Ashish Tulsian:

Hi, welcome to Restrocast. Today, my guest is Saer Imad, Group GM, Almed Retail. Saer today is building a restaurant business in Almed Retail for last seven years from scratch, brands like JJ Chicken, Darwandi, and a few good brands franchised internationally.

But Saer’s passion, from what I learned in the conversation, comes from working with entrepreneurs. Somebody who started his career in banking, providing loans to small businesses, to working at a private equity or rather a VC fund, and helping those entrepreneurs with venture capital, to moving to the side where he became an operator and started his own journey of building zero to one. His passion for restaurants, you know, comes from his experience with other entrepreneurs who, as a, as a private equity or a venture capital person, he helped and he saw them growing.

He also helped them, worked with them in trenches, but still missed that, you know, actual operator role. Today, he’s building these brands into franchisable formats, and somebody who is now ready to explore international waters in various markets as wild and diverse as India, Saudi Arabia, and UK. Saer’s perspective in life is quite balanced and yet refreshing.

I enjoyed this conversation. I’m sure you will. Welcome to Restrocast.

Saer, welcome to Restrocast.

Saer Imad:

Thank you for having me here. 

Ashish Tulsian:

Thank you. 

Saer Imad:

It’s a pleasure and an honor to be having this discussion with you, Ashish.

Ashish Tulsian:

Thank you. Thank you for accepting this. Saer, you’ve been, you know, you’ve been in Dubai and the industry for a very, very long time. I saw your, you know, career. You have, you know, you have quite a rich, you know, career, if I may say. There’s a lot that I have a lot of questions on literally, you know, each junction. But I would like to start with, you know, where it all started for you. So if you can touch upon, like, where did you grow up all the years and, you know, in your education.

Saer Imad:

Yeah. We came from a different part of the world, but we’re ending up in Dubai, actually. So I’m originally from Lebanon.

So I studied there. I worked there. Actually, I started my career as a banker in the corporate credit.

Then I went to open the bank in Africa, Nigeria, actually. So we had a lot of clients there. And then quickly I shifted to the finance department.

I came to Dubai in 2003. This is the first time I came here. I work mainly in helping, supporting and nurturing entrepreneurs and SMEs through a government agency called Mohammed Bin Rashid, Establishment for Young Business Leaders.

Ashish Tulsian:

That was back in 2003? 

Saer Imad:

Yeah, that was in 2003. So we were supporting all kinds.

We were sector agnostic. So we were supporting all businesses, F&D industry, industrial, retail.

Ashish Tulsian:

And what do you mean by supporting?

Saer Imad:

So, supporting by giving them financial support, by giving them economic support, commercial support, all types of support. So these entrepreneurs come to us. We help them to develop their business plan, their feasibility studies, and work on their budget and cash flows, and then work on the commercial part and operational part.

So we were giving them all this kind of support and helping them and assisting them until they are successful and they grow. So some of them, for example, they moved into franchising. Some of them, they went into growing and diversifying into different sectors.

So this was this part. So I continue with this.

Ashish Tulsian:

So this was not just like a SME loan?

Saer Imad:

No, no, no, no, no, no, no, no. It was hands on. And this is why I got to know more and more about the F&B industry.

So I started at that part, but I was on the other side of that.

Ashish Tulsian:

So you were helping them like sharpen their business plan?

Saer Imad:

Everything. Shop, helping them to rent the right place, do for them location analysis. Will they get customers here?

Is it fit? What are the type of customers they want to inquire at? All these details.

And then even going with them through their menu, what kind of food they want to go, having a big or small menu.

Ashish Tulsian:

That sounds like weird, but what was your training to do this? Like how did you even get to the point?

Saer Imad:

Exactly. So we started because entrepreneurship was new to the region. So we had a lot of training in the US.

So we were into a lot. There was a lot of exchange programs with the US that having these kinds of businesses or these kinds of programs because it was new to the region. And this is how we started.

Then we start to get a lot of pioneers in this sector to help these people and assist them kind of a mentorship program. So to give them the best practice in the market. But we were operating their businesses, but we were not owning the business.

So there is always this slight difference where the KPIs and the performance will always be the responsibility of the owner, of the entrepreneur. But you are kind of an advisor and it makes a lot of difference. So we continued doing this.

I continued doing this business. I moved to Abu Dhabi, same Khalifa fund. They have a bigger fund.

It was three billion dirhams at that time. And they were focusing mainly on F&B also. So this is also we get a lot of exposure until I shifted to Almed.

So we shifted to Almed and this is where my full focus on F&B started.

Ashish Tulsian:

Almed is where you are today.

Saer Imad:

Exactly where we are today, where we wanted to have. It’s a kind of a boutique F&B operator where we own, operate and manage different brands. And this is where I was in the other part of the game now.

So I’m responsible of the performance of the achievements of the KPI.

Ashish Tulsian:

Why did you take that jump?

Saer Imad:

I took this jump because I want to be more focused. I like the industry, so I wanted to experience it from a different perspective. There was always something that needed to be done.

So you give advice, you know what should be done, but it’s not done.

Ashish Tulsian:

I’ll, you know, Before we dive into that, at Khalifa fund you said for how many years were you investing the part of that three billion?

Saer Imad:

For five years and a half.

Ashish Tulsian:

Five years and a half. And what part of your investment or portfolio was F&B?

Saer Imad:

About 40 to 50 percent.

