00:00Insurance is really expensive.
00:01We had someone break our window, which was unfortunate.
00:04They smashed their skateboard into it.
00:06This happened like a month ago.
00:07It's like, I'm finally getting
00:08an insurance inspection for it today.
00:10Probably going to cost like $1,000, $1,200,
00:12and I think it should be covered, but I don't know.
00:16Maybe they won't cover all of it.
00:17We'll have to see.
00:25My name is Eric Kuo.
00:26I'm the chef and founder of Peking House
00:27here in Chinatown, and this is The Cost of Doing Business.
00:36The Cost of Doing Business
00:37All right, thank you.
00:37What can I do for you?
00:38Get a classic sandwich.
00:40Yeah, for sure.
00:40It's a good.
00:41All right.
00:42I always describe this restaurant as a
00:45Chinese takeout counter meets a fried chicken joint.
00:48It's meant to be very casual,
00:51kind of a fun, no-frills experience.
00:53Obviously, fried chicken is at the center of the menu,
00:55and fried chicken sandwiches are, by far, our biggest seller.
01:02Tenders?
01:04Yes.
01:04Okay, what flavor did you want?
01:06I came from my last job being a sous-chevel of Madison Park,
01:12where the menu is, you know, $400 to start.
01:14Obviously, made a pretty big pivot to, you guys now sell,
01:17you know, sandwiches and tenders for $16.
01:19We want to be this affordable, part-of-your-routine kind of restaurant.
01:24Obviously, the economics of restaurants are more challenging than ever,
01:27but we want to be something where people feel like we're still a good value.
01:31And that obviously presents a lot of challenges for us,
01:33because everything is so expensive now.
01:36Labor, food, rent, everything.
01:38It's really difficult to exist at this price point without being,
01:40you know, a major national franchise.
01:44We like chicken thighs for sandwiches.
01:47I just think it's a little juicier and tastier.
01:50I'm gonna get this one, too.
01:52I've actually reduced the price.
01:53So, it used to be $18, and I reduced it to $16,
01:56because I don't think we should be lumped in with the Popeyes
01:59and the Wingstops of the world, but we are, obviously,
02:01because that is the value perception of what we do.
02:04So, the sandwich is $16,
02:08and our goal is to be between 25% and 30% of that to be food cost.
02:1528% to 35% of that is labor, depending on the month.
02:19And then about, you know, 20% of that is rent, occupancy,
02:25the unexpected, overhead.
02:27So, we're left with, like, a 15%-ish profit.
02:30So, you know, we're making roughly, like, $2.30, $2.40 profit on the sandwich.
02:37So, bread, we get this really wonderful Japanese milk bread
02:41from Parisian Bakery in New Jersey.
02:44So, this is our beautiful Japanese milk bread.
02:47Unfortunately, a lot of people are like,
02:49oh, it's white bread.
02:50It's not just white bread, all right?
02:51It crisps up really beautifully.
02:53It has, like, a nice glutinous pull to it.
02:55You know, that's gone up about 30, 40 cents a loaf,
02:59and they charge for a fuel surcharge per delivery, about $5.
03:02That doesn't sound like a lot, but what that ends up meaning is that,
03:07per sandwich, you know, the cost of bread went from, like, $1 to, like, $1.25 to $1.30.
03:14And, you know, when we're talking a profit of, like, $2 to $2.50, that's substantial.
03:20We only get nine slices out of it because we never use the butt,
03:23except for snacks.
03:24But that has the food cost, too.
03:27And in fried chicken, the frying oil is an ingredient.
03:30So, it's super important.
03:32However, there is a cost issue with it because, you know, in my opinion,
03:36the best frying oils for fried chicken are peanut oil, lard, beef, tallow.
03:40Those are incredibly expensive, though.
03:42So, I try to kind of go in the middle where I use canola oil to fry it,
03:47but I finish our chili oil with duck fat.
03:49The price of canola oil and canola futures has gone up a great deal,
03:53especially since conflicts in Iran.
03:54I used to pay $29.99 per jib.
03:58Those are 35-pound cartons.
04:00We go through about 15 to 20 of those a week.
04:04Now, it's over $40 a jib.
