Project Survival: Jujube Restaurant

A Year-Long Series in The Triangle
Business Journal

A Year-Long series focusing on the startup of Jujube, an Asian eatery owned by chef Charlie Deal, who relocated from California to the Triangle and is taking on his first majority ownership role in a restaurant. The series explores the challenges of a business’ first year and taps a panel of local experts for guidance.

By Kim Nilsen
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Cooking Up a Winner?

Chef hopes to beat the odds with Chapel Hill restaurant
February 17, 2006

Charlie Deal’s upscale Asian eatery has nudged into cash-flow positive territory after two months of operation.

Charlie Deal hitched his wagon to an industry where the odds of survival are low. He became a chef.

At Oliveto Cafe & Restaurant in Oakland, Calif., in the early 1990s, he grilled and sautéed, dabbled in pickling and preserving, and learned the finer points of stocking, inventory and menu writing.

After more than a decade in the business, Deal has just stepped into his first majority shareholder role at Jujube, an upscale Asian restaurant in Chapel Hill that opened in December.

The path to Jujube’s first wok-flashed meal meandered. Deal had formed a partnership with restaurateur Giorgios Bakatsias to open three restaurants – the Asian eatery Grasshopper in Durham, the steakhouse Bin 54 at the Glen Lennox Shopping Center in Chapel Hill and Jujube, an Asian-themed restaurant next door to Bin 54.

As the restaurants were opening, Deal and Bakatsias restructured their partnership, essentially parting ways amicably. Deal, a minority partner, stepped out of Grasshopper and Bin 54, and his debt obligation for the three restaurants was erased. Bakatsias likewise backed out of Jujube, save a 20 percent equity stake to Deal’s 80 percent share.

To make the retooling work, Deal had to come up with $50,000 to renovate and equip the 80-seat restaurant and turned to a local investor for help. “It needed a daddy,” he says.

It’s the biggest gamble he’s made in the restaurant business. He’s pushing for $1 million in 2006 revenue.

To get there, he’s taken a second mortgage on his home, and he’s called up the spreadsheets and formulas he has developed over the years to calculate everything from the markup on wine to labor costs and menu pricing.

Among those who have been impressed with Deal’s cooking is Gene Gabbard, a former telecom executive who has hired Deal to cater gatherings at his Cary home. Gabbard now drives 35 minutes from Cary to Chapel Hill to eat at Jujube. “The food is just fantastic,” he says.

“He’s smart, he’s savvy,” Gabbard says. “Usually, you don’t find that kind of financial thinking, that budgeting basically, from a top-notch artist.”

Gabbard, who was chief financial officer of MCI Communications in the early 1990s and an adviser to executives of Walt Disney Co. in the mid-1990s, says Deal’s biggest challenge in this first year is likely to revolve around staffing.

While Gabbard senses that Deal is good at assembling a strong team, Deal will face a challenge stabilizing the group and putting the best people to work in the right roles.

The restaurant was cash-flow positive heading into February, but it’s too early to accurately determine patterns in costs and sales.

In the early days, the restaurant saw an older than expected crowd drawn from the surrounding neighborhoods. Now the crowds are more diverse, with professionals in their 30s to 50s and some university demand appearing.

“It looks to me like he’s already been found,” Gabbard says.

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Hoping Dim Sum Will Add Up

Deal launches weekend brunches in bid to boost business
April 21, 2006

Jujube owner and head chef Charlie Deal chats with customer Catherine Ruvane outside his upscale Asian bistro in Chapel Hill.

On the maiden voyage of the dim sum cart during lunch at Jujube this month, restaurateur Charlie Deal set an expansion in motion.

Deal is testing out a new twist on an old Chinese custom. He has paired mimosas and pitchers of Asian Bloody Marys with dim sum – a feast in which diners pick and choose what they’d like from among trays of hors d’oeuvres-like treats brought forth from the kitchen.

Dim sum has a high surprise factor. There’s no ordering, just sampling or passing on each dish.

