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Accidental restaurateur Khanh Nguyen finds success by putting employees first

“We pay more for cheese than rent.” - Khanh Nguyen

Chef Khanh Nguyen refers to himself as an accidental restaurateur. The chef/owner of DaLat Vietnamese and ZaLat Pizza concepts in Dallas began his career nowhere near the restaurant industry. After a dozen years of practicing law and then starting and selling a tech start up, he took a break from work to focus on a new tech idea. But the feeling for the work wasn’t there. Feeling uninspired, Nguyen put his energy into learning how to cook at home, leaning into how cooking and his focus issues could be connected.

“My ADD turned this into my obsession,” Nguyen said. Very quickly, teaching himself to cook to feed his family became multi-course meals of gourmet Vietnamese food, honoring his heritage and the food he loves. It was that passion that began his journey to food entrepreneur. He opened his first restaurant, DaLat, in 2012, serving late-night Vietnamese food. DaLat became a local favorite, especially for the service industry crowd, and Nguyen was hooked. Never one to rest on his laurels or to ignore an opportunity, when the pizza place across the street from DaLat went out of business, he decided to give pizza a shot. The first Zalat Pizza was launched in 2015, and since then, over a dozen more outposts have joined the family.

Coming into the restaurant business from the legal and tech worlds gave Nguyen a different perspective on the culture of his businesses. “What I learned from the service industry folks at DaLat was that so many of them were missing Christmas with their families year after year because of their work, or that they had been working the same low-paying hourly jobs for years with no upward mobility,” he said. “These were hard-working people working in an industry that offers very little financial benefits.” He wanted to have a business that took care of its employees long-term, offered health insurance and Christmases off,  and provided stock option packages to every hourly employee, not just the senior team. He acknowledges that these commitments are unusual in the hospitality world. “These benefits rarely exist within the service industry, and certainly not at privately owned mom-and-pop restaurants,” he said.

He remains devoted to the food first. “The most important part of our mission is to make the best pizza in the universe. If your food isn’t great, then the customer service or fancy décor aren’t going to keep you afloat. Your food has to be perfect every single time,” he said. “We spent 6 months developing our pizza crust recipe before we opened. We perfected our from-scratch pizza sauce recipe, which we still make in-house with freshly roasted tomatoes. We focused on the nuance of grease levels using different cheese brands and pepperoni together, and we’re open and willing to make changes if it gives us a better pizza. I love that we’re always searching to make our pizza better.”

But while having amazing food keeps the consumers happy, it isn’t protection against industry-wide challenges, Nguyen said. “We’re dealing with the same national labor shortage that every other restaurant is dealing with,” he said. “That is why we’re focused on taking care of our employees with great culture, benefits and stock options. If you don’t take care of your employees, they’re likely to not take care of the customers.”

This consumer-employee relationship is especially complicated with a business model like ZaLat Pizza’s. Nearly 80% of its sales come from third-party delivery services, limiting direct contact between its customers and the staff. That separation can make it difficult to stay energized. “We count on our employees to be passionate about their jobs. We want to make sure everyone has an opportunity to advance in the company if they choose, so we give them real pathways to make that happen,” he said. “The big thing about our employee stock option programs is that every hourly employee receives stock options. In a giant tech company, the janitor who’s working there 25 years later is still working for the same hourly wage. They never get a piece of the pie. We want all of our hourly employees to be owners of this company and get a piece of the ‘pizza pie,’ and you just don’t see that in restaurants.” This devotion to a corporate culture of universal advancement and success model for every employee helps with retention and keeping the joy in the work, which is important to Nguyen. After all, it was finding the joy in cooking and feeding people that started his own journey. 

When it comes to innovating on the menu, Nguyen feels that it all begins with the best ingredients. “We pay more for cheese than rent,” he said. Flavor and texture are priorities that the team is always looking to improve upon, and while they do have some traditional flavors, they have built their success on creating unique pizzas that cannot be found anywhere else. Many of Zalat’s pizzas are non-traditional, inspired by other cuisines. The Pho Shizzle pulls flavors from Vietnamese pho, and the Elotes hearkens to the traditional Mexican street food of corn in a cup. As with all aspects of his business, Nguyen leans into non-traditional methods of operation.

“A core company value is what we call ‘skulling.’ Skulling is solving problems without egos and being prepared to change your position when presented with better facts. We skull with our team to find our newest pizza flavors, and often the process is quick because everyone wants the best pizza, not just for their pizza to be picked,” he said. “Our most recent menu additions were the Nashville Hot Chicken and Pickle Pizza, and a Pesto Veggie. These were developed quickly because we truly worked as a team. The majority of our pizzas are ordered straight off our menu, not custom pizzas made by the customer. We think this is a sign we’re on the right track with our flavors.” He is also fine with keeping his menu innovation pure and focused. “We only do pizzas. No calzones. No pasta. We just focus on making perfect pizza.”

It is no surprise with his background in tech that it plays a huge part in his business. “Technology is critical to our growth and success. We are always looking for innovative ways to automate our processes, make our customers happy and make their ordering experience more convenient,” he said. “Drones and AI are already being used in the restaurant industry, so we’re finding ways to leverage cutting edge ideas and be at the forefront of innovation, rather than adapt to other company’s innovations out of necessity.”

All the bells and whistles aside, there is one simple answer to being successful, Nguyen said. “Make your employees one of your highest priorities. Happy employees keep their customers happy,” he said. “I learned how to make pizza by working late-night shifts in our original location all the time. If you don’t know how or wouldn’t do what your employees are trained to do, then you’re missing critical opportunities to gain their trust and loyalty.”

And for anyone else in the industry or looking to move into the industry, he has one rule: You shouldn’t do it unless it excites your passions. “It’s the same advice I would give to anyone in any industry; it’s a little bit easier when you love what you do.” 

Correction: October 25, 2021
This article has been updated to correct the spelling of Khanh Nguyen's name.
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