Ashish Tulsian:

Oh wow, that’s a big one.

Saer Imad:

Yes, because at that time the F&B becomes the trend. So all the entrepreneurs thought that it’s an easy industry or it’s quick money.

Ashish Tulsian:

They still do.

Saer Imad:

They still do actually. Yes, you’re totally right. And they still do, unfortunately.

Ashish Tulsian:

I am a product of that. 

Saer Imad:

Okay. 

Ashish Tulsian:

12-13 years back, I was running a telecom company, a tech company in India.

Saer Imad:

Interesting. 

Ashish Tulsian:

And, you know, one day a random conversation with a friend who was continuously exploring, you know, a KFC franchise or a Subway franchise. He used to keep reading these prospectus documents.

He used to keep discussing with me. And I said, well, why don’t you open your own brand? How hard can it be?

And he said, will you invest? So, of course, this is my idea. How can I say no to my own idea?

Let’s do that. And I jumped into it headfirst and got screwed so bad. You know, it was not only a financial loss.

It was an ego loss. 

Saer Imad:

Of course. 

Ashish Tulsian:

I mean, it was like, oh, wow.

I thought that I was so smart. And like entering a restaurant, it was like you’re not. Like, I mean, everybody was ready to take you for a ride.

So, yeah, it’s a trap.

Saer Imad:

Because it has a lot of details that you don’t see it until you are into it. And at that time, people want the cash business. So what happened that a lot of people, even not in the F&B industry, wanted to jump into this sector because here mainly the main money was coming from the contracting business.

And then suddenly contracting slowed down. And when you go into the contracting, you know, most of the money is stuck somewhere until you see it. 

Ashish Tulsian:

Yeah 

Saer Imad:

So they wanted this cash business.

And F&B is the best outfit where we can get your cash. So everybody started going to this industry and becoming very popular and becoming very famous. So that’s why 50% of our portfolio was going towards these F&B concepts.

And at that time, there was a lot of trends. So now is the trend of shawarma or the trends of burger or the trends of pizza. So you can see all the concepts are going to the same product, for example.

And they become more specialized. So before, if you look to the F&B industry here, especially in UAE, it went to different stages. So before, you don’t see a specialized restaurant where it offers a single product.

So it used to be a whole big menu where it has a variety of everything. Then this trend started that, oh no, let’s focus on shawarma, let’s focus on burger, let’s focus on brisket. And this is how the trend started.

And now it continues.

Ashish Tulsian:

So at Khalifa, what was you, when you say that you are investing a part of this 3 billion dirham corpus, were you investing in the restaurant?

Saer Imad:

Yes, investing in the restaurant.

Ashish Tulsian:

Investing

Saer Imad:

So the entrepreneur, you know

Ashish Tulsian:

Like a private equity?

Saer Imad:

Yeah, kind of a VC. Because, you know, being an entrepreneur coming, there is no bank that is willing to give you money. 

Ashish Tulsian:

umm

Saer Imad:

So because you’re high risk, 

Ashish Tulsian:

yeah 

Saer Imad:

it’s a new business.

It could succeed, could not.

Ashish Tulsian:

Higher chances that it will not.

Saer Imad:

Yeah, exactly. So usually in the States, for example, 9 out of 10, they fail. Startups.

Here it is a little bit more because we give them a lot of support, we open up for them a lot of doors. So the success rate was 6 out of 10, for example. 

Ashish Tulsian:

wow

Saer Imad:

Exactly. So we used to give them loans with very low interest. We take the full risk and we give them.

They used to have to contribute about 10 to 20% of the total investment required. So a restaurant that costs 5 million, they have to come up with at least 1 million. We put 4 million.

And we manage the disbursement of the fund and how it has to be disbursed. Buying equipment that much, rent, kitchen equipment, all these kinds of things. And move ahead.

Employees, what type of workers do you need to have? So we enter into all the details. But as I told you before, it also missed the point that we kind of advisor, mentor, but not hands on the operation.

And we don’t take decisions. Because if you take a decision, then you are responsible for the loss and the profit. So they have to take decisions.

I give them advice, they have to take decisions. And this was part of the problem maybe. So then when I shift to Almed, I am in the decision making seat.

So I have to put the plan and I have to execute the plan.

Ashish Tulsian:

How different it turned out to be from your perception?

Saer Imad:

Huge difference. Huge difference. Because we always thought that we’re giving the right advice and this should be enough to make it a success.

Which it’s not. The variables of the market, it’s so much that it overcome, overruled all these kinds of things.

Ashish Tulsian:

Did you, did you, When you came to, and we’ll dive into this deeper. When you came to Almed and you became the person responsible to execute directly now. Did you look back and saw some of your advice that was not cool?

Saer Imad:

Yeah, of course. Definitely. Definitely.

And the opposite. So one time I had, I’ll tell you this story. This is one of the lessons I learned in my life.

So one time there was a lady that came to us. She was not well educated. She was divorced, had four kids.

And she wants to do any business. She wanted to do henna. 

Ashish Tulsian:

Sorry?

Saer Imad:

She wants to do the henna tattoo. 

Ashish Tulsian:

Henna, okay. Yeah. 

Saer Imad:

So I said, this business will never make a profit. So she keep insisting, insisting, insisting.

She just wanted 250,000 dirham. She just wanted to make a tent in the hotels and do for the tourists. She said, please, in every corner there is a beauty salon who does the henna.

