Who are you, and what do you do?
Michael Ellinghouse. I am a franchisee of the HuHot Mongolian Grill Restaurant franchise. The concept was started by a family in Missoula and I was the manager of the first HuHot Mongolian Grill in 1999. I then went on to be the Director of Operations for the HuHot franchise and also be became a franchisee in 2003. In 2008 I left the position of Director of Operations for the franchise to focus on our franchised restaurants. My wife and I currently own and operate restaurants in Sandy, UT; Layton, UT; Spokane, WA and Coeur d’Alene, ID.
What has been one insight or lesson that has been most helpful in your career?
Develop a good relationship with your:
Banker – Will help to fund your expansion and to be sure you don’t become overextended
Attorney – We live in a very litigious society and your attorney is a first line of defense from potential lawsuits. Your attorney will also be utilized in reviewing your leases and contracts. You may not require your attorney’s services very often but when you do, they are worth it.
Accountant – help to generate the P&L monthly and give advice on how to reduce your tax liability.
What has been your favorite mistake? A mistake that in retrospect led to a great lesson and progress.
Not sure I have a “favorite” mistake. We have 150 employees and I tell them to do your best to not make mistakes but when you do, look at them as a learning experience. Mistakes are knowledge. We learn by our mistakes. I make mistakes every day, I learn something everyday.
Project forward ten years. How will your industry or field be fundamentally different then? What opportunities do you see?
Due to COVID and the restrictions put in place by our government officials, our industry has changed drastically in the last 7 months and some of those changes will take time to work thru. Restaurants the can transition into curbside or delivery have a better opportunity to be profitable. We operate buffet-style restaurants and a great part of our concept is that the guest gets to create their own meal. Every ingredient and the quantity of each ingredient is chosen by the guest. That ability to customize is very appealing to many so transitioning that to having someone else make “your recipe” has been a challenge.
The language in leases is going to be adjusted to include pandemic or government ordered shut down ramifications. Tenants are going to be seeking language allowing abatement if there is an ordered shut down or if capacity restrictions are put in place then downward adjustments in rent. Might have clauses allowing percentage rent to kick in if sales drop below a certain percentage. Landlords will resist such language, they have loans to pay on that space as well. Revenue generated per square foot is much less so that will reflect in the going rate per square foot the landlord will be able to get from prospective tenants. Opportunities – mostly in the drive-thru concepts and possibly in the concepts that can operate a ghost kitchen with no dining areas but have all product either delivered by in house delivery or third party delivery. No matter what transpires, the cost of dining out is going to increase.
In the last two years, what have you become better at saying no to?
Recommendations by people that don’t fully understand how hard it is to change even the smallest function of our business.
Being bullied by customers leaving fictitious reviews in online review sites. Yelp has harmed more good businesses than it has helped. If you’re not willing to talk directly to management at the time there is a problem with your experience then don’t hide behind your keyboard and try to damage the business.
What is the one book you recommend most often and why?
The Catcher in the Rye. Why not?
What advice would you give a smart and ambitious recent college graduate? What advice should they ignore?
Don’t have tunnel vision – “I have to do this because that is what I studied in school.” Always be prepared to take a different path if presented to you.
I am not sure about ignoring. I don’t think anybody’s advice should be completely ignored or dismissed. Take what you can out of any advice that is offered. The advice may not be the best for you in the circumstances you are in, but it may be helpful to somebody else.