Most TV ad campaigns are taken out by large restaurant chains such as McDonald’s, Burger King, Jersey Mike’s Subs, and Applebee’s that have the scale and budgets to support them. For most start-up restaurants and franchises, TV ad campaigns are too pricey and don’t get the bang for their buck compared to less costly, targeted Facebook and other social media ads.
But don’t tell that to Stratis Morfogen, the savvy entrepreneur who launched Brooklyn Dumpling Shop in New York City’s East Village in May 2021 when the pandemic was gaining momentum. Despite its Manhattan location, Morfogen named it Brooklyn because he thought the name had more cachet than more established Manhattan.
It now has 11 locations, with one-company owned and the rest franchised, including 3 in New York City. But he has at least 14 more franchisees set for 2024.
So why launch a TV ad campaign on Spectrum TV that appears on several channels in the New York/New Jersey/Southern Connecticut area including MSG, CNBC, NY1, YES Network and MTV. “Who doesn’t love a sandwich dumpling?” Morfogen quips. Hence, TV ads enable him to reach the masses.
Brooklyn Dumpling Shop is showing signs of steady franchise growth and is using a $1.5 million TV ad campaign to build its brand.
Morfogen describes its essence as “We have no connection to traditional dim sum Asian and dumpling shops who do traditional pork dumplings. We specialize in dumplings that are like one and a half ounce sandwiches.”
Showing its range, its most popular dishes ordered include Korean BBQ, mac & cheese, crispy chicken rice noodle bowls, and triple smash burgers.
Business Model Revolves Around Fewer Employees and Automation
Summarizing its business model in pithy phrases, he said, it specializes in a “smaller footprints, smaller labor force, lower fixed overhead, leveraging technology, maximizing customer service, higher wages for staff where 3 employees can serve 300 to 400 customers a day, and putting all these pieces together, maximum return on investment.”
Capitalizing its first location cost about $450,000, which he raised from equity co-investors. Morfogen is 56-years old, was raised in Garden City, Long Island, and learned his entrepreneurial skills running the Brooklyn Chop House in Manhattan (and seems to have a knack for opening Manhattan eateries with a Brooklyn name). He also ran the Philippe Chow Restaurant Group, based in Los Angles, which he sold.
Dinners at Brooklyn Dumpling Shop cost $10 to $14 a person, not much more these days than a fast-food burger meal.
Two Investors Fuel Its TV Ad Campaign
Morfogen met “Shank Tank” panelist Kevin O’Leary at the restaurant Morfogen owns in Abu Dhabi, and the duo connected with another “Shark Tank” participant Matt Higgins, who is CEO of RSE Ventures, a private equity firm. O’Leary and Higgins invested $5 million in Brooklyn Dumpling Shop, with access to another $5 million.
“They want it to be the next Chiptole,” Morforgen noted, whose father ran a series of diners in Queens including the Hilltop Diner on Union Turnpike in Fresh Meadows.
With the infusion of O’Leary’s and Higgins’ capital, its marketing budget zoomed from $50,000 a year to $1.5 million annually. The TV campaign revolves around “brand awareness. That’s the way to blow up your business,” Morfogen said, admitting that these kinds of campaigns take time.
“You have to lose money to gain market share,” he explains, pointing to Jeff Bezos’s losing money and facing ridicule at Amazon, before he turned it into a global powerhouse. In fact, he estimates that it will take two to three years to recoup the investment on their ad budget.
TV Ads Giving an Immediate Spark to Revenue
Yet since the ads started running, business at its flagship East Village shop is up 35% to 40% and its Upper East Side location has seen a 20% spike in business.
But sales in the shops are only one aspect of its revenue stream. Its consumer-packaged goods (CPG) will be selling at 1500 Wal-Marts, 6 Stew Leonard’s, and 375 Shop Rites, with more deals to come. Morfogen estimates that 75% of the company’s overall revenue will stem from CPG’s Its most popular CPG items are mac & cheese and Korean BBQ.
Just Like the Old Automat
Automation rules at Brooklyn Dumpling Shops. “The power of the guest experience lies in the palm of your hand with smartphones,” he explained. Guests can order their food on their own at the self-ordering kiosks, and there’s an employee to help those who are intimidated by technology,. And smartphone orders can be picked up in automated terminals.
Its target audience is quite widespread, he said, including children, university students and working families.
When this reporter paid a surprise visit to the original location in the East Village, the manager Gio greeted me and said, “Welcome. Is this your first time here?” My chow chow bowl of chicken, white rice with tangy buffalo sauce, with beverage and tip for $20 supplied me with dinner with leftovers for lunch.
By the end of 2024, Morfogen expects to have 30 restaurants with 28 franchised, and adding a second corporate store in Miami Beach .
Asked the three keys to its sustained success, Morforgen replied, 1) Innovation, 2) Listening to your customer, 3) Technology.
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