The Five Senses of Dining: How Steve Simon Built Fifth Group Restaurants

Anthony Codispoti: Welcome to another edition of the Inspired Stories podcast, where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codispoti and today’s guest is Steve Simon. He is the founder and CEO at Fifth Group Restaurants, an Atlanta-based company founded in 1993 that has become known for creating joyful dining experiences at places like South City Kitchen, Latavala and Echo. Their mission is to provide memorable moments through great food and friendly hospitality. Under Steve’s guidance, Fifth Group has been recognized for its sustainable practices, including a Green Food Service Alliance certification and pioneering Atlanta’s first zero-waste zones. Steve has spent over four decades in hospitality, beginning as a dishwasher at the age of 14. He is known for his focus on development, brand salience and day-to-day leadership of the team.

He also played a leading role in guiding South City Kitchen through major economic challenges, including the COVID pandemic. Through his commitment to innovation and sustainability, Steve has helped shape an organization that continues to thrive. Now before we get into all the good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company, and some organizations may not be eligible.

To find out if your company qualifies, contact us today at addbackbenefits.com. Back to our guest today, founder and CEO of Fifth Group Restaurant, Steve Simon. I appreciate you making the time to share your story today. Good morning, Anthony.

It’s great to be here. So Steve, you started out as a teenager, 14 years old, washing dishes. What key lessons did you learn from those early back of the house days that still influence how you run your restaurants today?

Steve Simon: Well, it taught me quickly that it’s not all glamor, and it’s mostly not glamor. But it can be a lot of fun, and you meet the people that become the closest to you in your life. It’s a high-energy environment, and it takes a certain type of person to really excel in the business.

It’s somebody that likes stress and pressure and a little bit of craziness, sometimes a lot of craziness. But that’s what it was for me at age 14, and that’s still what it is at age 57.

Anthony Codispoti: So did you just stay in hospitality all the way through, or you got your start as a teenager, went off and did something else and came back?

Steve Simon: I washed dishes at a couple of places. One was mid-defined dining place in rural Michigan, so it’s probably more bed than fine. And I did work at a private country club, and I worked at a pizza place, and so I worked a handful of places in, I guess, starting in junior high through high school. I moved into the country club scene later in high school and into college, but my father was in iovisual communications in Michigan, so he did a lot with everything he did, was with the car companies back then. But I initially thought while I was graduating high school that I was not going to go into the restaurant business, because quite honestly, between the stories I heard and some of the hands-on experiences that I had were you worked with some unsavory people, including owners.

And not all of them were like that, but there are some stereotypes, and as usual, those stereotypes are true to some degree, and so I had a little bit of fear or concern about going into that industry and saying, gosh, can that really be a career with some of those unsavory people? And so no one in my family had been to school, had been to college, it was really important to my parents. I was not a great student, but I was going to go to school and be the first in the family to get a degree, and because my dad was in his own company, this out of view of short communications, I was going to take electrical engineering, so I could understand the technical side.

He was more the business and sales guy, and it was going to become a family business. And so after three days at Lawrence Institute of Technology in Detroit, Michigan, I came home on the third day and I said, mom, those are not the people I’m going to hang out with the rest of my life. And she said, that’s great. She said, you better figure out who it is, because it’s not me and your dad.

Anthony Codispoti: It only took three days to figure out that wasn’t your calling.

Steve Simon: It really took one day, but I felt like if I didn’t give it two more days, I was really going to be in trouble with that news. And I had actually, with the high school I went to, actually had a vocational ed program for electronics, so I’d actually had three years of electronics, and I really enjoyed it because I’m kind of a technical math electronics. I like to fix things, and I like to know how things are built, so I thought it was a good mash, but it got too heady, too fast for me.

Anthony Codispoti: And so it just takes a quick step back, Steve. What were the unsavory stereotypes of restaurant owners at the time?

Steve Simon: Well, to put it bluntly, it is like everybody’s a drunk or a crook. And that’s the, you know, that’s the…

Anthony Codispoti: You didn’t want to be around that for a career. You didn’t want to be that as somebody in your own business. It was not very aspirational as a goal, too.

Because I guess I thought I would I guess I thought I would be in business for myself at some point in time. And also the lifestyle of a lot of these people, because again, we were in a more rural area. So it’s like these people worked 90 hours a week, and they had their life savings in it, and you drop a glass, and you would have thought that you cost them $10,000. And at that point in time, a glass was 50 cents. And so it just, there were some of those things that it was like, God, this is a pressure cooker.

Anthony Codispoti: So… So what point did you realize that you wanted to start your own thing?

Steve Simon: So I didn’t want to really go to school, but I knew it was important. So I dropped the three classes and I waited. Basically the three days was long enough that I was, it was going to be too late for me to enroll anywhere else that semester. So basically I bought myself a semester that I could just work, which is really what I wanted to do.

So I went to the country club that I had been working at part-time, and I was able to work 60 or 70 hours a week, which is what I wanted to do. And so the following winter semester, I signed up at a local university, and I took general first term stuff that doesn’t matter what you take, because everybody takes it. And so I worked throughout that semester, worked through the summer, and I waited just long enough in the fall to say, okay, I think I’m going to really make a go at this restaurant thing. But I had waited too long to get in fall semester.

