The Game with Alex Hormozi
How to Turn One Restaurant into a National Brand | Ep 886
Thu, 15 May 2025
In this episode of The Game, Alex (@AlexHormozi) helps Calvin and Air, owners of a $3.5M Thai restaurant, strategize their second location launch. From boosting weekday sales and alcohol revenue to creating scalable systems, this is a masterclass in turning a great product into a real business.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Wanna scale your business? Click here.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | AcquisitionMentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: Who are Calvin and Air, and what do they do?
This is Calvin and Air, a husband and wife duo that run a Thai restaurant that does $3.5 million a year and has lines out the door. But they're opening up their second location next month and they're not ready. If they mess this up, they could lose their savings and the reputation they spent years building. Hi Alex, how are you doing? My name is Calvin and this is my wife, Air. Hi.
Welcome. We're the owners of Basil & Co Thai Cuisine in Diamond Bar. 2024, our revenue was $3.5 million. Gross profit was $670,000. Our net margins was 19% and served over 100,000 guests last year.
First impressions, restaurants have the highest failure rate of all businesses. So the fact that they're at, you know, 19% margins, I would say that's good. I would love to see if we expand it. Now, some people might hear that and be like, I thought the average restaurant margins are smaller. Yeah, they sure are. And that also doesn't mean that we need to be constrained by that.
So what is the goal?
So our goal is to open 20 restaurant locations in the next 5 to 10 years. And we want to bring in over $80 million in revenues. And we want to get there by providing nice and comfortable space for friends and family to gather over a delicious meal. Another mission that we have personally really is to create an environment for staff to showcase their talent and also receive competitive pay.
How'd you start the business?
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Chapter 2: What are Calvin and Air's financial goals for their restaurant?
Maybe 15 years ago. And that is when Calvin and I met in a Thai restaurant in Santa Monica. He was a busser and I was a server. So naturally, you know, we talk, right? And then we talk about our big goal, wanting to become an entrepreneur and own a restaurant in the future. Well, that plan goes so well that I end up marrying him. In 2019, we opened our first restaurant, Basil & Co.
in Diamond Bar, California. Within the first three years, we maxed out our capacity. We actually leased the next unit, and we're able to meet the demands. But we are starting to max out again, so a sneak peek is our RE Thai Eatery in Azusa, California, coming up soon.
Chapter 3: How did Calvin and Air start their restaurant business?
Okay, so who do you serve?
So we serve our local communities, businesses, and families in Diamond Bar. The people who walk into the door, we see an age range between 25 to maybe 60. And we're in a very situated, mid to high income neighborhood.
Awesome. Well, how do you make money? Let's go through the numbers.
So our average food item is $16. Okay. Our most expensive one is $68, the Crying Tiger. Average ticket size is $60 to $80, $80 on the weekends. Takeout is 30%, dine-in is 70%. And our most popular dishes would be the Pad Thai, Pad See You, and Drunken Noodles. And we also do beer and wine, but it's only 1% of our sales.
Ding-a-ling-a-ling here. So right off the bat, they have beer and wine. And the fact that they have 1% of sales from arguably the highest margin item that they sell, there's probably more we can find out and some big opportunities there. How do you get customers? How do they find out about you?
So we have organic page. It's about 50% of our business, we think. 1,300 reviews, 4.6 stars. Google has 460 reviews at 4.7 stars, Instagram, Facebook. Word of mouth, our customers like to spread the word of mouth a lot. Paid ads, we do Yelp $1,200 a month. We do affiliates, foodie collaborations on Instagram.
But word of mouth is really through our server talking to our customer. And when we are at the restaurant, we talk to our customer.
Right. And you'd say about half of them come from... Yeah, my mom was here yesterday.
She said, I need to come try. And they come try. And then they say, I'm going to go tell my friend to come try.
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Chapter 4: What strategies can increase weekday sales for the restaurant?
We want to make it right at the get go. So having Alex on board or guidance us, that's tremendously helpful. And then also the other reason why this is so important to me, especially with our second venture, is because I just quit my full-time job and I am going to be committed and fully focused on this restaurant.
So increase alcohol sales, increase takeout sales, attribution for sure. I think with this business particularly, it'll be more difficult to do attribution than maybe a traditional business. That's okay. I'm not as concerned about that. I'll introduce a couple of things that I think might be able to help us out.
So looking at the problems that they presented, I think, number one, we can increase sales during non-peak hours by actually changing pricing during peak hours. Second, how can we increase alcohol sales? Well, that's going to be through recruiting, hiring, and training staff. I would say takeout sales and attribution I would put as kind of like the third priority for me going into this.
What kind of promotional offers do you run to kind of attract customers?
Would you like to give free items instead of giving percentages off?
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Chapter 5: How can alcohol sales be improved at the restaurant?