Why? Why they will come to you? What’s different?

But actually, this lady, at some point of time she had 60 locations. She franchised the business to different countries, and she was making a net profit of approximately half a million dirham per month. What she did, 

Ashish Tulsian:

wow

Saer Imad:

we always talk about innovation, but what she did is she didn’t create something new about the henna, but she repositioned the henna.

That I’m offering a temporary tattoo of over two weeks for tourist people who are willing to spend and pay double the amount that normal people pay in the beauty salon because they are coming for fun. They don’t mind to pay instead of 50, 100 dirham for tattoo. It’s something traditional, nice.

And that’s why she was successful.

Ashish Tulsian:

Wow.

Saer Imad:

I learned a huge lesson from it, that innovation doesn’t necessarily have to come from something totally new, creating a totally new product. Innovation can be by positioning the same service or product to a different type of customers in a different location.

Ashish Tulsian:

You know, this, in the 90s, I grew up in India in the 90s, and I don’t know if you’ve heard of these. I don’t know if these were global or not. It used to be called tele-brands, like the tele-TV shopping ads.

Saer Imad:

Yes, yes, yes.

Ashish Tulsian:

And I remember that, you know, I was growing up, I was, I think, eight years or nine years. So this ad came on tele-shopping, you know, during the lunchtime. We just came back from school and, you know, having lunch and watching these daily soaps.

And that ad said, you know, it was a device called Clear Tone. And it basically said, you put it here, and then you adjust the volume from here. And now, these guys were showing what all this can do.

So it basically showed a scene where a dad is watching, you know, a game and a kid is studying, and the kid is, you know, really getting, you know, pissed. So, you know, dad, what he did is now, he just put the volume of the TV to the lowest, increase the volume, you know, of the device here, and everybody’s happy. Then it also said, if you increase the sensitivity of the device, you can also listen over here, eavesdrop, you know, on conversations of others.

And it gave random 20 very cool use cases. As a kid, I was tempted to buy that. Of course, my mom didn’t allow.

But it stayed with me. I never realized what that machine was until I came to college. And my then girlfriend and my wife, her family is in hearing aids business.

And I had never seen a hearing aid before. And I mean, because after that, being a kid, it never, I never saw that device again. So it never occurred to me.

I remember one day, you know, she brought a hearing aid. And I was like, clear tone. And like, oh, shit.

So basically, somebody thought that I’m going to sell hearing aid to people who don’t have a hearing loss. By telling them, you know, how can you manipulate this? You know, somebody reimagined the same product.

Saer Imad:

Exactly

Ashish Tulsian:

And those guys, I’m not kidding, sold 100,000 pieces.

Saer Imad:

Wow.

Ashish Tulsian:

In India, a hearing loss product for people who can hear. 

Saer Imad:

Wow.

Ashish Tulsian:

So this repositioning is possible. 

Saer Imad:

Exactly, exactly, exactly. So yeah, so when I came to Almed, I had a mission to create a company with different brands.

So we have different options. Either we have to buy ready-made brands and grow it. Or to come up with a totally new brand that we own.

So this was the mix. And that’s what really happened. So we acquired a small business that exists here.

And we worked on the development of everything. 

Ashish Tulsian:

What was it called? 

Saer Imad:

JJ Chicken.

So this was the start. We bought out, we acquired 100% share of JJ Chicken. We worked on development.

We changed the menu. We did rebranding, the logo.

Ashish Tulsian:

So it was, can you talk about JJ Chicken? Like, was it an existing brand?

Saer Imad:

Yeah, yeah, it was an existing brand. It was an existing brand with two shops. A small entrepreneur started the business.

And was, he doesn’t know what to do about it after this. He has either to inject a lot of money that he doesn’t have. Or he has to sell it.

So he has these options. So we took over the business. We did complete rebranding with complete redevelopment of the brand.

We opened about 10 shops in two years’ time. Transferred the business into a total franchising model. Signed an agreement with Franchise India or Frank Global India to develop the business in India.

Participated in a few exhibitions there.

Ashish Tulsian:

Oh, you guys are in India as well?

Saer Imad:

Yeah, yeah. Actually, we had a deal on the table and then COVID hit. 

Ashish Tulsian:

Got it. 

Saer Imad:

And changed everything.

But we had the complete franchising model of the business. And then we started developing the business because it was only chicken. Then we said, okay, we need to cater to the market.

We need to adapt to the market. So we said, let’s have an Indian range, for example, because most of the communities here are Indian. Then we said, we have to do and add some meat products because no matter how much you like and you love chicken, you will not eat chicken every day.

So if you think of eating meat, for example, immediately the option of J.J. Chicken will be out of your mind

Ashish Tulsian:

Correct.

Saer Imad:

So why would I want to lose this type of customer? So that’s why we added meat and we did some testing and stuff like that.

Ashish Tulsian:

But the brand is still called J.J. Chicken?

Saer Imad:

Yes, because 90% of the or more, 95% of the menu is chicken, but there is 5-10% which is a small part. And then we acquired another franchise from Paris. It’s called Andy Mochapedi.

So Andy Mochapedi is casual to find dining. The business exists in Paris, Saint-Germain. It’s nice.

They have very nice pastry. The food is very chic, elegant.

We developed the business.

