
Hospitality Strategy Lab with Jason Littrell · 2026-03-27 · 27 min
Key moments - from our scoring
Substance score
58 / 100
Five dimensions, 20 points each
Hellbraun Levy is the largest niche hospitality law firm in the country with 20 lawyers focused exclusively on restaurants, bars, and hospitality businesses in New York. The conversation covers the most pressing legal challenges hospitality entrepreneurs face, starting with wage-and-hour violations - a major source of litigation where organized groups of workers sue establishments for payroll errors, sometimes resulting in six-figure settlements. ADA compliance is another significant liability, with plaintiff attorneys systematically targeting non-compliant locations rather than providing notice-to-cure opportunities, extracting $5,000-$10,000 settlements per claim. The firm emphasizes conducting payroll audits and working with employment lawyers to create compliant employee handbooks and policies as preventive measures. The episode walks through the stages of opening a restaurant or bar: the "sanity check" on business feasibility, raising capital with investor term sheets, negotiating leases while considering community board restrictions and liquor licensing hours, and the critical decision to build a hospitality group rather than a standalone location. David discusses how AI tools are helping mom-and-pop operators compete with larger groups by analyzing P&Ls, optimizing labor and food costs, managing customer loyalty programs, and amplifying social media presence through data-driven insights.
Wage-and-hour violations are among the most common problems, including incorrect paychecks, wrong names on pay stubs, and improper classification of workers, which can result in lawsuits reaching hundreds of thousands of dollars in settlements.
No - plaintiff attorneys sue immediately without sending a notice-to-cure letter, and settlements typically range from $5,000 to $10,000 per claim regardless of whether the business fixes the problem afterward.
The earliest stage is ideal, before raising money and creating investor documents; many founders benefit from a "sanity check" on their business plan to identify unrealistic assumptions about location, hours, and capital requirements.
A minimum of three to four locations in different areas with consistent unit economics and same-store performance is necessary to attract and support franchisees.
Owners are using AI to analyze P&Ls for profit optimization, monitor food and labor cost improvements, build customer loyalty programs with targeted discounts and events, and optimize social media strategy across Instagram and TikTok.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode covers several practical topics (wage/hour compliance, lease negotiation, ADA litigation, franchising criteria, third-party delivery), but much of the content consists of general frameworks rather than novel, actionable specifics. Valuable nuggets appear (e.g., the wage-and-hour audit advice, the 3 - 5 company-owned-store rule before franchising, the 67% vs. actual 20% failure-rate reframe), but these are interspersed with lengthy anecdotes and tangents (ADA enforcement, outdoor dining, Con Ed frustrations) that add color but limited new insight for a B2B operator. The guest and host often agree rather than challenge, reducing depth.
Just do an audit. It's a good time of year to do it. It's the beginning of the year. Have an attorney go through your payroll practices.
you have to open up three, open up four. You have uh, you have to show that you can open up consistently in different places and have the same economics in each place.
The episode largely recycles standard legal and operational advice: audit payrolls, get a handbook, negotiate leases carefully, test multi-unit consistency before franchising, and avoid third-party delivery trap. The framing of AI as a tool for mom-and-pops to compete is somewhat fresher, but not deeply explored. The guest does not challenge conventional wisdom or offer counterintuitive frameworks; instead, he confirms received wisdom (e.g., the necessity of handbooks, the risks of ADA litigation). The discussion feels reactive rather than pioneering.
You have to have a handbook. I mean, it's your employee bible.
The idea these days is not to open up one place and retire. That's not even a thing. The idea is to open up one place, make it successful, try to get some good press, and then start to build off of that.
David Helbraun is the head of Hellbron Levy, a 20-lawyer hospitality law firm with credible depth in the space - licensing, leases, HR, wage-and-hour, and franchising. He has worked with mom-and-pops through major groups and now serves clients in both NYC and Miami. His background as a bartender (1985) gives him operational credibility. However, he is primarily a legal advisor and consultant, not an operator who has built and scaled a hospitality business itself; the perspective is advisory rather than first-principles founder experience. He is relevant and experienced, but not a tier-1 practitioner-founder.
