[OPENING MUSIC]

00:00:07 Alex VO: The Build is presented by Square. Opening your first restaurant is one of a kind challenge. Building the systems, team and infrastructure to grow beyond is another. This season, we're going beyond the basics and into Restaurant 201, following what it really takes to scale a restaurant concept without losing the hospitality, culture and food that made it special in the first place. Square supports businesses at every stage, with connected tools designed to help restaurant owners run their operations, understand their business, and keep growing. This is The Build: Season Three, presented by Square.

00:00:49 CARLOS: I mean, totally. I think something that's great to hear about right now is like, we can really try to build on a very tech way and operation so we can really focus on like spending our energy,

00:01:01 TANIA: The vibes.

00:01:03 JENNY: The vibes.

00:01:04 CARLOS: making sure the hospitality is where we want to be. Because I think, obviously, I think Peludo comes from an idea of the three of us to have a space that we just want to hang out there, right? Like that's pretty much why we are doing this. We just want to drink wine.

00:01:18 TANIA: Yeah.

00:01:19 ALEX: Yeah.

00:01:19 TANIA: Like it's our.

00:01:20 CARLOS: And aquachile.

00:01:21 JENNY: Which is.

00:01:22 TANIA: Yeah, aguachile with good wine.

00:01:23 ALEX: But that's how the best businesses are built in my mind,

00:01:26 JAMES: Yeah.

00:01:27 ALEX: is that you're building it for yourself and something that you would enjoy,

00:01:28 TANIA: Yeah.

00:01:29 ALEX: whether it's clothing or whether it's a place to sit and hang with your friends.

00:01:34 Jenny VO: You’re listening to The Build: a show about what it really takes to open a restaurant.

[THEME MUSIC]

00:01:41 Jenny VO: I’m Jenny Goodman

00:01:42 Alex VO: and I'm Alex McCrery,

00:01:43 Jenny VO: and we are the co-founders of Tilit NYC and host of The Build presented by Square.

00:01:49 Jenny VO: When you have one restaurant, you can keep a surprising amount of the business in your head. You know what's in the walk in, who called out, what needs to be ordered, and which piece of equipment only works if you jiggle it twice. But when one restaurant becomes five, you can't just rely on memory anymore. For Gio, Tania, and Carlos, scaling means finding better ways to see what is happening across different concepts, even when they cannot personally be in every kitchen and dining room. So today, we are talking about Restaurant Tech 201: What should be connected, what should be automated and what should always stay human.

00:02:21 Alex VO: We are joined by James Schonzeit, head of restaurants at Square and later by renowned restaurant tech journalist Kristen Hawley, founder of the Substack Expedite. Together, they help us answer the bigger question: can technology make a restaurant more efficient without making hospitality feel automated?

00:02:41 JENNY: Gio and Tania, tell us a little bit because you guys are going from one restaurant or actually two restaurants, right to to three to four to five this year. So tell us a little bit about like where you started with tech and how you were using it and how you're thinking about it as you guys expand the group.

00:02:59 TANIA: Yeah. I mean, it's a conversation that. Yeah, I guess we never thought of having, no? When you are opening a restaurant. It's almost like… Or at least in our experience, because it was our first restaurant, Taqueria Ramirez, five years ago. Um, yeah, it was just more about, you know, let's find ingredients. Let's find the people. Obviously, we were, you know, aware of costs, but not- we didn't have any reference on that as well. So I feel like since we opened, it's just been about, you know, dealing with everything, you know, just as we go. And now more recently, we, we were able to, you know, just kind of step back a little bit and with all these new concepts and new places, try to find more like systems in place, no? And obviously technology, it helps a lot with that. But even us, we're kind of still familiarizing with like, you know, add ons with the POS and all that, because we also just changed POS. And I feel like the one we have before. It was just not kind of very user friendly as well. So we were doing everything like more manually, like inventory, all, you know, bookkeeping a little more like not with… into the POS, let's say. Like scheduling as well. So yeah, I'm kind of like, we're starting to learn a little bit, a little bit more about that, especially with square.

00:04:26 JENNY: What are some of your biggest headaches? Where are you like, I should not be spending my time doing this.

00:04:28 TANIA: Mhm.

00:04:29 JENNY: And then how are you using technology? Or how are you thinking about the solutions to fulfill those gaps? And I'm curious to hear once Tanya's response, like how, how like you're seeing other operators do this.

00:04:41 TANIA: Yeah. I feel like a lot about is the ordering. There's still like just texting or, you know, keeping inventory very, you know, just in an Excel, for example, like that's kind of how I want to get away of that. And I feel like you, that you take care of more about that, like scheduling. That's also kind of something that we haven't implemented technology as we as we should. And honestly, with this project, we're starting to learn more about all these systems because it's way a bigger, you know, bigger a lot of people and a lot of more ingredients. Like with taqueria carnitas, it's always been small, so very manageable to do, you know, just on a piece of paper, literally.

00:05:18 GIO: On a piece of paper.

00:05:20 JENNY: Literally on a piece of paper. You’re just like with a clipboard O.G. style.

00:05:20 TANIA: Yes. So with soccer, it's just you cannot, you know, it's just big operation. So you need to be using technology in your favor.

00:05:42 JENNY: How are you doing at Socceria?

00:05:44 TANIA: Yeah. I mean, it's all, um, I mean, I don't know if I can say the software names, but yeah, it's just, um, in hand, like scheduling, there's a system. Payroll, there's a system, um, inventory, no? Everything related with the kitchen. it's something that we're learning to right now. I feel.

00:06:04 Alex VO: Now joining us is James, head of Food and Beverage at Square.

00:06:08 JENNY: How are you seeing people do this more efficiently?

