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Scaling Success in the Restaurant Franchise World with Paul Tran

• Erika Rivas

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In this episode of the Restaurant Technology Guys podcast, host Jeremy Julian converses with Paul Tran, a seasoned entrepreneur and franchise expert. With a 20-year journey in the restaurant industry, Paul shares his story of turning a student loan into a successful Cajun crawfish restaurant and subsequent experiences scaling major brands like Halal Guys and Pepper Lunch. Paul discusses the importance of selecting the right franchisee, maintaining operational consistency, and building strong relationships between franchisees and franchisors. He also offers insights on effective marketing strategies and operations that contribute to franchise success. The episode is packed with valuable lessons for anyone looking to scale in the restaurant industry or seeking entrepreneurial inspiration.

00:00 Paul Tran of Pepper Lunch

01:39 Introduction and Welcome

01:50 Meet Paul Tran: A Journey in the Restaurant Industry

02:35 Paul's Early Ventures and Lessons Learned

05:44 The Halal Guys and Franchise Experience

07:05 Pepper Lunch: A New Venture

09:27 Insights on Franchising and Finding the Right Franchisees

14:59 Challenges and Success in Scaling a Franchise

24:16 California Brands in Texas

24:54 Franchisee and Franchisor Relationships

26:02 Choosing the Right Franchisee

26:47 Healthy and Unhealthy Tensions

31:21 Marketing and Community Outreach

37:10 Pepper Lunch Concept Explained

42:36 Final Thoughts and Contact Information



Speaker:

This is the Restaurant Technology Guides podcast, helping you run your restaurant better.

Welcome back to the Restaurant Technology Guys podcast. And today's episode is one of my favorite episodes because Paul and I have been chasing each other for a while to get'em on the show. Uh, if you ever dreamed of building a restaurant brand, scaling a franchise group or so, listening to someone that turned crawfish deliveries into a multimillion dollar business. Paul is your guy. Uh, for those that know Paul, he's just an amazing dude that, uh, is a, a consum an entrepreneur, but he is really helped franchisees grow, uh, in lots of different ways. The, um, he's now helping to expand the Pepper Lunch franchise group, but in the past he has lots of different experiences working with Halal guys and some other concepts. He and I talked quite a bit about what it looks like to learn and grow and scale in the restaurant industry. Whether you're a franchisee hoping to open more restaurants, or you just love a good entrepreneurial story about somebody that's made it, Paul is your guy. So check out the episode, hang out till the end where he and I talk a little bit about some of the things that were his best lessons and some of the great food that he's eaten. Over the years in the different groups of restaurants that he is worked in. If you don't know me, my name is Jeremy Julian. I'm the Chief Revenue Officer for CBS North Star. We sell the North Star point of sale product for multi-unit restaurants. Please check us out@cbsnorthstar.com and now onto the episode.

Jeremy Julian:

welcome back to the Restaurant Technology Guys podcast. I thank everyone out there for joining us. As I like to say, on the onset of every one of these episodes. I know you guys got lots of choices, so thanks for hanging out. I have a, a, a very special guest today and, and it's kind of funny because I had been following Paul for quite some time, even before Paul knew who I was. I'd been following Paul and his journey all really through restaurants. And so Paul, why don't you introduce yourself a little bit. I know you and I got to meet in person just earlier this year, at a trade show, but, who is Paul Tran? tell me a little bit about your backstory and then we'll talk about how I've been following the different brands as you guys have gone and your learnings and what you're doing. Most recently,

Paul Tran:

For sure, Jeremy. And, along that same line of what you started with, audience has tons of choices and they choose you. I wanna say the same thing to you. you have plenty of people. In your network as well. So I'm honored that you would choose me and hopefully there's a, hopefully there's a way I could be of service and be insightful to this. So thank you again, Jeremy.

Jeremy Julian:

I'm certain you will.

Paul Tran:

Uh, well, for myself, I've, I've been in the restaurant and the franchise world for about 20 years. and I got into the industry like most people by accident and, uh, and because I was just hungry, uh, and, I'll let you poke holes at what you think is the most interesting or deserves a little bit more elaboration. But, essentially I, I started, I got into the business by just blowing some student loan money while I was still in college. I thought I could. I thought, how hard can the restaurant business be? Let's create a cool concept. I was frustrated with, how busy a certain restaurant was here in Southern California. and I wanted to scratch my own itch. I was like, I don't wanna wait anymore. Let me just create my own stuff and kind of get high off my own supply, uh, and, and just ignorance, confidence, and borrowed money. Uh, just allowed me to just get into the business. Uh, and it's an amazing thing when you're, when you're naive and when you're young,'cause you your arrogance and your confidence kind of like overlook and, and minimize all the real obstacles that tend to be in the way when you're trying to do something, like start a business or learn how to cook. Uh, and so I got really lucky. I built a really cool restaurant, uh, that served Cajun crawfish shipped, directly from Louisiana Every day. I have stories of me, driving my little Honda Civic to John Wayne Airport every day to the warehouse, to to the cargo hold where I would pick up 10 to 20 boxes of, uh, crawfish directly from. Louisiana shipped to Houston. Houston shipped to John Wayne. Uh, and so my car always smelled like crawfish and wasn't helpful for the dating life.

