Q&A with Raymund Magdaluyo, President of Red Crab Group on Restaurant Industry

Q1: You are well admired as the owner / part-owner of many successful local-concept restaurants like Red Crab, Sumo Sam, Claw Daddy – all known for their excellent food and good customer service. You also ventured into fitness centers with FTX in October 2011.  What’s your thinking process in coming up with new ideas?
I have been a full time restaurateur since 1999. On one hand I led a bunch of mostly seafood dining formats such as Red Crab Alimango House, ClawDaddy, Crustasia Asian Bistro, Blackbeard’s Seafood Island, and BluFish Contemporary Coastal Cooking.  Under this cluster I loosely term as ‘The Red Crab Group,’ we also run New Orleans Bourbon Steaks and Oysters, our newly launched Komrad – Mao’s Hunan and Sichuan Kitchen and others.

On the other hand, I am part of another group – The SumoSam Group of Restaurants, and I am in charge of business development, especially franchising as well as provincial expansion efforts.

I have been expanding, through these years, my personal and our collective mission for our group. Initially, we just wanted to be a niche player and create a small casual crab & seafood-dining segment for family and special gatherers. This mission has expanded to then push seafood dining toward different directions. From there, since our competencies have grown outside just building and running seafood restaurants, our mission has grown to building a house of home-grown but world class restaurant brands.

Now I have two general business and personal objectives:

First is I want to pick a few of the concepts and start building CHAINS out of these 2 to 3 highly scalable restaurant brands. Second, I also want our group to expand our reach outside food and include other areas of the hospitality business we can develop.

You see, a lot of the things we do in planning and building restaurants are the same for building gyms, spas, and retail stores – i.e., getting good locations, having them designed, coming up with service design blueprints, etc.

Also, I wanted to put up something that will be good for my wife and my own health and fitness.

Q2: We are sure you considered many options before choosing a final concept. How do you actually decide which one will become your final concept as well as determine the right price for it?

For restaurants, aside from our usual customers, the first market we have to satisfy are our landlords. Most of them are mall developers and expert property managers who have extensively researched on the community/ trade area they want to serve. It is important to us that we know what they want to achieve, and how we can fit in serving their customers. We ask them what cuisines (of course, in our case it is mostly a choice of our existing restaurant concepts) they need or what their focus group discussions reveal as far as dining preferences are involved.

After the space has been allotted to us, we then see what concept of ours best fits the micro market (eg. mall, street, strip, etc.). We look at our neighbors, especially the very strong ones and see how we can complement them. You see diners now are polygamous and often patronize several restaurants. Weekday preferences, especially for office goers are usually the same. Weekend preferences, especially when with family always vary.

Of course, we try to check out prices of our neighboring establishments, the general income levels of our community, as well as our internal sales and profit targets. For instance, with some of our restaurants in BPO complexes, we try to adjust our offerings to cater to their budgets.

Q3: Service excellence needs good and well-trained people. Can you enlighten us with your recruitment and screening process?

Service Excellence, especially in casual (and fine) dining establishments is a lot more dynamic and variable (i.e., non standard). There are no cookie-cutter scripts and robotic employee manuals that tell them exactly what to do. What we do is arm and empower our service staff with what I call the 6 Petals Of Enlightened Hospitality:

  • Script (standard and dynamic) and service sequence
  • Service standards (how to bus out, serve, open and serve wine, etc.)
  • Dining dynamics (more like knowing strategic dining positions not far from basketball positions) – host, order taker, runner, expediter, back ups, eye, etc.
  • Offensive moves (15 to 20 time tested small strategies to delight customers)
  • Defensive moves (15 to 20 moves addressing usual service fail points)
  • Menu mastery

We usually get a team balanced by two types of people – those trained in HRM and culinary schools and those trained at the school of hard knocks. Lately, many of those who join us for their OJTs and practicum become potential hirees. Partnering with schools is an effective way to not just have access to good practicumers, but also a way of getting low cost recruitment program going.

We also do the usual mass hiring and screening for those applicants who have gone abroad. We find that many of them who have spent a lot of time abroad settle back in the country because they have already saved and now want to be nearer their families. These ex-OFWs are good recruits since they bring with them automatic skills and usually ‘automatic’ American or European accents.

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