We're a hospitality law firm. We do it all. We represent the hospitality industry. Everybody from mom, um, and pops to the big boys and girls.
We have the largest fully focused niche hospitality law firm in the country.
The episode offers scattered specifics but often lacks concrete numbers or named examples. References include: Cold Stone Creamery (used as a franchising model with estimated $300K opening cost, $3M annual sales, 20% margin), a few NYC community boards (CB2 noted as difficult), specific names like Bridges in downtown Manhattan, and vague litigation settlements ($5 - 10K for ADA cases). However, many claims lack backing: the wage-and-hour lawsuits are described as "hundreds of thousands of dollars" without detail, the AI use cases for mom-and-pops are mentioned but not tied to specific results or metrics, and the Miami seasonal pattern is asserted but not quantified. The AI discussion by the host is detailed, but the guest adds little specific evidence.
Cold Stone creamery. Okay, it's Gonna cost you 2, $300,000 to open. You can expect sales of $3 million a year. You can expect a profit margin of 20%.
They're getting a $10,000 settlement for their client. They're taking a third.
Jason Littrell asks decent opening questions ("What's the most common problem?", "How do you identify and solve wage-and-hour issues?") and does probe on ADA enforcement (asking whether the court requires notice before suit). However, he rarely pushes back or challenge the guest's claims; the conversation feels collaborative and confirmatory rather than adversarial. When the guest makes broad assertions (e.g., "Mom-and-pops are a dying breed" but can compete with AI), Littrell agrees rather than challenge. The host also steers into his own tangent about third-party delivery and the "unbagging experience," which is entrepreneurial but shifts focus from the guest. Follow-up questions tend to be surface-level; deeper probes into the logic or evidence of the guest's points are rare.
Wage an hour is so complicated and the stakes are so high. What would you advise? How do you identify the problem and how do you solve it?
Is this legal advice?
Computed from the transcript - who did the talking, and the words that came up most.
Jason Littrell sits down with David Helbraun , a hospitality law expert, to break down the legal challenges that restaurant owners face in NYC and beyond. From HR and employee handbooks to leases, ADA compliance, and AI-driven operations , this episode gives practical advice to help restaurants grow while staying compliant and efficient.
Transcribed and scored by The B2B Podcast Index.
Speaker A: What's up? Thank you for checking out the hospitality strategy lab. My name is Jason Littrell. If we haven't met, I'm Jason Luttrell, former bartender. Uh, now ahead of a company that's kind of like Salesforce for restaurants. So currently we're advising clients on how to convert third party delivery apps into customer relationships. So if you're going to pay 30% for the business, might as well know their name. So today I'm joined by David Hellbron. He's the head of Hellbron Levy serving New York hospitality groups, Leases, franchises, licensing, hr, all kinds of stuff. Um, I get their newsletters. They're really amazing. Um, head to hellbronlevy.com to get on their newsletter. Mr. Hellbron, thank you so much for coming on. Welcome to the show.
Speaker B: Thank you. Thanks, Jason.
Speaker C: Let's get into it.
Speaker A: Did I get all that right?
Speaker C: You got it all right.
Speaker B: Yeah.
Speaker C: We're a hospitality law firm. We do it all. We represent the hospitality industry.
Speaker B: Everybody from mom, um, and pops to
Speaker C: the big boys and girls, the big groups, uh, hotels and restaurateurs. And, um, we have the largest fully focused niche hospitality law firm in the country.
Speaker A: What does that mean? About 30, 40 lawyers. What does that mean?
Speaker C: No, we have about 20 lawyers.
Speaker B: We have about 40 people, but all we do is restaurants all day long. There is no other business that we represent. A couple of retail stragglers here and there, but it's restaurants and bars all day.
Speaker A: Uh, what's the most common problem that crosses your desk?
Speaker B: A variety of things cross our desks. We have different sections of the firm these days. We have a lot of wage and hour cases. People not paying people the right way. There's a little mistake on, uh, sometimes just on a paycheck can cause problems. But mostly we deal with people who are in exciting places in their career, meaning that they're growing their group and they're starting a hospitality group. We take a lot of first timers and mom and pops and we bring them along until they become a hospitality group, meaning two, three, five locations, maybe a CPG product, et cetera. So that's the kind of stuff that gets me very excited.
