WOK THIS WAY

Kara Gebhart

Concepts of Tomorrow
Growth Strategies For Emerging Full-Service Restaurants

Stuart Davis offers up traditional Chinese
cuisine with some American fanfare.

WOK THIS WAY

Stuart Davis isn’t your typical Chinese restaurant owner. The born-and-raised Bostonian was a long way from home when he opened the first City Wok in star-studded North Hollywood, Calif., in 1990. "Yes, I’m an American owning and operating a Chinese restaurant," says the 44-year-old founder and c.e.o. "The authenticity comes from our Chinese chefs and head chefs running the kitchen."

Davis began researching his four-unit concept in 1987. His goal: To create a fast-casual, consumer-friendly restaurant that serves fresh, high-quality, made-to-order Chinese cuisine in a stylish setting with table service. He was convinced that menu items prepared on the spot in front of customers were the future of fast-casual. He was also convinced that his version of Chinese take-out and delivery services could break through traditional poor-communication barriers by offering state-of-the-art packaging and employing a well-trained staff. He succeeded on all fronts.

Davis, the fomer manager of Apple’s Bar in Santa Monica, Calif., designed City Wok’s menu by experimenting with recipes in the bar’s kitchen after the kitchen was closed. There he met Hing Fan Chan, a professional head chef trained in Kowloon, China. Chan, who previously cooked in many fine-dining establishments, helped Davis create a high-end menu without the high-end prices. According to Davis, Chan, who now operates his own restaurant, brought a lot of traditional recipes to City Wok, yet worked with Davis to prepare his traditional dishes in a healthy manner, eliminating things like MSG. It was an East-meets-West approach that combined the best of their knowledge.

"It was a 50-50 collaboration," Davis says. "He had great talent when it came to professional, traditional Chinese cooking. I had a great sense of what people really wanted."

Ninety percent of City Wok’s menu is available in half orders, an example of Davis knowing what people really want. Davis claims City Wok was the first Chinese restaurant to offer half orders, differentiating the concept from Chinese restaurants that refuse to split orders. "It went over fantastically," Davis says.

Many people have favorites when it comes to Chinese, such as Kung Pao Chicken, which is perhaps one reason why 70 percent of City Wok’s menu still is intact today. "It’s amazing how people come in and eat the same things three times a week," Davis says. "But [new items] keep the menu fresh and looking good." How quickly an item can be made to order often determines whether or not it stays on the menu. "If we feel there is a dish we just aren’t executing to our standards, we take it off and offer something else," Davis says.

The speed in which City Wok’s dishes are prepared blends into the concept’s décor. City Wok sports contemporary exhibition kitchens where professional Chinese chefs show off their skills working two woks at once. The kitchen is the focal point of each restaurant. It’s noisy, it’s fast-paced and fire occasionally shoots into the air. It’s a show that leaves the counter seats rarely empty. "This isn’t a romantic restaurant...you aren’t going to propose here," Davis says. "There’s a lot of action. It’s hectic."

City Wok’s décor also includes a large, marketing-inspired wall display that is put together like a collage, depicting service personnel working tables, guests enjoying their food and chefs cooking in the kitchen. "It sells the brand and it sells the product," Davis says when describing the mural. "It shows people what some of the food looks like and it shows smiling servers, happy guests and lots of action." All City Wok restaurants are built using high-end finishes, including stainless steel and granite—anything that requires little maintenance.

City Wok’s packaging echoes its décor. Take-out and delivery orders account for 30 to 40 percent of City Wok’s daily business. Because of this, each City Wok has an area that’s strictly designated for walk-in and phone-in orders only. Food is packaged in state-of-the-art, heavy-duty packaging that sports City Wok’s logo. "We spent a lot of time and a lot of money making sure the packaging is effective," Davis says. Unlike many Chinese take-out joints, Davis says his packaging was created to fit the food, rather than creating food to fit a package.

Davis works to ensure that City Wok’s take-out process is as slick as the take-out packaging. City Wok’s seating is limited, with each unit offering about 80 seats. And with City Wok’s average check coming in at about $8 for lunch and $12 for dinner, it’s pretty much guaranteed that a four-top isn’t going to generate a $150 check. But, according to Davis, large take-out orders can reach the $100 range, easily. Therefore, Davis says perfecting the take-out process is key.

