Dok Kwon, President and COO of Cupbop

Guest: Dok Kwon, President and COO, Cupbop

Host: Chris Hatch

Listen on Spotify

Summary

Chris Hatch talks with Dok Kwon, president and COO of Cupbop, the Utah-born Korean barbecue in a cup brand. Dok shares how he moved from Korea to Orem as a sixth grader, went from BYU to Goldman Sachs and Citadel, and left Wall Street to help founder Jung build the first national QSR brand based on Korean cuisine. He explains how Cupbop grew to about 60 U.S. locations without outside capital, centralized its sauces and marinades to get ready for franchising, and is opening in the UAE and Canada. He also tells the story of the two University of Utah students who took Cupbop to Indonesia, where it now has about 200 stores, and covers co-tenancy, third-party delivery, gluten-free menus and his go-to order.

Key Takeaways

• Cupbop has grown from a 2013 food truck to about 60 U.S. stores and nearly 300 worldwide without taking on outside capital.

• Before franchising, the brand centralized its proprietary sauces and marinades with outside partners distributed through Sysco, so quality is consistent and scalable.

• Franchising will be selective: multi-unit operators with food experience and a strong fit with the brand.

• The worst thing a restaurant brand can do is grow too fast. A restaurant is only as good as the leader running it.

• In new markets, Cupbop wants to sit next to strong national co-tenants like Chipotle and Panda Express, and talks to those managers directly to gauge performance.

• Smaller second-generation spaces fit the brand's food truck DNA, and 35 to 40% of sales come through third-party delivery.

• Getting onto delivery platforms early locked in better commission rates; new restaurants can face rates around 35%.

• The right partner matters. Cupbop's Indonesian partners kept the brand alive through COVID and grew it to about 200 stores.

• Advice for young professionals: in your 20s, grind, raise your hand for everything and be the person people can count on.

Transcript

[01:45] Chris Hatch: Okay, welcome back to the Dirt Dog Pod. Today we've got a wonderful guest, Dok Kwon, who is president and COO of Cupbop.

[01:53] Dok Kwon: Thanks for having me, man.

[01:54] Chris Hatch: Hey, thanks for joining us.

[01:56] Dok Kwon: Of course, anytime.

[01:57] Chris Hatch: You deliver delicious food to the world.

[02:00] Dok Kwon: That's right. We try.

[02:01] Chris Hatch: And a Utah brand at that, which we're super fans of here at our office, of course. Tell us, how long have you been with the brand?

[02:12] Dok Kwon: It's coming up on six years. It'll be six years in July. Time has flown by.

[02:17] Chris Hatch: And prior to that, you relocated here from New York, right?

[02:21] Dok Kwon: Yes.

[02:21] Chris Hatch: And were you new to Utah, or had you lived here before?

[02:25] Dok Kwon: No, I lived in Utah. I'm from Korea. I moved to the States, to Utah, back in '99 as a sixth grader. I went through school here, graduated from BYU, and then moved out to New York for my job in finance and spent about seven years there. I did the whole investment bank thing. I spent about two and a half years at Goldman Sachs in the investment research division, and then moved over to a big hedge fund called Citadel, where I was an investor for about four and a half years. By the time I resigned, I was running a portfolio of about $480 million. So a very different life than growing Cupbop.

I did that, and I had this itch to build something. I didn't know what. I never thought it was actually going to be in restaurants. But Cupbop is a brand I got to know right before moving to New York, actually. I had about three months of overlap with Cupbop when the food truck first started. I thought the brand was brilliant. I was a huge fan; I'd go see the truck every week it came by. That's how I got to know Cupbop, so I was already a big fan. I got to talk with the founder, Jung, while I was at Citadel, and looked at how everything was. They were just building out their 10th location at the time. And I thought, "Hey, this is such a great brand." The macro landscape was very good, not just for QSR, but for Asian overall and Korean specifically. And I thought, "Hey, why don't we go build the first national QSR brand based on Korean cuisine?" So I ended up dropping everything and moved back to Utah almost six years ago, and I've been running since.

[04:32] Chris Hatch: I love that. Okay, there's a lot of pegs there. So let's start with immigrating to America, because you said sixth grade. I have a sixth grader. At sixth grade, you're old enough to kind of understand what's happening in the world, but that's about it.

[04:57] Dok Kwon: Right, right.

[04:58] Chris Hatch: What was it like moving from Korea to... you moved to somewhere in Utah?

[05:04] Dok Kwon: Yeah, we moved to Orem.

[05:06] Chris Hatch: You moved to Orem. Okay, Utah County, right next to BYU. That's kind of a little bit of a shock.