Speaker A: Wage an hour is so complicated and the stakes are so high. What would you advise? How do you identify the problem and how do you solve it?
Speaker C: Just do an audit. It's a good time of year to do it. It's the beginning of the year. Have an attorney go through your payroll practices.
Speaker B: They will tick all of your paychecks, all of your pay stu. So make sure, you are paying people correctly, that you're using the right forms, have them review your handbook, make sure that your policies are correct.
Speaker C: And then once you do all that and you make the changes that you need to make, you can sleep at night and not have to worry about these crazy lawsuits.
Speaker A: And the lawsuits are crazy. And are they always legitimate?
Speaker C: Sometimes they are, sometimes there's not.
Speaker B: We hear these crazy stories of like, these band of front of house workers
Speaker C: who go from restaurant to restaurant to find the problems and then walk, right, they quit. They walk into a plaintiff's lawyer's office and they sue. And they've done it one, two, five times. And if you make one mistake, you lose. So, uh, you know, these guys are, uh, and ladies are getting big payouts. It's a, it's a major shakedown. So it's insane. Sometimes these lawsuits just from paying somebody the wrong way, putting the wrong name on a pay stub, can be hundreds of thousands of dollars.
Speaker A: Uh, I, you know, I honestly, I forgot to mention this, but I thought you were going to lead. I, uh, had a bet with myself that you were going to lead with the classic lawyer line. Like, this does not constitute legal advice. Is this legal advice?
Speaker C: Never legal advice. No, no, this is, guys.
Speaker A: All right, so that's crazy. So there's, um, there's a band of people rolling around New York City that work together in concert to, to become, with the intention of becoming plaintiffs. That sounds terrifying.
Speaker C: I don't know if they're still in action. They were at one point, but the word gets around. It's a small industry, so if you're a busboy or you're a waiter and you don't like your owner and you get fired, you walk over to a plaintiff's office, you ask your friend, you're like, hey, what happened when you got fired? They're like, oh, I went to this scumbag lawyer, and they go to these lawyers and they look for your pay stub and they find one thing wrong and they file a lawsuit and then you're in it.
Speaker A: I had another guest on a while back, um, Leif Huckman, who had this product called checkmychecks.com. it's a free service where people like that, it actually checks their stuff. But it says very clearly that, like, you know, this is just, you know, this isn't advice. Okay, so that's, um, that's really terrifying. That kind of threw a curveball at me because I've never even heard of anything like, I've heard, like, the ADA stuff Where people, like, they look for the ramp and they look for. For, like, the. The customers they. They look for. Look at your website and they say, are the alt tags there? Because you're discriminating me against me. Because it doesn't say this. Are you seeing that kind of stuff as well? That seems like much lower touch. Like, doing, like, screw it, Like. Like trolling people on the Internet. Seems like much lower touch than actually getting a job at a place with your friends.
Speaker C: No, that's scumbag number two. Like, it's unbelievable. These lawyers walk the streets sometimes with or without somebody in a wheelchair. And let me say, of course, every place should be ADA compliant if possible. We're all about that. But sometimes it's impossible to do. We're in New York City. You can't have a ramp on every single place. So they walk down the street and they just say, don't have a ramp. Have a ramp. Don't have a ramp. They send a lawsuit and 10,000 bucks, that's the going rate between 5 and $10,000 to settle the problem with the law. The way that it is now is that there's no chance to cure the problem. It's not like they send you, uh, a notice and say, hey, my client couldn't get in. Can you please add a ramp? Or can you please add an ADA accessible bathroom? They don't say that they sue you. They don't really care if you fix it or not. They're getting a $10,000 settlement for their client. They're taking a third. They move on to the next person. You do 20 of those a week, you're in good shape.
Speaker A: And so, uh. Okay. So there's no okay. Wow. So the court wouldn't say, did you ask them if they could pull out a ramp?
