Are High Quality Restaurants Sustainable? An Interview With J.C. Holdway Owner and Chef, Joseph Lenn

J.C. Holdway, 501 Union Avenue, Knoxville, May 2023
J.C. Holdway, 501 Union Avenue, Knoxville, May 2023

A few months ago, the New York Times published a guest editorial by celebrity chef Vivian Howard. She operated her flagship restaurant Chef and the Farmer in Kinston, N.C. for fifteen years. Noting the recent closure of very high end (three Michelin Stars) Noma in Copenhagen, she questioned the sustainability of the high-end restaurant model, even at her much more affordable level (about $60 per person).

She has decided to close her restaurant citing challenges such as:

the inefficiencies, stress and fatigue brought by an unsustainable business model became impossible to ignore. Our industry needs to evolve or else more full-service, cuisine-driven restaurants like mine will languish their way to extinction.

In short, she said the margins are too small and the work too brutal to sustain. She’s tried opening secondary, more fast-food type restaurants to support the larger restaurant. She’s ruled out raising prices to a level that would support the business. She plans to re-open, but with major changes to the model. Patrons will be served cafeteria style by the chefs, eliminating servers and focusing on food. They will open ten hours a day, but only four days a week, “because that’s the kind of schedule that nurtures staff retention.”

They will work seven days a week, however, preparing meals to “stock the restaurant’s small collection of free-standing, strategically located smart fridges . . . Next-level take-and-bakes, chef-prepared assemble-and-eats and pasta deliveries, when coupled with an already operating kitchen, will help make us whole.” She said the trend of high-end take-out that presented itself during the pandemic is one positive development to come out of that difficult period.

After reading the article, my thoughts turned toward our own higher-end restaurants. We’ve seen a small explosion of fine-dining or farm-to-table elevated cuisine in downtown over the last decade or so and I wondered how they might be dealing with similar issues. Joseph Lenn agreed to talk about the issues raised in the article and what makes his restaurant, J.C. Holdway, sustainable.

“It’s interesting to see how people are making changes in the industry. We (J.C. Holdway) started off doing things differently from an employee perspective. I jokingly say I tried to open the restaurant I always wanted to work in when I was younger.” He said he would have loved to have had insurance, paid time off, and a 401K or something similar. He said he was lucky that someone talked to him early about investing and gave him a Dave Ramsey book.

He said his favorite places that he worked were places that offered those kinds of benefits. It all likely goes back, he said, to one of his first jobs, which was at Butler and Bailey Market in Rocky Hill with his boss Tom Butler. “Having a boss like that who offered benefits when I was young,” he said, made a great difference. He went to work there when he was eighteen years old and it contributed to his interest in becoming a chef. Tom remains a friend and a mentor.

J.C. Holdway, 501 Union Avenue, Knoxville, January 2023

When it came time for Joseph to start his own business, Tom encouraged him to offer similar benefits to his employees and he took that advice. Insurance was available from the beginning and a 401K was offered after a year of employment. He saw it as a mutual investment between him and his employees. “Pre-COVID, our shortest tenured cook was two-and-a-half years and that’s unheard of . . . I felt like we were doing something right.” He said they also tried to pay well.

While the restaurant has had to absorb higher food costs in the last year or so, other costs that some competitors are facing for the first time as they compete for staff, was already a part of their normal operation. It all requires higher menu prices, but that, again, had already been a part of their model. “It’s expensive to pay people more than other people. Our pay is similar to New York and Atlanta. We have to do that to attract talent. It provides people a way of living where they can buy their own place . . . It’s a source of pride for me . . . I’m investing in my best asset, my employees.”

He said he constantly asks his employees what they need to make the job better, whether that means better equipment or better support. He tries to find employees who are happy to be at work and have a positive attitude. To that end, he is very pleased with his current staff, describing them as young, hard-working, and with a positive attitude. While the model they use requires that everyone be on-point and working as quickly as possible, he tries to make it as low stress a work environment as possible. Still, some find it to be too stressful and move on, something he supports.

He said when they first opened it took about a year-and-a-half to get the staff to the place he wanted it and coming out of the worst of the pandemic took about the same length of time. It also took a while for business to return to pre-pandemic levels. Last year was a good year and the fall felt steady like pre-2020. He said a substantial portion of the current business is from people who have recently moved to the city, noting they have customers who have moved from California and New York, as well as other places.

He said restaurants with extreme special menus, like Noma, referenced in the article, or other Michelin-starred restaurants have so many specialists and the food takes so long to prepare (some dishes take days with one person dedicated to that only) and plating is so precise, they have a hard time maintaining the model without very high prices. They are often extremely creative, but sauces, for example, can take a month to develop into a great flavor that will result in a couple of drops on a plate.

“We run a line of whether we are we fine dining, are we casual dining, are we high-end? We are a mix of it all, kind of thrown together.” He once worked at Peninsula Grill in Charleston which “very much rode that line of fine dining and volume. It was excellent service, a great food product, all the cooks believed in it, the wait staff believed in it . . . I’ve always remembered my time there. I remember the energy in that restaurant. It was very lively and everyone was happy to be there.”

Joseph Lenn, Chef and Owner, J.C. Holdway, 501 Union Avenue, Knoxville, January 2023

Joseph met Vivian Howard (author of the New York Times article) and did a couple of food events with her. He said their concepts are similar, but their approaches are different. Where she spun-off other concepts, he realized early on that if he was to have a life, that wouldn’t work for him. He also decided to be open five days a week (they are closed Sunday and Monday) and to close on holidays. He said so many restaurants are open on holidays and he knew he wanted to be with his family and figures his employees do, as well.

He also said Ms. Howard likely has more specialized staff and upper-management staff. Her time is divided between restaurants and he thinks a chef’s presence makes a difference. There are also the efficiencies from being open less hours during the week, as she now seems to have discovered. It’s a lesson he thinks a lot of restaurants took from the pandemic.

One thing he noted in the article that Vivian is doing is selling essentially boxed foods which has the branding. He said it’s really smart to do that and J.C. Holdway sells branded peppermint eucalyptus soaps that serve a similar purpose. It is a tangible reminder inside customers’ homes that keeps the restaurants in their mind.

He does remain concerned that people are going to balk at the increased menu prices, but he’s paying the same price the rest of us are at the farmer’s markets. “It’s expensive and that’s the challenge here. How are we going to navigate?” In the end, of the current situation, he said the cost of ingredients is high to offer the quality his customers want. He said he does see people being very generous with service workers. In the end, he is determined to pay his employees well and to offer good benefits. “Those are the key components of why our prices are like they are.”