By Caroline Hatchett
Ezequiel Vázquez-Ger opened Seven Reasons with chef Enrique Limardo in 2019. In its first year, the restaurant was named Washington DC’s best restaurant by The Washington Post, as well as Esquire’s best new restaurant in America. Before Seven Reasons, Vázquez-Ger studied economics in his native Argentina, worked at the Atlas Economic Research Foundation, and owned a DC lobbying firm.
In Spanish, we would say, “Soy muy cuadrado.” I’m very square-headed. I don’t know if it’s because of my finance background or my non-restaurant background, but for me, the numbers are as important as food or anything else. I have tracked every single expense, every single day, since we opened Seven Reasons, and what that has allowed us to do is not wait three or four months to pivot from something that’s not working or costing us too much. We have pivoted almost on a weekly basis.
On March 14, the Saturday night before closing because of the coronavirus, the restaurant was packed, as if nothing was happening outside. We had 260 covers. I think we broke record sales. People were waiting in line. It was incredible on the one hand, and frightening on the other. We thought, “Yeah, we’re open, but we don’t know if we’re supposed to be open. And we don’t know if all these people are supposed to be here.” That night we decided that whatever happened, and whatever the orders from the DC mayor’s office, that we would close in the next few days.
We had very good numbers in 2019. The overall margin was 14.9 percent, and if you take the period from October to February, the net income was around 19 to 20 percent. In February, right before the crisis, we paid dividends to our investors. Of course, I wouldn’t have paid if I knew this was coming.
I sat down with Enrique Limardo, my business partner, and said, “OK. What do we do? We have money in the bank. We can support a three-, four-, five-, or six-month shutdown. Our rent is not that high. We have reserves.” But we have 44 employees, and many if not most of them are from Venezuela, seeking asylum because of the situation there. That meant that most of them couldn’t apply for unemployment insurance because they’re not US citizens—even Enrique. It was a very complicated situation.
The first week after closing the dining room, we decided that managers and everyone on salary would come in and see if delivery service could work for us. We started delivering food on Tuesday, but didn’t sell much. Wednesday was a little bit better. Thursday, a little better. Then on Friday between 6pm and 6:15pm, we got over 300 orders, and the system completely crashed. Our printers stopped printing tickets. There was no way to pace the orders. It was crazy. We ran out of food, and we had to start calling people saying, “Hey, we can’t fulfill this. I’m sorry. Please call again tomorrow, and I will take your order tomorrow.”
That night we said, “OK. There’s an opportunity here. Evidently people want to eat in their houses, but with food from a restaurant.” The next day we started bringing people back to the kitchen. We started organizing ourselves. We moved the reservation system to Tock. The good thing about Tock is that they treat an order as if it were a reservation, so we can decide how many orders to take every 15 minutes or 30 minutes. From there, it has been growing every week. That first week we ended up doing $25,000 in business, the second week $40,000. I’m not even at the best part yet. The third week we made $50,000, the fourth week, $60,000. The fifth week was a little less at $55,000.
Our average weekly revenue before the shut-down was between $75,0000 and $85,0000, and now we’re between $50,000 and $60,000. We have 25 employees working—all our managers and basically all of the kitchen. Many of our servers are now drivers. No one is making as much money as before, especially the servers. But still, they’re working and maintaining their families, and they’re happy. They come here with a happy face, and they can continue to do what they love.
Before all this happened, we were coaching one of our line cooks, Will Harner. We were thinking of promoting him to sous chef or maybe chef de cuisine of a second project. In the process of training Will, he shared with us an idea about healthy, affordable burgers. When all of this started, he called and said, “Ezequiel, I always heard that the best ideas are developed in crisis. I thought about launching my burger concept in the middle of this crisis. What do you think?” I said, “Will, you’re a genius. Let’s do it!”
So we decided to give him the Seven Reasons kitchen for lunch service. He could use our purveyors to place orders and launch his concept, Soleado, from here. It’s been great. He’s selling 15 to 25 orders a day. And it was the beginning of our program, “From from Employees to Entrepreneurs.” The idea is that we guide cooks, give them all the support they need, and advance them whatever capital they need to start building it. Then they execute it on their own.
This week we launched the second pop-up with our sous chef Genesis Flores. It’s called Cakes by Gene Flores. We sent out an email to customers saying that we had the capacity to make 50 cakes a week because of refrigeration space, et cetera. We sold out in 30 minutes. So now we’re working on buying a new refrigerator for next week.
The third pop-up we’re thinking about launching is with Nacho Useche, our executive sous chef, who has been cooking with Enrique for many years and has an ownership stake in the restaurant. Instead of making fully prepared meals, he wants to sell pre-cooked meals for people to finish and plate at home. The idea is to show people with videos and photos how we plate these beautiful dishes with food that they can finish in 10 minutes in the oven or on the grill or whatever the recipe says.
When we started Seven Reasons, we always thought of this as a very small company that would hopefully grow, and we hoped that every employee would grow with the company, too. Before the crisis, once or twice a month, I held a class on restaurant finances. It was a casual thing, nothing structured, just me saying, “Hey, come over here. Let me show you this.” I would run them through the restaurant’s numbers, show them how the P&L works, etc. Just as Enrique has developed them as great cooks, I want to develop them into great entrepreneurs.
For a period of time, I made Nacho run food inventory every single week, which is an hour-and-a-half-long ordeal. My intention was that he would understand perfectly the way you calculate food costs—and not only how much you spend. It’s how the inventory moves every week. If you don’t see how inventory moves, you cannot calculate the cost. So you might think you’re at 25 percent, but you’re really at 38 percent if you consume all your inventory.
One of the lessons everyone is going to learn from this crisis is that management matters. At the end of the day, a restaurant is a beautiful business, an altruistic business even, but it’s still a business. For me, having my staff understand why we make decisions and what’s behind each decision is very important.
My dream is that when my cooks decide to go on their own, they do it with me as an investor and partner. Our sous chefs are so talented, and they’re young. They’re 25 or 26, and I’m sure that in five years, they’re going to be the best under 30 chefs in the world. In 10 years, they’re going to be the best under 40 chefs in the world, and I don’t want them to be here forever. I want them to launch their own concepts.
In this moment, we’re not thinking about making money or paying back investors. No one expects that. We’re being creative and learning new things—and, of course, continuing to employ people so they can support their families. Again, with these pop-ups, the most important thing isn’t that our cooks are making a little bit more money. It’s that they’re being creative. They’re thinking, and that, for me, is the most important thing.