[05:16] Dok Kwon: It almost went too fast. My parents had their plan of giving their children the opportunity to study in the U.S. and have the opportunities this great country provides. And it actually was almost like a family vacation when we came. We came through California and did all the national parks, hit all of that, southern Utah. They had good family friends who lived in Utah at the time. And they looked into the state, found out it was a religious state, and thought it must be safer than other places, right?

[06:00] Chris Hatch: Like a logical conclusion.

[06:02] Dok Kwon: Yeah, pretty logical.

[06:04] Chris Hatch: Maybe its own version of crazy.

[06:06] Dok Kwon: Yeah, for sure. I don't know how my parents did that. But yeah, we ended up coming here. One day, as our vacation was ending, my parents sat me and my brother down. I was a sixth grader; my brother was a seventh grader. And they said, "Hey, FYI, we're going back. You guys are actually staying here." They had enrolled us at a school called Meridian School, which was on 9th East in Provo, right by BYU. And they went back, and we started going to school the next week.

[06:47] Chris Hatch: Amazing. That's actually crazy. And you were living with the family friends?

[06:54] Dok Kwon: Yeah.

[06:54] Chris Hatch: Wow. What a shocker. And mom and dad are, what, 14, 16 hours away by flight?

[07:01] Dok Kwon: At that time, it was really before any kind of internet penetration. We didn't have FaceTime. It seemed much farther away back then than it does now. But I was almost a little too young to comprehend what was going on, which I think was good. I thought, "Okay," and just started going to school and had to learn the language. But it's by far the best thing they've done for us. I'm very, very grateful to my parents for doing that.

[07:35] Chris Hatch: And are your parents still in Korea?

[07:38] Dok Kwon: They actually spend about half the time here in Utah now. They spend half the year here, and then they go back and spend half in Korea.

[07:51] Chris Hatch: That's got to be a good setup.

[07:53] Dok Kwon: Yeah, it's so amazing.

[07:55] Chris Hatch: Okay, so you attend BYU. Did you just fall in love with some of the finance classes and that route, or how'd you end up on Wall Street?

[08:06] Dok Kwon: It was actually a pretty simple decision. When I was going into high school, in eighth grade, ninth grade, my dad's business ended up going under. So as a family, we got into some pretty tough financial hardship. My parents obviously did everything they could to shield us from feeling any of that, and I'm very grateful we never really felt too much of it, but you see what's going on, right? You're like, "Shoot, this is not good." So my brother and I thought, "Okay, it's our turn now. We've got to go get our family back on its feet. We're going to make as much money as possible as fast as we can." So I just googled, "Where can I make a lot of money?" And it said, "If you go to a hedge fund in New York, you get paid a lot." So I thought, "Okay, that's what I've got to do." Step one: how do you do that? You've got to go to an investment bank, and then you go to a hedge fund. "Okay, that's what I've got to do, then."

[09:22] Chris Hatch: There you go. But talk about truly wildly different environments, going through the rest of your youth into adulthood living in Orem...

[09:34] Dok Kwon: I lived with the first family for about a year and then ended up moving and living with another family. The majority of the time, I actually spent in Payson.

[09:44] Chris Hatch: Oh, yeah. Which is a mix of suburban residential and farming, full ag.

[09:48] Dok Kwon: Absolutely.

[09:50] Chris Hatch: So you went from that into BYU, which, to your parents' point, is a pretty tame environment for the most part.

[09:58] Dok Kwon: 100%.

[09:59] Chris Hatch: And then straight to Wall Street, which is for sure tame.

[10:03] Dok Kwon: Yeah, it's a little bit wild. But I didn't think it was a huge change, crazy enough. I guess it's probably because after my sophomore year at BYU, I went back to Korea to serve in the Korean military for a couple of years. And that's a wild environment of its own. So I was probably used to some extremes here and there. And New York was absolutely the best place to be in your 20s while you're single. It's a great place to advance your career at the beginning and meet all kinds of people. I love New York. Now that I'm raising a family, Utah is an unbelievable place.

[10:48] Chris Hatch: You're seeing what your parents saw.

[10:50] Dok Kwon: Yeah. I actually didn't appreciate Utah until I came back from New York. I couldn't wait to get out of Utah. I just thought, "Hey, there's a world out there."

[11:03] Chris Hatch: Did you move back married with kids?

[11:06] Dok Kwon: I moved back married without kids, and now I've got three kids. It's just such a beautiful state. I just love the people in Utah. They're such good people. Even when I first moved back, I thought, "I'm probably going to do a couple of years, then maybe move to California or Denver or something like that." My wife did not want to move back to Utah. She'd spent some time in Utah as well; she did her PhD at the U. And she loved New York and said, "Oh, I'm never going back." Now she says, "I'm never leaving Utah." So it's a great place.