So I bought myself another semester of working, which is again, what I really wanted to do. And so I started that winter semester in Michigan State, and their hotel restaurant institutional management project in the College of Business.

Anthony Codispoti: And did you end up finishing that program? Did you graduate from there?

Steve Simon: I did. I was able to stretch a four-year program into five and a half years. And so parents were snimer. First semester signed up for 17 credits. They got dropped five. And I did a version of that more than once, let’s say.

Anthony Codispoti: Okay, but you got to the finish line at some point.

Steve Simon: And you’re probably working along the way. I worked almost all the time throughout college, certainly all summers. A couple summers, I stayed in Michigan State, a couple summers I came back home to my small town, Romeo, Michigan.

And yeah, and so I worked through. And then my after my between my junior and senior year, I did an externship for a guy that ran the country club down and down where I lived in Michigan. He was up in Northern Michigan, which is a vacation spot.

It’s a town called Trevor City that my parents and our family went every year for summer vacations. And so I went and worked at that country club. And I met a girl. And that girl ended up, she had just enlisted to be a Navy nurse. So she was finished.

So she was here ahead of me. And she was going to be chipped three months there. And then she was going to move down to Charleston, where she was assigned at the Navy base. So anyways, so that’s ended up being how I got to the south because I followed her after I finished school. And I guess the rest is history.

Anthony Codispoti: So when and where did the idea to come up to start your first restaurant?

Steve Simon: So I so I ran a place called Magnolia’s in Charleston, which was it’s still around and it still does very well. And it was one of the earlier this is back in 90s back in 90 and 91. And it was one of the first like more upscale Southern restaurants. And so I was there for two and a half years. And the fellow that was the one of the owners there, ironically happened to go to Michigan State.

He was a few years older than me and it’s him and his uncle, who was the finance hero of it. And so a couple years in, they had a falling out. He left. And six months later, he and I discussed doing something together. And we ran into a couple of local restaurant tours in Charleston that basically said, Hey, we love what you guys do.

And we’d be happy to finance whatever you do. Well, he said, Okay, well, and he had a non compete for Charleston, my partner at the time. So we took a couple road trips that we went to Charlotte, North Carolina, we went to Atlanta, Georgia. And we picked Atlanta, Georgia, Midtown in particular.

Anthony Codispoti: And I see you’d never lived. Neither one of you had ever lived before.

Steve Simon: Never lived, never been. I mean, we and I don’t know if you know Atlanta or Midtown, but there’s, you know, where where our first location is, is right in the core of the business district. So they’re a scoped out the area.

But the reality is we had missed a couple of the neighborhoods, and especially some of the wealthier neighborhoods that were literally four blocks from us. And so when we opened that restaurant, we thought we would open it for dinner first to have a soft opening. And then when we open for lunch, all the business people at lunch were going to come down and fill it up. Well, what we didn’t know is there was all this residential around us. And there was, there were very little, very few other options in Midtown. And so on our third night, we turned 150 people away because we were that busy.

Anthony Codispoti: What an incredible start. You guys were off to the races right away.

Steve Simon: It took us seven months to even get open for lunch, because we’re just, we’re getting run over every day. Wow. Yeah.

Anthony Codispoti: And so right from the start, you’re like, we’re on to something here. So how long did it take before you’re like, Hey, let’s work on another spot?

Steve Simon: Well, we decided to do that too quickly because well, one is that it took us forever to figure out how to make money, even though we were doing a ton of business.

Anthony Codispoti: Okay. What was the struggle there?

Steve Simon: Overpaying for, because we were not as, we were not as smart of business people as we thought we were. I was 25, he was 28. You know, we had both run restaurants, but running a restaurant and really owning the cash flow and the P &L, those two different things. And all of a sudden it’s like, you know, and of course, we went way over budget on the build out.

You know, our, our investing partners did a certain, they did a very casual sports bar type thing. So they spent no money. We did something nicer. And so, you know, at that point in time, we said, Yeah, the chairs are going to be $200. And they said, $200. We paid $30 for our chairs.

And, and every decision was like that. I mean, now you spent $1,000 on a chair. It’s crazy, but it’s, you know, is that a massage chair? No, it’s a chair that won’t collapse when somebody sits on it for the third time. Yeah, in a, in a commercial environment, it’s everything’s got to be really built to last. Otherwise, you’re thrown it away every year.

Anthony Codispoti: So how long, how far into it were you before you actually started turning a profit?

Steve Simon: I’ll bet we were a year. I mean, we were close. We were teetering on break even six months in or something like that. But I mean, if you knew the volume we were doing then versus the fact that we didn’t, we couldn’t figure it out, it was crazy

Anthony Codispoti: making, you know, were some of the big learnings along the way? Like what dials were you guys turning to get to that profitability state?

Steve Simon: A lot of it was structure within the organization and really having clear roles. Let me back up. We, you know, we were young and dumb or naive. And, you know, and one of the things that was important to both of us, we had both worked in the sweatshop versions of restaurants where everybody really had to grind it out. And so culture was very important to us. And the place that we had run together in Charleston had that.