So we opened also two shops, one in Blue Water, dubai, next to Dubai Eye, 

Ashish Tulsian:

yeah

Saer Imad:

another one in Dubai Hills. Also, it is totally different because J.J. Chicken is a fast casual concept. Here we shifted into the casual to find dining.

So it’s a different customer expectation, different type of food, different capex, if you want. Even the shop of Andy Mochapedi is something like 500-700 square meters, while the shop of J.J. could be 60-200 square meters. So totally different dynamics, totally different game.

And totally different customer base. Because your average ticket is different. So, And then we said, now it’s time to create our own brand.

So we went and created our own brand. It’s called Derwendi. It’s purely Lebanese restaurant.

So it took a lot of time because we worked on the logo, on the menu, on the recipes, on the look and feel of the shop, interior, cutleries, tableware, you just name it. So this took a lot of time with us. So we opened our first branch in Abu Dhabi.

And our second branch was is in Dubai, opening hopefully next month. Then we acquired another business that was doing well called Solidair. It’s a Mediterranean concept.

And we are now having these four businesses, each one in a different sector, different cuisine, and catering different customer base. But you learn a lot of experience because each one is different. So the marketing that you do for Andy Mochapedi is different than what you do for J.J. 

Ashish Tulsian:

correct

Saer Imad:

So this is what enriched my experience, to be frank with you. And when it comes to decision-making in this complexity of the market, it makes a lot of sense. Then COVID came. 

Ashish Tulsian:

Oh, you had done all these brands before COVID?

Saer Imad:

J.J. before and Andy Mochapedi before, Solidair before, Derwendi was after COVID. So three brands before and one after. But COVID changed everything.

So people sitting at home, you’re not allowed to go to the street, you are obliged, forced to order online. 

Ashish Tulsian:

yup

Saer Imad:

And this was the killer of the market. So then aggregators like Deliveroo and Talabat took great advantage of this scenario.

And people get used, unfortunately, to this. So people started first saying not to use your app. Why would I want to have 20, 30 apps on my phone?

Ashish Tulsian:

exactly

Saer Imad:

Just two apps and enough. So then apps went out. Then because everybody got used to these aggregators, started charging a lot of commission, which started taking from your profitability, unfortunately.

At the same time, the market, because of cloud and dark kitchen, came to the picture. So a lot of people wake up in the morning, okay, I don’t have anything to do, I have 100,000 dirhams, let’s do a chicken concert or a burger concert.

Ashish Tulsian:

But you know what? Hasn’t a lot of that expansion into cloud kitchen, where everybody in the street was having an idea,

Saer Imad:

yeah , yeah, yeah

Ashish Tulsian:

and having a brand, right? Hasn’t that already gone?

I think that market has gotten corrected.

Saer Imad:

Actually, what’s happening, these businesses, their lifespan is six months to one year.

Ashish Tulsian:

correct

Saer Imad:

But unfortunately, you have 10 dying and 10 living. 10 coming. 

Ashish Tulsian:

So they keep swallowing the market.

Saer Imad:

There is a lot of people keep trying their luck. There is a lot of people keep trying their luck. Then what happened that this has created a huge competition, which start eating from your market share. 

Then brands like. existing brands like us having shops, start looking that they need to maximize their efficiency, especially production efficiency. So they said, why leaving and keeping these people trying new brands in dark kitchen? Let me try myself in our kitchen.

So a lot of brands start, existing brands with physical shops, brick and mortar, start launching their own brands. Their dark, as a dark brand. So from their own kitchen, so I have JJ Chicken, for example.

Okay, you come and see. But at the backside, I’m having three other brands called XYZ. Because you need to be innovative and you need to adapt to the change that’s happening and not keep fighting competition.

Ashish Tulsian:

correct

Saer Imad:

It’s just keeping playing the same game. It won’t happen. So this also fueled the competition further and further.

Ashish Tulsian:

But Saer, as somebody who built this business, and it’s been seven years at Almed, right?

Saer Imad:

Yes.

Ashish Tulsian:

So you’ve been on all the three sides from, you know, on the bank side, which was developing and, you know, giving debt to equity side, investing, taking that bet, supporting them and then being, if I could say, an entrepreneur in residence, you know, for Almed, you know, Almed retail, I think. What do you think that you have learned today from a KPIs perspective? What are some of the things that you know today that, okay, you know, these KPIs, these metrics mean the business is doing great.

And these metrics mean it’s not doing great, no matter what subjective explanation of that is. How do you value restaurant business today and what KPIs? What restaurant business you will say, you know what, this is not going to work?

Saer Imad:

You know, there is, there was a very common mistake. Most of the entrepreneurs falls in that. They use not to differentiate between P and L in the cash flow.

And that’s a major problem. You know, you could have, you could be profitable, but you don’t have enough cash to pay your bills. So this was a major problem people face.

But one of the major KPIs in the F&B industry, especially restaurant, one is your cost of goods. That’s very important. So if you are not managing this pretty well, regardless what you will do, you will never make money.

So for me, three KPIs are very important. Your cost of goods, your salaries, your employees cost, and your rent. Especially here in Dubai, because rent could be a, make it or break it.

It is because the rents here are very expensive. So this could take a lot of chunk of your profits.

Ashish Tulsian:

What’s your, in your formula, what is the percentage of rent? What rent should form what percentage of the revenue of a store at a store level?

Saer Imad:

In Dubai, the rent should be between 15 to 18%.

