#15: How Asian Box is Reinventing Fast-Casual with Fresh Flavors and Smart Growth | Chuck Eperson, Asian Box

Daniel Tsentsiper (00:01.19) Perfect. Go ahead. Daniel Tsentsiper (00:24.282) Also, thank you for being flexible with me. think we rescheduled this a couple times. Chuck (00:35.086) All right. Daniel Tsentsiper (00:37.714) All right, let's do it. All right, so it's already recording and I'm just, whenever you're ready, I'm just gonna go ahead and just start and this will be edited. Ready? Awesome. Chuck, welcome to the show. How are you doing today? Chuck (00:49.624) Good, good, thanks for having me. Daniel Tsentsiper (00:51.419) First, gotta say, I'm a big fan. I think we talked about this before when I was studying up in the Bay Area. I used to eat your food all the time. And I remember actually getting catering a few times for a group that I was putting on at Stanford. So big fan of the concept, think, with thinking about some of the brands that I'm seeing today that are having a lot of success. A lot of them, I think personally, are having a focus on good food, healthy, gluten-free. And also there's this new kind of new age of Southeast Asian concepts that are kind of popping up. So I really wanted to personally just like understand kind of your story and where Asian Box is going, because I'm sure it's going to expand across first California, maybe across the US. So we'd love to kind of dive into that. without further ado, Chuck, you want to tell us a little bit by yourself? How did you get into the seat? Chuck (01:46.552) So yeah, my name's Chuck Emerson, Asian Box CEO. Yeah, I've been in the restaurant business since high school. I was a cook, worked my way, coming out of school, became a manager, spent a lot of time, 15 years at Marie Callenders, and kind of worked my way up the ranks there. Left Marie calendars did a startup called Life Kitchen, Love Your Food Every Day, which is also a healthy food driven concept in Palo Alto. And then it expanded. And I've been with Asian Box since 2014 and, you know, worked my way from director of ops to CEO took over in 2019. Got to take over right before the pandemic. Lucky me, but yeah. Daniel Tsentsiper (02:33.968) We'll definitely talk about that. Chuck (02:36.79) And, but it's been exciting, you know, prior to working here, I wasn't into this kind of food, which just was, it hadn't been exposed to it really. And fell in love with it. The founders were regulars at Life Kitchen. That's how I got to know them. And the first Asian box opened just a few months after the first Life Kitchen. So we were kind of connected there. And when it was time for me to move on to from life, I called. the founder of Asian box. He's like, come on over and can start tomorrow. So. Daniel Tsentsiper (03:08.794) That's amazing. What was what was Life Kitchen? Was it like a fast like a fresh, fast, casual brand or was it? Yeah. Chuck (03:13.902) The concept was a brainchild of Mike Roberts, was CEO and president of McDonald's, left McDonald's and wanted to do a healthy fast food. It ended up, you know, I started a year before we opened helping develop the concept and it kind of turned into a fast casual, which made more sense and. You know, so it was all, you know, everything was under a thousand calories, 800 milligrams of salt. So, it's, it still operates in Chicago, the franchise group in Chicago. but they just grew, try to grow too fast all over the country at once. And, just wasn't able to support it. Well, I left the company before they really started to leave California, but, Daniel Tsentsiper (03:53.136) Hmm. Chuck (04:06.208) Yeah, so but the Chicago franchisee my understanding is they bought it and still operate them in Chicago. It's a great idea. Daniel Tsentsiper (04:12.013) Right. That's it. Yeah. It's always tough. Like, you know, when you have when you have plans for growth, right, you oftentimes, depending on the types of capital you you get or the types of partners you bring on, that growth trajectory might be a little bit too audacious. So you have talked to lot of operators that are very meticulous about the franchisees they work with and the speed, the velocity of which they they franchise and expand. One thing that I got. Chuck (04:43.726) I was just going to say, you know, that's so important to lay that foundation. Otherwise you get yourself get over the skis, so to speak, and you can kind of lose control or, you know, you're just not operating as efficiently as you can, or you're, you know, the, you're not doing a good service to the brand as far as food quality and service. Daniel Tsentsiper (05:03.641) Right. Let's go back before we before we dive deeper into Asian box. I want to learn more about your experience with Mary calendars. What what was your roles there? You said you kind of worked up the ranks there. What did