Jeremy Julian:

Yeah, I was gonna say the dating life rally was like, whoa, what's going on here?

Paul Tran:

it's not gonna get hot and steamy in the car for sure. but, uh, but no, it, when you're young and, and you just bootstrap and you have naive, but you have a lot of grit, just did whatever I needed to do to succeed in the business. And, um, yeah, just built a really good restaurant that eventually got sold. I got acquired, um, by a private investor that bought me out after three years of, uh, of a successful run. and that pretty much. Jumpstarted me, uh, to the restaurant business. I was just fascinated by food. How, When you're hungry or when you need to decompress or you want to celebrate life's biggest moments, or you just wanna hang out with a friend, always the common denominator is food. and so I decided to just pursue it a little bit further from the business side and, just a lot of. Chance events allowed me to start consulting other restaurants, learn the business from, some mentors that, took me under their wing. if you're familiar with Dan Rowe from TranSMART, I ended up working for him for 10 years. and, uh, had a chance to see five guys. inaction when there was just like a few stores when they only had like five locations, to, you know, over a thousand locations around the world. so I got to see what it took for a small mom and pop unassuming brand, uh, reach escape velocity. and I also learned a lot about what brands should not do and brands that didn't make it. Uh, and it was during that time that I built knowledge. Connections capital. and uh, that was when there was a ti uh, 2000, let's see, 2000, 1214 is when the, uh, the Halal guys decided to franchise and they became a brand in our portfolio in f March portfolio. And at that time, I, I just had this itch to jump back in the business. Like you, Jeremy, I know you're a fan of all guys. Same thing. Uh, I first fell in love with the brand, just traveling to New York, lining up, uh, at the carts, and I just, I had to be a part of it, not just from a consulting. Uh, capacity. So I ended up wearing both hats and I consulted for them globally, and I also became a franchisee for them in Southern California. and I knew I couldn't do it alone. and so I built a team, raised a little bit of capital, and, built, an organization that went to 11 stores. We did lose two stores, uh, during the pandemic. Um, but we did a healthy 15 to$20 million a year in annual sales. Uh, and we were continuing to build more, but we got approached by a hospitality company that wanted to add, food to their portfolio. So they made an offer. And, two years ago I ended up, uh, closing the sale of, of my company. Sold the company and, uh, just continued to consult some more. And, and I wasn't planning on getting into the business again. My wife told me that if I got it back into the business, she would kill me and, and, uh, and then divorce me. but here we are because I, I also, I decided to, I fell in love with Pepper lunch. Uh, you and I know Troy, uh, Troy actually reached out to me. Uh, he, he cold DMed me and said, Hey, I heard that you are in the restaurant business and you do development, and we had a great meeting, and I was just gonna consult for, and just do a little bit of franchise development for pepper lunch. But same thing with Halal guys. I just. I fell in love with Pepper lunch in 2016 when I was traveling in Australia. same exact pattern. My, my pattern was I, I fell in love with it while traveling. I had to be a part of it. I couldn't just stand still and just, help them along. I had to, to jump in. So, I took my, uh, my original partners from Halal guys, a few of them, and we decided to buy the rights for pepper lunch. And so, uh, we bought a, uh, 11 store development. Between Southern California and Northern California and I opened my first store in February. Uh, it's doing, above expectations and I'm so happy about it. Been well received, and we just signed a lease on store number two and, uh, we have a lot more runway to go. Um, I still consult here and there, but uh, pepper lunch has pretty much taken my entire life, uh, work-wise.

Jeremy Julian:

Yeah. No, and I love, so part of why I reached out, Paul, and the part I love about your story, there's a lot of things that I, I. Respect about your story is'cause not only are you one of those people that has seen it from both sides, you've been an owner operator of your own store, that you kind of started from scratch, then you took on another brand where you're having to listen to corporate. Then you were selling franchisees. And so it like, that's the thing that, that you hold this unique place that I don't know that anybody on the show has ever been in where they've not only been an owner. They've started something on their own. And again, as I looked at your backstory and you shared your website, I was like, oh, this isn't the only thing he started, he's got a whole bunch of other entrepreneurial ven ventures that, you know, it's, it's, it's a wonder your wife, uh, your wife is able to keep up with you instead of, uh, she just, she just makes herself at home in your office now with all of her trinkets to make sure that you don't forget about her. But, uh, you know, so from, from my perspective, Paul, yeah, exactly. She's watching to make sure that you're not playing with her toys too much. but in general, the thing that, that I wanted to have our listeners hear a little bit is, talk to me a little bit about why the purpose of, as you sit and look at your time at Fran Smartt, you look for the right kind of franchisees. And so I'd love to go down the franchise route because you've been doing some of that for Pepper lunch, but you're also an owner operator. And so I love, I'd love to kind of go down that path because we have a lot of listeners out there that are looking for their next brand and I want to, I want to. Have you share? Troy shared a little bit. Aaron's been on the show as well. Um, Aaron Hooper is just, what are the things that you would look for when you were trying to find a match, whether it was with, you know, when you were at Fran Smart, whether you were looking at the Five guys thing. And again, you and I run in some of the same circles. I know a lot of the same people that you and I will comment on within LinkedIn. I'd love for you to share because again, all the time, people that are listening, they might be in the middle of Kansas and they don't know about pepper lunch, but what are the types of things that you're looking for when you go out to talk to a franchisee? And then we'll talk about the flip side of where are the challenges as a franchisee looking out at corporate as we continue our conversation.

