Q&A with Kevin Fat, CEO of the Fat Family Restaurant Group
You made the decision to close your downtown restaurant, Frank Fat’s, for a week—except for dinner on Friday and Saturday—in late July. Can you talk a little bit about what prompted that decision?
It wasn’t an easy decision. We were already short-staffed, and some staff were on vacation, and then some called in sick because they tested positive for Covid or someone in their household did. It had to be done because we were concerned about the quality of our product and our service.
Did you ever close your restaurants at the beginning of the pandemic?
No, we didn’t close, but we had to pivot to takeout. “Pivot” has been the biggest word in the last couple of years, right? Takeout wasn’t that much of a stretch for us and it did give us an opportunity to figure out how to streamline the process to make it a better experience for our guests and an easier experience for our staff. So on a good note, the pandemic forced us to figure out some best practices and see how we can be better. For example, we invested in HEPA filters for all of our HVAC systems, and it was a pretty costly investment, but it hopefully gives a sense of comfort to our guests as well as our staff.
Now we’re two and a half years in, but we’re not out of it yet. We’re still feeling the effects. When people talk about businesses coming back, well, restaurants are not fully back. We’re still short-staffed. A lot of us have limited hours.
One thing we all heard at the beginning of the pandemic was to support our local restaurants when indoor dining was closed. But we also heard that delivery services like DoorDash and Postmates were taking a chunk out of the restaurants’ profits. Do you work with those delivery services or has takeout changed for you over the course of the pandemic?
Takeout is still going well. We had to streamline our menu and select items that do well on takeout. The ones that work best with takeout are fried rice and noodle dishes like chow mein. Deep-fried items can be done, but with fried, you want it to be crispy and the longer it sits in the box, the softer it gets. So we tried to minimize those.
We do work with DoorDash and yes, they do take out a certain percentage, but it’s just another part of doing business. Another thing we invested in during the pandemic has been online ordering on our website. It was another significant investment, but it has helped eliminate human error on our side.
I know you’re not doing lunch at Frank Fat’s. Are you serving lunch at your other restaurants?
We are doing lunch at the bistros in Roseville and Folsom, but no, not at Frank Fat’s right now. We [recently] tried it for a couple of months when we heard that state and city workers would be coming back to their downtown offices. We were anticipating that a lot of workers would come back, but unfortunately, it just didn’t happen.
And unlike Frank Fat’s, your Roseville and Folsom bistros have outdoor patios, so that must have helped over the past two-plus years.
Yeah. As a matter of fact, at our Folsom location, we recently put out new patio furniture. We were lucky we had those spaces. We looked at it for Frank Fat’s. We were looking at our alleyway in the back and thought maybe we could do something really nice. We also looked out front on L Street, but the sidewalk isn’t very big. We even looked at our garage next door to see if we could utilize that. Ultimately, we decided not to do it because it would’ve taken a lot of effort and investment to beautify it and it just wouldn’t be the same experience.
In May, the White House estimated that as many as 100 million Americans could be infected with Covid this fall and winter. With the possibility that the virus will be staying with us for years to come, have you thought about how that might impact your restaurants and the restaurant industry in general?
We think about the future a lot. We think about how we are going to last. But at this moment, the environment for business is so difficult that, honestly, we and other owners and operators that I’ve talked to are all pretty exhausted. We’re trying to think of all these different new ways to do business,which then makes it harder for us to think about operating our business today, especially when we’re short-staffed and need to serve our current guests. A lot of us are mentally exhausted. It’s been very tough.
Speaking of staffing, I know that has been a particularly big issue in the restaurant industry. You also spend a lot of time and resources training people when they start.
That’s absolutely right. It costs us a minimum of $3,000 to $4,000 to train someone. We’ve experienced a lot of cases where someone accepts a position and they train, and then on their first day, they say, “It’s not for me.” So yeah, during these past two and a half years, more than ever, we’ve had people apply and then not commit, and it’s really testing our management’s mettle.
So if three people go through training and then they don’t continue, you just lost $9,000 to $12,000.
That’s right. And we have to start all over again. And then the senior staff who train them, they lose out as well.
What other financial challenges are restaurants facing now?
As you know, minimum wage has been increasing a dollar per year in recent years. It just reached $15 this past January. And when those wages go up, we also increase the wages of those who already make more than minimum wage. In January, the minimum wage is going to go up again, to $15.50. Maybe 50 cents doesn’t sound like much, but it is a significant amount in our industry. There’s even talk about increasing it to $18 an hour. And food prices have gone up. But in restaurants, we can’t raise our prices every time there’s a cost increase. There are a lot of times when we’re forced to, otherwise we’re not going to be in business for much longer. Restaurants already operate on a small profit margin as it is. So it’s a very challenging business environment right now.
As you know, several eateries near you, including Devil May Care Ice Cream and Odd Cookie Bakery, have closed recently. You’re on the board of Downtown Sacramento Partnership. What do you think needs to happen to turn downtown around?
I’m glad you asked me that. I think the first thing is that the perception of downtown needs to change. Right now, the perception of downtown is that it’s not a clean and safe place. Even though people are coming down for concerts and events and going out for dinner sometimes, I still hear a lot of people say, “I’m not going to take my family downtown.” People are scared. But in order to change the perception, action needs to be taken in order to make it and keep it a safe and clean environment. Downtown Sacramento Partnership can only do so much. It requires commitment from the city.
What specific actions do you think the city needs to take?
I think we need a stronger police presence, and I don’t think we should be allowing encampments downtown, especially in front of a place of business. We need to keep downtown cleaner—pressure cleaning the streets and alleyways more. For people to feel comfortable and be willing to invest their dollars in downtown, they need to feel that the city is taking care of the area. They’ve talked about more lighting downtown, and I think they’ve started that, but there should be at least enough light that people feel comfortable and safe.
Your mom, Lina Fat [who passed away in 2019 and served as corporate executive chef for the Fat restaurant group], was in many ways the face of the family business for a very long time. Can you share some of the things that you learned from watching her over the years?
Her attention to detail. She really stressed that. If you ask anyone who used to work for us, they’re going to say that she always stressed putting the coffee cup handle or the tea cup handle at the 4 o’clock position. That’s how you reach for your coffee cup, at least for right-handers. It’s just part of fine dining. Another thing was knowing your Ps and Qs—“Please,” “Thank you,” “You’re welcome,” “My pleasure.” And gesturing with an open palm instead of pointing. On the cooking side, presentation was big for her too—making the dish look appetizing when it comes out. Also, she taught me that the flavor has to be just right, you know. Once you taste the food, it has to be a mind-blowing experience.
The people in this industry are great people and we all do it because it’s a people industry and we all like people. We all want to make people happy. We want to see people smiling when they’re coming in, while they’re dining, and as they’re leaving. Food is a big part of not only our culture, but our humanity.
With the various local restaurant closures over the years, Frank Fat’s is now the oldest operating restaurant in the city of Sacramento. And in August, it celebrated yet another birthday.
Yeah. Club Pheasant in West Sacramento has been open longer than us by a couple of years and has been owned by the same family the whole time, but unfortunately, they’re closing. It’s sad to hear. We’ve been in business for 83 years and I’m trying to get us to the century mark, so hopefully we can get there.
This interview has been edited for length and clarity.
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