Speaker C: No. Can you believe it? The court.
Speaker A: Is that what they call it? Is that tort? Is that what they refer to when they're talking about tort reform?
Speaker C: No.
Speaker A: Or is that something different?
Speaker C: Tort reform is something else. But it's. With both of these things, with wage and hour cases, with ADA cases, if they just gave an operator a chance to fix the problem, we'd be in such better shape. But they do not give you that chance. You get sued, you have to pay. That's the end.
Speaker A: Um, but do you do an initial service where you, like. Like, clients are like, I don't know if I'm covered or not. I don't know where my exposure is. And then you, like, physically walk through their space and say, like, here's what we need to fix, like right away.
Speaker C: We don't. But when you open up a place, we tell you to get a good
Speaker B: architect who understands ada, who. And to have them go through it with you and tell you what you need to do.
Speaker A: What about second generation spaces?
Speaker C: Second gen are harder. You know, sometimes you have to roll the dice because the landlord's not going to pay for it or you just can't do it.
Speaker B: So you take a place that doesn't have an ADA bathroom, it doesn't have a ramp, and you want to open
Speaker C: up in that spot and there's nothing you can do. And then you get sued and you
Speaker B: pay and hopefully you don't get sued again.
Speaker A: I've made a terrible joke over the years being like, hey, you want a piece of $50,000 advice? Put your money that you're going to put into a restaurant into the index, into an index fund. But that's people, they do it anyways. They open up a restaurant because they have a dream. And some people are successful, some people are not. It's a ruthless, ruthless business. At what point of the process of opening up a bar do they call you?
Speaker B: People call us when they're thinking about doing it. Where the first stop, hey, I have an idea. Um, I have a business plan. How can you help me? So we help them raise the money. That's usually step number M1, right? I got a raise.
Speaker C: And it's also our, we call it a sanity check. Someone comes in and says, yeah, I want to open up a bar and
Speaker B: I want it to be, uh, you know, 1500 square feet on the Lower east side.
Speaker C: And we say, okay, well what time
Speaker B: you want to stay open to? And they say, four o'.
Speaker C: Clock.
Speaker B: Instant no. And then we ask them how much it's going to, they think it's going to cost. And they say, $150,000. That's no number two.
Speaker C: And so if they fail the sanity
Speaker B: check, we, we don't take them as a client. We tell them to go back, figure out your business plan. We give them some resources and come back when they figure it out. But once they figure it out, and let's just say they know they have to raise a half a million dollars. That's when we start helping them put together investor documents. And that starts with the business plan and what we call an investor term sheet. So you go to your friends, your family, people who know you show them your business plan.
Speaker C: They're excited about it. They say, I'm in.
Speaker B: What's the deal? You hand them this thing called an investor term sheet. It says for 30% of the business, you can give us $500,000, whatever the number is. And then we get rolling that way. Once they start getting the money in and they start feeling confident that the money is going to be there, then they start looking at spaces. And once they start looking at spaces, we also get involved there with negotiating terms on a lease. That's stage number two. As we're doing, uh, a lease negotiation. We're also talking about liquor licensing and what kind of hours they can get. There's different community boards in New York City, as you know, 1, 2, and 3. Very difficult. The reason I use that example of
Speaker C: they'll reside 4am is because it's not
Speaker B: a thing anymore unless you buy one. The community board will never say yes. And although they don't have the final answer, the state liquor authority will listen to them.
Speaker A: Yeah, I remember CB2 being particularly difficult. I remember explaining the fact that, like, um, uh, when I was opening up a bar 100 years ago, um, that we were going to play analog records on a spinning turntable, and they're like, oh, you have DJs all night? No, no. Um, and I was like, there's a subtle distinction. They're not moving them back and forth. They're just putting the needle on at once. Um, and they didn't really get that.
Speaker C: That was.
Speaker A: That was kind of fascinating. All right, so I was a bartender for a hundred years, too, and I remember getting a bunch of handbooks, and I never read any of them. So how would you recommend that, uh, bar owners approach delivering and training handbooks?
