James Choi is the Owner of Cafe Dulce and a seasoned entrepreneur with a unique journey. Initially aspiring for a career in the PGA Tour, James found himself on a different path, obtaining his CPA license and working at Ernst & Young. Drawing upon his entrepreneurial spirit, he assisted his mother in launching various small businesses, including a chocolate boutique in Zurich, Switzerland. Today, as the visionary behind Cafe Dulce, James has expanded the brand to five locations, and he’s not stopping there — his other entrepreneurial endeavors include a new superette concept and a jiu jitsu fight club.
Here’s a Glimpse of What You’ll Hear:
- James Choi explains how he went from aspiring PGA Tour golfer to an entrepreneur and restaurateur
- What can a customer expect when visiting Cafe Dulce?
- James reflects on the turbulent early days of Cafe Dulce
- Advice for anyone considering opening a cafe
- How the expansion to multiple locations came about
- Why Cafe Dulce has been able to retain staff in a high-turnover industry
- James discusses his other venture outside of Cafe Dulce
In this episode…
Employee turnover has been an issue for restaurant owners to contend with for years. Through a combination of a supportive culture, fair compensation, and dedicated leadership, some restaurateurs have been fortunate to retain a loyal and skilled team.
At Cafe Dulce, the commitment to building a strong team is evident in the longevity of key staff members. For instance, the manager of their second location has been with the brand for a decade. Owner James Choi attributes this remarkable employee retention to a focus on fostering a positive workplace culture. He emphasizes his personal dedication, working alongside his team and sharing the challenges with them. Financial well-being is also a priority, and James acknowledges the importance of fair compensation. He shares an example of an hourly employee without a college degree earning a six-figure income due to their indispensable role in the business. Additionally, Cafe Dulce’s commitment to employee development and support echoes Tony Hsieh’s philosophy, aiming to retain and coach staff rather than resorting to terminations.
On this episode of the Top Business Leaders Show, James Choi, Owner of Cafe Dulce, joins Rise25’s Chad Franzen for a conversation about the unique origin and evolution of his restaurant brand. James discusses the key factors in Cafe Dulce’s long-term staff retention and the lessons learned from the challenging early days after the restaurant first opened. He also provides insight into his other entrepreneurial ventures: a superette and a jiu jitsu fight club.
Resources mentioned in this episode:
- James Choi on LinkedIn
- Cafe Dulce
- Cafe Dulce on Instagram
- Yoboseyo! Superette on Instagram
- Little Tokyo Fight Club on Instagram
- Danny Meyer, Union Square Hospitality Group
- Tony Hsieh
- Chad Franzen on LinkedIn
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Chad Franzen 0:20
Chad Franzen here, co host for the show where we feature top restaurateurs investors and business leaders. This is part of our SpotOn series. SpotOn has the best in class payment platform for retail and they have a flagship solution called spot on restaurant, where they combined marketing software and payments all in one. They serve everyone from larger chains like Dairy Queen and subway to small mom and pop restaurants. To learn more, go to spoton.com This episode is brought to you by Rise25. We help b2b businesses to get ROI clients referrals and strategic partnerships through done for you podcast. If you have a b2b business, you want to build great relationships with clients referral partners and thought leaders in your space. There’s no better way to do it than through podcasts and content marketing. To learn more go to rise25.com or email us at support at rise25.com James Choi grew up pursuing the PGA but ended up landing a job with Ernst and Young where he earned a CPA license. During that time he helped his mother open and run various small businesses including a small franchise chocolate boutique based out of Zurich, Switzerland. He opened the first Cafe Dulce in Little Tokyo in the spring of 2011 and has since then grown it to five locations and started a new Superette concept with their coffee roaster and a jiu jitsu Fight Club. He joins us now from his car while driving. Hey, James, thanks so much for joining me. How are you?
James Choi 1:42
Yeah, thank you for having me Chad. Sorry, the driving thing with a lawyer I expected but
Chad Franzen 1:47
That’s okay. Where are you?
James Choi 1:51
I just, I had an unexpected meeting at a USC location, and then I’m just going to another spot. And I have you from two o’clock on so it kind of works out. It’s perfect.
