Amber: Hi welcome to The BusinessMakers Show. I’m Amber Ambrose here with Arron Lyons, the CEO and Founder of Dish Society. Aaron welcome to the show.
Aaron: Thanks for having me.
Amber: First of all what is Dish Society for those who have not had the pleasure of eating there?
Aaron: Dish Society is an approachable farm-to-table concept. We serve sort of modern takes on traditional favorites with a southern twist is how we like to explain it. We’re counter service for breakfast, lunch and brunch and full service at dinner; just your casual sort of neighborhood restaurant. We have a location in the Galleria area, one in Katy, we just opened in Memorial and we’re opening two next year.
Amber: Oh wow, okay. So can you give us the general vicinity of where the next two are coming?
Aaron: We’re opening one in Downtown and we’re opening one in the Heights.
Amber: So you’ve obviously found somewhat of a formula that is repeatable and scalable; what does that entail and how did you come up with this?
Aaron: The concept for me – I had no background in the restaurant industry, this was sort of your – I’ve always been an entrepreneur though. And sort of as an entrepreneur you find needs that aren’t being adequately met and you think of ways that you can meet those and that’s exactly what this was. I was a consultant. I was living out of a suitcase, I was travelling around. I was eating out for every meal, I didn’t grocery shop, I didn’t cook and I was somewhat conscious about what I put in my body from a health perspective, but also from a sourcing perspective. And I just found it very difficult to find that in an approachable way and I kept asking myself why isn’t anybody doing this?
And around that time is when Chipotle had just gone public. Fast casual was blowing up and Chipotle was doing mindful sourcing, sustainability, that whole thing, and it was really working for them and people were really gravitating towards that. So I started studying them and I knew I didn’t want to be purely fast casual, I wanted it to be a little bit more elevated with more focus on alcohol, coffee, craft beers and things like that; something that they weren’t doing. And I also realized that fast casual sort of missed the mark for dinner. People didn’t really want to stand in line for food during dinner.
Amber: Yeah, you want to have a slower pace; to sit down and have someone bring stuff to you.
Aaron: It’s a different experience, right. So went to this flex casual model to where we do offer full service.
Amber: Flex casual. Sorry, I really like that term so I wanted to make sure I pointed it out.
Aaron: I didn’t make it up.
Amber: That’s okay, I’d never heard it until now.
Aaron: So that was sort of the genesis of the idea, kind of like where is a place that I would eat at three times a week. And not just me but I knew that the market was there that would fill a lot of peoples’ need.
Amber: Right, so why Houston?
Aaron: Honestly Houston wasn’t on our radar when we started. I was getting my MBA at UT in Austin, I was writing the business plan for this and I’m from Austin, I wanted to stay in Austin. Austin unfortunately is a lot smaller than people think, especially from a real estate perspective and you’re opening restaurants, there’s only a handful of areas that you really want to open this kind of restaurant. And for somebody who was 26, 27 at the time who had no restaurant background and basically had a 15 page business plan shopping to real estate developers you know my risk profile was very high compared to that of somebody who just won a James Beard in New York who wanted to open a restaurant in Austin.
Or basically the Austin version of me now then who was going to open their fourth or fifth concept, something like that I stood no chance, and so I kind of saw the writing on the wall and the deal kind of got stale there. So I started looking in Dallas which I had spent a few years in, and then Houston because my wife worked in oil and gas and so she was coming down here a lot and that really opened it up.
I fell in love with Houston immediately because of the size of the city and the fast pace of it – totally different than Austin – and just the sheer density. On paper it made a lot of sense to start a business here, the clientele, the demographic and just the real estate opportunities. In Austin I could open maybe three, maybe four Dish Societies, here I could open eight, so it just makes a lot of sense to start here. And at the time in Austin there was a lot of competition for what we were doing, here there wasn’t that much at all really so it just made a lot of sense.
Amber: Speaking of risk and restaurants and a lot of money there has been seemingly sort of a wave of closings in the larger more fine dining establishments, but obviously your concept is growing. Why do you think there is a disparity between the two?