Speaker B: You have to have a handbook. I mean, it's your employee bible. Employees need to understand the rules of your particular company. So go to a lawyer, an employment lawyer. We have one. They'll write you a handbook. They'll ask you a bunch of questions about how you want to run your business. It'll be in the handbook. You distribute it to your employees. Here's how it works, here's how you get paid, here's the scheduling process, et cetera, et cetera. They'll do some training also to some of the management, which is required in New York, and then you're off and running. But it's important to have it because things do pop up in this world, and it's nice to be able to refer back to, really, a comprehensive handbook.
Speaker A: Yeah, it's always seemed kind of like a CYA thing to me, where it's like they sign like I would sign. I would get a job and I would sign the document saying that I received it, making me responsible for understanding the information in it. But it was never part of a training. It was never part of onboarding. It was never, you know, it was just like, here's your thing, here's the rules. Can you work tonight?
Speaker B: Things have changed a little bit, Jason. You know, I was a bartender. I had my first bartending job, um,
Speaker C: um, back in 1985.
Speaker B: And I don't even think a handbook was invented back then. It was like, come to work, work 18 hours and don't complain, and here's some cash and we'll get drunk after, after your shift.
Speaker C: Things have changed. People read the books now, uh, and the younger generation cares a lot about
Speaker B: how they're treated and what the rules are.
Speaker A: That's really interesting to hear you say that, because I've heard exactly the opposite about, um, the new generation of front of house hospitality workers. It's not like particularly apath. But it's like, not as ambitious as I was when I was coming up. I like, I was, I was like, I'm going to be at the top level of tending bar. And you know, at the time I was. Now I'm just like, I'm like a toddler in that game. But there was no particular ambition. Are you. So you're seeing people that are like, actively engaged in being hospitality workers, or do you have. Does that even cross your desk?
Speaker B: I'm seeing them be engaged in what their rights are. Uh, I'm not saying that they're the most ambitious people in the world, meaning that they want to strive to be the, at the top of their field. But when they do get a job, they want to know what their rights are. So they're much more educated in that way, for sure.
Speaker A: Very interesting. Are you seeing any interesting applications of AI in with your clients?
Speaker C: I'm seeing it in a couple of different ways. You know, a lot of people ask me about mom and Pops and can
Speaker B: mom and Pops survive? And if you read any of the trade journals or the rags that we read, you'll see all these chefs and restaurant owners writing about how it's impossible. Mom and Pops are a dying breed. But there are ways to compete, and AI is one of them.
Speaker C: So seeing people using AI to compete
Speaker B: with the big hospitality groups who have
Speaker C: all of these kind of ancillary professionals
Speaker B: on board, like PR companies, like accountants
Speaker C: and bookkeepers, and they're using AI to scrub.
Speaker B: First of all, they're using AI for financial health.
Speaker C: They're using AI to scrub their P&Ls
Speaker B: to see where they're lacking, to see where they can gain a few points of profit, to see if their food costs in some way can be improved and their labor costs can be improved. So that's a huge way to use AI.
Speaker C: They're also using it for PR. They're figuring out ways to maximize Instagram,
Speaker B: TikTok and other things by using AI.
Speaker C: They're using it to cultivate loyalty amongst the customers. They're putting in their customer databases, they're coming out with events or products or
Speaker B: discounts for their customers.
Speaker C: So there's all these kinds of ways
Speaker B: to use it these days that allows them to be more sophisticated, the mom and pops that is.
Speaker C: And allows them to compete with the
Speaker B: bigger hospitality groups who have all the resources in the world put into this stuff. Mhm.