Paul Tran:

Yeah, great questions and yes, uh, one size does not fit all and, there's. There's a different type of DNA that's required when it comes to a franchisee. I always tell people that if you're like a hardcore entrepreneur and you like creating things and breaking rules and all that stuff, then please don't inquire. You should probably create your own concept, uh, because, uh, you're not meant to be in a box. And there's been plenty of people throughout my career who, you know, early on, like I was, I, I, I didn't know. Who to look for or what kind of franchisees, you know, I just thought if you're an entrepreneur, franchising is an entrepreneurial vehicle. that's pretty much it. Right? And, and it's not the case. and so it, it, first question is to know, know thyself Like, are you. Are you the type that likes to create things and break rules and be disruptive, uh, at, at your very core? I, if that's the case, please create your own. Like I might even talk to you later about franchising you, not, not you becoming a franchisee. what I've learned throughout my career is that there's pretty good percentage of. Best in class franchisees who actually were never set out to be entrepreneurs at all. Uh, they actually have thrived in the corporate space. They're executives who are used to managing large teams. They know how to handle high volumes of revenue, and, uh, they are just, they thrive in. They thrive in a company that appreciates who they are. They, there's a mission and values that they subscribe to, and there are protocols and, systems that they, that they thrive in that like they don't see systems and protocols as, as chains. They see them as,

Jeremy Julian:

or as hindrances for them not to be able to succeed. I've watched it for, I've been doing this for 30 years now, and I love it when I go into a franchise group and I'm like, that's not the same menu. Or they added two or three menu items and you, to your point. Those probably aren't the right franchisees that are looking to go create their own thing, but put somebody else's logo on the outside. I guess on the flip side, what is the right thing? Is it those people that you know, you, you talked about people, I mean, we are in the people business primarily, so understanding how to, how to attract the right people and and manage the right set of people. Is that a big piece of what you look for?

Paul Tran:

The, like managing people. a hundred percent. It's all people. I definitely happy to segue into this. When one layer is. When you buy a franchise, the business model and the franchise vehicle, they're all good and dandy, but what really makes the difference is the people. There's no short shortage of ways to make money. There's no shortage of opportunities to get excited about. At the end of the day, it's actually the people, like forget pepper lunch. Pepper lunch probably carries like maybe. I'm probably gonna get yelled at for this, but I'd say like pepper lunch probably is 30% of the equation. 70% is who's gonna be supporting you? Do you like Troy? Do you like Paul? Do you like the people you're gonna be working with and interacting every day? It's the people. there, no, again, there's also, there's a graveyard of Really cool brands and incredible food that just can't be executed consistently. Or there's no shortage of, of brands that scale to a thousand stores, but they're riddled with lawsuits and their store closures everywhere. but the food was amazing. That doesn't matter. It's like, who, who actually gives. Crap about your success and who cares about you as a person and whether you guys actually vibe. It's a real marriage. It's like a real marriage. Not, not like, it's not even a, a metaphor, it's like a true marriage. That, and also it kind of, kind of bleeds over to you building a team with the right people too. But yes, it's people. pepper Lunch was, pepper lunch was the gateway for me, but I, I moved forward because of Troy and because of the executive team and because the people behind it, like I know that they're gonna be, looking out for my best interests they actually care in, in, in my industry. there's so many bad actors in the space that, you know, you hear all the crazy stories of people selling millions of dollars in franchise fees and running off, or franchise. Franchise.

Jeremy Julian:

I'm say you might have been associated with one of those that, that might be in the middle of a lawsuit. We don't necessarily have to talk about that, but, but I still get my Orange County News that, I saw how the, the car payments might, may not have been getting

Paul Tran:

oh my gosh.

Jeremy Julian:

with the cash

Paul Tran:

Okay, Jeremy shots are fired. Yes. but that's exactly it. It makes me so upset because, there's franchisors who are, they have something so amazing, but they get shortsighted. or they get greedy and they forget that franchise, what franchise fees are for. they try to develop other ways to like extract value out of franchisees. there's, yeah, again, it's people.

Jeremy Julian:

Well, and so going down that path, Paul, you, you've obviously been able to be successful in two different franchise organizations. What types of things do you look for outside of your alignment with the executive team? Is it just great food? Because you could have taken the cash and gone and built a Domino's or gone and built a Papa John's or gone and built a a Jersey Mike Subs. Very well established brands that have name recognition and have TV rights and all of these kind of things. But you chose to, you chose to go with a very well-known global brand currently, um, halal guys before that was, you know, was known well on the east coast and kind of expanding, but you found a way. To come in at the early stages. What made you decide to go down that route? Was it just the people? Was it the vision? Talk to me a little bit about the things.'cause one of the things I'm so impressed with what you and Troy and Mark and all of the guys have built at Pepper Lunch is almost how cookie cutter it is, but not in a bad way. Cookie cutter. Cookie cutter in a way that you can be very successful and make a good amount of money. No different than Subway did back in the nineties when they were just rolling out stores and. They had the supply chain all figured out and whatnot. So I'd love for you because again, we also have listeners that are like, okay, I want to go, I want to go learn from Paul. And what did he find to be successful?'cause you obviously have been successful in one and are in the process of doing your next successful launch of, of your 11 stores a pepper lunch.

