How To Build A Restaurant Empire
The co-founder of The Alinea Group tells Janice Leung Hayes about staying motivated, why restaurants fail, and how they choose partnerships
August 11, 2017
From the moment they decided to open their first restaurant, Nick Kokonas and Grant Achatz (pictured top), owners of The Alinea Group, have always done things differently. Before Alinea opened, they documented their plans and thought processes on an online forum, then came Next and their revolutionary ticketing system, and The Aviary made us all give cocktails a second thought. The Group now boasts five establishments in Chicago, and one (soon to be two) in New York. They have been showered with every accolade imaginable with their dishes and ideas constantly imitated around the globe. Even non-foodies know about “the restaurant that serves dessert on your table”.
How do they do it? We spoke to Nick Kokonas to find out more.
See also: A Food Lover’s Guide To Chicago
Janice Leung Hayes: When you started Alinea (and The Alinea Group), where did you think you’d be in 12 years?
Nick Kokonas: In some ways we've exceeded my initial expectations, in others we are right on course. When we began I put together a long-term plan that included a 2-3 restaurants, a bar, and a winery. Obviously, we don't have a winery!
JLH: To those outside the US, Alinea arguably put Chicago on the culinary map. Do you think you’ve changed the restaurant scene?
NK: The Alinea Group really put 'experiential' dining front and center, cementing that with Next. Alinea was and remains Grant's vision of a dining experience which is fun and delicious... but also emotionally resonant. Next then took that to another level, changing the theme entirely every four months. We've now done 21 menus with completely different experiences, serviceware, and menus since 2011. I think that's set the bar high in terms of what is possible for a single restaurant to accomplish.
JLH: How did the concepts for Next, The Aviary, The Office, and Roister come about, respectively? Was it a conscious decision to head down an increasingly casual route?
NK: Next is about taking the techniques and precision of Alinea and applying it to the world of cuisine, one focus at time. The Aviary is a 'restaurant for drinks'—utilising Michelin quality chefs and processes to innovate cocktails and the lounge experience. Roister came about when we realised that we personally enjoy rustic dining in sight of the kitchen and hearth. Alinea is our flagship and all of the fine-dining focus is there, so naturally the other innovations are more casual... otherwise we'd apply those improvements to Alinea.
JLH: Around the time that Alinea opened, “foodieism” had just started to take off. How have things like Yelp, social media and the World’s 50 Best awards affected what you do, for better or for worse?
NK: The internet is simply magical and allows us to connect directly with our guests without a PR team filtering the message. Since 2004, we've embraced that direct connection and encouraged our guests to share their experiences, first via foodie message boards like eGullet and now via Instagram, Snapchat and others.
JLH:In many ways, the restaurant industry has traditionally been very archaic and insular, and, for instance, chefs complain that their dishes are copied within a week of appearing on Instagram. You've been very “open source” from the get-go, be it about creativity in the kitchen or how you run the business. Why did you do this?
NK: I've been involved in computers since I was 10 years old—way back in the hobbyist days of the Apple II. There is a culture of being open-source and sharing knowledge within that industry. Beyond that, the internet makes such 'ownership' both easy and impossible... so we decided to document our team's creativity both to take 'credit' for the innovation and to share it from our own point of view. While not financially beneficial, we do own the idea and that helps our business reputation. It's also the right thing to do for the industry and the art.
JLH: Most fine dining establishments work incredibly hard to gain certain accolades. Once you’ve reached that level, how do you stay motivated and keep creating rather than stick to a tried-and-true formula?
NK: The accolades do not make a business and the good feelings of winning awards do not last very long. Keeping our patrons excited and happy, however, is a daily goal and the feedback is often and immediate. So that's where you have to focus, in any business. And that makes pushing in new directions a necessity.
JLH: How did you come to realise that ticketing was the way forward in terms of reservations? What are some best practices you've learned when it comes to handling the reservations process?
NK: Well, this is a huge question and I've built an entire company around the answer — Tock. We now provide reservation software to restaurants (and even wineries) in 16 countries and 46 cities around the world—and growing quickly. In general, restaurants still answer the phones in an era when people would rather swipe on their smartphones than dial on a landline. Beyond that, quick communication, better CRM, digital waitlists, and no lines when you arrive are all better hospitality. Unfortunately, OpenTable, Resdiary and others around the world have not innovated in over a decade, and restaurants rely on them to 'template' their bookings in the evening instead of running the proper experiments to optimise the flow of guests. It's the biggest mistake I see restaurants make.
JLH: You’ve made a point of making your establishments about the experience, being a form of recreation, and not just about filling hungry stomachs. But what happens in a recession when belts are tightened? What are your strategies for mitigating lowered interest/disposable income and making a recession work in your favour?
NK: We've had dynamic and variable pricing in place since inventing Tock in 2011, and even a Tuesday night is priced differently than a Saturday. If we are offering great experiences—truly unique, world class—then even in tougher economic times people will celebrate with us. The industry as a whole may suffer, but that doesn't mean, necessarily, that any individual restaurant will be hurt.
JLH: Many people think there isn’t a strong business case for fine dining – low margins, high labour costs, can’t scale/franchise, for example. As the owners of a successful restaurant group that started off with the epitome of fine dining, what are your thoughts on this?
NK: I wrote a long piece on Medium about just this— basically, a failing business is a failure of the management and ownership, not of the business type. We've tripled our margins in the past few years during a time when many restaurant groups are feeling the pinch of rising labor, lease, and food costs. For the most part, restaurant people focus on food and service and forget the 'other back of house' — the business side.
JLH: Restaurant staff with the right skills and attitude, both front and back of house, are increasingly hard to come by. How have you approached hiring and managing that has helped retain talent?
NK: We are working to treat restaurant employees as the professionals they are... which means offering benefits, pay, and perks commensurate with their skills. We host job fairs, are increasing professional training, and more across our group.
JLH: With the expansions, publishing your own books and so on, do you ever worry that you’re stretching yourselves too thin, and not focusing on the restaurants and the food?
NK: Grant [Achatz] is in the kitchens and over a cutting board every day—that's his home. Our entire focus is the guest experience—the photography, serviceware design, Tock, and other endeavors are all in the service of hospitality.
JLH: You’ve just opened The Office and are about to open The Aviary in New York—is the plan to roll this concept out worldwide?
NK: After we open New York's Aviary and The Office we will assess what we'd like to do next for the Aviary... but the goal is a few more major world culinary centers.
JLH: You must have had plenty of potential investors in other cities looking to partner with you and open restaurants outside of Chicago. What do you look for in a partner?
NK: A commitment to excellence, not just the talk of it. We get calls every week from groups that want us to open a restaurant in their building or hotel, or simply want us to do a pop-up. But they often have no idea the number of staff, the investment required, to do the project an Alinea standard. They often think that a single chef can show up and make it happen with existing staff—and that's just not possible of course. For our pop-up in Madrid we got 52 EU work-visas; that alone cost nearly US$80,000 of legal work.
JLH: What’s next for The Alinea Group?
NK: We'll be announcing a new project in Chicago soon...
Janice Leung Hayes began a career in eating (and writing) in a Melbourne community magazine. She has since eaten and written for major local and international publications including New York Times, Gourmet Traveller Australia and Eater, and founded two Hong Kong's farmers markets. She is also a regular contributor to Hong Kong Tatler Dining. See more articles by Janice