04:06So, do the math.
04:07That's an extra $200 a week, you know, $800 to $900 a month.
04:12That's pretty substantial for a restaurant of this size.
04:18I had trained in fine dining for well over 10 years,
04:21and I thought that was my destiny.
04:23My family had a restaurant called Peking House in Queens.
04:26I just was swooping in, trying to help a little bit, and I thought,
04:29hey, why don't I make this fried chicken dish, and I'll deliver it to people.
04:34And it became, you know, kind of a sensation at the time.
04:37I hired all sorts of random people.
04:38I had a fleet of cars, like 15 different drivers.
04:41Yeah, it was crazy.
04:43We opened a brick-and-mortar restaurant in Brooklyn in 2022.
04:46We built out this huge restaurant on Flatbush Avenue that was just way too big.
04:52It required me to be there constantly.
04:53It just was so difficult to manage, and the up and down of being profitable,
04:58of like, oh, this month was great, and the next month was awful.
05:01It was burning me out really badly.
05:03But you can't really make a living off one restaurant in New York City anymore,
05:06unless you're at an extremely high price point.
05:08So this was, like, kind of meant to be, like, a satellite expansion,
05:11which is why it ended up being so small and off the beaten path.
05:14So we pay, like, 4.9K total for this space.
05:18But there's a reason we pay that little.
05:20We are kind of in the middle of nowhere.
05:21We're under the bridge.
05:23There's very little foot traffic on this street.
05:25What is next door?
05:26A scrapyard.
05:26The Chinese uncles are breaking apart air conditioners and refrigerators.
05:30The plan was for this to just do a lot of takeout and delivery.
05:33This location has surprised me in many ways.
05:36The business model has been very different than what it originally planned to be.
05:39I think walk-ins make up about 60% to 70% of our business.
05:42I think the food's the best, obviously, when you come in to eat it.
05:45But, you know, I get it.
05:47It's not the biggest, most comfortable restaurant.
05:49When there's a line and people eating,
05:51it's kind of comical how packed it gets in here.
05:54What made Brooklyn not viable was the labor.
05:57I used to have 30 employees in Brooklyn.
05:59Now I have six employees.
06:01It's just much more manageable, and they can handle it.
06:03But that seems to work, you know, and that will be a much more sustainable model moving
06:07forward for expanding, which we still have plans of doing.
06:14I don't know exactly how many sandwiches, but we've sold, like, almost 10,000 sandwiches
06:19already this year, which is, like, almost double what we sold last year.
06:22So it's been a pretty busy year.
06:26I'm told that I go viral on TikTok now and again.
06:28You know, something about this drippy red chili oil chicken, it just grabs the algorithm.
06:34But it's a lot of up and down, and it can be very unpredictable because you could get slammed
06:40one week, like last week, and then, like, you know, we'll have lulls where, like, you know,
06:44you're not going viral on social media and then, like, it'll be kind of slow.
06:46So I don't love that personally, but it is the modern game of restaurants.
06:52We're usually busier for lunch, you know, between 12 and 2, and then we get a small little early
06:57dinner rush, and that's really it, you know?
06:59I think we want to average, like, $2,000 of sales in a day.
07:05In my perfect universe, yeah, we would do, like, $2,000 to $2,500 every day consistently,
07:11but it's just not how, you know, it works, where it's usually very lopsided, where Saturday
07:15is our busiest day, you know?
07:16I think our record is, like, $6,000, but that's, like, the wheels are coming off.
07:20Like, that's not ideal scenario for me.
07:23Yeah, I mean, it's very, it's very saturated on Saturdays.
07:26Saturday is our busiest day.
07:31I've gotten a lot of up and downs with Pecking House.
07:33There's been many times I wanted to give up on it.
07:36You know, coming from a fine dining background, it's kind of seemed like something that happened
07:39by accident.
07:39I usually joke it was like an unplanned pregnancy.
07:41We're happy it's here, but we're also, like, really not prepared for it.
07:45I would say after six years, in a good way, I think I've finally come around to being really
07:50grateful for this thing, and it's been something I'm really proud of, so we're going to keep
07:55it rolling.
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