Paul Tran:

Yeah. great question as well. you're a good interview by the way. you had a lot of really good context, which is great. So going back to the first piece of advice I mentioned in, in a previous dialogue with you is you have to know yourself. one of the things I, I've learned about myself is that I like to be part of something new and small, because I want to, when you work for a really large company. sometimes you become a cog on a wheel if you're like the 10000th subway operator. I don't know if you feel like you are making an impact. And I feel like when I first grew with the Halal guys, we were their very first West Coast franchisee

Jeremy Julian:

I remember I was so excited'cause it was just up the road from my house. I was like, dude, I no longer have to go to New York to go get this.

Paul Tran:

Yeah. Yeah. You saved what? A thousand dollars worth of airfare and all that.

Jeremy Julian:

Oh, well I remember when you guys opened that store, dude, in the tuss, in, in the district. There was a line out the door every day. I was like, all right, I gotta go in my shoulder periods.'cause I didn't have enough time to sit and wait. Sorry. I'll let you keep going. But yeah, I think to your point, you like that new, it gives you enough entrepreneurial, whereas it gives you enough to be able to grow and make a difference, but not so much that you gotta do it all on your own and you gotta worry about, about all of it by yourself. Sorry, I'll let you keep

Paul Tran:

no. That you're a hundred percent on it and I can jump off of that. it's pretty, but yeah, it's new and small, but. But it's, it's I guess, a paradox of just being old and tried and true as well. I don't, I want them to be two sides of the same coin, because Halal guys, yes, it's brand new in that it just started franchising, but it's, and it's new because. Gosh, like the place is, the whole marketplace is riddled with pizza, coffee, burgers. but Middle Eastern at the time before Kava hit the scene and Luna Grill and other Middle Eastern competitors, like they hit the scene. We were, we were, it was untouched. and so I felt like that's the new part. And then the old part is that it's been around for 30 years. It's a, it's a, and it's, it's the, and the type of food is, is. Even deeper than that. and also the new part is there's just a huge gap. There's a huge demand supply gap. there's more demand for Middle Eastern food than there is supply, at least for a fast casual mainstream. And so that's the reason why I, I jumped into the HAL log ice. Same thing with pepper lunch. I am shocked that Pepper lunch is 550 units. That's the tried and true, and, but at the same time, it's still new here in the States, like with kdr, with K-pop, Asian culture, ramen, Korean barbecue, there's still that demand supply gap where, gosh, before us, the only big innovation is what Panda expressed. So, so I saw the same exact patterns as halal guys, like Asian food is, is overdue for, for a huge. Growth spurt. And so I, yeah, I just know myself as wanting to get in quite early, but at the same time, not without its, you know, tried and true template.

Jeremy Julian:

Yeah, and I can't wait till you guys get stores close to me. I know there's a couple that are on the path. I, I stay connected enough'cause it definitely is, I miss my Asian food after I left Southern California. It's something that, that I certainly miss.

Paul Tran:

Detroit, Detroit. Tell you where we're coming in

Jeremy Julian:

yeah, I've got, I've got the Plano store set and I, I was telling him the last time I talked to him a couple weeks ago that uh, we certainly need one in Fort Worth'cause I live on the Fort Worth side. But when I'm up that way, and quite frankly every time I'm on that side of town, I do end up eat, eating Asian food, middle Eastern food, or Indian food'cause all of it's there and it's less so on this side of town. So, um, I miss it from my SoCal days. Paul, you, you've been at some of the early phases, and one of the things that I continue to see restaurants struggle with is the innovation and the consistency. I remember when, or I feel like I remember at Halal guys where you guys used to make the white sauce in-house and now it comes out of a package, or at least I feel like it comes out of a package. And I, I'd, I'd love to, and again, at least at the local store that I have, and I'm not on guys, but I would talk balance of. Made from scratch in-house fresh food franchise, along with the idea that it's gotta stay consistent so that you can get it nationwide and scale the way that you guys are looking to,'cause I know you guys are doing a lot of that at Pepper lunch as well, and I'd love to kind of get your thoughts on that because it's hard to execute at scale. It's also hard to, it's hard to execute at scale, but it's hard to make sure that you've got the right product if you don't have systems in place. And so I'd love for you to expand upon that a little bit because I remember when you guys used to make white sauce in-house and that, I remember when I was like, oh, what happened here? It's out of a package, what's going on? And it's not bad. The product is still fantastic, but I've watched that juxtaposition. Over my time as brands scale, they try and simplify, but sometimes, not always. Sometimes they lose part of the brand in that simplification.