Time will tell whether dim sum is a smart move for Deal’s restaurant. Offering dim sum brunch each Saturday and Sunday means Deal has had to surrender his day off – at least until his staff gets up to speed on the new format and dishes, allowing him to again spend Sundays at home recharging his batteries.

The addition also meant expense – ordering a dim sum cart – at the same time Deal was digging into Jujube’s cash to pay for tables and chairs for the restaurant’s newly opened patio seating area.

Easter Sunday marked the fourth dim sum brunch and the first good crowd. About 55 people turned out, each spending roughly $15. “It was actually pretty promising,” Deal says.

He’s not so sure about the potential for turnout on Saturdays.

While Deal waits to see how the dim sum following shapes up, he’s holding off on another addition he’s been mulling – Sunday dinner. Sunday is the only night of the week Jujube isn’t open for dinner, and he’s been told that the nearby Cedars of Chapel Hill retirement community doesn’t offer dining services that night either.

He figures that his staff has the regular dinner routine just about down, so adding one more night would be even easier than rolling out dim sum service has been. And a seventh night could bring in sales to dilute his fixed costs, such as rent.

But he’s wondering whether Sunday dinner could also dilute Jujube’s crowds other nights of the week.

Then there’s the restaurant’s young age to consider. Jujube opened Dec. 19.

For now, Sunday night is on the back burner. “I don’t think we’re quite there yet,” Deal says.

The bigger issue, Deal says, is getting a handle on what Jujube’s sales will be on a consistent basis. The restaurant has been undulating between $15,000 and $18,000 in sales from week to week. The challenge of the back and forth is figuring out how to be profitable in the slower weeks and managing food and service at the busy times.

“There’s no predicting it,” Deal says. “I’m trying to figure out who my customer is.”

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Business Falls on Summer Break

Restaurant’s sales take post-graduation hit in Chapel Hill
June 16, 2006

Jujube owner Charlie Deal, left, confers with the restaurant’s bar manager, Jae Sun Rhee.

Charlie Deal is being educated in the ups and downs of business in a college town. Weekly sales at his new Asian restaurant, Jujube, tumbled from about $19,000 to $14,000 in May after graduation at the University of North Carolina ushered in the college town’s summer season.

“It was a total shocker,” Deal says. The summer doldrums came after a month of weakened sales in April, when income totaled about $70,000, down from $75,000 in January and March. And because Deal’s restaurant is new, his agreements with his suppliers require him to pay vendors quickly. That meant the bills for the busy spring and end-of-school times were coming due during the more lean weeks.

The first full week of June showed improvement, including a rush on June 9 that made that particular Friday a top 10 in Jujube’s books.

June 19 marks the halfway point in the Jujube’s rookie year. The upscale eatery opened its doors at Chapel Hill’s Glen Lennox shopping center on Dec. 19. The venture is Deal’s first turn as principal equity partner and chief operator of an upscale restaurant. His resume includes stints as a lead cook, private chef, winery salesman, restaurant consultant and restaurant operator, primarily in the Santa Cruz region of California.

Durham restaurateur Giorgios Bakatsias, the owner of restaurants such as Parizade, Spice Street and the steakhouse Bin 54 next door to Jujube, is a minority shareholder in Deal’s restaurant but plays no role in day-to-day operations or the restaurant’s finances.

“We have still basically gone without having to do a cash infusion,” Deal says.

But he has critiqued his own menu, analyzing whether each and every dish made business sense. Putting his chef’s sensibilities aside, he scratched some higher-end dishes that had small profit margins. A grilled tuna dish, for example, was a challenge to make money from based on the high cost of the fish and the need to keep its price in line with the rest of the menu. Dinner entree prices now range from $10 to $20.

“It’s back to basics,” Deal says. The retooled menu hinges on dishes such as the pan-fried crab and shrimp cake, which at $15 sells like hot cakes and generates an appetizing margin for Jujube.

Deal expects that next year, Jujube will be able to build up a cushion during the busier months that will help the restaurant ride out the summer lull. This year, that buffer was drained by startup expenses and the costs of furniture and equipment for the restaurant’s patio and dim sum offerings.

