Forktales Ep 28 / Alonso Castañeda on Scrappy Startup & Growth

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Alonso is a prime case of professional development and career trajectory that can be experienced in the restaurant industry. His story outlines the journey and how one can easily find success and fulfillment by learning and growing. We address the labor shortages and what’s driving them, and we dive into how to build scrappy brands that thrive and grow.

  • VP of Brand Development & Strategy at Savory Restaurant Fund
  • Started career at 18 – managing a small Mexican grill (under 10 units)
  • Began franchising and helped the company expand until acquisition by Jack In The Box
  • Then helped grow the Paradise Bakery with franchising until acquisition by Panera
  • Moved on to 14-unit company called Cafe Rio, grew to 100 units and, you guessed it, acquisition!
  • Grew another franchise system with Four Foods Group; then purchased 48 Little Caesar’s locations. Added 30 more locations, then sold them off and “lived happily ever after”.
  • https://www.hashkitchen.com/
  • https://savory.mercatopartners.com/
 

QUOTES

 
  • “Small brands – those 5 to 15 location concepts … this growth from that moment to 50, 100, 200, seems very enigmatic and tough.” – Joseph 
  • “During that growth phase … we learned a lot on going fast but not too fast.” – Alonso
  • “There’s nothing you can read, nothing you can do, that will teach them but your experience. You can’t replace experience.” – Alonso
  • “Every stage in the restaurant business is difficult. It has its own little challenges. The industry in itself is hard, right? The initial stage from 5 to 50 is especially hard … you gotta keep that momentum. Setting up that foundation is so important.” – Alonso
  • “Sometimes restaurants get funding and they slowly forget to be scrappy.” – Alonso
  • “There’s all these services that come to you as a young operator and they offer you … this extra little software that tells you the weather … the sales pitch was fantastic … so the middle of your P&L fattens up and your profits are so low.” – Alonso
  • “You have to be brilliant at the basics. If you have great service, great quality food, and a clean environment, and you’re consistent with it, that’s all you need.” – Alonso
  • “If you’re not careful you can get rid of your money. It’s pretty easy.” – Joseph
  • “What’s needed today and a little bit of tomorrow, instead of what’s needed five years from now.” – Joseph
  • “If you’re a mom and pop shop, opening your first or second location, do you need to spend $50k on a brand identity? Probably not.” – Joseph
  • “Focus on operations, get those systems smooth… when you hit that 10, 15, 20 location mark then take a look at the brand.” – Joseph
  • “Your food is your branding. Your marketing budget is getting your food in people’s mouths …. Feed the local football team for free. That’s your marketing” – Alonso
  • “Everything you do does build a brand, so if you do it wrong you’re doing yourself a disservice.” – Joseph
  • “We find these brands that have so much potential to become a great emerging concept and all they need is a team of restaurant experts and the right funding. Our model is to help them grow from 4 to 40.” – Alonso
  • “It’s sort of the morning party! Eggs benedict and Lil Jon.” – Joseph, about Hash Kitchen, a breakfast spot with a DJ.
  • “I used to own and run a nightclub in Palm Springs … I thought I was done with DJs, but this is my 40’s DJ life now … but they don’t let me touch the playlist” – Alonso
  • “In the casual dining space, people want ‘eatertainment’ – that experience when you go out and sit down with your friends and have a server and have to pay a tip – you want that experiential dining.” – Alonso
  • “Finding people that show up for interviews … the flake ratio of people that show up is ridiculous.” – Alonso on the challenge of finding great labor.
  • “It’s a cool place to be, it’s cool to say I work here, and the tips are great.” – Alonso on the challenge of finding great labor.
  • “The conversation is centralized on compensation, but I’ve heard many other factors that play a large role.” – Joseph, on the challenge of finding great labor.
  • “The restaurant industry has had a bad rap for years, working their employees hard, work life balance and all this, and I think we need to squash this. That’s old school, back in the day … you’ve got very educated restaurateurs and operators now, we take care of our people, and work life balance is great.” – Alonso
  • “The problem is you’ve got the gig economy now, you can go and Uber, or Doordash, and make good money, and not wash dishes til 1:30 in the morning.” – Alonso
  • “I don’t think you can make dishwashing a gig economy job.” – Joseph
  • “The future growth for go-getters, for people that are dedicated to a job well done, and learning, the sky is the limit.” – Joseph
  • “The path from dishwasher to CEO … it’s not that long. It’s not that far away.” – Joseph
  • “Up to this day, I don’t think I’ve talked to anyone who hasn’t raised prices. We’ve tried to hold off, as long as we could, but this whole thing has been unprecedented, from paper and plastic to produce and proteins. It’s gotten out of hand. We transfer a little bit of that to the consumer because we don’t want to go down in quality.” – Alonso
  • “The consumer is not shying away from paying a little more.” – Alonso
  • “Eggs over easy, hashbrowns well done, Lingonberry Crepes. That is my jam.” – Alonso’s last meal.

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