Don't be surprised how appealing a "New York" brand can be in international markets!
And more advice from Ben Conniff, President of Luke's Lobster
Luke's Lobster first opened its doors in the East Village in 2009. They now bring traceable, sustainable seafood to guests across the United States and Japan. They work directly with fishermen to hand pick the best seafood, bring it straight to their our own seafood company and then ship it directly to their shacks. They cut out the middleman which means better tasting lobster, crab and shrimp for their customers and a fairer price for their fishermen.
1. Don't be surprised how appealing a "New York" brand can be in international markets!
I think generally New York brands, once you open a few locations that are going well, start to get a lot of international franchise requests. They sort of come pouring in over email. The idea was attractive to us, but only with a partner who was going to absolutely respect our brand, our way of doing things, and the sustainability aspect of what we do. And, was going to execute it faithfully. The story of that expansion is very important to us. Going to Japan first was the way to go to the most reverent market in the world for quality seafood. If we were going to have an international business, we were going to go the place where it was most challenging to prove ourselves to the tastebud of that audience. So, that when we do incredibly well in Japan, the rest of the world will say that "if a great seafood company like Luke's Lobster can make it in Japan, they must have a killer product." The key to the puzzle of operating franchises is the partner. We were not going to open an international location if we didn't have a partner that we absolutely trust. We spent two years with them talking about how our business works and getting them to New York for training. On our end, the lobster goes the same path as it does in the US. We source the lobster from Maine or Canada, depending on the season. We oversee all the processing to make sure that it all goes to our specifications. Then we liquid nitrogen freeze it from 41 degrees to negative 15 degrees in about 15 minutes so the molecular structure of the seafood does not change at all. So, when they slow thaw it in Japan with the program that we taught them, it is completely indistinguishable from something that comes right from the dock. We are not flying it over; we are shipping it. We are putting it on a boat that takes 45 days. They thaw it as they use it.
We have been incredibly lucky with the partner that we have. The biggest issue that we had was that they completely underestimated how successful they were going to be with Luke's. They had nowhere near enough lobster for the first couple of months. They were rationing. They were closing at 2 pm every day because they needed to make sure that they got through to the next shipment. On our side, we were frantically sourcing and preparing more seafood to ship to them to keep them properly stocked. They ordered based on their modest projections. They didn't think that they were going to shoot the moon on day one. When there was a 200 person line from open to close, they weren't ready for it. The success was a combination of being a New York brand that resonates well in Japan and being a really high-quality seafood brand. Being that they are an island country, they have an affinity for seafood. And, this was one seafood that was very difficult to get over there.
As we go into other international markets someday, we know going in that we are very spoiled right now. You have to do your diligence up front, and that you are hitching your wagon to the right horse. Our partners in Japan were not talking about getting rich; they wanted to add an amazing additional brand to their portfolio. Interestingly, they don't have a word in Japan for sustainability. Instead of saying we are not going to make this a part of our brand over here, they said that this is a great opportunity to talk about sustainability. They are behind on over-fishing and preserving fisheries in Japan. To be able to take an example like Maine and Canadian lobster and what they have been able to do to revive these populations and to spread that information to communities where overfishing has been a huge problem that people weren't really talking about has been amazing.
A lot of what makes us popular is the New York connection. How cool New York is. Stateside, we love that we had our first store in New York. But, we want to talk about being from Maine. Our lobster is from Maine and Canada, and our story is about the lobstermen in Maine. The ideal that we are trying to achieve is the Maine way. How we treat our food and how we prepare the lobster is very simple and unadorned. Also, the hospitality aspect of our business and being friendly is important. They talk about Maine as the source of the seafood in Japan, but they still make a lot of cultural linkages to New York because that's what gets people over there more excited. People don't know where Maine is. You can't cling so tightly to everything about the brand.
2. Don't wait on developing communication and training systems for your company.
Think through communication and training systems before growing as opposed to growing and then playing catch up. For Luke's, it came so naturally in the first two locations to be there constantly. We knew every single teammate by name and by face. We were personally involved in all of the training that they received. We wanted to have them be a friend and feel like family as well as understand everything about our business, our brand, our values, and why we did what we did. Then it became very easy for them to turn around and talk to our customers about the company. We wanted to have a very cohesive feel and message. We opened our second location seven months after the first one. It was another seven months from the second one to the third one. At that point, it was still easy to know everyone. Even in the next year when we opened down in DC and the Financial district and added a truck, I still knew every single person in the company, and I still saw them. The longest I would go without seeing someone who worked for Luke's was about a month. That was awesome. You come to love that and be used to that. You have these great personal relationships. It is tempting just to stop. You could say that we are a big enough company now, and we are having fun. Things are good, so let's stop. And, there was the other part of me that just felt that we went after this to promote a sustainable fishery, and to tell the world about sustainable seafood. And, to be a great employer for as many people as we can. We didn't know if we would ever have more than one and if one would even last. Now that we had gotten to five or six, we have something that we can grow.
We were developing a system for training and communication, but we were already a year behind at that point. We developed a system for the number of our current stores, and then we would open three more. What we had wasn't enough anymore. Luke and I were face-to-face with these folks even less. The learning there is if you are planning to scale your business, you have to concentrate on what your company is about and how you do things both operationally and culturally. You have to get it written down in a digestible form. In the beginning, you are still going to deliver face to face with every individual. As you grow, and you are less capable of doing that. You are in several different cities, and your attention is pulled every which way. You need to pass the training to the General Managers, and when you have enough locations, then to your Director of Operations. You are never going to have a system fully finished in year one. It will never be fully finished ever. It will always be evolving. But, you will always have the structure of a communications and training system to ensure that everybody is getting the message the way you are trying to tell it. Once your team starts being off-message and saying different things to different people, that is when your guests are going to lose confidence in you as a mission-driven organization. Put everything you don't think you need down on paper because although it is just second-nature to you, it may not be for your staff.
3. Don't expect expansion in the United States to be streamlined.
Every state and every city has its own red tape in every single situation that you will encounter. What was hard in New York might be easy in Maryland and vice versa. You have to be prepared to approach every new market as a different country when it comes to the government. Things do not run the same way anywhere. And every neighborhood could be its own country! When we went to Penn Quarter in D.C., it was extremely easy to get a beer and wine license. When we went to Georgetown, licenses were capped. I had to sleep overnight on the sidewalk outside the alcohol and beverage control when they released three beer and wine licenses for the neighborhood for the first time in a decade. The only way to get one of those was to be one of the first people to turn in your application. Everything that you learned in your first location in your first city you have to forget.
4. Don't expect finding the right people for your business will be easy, especially in the beginning.
It is so hard to find the right people. You need to be patient. For the most part, skills can be taught. Personality and work ethic can't be taught. If you are somebody who wants to work hard and understand that you are getting into the service industry and that means that you are there to serve other people, you are going to do well. If you approach this like "I am a filmmaker and this is just my day job, and it's every guest's privilege to come in and order a lobster roll from me rather then my privilege to have these folks pay my paycheck," that is a problem. It is the ability to understand that connection and feel passionately about their experience that makes a successful employee. Developing your people and looking out for their needs and their growth is critical.
5. Don't forget about your overall mission.
For us at Luke's, we have three pillars we live by:
-You can't ever sacrifice the quality of your food.
-You can't sacrifice on making decisions based on the moral values of your company.
-You can't sacrifice investing in your people.
Don't get into this business without a passion for specifically what you are doing. Jump into this business when you feel you have something you cannot say no to because it will be so much a part of what you want your life to be.