Podcast Summary: Building a Better Restaurant with the Owners of Nashville Hotspot, Noko (ENCORE)

Podcast Information:

• Title: RESTAURANT STRATEGY
• Host: Chip Klose
• Episode: Building a Better Restaurant with the Owners of Nashville Hotspot, Noko (ENCORE)
• Release Date: March 31, 2025

Introduction

In this insightful encore episode of the Restaurant Strategy podcast, host Chip Klose sits down with John Murray and Wilson Branak, the visionary owners of Noko, a thriving restaurant located in East Nashville. The conversation delves deep into their unique approach to building a sustainable and profitable restaurant, emphasizing innovative operational strategies and a strong commitment to employee well-being.

Guest Backgrounds and Journey into the Industry

Wilson Branak shares his unconventional entry into the restaurant industry, transitioning from a career as a karate instructor and aspiring filmmaker. A pivotal moment occurred in 2017 when Wilson joined Oku Atlanta, an Indigo Road outpost in West Midtown, where he met John Murray.

John Murray recounts his beginnings as a dishwasher at Applebee’s, a role crucial for his entry into the restaurant business due to his lack of server experience. Over the years, John climbed the ranks, gaining extensive experience that eventually led him to co-found Noko.

John Murray [03:38]: "My first job was a dishwasher at Applebee's. My brother waited tables. I was 18 years old, freshman in college, needed to make some money... That's how I got through college."

Conceptualizing Noko: A Response to the Pandemic

The inception of Noko was heavily influenced by the challenges posed by the COVID-19 pandemic. As restaurants faced shutdowns and operational uncertainties, John and Wilson envisioned a sustainable and employee-centric establishment.

John Murray [08:28]: "Conceptually, the restaurant was born out of COVID... we wanted to make this a more sustainable industry and create something where people want to actually be in restaurants and make a living out of it."

Creating a Sustainable and Profitable Model

Noko differentiates itself through a comprehensive list of employee benefits and operational efficiencies designed to enhance job satisfaction and reduce turnover. This "laundry list" addresses common pain points in the industry, ensuring that employees feel valued and supported.

Key Initiatives Include:

• Paid Vacation: Two weeks of paid vacation annually, allowing employees to take time off without sacrificing income.

  Wilson Branak [12:09]: "For our full-time employees, we do two weeks of paid vacation every year... we're getting an average of what you're paid a week."

• Competitive Compensation: Ensuring fair wages that reflect the value employees bring to the restaurant.

  John Murray [14:18]: "We never give away the house... We want it to be affordable and approachable for guests to come in here, because that's going to leave them wanting to come back."

• Health Benefits: Comprehensive health, dental, and vision insurance, along with access to virtual therapists and gym memberships.

  John Murray [14:18]: "We have health, dental, and vision. We also have insurance for them to have access to therapists... We pay 100% of that."

• Profit Sharing: Allocating 1% of gross sales monthly to fund employee vacations and other bonuses.

  Wilson Branak [14:18]: "We take 1% of our gross sales and transfer that total into a separate bank account... we help pay for one of their vacations."

Managing Profitability

Despite generous employee benefits, Noko maintains impressive profitability through meticulous financial management and strategic operational decisions.

Occupancy Costs: Keeping rent below 7% of total sales to ensure flexibility in menu pricing and affordability for the neighborhood.

Wilson Branak [24:19]: "Occupancy cost is definitely sub 5%... it allows you to make decisions on your menu pricing. You can stay affordable to the neighborhood."

Cost Management Tools: Utilizing software like Margin Edge for daily cost tracking, inventory management, and labor cost control.

John Murray [27:16]: "We manage our costs daily... Margin Edge allows you to run your business at such a high level and it's so intuitive, it's so user-friendly."

Open-Book Management: Sharing financials with managers to foster transparency and empower them to contribute to the restaurant's success.

John Murray [30:39]: "We share everything we want our people to... We are as transparent as they come."

Philosophy on Surcharges and Value

Noko firmly opposes the use of surcharges, believing that exceptional service should naturally merit tips. Instead, they focus on providing value through fair pricing and high-quality service without additional fees.

John Murray [46:48]: "In our business model, we don't believe in [surcharges]... We never are going to pay our people and we're going to pay them well."

Chip Klose adds that surcharges can lead to inflated costs for customers, making dining out less affordable and potentially driving away loyal patrons.

Chip Close [48:58]: "It's a slippery slope... we pay 30 to 40% more for the convenience of sitting on our couch while somebody brings me the food."

Future of Restaurants: Emphasizing Community and Innovation

Looking ahead, John and Wilson foresee a shift towards neighborhood-centric restaurants that prioritize ambiance, hospitality, and community engagement over grandiose spaces. They emphasize the importance of maintaining a personal touch, even as technology becomes more integrated into operations.

Wilson Branak [56:24]: "Neighborhood restaurants are gonna take over... They have a great ambiance, great hospitality."

John Murray [56:52]: "Full service restaurants are going to get dumbed down... My biggest fear is that people are going to look at their people as a cost and not an asset."

Chip Klose echoes the sentiment, advocating for leveraging technology to enhance, rather than replace, the human element in hospitality.

Chip Close [58:40]: "Inject it with more hospitality... how we can use technology not just to cut labor, but to actually make a better experience."

Personal Insights and Final Thoughts

Towards the end of the episode, John and Wilson share their personal experiences and aspirations, highlighting the importance of mentorship, vulnerability, and continuous adaptation in the restaurant industry.

John Murray [36:20]: "Vulnerability, in my opinion, is a superpower... not enough people lead from that place."

Wilson Branak [55:20]: "For some reason, we need a little bit more grace."

Chip Close emphasizes the necessity of evolving the restaurant model to better serve both employees and customers, ultimately fostering stronger communities.

Chip Close [61:46]: "Challenge ourselves to make it better, not just keep going and getting so sacred about it."

Conclusion

The conversation between Chip Klose, John Murray, and Wilson Branak offers a compelling blueprint for building a sustainable and profitable restaurant. By prioritizing employee well-being, maintaining strict financial controls, rejecting surcharges, and fostering a community-centric approach, Noko stands out as a model of innovation and integrity in the competitive restaurant landscape.

For more information about Noko, visit nokonashville.com.

Notable Quotes with Timestamps:

• John Murray [03:38]: "My first job was a dishwasher at Applebee's... That's how I got through college."
• John Murray [08:28]: "Conceptually, the restaurant was born out of COVID... a more sustainable industry."
• Wilson Branak [12:09]: "Two weeks of paid vacation every year..."
• John Murray [14:18]: "We have health, dental, and vision... We pay 100% of that."
• John Murray [27:16]: "Margin Edge allows you to run your business at such a high level."
• John Murray [46:48]: "In our business model, we don't believe in [surcharges]."
• Wilson Branak [56:24]: "Neighborhood restaurants are gonna take over..."
• John Murray [36:20]: "Vulnerability, in my opinion, is a superpower..."
• Chip Close [61:46]: "Challenge ourselves to make it better..."

This comprehensive summary encapsulates the essential discussions, insights, and conclusions from the episode, providing valuable takeaways for independent restaurant owners and industry enthusiasts alike.