Wahoo’s Fish Taco is known for their eclectic interior and delicious tacos, but the company has had to quickly innovate since coronavirus prohibited dine-in options for restaurants. One of the main ways Wahoo’s has served their customers during COVID-19 is by providing carry out and delivery options and partnering with other businesses to serve the community. Looking forward to the new normal, Wing believes that businesses must evolve to accommodate social distancing and customer comfort levels. Learn all this and more in this episode of Back to Business: COVID-19 & You.
Third-party delivery platforms like Grubhub and UberEats may be convenient for customers, but can cut deep into the margins for participating restaurants. In the current economic climate, many restaurants can’t afford to pay the 20% commission that these platforms often require, especially when dine-in may be prohibited or limited. As a result, Wahoo’s started offering incentives to attract pick-up customers, including free sodas, beer growlers, and BOGO.
This is why it’s so important for restaurants to enhance the user experience on their own websites and introduce functionality for ordering, pick-up and delivery to draw customers away from these third-party platforms. Optimizing the visual aspects and mobile-friendliness of your site will help keep customers, and encourage them to complete their order on your platform.
With disposable menus becoming mandatory once restrictions are loosened, restaurants should consider enhancing the digital menu experience or bringing their menu online if they haven’t already. Over 81% of Americans own a smartphone, so digital menus are a great way to save money, and increase traffic on your website. Disposable menus may become another added cost for restaurants already reeling from COVID-19 setbacks. Thorough digital menus on your website are also a great way to push for direct orders, rather than through third-party platforms.
After the podcast finished, Wing was on his way to donate meals to frontline workers. Wahoo’s partnered with the Anaheim Ducks and the Honda Center to deliver meals to frontline workers, and they shared this on their Facebook page. What are some ways your business is helping your community? Feeding first responders, donating meals, and more is all valuable information worth sharing with customers. It’s a good opportunity to utilize different communication channels, such as email, blogs, social media, and websites, and share your response to the coronavirus pandemic.
According to RepTrak, customers will remember good and bad decisions companies made in response to COVID-19 and how they treated their customers. Giving back to the community, protecting your employees, and being proactive with coronavirus measures are all worth sharing to maintain customer loyalty.
Wing Lam, one of three co-founders of Wahoo’s, started the company with his two brothers over 30 years ago. Now, Wahoo’s is an OC staple with over 40 locations throughout California, Texas, Colorado, Hawaii, Las Vegas, and even Japan.
Quick disclaimer: these transcripts are auto-generated. They are best used in addition to the Podcast audio not instead of. We cannot guarantee 100% accuracy.
James Fratzke [00:00:04] Hello,everyone, and welcome to Back to Business COVID-19 and you. This is the podcast where we meet with business professionals, experts and business owners to try and determine what is the path forward. You know, we've all been impacted by this COVID-19 pandemic in different ways. And now we're in that phase where it's more about what we're gonna do next and what we've done in the past. And so that's why we've put together Back to Business to help mid-size businesses like yours think about what are some of the best practices?
James Fratzke [00:00:38] What are other people doing in different industries? What are the experts saying from a marketing perspective? Are the ways that we can get back to business?
James Fratzke [00:00:50] Hello,everyone, and welcome. On today's episode, we talk to Wing Lam, the co-founder of Wahoos Fish Tacos. Now, just like Fratzke Media, Wahoo's is a family-owned and battle-tested company. So I love Wing's perspective, especially when you consider that here in Orange County, Wahoo's has been around for over 30 plus years. They have 40 plus locations here and in some other markets around the country. So he's got some great experience to share with us when we start to think about what does it look like to get back to business? And of course, I would be remiss if I didn't mention that this episode is going to talk a lot about the restaurant industry specifically. So if you are in the restaurant industry, this is the perfect episode for you if you're not. There are still many, many parallels when it comes to how do we operate our business at a limited capacity. What are some of the things that we should be thinking about from a digital perspective in a digital marketing perspective? We get into all of this and more. So please enjoy my interview with Wing Lam from Wahoos Fish Tacos.