Ashish Tulsian:

Oh, that’s high.

Saer Imad:

In Dubai. I started my sense in Dubai. Because this is the trend.

Staff, like 20%. When I say staff, that’s C2C. 

Ashish Tulsian:

yeah

Saer Imad:

I mean, it goes to company.

Because here you know, it’s not only the salary. It is the salary, it is the residency, the legal documents and papers that you pay the government. It’s the air ticket to a country.

It is the medical insurance that you pay. It’s the end of service indemnity. It’s all these costs embedded under staff.

Ashish Tulsian:

20%.

Saer Imad:

Yeah, so it’s not only salary. So when we say employee cost, it’s all these costs together.

Ashish Tulsian:

So is it safe to say that like of 20%, 10% is the actual salary to the employee and 10% is the rest of the, like what’s the share of?

Saer Imad:

No, it is like 15% is the actual cost. 

Ashish Tulsian:

15%

Saer Imad:

Yes. You add always 10 to 25, 20 to 25% on your salary. Your salary is 10,000.

Your cost would be about 2,500.

Ashish Tulsian:

So 20% should be salary, rent should be 15 to 18. And what should be the cost of goods?

Saer Imad:

Maximum, maximum 30%. Maximum. 

Ashish Tulsian:

What’s a good cost? 15? 

Saer Imad:

15 you will never make. 

Ashish Tulsian:

15?

Saer Imad:

Yeah, it’s difficult. No, not now, not in Dubai.

Ashish Tulsian:

So the spectrum is 20 to 30?

Saer Imad:

No, a good one that you’re doing well, it will be something in the range of 22, 23, 24. 22 to 24% is an achievable target and a healthy one.

Ashish Tulsian:

So what you’re saying is that, you know, every percentage point between 22 and 30 is going to be make and break.

Saer Imad:

Yes, it’s taking from your bottom line, it’s taking from your EBITDA Profit.

Ashish Tulsian:

How many restauranteurs I, you know, and I’m in this business, you know, I see this every day. Cost of goods, as you said, is a very underrated KPI, though it shouldn’t be. Theoretically it’s a…

Saer Imad:

Should be the most important. 

Ashish Tulsian:

You know, theoretically people understand as well, but most of the restauranteurs that I meet, rarely I meet people who have like absolute understanding of their cogs all the time.

Saer Imad:

I believe I have a competitive advantage here, because I come from a finance background, so you look more into numbers and don’t look only to operation. The problem is the cost of goods sold, and this problem across all restaurants, people who work in restaurants, that they miscalculate this cost of goods sold. That’s the problem.

Ashish Tulsian:

how?

Saer Imad:

So, either they have a problem with the recipe, and the ingredients is not calculated properly, or they miss something between the whole value, or between the whole supply chain and the production. So, from when it started from supplier to the end product.

So, this is it. There is a lot they miss the yield, for example. So, you bring, I don’t know, 100 kg of something.

This will never give you 100 kg. So, there is a certain yield, and this should be tracked over a period of time to check how much is the average. So, all this will give you a miscalculation of the cost of goods sold.

So, you think that you are doing well, but then you are not. That’s why you see most, if not all, the restaurants have a variance between something called theoretical cost and the actual cost. 

Ashish Tulsian:

right

Saer Imad:

So, my theoretical cost is 23%, but I’m paying what is equivalent to 28%.

So, this 5% is going somewhere.

Ashish Tulsian:

And this 5% is actually, was supposed to be your margin?

Saer Imad:

Yeah, it’s supposed to be part of your profit. So, this is the problem people are facing now. so,

Ashish Tulsian:

as a, and what were the areas where, you know, you feel that, you know, if you had not had your investing experience, or even after having that investing experience, building a business, building a brand, building a new concept, running it in the market is still tough. It doesn’t matter what you know, you know. 

Saer Imad:

Definitely.

Ashish Tulsian:

So, what do you still feel are challenges that you face every day, in your life, as somebody who is responsible for building these brands, even after knowing what all you know?

Saer Imad:

No, there is always challenges, I mean, today, one of the most challenges we are facing is inflation, for example.

Ashish Tulsian:

No, I’ll say the challenge that you have. I mean, I’m talking about your own challenge, like what is still in your mind is like, oh man, it’s still a battle and I’m not very sure about the answers.

Saer Imad:

Sure, a challenge that I will always face managing an F&B business is just how you will be able, always, to maintain consistency of your product and have this offer to your customers. This is something very difficult, because regardless of what you do, you will always have this problem. For me, I believe I will not be able to get a solution for it, because consistency is very important in the type of restaurants that we have, because it’s not like, I don’t know, McDonald’s, for example, you have everything ready made and stuff like that.

Ashish Tulsian:

correct

Saer Imad:

So, for example, take JJ Chicken, we do chicken on charcoal. So, how difficult it is to control charcoal and have it well cooked, half cooked, all the charcoal. So, the consistency in these kinds of products that we offer is very difficult.

Consistency even of the raw material that we receive, especially in the previous couple of years and during the COVID and after COVID. So, all this is creating a problem in enabling us to have this kind of consistency in the product. So, this is a major challenge.

Second one is that we always keep facing is that how to keep your employees and your staff on the ground, people, especially in the kitchen, motivated. And this is something very difficult. Maybe people who are in the front of house, it’ll be easier for them to help them get motivated.