Speaker A: Uh, I mean this, your, your lips to God's ears like this is what I, this is what I sing to my clients. I'm like listen, this, this is not here to replace anybody's job. This is here to make you ten times more effective. And just uh, I, I mean just even recently like there's been such crazy, it moves so fast. But like I um, was um, Claude Chrome um, browser which is like the, the most people are like I don't know where to take my kid this weekend and they ask ChatGPT and it spits out some information of varying degrees of quality. But now the next frontier is getting AI to um, like interact with other AI and be a force multiplier in your time and effort. And then what I've recently found is that it can literally start moving your mouse for you. And so like if you say like this is the website that I want, let's say it's Gmail for instance. It's like I would like you to draft a response to everything in here every hours and it'll do it. And, and if you like the responses you can have it start sending for you. But I mean it's effect, it's like so crazy Unlimited. I'm curious what kind of products people use but uh, I don't think we have time to get into that. But as a PR angle, another thing I did that might be actionable for people to, to do is like, is to have like your like for instance a cloud Chrome browser browser go through all your Instagram posts for the last year and tell you what was actually effective, what people actually cared about. That's something that you would have had to pay somebody a year ago to analyze for you. But it'll tell you exactly, exactly what to say.
Speaker B: It's incredible.
Speaker A: It's incredible. Okay, so we talked about interpretation. We talked about hr. Um, I'm curious about your, um, art. Do you have a concentration of clients in New York? What are your thoughts on Mamdani's administration?
Speaker C: My thoughts are, let's give the guy a chance. Hope he, you know, he, he, from what we understand about the mayor elect,
Speaker B: is that he's a foodie. That's a term that I don't like to use, but he's used. So sorry that I used it, but that's fine. Like, he goes to restaurants. He's a young guy. Hopefully he understands the industry a little bit. I hope he understands when he says
Speaker C: tax the rich, that that's okay.
Speaker B: But restaurant owners are not the rich, and we need some help.
Speaker C: The industry in New York City needs help. We need help with outdoor dining that
Speaker B: should be all year round. Having to take down outdoor dining sheds in November and put them up in April is absolute insanity.
Speaker C: We need help with Con Ed. You call Con Ed 600 times.
Speaker B: Maybe they come out in three months. And so you're sitting there paying rent, trying to open up a place, waiting for Con Ed.
Speaker C: He has the ability to kind of move these things along. There's a lot of stuff he can be doing for us to make New
Speaker B: York more hospitable to the hospitality industry.
Speaker C: And so I hope he listens to the industry.
Speaker B: I hope he's out there talking to owners.
Speaker C: And I'm just hopeful, but we'll see.
Speaker A: Yeah, well, I mean, he picked up Andrew Ridgy to come. To come. This isn't a gossip show, but it's like, um. But he did pick up Andrew Ridgie to come out there and help him with at least the transition, hopefully a more permanent position for. For the nightlife, um, for the nightlife scene in the office of the nightlife. But, yeah, it's brutal. It's brutal out there. I don't.
Speaker C: I'm.
Speaker A: I'm. I'm not as optimistic as you are, quite frankly, because I don't think four years is enough time to keep the promises that he's making. But that being said, um, it's. You will never find a more resilient industry because it seems to shift around the. The stats that I hear and Repeat are like 67% fail rate within a year, 80% over five years. Is that accurate in your opinion?
Speaker C: I don't.
Speaker B: You know, I've never. Maybe it's just our clients. Maybe because we Set them up the right way.
Speaker C: But I've never seen a number near
Speaker B: 67% in the first year. Our clients are all open after one
Speaker C: year, maybe within five years, 20% are out of business. But most people make it at least five years and you start getting.
Speaker A: That's a really.
Speaker C: You start.
Speaker A: That's a really. That's an incredibly validating point to like hiring you guys on much, um, earlier in this stage. Um, like, like, uh. Do a lot of people come to you with emergencies, like reactive situations?
Speaker B: You know, that's the bane of all of our lawyers existence is people come to us when it's late, when something terrible has happened that we could have helped them prevent. But yes, so we do get emergencies. But. But like I said, most people come to us in the very early stage of raising money. And so if they do it right and they set it up right and
Speaker C: they're, you know, finding their business plan
Speaker B: is correct and they're finding a place that's not too big and they can
Speaker C: figure out a way to make a
Speaker B: couple of bucks, they're going to stay
Speaker C: in business for a while. And the idea these days is not
Speaker B: to open up one place and retire. That's not even a thing. The idea is to open up one place, make it successful, try to get some good press, and then start to build off of that. You have to go into this industry now with a mentality of growing a restaurant group. I'm going to have a hospitality group. I'm going to start with one.