00:06:10 JAMES: Yeah. I mean, I think, um, you know, we started looking at inventory pretty hard maybe three or four years ago. And I remember back then there were basically two ways of doing it. You were either all in or you were on pen and paper. Like there was very, very little in between because it's either the amount of work you need to do to get inventory right at the time was like extremely manual, right? It was somebody was sitting down with a spreadsheet entering in every single ingredient, checking their prices and like all of these steps. And then at the end of the day, it's also a very manual and person to person industry, right? You're texting your vendors being like, hey, do you have this? And it was still like a lot of work to just answer a very basic question, am I making money or not? And do I have the things that I need to do to make food or drinks or whatever? Um, and so what I've seen folks do is like, I think honestly, the majority of the industry is still on pen and paper. It's still on a whiteboard.

00:07:01 ALEX: Yeah, I was curious. Is the tech actually telling you what you need to order for the next day based on the

00:07:06 JAMES: Yeah.

00:07:07 ALEX: dishes that have gone out from the kitchen? I mean, I'm fifteen years out of a kitchen and it was there was a lot of time walking around with a clipboard,

00:07:13 JAMES: Yeah.

00:07:14 ALEX: seeing what we have seeing. And that's how

00:07:16 TANIA: Yeah.

00:07:16 ALEX: it was done. So how is that being replaced and made easier with…?

00:07:20 JAMES: Yeah. So that's, I think what what's changed though is like, you know, there used to be this really big divide of people who would just be fully manual and have people who would like were spreadsheet gurus and had everything priced down to the cent, had every ingredient tracked. And but there was very little in between because of the time that it took. And that's what I've started to see. That's actually been kind of wild of folks starting to be able to like. One thing that we launched last year was a product called Order Guide. And basically you can look at your menu, um, generate the ingredients from that, or you can upload whatever your recipes are. And I'll actually track your prices across the different vendors that you're ordering from, be it Cisco, US foods… What is it… Fortune here in in New York, and actually track those prices. So, you know, like, hey, look, I we know that the price of beef has been going up. How can I actually make sure I'm still getting the right level of quality on this from, from the right vendor? And you can do all that now with just like we don't want to take people away from the whiteboard. Like if that's what your chef is used to doing every day is just like walking around writing stuff down on a piece of paper. Great. Keep doing that. Like you don't need to like, get out an iPad and scan the QR code on the box to like for some people. Yeah, like at a, you know, large, you know, franchise quick service spot, sure. But in a small restaurant where the, you know, the walk in is the size of a New York City closet, that's overkill. Right? A piece of paper is great, but what you can do now is take a photo of that piece of paper.

00:08:47 JENNY: Take a picture, yeah.

00:08:49 JAMES: Yeah. And then translate that and it maps it back to your actual vendors. So this, you know, it's that gap between do you have two hours today to sit in front of a computer and write things out on a spreadsheet? Probably not, but do you have time to take a picture and upload it to the system? And then it actually is already connected to your inventory, to your menu, to your vendors? Does it know what like, and can you even get into like, hey, we expect that we're going to have like a huge day of sales next or today, you know, because of the World Cup game or something like that. And you can start to actually marry up, hey, what's in my walk in? How much do I expect to have? What are the right prices? And like that's available to someone who doesn't have that, you know, Director of Ops who's spending all day in an office somewhere hunched over a spreadsheet and that's like been the big shift, I would say, in that space, which is pretty nuts.

00:09:41 JENNY: And you guys have a product that does that?

00:09:44 JAMES: Yeah, yeah. We have the, the Order Guide product has been live for a while, and we're working on some other things there right now that make that even easier, honestly.

00:09:50 JENNY: What about the text of the vendor piece? Because we get text messages all the time. I'm like, y'all stop texting me because I forget to put it into the rest of the system. I will, I will mess up your order if you text me. So I'm like, I feel like that happens with all the vendors because I'm like, I need to put it in the system. So how does that work? How does that workflow get easier for folks to where it's like, because y'all chefs love to text people. We know.

00:10:12 GIO: I's easier to see my phone than pull up a computer.

00:10:14 JENNY: Yeah. And it all plugs into the phone?

00:10:18 JAMES: Yeah. I mean, I think that's a really like, that's a big space that we're, um, we're seeing a lot of in the industry, right? Like, I mean, this is an industry that is about communication

00:10:25 JENNY: Yeah.

00:10:26 JAMES: between front of house and back of house between, you know, a manager and their staff, right? Like good restaurants run on good communication. Um, and it also matters with your vendors too, right? You're not going to choose a vendor who doesn't respond to you when you need something. Um, that's actually been an interesting, uh, thing. We're seeing a lot in terms of, um, what's happening with AI tooling these days, right? Like a lot of folks think about like talk to ChatGPT and it's a one on one conversation. But in reality, a lot of what's starting to happen is, um, you know, can you bring in some of these AI tools to help do some of that for you? Perhaps like, obviously you still want to hold a close relationship with your people. This is an, I should say it's interesting about communication and it's interesting about people. Um, but at the same time, can you like one of the things with like the order guide that I'll bring up is like, um, you can actually connect it to your email address so you don't have to manually upload. Like when you get your price list from your vendors instead of having to go click drag, let me upload this. You can just connect your email address to it. And so instead of having to manually do that, it can already look at that for you. So little things like that. But I think one of the, one of the things here that, that we try to think of is like, we don't want to ever enforce technology into a place where people are already used to like, hey, I'm already texting, I'm already messaging or slacking or sending an email. We want to try to integrate with the tools that folks are already using. Um, yeah, make that easier.

00:11:45 ALEX: It's so interesting. I get so much like anxiety thinking about someone else going through my emails.

00:11:52 JENNY: I love it. Get in there.

00:11:52 ALEX: And just like, pulling out what it wants and like, get in there. Not that there's anything in there, but just that it's like, it's.

00:11:58 JAMES: Yeah. It's only from specific email addresses, I should say. So it's not, it's not everything.

00:11:59 ALEX: Got it. Got it.

00:12:00 JAMES: It's an email forwarding, I guess you could say.