As people are in the back of house, they are not interacting with people, they are always in a closed environment. So, these people are very important to your operation and you need to keep them always motivated.

Ashish Tulsian:

When you say it’s a challenge to keep them motivated, what’s going on in your head? Is it retention or is it just general well-being?

Saer Imad:

Both, especially in a market such like in Dubai.

Ashish Tulsian:

But, you know, how do you, like somebody and I’m just being…

Saer Imad:

So, you don’t want only to retain them because they can be there but not at the same level of enthusiasm and motivation you need to give what you need them to give.

Ashish Tulsian:

But I’ll be a little bit of a, I don’t know, devil’s advocate or pragmatic? I’ll pick pragmatic. Somebody who chose to work in the kitchen.

Chose to work in the kitchen. So, don’t you think they should find their own motivation anyway?

Saer Imad:

They should, but you don’t have to forget the environment they live where. So, take for example, because we have a great experience in UAE. Let’s talk about UAE.

Because there is a lot of restaurants opening every day. 

Ashish Tulsian:

correct

Saer Imad:

The pace is fast. So, people want to be, they will always look for better.

Well, that’s something very normal. But, they will be tempted with the situation that is there. So, they can get a better salary, for example.

They can get a better position. So, they are always moving with this fast pace and you cannot keep having people coming and going.

Ashish Tulsian:

So, retention is definitely at the center, right? Now, what do you do for retention?

Saer Imad:

We try to, besides the financial part, because at a certain point you reach a ceiling with the financial part. 

Ashish Tulsian:

correct

Saer Imad:

You cannot always come.

Ashish Tulsian:

And also, everybody’s paying salary. So, there’s nothing different.

Saer Imad:

Yeah, so paying salary, that’s taken for granted. So, we work with the tips, we work with the bonus scheme, we work with these kind of things. Also, at some point of time, it reached a certain point where you cannot financially keep giving.

So, we are trying always to be close to them, give them training most of the time. If they have any problem, even if this person tried to solve it, being flexible. So, these kind of things, especially that most of these people are expatriates.

So, they are alone here without their families and there is always this kind of problem. So, the operation manager on the ground has to play a major role to be very close to them and try to empathize with them, understand the situation. So, these kind of things is really playing to our favor and because they know at a certain point of time, you can be in a very bad environment, for example, and getting money.

So, also this is bad.

Ashish Tulsian:

With your experience and the capital available, why build your own brands? Why not be the carrier of most successful brands in the world and use your advantage in the region?

Saer Imad:

A very good question. Actually, we experienced both options. So, what we did, we had Derwendi, we created the brand as it is and we were tempted by the idea of being the owner of a franchise and just growing this franchise across the world and having multiple tasks.

So, we were tempted with this and we went into this option with Derwendi. We created the brand, we own it, we registered the franchise in the UK and now it’s registered worldwide. And at the same time, we got the franchise from France, from Paris. Andy Mochapedi.

It’s a totally different approach and model, actually. When it comes to franchising, at the beginning, you don’t put much effort and maybe you can make more profit. When you have your own brand, you have to put a lot of effort at the beginning and lose at the beginning.

But in the long term, you definitely make much more money than handling or being a carrier of a bigger brand. So, this is one. Don’t forget one thing also.

If you are the master franchisee of a bigger brand, you sign a contract for what, five years, ten years? So, you have a huge risk after ten years just not to renew the contract. This is one.

Two, some franchises, they are not willing to adapt to the market or make the right changes to make you successful. So, maybe this brand is very successful in the UK or the US or France, but not necessarily to be successful in the UAE because it has different taste, different culture. So, it’s not always like being big outside that gives you success here in Dubai or UAE or wherever you are going.

So, each one has its pros and cons, actually.

Ashish Tulsian:

Yeah, I see so many, you know, American brands that are infiltrating the market and across Middle East, right? I mean, in fact, recently there’s a new brand in the US, fairly new, six years old brand, kind of started franchising two years back for the first time and I saw one of their branch here.

Saer Imad:

What’s the name?

Ashish Tulsian:

Dave’s Hot Chicken.

Saer Imad:

Yeah, Dave’s Hot Chicken recently came, but yeah, it’s difficult.

Ashish Tulsian:

No, I’m sure it’s gonna be difficult. I’m just surprised that they’re here because, you know, I can clearly see that they don’t have a recall yet, right? Because the brand is very, very fresh in the US.

Saer Imad:

The owner of Dave’s Chicken, actually, they experienced the same what you experienced. So, they have Bar Bar, which is franchised from Lebanon, which is doing much better than Dave’s Chicken. They have Joe and the Juice, also.

Ashish Tulsian:

Oh, Joe the Juicer?

Saer Imad:

Yeah, Joe and the Juice. So, it’s the same company. They have Bar Bar, they have Joe and the Juice and they have Dave’s Chicken.

Ashish Tulsian:

I think they have five guys as well, right?

Saer Imad:

No, not for them. So, this is the group that have these businesses.

Ashish Tulsian:

No, but I think the point I was making was that, you know, when I saw Dave’s Chicken here, like my actual point is when I saw Dave’s Chicken here, my like immediate reaction was that, hey, wow, like, you know, this is a brand which started franchising in the US in 2021. You know, you know the legendary story? Dave’s Hot Chicken started in 2017 in a parking lot.

Saer Imad:

Wow. 