"We have young kids working on 40 orders at once," Davis says. "And it’s not just burgers and fries. These kids have to learn a 60- to 70-item menu." Each customer’s take-out order is neatly packaged with condiments, fortune cookies and anything else the dishes prepared require. Before the customer leaves, each order is double-checked.

CITY WOK'S MARKETING EFFORTS GO BEYOND SLICK wall displays and state-of-the-art packaging. The restaurant maintains a web site at www.citywok.com. Most of City Wok’s marketing efforts go into direct-mail campaigns that use a 10,000-name database derived from City Wok’s customers, who fill out guest cards or type in information into a computer at City Wok locations. Currently, Davis is working to increase the number of names on the chain’s database. He consulted with Fishbowl, a national e-mail marketing firm, to take care of City Wok’s e-mail specials, including 20% discounts, and birthday and anniversary specials. "We’re starting to lean away from a postal database and leaning toward an e-mail database," he says. "It’s more cost-effective."

Davis’ City Woks are located in tourist-infused towns. Therefore, he makes a point to meet, greet, and feed local hotel concierges in hopes that they will recommend City Wok to their hotel’s patrons. City Wok also buys listings in local magazines that are placed in every hotel room in the area, but that’s as far as Davis will go when it comes to coupons and advertising. "When you send out mailers in things like Val Pack, you usually get about a two percent return," Davis says. "Plus, your image takes a beating." Davis strives to uphold City Wok’s image as a non-discounter.

Davis plans to grow the chain as big as it can get without sacrificing quality and service. "I never want to hear ‘Oh, they used to be good,’" Davis says. To prepare for future growth (his goal is to open two units per year for the next five years), Davis has spent the last two years honing the infrastructure of the company to create a mode of compliance and best practices within each restaurant. He contacted Bill Main & Associates for consulting purposes on everything from food handling and human resources to customized manuals for every position. "We’ve spent the last two or three years making sure the company is ready to grow," Davis says.

ALONG WITH SELF-FINANCING AND CITY WOK'S PROFITS, DAVIS plans to finance future growth with the help of two private investors that have been attached to City Wok’s growth for several years. Smaller endeavors, such as City Wok’s latest location at the Trump 29 Casino, are completely self-financed. (The City Wok in the Trump 29 Casino operates in an upscale, three-restaurant food court and, therefore, is smaller.)

Currently, Davis is negotiating deals on two new City Wok locations. He looks for spots in medium-sized shopping centers that also house quality grocery stores and stores like Wal-Mart or CVS. Davis says co-tenants, such as Starbucks and Jamba Juice, have worked well for City Wok in the past.

So how does City Wok compete with other fast-casual shopping center locatedconcepts such as Panera and Chipotle? Davis says City Wok’s distinguishing factor is that it offers table service. At one point Davis toyed with the idea of getting rid of City Wok’s dishwashers and going to disposable ware instead. "We got a big, negative response from focus groups in L.A.," Davis says. "People want to be served... they don’t want to wait in line and get their own drink."

Davis says he doesn’t have an exit strategy, but adds that if the right buyer comes along, he’ll listen. For now, he’s working with consultants, continuing to make the company strong from the inside so that, when the time comes, the concept looks attractive to larger companies peering in from the outside.

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CITY WOK

CONCEPT: A fast-casual, consumer-friendly restaurant that serves fresh, health-consciously prepared, made-to-order Chinese cuisine in a contemporary setting. UNITS: 4 in California.
OWNER: Stuart Davis, founder and c.e.o. LOCATIONS: El Paseo: Palm Desert, Calif.; Country Club: Palm Desert, Calif.; Studio City: Studio City, Calif.; Trump 29 Casino: Coachella, Calif. MENU: Five-page menu includes traditional Chinese cuisine (Kung Pao Chicken) and dishes unique to City Wok (famed City Wok Chicken). AVERAGE CHECK: $8 lunch, $12 dinner ANNUAL SALES: $5.5 million company-wide FUTURE GROWTH: Two units per year for the next five years

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City Wok Strategies

• Create everything within the chain to be
"consumer-friendly."

• Prepare authentic, healthy, made-to-
order Chinese cuisine quickly and
efficiently. Offer half orders.

• Offer table, take-out and delivery
services.

• Pump up brand awareness through the
packaging, décor and web site.

• Create an infrastructure that offers a
real mode of compliance and best
practices within each restaurant so
when the time comes to exit, the chain
looks attractive to quality buyers.