This was a very family environment. And so part of that we brought, a lot of that we brought to Atlanta. And what we realized, I mean, shoot, I’m realizing things every day now that were mistakes that we made 32 years ago that it’s like, oh my God, if I would have done this different, it’d be so different. And because what happens is, you know, was that without some of the strut, you know, holding people again, one of the things that I’ve realized is that holding people accountable is something one that they need. And number two, most people really want, they don’t say it out loud. Nobody comes and says, I want you to hold me accountable because it sounds like, you know, the flip side of that is, you know, you’re going to stand over them with a whip, which is, you know, that’s one way it’s not a very effective way to hold people accountable.

But, you know, we were young and immature and didn’t have, you know, whether it was the emotional intelligence or just the, quite honestly, the years of leadership and expertise to understand, you know, how you can hold people accountable and not be a bad thing. And that and the efficiencies that that brings in an organization is, you know, it’s tenfold. You know, we had a lot of people just, you know, walking around, kumbayaing and all this stuff. And so, you know, labor has always been the biggest expense in a restaurant, more than food, more than rent, more than anything. And so when that’s already the biggest expense and we were wildly inefficient with it. So you guys were over staffed? We were, we were over staffed and the staff that was there wasn’t sure what they were like, what they were really accountable for. You know, and nobody can really be more accountable for more than, you know, four or five things, especially, and, you know, and if you’re at an hourly level, it’s different than if you’re at a management level versus a director level versus a VP level. And so that changes a little bit.

But, you know, to really say that I am the owner of these five things and to be able to clarify that, that’s what we didn’t know how to do that. And so there was efficient. So we were over staffed. And even when we weren’t over staffed, we were inefficient because too many people were doing the same things.

Anthony Codispoti: And, you know, it’s like three people cleaning when you needed one person to clean and another one to restock or something like that.

Steve Simon: Or it’s like if everybody’s responsible, nobody’s responsible. And so it’s like, well, everybody cleaned the restroom. Everybody makes sure it’s clean tonight when you leave. It’s like, okay, well, there’s nine other servers working and I got a date where I want to go to the bar. And so I’m going to slip out and nine people do that.

And all of a sudden you go into the next day and it’s like, this place looks like hell. So it was learning to create the structures and the systems. And again, 30 years later, we’re still, we still rewrite these things all the time because we go, oh, this isn’t clear. And, you know, and clarity allows people to perform better without you having to kick and scream at them. And it’s clear to them.

They know what it is. It’s like, these are the things I got to do. And I can do this many, I can’t do this many. Or I can’t do that many well.

Anthony Codispoti: Now what you said a moment ago makes a lot more sense when you’re like holding people accountable is not only what they need, but ultimately what they want. And they’re not going to say that, but they want to know like, what is my job? What am I responsible for? You know, what is it that I own so that I can feel comfortable in knowing that I’m checking the boxes I’m supposed to check today?

Steve Simon: And sometimes you go to the other extreme, like, you know, we’d have these three page job descriptions. And it’s like, who would take this job? So part of it is, you know, and it’s also being clear as to this is the most important, this is second most, this is third most. And so it’s a lot of that clarity. And then, you know, and you’ve got to have that before you can really be good at managing food cost, or managing labor costs, or managing beverage costs, or your controlables, or, you know, all the things. There’s, you know, there’s 65 lines in our P &L. And they’re all and then some of them really should have some accounts on there. Okay.

Anthony Codispoti: Lots of detail. Lots of cascading structures.

Steve Simon: Yeah. And the restaurant is the restaurant business is either death by 1000 cuts, or it’s, or it’s, you know, it’s like a fantastic ballet.

Anthony Codispoti: And so about a year in, you guys are getting some of these things figured out, you’re finally turning a profit. And then I heard you say that you opened your second location too soon. When was that?

Steve Simon: So we brought on a third partner about a year in. And the reason we did that is because he was best friends growing up with my partner. He happened to live down here also happened to be a restaurant guy. And there was this company called Starbucks that was just coming up in the Northwest. And they had read about it and he had been out there. And so he, he had this idea. He’s like, they’re doing this thing. It’s going to blow up.

It’s going to be the thing that allows us to retire when we’re 35. And there was literally one coffee shop that I could think of within 15 miles of Midtown Atlanta at the time, maybe two. But it wasn’t, there was no Starbucks, there was no caribou. I mean, there was a local place.

And, and it was kind of often a neighborhood, you know, other than, I guess you could get Dunkin Donuts then, but there was no coffee culture. And so it took us about, and our original investors said, Hey, we’ll do that too with you guys. And we’ll bring this guy in and we’ll just all divvy up the ownership and we’ll fund it. We’re like, okay, that sounds easy. And so it was too easy.

So we didn’t have to really think about it. And so we went about building this first coffee shop called the Urban Coffee Bungalow, which was everybody’s favorite. So they say, and, you know, it probably took us nine months from the time we said we were going to do to get it open. And, and one of the things we said is we’re like, look, the coffee shops that we’ve seen, and we had traveled to some other cities to see what other people were doing. It’s like, they’ve got these pastries and they’re no good. And so, you know, we know fine dining. And so we’re going to hire a baker, we’ll have him do the breads and things for some desserts for South City. And he’s also going to do all the pastries. And we’re going to have sandwiches and we’re going to have salads. And I mean, the food we were doing in this coffee shop was better than food that you can get in most restaurants now, like, like a lunch place.

