're making a new pad there and people slowly come in. We have a couple of pads that are opening up and you're like, “What's going to come in?” As a person, I'm like, “Please put something that I like right there or right down the hill.” There are opportunities still where we live for new folks to come in and it's happening. It seems like it's never going to stop. We moved here and thought it would be a little bit quieter. Lo and behold, the growth has fallen us. We were in Miami for fifteen years and that place got filled up pretty well.

Like New York City now.

Football Talk

You folks are not in a secret area in Westchester. That's for sure. As we finish, what's in the background? Football helmets. Are you a fan? What do we get?

That's my football helmet from college. This is a support restaurant’s hat. I was a part of a commercial real estate company. Our brokerage has a digital army. This commercial real estate creates content and then a bunch of pictures of my daughter and my wife. This is a tequila bottle that we tend to cut in half for somebody and a bunch of my favorite cookbooks, Eleven Madison Park, Joe Beef, How to Prepare, and The Art of the Restaurateur.

Did you play ball yourself in college?

I play football and baseball in college.

What are your positions?

I was a defensive back in college. I was a quarterback in high school. I was a pitcher and a right field in baseball.

The important question would be if you're in New York, I probably know the answers, but it's going to be Jets Giants and Yankees. What do you get?

I am Yankees and Giants.

The Yankees Giants are okay. My bet was the Jets, but what are you going to do?

I grew up next door to the dentist for the Jets. He would take us as a kid to Hofstra at the time and I was in Jets fan for a long time. I was like, “I dedicated too much of my life to spending 24 hours watching this team on a Sunday.” A buddy of mine coached for the Giants and I said, “I’ll support him,” and it became a much more fun game to watch.

It sucks to be a Jets fan. I can say that as a Patriots fan, but I grew up in Boston and so forth. There were a couple of years where they got us when I was growing up, but for the most part, they didn't. The Giants had two historic wins against Tom and his crew. That was a crazy catch. I saw Tom and said, “I would trade that God damn Eli Manning loss.” I don't know. Whatever he said. He said, “I'd rather have that perfect season than giveaway one of my big trophies.” It’s something to that effect.

“Yankee wins. One Giant Lost” was my favorite T-shirt. No one wants to listen to that. What do you think about him being in Tampa now, though?

It's super funny. We've been here for a little while and I'm full of the Patriots and a Tom Brady fan because it fits my generation on how he played. To see the dude transition to another location, “Bill is not there. It's not going to work.” Let's see what happens. He goes there a little bit early success and then a little bit of definitely question marks. He finishes the season strong. It wasn't Bill and then conversely what happened in New England.

They didn't even make the playoffs for the first time in forever. Was it Tom? Was it Bill? We don't have definitive answers, but Tom seems to control his own destiny a little bit. His teammates are super complimentary of his leadership. It tells a story. That level that works that hard continuously doesn't happen by accident. Success doesn't happen by accident. He would be a case story for that.

I have an appreciation for what he's accomplished. I thought it was great to see the drunk Tom Brady on the boat. That was his human side. I thought it was great. He could never have done that in New England, so I thought that was great.

That wouldn't have worked on the duck boat tours. People didn’t even know that Tom was a real person, not some robot, but that's good. I hope the draft works out for New York teams. It probably won't, so another year of suffering coming your way.

I know by now how to tame my expectations.

Good stuff. I have a web link for you that I'm going to share but where else should they go? Tell them where to go and make sure we get them in the right spot.

@KyleInserra on Instagram. The best way to catch me is on LinkedIn.

Folks, Kyle Inserra of SABRE Advisors. Also, the host of the National Restaurant Owners Podcast. You can find him on the website. For the website, it's weird. It's Sabre.life. Google the app and find him on LinkedIn and so forth. Podcast platforms are super easy to find. Go check out the episodes. Dig in there. Good stuff there. For more great restaurant marketing, operations, service people, and tech tips, stay tuned to us at the show. We'll see you in the next episode. Thanks, Kyle.

Thank you.