James Fratzke [00:02:00] Alrighty, just want to say hi Wing. Welcome back to business. How you doing today?
Wing Lam [00:02:02] I'm doing great. It's Monday. It's time to get going.
James Fratzke [00:02:05] Yeah,I hear that. And, you know, it sounds like there's a lot going on at this particular Wahoo's location that you're at. And I just want to start by saying,you know, we've heard a lot of stories about people and business owners getting involved in and pitching in and trying to help. And I just want to thank you for all the work that you're doing in the community, helping frontline workers teaming up with Anaheim Ducks in the Honda Center. Another occasion, you did 250 meals for Costa Mesa police and firefighters. So I just want to thank you for that.
Wing Lam [00:02:36] Well,thanks. I mean, we're doing our part to try to stay busy, so it's too full of helping the front liners, keeping my staff working. So it's good, right?
James Fratzke [00:02:46] Yeah.Well, I'm you know, again, here in Orange County for folks that are listening that are in Southern California. You know, they've probably ate at a Wahoo's before. And so it is nice that you are staying open and that you're coming up with different solutions to try and feed people and keep your workers on the payroll and give them something to do in this time where a lot of folks are staying at home. With that being said, you know, since the kind of the beginning of this pandemic, what are some of the biggest changes your team has had to adapt to in this crisis?
Wing Lam [00:03:21] The biggest thing right out of the gate is the fact that, you know, our business got cut down by 90 percent. So imagine, you know, one day you're doing a thousand dollars and actually you do a hundred dollars. So using that as the basis we need to get to about 20 percent to kind of keep the lights on. So luckily for me to, you know, a little bit of I call it will have a little faith. I was able to team up some with my friends, vendors specific, like Pacifica's here, our constellation partner. And they said, hey, the"supermarkets", distribution centers are busy, but the restaurants are really doing no business at all. So maybe there's a way for us to take some meals to supermarkets. And they all looked at me like your crazy. I ask, you know. And they thought, what a great idea, because we do have all this marketing budget set aside that we're not going to do anything with because there's no events, no chairs, nothing going on. So why not kill two birds with one take care of an on premise account, which is me. And they see, you know,share with an off premise, which is a supermarket. So we started out with Northgate, Smart and Final Trader Joe's, Ralph's, Pavilions. So we've done the mall, right? So a little bit of that money offset the fact that goes, hey, now we can basically donate some to the hospitals because they don't have a budget to do anything with, right? So we kind of took a little bit from Peter to pay Paul kind of a thing, but really was it was able to keep our businesses afloat.And then when people started seeing this other basically friends of mine, you know, Viña from Home Depot, Kosovo's all these people started coming in. Hey,how can we help you? Right. It'd be great if you guys could help us underwrite some of the cost. So they all did. So it's not about making a living. It's about keep the lights on. So if I needed to get to 20 percent, I've achieved that. It also prevented us from closing an additional four locations because they were facing decimated. So we already closed the two mall locations. We already closed two L.A. locations and we closed two of our sporting events,Staples Center and Honda. So all in I think it was seven stores that really got shut down right out of the gate. So we didn't like okay, there were four more on the bubble. So you're looking at almost a third of our stores would've been closed in Southern California. So Vegas and ourselves basically said, well, how can we do this? There's obviously you've seen pictures of the Las Vegas Strip.You can literally take a bike ride from one end to the other and not see a person. It's just crazy. That's never, ever happened. And we're not talking for one day. We're talking for the past, what, six, eight weeks is absolutely crazy. So it came down to, hey, let's get creative. If the most customers are not coming in, let's go out and find them.
Wing Lam [00:06:29] And that's what we've done.
James Fratzke [00:06:31] Yeah,yeah, I absolutely love that. And to your point. It kills two birds with one stone, right? So you can keep people employed and bring different partners together to help kind of write off some of the cost or to carry some of that burden or some of that load. And you're helping people out in that community.So it's like a win win. Win, win, win, win. Yes.