And it was just everything was fresh and scratch and things like that. But, you know, we were doing $1,200 a day in sales and half of it was coffee and people were coming in, they’re like, you know, we’re making focaccia to put this roasted chicken salad on it. And, you know, we’re charging $5.54. And they were like, $5.50 for a sandwich, Jesus. But, you know, I mean, this is when espresso was $1.50 and coffee was $1.50.

Anthony Codispoti: And there was a mismatch between what people wanted and what you guys were providing.

Steve Simon: No, they wanted it. But because there was nobody else doing it, they had no perception of what they could really cost.

Anthony Codispoti: They couldn’t wrap their heads around what you were doing.

Steve Simon: And because we came at it from such a heady place that we were so committed to doing, like, this level of coffee experience, we didn’t perform on what it was going to cost to do that. I mean, we had three full-time people in a bakery to sell, you know, two dozen muffins, a dozen cookies and, you know, a few salads and quinoa, this and, you know, two dozen chicken salad sandwiches a day. You know, we have three full-time people doing this. And so it’s like, God, why can’t we make any money on this?

Anthony Codispoti: So looking back, do you think you were just ahead of the curve? Or like, even if you were to have done something like that five or 10 years later, do you still think it wasn’t sort of the right market fit?

Steve Simon: So what I left out is that from the time we decided to do it, I told you that there’s no Starbucks or Caribou in town. The time we opened, there was a Caribou four blocks one way, half a mile the other on the same street. And then there were three Starbucks within a half a mile. So we all opened up, you know, and they were doing, you know, they were doing really lousy, but cheaper baked goods.

And, you know, and it was the Starbucks name and the Caribou name. And so, you know, we had the local neighbors that were really committed to us and loved what we did, because we also created a really beautiful environment. And in fact, the guy that made our furniture, this is how young and dumb we were, we thought, Oh, this guy needs money, he needs investment. We’re going to invest in his company. This guy that made these artistic custom chairs.

Anthony Codispoti: So, so at what point did you realize, all right, the this coffee shop isn’t the right direction, we got to wind this down.

Steve Simon: So six months in when we weren’t making money, we thought it’d be great to do a second one. So we did that. And then four months at the force. I don’t know, six months after that, we decided to do a third and it was in the, it was in a adjacent building to the high museum of art, which is our big cultural center here. And so, and that had opened for a huge exhibit that that was going to be there during the Olympics, when the Olympics were here in 96. And so that restaurant made money.

I think we made $50,000 a year on that. The other two lost multiples of that. And we said, after that, we’re like, we got to get out of this, this is going to, this is going to kill us. And so we ended up losing effectively the amount of money that it cost us to build South City kitchen the first time.

Anthony Codispoti: So along the way, as it’s not working and you’re opening up other locations is the thought process that, hey, we need to get to economies of scale, because we’ve got these full time bakers and people making really great food. If we could spread that cast out over a few locations, then the numbers are going to start to turn in our favor. Is that the thought process?

Steve Simon: It was. And that’s the disease of being an entrepreneur and being in this business. You always think if I do one more, everything’s going to fall in line. All the numbers are going to go like this. And the reality is, if you don’t have a single restaurant profitable, you should not do a second one. Because doing the second one is going to take more of your attention out of the first one that you don’t have figured out yet. And anybody with a lick of common sense says, of course, who would do something that’s so stupid? And I will tell you, everybody that I know in this business, almost everybody that I know in this business has made that mistake. And some of us continue to make the mistakes.

Anthony Codispoti: Some of us are just wired as creators. And it’s like, oh, I can see it. I can feel it. I can taste it. I need to build this other thing over here. And then that’ll help connect the dots.

Steve Simon: That’s right. And entrepreneurs like to build stuff they like to create. And it’s one of my diseases. It’s like, if I could be involved in a restaurant design and construction project, or two or three of them at the same time all day every day, and I didn’t do anything else, I’d be in heaven. Because I just like picking out furniture and fixtures and fabrics. And I love architecture. And I like creating environments.

Anthony Codispoti: So the coffee shop didn’t work out ultimately, lost a chunk of money. It has to be a rather significant blow, not just to the pocketbook, but also to the ego. And for some people, they go through that and that wipes out what they’ve got inside of them. They can’t go back to the well again. They’ll go and they’ll find a job. That didn’t happen to you.

Steve Simon: You picked yourself up. Well, we were lucky that we had the mothership, which is 32 years old now. It’s still the busiest restaurant we own. It’s the smallest one. We’ve got restaurants two and a half times the size that don’t do the volume. And so to answer your question, total ego blow. And again, at this point, I’m 20, not 25, but I’m 27, 26, 27, 28. So it’s like, you’re embarrassed. What are people going to think when we close that? When the reality now, it’s like anybody drives down the street and goes, oh, that closed and they just keep driving. And we sit there and say, they must be bad people. Are they stupid? Or what’s wrong?

Anthony Codispoti: And so as you know, as a young… That’s the inner dialogue that goes on when that happens.

Steve Simon: 100%. It’s 100%. It’s like, I need it. If you’re in business for yourself, you need to coach or a therapist as part of your employment pool.

Anthony Codispoti: I know you’re kind of cracking a joke, but I’m actually glad that you touched on this because I think this kind of thing is so important. Yeah, say more about that.

Steve Simon: About me personally for that?

Anthony Codispoti: Yeah, it’s kind of what your support system looks like, whether it’s a therapist, a coach, like a peer group, a mastermind that you meet with.