Chad Franzen 2:03
Okay, yeah. Very nice. Hey, so tell me how did you transition from being an aspiring golfer to an accountant to owning a Cafe Dulce?
James Choi 2:15
Yeah, so I mean, my I, my life’s pursuit was like you said to become a PGA Tour player that obviously didn’t pan out. I played on the USC golf team for two years. And then I left after my sophomore year, because my mom was going through some difficult times financially, which is a whole other story when we have to get into that. But so when I obviously golf is a very expensive sport to pursue any athletic pursuit, I think it’s quite a bit of financial commitment to pursue. So kind of looking at my mom’s situation, and then prospects of me becoming an actual PGA Tour, I realized that I should probably switch my focus. Focus on to like, figuring out how to do something where I can take care of myself and potentially take care of my mom. And if I need to, if I needed that, too. So yeah. So then I did, I decided to declare my a major, I was a business major at USC as well. And then the accounting school is very strong. So I decided, hey, why don’t I go ahead and just switch my major to accounting, recruited successfully to Ernst & Young, I had a summer internship there and find a full-time offer before my senior year. And so like, great, that’s set up. And then from accounting to small business entrepreneur, my mom was, as I graduated from USC, and went to go work for Ernst & Young, I realized that or my mom was, she should go into some lawsuits and stuff like that. And she decided, hey, I’m gonna start start a small business. So she found a location, also a long story, but we ended up pursuing a location for Teuscher. The Swiss chocolate monetize out of Zurich. And the location was in the Stanford Shopping Center in Palo Alto. And so I, so we pursued that. And we opened that as a parallel to me started my career at Ernst & Young. So for the first six years of my life after college, I worked Ernst & Young from Monday through Friday, flew up to Palo Alto, work the chocolate boutique over the weekend as much admin and scheduling as I could flew back down and worked Monday through Friday again, rinse and repeat. So now that was fun. And then and then we ended up selling that store, I realized she was really unhappy there. No friends, no family, my grandmother passed away during her time up there. And so then we said, sounds like okay, we should sell this, get it back down to LA around friends and family. And we successfully sold it and pass it on to another family, which was an experience all So and once once he moved back out, back down, we realized, we found out she had ovarian cancer, which she later lost her battle to. And, and yeah, and so I, luckily we sold the store. So I took care of her for a year, after year, I went back to work at Ernst & Young. And then during my time at Virginia, she kind of a serial entrepreneur. So she was like, Hey, I’m starting a coffee bakery in Little Tokyo. And that’s what capital say was. And then, once a part, she had a partner, because I didn’t want anything to do with it. And then, as they were about to open the stores, the foreigner said, Hey, good luck. I’m out. They had some sort of dispute. And once he left, I said, Well, she can’t win it by herself. So then I quit and shut down for a second time. And then said, Hey, let’s figure out how to run a bakery.
Chad Franzen 5:49
Wow, that is, that is quite a fight for both of you. Really an amazing story. So tell me a little bit about Cafe Dulce, then, you know, let’s say I’m a customer who hasn’t been there, what could I expect?