Wing Lam [00:06:54] Literally,like I was talking to our friends from Snyder Langston, a big construction company, and they did the same thing. They had a project in downtown L.A. and they call their topping off party when they put the last beam at the top of the building, right? So we went in there. We brought lunches to the crew and they've never seen anything like it because typically they don't do that. But the fact is, they're like, hey, since we don't have any sales going on, we hit this budget set aside. Here's a thousand dollars to go take care of our people like. Sure. Right. So, again, it wasn't anything typically that I would do. But the look on all the construction guys faces because they're working so it's again, so nice. I call it "Surprise, A Nice Gift". And we sell it like, oh, my God, it's. You ever seen it before? And here's the owner of Wahoo's. And unload all the trays. They were thrilled. And that's the reaction we get. We go to hospitals, fire departments. They're just like eating food,they're seeing the order, the guy pick up the meat, driving the car, unloading everything.
James Fratzke [00:08:05] So that's special it's cool. I like it. And in people, again, if you're if you've ever been to Wahoo's before and then you're walking down the street, you saw Wing Lam walking across there, you would say, oh, that's the owner Wahoo's. I mean, you just have that kind of aura about you here in a county especially.But tell me a little bit about how you've adapted from a perspective. You know,a lot of folks in your space are doing some of these third party delivery apps they're shifting to take out. How has that been going? What does that process look like for your team?
Wing Lam [00:08:39] Well,we are doing a lot of third party. The Grubhubs, the DoorDashes, the UberEats. But the main thing that I like to stress to our customers, if you'd like to support us, call in, and come and pick it up yourself.
Wing Lam [00:08:55] Right.Because by the time the third party takes their fee to run their side of the business, there's really not a whole bunch left for us. So I explained the math to them and they're like, oh, my God. Yeah. I mean, it's better than nothing.But if you really want to help us, you know, go to ours or go to any of our neighbors come in in person, say hello. Tell them you appreciate they're still open for business. You know, but really come out. But the big number that everybody's got to see is we were 80 percent dine in, 20 percent takeout.That's why we're down 80 percent. Right. Because we only have the takeout part.So we're having to adapt. We're losing a lot of different facets. How we could basically the consumer the missing pieces that drive. Right. Because there's a huge liability having your guys. So the people that were following the pizza business they're already in that model. They own their drivers. So that's the missing piece that I think all of us have to think about that because if you drive around people here anywhere, that has a drive through their numbers are down 20 percent. They're not down 80 because their business model was 80 percent right through anyway. So you're missing designed in part what you're going to do for the one that I'm laughing at the most is Sonic Burger. I mean,two months ago, there were just another burger place. Now, on a Friday night,you can't find a spot because they're all the old diners, right? You just pull up and you sit there needing your car, right? Which is amazing. It's a great experience. But they're the only ones that were doing that before this. You know, so they're right there. Like, they have no issues because their model was eat in your car.
James Fratzke [00:10:45] Right.Yeah. Not much has changed. That's so true. What I want to get into the takeout part or the pickup part a little bit deeper because to your point, and it's a really good point that some people, especially the consumer, probably miss, isthey really don't know where their money is going when they log in to UberEats or Postmate's, they just know they're ordering their food and then it's going to get delivered to them. But it sounds like pickup and takeout is more beneficial to the business. So how do you incentivize people? I know you said,hey, you're trying to tell folks, come on in, say thank you, show some appreciation. But how do what are some other tactics that you use to incentivize people to kind of train them to come in? Because that last mile, to your point, is the most expensive. Whether you're paying some other driver or you're bringing in the driver, you lose a lot of your margin right there. How do you get them to come in the front door?
Wing Lam [00:11:40] Well,one of the incentives we started doing right out of the gate, we offer everybody came in a free soda, right?
Wing Lam [00:11:49] A free, fountain drink. And right here, that's a two to three dollar dipping. And it's a nice incentive. So you have a party of four. You just not only ten dollars off your order. So it was a really good deal. And he said, hey, because all the product was going to sit anyway, right? So it was a really nice incentive because to Uber it's kind of hard because by the time you get the soda, it's going to be almost flat because it's going to be 15-30 minutes if I'm ordering the time it gets. So one of the nice incentives was hey, come in.And one of the other things that we've offering is a small sort of red ball kind of a thing. Buy one. Get one. Right. So we try to find different ways to add a little bit when they show up. And now we've got the growlers for beers. We've got all these little things that aren't necessarily offered through the delivery system because the stuff's going to go flat, we call. Right. So you can come in, you know, get a special, you know, couple of bucks for a beer or a dollar for a soda. So anything like that, you know, it kind of helps us. And also, you know, we always try to get out of the house.
