Pho: Juliette and Stephen Wall
Nine months’ travelling in search of entrepreneurial inspiration is clearly paying off for ex-marketers Juliette and Stephen Wall.
Nine months' travelling in search of entrepreneurial inspiration is clearly paying off for ex-marketers Juliette and Stephen Wall.
Fast-casual Vietnamese restaurant chain Pho was the result of “eating our way around the world, off the streets and in the nicest restaurants”. It will soon be trading in five locations, and has the cream of private equity houses circling.
The husband-and-wife team returned from their trip with the likes of noodle chain Wagamama thriving. But traditional Vietnamese restaurants had still not been given the contemporary treatment, even in the US where Stephen found viable and hugely popular Vietnamese restaurant franchises. With savings and remortgaging releasing £120,000, the couple secured a bank loan and premises for the first outlet in London's Clerkenwell district.
By keeping it simple, they quickly established a burgeoning reputation for good food, great service, a comfortable family-friendly environment and fair pricing. Such was the appeal, gastropub entrepreneurs Ed and Tom Martin went from customers to making a six-figure investment.
“They came in a couple of times a week, and we got to know them as we were serving every day,” says Stephen. “There were loads of customers approaching us and they were all loaded.”
The Walls even spurned another angel investor's offer, with the Martins bringing five years' experience of the restaurant trade to the table. Plus Pho could tap into their head office, infrastructure and banking contacts, something it has turned to for a debt facility for two of its outlets.
But like any fledgling brand, there have been challenges. The intense desire for authentic recipes was one, according to Juliette. “Food varies so much between south and north Vietnam. There are also very different hygiene rules in the country.” You won't find unfertilised eggs or cow intestines floating in the soup, she adds, recalling experiences and customers' tales of trips there.
In Pho's first year, turnover hit £260,000, with the Walls waiting tables. In 2009, turnover had leapt to around £3.5m, with earnings before interest tax depreciation and amortisation a very healthy £600,000. The chain now employs around 110 people, including 80 full-timers. It also has an outlet in the enormous Westfield shopping centre in London's Shepherds Bush, proving the concept's appeal to the mass market, as well as the ABC1 creatives. It has ventured beyond London too, with a 130-cover restaurant opening in Brighton in May this year, next door to Jamie's Italian, Jamie Oliver's latest venture and the most popular eaterie in town. Pho Brighton was profitable within four weeks.
The south coast outlet was also designed by Martin Brudnizki, described by many as the most exciting interior designer in the restaurant industry. He's the man responsible for the Miami and Berlin designs for the international expansion of Soho House. In Brighton Pho, Brudnizki has created ‘zones', placed an open kitchen centrally, and built in a larger and more well-designed bar than in Pho's early outlets. There are also higher benches, a physical merge with the front and the street, and booths to the rear.
Despite the step up in look and feel “you know it's Pho”, says Stephen, betraying his marketing roots and pointing to its core dining values, logo, coloration, menu and liberal use of bamboo. With an outlet slap bang in the middle of Soho set to become the fifth Pho, and plans for 20 locations in four or five years, including cities such as Manchester, Leeds, Liverpool, Bristol, Cambridge and Oxford, it's no wonder the money men are taking interest. Of course, there's still a chance the Walls will go down the organic route and the pair seem eminently sensible.
“We'll be very careful where we locate,” says Stephen. “You can't pop up on every street corner, and we won't be next to every Strada.”
The approach extends to dealing with potential investors. “We want the right private equity partner,” Stephen continues. “We want someone with the right relationship who will make the right choices, and won't want to run the business.”
No doubt this, a process of streamlining suppliers, refusing to discount or offer vouchers and hiring an experienced operations director reassures investors that the pair remain grounded and ready for the hard slog of managed growth. And Stephen being “caught” wiping tables in Pho Brighton by a prominent private equity firm has only served to support their down-to-earth reputation further.
“It's turned into a business that, if we don't screw it up, will be a platform for expansion,” says Stephen, who is well aware of the pitfalls, having seen Tiffinbites over-extend. “I researched that chain six years ago. You've got to make sure you're financially sound, watch the cashflow, get the locations and teams right, and get the people to take you to the next level.” If the Walls do this, Pho will continue in one direction.