00:12:00 ALEX: Yeah.

00:12:02 JENNY: Do you have a thought?

00:12:03 GIO: No, it's just it's a lot of learning. I didn't knew that those things existed, to be honest.

00:12:09 JAMES: Yeah.

00:12:10 GIO: I'm glad I'm here. Just to kind of like.

00:12:12 JAMES: Yeah. We can go into all...

00:12:12 CARLOS: Yeah. Is that gonna be? Is that gonna be part of our square plan?

00:12:14 JAMES: It already is. I think we can, we can, we can try it out later. Yeah.

00:12:16 CARLOS: Amazing.

00:12:18 JENNY: We can try it out. You can stop texting your vendors. We'll see what happens.

00:12:20 GIO: Let's see.

00:12:20 JAMES: Yeah.

00:12:20 JENNY: Yeah.

00:12:20 TANIA: Yeah, yeah, yeah.

00:12:21 JAMES: You still probably want you still text your vendors.

00:12:21 JENNY: We'll see. You're still gonna text them.

00:12:23 JAMES: We're not there yet.

00:12:23 JENNY: Yeah.

00:12:24 TANIA: I think that part specifically is probably still gonna be that way now.

00:12:26 JAMES: Yeah.

00:12:30 Jenny VO: But you can't just add more software to solve your problems. You have to make sure those systems share the same information. Otherwise, operators are not eliminating work. They are just creating more places to look for it.

00:12:41 Alex VO: Kristin Hawley has covered restaurant technology for nearly fifteen years. Beyond her Substack Expedite, she writes for publications including Fast Company, Food and Wine, and Eater. We asked her what growing restaurant groups are getting right within the tech space.

00:12:54 KRISTEN: I get really excited when everything talks to each other, and I think more and more tech vendors are making products, even if it's, you know, disparate concepts under the same umbrella. The CRM talks across locations, the back office will synchronize supply chain things, will synchronize all of those things. So even if you have three disparate concepts run by three disparate teams in three different locations, the things that need to be, the things that need to work together, the things that should be, you know, single source of truth can be. And that's really helpful. Especially, I mean, we're talking about opening a new location. You certainly want to make sure a regular at one location is recognized at a new location. That's really hard to do without, like a superhuman at the front door. Or good technology.

00:13:46 JENNY: What are things that are like a nice to have and a nonstarter for you have to have in this day and age in order to be competitive. And, and for lack of a better word, I need profitable margins are so slim.

00:13:58 KRISTEN: I think that diners generally are expecting some kind of digital engagement, which translates to digital personalization. For any, I mean, maybe not a counter-service fast casual spot, but anyone that's providing hospitality and an experience for their diners, like the customer facing CRM stuff, is just really important and wanted and necessary. I think it would feel kind of, I think people would be upset if they went to a spot and it was like, I know I get upset when they're like, have you been here before?

00:14:31 ALEX: You should know that.

00:14:32 KRISTEN: Like, Yeah, yeah, I just checked into my hotel today and they were like, do you, have you stayed with us? And I was like, literally twenty times. So it is. There is an expectation to know that. And that's the stuff that I think is so interesting, how diner expectations are evolving because of technology. When I started covering this fifteen years ago, it was like, I want to tweet at the chef to get a reservation or tweet at the restaurant to get a reservation or and basic stuff. And it's really evolved into just wanting that digital hospitality, if that's a term and, um, personalization in interactions. I would say, too, just like technology that works. I know that sounds really basic, really basic, but it is infuriating when you are pushed toward a service that doesn't do the thing that it's supposed to do as a diner, you know, I want to, and a lot of people that love restaurants want to do what the what the restaurant says to do. Like you want us to order with a QR code? Fine, fine. I'll do it. But if it's not working, if that doesn't work or whatever doesn't work, that it's really increases frustration. So I think there's so many different solutions and every restaurant's stack and choices are going to be different, but it should help them do their jobs better and it should work.

00:15:55 JENNY: Mhm. How do people find the best technology for their restaurant? Is it like trial and error? Is it you know, what do you recommend or what have you seen work just through your reporting?

00:16:05 KRISTEN: I mean, it's almost always word of mouth. I was out talking to a chef. And, you know, I asked, how do you choose who to work with? And it's just like, who are my friends working with? You know, who are my neighbors working with? And sometimes that's, you know, a reservations platform that has network effects because everyone on the same block is using it. And sometimes it's an inventory management or scheduling or any kind of labor training tool that works for them. I think, I think the person I was talking to said, I will only talk to companies that my friends or colleagues have worked with in the past. So that's one way. And the other way is that so many of the biggest companies are releasing products and services that fill tiny little gaps that we're missing. So instead of twenty tech vendors, maybe you need five. And that's not that's not a bad thing.

00:16:55 Jenny VO: Connected systems create connected data. However, data alone does not want a restaurant. As the Ramirez group grows, their bigger challenges are deciding what still needs the founders, what can become an automated process, and where another leader needs to step in.

00:17:11 ALEX: Because there are three restaurants open now, two more coming, are there economies of scale to that are achieved by having the right tech? Aside from, like you said, of going to a bigger volume… You know, five, five restaurants is a lot. Are there ways to, to connect to the vendors and things like that, that to where you can maybe order and get bulk pricing and those kinds of things that.

00:17:36 JAMES: You probably have to text your vendor to get the get better pricing.

00:17:37 ALEX: Then it's more on the vendor side. Yeah.

00:17:38 JAMES: But I mean, actually, we are thinking about how we can help operators out at scale in that way. But, um, you know, I think the, I, in spite of working in tech, I don't believe tech is always the answer,

00:17:50 ALEX: Right.

00:17:51 JAMES: but I, I do think that as you go from one location to two, two to five, you know, you, you start to feel it, you know, it's literally your days off is probably where you feel it the most of like, can

00:18:06 ALEX: Do you have days off with five restaurants?