Paul Tran:

Yeah. gosh, this is kind of loaded and maybe it's. Above my pay grade.'cause I know that Mark is a little bit more like, you know, since he's the COO, he's the one that's like maniacal about the quality, with Pepper lunch. But at, at the Halal guys, the original founders, uh, of the brand, uh, when they decided to franchise, they were very involved throughout the whole. Process of vetting, co-packers and manufacturers. And so I think the original founders being maniacal and really giving a crap about the quality of it just was, it had to start from the top, after. And they also could not settle as well. So they probably visited like over a hundred different, uh, vendors in order to get to the right supplier. And it's complicated'cause it's not just the right. F maker, but now we need to figure out how to get it to US foods and uh, it's a big logistical nightmare as well. So it's not just creating and co-packing, but it's also distribution and, and, and being able to go nationwide as well. but yeah, I mean, all I could say is in a nutshell, the lead domino is just the owners need to. Need to be a part of that process and also stay on top of it on a regular basis. Like that's probably the most important thing they do is just audit it all the time, uh, to keep'em on your toes. And same thing with, with, uh, pepper lunch as well. I mean, the sauces. we thank goodness our parent company is all about supply chain and logistics. They're like maniacal about it. So I'm, I'm really glad that we're kind of, I'm kind of spoiled by that, but, it's better than the idea of making stuff from scratch. it's, it sounds really good. but at the end of the day, we need to be aware that we are a franchise. We're not like a mom and pop. and so customers care more when they visit a franchise that it tastes the same way every single time. it doesn't matter if you say it's made from scratch, if it tastes different every week because customers don't trust you anymore. And that's, they lose faith in the franchise system. So I, I, I'd rather, again, the quality does be good, but it's made from the top. We kind of take away the variability of operators making stuff in-house. we'd rather them just execute what we've given them, at scale. So I'm glad to say that. the beauty of the simple operations inside of a pepper lunch is because they've taken the variability away from us. We just now need to like,

Jeremy Julian:

You need to execute day in and day out.

Paul Tran:

We just need to execute. That's it.

Jeremy Julian:

Yeah. and I think that's a, it's funny'cause what you can make in a mom and pop, I tell a funny story. I was, at RLC with, Pete Riggs, the time that I first met you, Pete, I don't know if Pete. but Pete was testing some sauces for pita pit and he had brought them in and we were testing, I don't remember exactly what the sauce was. Um, I think it was the Taki sauce for his pita pit. And I was like, okay, when are you gonna get it on the menu? and it was something related to lactose and whatnot. He's like. Unfortunately, I can't, I gotta figure out how to mass produce this at scale, so I can't. And so to, to your point of being maniacal, I was like, dude, that was some of the most amazing sauce I've ever had. And he's like, I can't get it out because I can't execute it over and over and over again. So I've gotta continue to go back to the drawing board. And again, I've watched across the, across the chains, and especially having moved to Texas from California, I watch California brands get here. And I'm like, it's not the same. It's not the same as what I got back there. And then you go to other brands where. Across the board, they've figured out how to execute in a way that you're like, oh, they do get it. It's the exact same look. It's the exact same feel. It's the exact same culture. And so I love that you have sat on both sides of that and consider that whether it comes out of a package or it's homemade, in-house, just understanding that consistency is key is really critical to ensuring that you can be successful across the board.

Paul Tran:

For sure, a hundred percent.

Jeremy Julian:

Yeah. So I'm gonna pivot here just for a little bit, Paul, about the relationship between the franchisee and the franchisor. you've been on both sides, and I'm sharing that because you talked about the fallacies of I'm an entrepreneur, I'm gonna go do it all myself, and then, you know, and, and there's times that there's tension. There's healthy tension and then there's unhealthy tension within the franchise community. I just was on one of the early, yeah, just yesterday I recorded a show with one of the early, Freddy's franchisees. He was there when they were at store seven and grew it to the 500 stores. And then he has since sold, they, they've sold it off. He was with the original founder. He was the seventh franchisee. Um, I think he's got a little under a hundred stores now. He's starting a coffee brand. He is got another sandwich brand in Phoenix. But it was cool just talking to him a little bit about that. And so I'd love to. Have you share? Where are the healthy places to push back on your franchisor, and where are the unhealthy ways that you can educate our listeners that you've watched, whether it was yourself or you've watched when you're at Fran Smart, the healthy ways to push the brand to be better and the unhealthy ways where you're like, that's probably going to hurt something. And ultimately either turn into a lawsuit or a store that's not succeeding because of it.

Paul Tran:

Yeah. the best way to answer this is there's a way to eliminate 90% of the friction. If we choose the right franchisee early on, it's no different than choosing the right mate soulmate. Like there's so many problems that can get overlooked and overcome if you just choose the right person and if you take your time to choose it. and so it's more like measure. It's the whole what? Measure twice, cut once. It's like measure 20 times and then cut once. So I will tell you that, if you. Yeah, not all franchise fees are the same. Not all partners are the same. Like, take your time. I know if you're a little bit more picky early on, you might grow slower, but you'll grow properly and probably grow for a long period of time. and so that's my first piece of advice. But if you've already like, moved, moved through, uh, and, and there's already relationships in place, um, a lot of it's just communicating expectations. Right, right from the get go. It's, it's more like, Hey, I just want you to know that you're signing on to follow the system and you being able to give the customer the same exact exp experience at Tustin is gonna be the same exact experience at Costa Mea and, and the same exact experience in Dallas. Uh, like that, that matters more than one incredible idea that just cannot be scaled. it, it doesn't matter if it cannot be scaled, so just having compassion on the franchisor because yeah, you have franchisees have like a selfish need to be, to do things better, do things differently, or do things to your DDNA. But, but the franchisor has a much bigger responsibility to make sure it can be done at scale and consistently so franchisees need that kind of compassion. however, when it comes to ideas. Innovations. we're, we are a good franchisor is aware that the best way to get intel is on the front lines and your franchisees are on the front lines. And the beauty is, you know, Troy and I were, we're in a lot of discovery days where I like, I love it when Troy mentions that, Hey, I just want to let you know that, you know, did you know that McDonald's chicken nuggets and Big Mac and egg McMuffin, did you know what, where, what.