James Choi 6:04
Um, we, my main focus, when we first opened up was to create a specialty coffee shop. So really specializing and direct trade kind of coffee. So working with really great coffee roasters, and having a specialty beverage program and that sense, having great tea lattes, and stuff like that. So we have your general run of the mill quintessential specialty coffee store, espresso menu. So cappuccinos, lattes, and what have you. And then we learned how to our first coffee provider, they also did a bunch of pretty unique things, we learned how to make a Hong Kong milk tea and a chai latte. And then taking that technique, I was like, Oh, this could be applied to all sorts of teas. And so we have a really great tea latte menu as well. And so we did that. More recently, we were pretty early on with the matcha latte. Train. And I think we were one of the first to market with it. And so our Marshall lattes have exploded. And then we’re a full bakery. So we have different types of pastries, we call them like Asian East Meets West kind of Asian pastries with the Western Western roots, or vice versa. And then, you know, our menu is pretty organic. So we have like sandwiches and salads. And then a breakfast burrito. And breakfast sandwiches are very, very popular. I know that kind of purely came about because, you know, we’re making family meal. In the morning, my guys would just come with tortillas. And then they would just be making breakfast burritos for the staff. And then our regulars would be like, you know, let me get one of those. And then we started serving them to regulars, like we got to come up with a price for this. And so it’s an off-menu item for a long time. And then has other people started seeing like, oh, one of those guys have been like, how do we get one of them? And they were like, Okay, let’s put this on the menu. And now we sell so many breakfast burritos and breakfast sandwiches. But yeah, so it’s really kind of, we weren’t really happy that started and said, Hey, this is what we’re gonna do. This is our menu, it was very much like, let’s just figure this out. Like, what? We don’t know what we’re doing. We got to keep the doors open. We know what we want to try and do. But we’re very open to shifting and making sure that we can serve our community. And that’s also partly why we people asking if we want to expand outside of Los Angeles, like there’s no, I’m not in a rush to, there’s actually no desire to actually as well. Because our like most of our guys have been with us since year one, or a lot of our guys, at least our key key key people in the kitchen and that event, so I can’t imagine trying to start this somewhere else where I don’t, I have to start with a fresh team because our cafe really is the people that are working in it. So that’s kind of what you can expect from a family cafe. full blown, you know, sandwich salad coffee menu, specializing teas and like unique pastries.
Chad Franzen 9:10
Great. So you mentioned your one what you know you would come into it with experience helping your mom with the chocolate boutique and some other small businesses what were the early days like those specifically for Cafe Dulce?
James Choi 9:26
And we, my wife now, girlfriend at the time she was in restaurant marketing for a larger restaurant group and she was just I could see the I don’t want to say pity but like the worry in her eyes, and I’m dating this guy it’s pretty serious. He’s helped me in his family out with his mama with this cafe thing quit his like stable job to do this and and they don’t have a menu. This guy has no experience. She knows how difficult restaurant businesses are. And so our menu changes constantly. At one point, we got rid of the first speaker that was with us, because it just wasn’t working out. And so after two months he left to like, what do we do? I don’t have a full banking background. So we were buying frozen dough for cookies, we were buying wholesale pastries, like danishes, and all sorts of like, sort of regular continental stuff. And I think the reason why survived through that is to to the main thing being, we’re, we’re lucky that we landed in a Little Tokyo, we’re really received by the community, they said, Hey, welcome to the community, let us know how we can help. And so I was, I was like, I’m with you guys from day one. And now I serve on a couple of nonprofit boards that are located in the community, and what have you. So that’s been a really great relationship, it’s fundamentally changed the way I think about how a small business should operate in a neighborhood. Now, second reason why I think we survived is that always before the the onset of social media as a really big business platform. And so Yelp was still new, Instagram was very, very new. And so all the mistakes we got, and then all the different mistakes we made, weren’t amplified, amplified to the moon, where people were like, “Oh, I’m never gonna go this way.” So we were afforded a lot of grace and afforded a lot of mistakes in the early days of opening. So I think that’s where we will kind of survive, and not have 1000, negative reviews, because we did everything wrong, you could have thought of. And then it was just really just, we hired a family friend at a baking retirement, who came on and really helped establish kind of our baseline menu and, and discover kind of our language in terms of how we want to express what we wanted to serve. And, and then it’s been 12 years since. Yeah, yeah.
Chad Franzen 12:00
Yeah, amazing. Would you say that? Like, if you were to talk to an entrepreneur, now, would you say, just don’t worry about it just go forward, even if you don’t really totally know what you’re doing just just open the doors and kind of do the best you can? Or would you say, based on your experience that you might advise more? I don’t know, you know, knowledge of the, you know, the, what, how you get, you know, how you get started? And where do you go from where you get started kind of a more of a roadmap.