Steve Simon: So I’ve had all of those. I’ve got a couple of them now. Currently, I work with a business coach that I met a year and a half ago. And he’s… I, quite honestly, I say about a lot of these people, like they saved my life. And some of them save it in different ways, but it’s like, I’ve been… I’ve probably worked with… I’ve worked with four therapists in the same office, a husband, then his wife, then one of their partners or one of the other people in the office, the wife retired. I was in a… And those were individual. I was in a group with the first and the third co-ed group. She retired, so the co-ed group disbanded. Then I ended up in a men’s group that the two guys ran. Then he retired and the son of a couple, who’s also a therapist, started the group with the other guy. And so it’s like…

Anthony Codispoti: And what do you get from this? What’s the benefit for you?

Steve Simon: Well, a lot of it is, for me personally, and this is just how I’m wired. And part of this is the position that I’m in because being the leader of the organization, it’s like, I don’t have a lot of people to bounce things across. And especially when they say it’s lonely at the top, it’s cliche, but it’s true. And it’s like, other than my friends outside of work, which some are business people and some are not, but unless you can have somebody that really knows you and what’s going on with your personal life and what’s going on in your business, it’s really hard to get somebody to connect to you. to be able to communicate and share and learn and understand from and you know and be able to be vulnerable to also because a lot of it is you know some of us a lot of stuff you talk about there and it’s like anyone talk about it in the free world you want to talk about it on a podcast sure you

Anthony Codispoti: want to present a good face you want a strong front yeah yeah and I don’t even have that so much as a from an ego standpoint but it’s like if I’m the leader and I’m and I’m depressed or I’m angry or I’m

Steve Simon: whatever I am that sets the tone for the company and if it’s and if it’s not a good tone I mean that’s the high watermark nobody’s gonna aspire for above that right because because why would they I mean some people are just naturally more positive and you know it’s it’s not gonna necessarily bring him down but you know if it’s like I you know I and I’ve had bosses in the past I had a boss in college at a nice restaurant that I worked out and in this guy was such a salty crotchety dude and he was only a I thought he was old at the time but he couldn’t have been more than in his 40s and it’s like I’m like oh my and everybody’s scared to death of this guy so you walked on eggshells around him and it’s like that’s that’s no way to be and you know part of that was just because he was the boss and I was young and I didn’t know what that meant but you know and I know when I walk in my restaurants now it’s like people stand to attention and it’s not because I walk in and you know start cracking whips it’s just because there’s some implied there’s something of a plot implied about me being in my position

Anthony Codispoti: you’re an authority figure you’re the bosses boss’s boss yeah it’s natural it happens yeah

Steve Simon: and and I think of myself as the guy that used to wait tables alongside people and so and I have to read and that’s one of the things that you know to this day that I have to remember it’s like I I can’t be as charming as I would naturally be to people because I I enjoy people and I love getting to know them and getting close to them but some of that I have to be cautious about

Anthony Codispoti: so what’s the name fifth group restaurants what does fifth group mean

Steve Simon: well everybody thought it was when we opened our fifth restaurant and they said what do you do when you’re open your six and we’re like no no that’s not what it was but when we went through the branding exercise and to really you know to figure out okay what is this parent company gonna call be called and you know it was originally set up really from a from a business standpoint you know to have you know one LLC that owns other LLCs you know we can take care that we can treat have the best tax treatment and corporate protection and so it was set up for because of that but at that point it’s like we were known as the South City guys and then the Urban Coffee Bungalow guys and then the food studio was our second full service restaurant and then we had been a catering company at the same time and so it’s like what are we for the coffee guys of the South City you know and so we worked with a branding agency that did a great job and and one of the things we kept coming back to is we loved the we loved the number five and we started talking about it things that it represents it’s like the five senses and it’s like oh well five senses are pretty relevant to what we do because you know we’ve we’ve always approached the the business from a standpoint of we do a lot more than food beverage or food beverage at service and so

Anthony Codispoti: it’s really a sensory experience that we want you to have when you come in our restaurants it’s all the five senses

Steve Simon: we love the stature of like a five-star hotel or a five-star general and so we we thought of all of those things and you know and then we thought about it the fact that what we do is like we’re really the fifth food group so you know we kind of like stand over the four food groups so there were there were a variety of these things that we said okay we can spin this marketing could spin this and you know depends who’s asking we got a different answer every day so that’s how it came out

Anthony Codispoti: got it curious to hear about the environmental initiatives that you guys have taken on zero waste zones in Atlanta the Green Food Service Alliance certification why have these eco initiatives been so important to you Steve

Steve Simon: so in 2008 when the world was coming to an end big financial crisis financial crisis that’s right that we were not spared from that and so we were really batting down the hatches and trying to figure out what do we need to do to save our company you know and that was one of the you know more than a couple of times that we’ve had to do that and we had never been through something like that we had opened in 93 and other than the fact of the failing coffee shops which you know that was 13 years later so you know out of sight out of mind we had forgotten that we were not invincible you know the city of Atlanta had always had really good growth and so we were very fortunate that we just grew every year whether it’s same stores or whatever we added a store and so I was called by a woman that worked with the restaurant association at the time and she says Steve she said we’re starting this this group of people to talk about sustainability and we’d like you to be part of it because you’re a leader in the industry here and I said okay I said I don’t have a lot of time I certainly don’t have any money but I’d love to hear about it because it sounds like the right thing to do and and I’m concerned I’m nervous getting into this group because you know I you know I I assumed I was gonna be walking into you know 1969 woodstock or something like that there’s gonna be a bunch of hippies and green peas and stuff like that and a that wasn’t me and be we weren’t doing anything we weren’t doing anything at the time