00:18:07 JAMES: Yeah, exactly.

00:18:09 GIO: We have one from like just today, but we haven't had one in like a month.

00:18:12 ALEX: This is your day off.

00:18:13 JENNY: This your.

00:18:13 GIO: Yeah, yeah.

00:18:14 JENNY: We're working right now, though.

00:18:15 ALEX: Yeah.

00:18:15 GIO: Oh, yeah.

00:18:15 JENNY: This is fun!

00:18:15 JAMES: Yeah.

00:18:16 TANIA: Yeah.

00:18:18 JAMES: But can you be off on your day off? You know, like that's the and as things get bigger, I mean, maybe it's almost like when you're small, you have to do every job.

00:18:25 TANIA: Yeah.

00:18:25 JAMES: And then when you're big, there's more problems that are just always coming up.

00:18:29 ALEX: Well, speaking of days off, we were talking about before we started taping that of how like the AI systems can respond

00:18:35 JAMES: Yeah.

00:18:36 ALEX: Yeah. to your staff, even the obvious questions that come up from staff all the time of the dishwasher broke or this is broken once it's been developed and in there, then the tech can respond to them so that you don't have to, so you can actually enjoy your day off, which I think is super interesting.

00:18:50 JAMES Exactly. Yeah

00:18:52 JAMES: Yeah. I mean, think about how many questions you get asked.

00:18:54 ALEX: Oh my God, that was the worst part about being a chef

00:18:56 JAMES: How many texts do you have right now from?

00:18:57 ALEX: was the day off. You were getting calls all day long.

00:18:57 TANIA: Yeah yeah.

00:18:58 JAMES: Exactly.

00:18:59 ALEX: Yeah.

00:19:00 JAMES: Yeah. So it's, it's really like, what are those? It's as you scale, I think it becomes a questions of like, all right, what are the questions? I just keep getting asked. The problems that keep coming up. How do I find a solution to that? Maybe like it's, hey, we hire on a director of operations to work across all five locations. Maybe it's. We need to staff another prep cook on Tuesdays at this location such that they're not running out of this ingredient by seven pm every night. Right? It's you think about what your problems are, what the questions are. And honestly, you think about like the things that keep you up at night, like what are the things you're worried about every day? There's so many things that can go wrong running a restaurant. Uh, and those things just multiply as you, as you scale as a business, right? And so how do you, uh, how do you… where do you…

00:19:43 ALEX: What comes to mind. I feel like you're smiling.

00:19:44 JAMES: Yeah, exactly. Yeah.

00:19:46 GIO: No. Yeah. No, I feel you. I mean, like, I'm seeing myself right now in that picture.

00:19:48 JAMES: Yeah.

00:19:50 JENNY: Do you guys have a director of operations, or are you planning to hire one with the growth?

00:19:54 TANIA: Yeah.

00:19:54 GIO: Yeah, yeah. We we.

00:19:56 TANIA: We're planning.

00:19:58 JENNY: Yeah, yeah.

00:19:58 JAMES: Yeah. See?

00:19:59 ALEX: Yeah.

00:19:59 JAMES: There it is.

00:20:00 GIO: Please! Yeah. No, we that's becoming more urgent almost like every day. But I feel like I want to do the way I see it is that I, I need to do it first myself.

00:20:13 TANIA: Yeas

00:20:14 GIO: At least for the first year.

00:20:18 JAMES: Yeah.

00:20:18 GIO: And and and go from there. Yeah.

00:20:19 JENNY: For the first year?

00:20:20 JENNY: Remember we talked about days off a minute ago.

00:20:21 GIO: Only one year. Yeah.

00:20:23 ALEX: But I think the goal too is like in hiring, at least for us. I think about it as like you. You want to always hire people that are better than you, right? So it's and then that's where your, your team is like this team of rock stars.

00:20:34 TANIA: Mhm.

00:20:35 ALEX: So maybe you don't need to do it. I mean, it's your business. You do you. Right.

00:20:36 GIO: Maybe.

00:20:36 TANIA: Yeah.

00:20:40 JENNY: But for in while you think of like what this director of operations will look like, how will you set them up for success and what is like what's happening now is everybody from all three restaurants that are currently opening, just texting you all day. And how are you dealing with that workflow? What systems are you putting in place?

00:20:57 GIO: I mean, for me, first of all, we will have to be a person that understand what we're doing in a cultural level and, and kind of go from there because like all the technical part and the systems can, can always be improved and learn. But the cultural side of what we're doing and basically our why we do what we do is I think that's the most relevant thing that that person needs to really be as their motto for every day and every single space. Yeah, I just see it that way. But then he can talk to Tania about the, the,

00:21:33 TANIA: Like what do you think?

00:21:35 GIO: all the other part. Now you obviously also obviously involved in that. Yeah.

00:21:37 TANIA: Yeah. No, I mean, I feel like for me, the best way is hard to, you know, hire someone or partner with someone when you don't know them. No. So I feel like for me, it's very important to literally hang out with this person, this possible prospect, like getting to know this person more on a personal level. You know, I think that's the first way to connect with someone, which I feel like it happened that way too with this partnership. Like we were, you know, working together, but also hanging out with

00:22:08 GIO: With Carlos.

00:22:10 TANIA: Uh huh, with Carlos. And so that way you really like are sure also like this is going to work. And And yeah, that for me is kind of like very important. But after it's the system's not, you know, I mean, right now, I feel like we Taqueria Carnitas and Socceria is a little bit all over the place in a sense of just to think about the accountant, no? there’s like three different accountants.

00:22:38 JENNY: Three different accountants?

00:22:41 GIO: Yeah, because we thought that we were gonna test them out and then probably just, like, choose one

00:22:46 TANIA: Yeah.

00:22:47 GIO: For the next year.

00:22:48 JAMES: Are they watching? Are they listening to this?

00:22:50 JENNY: It's like the accountant Hunger Games, I love it.