James Fratzke [00:12:57] Yeah,I know my wife and I, we have tried to carve out that time to get out. Even if we just get in the car and drive to the beach, maybe we don't get out, but we're just cruising down PCH just to see the ocean again.
James Fratzke [00:13:10] It is important. Let's dive in a little deeper to you. You said you were looking at maybe some alternatives to get direct to consumer in your business, primarily being brick and mortar. Like you said, 80 percent dine in, 20 percent take out. How do you start to look into that digital transformation, into some of these different ways to go direct to consumer? And what are some of the things you're looking at?
Wing Lam [00:13:40] Well,there's basically these apps I called delivery apps, you know? And right now I think there is at your table I believe was one. There's like two or three of them. Right. So the idea is to somehow either have the person come in or find a lower you know, because there are these companies out there that I don't want to use the word they're more efficient. Right. And they don't take quite as much of the commission. So that's it. You're right. Because if you're taking anything more than 20 percent, that's pretty much your margin. Right. So if you can get down to like 10 to 15 percent, it's palatable. So it's not like you'remaking money, but you're kind of somewhat at least covered your cost. So that's what we're negotiating with right now. And there's a number of about that we just had to be smart. And how we do it, but also allow it to make sure it's foolproof, right, is the thing that doesn't work in this model. If you get any kind of mistake is just like when you club people right when you buy the Shaver's right. You have to return it that model doesn't work. So if you get a subscription where it's a free clothing or food. As long as there's no returns,the model works. So you got to make sure to streamline the operation a little bit and maybe don't have the full menu but make it so it's almost bulletproof because you want to allow the customer to customize some of it. But at the same time, we want to minimize it, because when you start customizing orders, that's when the mistakes happen you just ordered the hamburger the way it is never any issues. Or when you want this on the side, it's on the side, and this on top.This notch, that's a human error, whether it's you or me or the chef, someone is going to go, oh, I forgot the cheese, right? So that's where you just got to be really careful because your order may be done perfectly, but because you modify it, there's going to be a human touch in there somewhere. And that's where the mistakes happen. So, whether it's on the input or on the output side,things are going to happen.
James Fratzke [00:15:47] You know, I know when I'm at Wahoo's, and I'm ordering my two tacos and I like the version that has the kind of cream slaw. But I always say no cilantro, because to me cilantro tastes like soap. But I can imagine a world and that's a thing that's scientifically proven. I'm not just high maintenance, but, you know, I can imagine a world you're given that phone call. No cilantro. And they go, OK,more cilantro, you know. And then by the time it gets to you, you know, you're a little disappointed. So to your point. It's like, how do you bulletproof the menu to make sure that these items travel well? You know, maybe even do some testing, I guess, and say, OK, let's put it out for 30 minutes and let's see if it still tastes good at the end. Something that you talked about with the Sonics, kind of this light bulb went off in my head about some of these industries or business models that were kind of were set up in such a way that this whole coronavirus crisis kind of actually played perfectly into their model. That's what that reminds me of, is that as we kind of get back to business and start opening up again, do you think there is anything or any consumer trends that have started now, like delivery or takeout that will last?Or do you think it will be back to business as normal? I mean, what are some of the things that you think will continue to do to change the industry?