Jeremy Julian:

They came from franchisees. I was about to tell that exact same story. They came directly from franchisees trying to meet a meal period, and maybe they were going off script, but ultimately it turned into some of their most successful products,

Paul Tran:

Yes, but that's in sequence. Those were recommended by franchisees who were following the system at a high level and executed at a high level when they followed the system and did incredible job. You've earned the respect of the franchisor, and you've earned the right to make suggestions. Like no one's going to listen to. A franchisor should not be listening to a franchisee who's already breaking rules and outta compliance right off the

Jeremy Julian:

Yeah. Is not making any money and hasn't had a successful store and hasn't hit half of their targets for, they were supposed to open 11 stores and they're own store one and a half and they still aren't even projected to ever get to store three. Yeah. You definitely don't wanna be talking to those people. And to your point at the beginning, making sure that the marriage. Is built on the right foundation is huge in the beginning and I've watched too many franchisees and franchisors that try and grow so fast. and I know quite frankly, I've watched too many of them grow so fast and fail. And it's a shame. It's really a shame because the product is fantastic, but then they get a few boat anchors of franchisees that take them away from the core of what they're doing.'cause as a franchisor, you have to manage those guys pretty significantly, and it takes a lot of resources to ensure that. You can either get them back in compliance or you fire them and, and that's legal and a whole lot of crap there. And that's, that's hard too, right?

Paul Tran:

Oh, a hundred percent. It goes back to make sure you choose the right partner first.

Jeremy Julian:

Yeah.

Paul Tran:

So with with Troy, like, it's interesting because you know, most small brands, emerging brands, they. They're hungry to grow. They need the capital. Right? And they, they're excited for growth. And so sometimes they have good intentions, but man, sometimes they overlook a lot of like bad there. it's one of those things where now that after a bad franchisee closes stores or you get into a lawsuit, you're like, you look back just like a, a dating relationship man. There were signs. There were signs.

Jeremy Julian:

you just had bedroom eyes when you were looking at it and you're like, no. They're gonna be fine. They're gonna be fine.

Paul Tran:

I'm spoiled because Pepper lunches parent company is like. One of the largest private equity firms. So again, I'm super spoiled. Like we're not in a crazy like rush to like make a ton of money off franchise fees. We can grow slowly and surely. Um, but I will say I hope that the franchisor that is not. Backed by private equity. I hope their concept is just a really profitable concept on its own. And they don't need to sell franchises in order to be profitable. And they can wait for the right franchisee to come along and they can say no more than they say yes. and yeah, just wanna leave it at that.

Jeremy Julian:

And I think that's huge. I think that's great advice, and I think I wish more restaurant brands would do that. Unfortunately. I think all too many times the founders want to get out and get their payday. They wanna sell as many as they can. Get that big private equity check that somebody came in and bought the brand and now they, it's not their problem anymore. And, uh, unfortunately I've watched too many founders watch their baby die slowly on the vine because they, they let go of it. but. to each their own. There's not a whole lot you can do, and I think, uh, your advice is great. one last line of questioning, Paul. When you go to open in a new community, I'd love for you to talk about the things that you've found to be tried and true to help grow. You talked about your, your first store there in Irvine. It's, you know, I dunno, 6, 5, 6 miles from the original store I think that I had ever gone to. It's not too far away, but the brand recognition, it's not like everybody walking down the street when they tell people pepper lunch, they're like, what is Pepper? What is a pepper lunch? I'm sure you hear that. So what did you do to be successful?'cause you replaced another brand that. Was in that concept, it was in that space that was or wasn't successful. Doesn't matter. I, I, I know that mall really, really well. but I'd love for you to talk about that and as you're going to your second store and third store, what have you seen franchisees do well, and where do you think they've, you've watched people spin their wheels where the juice wasn't worth the squeeze to, to share with some of our listeners out there that might be looking to expand into another region, looking to expand to another store and they know they need to pick the right. Real estate number one, but number two, what are some of the things that you've found to be the most successful for you and other brands that you, uh, that you've worked with and talked with?

Paul Tran:

Yeah. good question. And yeah, there, there's a lot, there's a big story behind that store before we turned into pepper lunch.