00:22:51 GIO: They will.

00:22:52 ALEX: Yeah.

00:22:53 TANIA: Yeah yeah, yeah. And now I feel, yeah. Now I think we know we actually with Socceria, 2e got connected to this, uh, firm and they are very much tech forward, no? which is not the case with the other people. So you know, now seeing the difference, it's just like, yeah, why don't we just, you know, make our lives easier, make everybody's lives these years and have someone to overlook everything. Especially with technology, you know, implemented with that.

00:23:25 GIO: Yeah.

00:23:26 TANIA: Mhm.

00:23:28 JENNY: So now. So you're transitioning the other two locations.

00:23:31 TANIA: I mean, not not at this exact moment, but that's the plan.

00:23:31 ALEX: We're just announcing. Sorry, guys.

00:23:33 CARLOS: Now that you're listening to this, the firm knows now.

00:23:34 ALEX: Yeah.

00:23:35 GIO: But it's coming, it's coming.

00:23:36 JENNY: Sorry. I hope your accounts aren't listening to this first.

00:23:37 JAMES: They need a director of operations first.

00:23:38 TANIA: Yes.

00:23:38 JENNY: And then what are how like so when problems come up with your team. I mean, I'm curious to hear how like the financial piece overlays what's happening with the POS from from you, James. But I'm also curious because we were talking about team and how communication happens. What happens now with your team when like there is an emergency at one restaurant, are they texting you and how do you put systems in place as you keep scaling for that?

00:24:00 GIO: Yeah, they're texting me mostly.

00:24:00 ALEX: You get all you get all the time.

00:24:02 JENNY: They're texting me. Just simple.

00:24:03 GIO: No, I'm like.

00:24:03 ALEX: Tania hid her number.

00:24:04 GIO: I'm also like the handyman, you know?

00:24:06 JENNY: Of course.

00:24:06 GIO: So if there's anything that is broken, I'm like, oh, Gio sometimes takes a little bit. Like the AC that

00:24:13 JAMES: No, no.

00:24:13 GIO: there They will remind me today. But yeah, they keep calling me. That's why obviously this director operations should should be like really also hands on on to down to do anything.

00:24:27 TANIA: Yeah.

00:24:27 GIO: Yeah.

00:24:28 TANIA: You cannot just be like in the computer or.

00:24:30 GIO: No.

00:24:31 CARLOS: No.

00:24:32 TANIA: No, I think someone that can be hands on is very important. Yes.

00:24:36 JENNY: So. And how do you see like your systems connecting everything from like this bookkeeping piece to the inventory management to like the people management and a repository for how do you fix the AC when goes on vacation in Oaxaca next week?

00:24:49 GIO: Yes, please.

00:24:52 JAMES: I'll come back to that in a second, but I just want to come back to something you said. Just like the first the first thing you're like, they need to understand what we're doing culturally. And you know, that to me is actually something I see from a lot of operators. I've like I've been with Square for five years, so I've seen a lot of businesses go from their first location, a pop up to a first brick and mortar to a second to a fifth to a tenth. And I feel like actually the common thread of like, what's made that really successful is you have great people at the core of it. So finding somebody who can like, embody and understand what you're trying to do with the business, with your guest experience, with what you're trying to do for your staff, that actually then I agree very much with what you said of like, the systems can be scaled, the technology can be, they can learn a new tool, they can learn how to do inventory management. Um, and honestly, most people who are in this industry have learned it at some point in their careers anyway. So… But in terms of like, how do you connect all of these systems? How do you go everything from fixing the air conditioner to, uh, you know, um, ingredient costs or scheduling or, you know, I need to make a menu update kind of thing. That's one of the things I'm most excited about.

[AD BREAK]

00:25:55 Alex VO: Last season, we watched Rasheeda build Ramen by Ra around two very different experiences: an intimate chef's counter and a fast moving takeout window. Square helps her manage both while also connecting online orders, in-person sales, merchandise, and guest information. That means Rasheeda can recognize the customer who ordered ramen last week and bought a shirt two weeks ago. It's tech helping a small business feel even more personal. The Build is presented by Square. Learn more at square.com.

[MUSIC FADE]

00:26:29 Alex VO: For a growing group, the promise of AI is not necessarily a flashy guest facing feature. Some of its most useful applications are almost invisible. AI can help operators understand existing information, spot changes faster, and ask better questions without needing to become a data analyst. More on that with Kristen.

00:26:47 KRISTEN: There's the really blatant AI, the chat bots and the voice and the reservations and chatting. But then there's like a bunch of restaurateurs that just use Claude, for example, to help them make sense of disparate data sources. And it's not sexy. It's like it's, you know, they're just using a new tool and running their numbers through it and, and finding answers that they need to find. That's the most transformative, transformative thing. It's just, it's helping anybody who owns and runs a business do things better and faster, and access more information about how different you know, data that lived in separate services now can be applied toward each other. And so that's, that's what's exciting. It's not very sexy. It's kind of like, yep, restaurants use Claude two. I think the real unlock for me truly, though, is that it is so humanized in the products. Right? You talk to Claude in natural language. I know some of the tech products that restaurants use have AI chat built in. And you talk to those in natural language. That's just a game changer for me, because you can have an owner who may not be super tech savvy or understand before what they were looking for in data terms, but knows exactly what they need to know for their service or, you know, to figure out how their month was. And they can ask in those terms. And that's like the most brilliant use of AI in restaurants. And again, pretty simple, pretty unsexy. But it gives people the information they need in a way that they can understand it. And that's actually very exciting. One of the more exciting ways that I've seen people use technology for inventory is multi-location businesses that have perhaps the same similar menus or similar ingredients, same suppliers, but one location is near downtown and they do a huge lunch catering business. One location I'm thinking of a place in San Francisco is by the ocean, and they just do like salads and slices, and it's the same concept and they have the same suppliers, but they're very different businesses. And so being able to say like, there's a event by the water and we expect a ton of traffic at this location that sells mostly salads and slices. You know, what should we be ordering? How should we change our order? Um, you know, it's holiday party season. How does that change in this one location? And it's able to differentiate and be really exacting on a per location basis while still tying into the broader, larger company. I think that's, that's really great. And I think that's a nice little entry point because it's something that is so meaningful and can save money and make them run more efficiently, even when they're very different businesses.