Wing Lam [00:17:14] Oh,the food. This didn't seem hard, right? So I think restaurants that have the drive through will be fine, restaurants that had patios will be great. But in any restaurant where literally like bars that it's you know, the more crowded the better that model is done. So we've got to figure out at least for now. We don't know after this next winter what the normal will be. So whatever happens this summer, it's always going to happen because once October, November come, I call flu season again. All right. Last year was flu, then the COVID. I think this year, anybody that's cough it's COVID. Right. So people are going to be on very high alert and very sensitive to anybody. Sniffling, coughing, anything.It's like, oh, my God, my God, they're going to freak out. Right. So you're going to have that immediate knee jerk reaction. So anything that's crowded,like from a sporting event to a concert, anything where you used to be shoulder to shoulder, back to back. That's going to change a little bit. So that's where we've got to figure out what is going to be the new comfort level. Right. And again, if you've ever been to Asia, it is literally if you open even a little bit of room, whether you're driving or walking, somebody's going to cut in front of you. All right. So social distancing in Asia is very like shoulder to shoulder, right? Like the subway in America. There's a little bit of personal distance. The question is, how is that going to change? That's right. It's going to be two feet apart, six feet apart. And that's really the thing that we don't know. And so for restaurants right now for dine in is that this is six feet. Right. So we're trying to follow all that. There's a lot of rumors about having a glass partition. Right. And you've seen some of this shower curtain because people use it in Europe or the glasshouse or the greenhouse. And so we're seeing a lot of that. Right. So we don't know what's going to be the mandate.And everybody here say. MASH, a really nice right to put out, right? Right. We know that only protects other people, right? That's at least what we hear.Right? Then you have these new things. Right. Again, we have everything ready. We've got gloves. Well, we all know. Wash your hands, maybe a little better than gloves. From an aesthetic visual. Somebody's got gloves. Somebody's got a shield. Somebody's got a mask. The consumer feels a little better, right. So now we're just trying to figure out what looks like everybody is going to be.So we're like we're ahead of it, but we don't know what's going to happen.Right. Right. In a perfect world, we would have our two thousand square foot restaurant turning into eight. Right. And then we have played your role. But if we have to pay rent on eight thousand. That model doesn't work. Right. So this is the two parts. Right now, it looks like.
James Fratzke [00:20:28] Well,I think you brought up some interesting things there. And I love the Wahoo's branded face shield there. That's great.
James Fratzke [00:20:37] I even heard a rumor that you guys were potentially thinking about selling those at cost or something like that just to give people that sense of safety. So that's one of the things I start to think about. And you kind of mentioned pieces of it. How far out are you thinking right now? Is it a two week period?A four week period? What does it look like?
Wing Lam [00:21:00] We'rethinking next winter, because right now the weather's warm. You got this really nice sense of security, like, hey, you know, like if you were down at the beach over the weekend, you would have thought anything was going on. I mean, they were people, right?
Wing Lam [00:21:18] The beach cruisers, skateboards, the scooters. Shoulder to shoulder, going to the local eatery, grabbing food and going to the beach and eating it. Other than not eating at the restaurant, you wouldn't have thought anything else was going on. So if you go off the beach, you can't walk into a supermarket without a mask. At the beach, it was like the Pavillions they were sick and tired of yelling at people. So there were times when somebody would say, hey, you can't come in without a mask. Right. So the majority of time know it is what it is because not everybody has a mask at the beach. So I can tell you from being there for the last two days because I live down in Newport. I would say that maybe less than 10 percent of people at any sort of cover. Where there is a shield or a mask. And they're all cruising around rollerblading and skating or whatever they were doing. Because there's always you're moving. That was a whole mandate. You're not sitting. And I'm like I'm just, you know, I'm watching all this and enjoying the weather.
James Fratzke [00:22:24] But the weather has been nice the last couple of days. It's raining a little bit.In Southern California today. But you wouldn't have known that yesterday or the day before. So beautiful. And Californians are notoriously creative.
James Fratzke [00:22:37] So you have to give them that. Well, we're not standing still. So, you know, you did an interview recently and you had a quote that I really liked. And I kind of was hoping we could unpack it a bit. You said this is not going to be a tomorrow morning. Turn on the lights back on. It's going to be tough as a community. We really need to get our act together and rally. What does that look like? What does that rally look like? What are you talking about specifically?
Wing Lam [00:23:05] We got to pay attention. Yes, we are awesome. I mean, we're all like that across the board. Eighty percent. Right.