James Choi 12:31
I mean, I feel I had a conversation with a friend’s brother today, she asked me to talk to her brother, because they’re exploring opening a cafe, I’ve actually talked a lot of people out of opening cafes. Not because of any, like, selfish reason of like, a competition or whatever. But it’s just, I think it’s so it’s such a difficult task. And so obviously, the more number crunching and the more planning you can do ahead of time, and you have a better chance that you have, at the same time. You know, every time we sign a new lease, the landlord always says, I need 10 year projections, I need to know what your plans are, and whatever else. So having a CPA background, I’m able to come up with a really great performance financials and production and stuff like that. I’ve never been close on any of this prediction. My expenses are always way higher than I thought, My revenues are higher than I thought. It’s just always like, it’s not even close. So but I think the thing is that how this, I think you got to stand for something when you open, open, so you, you know, stand for something or fall for everything, right. And so you have to have some sort of direction you want to go. But in terms of what we were selling, I think we were very open to being fluid about what works and what doesn’t, I think I have a pretty good sense of like, your average average person’s tastes and pasting what’s good or what’s not. I feel like I’m a pretty average Joe. So. But at the same time, I think my biggest things, depending on where you are opening, I’m located here in California, and, you know, not to get political or anything like that. But it’s a very, very difficult environment to open up. It’s a very, very hostile environment response. And it’s much harder today than it was when we opened a while years ago. Just from the standpoint of our minimum wage being when you just don’t have your war chest has to be that much greater because minimum wage is half of what it was to half of what it was, what it is today. Yeah, I think we’re, I remember that we were talking to Ken about the regulatory environment of California and just in general, I think it’s so difficult and there was an article or most recently, I got asked to speak with a bunch of community members because there’s an onslaught of ADA lawsuits. Like, all suing small businesses in our community, and it’s basically, I mean, I’m all for accessibility and, and we got hit with three different ones over the past 12 years or 10 years for accessibility things. And, and I understand if it’s something that’s egregious, and you know, we didn’t want to serve somebody, but I’ve got a, I’ve got an uncle in a wheelchair. So it’s like, you know, it’s I went, if anybody came to our cafe, we do everything we can to accommodate the person. And the reason why I knew it was a frivolous lawsuit is because they sued us for a bathroom that no one’s allowed in. And so but, like even that, right, it’s such a, I think, this article that I read, or this video that I saw, they said that I think 50-50 or 75%, of all ADA lawsuits, for accessibility issues, these types of cases happen in California, within the entire US. And so it’s just, it’s just rough. I mean, there’s, there’s a couple of things that happen, I think, a couple of things that were decided on a court that turned into case law. And so now a lot of lawyers have a way to make money by partnering up with somebody that’s disabled and using their name. And going against small businesses. And the reason why they go against small businesses, because we don’t have the resources to fight this in court. And so kind of going on and catching but it’s so much more expensive to fight it in court, and then potentially lose the law case, and it sucks, because you’re guilty until you can prove yourself innocent. And so, because we don’t have the resources to fight it, they’re like, Okay, let’s just, you end up just settling. So she’s like $4,000 to $5,000 for the settlement plus your own legal fees. So you’re out $78,000, just for being served a lawsuit. And $78,000 represents. I mean, like, if you’re gonna use simple math and simple numbers, I think about $70,000 in sales. Because, you know, we think about like a 10% profit margin. So that’s seven cases, straight off the you know, the bottom line. And so it’s really difficult to show that out of your pockets. And so if you get hit with that, because you’re a new business, and you’re trying to figure things out, and you’ve already paid all this little the start your business and open your doors, when you hit with something like that, it’s pretty rough. And so I think it’s much more difficult today to open. And I think with the way labor is going, we’re gonna see less and less larger size small businesses where you can hire a bunch of people. And truly, you’re just going to be left with a lot of actual, like, literal mom and pops were the people that work in the store are only the owners, because it’s so difficult to hire people. And so not to be like, all doom and gloom at the same time. I think it’s an amazing time for entrepreneurs at the same time, I think the barrier to entry to opening up a store when we started was knowledge. I didn’t know what I’m just learning, learning what equipment to use, what filtration system we needed for a coffee, coffee system and set up and like, that sort of thing was really difficult to figure out. And it took us a while till we really dialed that in. Whereas today, all sorts of information online. So the barrier to entry is much less knowledge and it’s more capital and I guess branding, and what have you to situate yourself that way. But so yeah, I think, I don’t know. It’s hard. It’s the biggest gamble for sure.