Jujube’s monthly payroll expenses inched up to about $22,000 – roughly equivalent to 31 percent of sales – in April and May. The employee count has dropped in recent weeks, primarily as the result of departures of staff members, such as a pastry chef who landed an internship elsewhere.

On the marketing front, Deal has begun advertising in a weekly arts tabloid, The Independent. His agreement with the paper allows him to pay for part of the ad space in trade by allowing Independent staffers to dine with clients at the restaurant.

He has struck a similar deal to land Jujube’s name in the playbills at Playmakers Repertory Company. The Chapel Hill theater group’s patrons could invigorate the normally quiet dinner hours of 5:30 p.m. to 6:45 p.m.

Deal also has other ideas: He’s cooking up a plan to host the social chairwomen from the university’s sororities for cocktails and snacks in hopes they might consider the Asian eatery as a location for sorority events.

To keep Jujube fresh in the minds of people who have been to the restaurant, Deal is using an e-mail newsletter to highlight themed dinners and special offerings.

And he will school students in the art of pork and shrimp dumplings and sweet sherry-braised shiitakes during a cooking class later this month at A Southern Season, a retail store and catalog business that caters to gourmet foodies.

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Spouses Share Startup’s Burdens

Owner’s wife deals with second mortgage, his long hours
August 21, 2006

Setting the table: New restaurant finds its place in the market.

Business plans rarely address the demands placed on a key member of most new business teams – the owner’s spouse.

The support of a husband or wife – or, in some cases, parents or siblings – can be the difference between success and failure for a new business. Often, family members help cover the expense of a business startup. They also shoulder a share of the stress, often while sacrificing family time.

Since the inception of the Asian restaurant Jujube last year, Diana Deal’s chef/entrepreneur husband, Charlie Deal, has been away from home nearly all day, almost every day. He’s asleep when she leaves in the morning for work. She’s asleep at night when he finishes with the dinner crowd at Jujube and returns home.

As the associate creative director for a specialty advertising firm in Chapel Hill, she balances her work with household chores that her husband once shared, from mowing the lawn to making sure the bills get paid.

“In starting this restaurant, we jeopardized a lot,” Diana Deal says.

To help finance Jujube’s build-out and equipping, Charlie and Diana placed a second mortgage on their house and agreed to a path that would mean his salary would take a back seat to paying vendors and employees.

The couple met in California, where he was a partner in restaurants and she was working as a nutrition consultant.

“We both love delicious food,” she says.

They were a couple when he was a founding partner and chef at Charlie Hong Kong, a Santa Cruz noodle restaurant that rang up $900,000 in annual sales. That restaurant was well funded from the start, she says.

Jujube, which opened Dec. 19 in Chapel Hill’s Glen Lennox shopping center, was not as well funded, she says. “This has been … the most challenging thing we’ve had to deal with professionally,” she says.

Charlie recently agreed to surrender some of the Sunday time he was spending with his wife. That’s because he has rolled out a new Sunday brunch menu and will be overseeing the kitchen until his staff masters the Asian fusion omelets and other selections.

The brunch was a tactical move. The new menu is Deal’s replacement for the dim sum brunch that he shelved after a little less than three months.

Deal says purists were expecting classic dim sum cart specialties, which range from pork and shrimp dumplings to braised chicken or duck feet.

Jujube’s dim sum drew more mixed reviews than Deal was comfortable with, and sales were lukewarm. So he idled the dim sum cart he had purchased, arguing that he should be able to recoup that investment with a more popular, profitable brunch.

“We can make the money back faster by doing something else better,” he says.

Deal says the new brunch menu better reflects his style and strengths. The selections include small plates borrowed from the dim sum cart, such as dumplings and siu mai.

In addition, Deal has folded in five-spice French toast and coconut pancakes with ginger syrup – American breakfast staples with Asian influences.

In its second week, the brunch set a record for sales outside of holiday weekends.

Deal has been successful at lowering the restaurant’s cost-of-goods expenses by looking out for food waste and trimming ingredients with high costs and short shelf life, such as tuna, from the menu.

Cost-of-goods expenses paid out in July were 28 percent lower than the average total for spring months.