Wing Lam [00:23:14] But if you decide that, hey, I need to have dine in and reopen my bar tomorrow,you're affecting the entire industry. So you kind of have to be smart. It's not just you that is down 80 percent. It's all of us. So be smart. If you're going to offer alcohol, you've got to have a patio again. I'm not telling you to do it, but it's a little bit better than an enclosed space. But is it perfect? No,there's no perfect solution at the moment. We're all going to try. Right. But the moment somebody goes down because they were at a bar, you know, affected all of us, the same with a shop, right. Retail. What's the difference between a surf shop and a bike shop? Cause the bike shops right now are packed. All my friends that own bike shops. They've never made more money than they're making right now. The gyms are closed. So when you look at a bike shop and in a surf shop, I see the surf shop might be open as well. There's I can tell you all the bike shops. There's not a whole lot of social distancing. I understand this.People are used to shopping. They want to touch and feel their bike. Right. So that's the part that I like. OK, if you can allow retail to open, you should allow retail to be open, right? Bars. I understand the restaurants. But again,if you were at the supermarket, you realize there's not a lot of distancing going on. So really, what does that mean? Right? And you you've heard we've all heard that people have gotten sick.
Wing Lam [00:24:52] And these employees of the supermarkets. So, again, that's the whole thing is this guy can be open, and this guy can't. I don't see it. Right. So just because you're walking around and you're not sitting down, you're still in a supermarket for 20, 30 minutes. Right. I mean, if you mean been to Costco, it takes your half hour to get into now, right? That's the part that I don't understand. But hey you know what, I'm not the governor I'm not the president.So that's where everybody say, hey, if guy can be open here, why can't I? And that's the hard part. I don't have the answer. Right. We're doing the best we can,but it would be like, oh, hey, you can't go inside the supermarket, you got to do curbside. Most people like to pick their own produce. So that doesn't work,right? So if you're going to allow supermarkets, I think retailers that are selling food if you're going to let the bike shop open, you got to let the surf shop be open. So these are the things that, you know, the arguments walk in it together. But don't go do something just because. Right. Because you can affect the rest of us. So we all have to be smart.
Wing Lam [00:25:58] But at the same time we all have to survive. Because I'm finding more and more people that are ready to say we're done. We're not going back. And I'm like,whoa, whoa. You've been around for 30 years. What do you mean you're done?Because we're not fully done.
James Fratzke [00:26:13] Yeah,it's one of those flashbulb moments. You know, we think about as a culture and as a country. 9/11, Pearl Harbor or some of these things that everybody remembers where I was when that happened. The thing that's a little bit more difficult about this crisis is that it's so long.
James Fratzke [00:26:33] All right. I want to take a quick break and pass it over to our Head of Client Strategy here at Frazke Media, Lisa. Lisa, take it away.
Lisa Fratzke [00:26:42] Thank you, James.
Lisa Fratzke [00:26:43] I'm really excited to talk to this audience today because we've been talking to a lot of our clients at Fratzke Media and truly believe that now more than ever,it's important for mid-sized businesses to connect with their customers online.I think we've all seen that COVID-19, has had widespread impacts on companies,our employees and our economy. We fundamentally believe, Fratzke Media, that the rebound will be digital. If you don't know where to start and you want to make digital your competitive edge, we can help. Visit Fratzkemedia.com to schedule your free consultation. Our digital marketing experts specialize in helping mid-sized businesses like you leapfrog the competition. We look forward to talking to you soon.
James Fratzke [00:27:25] Thanks,Lisa. All right. Let's get back into it.