Jeremy Julian:

we might have alluded to it

Paul Tran:

that's part two. Part two. but, yes, real estate again, lead domino. All the, most of your problems can go away or can be overcome by just incredible real estate. So that's also something you need to measure 20 times and cut once. and the rent there is not cheap, but I do

Jeremy Julian:

And your landlord's not the easiest to work with. I'm not gonna lie

Paul Tran:

well there they're a joy. if we are a good

Jeremy Julian:

if things are working. Yes, absolutely. I think we've got 20 customers in that same mall with you, and I've watched both it be successful when things are going well and then the opposite, but, sorry. I'll let you keep

Paul Tran:

No, no, all good. It's funny, we can have all these side conversations, I swear. but as, as far as, what works as far as maybe marketing and community outreach, I'm a little bit spoiled by Irvine Spectrum, of course, but I'll kind of overlap that with my time with, with Halal guys as well. At the end of the day, uh, we see all of our restaurants next to us as friends and comrades in battle. Uh, we're not competing against Shake Shack and Silverlake Ramen and all those guys. We actually hope that they do so well that they're, they have a bunch of customers waiting and they're not willing to wait, and they come to visit us. We also hope that our store is so busy that people are unwilling to wait for us and they decide to visit Silver Lake Ramen or Shake Shack. we've just formed a lot of really good friendships with our neighbors. we're really good friends with them. We give, uh, all of our, uh. Our neighbors, you know, discounts on food and we do hook them up here and there. Uh, because we want them to also rave about us too, just like we wanna rave about them. So we kind, I think that creating that comradery and community amongst, operators is helpful. On that same point, we also started our, our soft openings by just giving away a ton of free food. Same strategy as like Costco, right? When you're at Costco, the best way to buy something is after you've already trialed it, like as, as a free sample. There's no better marketing than that,

Jeremy Julian:

so Panda was the killer of that in the shopping malls back in the day when we were youth. walking around the mall, a little bit of orange chicken, you're like, oh yes, I'll have a two item combo.

Paul Tran:

And it's crazy because, uh, you know the story, but most people might not know. But orange chicken was never even originally on the menu. they had to force it down people's throats through free samples. Now it's like the, the thing. So that's another lesson about like. You know, just getting started and, and uh, kind of letting the market kind of figure, uh, reveal, innovations for you. but we just did a lot of, free food. Uh, we let people in the community try the food. we did train our staff to, you know, be very educational.'cause when, when customers get to learn new things, that kind of like gives them a dopamine rush. Uh, and so, so being able to go out and just teach people about what pepper lunch is, it, I think everyone's kind of like the bright, shiny object syndrome, right? So you, you can use that to your advantage. Um, and then we just s try to support like all the local schools and sports and just the usual stuff and, and, uh, we do it that way. But, yeah. Oh, and also also social media. One of the things is that we, we try our best to reach out to social media. Content creators who are smaller, uh, and are focused on the local market. you know, a lot of people talk have this bad stigma of like social media influencers where they have like a million followers and they charge like$5,000 for a post. those aren't as as effective because they're more audiences are all over the world sometimes, and when you post it doesn't really, it's kind of like. It's kind of like a, a shotgun where you're not really sure what who's gonna get hit, right? Like, but it's, we like to go after like small content creators who maybe have maybe a couple hundred followers. and they're local to the market. They're a lot more amenable. They are looking for content. Their customers, even though they don't have a million followers, like a good percentage, are actually our local. Our local customers that we actually serve. And that's been really, really fruitful for us as well. So that's that. There's a bunch of other things we do do, but I, I'd say that those are the strategies we always make sure to incorporate. Um,

Jeremy Julian:

Yeah. And the one other thing that I've watched you guys do really is be responsive to your guests. You guys are really good about taking the feedback and responding on social or otherwise to, whether that's modify the changes or get feedback from them. And even if they didn't have the best experience.'cause we all know not every experience when we go out to dine is gonna be the best. At the same time. When they know that you hear them and you see them and you're there with them, they're willing to oftentimes give you a second or even a third chance if you screw up.

Paul Tran:

For sure. And a lot of times they're not even, yeah, like you said, they're not even looking for a refund or anything. They just want to feel like they're heard and their stuff matters. so just acknowledging that is already An opportunity to create raving fans,

Jeremy Julian:

Love it. so since you're the pepper lunch guy, for those that haven't heard Troy's episode, why don't you give everybody a 32nd primer or a one minute primer? What is Pepper lunch? I've been, I'm a huge fan. Can't wait till there's one close. I will be a frequent customer. You might get selfies from me out in front of the store, but, what is a pepper lunch and what is the concept that there's 500 plus of them overseas that, that, you guys are gonna blow up here in the states here in the next couple years?

Paul Tran:

Make sure one of the selfies has me in it too. but no pepper lunch is, Gosh, the way I would describe it is it's a DIY teki concept. I usually tell people if you're a fan of like Benihana, it's like it's being able to have food being made by a chef, uh, with theatrics and being able to show, see your food being made fresh. Uh, but because it's DIY, you're actually the chef. And so when you place an order with us, We are actually just assembling food in a, in a hot plate that goes up to, that gets heated up to 500 degrees. Uh, and our staff simply puts the proteins, the rice, and the toppings that you ask for, but we send it out to you so that you can be part of the process, uh, be part of the cooking, become your own chef, cook it exactly how you like it. And I love the concept because I think nowadays people aren't just looking to buy things. Uh, they're looking for an experience. Mm-hmm. Uh, and. And to make something their own. And so, being able to make their food their own, makes'em feel a little bit more bought in. I feel like it actually fosters loyalty. and it also helps that they love taking photos and videos and, uh, do the marketing for us on social media

Jeremy Julian:

and it's also lots of customization. If you want to, you can customize your sausage, you can customize your proteins, you can customize your starches quite a bit, and so you've got almost unlimited options. Is that fair?