Anthony Codispoti: we might be gonna be pressured or guilted or you know shamed for

Steve Simon: what I felt like I was gonna feel stupid because everybody else were doing all these things and we weren’t so that’s that’s what I said we’ll do it but we’re not we’re not gonna be your poster child well I got involved and then I realized nobody else to do anything either nobody knows anything about it but there happened to be this one woman that was leading it and as she said you know and so we we started learning more about recycling and we’d been recycling cardboard at the time but you know it was it was it’s still a newish thing because again it was well it was 2008 so recycling was a thing but here in the state of Georgia because because it’s always been a red state and because sustainability is just still not a thing here or it’s not a consistent thing here and the state’s never gotten behind it there there’s no it’s not cost effective we’ve got the we still have the lowest tip fees in the country and so we have lowest tip fees yeah for like a like a word trash gets dumped and so we literally have states bringing trash in and tipping it in Georgia because it’s so cheap to tip here and so there’s so it make so because that’s so inexpensive there’s no incentive for recycling and then what we ended up getting into is composting and so anyways so we so we start really doing a deep dive on composting we started doing or on recycling then we then we learned about this company that was doing something called composting I’m like what’s that and they’re like well we take all your pre and post consumer waste and we take it and we turn it into compost that we can either give back to you or we sell or whatever and I’m like oh this is great how much that cost and at the time it was $150 a month location and so it was you know it was more money but it wasn’t wasn’t gonna kill us

Anthony Codispoti: was it gonna reduce your tip fees at all

Steve Simon: or not enough to be so it was gonna redo parts reduce our tip fees it certainly wasn’t gonna be cost-neutral because we were also adding more recycling at the time so you know one bin getting picked up by one hauler is always cheaper than multiple bins by multiple haulers right and especially because especially if you have wet trash and the compost in particular you you know you can’t say it will just come in once a month you know you got to do you know with a compost it’s two or three times a week or else you know it’s it’s bugs and it’s smell and it’s just like your trash can at home but more and so we we really dug into that and we dug into it because there weren’t a lot of the things that we were celebrating because we’re just you know playing you know try to catch up and stay alive and this was something that the staff really got engaged with and they supported and we very quickly within six months became the poster shout for the city

Anthony Codispoti: to the point that you said you weren’t going to be

Steve Simon: I couldn’t imagine it because you know because you know when you don’t know what you don’t know it’s like oh my god this could be so hard it could be so expensive we’re not gonna be smart enough to figure out how to sort trash I mean I mean those are things that go through your mind when you do the fear you know what you don’t know yeah and so we kind of did there’s us and there was another caterer in town and but but there was a few of us that really jumped on the bandwagon and you know fast forward to now what’s happened is the city and the state has never jumped on board I mean they said they were going to I mean we you know the you know city of Atlanta or the Atlanta airports one of is like the busiest in the world right or one of and so 15 years ago 14 years ago just after this is that right yeah so just after this maybe 2010 they were building the new international concourse which was huge and at the same time that they’re building that and we were we were putting bids in and we ended up with three restaurants in the Atlanta airport one of the things they said when all of the different concessions were turning everybody knew that comes in has to go 100% compostable and so we were like that’s great we can’t believe it this is fantastic well so as we got through opening you know and every you know and the materials are expensive right there they’re a lot more expensive than other packaging materials so I remember walking through the airport one day and seeing all the you know all the different QSRs and all the people walking around with food and it’s all compostable and like this is amazing and first they don’t have compostable containers to throw the stuff away and but what’s the deal it’s like is this this is like smoking beers and so they literally didn’t think about that so then I had a scramble to get all the compostable containers next to the recycling next to the trash and then thought they didn’t have the hauler figured out and there was one guy at that time that could do the hauling because there’s only one place so they finally got him on board and then the airport just abandoned it oh and part of the reason they abandoned it was because the city took the lease away from the guy that had been doing this for 10 or 15 years because some neighbors complain I mean it’s and so we fast-forward now I mean it’s unbelievable so there was a new guy that came in behind him but he had to drive the organics like two hours out of town I’m like okay so we’re going through the trouble of composting to be more sustainable this guy’s got to drive two hours to eat and I’m like okay this is dumb so anyway some other people have figured out some closer things since then but you know the cost of the labor the cost of tip fees you know what what was a hundred and fifty dollars a month for a location back then it now can be eight or nine hundred a month so you know and tip fees for trash and tip fees for recycling have gone like this at the same time and so it’s it’s been a it’s been a frustrating thing to stay really committed to because it feels like it just feels like we have so much so many had wins you know and when I go out and visit my brother in California he’s got four trash cans at his house you know and if you have too much in your trash you get fined okay so it’s you know it’s different worlds in different places but so anyway so that was an end so the whole waste stream you know picking that apart and trying to do better with that was a big part but it also was water conservation because you know we use we use a ton of water in a restaurant Atlanta’s got high water bills compared to a lot of places because the infrastructure sold but you know we’ve got we’ve got restaurants with four thousand dollar water bills every month and so oh so then it’s like okay where does most that water go well most of it goes through the dish machines it’s like okay so then it was a search for who makes the most efficient dishwasher or glass washer for the bar and so you know we went from finding using a machine that’s that was a gallon and a quarter per load which doesn’t sound like that much but when you’re running 500 racks in a day it’s water or a thousand racks so how much we able to reduce that so we were able to go from machines that used like a gallon and a quarter to less than half a gallon wow so and and this is my funny example it’s like when the year the old urinals that used to flush and they run for five minutes and now you see them and that says you know point two five liters per flush you know to me it’s