Speaker C: I know what number two is going
Speaker B: to be already before you open up number one. Because what happens is, and I've seen this happen a million times, is that people open up their first restaurant and it's wildly successful. Look at, I don't know, Bridges, for example, in downtown Manhattan.
Speaker C: And then all of these hospitality hustlers
Speaker B: come out of the woodwork and they're
Speaker C: like, hey, I got this idea. Come do this with me, come do that with me. And then start throwing money at the, at these guys, and they don't know what to do.
Speaker B: Not saying the bridges guys, they know
Speaker C: what they're doing, but somebody else, and then they. They end up opening up some crappy
Speaker B: place in some crappy location, and then they're toast. So having a plan and knowing what you want to do and getting in bed with the right people is the way to go.
Speaker A: So, yes, let's, let's say that you're okay. Let's talk about. Do you service, uh, serve Q QSR brands?
Speaker C: Yeah.
Speaker A: Okay. All right, so Quick service restaurants like these are grab and go, like you know, fast casual, et cetera. Uh, I'm hearing that there's no middle class in restaurants or that, or that it's kind of like fading away a little bit. But the, but the things that are surviving that are, they're doing well are quick service, 20, 25, average order value, something like that. And then like really fine dining. So what would you say to a quick service brand that's ready to rapidly expand, that just wants to go straight to franchising, wants to go straight to real estate.
Speaker B: There's that, that's not a thing.
Speaker A: It's not a thing. Okay.
Speaker B: No, no, you gotta open up your first one.
Speaker A: No, no, I mean, uh, after the first and second one are like very healthy.
Speaker C: I would say open up three, open up four. You have uh, you have to show that you can open up consistently in
Speaker B: different places and have the same economics in each place. That's what franchisees want to see.
Speaker C: I'm gonna open up a Cold Stone creamery. Okay, it's Gonna cost you 2, $300,000 to open. You can expect sales of $3 million a year.
Speaker B: You can expect a profit margin of 20%.
Speaker C: And if they're doing that consistently, that
Speaker B: franchise is going to sell. But if you have a franchise where one is doing 5 million a year and then you open up another one that's doing one and you open up a third one that's doing three and their numbers are all over the place, you're never going to sell them because without selling consistency.
Speaker C: So open up a bunch, figure it out, be consistent. And then when you have three or
Speaker B: four or five company owned stores, then consider Franchi.
Speaker A: Okay, um, do you have any thoughts on third party delivery systems and apps and stuff like that? I, yeah, yeah.
Speaker B: My thought is
Speaker C: how on earth is,
Speaker B: has no one invented or discovered a way to have a third party system that does not absolutely gouge the operator? It's unbelievable how much money that a restaurant owner has to pay Doordash or Uber or whatever, it's you know, 30 to 40%, sometimes more. And I ask my clients, why do you do it? And they say, well, I feel like I have to for exposure to stay in the game. Do you make any money off of it? No, we don't. So, you know, what's the point? So I, I hate them. I hate that it has to be done. I hate that nobody's come, come along and partnered with restaurants for real. And uh, someday somebody will, oh, uh,
Speaker A: well this is my 20, 26 obsession like I'm, I'm thinking a lot about the unbagging experience and how do we convert that?
Speaker B: That mean what's unbagging?