“We stopped trying to keep up with a lot of the high-end restaurants,” Deal says.

Business overall for the restaurant slowed slightly in the summer, primarily in July, but revenue didn’t fall off to the degree Deal feared that it would in May, when University of North Carolina at Chapel Hill students began to head off for summer vacation.

A favorable review and three-star rating from The News & Observer restaurant critic Greg Cox on June 16 sparked a run that began a few days later and resulted in Jujube’s best week ever, with roughly $19,300 in sales.

A few weeks after that sprint, Deal faced a predicament. Business was busy, and the dim sum brunch was trying to get its footing. It was not an ideal time for him to be away, but he and his wife were expected at her sister’s wedding July Fourth weekend. He knew her family would excuse his absence.

But Deal decided to promote his head line chef, Joshua Samara, to sous chef. He packed for the wedding trip and left Samara in charge for the holiday weekend. Giving Samara more responsibility should free up some of Deal’s time for business development work outside the kitchen and dining room. But the decision to delegate and leave for the weekend meant more than that.

“We had the final say,” Charlie notes, meaning the demands of the restaurant don’t always dictate his and his wife’s lives.

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Sprinkling on a bit of garnish

Nearing first anniversary, owner-chef tweaks his creation
October 27, 2006

Charlie Deal is operating in refinement mode. He’s 10 months into his restaurant’s freshman year. For Deal, that means it’s time to knuckle down and get things running at as close to optimum performance as possible.

In the initial months of Jujube’s first year, inconsistencies were largely forgiven. The staff that Deal leads as chef-owner scrambled to get through new challenges, to retool the menu and to finish building out and equipping the restaurant. Deal believes it’s now time for him to be Jujube’s toughest critic.

“We’re staring at our one-year anniversary right now,” he says. The restaurant opened Dec. 19 in Chapel Hill’s Glen Lennox shopping center.

Durham-based restaurateur Giorgios Bakatsias, the owner of restaurants such as Parizade, Spice Street and steakhouse Bin 54, Jujube’s neighbor at Glen Lennox, is a minority shareholder in Deal’s restaurant but plays no active role in day-to-day operations or the restaurant’s finances.

Deal, a California transplant, has run restaurants before, but Jujube is his first experience as managing partner and majority shareholder. His goal is to get the Asian-influenced restaurant running on all cylinders while calibrating his schedule to allow more time to recharge and to plan. He took a step in that direction Aug. 24 in an e-mail newsletter to customers in which he announced he was putting Jujube’s Sunday brunch on ice.

“Frankly, it comes down to the simple fact that the only way I can assure myself of having an entire day off each week to spend with my loved ones is to close down on Sundays,” Deal wrote. The brunch had been a replacement for a dim sum offering he tested in the spring and then halted when it failed to build a following. He says he had mixed feelings about canning the brunch because he was excited about the direction the menu was heading.

As for the revenue side, fall, and the return of the University of North Carolina at Chapel Hill’s faculty, staff and students, brought a bump in business. Revenue for September climbed by 10.8% over August sales. Jujube turned a profit in September even as Deal plowed about $6,000 into building out the space and $4,000 into equipment. He kept the restaurant’s monthly cost of goods sold under $12,000 during July and August – summer months that were not as slow as expected – and under $14,000 in September. Those food-related expenses had been creeping higher in the early part of 2006, prompting Deal to tweak the menu, trimming out dishes and ingredients that didn’t make financial sense. He is beginning to reap rewards from his commitment to offering an extensive wine list.

“I’ve always put a lot of energy into our wine sales,” he says.

But he wasn’t sure whether that energy was invested wisely. Lately, more customers have begun ordering interesting and even pricey wines. His selection of wines by the bottle ranges in price from the low $20s to about $75. The Jujube wine menu includes about 80 selections, from sparkling to red wines and whites. Deal serves only wine that he has sampled and enjoyed. By offering some premium wines in by-the-glass pours, he has been able to let customers sample higher-end or lesser-known wines. High-end white wines are selling well now, he says. Still, he has opted to limit the number of bottles kept in the restaurant’s inventory. That way, if a certain vintage isn’t selling, he can buy the unneeded bottles from Jujube, creating some top-line relief without taking a bath on the purchase.