you learn? What were some of the positions you held? And how do you think that impacted the way that you kind of run the operations now with with Asian box? Chuck (05:26.06) Yeah, I mean, I started as assistant manager back in, I guess, 1995 and aging myself a little bit here, but started as assistant manager. grew up in San Diego, so I was there. And then a couple of years into there, I became a GM pretty quick, you know, within the year. And then I became new store operating supervisor. So I was up actually in Northern California in the Hayward area, we all three in Oklahoma, Texas, in a few Pacific Northwest. So I really got to travel, I got to see, you know, how to open restaurants properly. The beauty of Marie Callender's at least back then, you know, it was a bakery with their pies, they're famous for the full service restaurant, a lot of them had bars. So you really got exposure to the full gamut of restaurants, you know, from the takeout business and the bakery. So it was a great experience and I was a new store opening supervisor, then a supervisor, then a director, then a senior director. And when I left, I had 50 restaurants throughout seven states that I was overseeing. So, so I really got a lot of exposure to the restaurant business, the ins and outs, how to grow. We had a big franchise side. I didn't oversee that directly, but I interacted with a lot of franchise groups because we shared marketing in six markets. so it was a great experience as far as getting all that different exposure to the different pieces of business. And new store opening supervisor, I got to be involved in construction, real estate selection, all those sorts of things. So it really prepared me for my next chapters. Daniel Tsentsiper (07:12.302) I love that. also do remember, I think Mary Callender's was the first or one of the first brands that went into CPG. And it did seem like it was quite successful because I knew Mary Callender's from the pies that you would buy in the frozen section and all the other products that they had in retail locations. do you think that that, were you around the time when they were starting to go into CPG? And what do you think of brands that are Chuck (07:40.364) the Daniel Tsentsiper (07:41.847) finding different ways to interact with customers beyond just like their physical storefront. Chuck (07:46.37) When you say CPG, you mean the retail side? Yeah. Daniel Tsentsiper (07:49.057) Yeah, the retail side, yeah. Chuck (07:50.83) Yeah, you know, it actually that was going when I when I started that had already happened. It was a really smart move by Don Callender. I mean, he was gone by the time I got involved in the company. But he he partnered with ConAgra, you know, had the licensing right to that. And they were a big player in that space. And yeah, he he made a great move there. And I believe ConAgra owns the the trademark today. But don't quote me on that. But That's my understanding is, you know, that really became a big piece of the puzzle for them. And it's funny because, yeah, there you go. You know, early on when they were first going to bring them to California, the frozen side, we were all nervous. But then we realized it's just a different customer. You know, it didn't cannibalize the business. And you kind of learn that even fast forward to today, you know, a lot of the third party customers aren't your in store customers. And so, you know, it's OK to have kind of different deals. Daniel Tsentsiper (08:25.879) Big piece of the pie. Chuck (08:50.724) different focuses because you know there's just different kind of customers. Daniel Tsentsiper (08:52.226) Right. That's a very good point. think that's a gold nugget there, right? I've often talked to operators, I think across the board, people are just so nervous and have a negative outlook on third party deliveries. And one thing that I try to tell them is that cannibalization is bound to happen, but the types of people you're going to get on DoorDash are probably not going to come into the store, right? And same thing with catering as well. You get a completely different clientele. Chuck (09:24.878) Yeah, you know, we've always had a philosophy that catering is going to drive box counts. And really even, you know, a lot of times, especially being in Silicon Valley, I guess would probably be different than other parts of the country is a lot of these companies have budgets to feed their employees. And they do it through the third party partners, whether it's in a catering format or individual box or dash, but then they get exposure, you know, and you hate to say it, but the budget, you know, for that employee who's using the company's money, you know, they might do some add-ons that they might not normally do, but they get exposed to the product and then when it's on their time, hopefully they're going