Restaurateur interview: Tom & Serg

Unless you’ve been living under a rock, you would have heard of a phenomenon called ‘Tom & Serg’. Tom Arnel and Sergio Lopez are the co-founders of Bull & Roo Hospitality and Investments, the privately owned mothership from which the concepts Tom&Serg, The Sum of Us, and Common Grounds have set sail. But they’re far from done yet.

When Caterer Middle East spoke to them in November 2014, the duo had 49 people in their team, and one restaurant in operation. Fast forward to a year later. The change is, it’s fair to say, noticeable. Three restaurants/cafés are operational, and the entire company employs around 170 people, and is still looking. Because they are going big — double or nothing.

The path to being an F&B entrepreneur in the region is not easy, and Arnel and Lopez have faced their fair set of challenges and setbacks. The two met a few years ago and realised they had noticed the same gaps in the market. Arnel says, honestly: “We thought we could do one better, and do something that was far removed from the franchise model, or from the multi-outlet model.

“We wanted to do something that had great coffee, great food, great service, with real people who gave a s***.”

That’s when the first location at the Al Quoz industrial area came in, and Lopez adds: “We always believed that Al Quoz could become the new Soho of Dubai — Dubai doesn’t have an area like that.”

Affordability was also of prime importance, with the owners believing they needed to supply an avenue where guests could visit almost every day. This is something they’ve translated well across all three restaurants under their remit — by smart menu engineering, with Arnel saying a lot of the dishes are vegetable-based, which helps control costs.

But actually opening Tom&Serg was not a walk in the park; Arnel admits “it was very tough”. Lopez reveals they had two investors in the project, who were present for nearly a year-and-a-half. But on the day the restaurateurs were to pay the deposit on the Al Quoz location (found after many ups and downs), the investors disappeared. Arnel now jokes that the two “freaked them out”.

Lopez is introspective. “It was one of the best things that could ever happen because all the best decisions come when you are struggling.” I suggest they got creative in desperation, at which point Arnel laughs and says that’s “absolutely what happened”.

After the setback, Arnel and Lopez called their families and made a business case study of their project — they got the investment. Lopez says: “The company became 100% ours.” Arnel adds: “Which, as he said, was the best thing that could happen because it gave us complete control over absolutely everything.

“It put the pressure on us so big, but at the end of the day, we knew it was risky going alone, but we believed in what we were doing, and we just knew it was going to work.”

It worked. And how. Tom&Serg opened on November 18, 2013, and was often found packed. They followed this with The Sum of the Us in Burj Al Salam Tower on May 1, 2015, with Common Grounds being the latest opening on September 28, 2015; this is located in the new extension of Mall of the Emirates.

There’s been a big gap between the first and second opening, compared to the last two. Lopez reveals that in the first year of opening they received 83 offers for investment. And with absolutely no trace of arrogance, Arnel says simply: “People wanted to partner with us, everyone wanted a piece of Tom & Serg Al Quoz action.”

They said no to everything except the location where The Sum of Us is housed. Arnel explains that in addition to the affordable factor, restaurant location was dissected thoroughly to understand where would bring in more money to the business.

The Sheikh Zayed Road spot had “a great catchment audience” according to Arnel. Not just office workers were targeted, but the Bull & Roo team was all about creating destinations. So while the restaurant was full during weekdays for employees in the area, weekends were equally packed. Arnel reveals the restaurant turns over the restaurant at least five times on weekends with “thousands of covers”.

And The Sum of Us doesn’t just have a restaurant; it runs a coffee roastery and a bakery, which supplies its two other restaurants. Lopez says: “That’s what we wanted to do with Tom & Serg but at that stage we were new, it would have been a bigger investment.”

The duo surprised everyone by not opening a second Tom&Serg when news escaped about their second project. And with the third, they created a new concept again. “We figured that if we had just put The Sum of Us or Tom&Serg in there, eventually it would have become quite robotic and just part of a system that was created somewhere else. So we’re doing a new brand, we created a new system, a new standard of coffee, a new standard of food, a new way of doing it. It made it so much more personable. I think people will appreciate that in that mall,” adds Arnel.

Opening restaurants means hiring new staff, which they have done in spades since the beginning. In a market where finding talented team members is a challenge, as is holding on to them — how do the two restaurateurs do it. I point out I see waitresses in The Sum of Us, who have been in Tom&Serg since it opened. What’s the secret?

Arnel says: “It’s one circular motion — the more restaurants we build, the more staff we hire, the more careers we can build, more promotions and pay rises they get. We’re just creating this big Tom & Serg community.”