00:29:40 JENNY: Mhm, mhm. For sure. Yeah.

00:29:42 KRISTEN: Yeah. It’s what do you want to do that you can't do today?

00:29:45 ALEX: Right.

00:29:46 KRISTEN: Not what do you want to replace?

00:29:47 Alex VO: That distinction matters because more information is only useful if it leads to a better decision for the Ramirez team. The immediate questions are not theoretical: what should the menu cost? Which items can carry the margin? How much labor does each concept require, and can the operation stay simple enough to execute on a packed Friday night?

00:30:05 GIO: Yeah, I've been using it for for also legal part.

00:30:09 TANIA: Yeah. You're right. Like, I think contracts, that's something that it's so helpful to, you know, like, you know, just even signing up for this.

00:30:20 JENNY: Yep.

00:30:20 TANIA: Like what's, what's the red flags in this one? You know, it's been helpful for a lot of those things.

00:30:27 CARLOS: Yeah. And I think for the we're also using it for like ingredient lists,

00:30:31 TANIA: Yeah.

00:30:32 CARLOS: uh, recipe books, uh, product lists, like I'm making everything on an AI for that.

00:30:37 GIO: Oh, yeah. I remember when I was working on the Socceria menu, I used it for to see where were my most profitable dishes.

00:30:46 JENNY: Mhm.

00:30:47 GIO: So he basically he… He.

00:30:52 JENNY: Okay.

00:30:52 JAMES: Do you have a name?

00:30:52 ALEX: Yours is a he.

00:30:52 JENNY: All right, so we know. so your AI is a is a man.

00:30:53 ALEX: Okay.

00:30:55 GIO: How.

00:30:57 CARLOS: God.

00:30:57 GIO: To break down. Yeah. And, um, and it gave me a little bit of an idea of a balance of, uh, that sixty, I think if I remember correctly, like sixty percent of your menu must be really high profit, profitable, while probably twenty percent of it can be like not as profitable, but, but it could lead mostly like the cultural or like the bring something that you want to bring to people,

00:31:23 CARLOS: All right.

00:31:24 GIO even though it's not going to make you a lot of money.

00:31:27 JENNY: Money, yeah.

00:31:27 GIO: Yeah, yeah.

00:31:29 TANIA: Yeah.

00:31:30 GIO I learned that on AI too. And then I, and I say it to Carlos as if I knew for years.

00:31:33 CARLOS: Yeah. He was like, we need to make our menu. Sixty six things of the ten of them are gonna be really profitable. The other four will be our brand items.

00:31:44 JENNY: Do you feel like you just saw like the veil was just lifted?

00:31:47 CARLOS: Yeah.

00:31:50 GIO: I mean, everybody knows.

00:31:51 ALEX: He's going to go home and read that contract, too. Yeah.

00:31:52 JENNY: Secrets revealed.

00:31:52 TANIA: Everybody knows. Yeah. Also.

00:31:55 CARLOS: Now I see where you're learning everything. You tell me.

00:31:57 TANIA: Yeah. I feel like in terms of just kind of like remembering all that we use it for, for example, when we were, um, making that offer letter for the GM, no?

00:32:06 CARLOS: Yeah.

00:32:07 TANIA: like that was something that, you know, just not knowing really the salary, the salary in New York just, it's helpful for that. And like,

00:32:15 JENNY: Research. Mmhmm.

00:32:16 TANIA: Okay, yeah, at this level with this certain employees, this is a good salary, you know, in New York. So yeah, just to do a little more legal or, um, yeah, I guess agreements or getting to know all of that.

00:32:33 CARLOS: Then especially because, I mean, we're right now is like, so busy for all of us that we really have, like, I don't know, one hour to get this done. We don’t have a team

00:32:42 TANIA: I mean, I feel like in taqueria, um, it's just a blessing because it's such a small space with a very small menu as well. Uh, we do need a lot of staff, but it's been like trial and error on the exact amount of staff, let's say. I feel like we that's what we spend the most at, no? In taqueria, like the the staff.

00:33:07 GIO: Staff and and meat.

00:33:08 TANIA: Yeah.Labor and meat and beef, you know.

00:33:09 JENNY: Staff and meat. Accurate, perfect. Staff and meat.

00:33:10 JAMES: Yeah, yeah. There you go.

00:33:12 ALEX: Yeah.

00:33:15 TANIA: So yeah, I feel like it's pretty easy to visualize where it's where we spend the most, the numbers

00:33:30 JAMES: Yeah.

00:33:15 TANIA: And carnitas. It's also kind of blessing because it's only pork and pork is the cheapest.

00:33:30 ALEX: Yeah. There you go.

00:33:31 JENNY: Today it is.

00:33:32 TANIA: Today.

00:33:33 JENNY: We'll see what happens.

00:33:33 TANIA: Today it is. like yeah, yeah yeah.

00:33:33 JAMES Yeah.

00:33:34 JAMES: YEAHI was talking to Salt Hank, and he was, you know, they're all beef.

00:33:36 ALEX: Was that the reason for carnitas or part of the thought with carnitas was like, hey.

00:33:38 TANIA: No not really. I don't personally, no.

00:33:40 GIO: Well, I mean the carnitas is is really profitable because the it's it's very similar to Ramirez, but it's actually the the labor. It's probably forty percent less.

00:33:54 ALEX: Wow. Because of its pork? No.

