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Hachi Grew From A Single Omakase Restaurant To 6 Brands. Founder, Fabian Koh, Shares How He Built The F&B Chain.

Hachi expanded its outlet sizes, locations and menu offering (including Hachi branded IPA beer and wines).

Hachi Restaurant Singapore

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Just looking at him, you would not guess that the Founder of the revitalised Hachi brand, Fabian Koh, has been in the F&B industry for over three decades. He looks young, maybe about 40, and exudes a youthful enthusiasm when talking about his food.

I wasn’t entirely wrong. While chatting, Fabian shared that he started working in restaurants at 16. After spending the better part of 20 years performing various roles in restaurants, bars, nightclubs and everything else in between the F&B scene, he had a unique opportunity to run his own show.

In 2009, he collaborated with the founding Japanese chef of Hachi Restaurant to revitalise the then 10-year-old Japanese Omakase pioneer in Singapore. Shortly after, he was left to his own devices to manage the business.

Initially, he continued to operate Hachi as a standalone Omakase restaurant. Fabian then developed an itch – wondering where his Japanese customers would go “if they wanted to have a casual after-work evening out?”

The Public Izakaya at was born in 2013 and its sister outlet, The Public Izakaya 2 just a stone’s throw away, opened exactly a year after in 2014. Sporting the same anniversary as The Public Izakaya 1 & 2, Hoppy Bar opened in 2015. Fabian has at least three more food concepts in development – Ryumon, Hachi Azabu and a final The Public Izakaya 3.

The Public Izakaya - Whisky and Cocktail bar

The Public Eight

With great pride, Fabian tells me that he prepares the food before every service. I took this as a hint to quickly start the interview – and to learn about his F&B journey and understand his thought-process on expanding his brands.

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Dinesh: Singaporeans love Japanese cuisine. However, there are already so many Japanese restaurants here. How do you stand out in such a crowded space?

Fabian: Our focus is to stay true to the roots of Japanese cuisine. For example in our Izakayas, I always plan our menu with the typical Japanese salaryman in mind – what would such a demographic like to eat across the different times of the year? Then, considering as well the appealing flavours for our local customers, I try to tweak the menu such that it satisfies the dual palates.

Sometimes my employees will tell me some of the dishes we put out are not ordered often. An example is our “chinmi” or fermented seafood dishes. In a full menu, we may have some loss leaders and some hot sellers. But you must have certain dishes that – even though very few might order – are on the menu because it’s representative of what an authentic izakaya in Japan would be serving.

Hoppy Bar Kappo Izakaya Course Menu

The Kappo Izakaya Course Menu at Hoppy Bar

Dinesh: While Hachi is your flagship restaurant, you’ve expanded with The Public Izakaya, The Public Izakaya 2, and have more food concepts in the works – Ryumon and Hachi Azabu.

Why did you create multiple F&B brands, instead of using Hachi – and established brand that all your customers know and love?

Fabian: There are many ways to expand. I’m more focused on expanding the depth of our restaurant rather than locations. The greater number of places you are in, the wider your presence, but it does not necessarily mean you’re more profitable.

For example, Hachi Restaurant occupied 1,500 sqft at our previous location at Mohamed Sultan Rd. Our current location (at National Gallery) is 4,600 sqft. So, we’ve expanded our operations by more than three times, providing us the ability to showcase and offer a larger spectrum of food & beverages.

I believe F&B operators need to expand their repertoire of menu offerings. To complement the dining experience for our customers, we developed our own branded products in collaboration with our Japanese producers like our own brand of Japanese IPA beer, non-alcoholic wine, and an upcoming line of seasonings including soya sauce and salt.

Made-in-Japan Hachi branded beverages

Made-in-Japan Hachi branded beverages

(Left: Pair of non-alcoholic wines, made in Toyama, Japan. Right: IPA Beer, made in Kanazawa, Japan)

Our initial concepts were created based on the feedback & demands of our existing customers. The Public Izakaya at 100AM, 100 Tras Street, was an example of a challenge to create a good izakaya for our Japanese customers.

While we wanted to make it authentic for our Japanese customers, we recognised the traffic & demographic of the locale as well and planned to win over the masses. The Public Izakaya, was then aptly named and its menu specially crafted.

Dinesh: Opening a new restaurant is always exciting, but it can also be very costly. What are some of the biggest challenges, especially for first-time F&B entrepreneurs, when opening a restaurant in Singapore?

Fabian: Rental is one of the main costs, but you also have to think about cost of goods, salaries, other operating expenses and even forex trying to run a profitable and sustainable restaurant. All of these components form percentages of your gross revenue. As long as we keep these percentages within range and check, we are fine.