Ashish Tulsian:

Literally, by two guys, three guys in a parking lot. And in 2020, it got kind of, it got private equity investment, it got it got this group.

In Jan of 21, they had two stores. In November of 23, they have 172. And what surprised me was that that stat itself was quite crazy.

For the US. Finding it here just blew my head because I was like, guys, you, you’re not done with the US yet. Like, this is amazing.

My own, the point I’m making is that when I saw that, I was like, wow, if, if this is, if this is how it, I mean, this, it felt like this is how it should be. Though I know, having said that, that the journey, whoever brought Dave’s here, the journey for them is long. I’m sure they’re taking a like really, really long bet on this, because they’re not gonna make money easily.

There’s no recall. But, but isn’t this, isn’t this something which like, isn’t this like investing in like McDonald’s of tomorrow or KFC of tomorrow if, you know?

Saer Imad:

And for me, I don’t think Dave’s Hot Chicken, they did the right step in franchising that fast and that early. Because if you take, if you see what’s happening here, because you need to build on the brand awareness of the brand itself before franchising. Because if you franchise and it’s not successful, then it will, the impact is very bad.

Ashish Tulsian:

sure

Saer Imad:

On growing the business outside. And maybe this is what we’re seeing.

For example, take Joe and the Juice. Joe and the Juice, they started in 2010.

Ashish Tulsian:

Correct.

Saer Imad:

They franchised here, what, last year, two years back. 

Ashish Tulsian:

I didn’t know they were here. 

Saer Imad:

But see how successful they are here.

They took their time, they built the brand awareness, they had now it’s brand equity. So when they came here, everybody just ran to see Joe and the Juice and eat there. They didn’t have to do any marketing, for example.

Ashish Tulsian:

But I think, I think I disagree there a little. I’ll tell you.

Saer Imad:

This is where you see the difference between two, two brands coming from outside.

Ashish Tulsian:

But, but I think, I think Joe & the Juice, I think the kind of community building they did globally on the internet, and how they took it like deep during COVID, is I believe the resultant success of Joe the Juice everywhere in the world is probably that.

Saer Imad:

Perhaps. But I mean, when I come to marketing, when I say marketing expenses they put, I mean here what they did. Here they didn’t spend much marketing, or they did much marketing activities.

So the brand by itself is attracting people.

Ashish Tulsian:

So what kind of leader are you? And how has it changed over the last 20 years of your work?

Saer Imad:

Because, because as I told you, I came, I used to work on the advisory part or the mentorship part and then jump to the operation. So this teach me one lesson that to understand better people, and this is one. Two, delegating tasks, that’s very important, but then not go and micromanage.

So just, you have to trust people. You have to trust their judgment. Definitely you will watch and verify and check.

So this is how I manage the business. This is one. Two, when I want to assign or ask tasks from people, I have to make sure that they have this level of responsibility or this level of, they are able to do it.

And then go and ask for accountability. So this is very important. And because now I’m more into operations, so it’s very important to understand the whole, if you want, the whole spectrum of the operation.

So this will give more respect and trust for your employees because they know that you know everything. So this kind of cooperation will be more smooth. And they will ask you and you will ask them the right things that need to be asked.

Ashish Tulsian:

Do you agree with, or like, what’s your opinion on people complaining about micromanagement?

Saer Imad:

I totally agree with them. Because micromanaging people is simply having whatever potential these people they have locked. You are not getting the benefit out of it.

You’re not using them, actually. So if you want to bring somebody and you micromanaging, micromanaging that means you’re forcing all your decisions, your inputs, whatever. So you’re not leaving in for any out-of-the-box thinking, you’re not leaving any innovation to come with it.

He just, at some point of time, surrenders and just waiting for your direction to adjust to do it. Which you don’t want.

Ashish Tulsian:

But in a repeatable operation process, in a repeatable process, you really don’t want people to think out of the box? I mean, it takes enough effort to just keep them in the box.

Saer Imad:

Believe me, when it comes to operation, no, you will always need them. Because things are not always smooth and there is no variables. I’m telling you, just imagine, go to the smallest thing, a waiter, a cook, a commis, these things.

So definitely, definitely, definitely, every day is not like the other. And definitely, there will be always some challenges facing them. I don’t know, a customer that is difficult to convince, a customer that he saw something that is different.

So definitely, things are not always the same. I don’t think there is something repetitive, unless you are in a factory, but we are not. So I don’t know, cooking, the cooking line, for example.

You will have always some problems, you have always some things that happens. And 

Ashish Tulsian:

how do you empower them to think out of the box?

Like, what’s your way of telling them that, hey, if you think out of the box and do something, and it can bomb, but I’m with you. What’s your way of communicating that to your team?

Saer Imad:

No, how things are done, when you say out of the box, is to give them the courage or to give them the delegation to take action. Because at this type of operation, if they want to go back and you want to micromanage, that’s impossible. You cannot do it all, you are not there all the time.

So this is, we help them through training, we help them through different, we give them scenario analysis that if something will happen, this will happen. So you try to help them with these different scenarios that could happen, that give them the solution for it. So mainly, this is how it is.

And I believe micromanagement is, it hurts the business, doesn’t help at all.

Ashish Tulsian:

As a leader today, what has changed? Can you cite two changes that have happened you, that you felt, you know, evolved inside you over the last decade?

