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The Honolulu Advertiser
Posted on: Monday, February 12, 2007

Leadership corner

Full interview with Sarah Espino

Interviewed by Greg Wiles
Advertiser Staff Writer

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SARAH ESPINO

Age: 38

Title: President

Organization: Union MAK Corp., operator of IHOP restaurants on O'ahu

College: University of the Philippines

Breakthrough job: Owning my first restaurant

Little known fact: I Once was a dentist

Mentor: Vince Espino, my husband

Major challenge: Finding time for myself

Hobbies: Golf, walking

Books recently read: "Shut Up, Stop Whining and Get a Life" by Larry Winget

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Q. How did you get into the restaurant business?

A. It has always been my dream ... to have my own restaurant. And so when I had that opportunity — my husband is a businessman and asked me if I wanted to pursue that dream of having a restaurant — we did that. We were lucky enough that there was an opening for franchising. I was in California then. And we had our first restaurant, which was a Fuddruckers. I wanted a franchise restaurant just because I don't want to reinvent the wheel. I would rather that somebody who has experience do the R&D and all of that.

Q. You mentioned that you are a dentist. How did you go from being a dentist to opening a Fuddruckers restaurant, and what was that experience like?

A. I was practicing dentistry in Manila. When I moved here to the United States, I was given the option of continuing my career as a dentist. I worked for a dental office for quite some time and at the same time that opportunity came for opening a restaurant.

I love dentistry. I enjoyed my work and my career in Manila, but it's always been my dream to have a restaurant. Ever since I was three I can remember role playing, 'Hi. Welcome to my restaurant.' That's why I wanted a franchise, because it would be easier for me to get into that business.

Fuddruckers, if you're aware, is a hamburger place. It's not like I had to come up with fine dining menus. It's not fast food; it's casual dining, so it was easier. To get into a franchise you have to go on training. It's from six months to one year depending on the franchise. So that transition wasn't very hard because in the restaurant business it's more about dealing with people.

The same thing with dentistry. You are taught some skills, on how to treat cavities or certain whatnot. But it's more on dealing with the patient directly or the guest directly. So that transition wasn't very bad. I just love dealing with people, talking with guests.

Q. How did you get to Hawai'i?

A. One of the things my husband and I do is plan 10 years from now, what we're going to do 20 years from now. One of those was where do we plan to retire. One time we were visiting here and loved Hawai'i. We were craving for pancakes, we were on O'ahu, in Waikiki and said "Wow, there's no IHOP." The business part of us, of course, asked IHOP corporate in Glendale (California) to find out if Hawai'i is open for franchising because we know there is one on Maui. So we went to corporate and they said yes it is open for franchising. And everything is just history.

Q. When did you open your first Hawai'i restaurant and how has that been?

A. We opened Waikiki on June 19th of last year. That has been very successful. We are reaching our targets, our projections. We've had no difficulties lately. Hiring was not a problem.

Q. How is doing business in Hawai'i different from doing business in the Bay Area?

A. It's tougher here. We've heard that before coming here, and it was proven it's tougher. The most difficult part is getting product from the Mainland. With IHOP there are a lot of proprietary products. If we have a special promotion we have to project way in advance what we think we will need since everything is special order and shipped by sea. So that's tough. It's just very, very competitive, with the state having its lowest unemployment rate. It's just being able to get good people and providing them good benefits. That's the most challenging.

Q. People talk about Hawai'i being so expensive. How about your costs here versus the Mainland?

A. Food cost wise, yes. The pricing we get if we compare it to the pricing from suppliers on the Mainland, ours is way higher. That's one of the biggest challenges as well.

Q. So how are you coping with these rising costs. Do you add a nickel on to your menu items, 10 cents, a dollar?

A. Yes, we do add it on to our menu. But we are not (adding) that much. You can only sell pancakes for so much. You can't charge too high. Instead of passing it all on to the customers, we're just taking it.

Q. So your margins aren't as large as they would be if you were operating in the Bay Area?

A. Yes, that's correct.

Q. How big is the Waikiki restaurant in terms of seating and how does it compare to the one at Windward Mall?

A. Waikiki can seat about 180. Windward Mall can seat about 200.

Q. Now it seems like they are very different markets. One is a tourist market and one is your first entry into a residential, or local market, here. Any differences?

A. Major differences. With Waikiki it's very seasonal. It's very hard to project our sales. There's a week where it's very, very high, there's a week where it's very, very low. We're very much dependent on the tourists, whether they be Asian tourists or the Mainland tourists. However, at Windward, it's just our third day, but it's steady the whole time. We're expecting it to be this way just because it's the local community.

Q. I'm curious about your management style. What type of principles guide you?

A. One of the things I tell all my managers is to hire for personality. That's something that I've learned in the restaurant business. Skills can be taught and not personality. I'd rather have an employee that smiles all the time and is willing to learn how to flip a pancake, rather than somebody who is very skilled but doesn't have the personality, doesn't want to smile, doesn't want to help her co-workers.

That's been going very well. I think that's a reason why I have not lost any of my managers. You may want to ask around Waikiki, everyone who started with me on the first day is still there. It's a happy working environment. You're in Hawai'i; there's an 'ohana feeling, an aloha feeling. And that's what it's all about. It's nice to hear your employees say there may be better pay at this other company but it's about getting up and wanting to go to work and enjoying the people you work with.

Q. Any big issues you're dealing with currently?

A. We are working on our third restaurant. One thing I forgot to mention to you which was a major challenge to us was the cost of construction.

That was something major. Really, we didn't realize the cost — how more expensive it is to build the restaurant here compared to the Mainland. Again that's all connected with the gasoline, the labor and everything. That's the biggest challenge we're having right now in Hilo.

Q. So you're going to be opening your third restaurant in Hilo. How big is that and when does it open?

A. We're looking at April for that opening. Again, it all depends if construction, if everything is on time. That's about 5,000 square feet. It's about as big as Waikiki.

Q. It sounds like you're fairly aggressive in your planning.

A. Yes, it sounds very aggressive. It wasn't really in our pipeline to open Windward Mall. It just so happens when we had our Waikiki opening and everyone found out there's a new franchisee for the state of Hawai'i, people started approaching us.

The Windward Mall was supposed to have an IHOP two years ago. And so they just approached us; it was so hard to say no. Everyone helped us to get this going and open. But if we had a choice we would have definitely done it a bit longer.

Reach Greg Wiles at gwiles@honoluluadvertiser.com.