Anthony Codispoti: kind of seeing some that are just like foam that comes down yeah

Steve Simon: so so anyway so we made major reduction in that with which both save money but you know we’re not use this as much we’ve got a restaurant that recaptures all of its rainwater off the roof well off the roof and and patio and it collects it in this rain pillow that’s underneath the house and we you know it gets cleaned and it gets reused for irrigation at the restaurant but it also feeds all the toilets so we don’t flush any no toilet flushes are used with city water

Anthony Codispoti: I’m gonna guess that all these initiatives that you’re talking about Steve it’s still costing you extra money out of pocket this is not revenue

Steve Simon: through true no no the rain pillow cost us 25 grand 14 years ago and you won’t be surprised to know it has ongoing maintenance of

Anthony Codispoti: course it does so you’re doing it because it feels like the right thing to do

Steve Simon: feels like the right thing to do and some of the thing you know it’s like buying buying a lower water use or a lower energy dishwasher it doesn’t cost $10,000 more it’s the same price you just have to find the right manufacturers and then you gotta find people that can actually work on them because it’s not the most common machine but you know we’ve done a lot with high efficiency heating and air systems that is a that is a significant incremental investment on the front end to get you know it’s kind of like at home do you have a 12 seer or a 15 seer or a 21 seer and they all have different prices on and so do they pay themselves back they don’t do you feel better yeah or I do anyways

Anthony Codispoti: yeah I think that’s great shifting gears I I’d like to hear about a serious challenge that you’ve overcome whether it’s personal or professional how you got through and what you learn maybe something we haven’t already touched on well so COVID was fun

Steve Simon: I mean we had we had come off of our busiest year ever in 2019 which I think was everybody’s story in the hospitality industry some of some of it looks at sense and some have not depending on your locations and cities but you know we and we were on this growth path and we thought we were going to have to go back to the first presidents which we had never had in the company before so they were not only three new roles but they were the three highest paid roles in the company and then within a month of hiring the third one we close all the restaurants it’s brutal and one of those roles to the VP of people of culture and so that person spent the next two years literally communicating with staff about COVID that was their job and a little bit of hiring but there wasn’t a ton of hiring for a while on COVID but yeah that that was I mean it wasn’t supposed to be their job but it’s like there was no people in culture it was literally talking about COVID so that was that was a thing we were at a point we were very fortunate we we had had we had a good nest egg and so while we were in panic mode because you know sales was at zero we knew that you know when we were originally thought we were closing for COVID we thought it’d be two weeks and be over and everybody’s cold would go away and whatever that obviously didn’t work and even though Atlanta and Georgia were the state that was allowed to open much earlier than a lot of places you know it was still weird at restaurant traffic work was weird and people were weird and you know some people are still weird about it but you know the other person was a CFO that we had hired and he spent a year or a year and a half figuring out what were all the government incentives that we get and you know how to manage that and how to make sure you not only applied for them correctly so that you would get awarded but then you know there’s a there was there was a lot of rules around you know reporting back to them so that you either got forgiveness or didn’t and so that was a big thing and you know and just be you know we felt like we were in firefighting mode 24-7 for more than two years 2021-22 certainly all of 2021 really into 22 23 is the first year that we actually had I think we had three restaurants back to same-store beating same-store sales okay but you know with 10 rest and you know one of the restaurants we opened we opened three weeks before COVID so that was you know open it fanfare spent all the money on marketing and having people in friends and families and all this stuff and then close for four months so and that and that restaurant particular has has that has had a hard come back because reopening it’s like yeah I mean the same excitement reopening there so and I hate talking about COVID

Anthony Codispoti: picking at that scab here sorry about that I

Steve Simon: know I mean but it but it still comes up in conversations more than once a week because because it’s a reference point I mean it’s like a month it it’s pre-COVID post-COVID pre-COVID post-COVID the heart of COVID but it’s it’s up you know and for us we were lucky in 2008 you know our sales went down a fair amount in 2008 they went down a little bit in 2009 but we were already in you know trying to really get tight mode so we actually had a little bit better profitability in 2009 and then after that we’re just smooth sailing so the reality is you know that event in 2008 that everybody talks about as being the great financial crisis was way less of a big deal than it was 12 or 13 years later in COVID because it lasted so much longer and you know and COVID changed so much of how people eat how they go out how far they’ll drive for it you know it’s when it’s when food service delivery went like this and and so that has really changed the whole business model and that’s so much more of an impact to our to our industry than like the financial crisis was I mean that was just and I’m oversimplifying is like everybody’s lost 40% of their investment you know domain in the stock market and you know and certainly industries got hit a lot worse you know real estate got destroyed but but I don’t think it had near the change to the how the world lives as as COVID I don’t think it was near as impact so so that was a that was a big one and it’s one that we’re still looking at saying okay what are the changes we still need to make today in our organization to make our business model more profitable and more stable and you know gives us the interest and willingness to continue growing