Wing Lam [00:27:28] The thing down that we're all worried about, and this is across the board, right.So let's just for our categories, restaurants and bars. Right. If we're looking at an occupancy of 25 percent. Remember the math I did for you earlier? Right.If 20 percent is take out and 80 percent is dine in. So if we go to 25 percent occupancy, which means to us we're full. Right. If that's all we're allowed to be, we're going to be at 50 percent, give or take of our business. Right.Imagine that we're 50 percent. Well, break even is somewhere around 80 percent.So we're going to be running negative. The big number that I'm worried about right now is the landlords are still going to charge you 100 percent. So nowhere's the math for you. That really is a hard one to solve. At 100 percent capacity. Most ranked structures are somewhere between, let's say, eight to twelve percent of the total sales. If you're running a 50 percent occupancy your rank just went up to about 20 to 25 percent. That's assuming you're at 50 percent. I can do the math for you. Most businesses can't survive. Right.Because who in their right frame of mind to date, the sign, the lease or their rent is twenty five percent of their gross sales. There's not a single business that I know in the world that can afford that. There's not enough margin to go away. Right. And that's assuming you're at 50 percent. In most instances, let's just say you go back to again, this is the occupancy. It's assuming that you could control 100 percent of your takeout, which we can't. So, I going to assume right it's about half and half, half delivery and half takeout. So you're actually running at about 30 percent. You're not it at 50. So your rent just went up to 35 percent. At thirty five percent. I'll be in business to pay my landlord every day. What is the point? So the landlords are like, are you kidding? You signed a great lease. I signed a great lease at 100 percent. At 50 percent or less, you need to take that percentage down. So it's still eight to 10 percent of my sales, but they have this thing called a base rent. You can't go below that. So it's whichever is greater the base or that the current base would be 25 percent of your business. You might as well close the books. Right.Because, one, we don't know when you're going to get to 100. If you're ever going to get there. Right. So the new reality might be running at 50 to 60 percent. So most of my friends right now are talking about walking away because they don't know, because right now we're hoping that we're going to be at 50 percent because of the weather. Come fall. If you go back to 20, pack up and go right now. The only reason we're even open a 20 percent is nobody's paying rent. As soon as you got to pay rent. Right now, most of our stores, the rent will be more than 60 percent of our cost. It was just unheard of. Because right now we have enough money to pay two things: labor and food. That's it. You add rent to it. So that's why the L.A. stores, when the mandate came, Santa Monica became a ghost town. Right now, malls are a ghost town. Right. So why would you want to pay? And some of our highest rates are in the malls. I don't see how anybody at all can afford to be open, right?
James Fratzke [00:31:39] My dad's in the mall business as far as he's got businesses inside of malls in San Diego, about five locations. And he's in that same situation where, A, they're not letting people in the front door, but his rent is still due and B, his big concern is that when they do unlock the doors and let people in. Nobody's going to be rushing to the mall to hang out. Right. But to your point, he's running into the same issue where the landlords are saying, well, hey, rent is still do. I mean, I don't know what to tell you. And it said it is a difficult situation, to say the very least.
Wing Lam [00:32:16] Yeah.So it'll be interesting to off-line to see what your dad's going to do. Does this your dad want to be paying the landlord so he can keep his lights on every month? I don't think.
James Fratzke [00:32:26] Not particularly. Yes. Now. Well, it's not in any he's in the same vein that you are, that there's a mutual benefit. We have a few minutes left, and I just want to kind of ask one big idea question and see where it goes. But do you see a reality where you know, your business today is 20 takeout delivery, 80 dine in.Do you see a reality where you start to think about how do we get dine in and take out to be at least 50 percent of our business and start thinking about maybe smaller locations that serve larger service areas and those types of things?
James Fratzke [00:33:02] Those been ideas you've kind of thought about.
Wing Lam [00:33:05] The whole idea with offices right now is everybody is trying to figure out that people work at home. Not all the jobs in any company can be. You don't need to be present. So it helps. You don't have to Google all the big guys. So you have a lot of offices right now. They're trying to sublease their office space because that's the new reality. Well, restaurants, that might be one of the options to say, hey, donut guy.
Wing Lam [00:33:32] Maybe you can use my shop in the early morning so that we can split the rent a little bit with the idea that you're going to be paying rent on the space. So you're only utilizing 25 percent of it. Just the math. I know you your dad will have that answer, I do. Let me talk to your dad. If he figures out how to pay rent on one hundred percent and use 25 percent. I just don't see that math working.So whether it's through a partnership, subleasing some creative way of maybe opening 24 hours a day. I don't know what the answer is, but you've got to be able to do 100 percent on twenty five percent of the states. I just don't see how that works.