Saer Imad:

A lot of changes changed. So first, your perspective to people. So how I see people, how…

Ashish Tulsian:

Give me a, give me an anecdote on how you used to think and what is not true today.

Saer Imad:

Actually, the way of how you manage people, this is how it is, it’s changed. So now I’m more a strong believer of delegating, of giving the chance to people, of putting them on the responsibility. They can show you that they can give you more than what they are supposed to give.

So this takes me a lot of time to believe that employees usually have the capabilities of doing these kind of things, but you need to give them the chance and give them the right tools. So, yeah, so this is, this is taking quite a bit of time to…

Ashish Tulsian:

So you mean earlier, earlier you were…

Saer Imad:

No, earlier, yeah, I was more hands-on. I call it hands-on, so I’m not saying micromanaging. So I used to be more hands-on, following up more, not leave, trying to be, because I’m a bit skeptical, so trying to not leave any room for mistakes, and I have to do this, so you will not leave us.

Unfortunately, I discovered that it hurts somewhere. So this took quite a good time to start moving to this kind of leadership that you are now, delegating people, give them the right training and tools and leave them. Just give them the chance to show what they have.

And anyway, nobody, everybody do mistakes. 

Ashish Tulsian:

yeah

Saer Imad:

As long as it is uncontrollable and as long as you are mitigating your risk, it’s fine. So this is a major change happened to me in the way of management.

Ashish Tulsian:

What’s your, what’s been your experience with, like what’s your relationship to technology in your business in general? Like how you perceive, it’s important, the current world knows that, but how do you perceive?

Saer Imad:

It’s not an option anymore. You like it, you don’t like it.

Ashish Tulsian:

But on what side are you? I know it’s a necessary one now, but how do you perceive?

Saer Imad:

Today, you cannot. We all know that technology is a major, major, major part of any industry.

Ashish Tulsian:

But are you reactive or are you a proactive leader on tech? How do you look at tech?

Saer Imad:

To be frank with you, now, no, we are, we are very active on this part. At least in the last, after COVID, we became very active. Maybe before we were a bit proactive, to be frank with you.

But after COVID, we became very active. Especially now with the artificial intelligence that is coming, we’re trying to get and benefit from it as much as we can. The issues of delivery also, when it came to the picture, especially in one of our branches, JJ Chicken, so forced us also to be very active when it comes to technology.

Because now you don’t interact directly with your customer. It’s all mainly through delivery. So you need to have all the right tools to help you understand and serve your customers better.

So technology is a major part of the business.

Ashish Tulsian:

Where do you want to see this? What do you think is going to be the success of, let’s say, JJ Chicken and all the brands that you’re using? What’s your next?

How do you look at that success?

Saer Imad:

We have a very promising and aggressive expansion plan for the brands, especially JJ Chicken and Derwendi. So we hired a special company in UK to do the studies for us, for UK to expand there. And it was very promising.

And this is our next. So we have three markets that we really were eager to expand there for JJ, which is Saudi Arabia, UK and India. And for Derwendi, Saudi Arabia and UK.

We did a lot of studies.

Ashish Tulsian:

Are you in Saudi Arabia already or not?

Saer Imad:

No, going soon for both brands. So we’re on the final stage. So, yeah, so I would be very excited and happy if I can see these two brands in these three countries.

Because these three countries, they have huge potential. Each for a different reason.

Ashish Tulsian:

It’s a very interesting mix. India, UK and Saudi Arabia. These are three different types of worlds.

Saer Imad:

Exactly. JJ Chicken for Saudi Arabia.

Why Saudi Arabia for JJ Chicken? Because they are the number one consumer of chicken in the world. And we are talking per capita.

So this is one. Why UK? Because if you go to UK and you see the fast casual restaurants, you have burgers, pizzas, fish and chips and that’s it.

UK is number one maybe in the world when it comes to casual and fine dining restaurants. When you come to fast food and fast casual, you don’t have much. There is not much competitors also in UK.

So we had this study. I called you. We have it.

And why India? Because it’s a very big market. It is dissected.

We did the study. We dissected India into 12 districts. Some people, they don’t eat chicken.

Some people are vegetarian. But still you will have at least a market of 200 to 300 million that eat chicken.

Ashish Tulsian:

India has a large chicken eating population for sure.

Saer Imad:

Yeah, exactly.

Ashish Tulsian:

India is not a meat eating country as much. I mean, not across the population. Of course, there are sectors.

Saer Imad:

So we did a lot of study with franchise India and Frank Global India. They know very well the market. 

Ashish Tulsian:

yeah

Saer Imad:

They took a few brands from here and they did very well there.

So also we are very optimistic about it. So that’s why in each country there is a different reason why we want to expand. The Derwendi definitely because it fits Saudi Arabia and it fits UK.

It doesn’t fit India. 

Ashish Tulsian:

yeah

Saer Imad:

So I would be happy to see these two brands there. We’re putting a lot of efforts actually.

And hopefully 2024 will be the title of 2024 is going out. That’s for sure.

Ashish Tulsian:

Awesome. That was a great conversation, Saer. 

Saer Imad:

Thank you. Thank you. 

Ashish Tulsian:

That was quite a view into your life at Almed and also in your mind. Congratulations on the success so far. And I really wish you all the best for the year of going out.

Saer Imad:

Thanks again. Thank you. And it was really a pleasure to have this discussion with you.

All the best. Thank you. 

Ashish Tulsian:

Thank you.