KwangHo Lee is the owner of Momoya, a beloved Japanese restaurant with three locations in New York. One of the newest members of SpotOn’s Restaurant Advisory Council, here KwangHo discusses building trust with guests and staff and how technology can help restaurant concepts scale more efficiently.
They say opening your third restaurant is much easier than the first and second. While you have more employees and higher overhead costs, expansion becomes easier once you have built a trusted brand. Last year, I opened my third location, Momoya SoHo. Over the past 17 years, Momoya’s customer pool has grown and grown. When guests come to our restaurants, they can experience consistent food and service quality. Momoya is a trusted brand.
Building this trust with our guests didn’t happen overnight. Our menus are time-tested. We have created a strong menu, proven over time, which we adapt with seasonal changes. We have tripled our volume and have started to reach economy of scale, which allows us to think about expanding further. I think a lot about scale in the restaurant industry. It’s easy to think that more is more. Depending on the restaurant concept, sometimes it is. The biggest challenge with scaling Momoya sushi concepts is that they rely heavily on skilled chefs. Even once you find a skilled chef, keeping them is a challenge. When a chef leaves, the food quality changes. This can doom successful restaurants overnight.
Building—and retaining—your team is very important as you expand. Currently, I own three restaurants, with more than 210 employees. Managing people is never easy. There are always issues you can’t foresee. The more employees you manage, the more potential issues there are. Plus, every day there is at least one machine that breaks. When I was just running one restaurant, I knew everything going on in the restaurant, every day. Now, I’m overseeing multiple locations while developing a new business concept at the same time, so I’m starting to run out of my bandwidth. Luckily, I have found excellent, trustworthy people who run my business as if it were their own. My most important job is finding the right person for the right position.
I miss being able to make a personal connection with every employee. It’s one of the best parts of running a small business. It’s already becoming difficult with three locations and going forward, it will be impossible. But as we scale, I will be able to provide benefits that I couldn’t provide as a small business.
Employees are not always treated well in terms of job security and benefits. For many restaurants, their employees are viewed as disposable. I hear a lot that “people come and go.” At Momoya, that’s not my mentality. Providing solid benefits will give our employees another reason to stay with us. It’s not easy to accomplish, but it’s one way to show that we value them. And perhaps influence more restaurants to do the same.
The restaurant industry is competitive. Guests have so many options to choose from, especially in a place like New York City, where we are located. You want to get your restaurants in front of as many clients as possible while still maintaining a connection and sharing updates that are important to them. Restaurant-guest relationships are changing as new platforms emerge that both parties can benefit from. For example, social media platforms and loyalty. We use these tools to hear the customer’s voice. We reward customers with loyalty points for writing a review. Our reward program is an excellent way of not just creating a connection, but fortifying it over time. If our customers go to a restaurant without a loyalty program, they won’t see the same long-term benefits. We reward customers with loyalty points for writing a review. Technology helps us be creative when enforcing our customer relationships.
As I look towards the future, I want to build a business that benefits from scale. There are many benefits to a delivery-only operation. It can be more profitable, thanks to reduced labor cost. On-premise dining requires people for front-of-house, plus the upfront investment for the interior. A restaurant takes a while to be profitable—you need to reach a certain volume of clients. With an online business, if you know how to market it, you can attract people more easily and increase your sales. There’s less risk and less upfront investment, which can lead to faster business growth.
At the same time, I am also drawn to fine dining. There’s something about an excellent fine dining experience that is so graceful. It’s like watching an orchestra performance, everyone knows where they have to be at any given time. Some day, I can see myself opening some sort of school where we study Japanese food and provide training for front-of-house as well.
While I have learned quickly, I am relatively new to the restaurant industry. Until two years ago, I was living in Michigan and working as a genetic engineer. One of the main things I have learned is that technology is an integral element to running a restaurant business. It can make or break your operational efficiency. As a SpotOn Restaurant Advisory Council member, I am excited to provide suggestions and share the restaurant owner’s point-of-view. SpotOn is our partner. I’m here to make sure that the platform helps Momoya NYC—and many others—operate more smoothly.