to come in and seek you out. And we see that a lot in some of our stores like Mountain View comes to mind where Daniel Tsentsiper (09:55.283) Absolutely. Daniel Tsentsiper (10:00.416) Absolutely. Chuck (10:13.036) You know, we had a company across the street that would cater regularly. And then when we weren't catering, we'd see the customer, you know, this those employees in. And so it's a great way to drive your business as well. Daniel Tsentsiper (10:25.919) Absolutely. I had a fat checkbook when I would order Asian box for catering. So I know, I know exactly what you mean. What, how would you say the demographic or the way to do business in Silicon Valley and Northern California, how is that different than maybe other parts of the country that you used to operate in or at least different cities within, you know, the United States? Is it more competitive? Is there a different way that you have to reach customers? I'm sure operationally it's way more expensive. So you have to get a little bit creative. What is, what is the dynamic like there? Chuck (10:57.486) Yeah, I mean, yeah, it's all proportional. You know, we even when you talk about like franchising or growing outside of California, there's always that asterisk. I mean, real estate is going to be more expensive here. No question where we operate in Northern California and labor, but you also can charge more. So, so, you know, all of a sudden you decide, okay, well, we're going to move to, you know, wherever, you know, the Midwest somewhere. And you're going to pay less real estate, less for labor, but you're also going to charge a little bit less. I think it becomes more favorable. mean, the minimum wage is not even the minimum wage in Northern California, the competitive wage. You everybody made a big deal about the $20 fast food thing. But the reality is, you know, a lot of our employees were at that already, you know, or. Yeah, we didn't lose anybody. It's not like someone woke up and said, oh, I'm going to go work at McDonald's because they paid $20 an hour. Daniel Tsentsiper (11:25.78) Absolutely. Daniel Tsentsiper (11:42.185) Yeah, you're paying around there before that minimum wage hike. Chuck (11:50.862) You know when they're making you know 18 to 21 already plus you know fast casuals You have a tip element so you know we didn't lose anybody To that you know and everybody's panic I have a buddy who who owns a franchise group of fast food and you know he he felt the pain for sure you know and You know it's not like you can raise your your prices to doubt you know to cover that all at once Daniel Tsentsiper (12:11.654) Absolutely. Daniel Tsentsiper (12:20.683) Absolutely. Absolutely. There was a, I went to school in Berkeley and I get a lot of flack for that because there was a massive research done that showed that the impact of, I think it was what, 2118? Don't get, don't quote me on the specific number, but there was a study that showed that it didn't have, it had zero effect on, on competition, had zero effect on margins of a business. But what you're telling me is that, you know, for a concept like yours, there wasn't much competitive pressure because you guys are providing already very good wages for your employees, plus also the environment and the work conditions and just the ambiance and the team dynamic in Asian Box is probably something that employees would gravitate towards rather than working in fast food. So it's a different type of employee profile. Chuck (13:13.561) Yeah. For sure. We've been so lucky with the managers we have. I through the pandemic, I always bring up is, you know, everybody stayed through. I mean, what I always share is our L.A. store, which the lease is now expired. at the time we closed it for a year. was downtown L.A., you know, at the base office. Well, it was because of the pandemic, you know, the pandemic hit and nobody was going downtown. You everybody's work from home. So we literally closed it for a year and this every employee came back. Daniel Tsentsiper (13:31.178) Okay, very expensive. Daniel Tsentsiper (13:43.913) Wow. Chuck (13:45.23) The GM, he just went and got another job. And right when I called him and said, hey, we're going to reopen, was, yeah, no problem. Let me know when. you know, we had a lot of loyalty with the management teams and the staff. And, you know, we juggled, we stayed open. We were fortunate, all except for that store. And we were already set up. We were doing a lot of takeout business. We have a big partnership with DoorDash. you know, our Paul Alto store was one of the first 10 stores on the DoorDash platform. I remember. Daniel Tsentsiper (14:12.584) That's pretty cool. Chuck (14:13.91) I was with LightKitchen at the time, but I remember Tony, the founder of coming in with a couple of buddies and doing, hey, we're doing this. well, it's our