Sharing the wealth in the midst of growth has become a tenet for management at Dallas-based ZaLat Pizza.
At 17 units — and recently expanded to its second market, Houston — ZaLat Pizza has adopted the philosophy for its workers, who call themselves Zealots.
“We have three primary missions,” said founder Khahn Nguyen. “No. 1 is to make perfect-tasting pizzas. No. 2 is to make customers for life. And No. 3 — and this is my favorite — is to make our front-line pizza Zealot wealthy with stock options.”
After launching a successful tech start-up, Nguyen launched the DaLat Vietnamese restaurant in 2012 and expanded into a nearby location with ZaLat in 2015.
Nguyen, who also previously worked as a corporate lawyer, said he borrowed a page from the tech start-up playbook in crafting the stock-option idea.
“Our big idea is how to share the wealth of the growth of a brand in the restaurant space with the front-line employees who work so hard,” he said.
Providing stock options is no easy task, Nguyen conceded.
“It takes a while to get to the point in this space where you can have the time and the focus to budget properly for getting the lawyers in to set up the proper structure,” he said.
Outside consultants must be hired to give proper valuations for the company, and the options much meet Internal Revenue Service criteria.
Nguyen had the advantage of dealing with employee stock options in other companies.
“I was a corporate and securities lawyer when I first started my career, so I've always had experience dealing with larger companies and other industries and how compensation is done,” he said.
Nguyen discovered front-line service-industry workers have “crazy lifestyles” and often don’t put a premium on savings or planning for future, which he hoped to change.
Service workers have also developed a fondness for ZaLat pizzas — and the fact that units are open until 4 a.m. During the pandemic, the brand also offered service workers, many of whom were furloughed or laid off, deep discounts on pie, Nguyen said.
Culture is important to the brand, he added. “It's something we work on every day,” he said, adding that it’s an “extreme give-a-s**t factor.”
Each ZaLat pizza is “a handmade product, and we're doing it in mass volume, so everybody has to really care — because the chance of screwing that up is tremendous,” Nguyen said.
For a brand that has nearly 80% of its sales directed through third-party platforms, the product distinguishes ZaLat from competitors.
Nguyen said he believes deeply that the restaurant industry has room for distinctive, high-quality product. “We pay more for cheese than rent,” he has said, and the brand has recently received plaudits for using higher-priced beef pepperoni.
“I'm optimistic,” he said, “that this is a space that has legs to it, and that we can grow nationally.”
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