James Fratzke [00:34:14] Well,I'll give you the final word, Wing, and I really appreciate our time today. But is there anything else you want to share with the audience before we leave today?
Wing Lam [00:34:22] The whole thing is, this is an unprecedented place that we're in. Did the best we can. But let's all be fair. Let's all try to work together, get out of this together because if you get out before that means rest of us that means the rest of us will be stuck. There might not be a Wahoo's in every corner. There might be only a handful left in this team for the business that's out therewith choices. I mean, a lot of mom and pops will probably cease to exist. All right.
James Fratzke [00:34:55] Well,I think those are very, very wise words. And I appreciate your time today. And the conversation was great.
James Fratzke [00:35:03] Wing.Thank you so much. I know that I've been enjoying my takeout Wahoo's tacos. And I'm hoping that folks, if they're living in California, they go and patronize your restaurants because the food is really great and you're helping out the community. And I think it's a win-win.
Wing Lam [00:35:20] Thank you.
James Fratzke [00:35:22] All right.That concludes my interview with Wing Lam, of Wahoo's Fish Tacos. I said it at the beginning. I want to say it one more time because it's worth repeating. If you're looking for an opportunity to help out a local business here in Southern California and just eat great food, then Wahoo's is a great option for you and make sure you do exactly what Wing said, which is do takeout. Go inside. Thanks people for their service and all the things that Wahoo's is doing in our community. With that being said, the Back to Business podcast is all about helping mid-sized businesses like yours get back to business in this kind of post COVID-19 reality that we're living in. And so at Fratzke Media, we really believe that the rebound will be digital. And that's why at the end of each episode, I'm going to unpack some of the takeaways from my interview with each guest and try to give you some very practical strategies from a digital marketing perspective that you can take back into your business. So there were three points that really stood out to me when talking to Wing. Number one is he gave us this idea of delivery on third party platforms and takeout and pickup in the math just doesn't work out with these third party platforms. Yes,they're very convenient for our customers. But that 20 percent commission,that's your margin when you're in the restaurant business and you can't really afford to give that up. So first point is, how do you leverage platforms that you own, like your website, to bring people in and help finish the ordering process right there on your website? Don't allow them to go to third party platforms, make your website so visually appealing and easy to use in mobile first optimized because so much traffic is coming from mobile that they can't help but want to finish and complete that order right there on your own platform. My second takeaway is when we're thinking about our menus in the restaurant industry, we need to start thinking digital first for two reasons.Number one, back to the first point. If we have a menu online, that's easy to find and has beautiful pictures, it's mobile optimized. That's going to help incentivize people to complete the order through your own platform. The second thing to think about is when we do get back to our physical locations and start offering dine again, one of the mandates is going to be that you have disposable menus that are one time use. And a great way to think about this is creating a digital menu that works just as well, if not better than a physical menu that folks can use at the luxury of having it right there in their own smartphone. So keep that in mind. Number two, when we're thinking about digital or when we think about menus, rather think digital first. And the third point that really stood out to me was putting on our storytelling cap. And when we're out in the community doing certain things like feeding first responders,understanding that that is valuable information to share with our customers and thinking through what are the best channels to do that? Is it on your website?Absolutely. Maybe through a blog post. Is it through email marketing? You bet.Right. That constant contact, it's like a direct relationship with our customers. And of course, the obvious one is sharing that story on social media. If you're in the restaurant business, Instagram is probably going to be a great platform for you if you're not already using it to tell that story of how you are reacting to this pandemic. With all that being said. I hope you appreciate it. Enjoyed the time we spent together. I know. I certainly did. And I can't wait to see all your faces in person, but until I can. Hopefully this checks off some box for you for the human contact that you were allotted today.All kidding aside, thanks so much for listening. And I can't wait to talk to you again.
James Fratzke [00:39:26] Everyone,one last thing before you leave. Make sure you go to whatever platform you're listening to, the Back to Business podcast on and leave us a positive review.Every rating and review really helps us grow the show and make sure you share it with people in your professional network so we can help other people like you and your midsize business get back to business.
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