Speaker A: Unbagging. Okay, so let's, let's say here, so you go on GrubHub, UberEats, DoorDash and you pick out the thing that you want. Statistically like 43% of people will not remember the name of the restaurant that they ordered from. And so like when they go back to the platform they're going to say, they're going to, they're going to uh, look back on the platform and it's going to say would you like this again or would you like to try something new? And it's going to give you a bunch of different options. And they spend lots of money optimizing how the eyeball moves across the site. Mostly on mobile. It's mostly on mobile. Most people decide that they're going to eat within minutes of wanting to eat after wanting, wanting to eat. And so what the unbagging experience is, is when um, they receive the package like they're at that point they are not, they're not your customer. Right? So if it's a brand like let's say it's, it's, it's burritos or burgers or whatever it is, um, you can have branding on the outside of the bag, um, but that goes to, in the trash within a couple minutes. And so the unbagging experience is saying like here's a reason to give to give us your contact information and, and to join our loyalty program which has to be absolutely, absolutely frictionless. But like as in like text this number and we' right back to you and you get two punches on your loyalty on your loyalty card. And so what we have is that information on like is, is we have a phone number now and we can work from a phone number quite efficiently. And so like there's other things that we drew in like um, like as far as like adding NFC tags to, to um, little tokens, you know, um, we're testing a bunch of different things out. But the idea is, is that if you can capture that guest information from the, from the bag as part of the experience, then um, then you've kind of won the game. And so if you're pulling off a small percent were door-grubhub seamless customers and then having them order from you directly, you're saving literally 30%. So if you're treating third party delivery systems as a customer acquisition tool, cool. It might actually be worth 30%. But if you're just paying them blindly to not even earn a customer, then you're just renting them or they're just renting you. Um, and it's uh, I'm with you. It's um, it's absolutely horrifying that uh, the balls these people have to like wake up and take 30% from, from people who have spent their life savings opening up their restaurant is crazy. So. Yeah, so that's, that's my 20, 26 is. That's what, that's the problem that we're solving. Anywho, um. All right, so what's next for, for Hellboron Levy?
Speaker C: Well, we just expanded to Miami this year.
Speaker B: So we're getting more and more involved in that industry, uh, in that world
Speaker C: and learning a lot about it and
Speaker B: representing a bunch of restaurants down there, which is very interesting for New York restaurants because we've seen so many brands make the move and migrate to Miami and all of South Florida from New York. And they, and they went down there because their clients were moving down there. So they just followed their clients and then we just followed our clients.
Speaker C: And now you have all these New
Speaker B: York brands who in the slow months now, January, February, March, are um, down
Speaker C: in Miami doing bang up business. They're taking some of their best, uh,
Speaker B: top level staff with them, keeping them employed. And it's been a, a great idea for most of them. So Florida's a really interesting place. So that's happening. We're also getting much more involved in the hotel world. We just made a very big hire that we're going to announce in a couple of weeks. Uh, a person who was a CEO of a major hotel, uh, brand who's joining us. So we're getting involved in hotels and yay.
Speaker C: Continuing our growth.
Speaker A: Yeah, that's exciting. Yeah. Miami doesn't really have seasons, do they? I mean people.
Speaker C: No, actually.
Speaker B: So their, their season is from November until May and then their slow season starts. And a lot of people have made the mistake, New Yorkers especially, of thinking they're going to be busy all year. But from May to like October, when it's a hundred degrees outside, sometimes it's very, very slow.
Speaker A: Like what do they do? What do people do? Where do they eat?
Speaker B: It's, they're eating. You know, the rich people go away for the summer. So the rich people go to South Florida now. They spend a lot more time in the cold, in the cold weather than when the weather starts to heat up. They go to the Hamptons, they go to Europe, and they're not there anymore, so people are still eating, but it's locals. Locals don't necessarily want to spend 150 bucks a head at Catch, uh, or Delilah, Harry's Steak or Milos.
Speaker C: Right.
Speaker A: Um, is there anything else that you want to share before we wrap it up?
Speaker B: I think I'm good.
Speaker A: Okay. This has been really exciting talking to you. Thank you so much for sharing all the stuff about, um, the work that you're doing with help on Levy from lease. Uh, like, the reason I call this title, I used the clickbaity title of, like, how to make this Stuff Sexy is because if you read their newsletter, it's really interesting how they frame things, and it's, like, very personable. Like, it feels like you're getting just straight up advice from a lawyer. Even though this isn't any. This isn't advice, of course. But thank you so much for joining us on the hospitality strategy. If you need any help with this stuff, check the show notes. I will link to, um, Hellbrown Levy, where they can help you with all your leases, HR paperwork, and make it sexy, maybe. All right, thank you, uh, Mr. Hellbron, thank you so much for joining us, and have a great day.
Speaker C: Thanks, Jason.
Speaker B: Okay, bye.
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