00:33:56 GIO: Because because it's for example, we only have one prep and one cook like one person cook the whole batch of carnitas for the day. While in Ramirez, we have three different cooks that have different stations, let's say, because the menu manage different processes of different cooking methods and proteins and things like that. But here in carnitas, it's, it's, it's really great because it's pork is yeah, it could be you can, you can, you know, get a lot of money out of it.

00:34:26 TANIA: Make money.

00:34:27 JAMES: There you go. Franchising.

00:34:33 ALEX: Which is. I mean, you have to you have to be successful to have a business that's sustainable. That's that's part of it.

00:34:38 TANIA: Yeah.

00:34:38 JAMES: Yeah.

00:34:38 GIO: Yeah.

00:34:39 ALEX: Right.

00:34:39 GIO: Yeah. I honestly came when I look at those system for the first time. I really got impressed that we were really high on the usual trends, like market trends of like, what's the percentage like that? Like the healthy percentage of labor costs, food costs and all that. And we were doing really well from, from there. And I feel like carnitas does even better in that sense.

00:35:02 TANIA: Yeah.

00:35:05 JENNY: So is carnitas, your most profitable restaurant.

00:35:06 GIO: Not by numbers,

00:35:08 TANIA: Mhm.

00:35:09 GIO: Because we do make more money on the first restaurant because you just have more volume. The volume we manage over there. It's insane. But in comparison with the, you know, if you put the yeah, like the, the.

00:35:22 ALEX: The margin is better at, the margin is better at Carnitas.

00:35:22 TANIA: Yeah, yeah.

00:35:24 GIO: Exactly.

00:35:23 JENNY: The margin is better at at carnitas, but volume wise is higher. Revenue is higher at taqueria, but margin is better. Okay.

00:35:29 GIO: Yeah.

00:35:30 TANIA: Mhm.

00:35:31 JENNY: How can you take that and roll that forward to the other concepts? Or how are you doing that?

00:35:37 TANIA: Yeah. I mean, Socceria, it’s its own thing because it's more obviously a bigger operation and it's just a little more complex, more, you know, like the menu is so extensive, there's a lot more ingredients. So that we knew from the beginning that it was just going to be handled different, like the margins were going to be different. We have more partners as well. So that's something that I. We joke like it's more like a passionate something we want to do. You know, the space is beautiful. The rent is actually not as bad as it should, probably for that amount of money.

00:36:16 ALEX: Do you have alcohol at Ramirez or carnitas?

00:36:20 GIO: No. We do actually sell beer.

00:36:20 TANIA: In carnitas, we sell beer and wine.

00:36:22 ALEX: So this is the first thing… you do?

00:36:22 TANIA: Yeah.

00:36:22 GIO: Yeah.

00:36:23 ALEX: But this is but Socceria's full bar.

00:36:24 TANIA: Full liquor, yeah.

00:36:24 JENNY: Full bar.

00:36:25 ALEX: So that must change your margins quite a bit.

00:36:26 TANIA: Exactly.

00:36:29 GIO: Yeah yeah, yeah. Uh, we're there maybe eighty.

00:36:27 ALEX: And your ticket average.

00:36:29 TANIA: Mhm.

00:36:31 GIO: Yeah. Uh, over there, maybe eighty?

00:36:34 JENNY: Is your average guest check?

00:36:34 ALEX: Okay.

00:36:37 GIO: Yeah. In the kitchen though. Like, I feel I know exactly what you're saying. Like it's a different operation for sure. So yeah, because the, the scale, but at least in the kitchen, we, we design it the menu to be simple. It's,

00:36:51 CARLOS: Yeah.

00:36:51 GIO: it’s, it's actually really easy to execute. And, and we use very, in a very smart way, like a lot of ingredients are come across to a lot of,

00:37:02 TANIA: Yeah.

00:37:03 GIO: You know, plates.

00:37:04 CARLOS: That’s such a Mexican thing, too, if you think about it. This is like, yeah.

00:37:05 TANIA: Yeah, that's a Mexican, like corn salsa protein.

00:37:05 JAMES: It's just like that.

00:37:06 GIO: Yeah.

00:37:08 CARLOS: Yeah.

00:37:10 ALEX: Right.

00:37:12 TANIA: Do it in different ways, no?

00:37:13 CARLOS: Yeah.

00:37:13 GIO: Yeah. We're we're blessed on that.

00:37:14 TANIA: That's true. Yeah.

00:37:15 CARLOS: I mean, that was the goal since the beginning of building that menu, right?

00:37:18 GIO: Yeah.

00:27:18CARLOS: Like we went from something very big to be like, okay, we need to be smart about how this is gonna work out

00:37:23 TANIA: Mhm.

00:37:24 in a bigger like scaling, like the amount of customers you can sit down and everything.

00:37:27 GIO: Yeah, yeah.

00:37:28 TANIA: Mhm.

00:37:30 JENNY: Like how do you guys manage it now that you’re scaling, right? Cause you were like, it sounds like you have three different accountants, and you were like “oh, we didn’t realize how profitable this one was versus this one,”

00:37:38 GIO: Yeah.

00:37:39 JENNY: and how are you looking at, how are you looking at numbers now and as you continue to, continue to grow and open a fourth one?

00:37:45 GIO: Well, I mean, Taqueria Ramirez and Carnitas are still performing really well in terms of those numbers. I feel like Socceria, we’re… we're we just have our first month and it's it was a great month because of the World Cup. And that obviously gave us an idea of like, what's the on, on, on the best performance. What's the picture of this place? But we will definitely learn more as as soon as the workup ends. Like, and I feel like that's going to be what, what is our challenge now? Like how we keep this growing and we keep the momentum of like building this place up with no workup or I mean, there's still obviously games and things are still happening, but like the energy of the workup is quite unique. So we knew it was going to be great number wise. And it is. But all I'm trying to say is like, I want to keep looking into the numbers that are coming later to, to really see what's going to happen there.