Big fan. So real quick, one of my big beliefs in business in general is not to give discounts. Basically it's either full price or it's free. I'm a big fan of that, especially for food establishments. Like you don't want to have people who become like discount seekers. Like that's not good, which I do want to be clear. I separate from, you know, if you have a prepayment discount,
for services, or you have some sort of incentive for someone to buy like on a sales call or within 24 hours. That I see is different than like running a promotion that's like 20% off. Not a huge fan of that. I'd rather give a free item and then have a clear ascension path to how I'm going to get that person to become a full paying customer.
We especially like to do that on the big holidays, Mother's Day, Valentine's Day, Christmas.
So mostly seasonal, nothing that's standing or rotating. Do you have a process in place right now for basically what recommendations your servers recommend, number one? And then number two, what things they can add on to their orders?
No, we do not have that yet.
Okay. There's going to be a really big opportunity there. Okay. And then in terms of encouraging people to come for that second visit, is there anything that you do special for first-time customers?
I think we just treat everyone the same.
Yeah. No, no, it's okay. I have ideas.
I have ideas. Yeah, no, we don't do anything special.
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Chapter 6: What pricing strategies could boost profit margins?
And it doesn't usually affect anyone's take rate from like what they choose to order and whatnot. But for you guys with a 3% increase would be like a 15% increase in profit from one thing. So we don't need to do that. I'm just like, that's one consideration you can do. The second thing that you can do is I noticed that you were at 0.00 in terms of your pricing.
Was there a reason for that versus doing like 1699?
I felt like the 1699 or 1695 thing was kind of old school. I just want to make it simple and clean.
Well, I'll briefly push back just because where you're at pricing wise, if you were, you know, I would say higher end, I think you guys are upper middle, right? You're not like here, right? Yeah. I would say, yes, if you're serving $29 to $50 entrees as the primary, then I think having .00 could make sense. Typically with luxury brands, they don't have 99.
But I think that you're in a spot where I don't think it would detract from your brand to have $16.99. And the reason for that is like most people make their judgment off of that character in terms of pricing, right? Yes. And so this, though it may seem really small, if your average ticket is $16, this is 6% absolute, which for you guys is plus 30% in profit margin for the business.
So if you went from 19% currently, because that's a 6% increase in total in average revenue, that would take you to 25% margins. from that, which is a 30% increase in profit. So that 600 and whatever it was, $670,000 in profit would be an extra 100, 200-ish, 220,000 a year for one move. I don't think it's going to affect your sales.
That's just me personally, because it's like we're not even changing any of the characters. You're already kind of like paying the fee of being at $16. I don't think anyone buys 16, doesn't buy 16.99. That's just my opinion. Yeah, so this is a monster moment.
It's like, yeah, one change that probably has no effect on your sales velocity could have a dramatic effect on your profitability as a business. When we're talking 20 bucks, 10 bucks, like this is a high volume business, those tiny little dimes and nickels and pennies, they add up in a huge way. And like I said at the beginning, restaurants are notorious for having small margins.
If we can have a 30% lift from one tiny change in terms of reprinting the menu, We should do that. Let's just use simple math. If every person who walked into their restaurant last year only bought two items, that would be $2 extra per person. They served 100,000 customers last year. That would be $200,000 dropped to the bottom line.
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Chapter 7: What are the key takeaways for scaling a restaurant business?
Worth considering. Okay. But, you know, it would be scary to do all three at the same time.
No, I don't think you necessarily should.
I think I particularly like this one the most. I've thought about it, but I think it just, we never actually had that percentage breakdown on how much is going to increase. So we didn't see like the whole picture and how it would impact profitability. I think this one actually resonates with me the most. In terms of processing... If you don't like it, don't worry about it.
This is why I lay these out, and it's a lot about you and how you feel. It's your business, right? And so if this feels light to you, you're like, I think we could just, you know, literally the cost of this is reprinting the menu. That's it, right? So check this out. So this is the $100 million scaling roadmap, and they are at stage five product size.
So they've got probably 20-ish people who work for them. And if we look at the constraints of the business for them, let's look at the things that I'm talking about them with. Most of the scaling roadmap, I tailor more to service-based businesses. And the reason for that is because 78% of businesses are services. And so I tend to skew in my language about that.
But the actual things that are happening are the same, right? And so a CS playbook to onboard, all of that is going to be around how are we getting customers this consistent experience? We talk heavily about training, right? Connecting CS to product. That's getting feedback loops based on what people are eating and what they want.
spinning that make something new to sell them i mean they functionally had alcohol but they weren't selling it so now we're pushing that a little bit stronger and from a finance perspective like we need to get better at their finances which is why a lot of the improvements that i had were very pricing centric probably because they didn't have good enough financials to be able to see oh wow when we sell this you know this product we're almost breaking even but when we sell these ones we make a ton
they didn't have that kind of information, which would have helped them reconfigure their menu to be the most profitable menu possible that also brings customers back.
And if you're like, man, that would be useful to know what stage of scaling I'm at, all you have to do is go to acquisition.com forward slash roadmap, put in your business information, and we have this little automated thingy that'll tell you what stage you're at, what problems you're facing, and most importantly, how to solve them.
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