When you sign a lease, it’s usually for two to three years. I strongly encourage people to sign for three years or longer. In the first three years of a lease agreement, you shouldn’t be focused on making large profits, and rather on recovering the initial investment plus brand building. After the first few years when you have depreciated the initial capital expenditures and amortised your expenses can you look forward to profits from your second lease onwards.

Renovation and build is a large component of your initial Capital Expenditure or CAPEX for new restaurants. As a yardstick, a new restaurant will require between $200/sqft to $250/sqft of CAPEX. So, if you’re going to open a restaurant that’s about 1,000 sqft, you will likely need to have quarter of a million. For a restaurant the size of Hachi Restaurant at 4,600 sqft, you would need over $1 million today. This is only for renovation and build and probably excludes the soft furnishings, artwork, antiques or other installations required to deliver the ambient experience.

Hachi Restaurant

Counter seats at Hachi Restaurant

Dinesh: The F&B business was one of the hardest hit during COVID-19, and we’re still not out of the woods. How has Hachi adapted to the new business environment?

Fabian: COVID-19 was probably the best thing that ever happened to our business. As a result of what we’ve done since then, we were able to achieve record revenues in 2021 and recently again in 2022.

When COVID-19 hit, we were forced to streamline costs, but we didn’t retrench anyone. We finally had the luxury of time to take a few steps back to just plan and put even more focus on our product.

The government helped us through various initiatives and rescue packages. And we were also fortunate to work with OCBC for financial support through the multiple Temporary Bridging Loans that were granted to us from 2020 – 2022 that helped to boost our cash reserves and operating cashflow – so we never had sleepless nights wondering what would happen to our business.

Since COVID-19, we also started doing takeaways at The Public Izakaya. Again, I see this as vertical expansion because we have incremental revenue but at our (existing) location, maintaining the same number of staff, but increased product offering.

We are also working with OCBC to finance our brand expansion plans – with new concepts to be unveiled soon.

Dinesh: People enjoy exploring new food concepts. How important is it to keep your menus fresh versus serving up comfort food that your customers are used to?

Fabian: I think it’s important to stay updated in Singapore. We are a small country without a lot of history. Many food concepts are inspired from overseas. We refresh our menu during extensive travels to Japan each year. We see, we learn and then we say “hey, let’s do this in Singapore, it will work”.

After The Public Izakaya – which I think is one of the first authentic Japanese izakayas in Singapore – opened, there have been numerous attempts to replicate. It’s natural. A competitor always has the benefit of observation and time to plan for a win. We need to set the bar high and constantly refresh the menu and dining experience to be the Izakaya segment leader in Singapore.

In many izakayas in Japan, they have started to use a lot of foreign techniques and ingredients to accentuate the taste of classical izakaya dishes. We adopted this philosophy in some of our menus, for example we have this dish in Hoppy Bar serving Garlic toast with raw tuna. Garlic bread is definitely not Japanese, but the taste is amazing. I wouldn’t call our food fusion either. It’s based off trends we’ve observed in Japan – an izakaya for the average man on the street, delicious food but accessible and friendly.

Besides marrying overseas ingredients, there is also a recent trend to go retro. We are going to rethink some of our very traditional izakaya dishes to give it an old town Asakusa vibe.

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During the Circuit Breaker in April 2020, many businesses were forced to shut their doors for about two months. Revenue dried up, while they continued incurring certain costs. Even though Hachi Group was a thriving F&B business, it had to rely on various government rescue initiatives and loans to tide through the tough period.

With this peace of mind, Fabian could use the downtime to innovate his menu, rather than worry about whether the business could survive and being able to pay his employees. His first task was to aggressively streamline costs – which has greatly boosted his bottomline today.

Having crafted their own beer brand and non-alcoholic wine, Fabian worked to extend his own line of soya sauce and salt.

At the same time, Fabian gained clarity on the direction he wanted to take his business. For him, expansion wasn’t just about opening new outlets for brand presence – it had to go hand-in-hand with an expanded menu and improved bottomline.

Today, he is looking to expand the floor area of his existing businesses. Fabian is also working to introduce new brands into the F&B space – Ryumon and Hachi Azabu.

While his business is profitable, cash can be tied up in stock and investments. Working with OCBC Serial Entrepreneur relationship management team, Fabian tapped on his Group’s strength to obtain multiple working capital facilities for renovation, furnishing and purchasing ingredients to launch his upcoming outlets.

Read Also: 5 Reasons Why SMEs In Singapore Can Consider Taking A Business Loan

All images from Hachi Instagram page

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