delivery business. It's a, you know, it's a technology business. And, you know, I signed up and Asian Box signed up as well. And, you know, it's so funny, you know, flash forward now and... Daniel Tsentsiper (14:17.31) Yeah, yeah, Tony Hsu. Chuck (14:37.482) I just had lunch with the CEO of Oren's and they had signed up too. So we're all in the top. Yeah, they have a great relationship with them. So you flash forward and now these stores, our Paul Ulter Store has a great partnership with them. But yeah, anyway. Daniel Tsentsiper (14:42.548) They were the first one, I believe. They were number one. Daniel Tsentsiper (14:55.818) Good. Well, you're one of the few that have positive things to say. You were an early adopter. You saw the potential in this technology. And at the time, even today, the team at DoorDash is fantastic. They got really close to the operators and did something different. Because if you go back to when they started, these apps, these delivery apps, it was a very competitive market. was, think Grubhub already had 60 or so percent of the market, but they came in and did something right. Chuck (15:25.836) Yeah, and to your point, yeah, they've always been good at communication. They've been fair. And they've done a good job. They've executed well. And at the end of the day, that's really important. And yeah, we've been very happy. We just went exclusive with them this year. So they're our only partner on the third party delivery service for individual boxes. Daniel Tsentsiper (15:49.546) Very cool. Very cool. Tony, Tony would be happy. Take me back to 2019, right? You took the helm as CEO, right? Where 2019 was a good year. And then, you know, all of a sudden, bam, at the time I was running a, I was actually running a catering business. So I went out of business. Take me back to 2019 and then through the pandemic, what was it like for you coming in as the new CEO? What did you do to survive? And then how did you get, you know, how did Asian box evolve? Chuck (16:06.316) Wow. Chuck (16:14.498) Well, you know. Daniel Tsentsiper (16:19.187) through that period. Chuck (16:20.078) Yeah, I mean, was certainly, you know, I can remember like talking to my wife, oh, this will be over in a couple weeks. This is not a big deal, you know, when, you know, everything kind of hit March and. And, you know, boy, I was wrong. But, you know, again, we were set up for the third party. So even though we took a hit, we, you know, we we had a couple of we had a few stores in Southern California that were were struggling already. We ended up, you know, having to move away from those. that was unfortunate. But but in northern California, we we outside of I think we had one store we closed for a couple of weeks. Everybody stayed open. you for the most part, most of our landlords were, you know, worked with us in some capacity. A couple didn't, but for the most part, they were all real good about it. And, you know, had to reduce the amount of staff. I had to lay off some corporate people, but, you know, it all about communication and working with them. And as soon as we could bring them back, we did. you know, I think it's no different with a lot of people experienced. I think we were fortunate that we had good, again, at the time, you we had all the third parties partnerships going. you know, were able to, to, you know, yeah, we're even better than most, you know, know, all services had a pivot and figure out how to do take out well, and even a lot of fast casuals that weren't all in to your point earlier that, you know, maybe we're skeptical or, you know, nervous about paying the fees and this and that that, you know, came with the third parties, but Daniel Tsentsiper (17:39.912) You were prepared. You were prepared to adapt on the fly. Right. Chuck (17:59.842) you know, we really leaned into it. really turbocharged that business. Obviously a lot of people used it then, you we, you know, went from, you know, 20 % of our business to 80 % of our business overnight. So, you know, you know, so, you know, we, we were able to build back, I think faster than most, you know, you know, we didn't get back to 2019 for a while, you know, we're starting to see those numbers now, you know, or we did last year. So, you I think good communication with the teams, having good managers that have a sense of ownership, you know, just being honest with the staff, you know, really helped us get through it. And like I said, you know, when we had to make tough decisions, everybody understood why, and you know, we, you know, we helped the team get through it. Daniel Tsentsiper (18:45.469) Got it. Yeah, that's that's very commendable. Where do you see Asian box growth in the next, you know, maybe two to five years? Right. When we last talk, you said you guys were exploring other ways to get in front of customer. I