Anthony Codispoti: what at 57

Steve Simon: I have a different risk tolerance than I did when I was 37

Anthony Codispoti: what kind of through all that the uncertainty the not knowing the stress of the business just shutting down overnight

Steve Simon: sleep aids probably probably I probably self-medicated with alcohol a little bit more for a while real calm which you know alcohol is a depressant so let’s see if you’re if you’re having a hard time let’s take something that’ll make you more depressed good call yeah but um you know I leaned on I leaned on my life partner I leaned on my business partner at the time I mean and quite honestly we had discussed breaking up or me buying up or you know one of us buying the other one out before COVID and so COVID happened we’re like well that’s on hold and so although we were in a somewhat of a contentious place and ready to be divorced it was like you’re all I got and so even and even with that damage broken whatever you want to call the relationship we had to we had to count on each other this is our livelihoods you know and we had at that point in time we probably had 25 investors we’re down to I’m down to 10 now but you know and so we still felt obligated from these investors that had joined in 2001 when we actually created the fifth group brand we were afraid that if we lost everything we wouldn’t be able to you know we’d lose their stuff too and you know none of them they were they didn’t worry about that they didn’t think about that but that was one of the other things it’s like are we not only save ourself and save you know we don’t want to have to let go at that point time 900 employees we don’t want to start our careers over again so so so we really had to work count on each other to you know to grind through the things that you needed to grind through to get through COVID.

Anthony Codispoti: Yeah last question for you Steve let’s end on a high note what are the the things you’re most excited about in your business in the next couple of years?

Steve Simon: I’m excited about where I feel like I am in the stage of my career and how I think about business you know after having bought the partner out and spent two and a half almost three years now you know I went through another I had to go through a growth phase of saying it’s we’re not a partnership it’s now me and so now I’ve not only got a I can’t do my job and his job but for a period of time I got to do my job and his job and then I got to figure out who’s gonna do what and what is really gonna be my role and you know and it’s still changing it’s not changing every day but you know every month I’ve or every couple weeks I’ve got this aha moment that it’s like oh my gosh it’s like I’ve got to do this differently and so and that excites me because my whole life has been you know I’ve not only wanted to grow a company but I’ve wanted to grow and and be better as a you know I wanted to be a better person I want to be a better leader a better business owner a better life partner but whatever it is and you know and this you know with all the curveballs I get thrown every day I have a lot of opportunities to do that but so that’s a big part of it figuring out quite honestly what is the what is the best market or markets for us to go and to and I’m not even talking about like locations but you know we’ve been you know we’re talking with two or three different hotels right now about doing food and beverage in the hotels whether it’s the catering and the restaurant or just the restaurant and we’ve got it we’ve got experience with that we’ve got a licensing agreement in a with one of our with our original brand South City kitchen up north of town in a hotel and it’s quite honestly it’s the most successful South City kitchen we don’t run it and so that’s been a great thing for us from a business model standpoint it’s lower investment you know and it’s leveraging our brand and so people want it they’ll pay for it and that happens to be a property that’s just done very well so it’s been great for the hotel and it’s been good for us and so it’s like is that is that something makes sense for us to go after you know there’s other things that you know food is you know the world of retail has almost been replaced by the term by the word restaurant and so you know that you go to all these places and all the restaurants like oh my god there’s 20 restaurants here and there’s only like three retail stores but they’re busy and so it’s like you know are those are those places that it makes sense for us to be put our put our brands in you know do we get into management agreements versus you know just doing traditional leases and so all of these have different risk-reward profiles and so a lot of it is me taking the time right now to step back and say okay what’s the best thing for our company because in in addition to you know I’m not gonna look to be a hundred but I’m certainly plan to be around a while and you know and and continue to you know grow the company I have to think about the the next couple levels of people below me that are looking for their career evolution and it’s like how can I set them up best I mean I was meeting with a within a state lawyer the other day and he’s helping me with my personal stuff but he’s also helping me make sure that the company is set up to you know take me out so that they’re not stuck paying my estate forever after I die with you know and getting nothing out of it right and then you know who am I gonna leave this to and who do I want to take this to the next level and so a lot of it for me is figuring out what is that foundation and who are those couple of people or a few people and how do I give them a voice right now because part of the reason I’ve hired them is because they’re smart and and I neither do I have all the answers nor do I want to have all the ants have to come up with answers so so those are the things that I’m looking forward to right now that’s exciting stuff that bell in the background it’s like that

Anthony Codispoti: that’s our timer

Steve Simon: I was gonna say you couldn’t you couldn’t

Anthony Codispoti: get that any better line that up pretty well Steve Simon fifth group restaurants I want to be the first to thank you for sharing both your time and your story with us today I really appreciate it

Steve Simon: Anthony it’s been great being here and great talking to you and come down to Atlanta let’s see

Anthony Codispoti: I’m gonna take you up on that folks that’s a wrap on another episode of the inspired stories podcast thanks for learning with us today