Aaron: I think at you look at the older model of dining where you had fast food and then you had casual and then you had fine dining, we sort of fit between fast food and casual. Closer to casual but we sort of fill a need where it’s approachable; you can go there two or three times a week. You’re not going to go to some of these other places two or three times a week. And you’re talking about more higher end establishments you might go there one to five times per year.
Last year you had the election, there was a lot of uncertainty, oil prices a lot of uncertainty, people being laid off – they’re not going out to eat. Companies cut account expenses so they’re not taking clients out to steak houses, things like that; so it was sort of a combination of those things. And a lot of those places they’re 9,000 or 10,000 square feet and they’re paying a lot of rent, and when you’re not putting butts in seats it makes it very difficult economically to make that model work. And so for us we have a smaller footprint, we’re sort of more agile. We serve sort of a broader range of people so it makes us kind of safe.
In kind of uncertain economic times you have people that might have had their holiday party at Morton’s, they have it with us. People that are still going to eat out but we offer and atmosphere that’s you’re not going to Chik-fil-a, you’re not going to Chipotle, and you can take client’s to Dish Society and you can take your family to Dish Society and not feel like you’re compromising that much. And so I think that’s why we’ve been sort of successful, especially in the recent year or two when the economy was kind of in flux.
Amber: Well looking forward obviously you have two new Dish Societies coming here to Houston in 2018, beyond that what is you plan? Or you vision I guess.
Aaron: The vision is to really scale this thing like we’ve done in Houston in other markets starting in Texas – Austin, Dallas/Ft. Worth, San Antonio – and then moving outside of that. I’ve got some other concepts that I would like to experiment with as well. I think we’ll reach our saturation point in Houston in the next few years where we just kind of run out of places to put Dish Societies. Houston is a great market and will support other types of concepts and so we’ll do that.
We’re already looking at other markets for 2019 and 2020. I think what a lot of people don’t realize is, this Memorial location for example, we opened at the end of 2017. We started talking to them in 2015, we signed the lease in February of 2016 and then we don’t open October of 2017 so there’s a lot of those things that go into it. And then you get delays and you get this and you get that and so you have to sort of deal with all of that, but yeah, expanding.
We’re experimenting right now with doing our own – sort of vertically integrating and starting our own farm to supply all of our restaurants with produce ourselves. And I think as we grow we sort of – one of the challenges with doing farm to table is unless you just have one restaurant you sort of outgrow on your suppliers. And a lot of our suppliers aren’t necessarily out there getting more land to grow more things and as more restaurants and grocery stores…
Amber: Because they are small local farms, they’re not big, industrial farms.
Aaron: Exactly and as farm to table and sourcing becomes more popular and a trend that people are jumping on – you’ve got grocery stores, you’ve got all of these other restaurants now that are going to your same farmer. So your supply is essentially fixed but the demand starts to increase and so obviously what happens is the farmers raise their prices.
Amber: If they’re smart.
Aaron: If they’re smart and at the same time they’re not able to meet our needs because we’re growing. And so we saw that as a potential problem and one that we’ve already started to experience a little bit with with a couple of the suppliers opening the third restaurant, so we know when we open two more they’re just not going to be able to support it. So we get things from Austin and San Antonio and Waco and things like that but there’s a huge opportunity for us to do it ourselves and I’m not going to get into cattle and poultry – I’m not trying to get into the agriculture business by any means – but there are certain things that we can do very easy and economically that align with our vision and also make sense from a business perspective. So those are some other projects that we’re doing as well.
Amber: Wow that’s really exciting.
Aaron: Yeah it’s awesome.
Amber: Well congratulations on everything and you’re also expecting twins in the coming year.
Aaron: That’s right.
Amber: You’ve got a lot of things happening.
Aaron: A lot of things happening, yeah.
Amber: Once again Aaron Lyons of Dish Society and I am Amber Ambrose and this is The BusinessMakers Show.
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