Paul Tran:

super fair. And what's what I love about the concept, from consumer standpoint, yes, you get to customize, you do part of the process. it's just such a fun thing to do, and it's like an affordable, luxury, affordable entertainment. but on the operator side, it's brilliant because you're, because the customer is doing the cooking, Our staff in the back doesn't have to do the cooking. So no li

Jeremy Julian:

it's all assembly.

Paul Tran:

minimal liabilities, and, very low staff needed. and so it's actually easier to operate and a lot more profitable for an operator. So it's the best of both worlds. I, again, I don't think I could have appreciated unless I operated like a busy, complex operation like Halal guys.'cause Halal guys, when it was busy, we had stores that did. Anywhere from two to 4 million and we needed, during the busy times, we needed like 13, 14 people.

Jeremy Julian:

Well, and you guys are shaving the meat all day long and you gotta get it on there and it's gotta get cooked it right away. I mean, yeah, no, it's a lot, there's a lot of work that goes into that. Not that there's not a lot of work in a, in a pepper lunch. One real, real quick thing, just'cause again, I'm a huge fan of the brand. it is, participated in a fast casual type environment. It is not like Benny Hana's where you gotta sit in front of a chef, you're going to the counter and ordering and then they're delivering your food to you or picking it up at the, at the window type of thing. So just for those that haven't experienced it,'cause you guys are gonna start seeing pepper lunches all over the place.

Paul Tran:

Yes, a hundred percent. And thank you for clarifying that. Yeah, it's hard because it's so unique that you, there's not much that I can really explain. you can say it's like Korean barbecue, but you get your own plate.

Jeremy Julian:

Yeah, it's like beep and bop maybe. but that's you can't, that's not a nationwide thing at the end of the day. I know it'cause I lived in Southern California and I used to go to the H Mart right there in that same

Paul Tran:

Oh

Jeremy Julian:

the, as the original one. There used to be a beep and bop place, Korean, where all of it's in the bowl and you mix it all together. So that's how I equate it, if somebody's familiar with it.

Paul Tran:

Yeah. Even though it's hard to explain. Same thing with Hal guys, where I really believe that, middle Eastern and Mediterranean food is over, was overdue for, for disruption and for someone to take a leadership position. Uh, Hal guys is definitely up there, but of course Kava is like pretty much the most popular well-known one I'd say. I'd say Pepper Lunch is very similar right now. There's just Panda Express. There's like maybe. I, yeah, there's no one else. And so I, I really believe that this has the mainstream appeal because Yeah. Right. We're starting to see, like a lot of non-Asians come in the, a lot of folks that are adopting it very similarly to where Halal guys, you know, it's not just attracting the Middle Eastern medi chain customer, but people from all walks of life and just mainstream. So I, I like to see it's, it's very similar.

Jeremy Julian:

Love that. last question. What is your go-to and what would you recommend a first timer come in and get? You're a restaurant guy, so I'm sure you modify the crap out of it, or you have a bunch of wacky stuff. Try. I asked Troy that question and he is I do this with this. And I'm like, dude, that's not on the menu anyway. He is like, yeah, I know. You're right. I, I make it up myself. But, I guess what's the go-to for somebody their very first time at PEPPER Lunch? What would you recommend they get? And then for you, what is your kind of go-to? what are you, consistently going and getting at this

Paul Tran:

Yeah. Um, so as a gateway, 50% of our sale, 50% of most of our stores, are the introduction. Three item is the jumble beef, pepper, rice, uh, that's certified Angus beef, topped with rice and corn and, and all sorts of really, and all sorts of signature sauce. Uh, and also our, proprietary pepper margin. Uh, it's incredible. I mean, if you eat it on your own, I think you can't go wrong. and my go-to my go-to is, I like the, kimchi chicken pepper rice. Shocked by how good it is. and it's one of those things where, you go there and your default is something, but every time I try, I'm like, oh my gosh, I just can't believe I, I don't eat order this enough. kimchi, chicken, pepper, rice.

Jeremy Julian:

Yeah. No, I, I go every time I'm there I'm like, okay, I gotta try something else. so Paul, thank you so much for sharing your wisdom, man. I know we've been, we've been talking about getting together for quite some time and I love that we got a chance to, to share what you've learned. How do people get in touch with you? How do people get in touch about pepper lunch? I guess tell'em how to stay connected so that they can, continue to be a fan of yours like I have been for the last couple years watching you online.

Paul Tran:

Oh, thank you Jeremy. and again, thank you for having me here. And, the best way to reach out is. I think the best way is to connect with me on LinkedIn. I feel like that's where I get to share my thoughts and insights, without a lot of filter. And I get to show you what I'm working on and who I really am. so yes, find me on LinkedIn. It's linkedin.com/in/ Paul Tran. So there's two T's in there. I think that's the best way forward. so yeah, looking forward to talk with anyone and be of help, in any way possible.

Jeremy Julian:

Awesome. Paul, thank you so much and like I said to our listeners guys, you guys have got lots of choices, so thanks for hanging out. If you haven't already subscribed, please do And, when you're in a town where there's a pepper lunch, please check it out and let us know how you like it and, make it a great day.

Speaker 2:

Thanks for listening to The Restaurant Technology Guys podcast. Visit restaurant technology guys.com for tips, industry insights, and more to help you run your restaurant better.

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