know that you guys are in the Asian museum, right? You guys have a storefront there. Where are you guys thinking of growth in the next, you know, next two to five years? Where am I going to see Asian box next? Chuck (19:07.394) Yep. Yeah. Yeah, yeah, yeah, we have. know, our investor group, we have a lot of small investors we have for many years and we are going to do a fundraise to to accelerate growth later this year. so we'll all be out, you know, looking for people that want to invest in Asian box. So if anybody's interested, feel free to reach out. But basically, you know, right now we open an Asian art museum almost two years ago now. And that's been a great partnership. inside their lobby, but guests can come in, you know, even if they're not visiting the museum. We have a site at SFO airport that we own and operate ourselves, you know, but we also have a like Terminal G, the International Terminal G. And then we're opening in the San Jose airport later this year with SSP as a licensee and they, you know, they, they run a lot of different restaurants and airports. So that'll be our first partnership and we're looking Daniel Tsentsiper (19:54.855) Which terminal? Daniel Tsentsiper (19:58.555) International, okay. Chuck (20:14.608) forward and excited about that. that, you know, hopefully that'll open at the end of the summer. They're about to start construction. And then, yeah, we're looking at real estate in Northern California. Our immediate plans are to grow in Northern California for company stores. And then the plan is to later this year, as franchise, we just got our FDD in place. We feel like, yeah, thanks. Our brand, easy to operate, high Daniel Tsentsiper (20:30.759) again. Okay. Daniel Tsentsiper (20:39.015) Congratulations. Chuck (20:44.548) quality food, a unique offering with the Vietnamese style food is all going to be positive towards that growth. Daniel Tsentsiper (20:55.299) I see. I'm actually very curious. What is that process like of getting your brand into, let's just say like a museum or an airport? How is that different than opening up in the neighborhood? Chuck (21:11.277) Yeah. You know, it's interesting with the airports, they, you know, you have to, you know, they put out an R, I think it's called RRP. And, you know, you submit and we submitted years ago prior to me joining the company actually, and I joined the company pretty soon after they opened. And we didn't, we missed out by half a point in the voting, you know, they have a whole committee that votes on everything from food and decor and, you know, everything. And we, you Daniel Tsentsiper (21:17.72) RFP. Daniel Tsentsiper (21:36.827) Yeah. Chuck (21:41.928) know, and just didn't sit right with us. And actually, I we had a contact with the airport at that point in time. So when the pandemic started, I just reached out to that contact and said, Hey, you have anything open in there for you know, we're looking to grow. he's like, as a matter of fact, you know, we do we have someone who closed a Vietnamese restaurant, we want to reopen it, they don't. And so we ended up buying the lease from them. And It's been interesting running it ourselves, you know, because of the union and everything else, but it's been successful. Yeah, it's been successful. Obviously, you know, airports have, you know, a built-in audience, so there's a lot of advantages. So we're excited. It's been a successful store for us overall. The museum, we kind of lucked into that. You know, we got reached out to. They were looking for a new vendor there. We submitted with Daniel Tsentsiper (22:16.453) All right, I'm sure it's competitive. Chuck (22:40.09) five other restaurants and we won the bid. And, you know, I think they just saw, you know, what we do. They, you know, they visited a couple of our local stores. It was just an obvious, great fit, you know, Asian Box, Asian. It is fantastic there. I mean, they've been great partners. You know, it's very up and down, you know, based on, you know, what exhibits they have, what they have going on. They certainly have slower times, and it's only five days a week. Daniel Tsentsiper (22:53.708) Absolutely. Absolutely. That was an easy one. Daniel Tsentsiper (23:06.595) Interesting. Chuck (23:10.0) and it's limited hours. you know, even though, yeah, even though it's a slower top line store, it's very efficient. And it did, it had a great year last year and it's starting off strong this year. And, and, you know, we do a lot of, on the two days that the museum's closed, we just started opening for lunch and catering. And we just got a massive order tomorrow with DoorDash. Daniel Tsentsiper (23:10.892) Interesting. It's very non-conventional. Chuck (23:39.342) and for that store which is normally closed on Tuesday so I'll hand that tomorrow at the museum. Daniel Tsentsiper (23:44.259) awesome. You can't, mean, sometimes it's hard to evaluate the goodwill and the marketing that you get from being in these kind of non-traditional sites, right? I might travel, I was just in Atlanta for the first time and I tried Corritos and I've always wanted to try it, but because I was making this quick layover, I had the opportunity and I got exposed to the brand. Sorry, Corritos was in Cleveland. And you start to see the same thing with museums and other locations where you put yourself out there, you attract an audience that has never actually seen you before. And then you're with them in the back of their mind. And then when they see you again, they're like, I remember seeing this brand at the airport, at the museum. So I think it builds up a lot of brand quality, brand loyalty, excuse me. And while maybe the sales are not as consistent. It sounds like you're being very creative and the fact that you are able to attract customers without them actually getting into the museum as well. Chuck (24:44.876) Yeah. Yeah, and it's growing every year as the museum does different things to attract more customers and we do things. It's been a winning partnership, but you're absolutely right. Even, you know, the airport location as well, you know, just, you know, and people, know, years ago there was a stigma of, if it's gluten free, it must not taste good. And that's just, you know, really lack of education and, you know, what that means. And, we, you know, we're almost naturally gluten free when we, for a good band and we just had to go to a higher quality soy to. Daniel Tsentsiper (25:14.606) Okay. Chuck (25:18.934) to be 100 % gluten free. then our chef, Grace, developed a gluten free banh mi and gluten free chocolate chip cookies. So, you know, she's brought a unique spin, you know, to, you know, to deliver a high quality product that's gluten free to, you know, people that are experiencing that. But yeah, no, for sure. Daniel Tsentsiper (25:38.69) As you start to expand, what is the type of franchisee profile you're looking for? Chuck (25:43.896) You know, we want good operators. You know, the key to our success is first and foremost, the food. You know, we have great food quality, fresh, high quality, healthy. And so someone's got to be able to execute that. And then obviously service is, you know, the close to, you know, if you, you you talk about like, you know, getting exposed to a brand, you know, in the airports or anywhere, you know, the food is good. People are going to remember it, you know, and Daniel Tsentsiper (26:10.276) time. Chuck (26:12.438) even more so than service. mean, service is a close to, of course, but the food quality is number one, service number two. And anybody we partner with, whether it's a well-established franchise group that's looking to expand their portfolio to bring in a unique brand or a lifetime GM who wants to their own business. you know, we're going to be open to anybody who's, you we feel is a good operator or have partnered with a good operator that's going to take care of the brand. so, so we'll be open to the right person. Daniel Tsentsiper (26:49.763) Good, that's good to hear. That's good to hear. Everyone listening, reach out to Chuck. Chuck, last question for you before we wrap up. I always try to ask my guests, who do they look up to in this industry? Maybe it's a mentor or an up and coming executive. Who do you see has a really interesting story or good playbook that you've kind of followed and taken after? Or at least respect. Chuck (27:14.26) You know, I think over the years I've been lucky to work directly with people. A couple of them aren't in the business anymore that that kind of like, you know, I think about my mentor at Marie Callender's Robin Henley. She's in the real estate business now. But I mean, what she taught me, I could never, you know, could have never, you know, repay her for that. And Mike Roberts at Light Kitchen. I mean, what a great person. What I mean, a smart, you know, human and, you know, in the industry, you know, there's you know, the Danny Myers of the world, you you just look at, you know, how meticulous, how they went about their business and you just think about, you know, that. So, you know, it's kind of been a lot of different people have, you know, impacted me or given me different tidbits to work with. Daniel Tsentsiper (28:03.107) Amazing. Chuck, thank you so much for joining the show. I am very excited for Asian box growth and expansion. And, you know, I hope to see it all over Northern California and then back in Southern California and across. We need to bring, you know, we need to bring good Vietnamese food across the U.S. There's a huge market there. So I wish you all the best of luck. Thank you so much. Take care. Chuck (28:21.74) Absolutely appreciate it. Thanks a lot. All right. Bye.