Richie Nakano was the founder and former executive chef of San Francisco's Hapa Ramen. Then he was fired by his own investor. Here's what really happened.
Photo via Flickr user Ben Metcalfe
Chef Richie Nakano has been the force behind San Francisco's Hapa Ramen since its inception five years ago. Having operated for years as a pop-up at local restaurants and the farmers' market, it opened as a full-service restaurant four months ago in a brick-and-mortar location on Mission Street, and was packed from day one. But in order to get footing for the new front, Richie sold the majority of the business—including its name—to an investor named Owen Van Natta, a business buff who has held high-ranking positions at major Silicon Valley tech companies such as Facebook, Myspace, Zynga, and Amazon. Richie forfeited his ownership and became the executive chef at the restaurant, while Van Natta and director of operations Deborah Blum took over the business end.
Last week, the San Francisco restaurant scene was shaken when Richie was abruptly fired from the business, leading to its sudden closure. The claim: that his food and staffing costs were too high, preventing the restaurant from turning a profit. As the backlash grew about the circumstances, Van Natta and Blum released a statement arguing that he actually quit after they wouldn't meet his unreasonable demands.
Cue more outrage—and, as usual, there are two sides to the story. Many San Francisco locals and restaurant industry employees fear that the firing and closure are indicative of a hostile cultural environment where tech money demotes and exploits the creative class, but others argue that Richie failed to keep the books as he should have.
We got in touch with the man himself to get the deep scoop on what really went down, what he would do differently, and what it might all mean in the scope of San Francisco's changing vibe.
MUNCHIES: Hi, Richie. How have you felt about the way that the media has handled the recent saga with Hapa Ramen? Richie Nakano: The stuff in the [San Francisco] Chronicle is pretty balanced. They got stuff from me, they got stuff from the people who fired me, and they took a pretty straightforward approach to the whole thing. The only other things that I read were the Bold Italic piece and the SFist stuff. I don't know if the SFist dude is just trying to get clicks, but it's pretty "hot story" kind of stuff. "Did Richie get fired because he tweeted about [SF Chronicle critic] Michael Bauer?" Any time that there's a story like this that's made public, there are always going to be different ways that people report on it. Everyone's going to have their opinion. I was prepared for that, so it's been fine.
What response have you gotten from other people in the SF food scene? It's been a tidal wave of people being supportive and helpful and nice. For the first four days [after the story broke], my phone was pretty much ringing nonstop the whole time. I haven't had to use Facebook this much in my entire life. Constant friend requests, people sending messages who I've never met. Then the occasional person who lectures me, like, "You've got to make better decisions."
Restaurants in SF close all the time, especially in the last few years. Why do you think that this particular story is so polarizing for people? There are a couple of different factors there. For one thing, Hapa Ramen is this very grassroots thing that has been built up over the past five years, so I think there's sort of a pull-yourself-up-by-your-bootstraps kind of thing that people identified with and liked about us. Beyond that, it's a story that people in SF are familiar with right now, the changing scene because of tech and tech money pouring into the city and the effect that that's having on a lot of different things, especially small businesses and restaurants.
Do you think that—not necessarily toward your investor in particular—do you feel like this is an example of the tech industry not understanding the rest of San Francisco culture? I would mostly say that for me, it was more a person who came from one industry and tried to get into another industry, and that's where the rub was. That's a hard question to answer because at the restaurant we fed a lot of tech people. They were our customers, and in a lot of ways the tech community has been good to us. But that's not to say that there aren't major issues and problems happening in SF that are going to have to take some form of resolution or this city is going to end up being a completely different place than it was a few years ago. That's a hard question to answer because you don't want to be like, this is representative of everything wrong with San Francisco. It's a little more nuanced than that, but there are aspects of that in the situation.
Have you talked much to the investor at hand after this incident took place? How much have you been in touch? Not at all.
One focus of this story has been the issue of profitability of new restaurants. Many people argue that it's very common for a restaurant to not be profitable for the first few months and then level out. Would you agree with that? We were open for four months and we were on track to be profitable within six months, based on the [financial] reports that we were doing. For me, it's interesting—you get a wide range of things people say. Some people would say six months is a reasonable amount of time, a year is a reasonable amount of time. For us, we were on track to turn a profit in the fifth period and we obviously never got that chance. But I would say on the short end of things, six months—depending on how much money you spent on the restaurant. Are we talking a restaurant that cost $600,000 to build out or a restaurant that cost $4 million to build out? San Francisco's crazy right now and people are building restaurants that cost $7 million or $10 million. You look at those places and think, how are those places ever supposed to turn a profit?
We were on track to do it, but we were given basically threats constantly—if you guys don't make this place profitable soon, we're going to shut down the restaurant. There were times when we heard that every single day. There were already unreasonable expectations to begin with.
Have you had an opportunity to respond to the statement that the current owners put out saying that you weren't fired, that you put out a list of demands that couldn't be met and you quit? First of all, why would I quit the thing I've worked on for five years? If you read their statement, it said I performed poorly and my food costs and labor costs were out of line, so I quit. It doesn't make any sense. It's just not true. This thing happened on my day off, where they changed one of my dishes without me knowing or having any input. I came back and said, "This can't really happen without me being involved, it's my name on the food, it's my reputation, and you can't go changing what's supposed to be my food without me being involved in it." And they basically said, "We can do whatever we want to do."
Does either of them have a culinary background? No. Neither one of them has ever worked in a kitchen. So I came back with a document that had five points on it. It said I need control of the menu, that I need to not be undermined through my staff—like them going behind my back to to my sous chef, telling them you're going to change a dish when I'm not there. I need a non-hostile work environment, and I need them to stop coming in every day saying the restaurant could be shut down. I didn't ask for money or anything, just the basic, basic things that you need as a chef to do your job. These are the things I need as the driving force behind Hapa Ramen for the last five years.
They came back and said, "We don't agree with any of this." I said, "Not even the non-hostile work environment? Because that's a pretty simple thing to agree to." And they said that that was touchy-feely stuff but the main point was the control over the menu. Then they fired me, and they weren't willing to negotiate on anything.
How did the rest of the staff react? It's really interesting because I guess at first the staff was told that I quit, that it was an amicable split. Then when the story broke three days later, they were mad. I've gotten a lot of nice messages and texts from people saying, "I really liked working with you." My former GM and I were able to land a lot of people really good jobs so they landed on their feet after this.
You can't use the Hapa Ramen concept moving forward because of the deal you made with the investor. Would you do another ramen concept moving forward? I've gotten a wide array of offers to do lots of different stuff. And a lot of people are asking why I don't try to do the pop-up again, but I don't want to go back in time five years. It was great, and I was thankful for everything it brought for me, but the thought of going back and starting from square one is hard to swallow. For now, I'm just hunting down other options.
For you, what has been the takeaway from this whole scenario? I think it's a story about who you get into business with, basically. What you get in writing and making sure that you're protected, which for me, I just should have done a better job fighting for what I felt I deserved or what I wanted. I took a sort of naïve approach where I was like, these are good people who won't try to do anything, they're good people to go into business with, everything's going to be fine. I kind of have a "trust no one" mentality at this point—not in my personal life, just in terms of my business. I don't have any regrets about what we were doing at the restaurant or any decisions we made there. We were making good food, the staff was happy, the guests that came in really enjoyed it. The day that I got fired, a really good review for us came out. My main regret is not protecting myself better, and that's pretty much it.
Thanks for talking with us.