Serg agrees that the focus is on career growth, and Arnel adds: “Definitely we pay 100% better salaries than everyone out there, I’m sure of that. And we give two days off a week. I actually think we may be the only company that has that as a standard across the board, which is an amazing thing for us.”

“That was about giving back to the guys and saying, ‘you’ve worked really hard for five days, now go and take two days off’. If we can continue to make sure they come here and we can nurture their experience and career, then they will smile at the customer, they will give better service, they will care more about the food, they will care more about the coffee, it’s a win-win situation for us.”

That’s ingredients, location, and staff members ticked. But restaurants are a business, and like any other enterprise, it requires ROI. Lopez says: “Before going into anything, myself and the finance team sit down and see what are going to be the projections, and then we look at the rent they are offering us and then we give our counter-offer. If it goes ahead, it’s like any negotiation. We take it, and if not, we move on.”

Tom&Serg made its ROI in its first year, and when I ask about The Sum of Us, Lopez laughs and says: “It is a beast! It’s a 1000 square metres inside plus 200 square metres outside.” Due to the size and the roastery and bakery costs, Lopez estimates ROI at 18 months to two years. “Common Grounds will be earlier than Tom & Serg, because it’s a smaller venue with footfall. Mall of the Emirates had 75 million visitors last year. So the footfall is massive.”

Lopez continues: “When some banks approach us, they ask how we managed to open two more restaurants, and I said, just by being careful about what we spend — and how we spend. People with an AED 10 million budget spend eight million in fit-out, 1-1.5 million in staff and the rest in little bits. If we have 10 million, we’d spend four in fit out, four in our staff, and the rest we keep it for the next project.”

And the two have their hands deep in the day-to-day running, with both making sure they visit all three venues every day. “We’re going to continue to do that,” adds Arnel confidently. Lopez says: “If you keep growing, it comes to a point where you cannot be at the same place all the time, so your staff needs to represent you. That’s why it’s important to invest in our staff. We have an initiative now where everyone in the office has to go work in Tom&Serg at least once a month. Including Tom and myself, we spend once or three times a month working, doing the service, making sure we get our hands dirty.”

Going back to the conversation we had with them a year ago, Arnel and Lopez had then confirmed that in addition to The Sum of Us, they were working on “four very quirky licensed and unlicensed outlets” — at the time pencilled in for 2015 — “which will focus on turning Dubai's casual dining scene on its head”. They have, in this interview, declined to share the information about how many restaurants they will be opening in 2016.

Lopez teases: “And you will see with our next openings, people will think, why are they opening here? How did you manage to get that?” Arnel adds tantalisingly: “The places that we have signed up for next year… nobody wanted them. So we put ourselves in an area of the market where there’s no competition. That’s one of the things that’s going to give us an X-factor.”

What they did reveal was that licensed venues are definitely in. Arnel reveals: “We’ve got some massive plans. We’ve not conformed and done what everyone thinks we’re going to do. We’ve got some really surprising and big projects coming up. Next year we’re doing licensed venues and we’re going to do them in an area that people would never expect. They’re going to be underground, not secretive, but in places that are accessible, but away from the glitz and glamour… very cool, very urban, very cosmopolitan.”

Lopez jumps in: “We can say by the end of next year, our company will have close to 500 employees. As long as we keep doing what we’re doing: having fun and bringing something different to Dubai, we’ll never stop.”

Arnel continues: “It’s a lot. We’ve been really ambitious. That’s why we have so many people in head office now. They’re not working for these three restaurants, they’re working on the expansion. But I think, we will still be the coolest private restaurant company in the UAE.”

Setting up your own restaurant?

Opening your own restaurant is not easy. Sergio Lopez gives us the lowdown of how much it will set you back in the current market.

Space: 3000 square feet

Number of employees needed: 20

Salary range: Between AED 7000-11,000 each to start with

What’s the damage at the start?: AED 200,000 minimum on salary. Rent of approximately AED one million in four cheques, so AED 250,000 at the start. Then add fit-out and equipment costs. Lopez estimates a 3000 square feet restaurant will require at least AED two million in this market.

The Tom & Serg Files

Where are these guys from? Tom Arnel is an Australian national, and a chef. Sergio Lopez is from Spain, and handles the operational side of the business.

Sounds good. Have they been here long? Arnel has been in the Middle East for six years; Lopez eight. But put together, they have nearly three decades of hospitality experience combined.

What’s with the name ‘Bull & Roo’? Spain has bulls. Australia has kangaroos. Go figure.