00:38:47 Jenny VO: Better information can make a restaurant more consistent. But consistency is not the same as hospitality. The danger comes when technology stops supporting human judgment and starts trying to replace it.

00:38:58 KRISTEN: You know what I'm really torn about? And I haven't seen this in action, but I've heard it's in development and it's coming. Or I'm sure somebody in where I live in San Francisco has it like a wearable that like a server can talk to like the glasses. Well, yeah, it could be the glasses or a pen or something that's recording instead of them taking the order. And it's just like, you know, kind of they're looking at me and they're smiling. It's just that that

00:39:22 ALEX: They become the robot.

00:39:25 KRISTEN: I don't know. Yeah. Maybe talk to me in five months and I won't feel creeped about it. It's just I don't know. I don't. Is that a human interaction? If you're just recording me and sending it to the kitchen,

00:39:22 ALEX: Right.

00:39:23 KRISTEN: That’s a thing. And if it's not a thing yet, it's going to be a thing really soon. That's, I find a little a little scary. I don't mind AI used thoughtfully and deployed well, like if it works again, this is back to kind of my theory. Like if it works for your business, it works. There's a place that I go to with my family and my daughters, and we're always running late. And I'm so upset when we're late to a reservation. So I had my husband call. We were like running there. and it was the AI on the phone and it was like, how late are you going to be? And he was like fifteen minutes. And you know, she said, oh, it shouldn't be a problem. And it wasn't a problem. And the host was great about it. But what if the AI was like, oh, no problem, this will be totally fine. And then we walked in the door and the human host was like, you were supposed to be here fifteen minutes ago. What's wrong with you? So just, you know, that would be an example of AI where it shouldn't be only because it's not actually providing any service, it's making it worse. It's providing more friction if the AI and it probably can, you know, alert, push notification, whatever the host stand and say they're running fifteen minutes late. Great. And everybody's on the same page that it's not a big deal. Awesome. Um, but any kind of miscommunication in that sense would be bad, right?

00:40:42 JENNY: Right. So like, there's, there has to be like a real feedback loop to a real human, basically.

00:40:47 KRISTEN: I think so.

00:40:49 JENNY: I agree, yeah.

00:40:50 KRISTEN: I think that there will always be a need for a real feedback loop to a real human in a human business.

00:40:55 JENNY: I agree

00:40:56 KRISTEN: I can't imagine not having that. That sounds terrible

00:40:58 JENNY: Yeah I agree. That does sound terrible. Is that even hospitality anymore?

00:41:02 KRISTEN: No! No. Then you're just optimizing or whatever term you want to use. And it's just, it's you've taken the heart, soul and, you know, sucked the life energy out of it.

00:41:12 JENNY: I'm curious too, because we talked about like, restaurants are collecting a lot of data now. Is it too much data right now? You know everything about these employees. You have a million different data points. How have you seen restaurants like make good sense of the data that they're collecting and deploy it well to improve the experience?

00:41:31 KRISTEN: This is really tricky. I don't have a good example of this. I talk about it a lot of times and I ask, and it always comes down to human judgment. I understand that there's notes all over my profile that I'm a journalist and that I know there's probably hopefully it says I'm a good tipper. Like, I don't know. I'm always worried Every time I talk about this, I'm like, could someone tell me if there's anything bad on my OpenTable profile? But I…

00:42:01 JENNY: They don't rate you back like Uber!

00:42:02 ALEX: Is that like the new Uber rating where like you get a four point nine or…?

00:42:05 KRISTEN: There isn't that there's very limited information that's shared across restaurant, very limited. But that is, I mean, the tech companies are kind of walking up to the line on that. Yeah. I think OpenTable has like buckets of like labels that might travel with you on your profile. OpenTable does have like a gold status and like, so that, that does travel with your profile. So like if you've booked a lot of restaurants through open family or. Yeah. So like there's that you're a good diner. I understand that that's going to happen. Like we're well past the days of somebody googling you before you come into. I mean, sure, maybe like five restaurants in the world still do that because it's all right in front of them. I don't need them to tell me, like every single thing that's on that list every single time. I don't have a problem with it, but it is, again, one of those things that requires human judgment. And I'm sure someday there's going to be a service that like, prompts the server that's like, today you should talk about this, you know? Um, is that bad? Is that good? You'd have to ask the server if they prefer agency and autonomy or being prompted and fed information. I'm thinking about this a lot right now actually is authentic hospitality versus tech assisted hospitality. Are we going to be able to tell the difference? Does it matter?

00:43:20 Alex VO: The best restaurant technology may be invisible to the guests, but it gives the team clearer information, catches problems earlier, and turns processes that once lived in a founder's head into systems the whole group can use. Data can't decide what kind of restaurant El Camaron Peludo should be. It cannot build trust with a new operations leader or know when a regular wants to be recognized, and when they simply want to enjoy their dinner. That still requires judgment, culture and people.

00:43:45 JAMES: As you grow, you're like, what is that? What is at the top of this list that's taking a ton of time? How do I need to create a system around that? What's the solution here? And again, tech isn't always going to be the solution to it. But if we can help, we will.

0:43:57 TANIA: Yeah. That’s great.

00:44:03 Alex VO: Next time on the build, the team moves from systems on paper to people in the building as they hire, train and prepare El Camaron Peludo for its first service.

[CREDITS MUSIC]

00:44:10 Jenny VO: The Build is produced by me, Jenny Goodman, along with Alex McCrery and Sam Gerardi. Our audio engineer for this episode is Sam Gerardi. The show is produced in partnership with Square. You can learn more at Square.com. Be sure to subscribe to the build wherever you listen to podcasts, and follow along @TilitNYC for special behind the scenes moments and more from the show.

00:44:32 Alex VO: The Build is presented by Square. Supporting restaurant owners and small businesses with the tools they need to start, run and grow. To learn more, visit square.com. And we'll see you next time on The Build.

[CREDITS FADE]