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For one year, not a bad Deal

Final story – December Chapel Hill eatery set to celebrate first birthday in business
December 15, 2006

Jujube owner and head chef Charlie Deal says he is enjoying the cooking he’s doing now as much as any he’s done in his career. When Charlie Deal looks back on 2006, he sees a year of good fortune.

His Asian-influenced restaurant, Jujube, will celebrate its first anniversary Dec. 19. The 80-seat, linen-tablecloth eatery offers lunch and dinner service that revolves around dumplings, rice and noodle dishes, and seafood and meat entrees.

In its first full year in business, the restaurant at Chapel Hill’s Glen Lennox shopping center has turned a small operating profit, developed a strong cadre of employees and weathered some equipment breakdowns and build-out expenses.

Along the way, there have been missteps, Deal acknowledges, including unexpected bills and a few unnerving slow days. He realizes now that he should have had deeper financial reserves to carry the business through its initial weeks. But the bills tended to arrive on the heels of busy weeks, and that eased some of the sting. Deal also was fortunate to be able to rely on wife Diana Deal’s salary during lean times when he couldn’t draw his full salary.

Within the first year, he’s been able to pay down the home equity line of credit he and his wife took out on their Durham house and shed any debt with a high interest rate.

Deal says his smartest move was putting the pan-fried crab and shrimp cake on Jujube’s menu. The popular dish has been good for the restaurant’s profit margin. His biggest miscalculations were his attempts to add Sunday hours at the restaurant when he already had a full plate. A Sunday brunch and a separate dim sum serving were both shelved after short runs.

Deal has been in the restaurant business since the early 1990s, spending much of that time in California. But Jujube was his first majority shareholder role. After relocating to the Triangle in 2002, he formed a partnership with restaurateur Giorgios Bakatsias to open three restaurants – Jujube, the Asian eatery Grasshopper in Durham, and the steakhouse Bin 54, which is next door to Jujube.

As the projects progressed, Deal and Bakatsias restructured their partnership. Deal, a minority partner, stepped out of Grasshopper and Bin 54 and his debt obligation for the three restaurants was erased. Bakatsias backed out of Jujube before its opening, retaining only a 20 percent ownership stake to Deal’s 80 percent share.

Deal started his first full year in business aiming to reach $1 million in sales. He says he now realizes he may have set the bar too high. To generate $1 million, Jujube would have to ring up weekly sales of a little more than $19,200. Deal says the restaurant has had several such weeks, but stringing together a year of them, given the restaurant’s size and price points, is unrealistic, for now.

Jujube’s average week is more along the lines of $18,000, which translates to $936,000 in annual sales.

Deal has made strides in managing his cost of goods sold – expenses related to serving what’s on the menu. Cost of goods expenses, which do not include wine, sake and other beverages, were 24 percent of total food sales for the three months ended Sept. 30, down from 30.8 percent of food sales in the first three months of the year.

Deal also is keeping an eye on payroll expenses – an area where he spent more this year than the industry standard. He could have aimed for hitting that mark – payroll of no more than 30 percent of total sales. But he says there were too many unknowns about when lunch and dinner traffic would peak, and he was unwilling to risk being understaffed. He also built some time off for himself into the schedule. The restaurant has a staff of 20 employees split evenly between full-time and part-time workers.

To bring payroll costs in line, his strategy is to grow his customer base “so the valleys aren’t as deep,” he says.

In recent weeks, he’s seen an increase in demand for higher-end wines and special tasting menus assembled by request for customers. Jujube is now serving up specials in addition to its regular menu, which has been shortened some. The restaurant’s new tag line is “Almost Asian,” which is meant to reflect nontraditional ingredients on the menu, such as goat cheese.

“I’m as excited about the food we’re doing right now as I’ve ever been about anything I’ve cooked,” Deal says.

He’s also so high on his current staff that he’s not ruling out possibly launching another restaurant in the not-too-distant future.