[11:49] Chris Hatch: Man, the food scene in Manhattan, though.

[11:52] Dok Kwon: Oh, yeah. Manhattan's got unbelievable food. That's for sure.

[11:55] Chris Hatch: It's got to have the richest food opportunity per capita of anywhere on earth.

[12:00] Dok Kwon: 100%. 100%.

[12:02] Chris Hatch: I never miss a chance to hang out in the city and grab a few meals.

[12:08] Dok Kwon: It's always a good time.

[12:13] Chris Hatch: So you called Jung and you started talking. When did you start talking with him? You said he had just opened the 10th one?

[12:23] Dok Kwon: Yeah, it was back in '19. I want to say probably early 2019. I started talking with him, and we just had a few casual conversations. We talked about where the company was, where it could go, what bottlenecks Jung was seeing at the time, and his vision of the direction he wanted for Cupbop. And the good thing was, Jung and I immediately shared the same vision. We're very long-term oriented. Our goal is to build the first national brand based on Korean cuisine. And Jung really got me when he told me, "Hey, look. There are a ton of successful hedge fund managers in New York, but nobody's been able to create a national brand out of Korean cuisine. Think about that. We could be the first ones." And I just thought that was so freaking cool. As soon as I heard that, I was sold. I said, "Okay, I'm coming. We're going to do this." That's how it went.

[13:26] Chris Hatch: I had the funniest experience this last year. I have Raiders season tickets, and I took my 14-year-old son to the last game of the season. The morning of, I said, "Hey, let's go hit the gym at the hotel and see who's stronger," which is a terrible idea, by the way. Don't do this.

[13:47] Dok Kwon: Don't ever do that.

[13:48] Chris Hatch: So bad an idea. I'm still limping from some of that activity. We were at the Waldorf in Las Vegas, and I said, "Let's go cool down by the pool." And a very nice older gentleman came outside to hit the hot tub. I said hi, and I kind of stumbled over my words. And my son's looking at me like, "Are you okay? What's wrong with you?" And I'm like, "Well, that's the founder of Panda Express." And he's like, "Okay, that's pretty cool. But why are you tripping over your words?" And I'm like, "This is like you meeting LeBron James." I am a restaurant drive-thru nerd. This is like meeting a hero.

[14:38] Dok Kwon: 100%.

[14:38] Chris Hatch: So I've got to put it out there in the atmosphere: if Andrew happens to be listening to this episode, please, please come on the Dirt Dog Pod. But what's crazy about his story and what you guys are up to is that there really isn't another Asian food concept at scale at this point.

[15:05] Dok Kwon: Yeah. And that's what gets me excited. Look, there are definitely big benefits and also challenges to being the first mover, as in any industry. The big benefit is that the consumers who love us and crave our concept are coming to us, right? They're coming to Cupbop. The challenge we constantly face is that we have to do the bulk of the education process. A lot of people will say, "Hey, what's Korean BBQ in a cup?" It's not as easily understood as a burger or a sandwich. So we have to create that market and be the leader in it. But it's been an unbelievable journey getting here, and we're really only getting started. We only have 60 locations here in the States.

But what I'm most proud of is that we've gotten here from a food truck without taking on capital. We've been able to bootstrap the brand, which is not an easy decision to make, because I get a lot of PE and VC firms reaching out to me.

[16:23] Chris Hatch: Especially with your background, I think.

[16:26] Dok Kwon: Yeah. But a restaurant isn't a business where taking on a ton of capital and scaling really fast has more upside than risk, generally. That's why we've been more prudent in our approach. But I'm very proud that we've been able to prove the brand out on our own. There's a point where you go from a good, popular restaurant to having three, four, five locations, but to get to 30, 40, 50, at some point you do need to create that brand identity, which is something so intangible but extremely hard to do. And I think we do have a very distinct color, brand voice and identity in what we represent. That's what I'm very, very proud of.

[17:21] Chris Hatch: So for the listeners who haven't been to one of your restaurants and haven't tried the food, walk us through it. What is Korean barbecue in a cup?

[17:35] Dok Kwon: Every one of our bowls comes with rice, cabbage on top, sweet potato noodles and a protein of your choice. And then we top it off with our special sauce, ranging from 1 to 10 in spice level. That's been the concept.

Where I'm very excited is that we have amazing opportunities to widen the customer funnel. All of the ingredients in our bowl are 100% Korean. The only thing that wouldn't be authentic Korean is the sauce we've created. The brilliance is the sauce, right? So what we've actually been working on is, "Hey, we could capture the authentic Korean market too." And we can do that by changing around the sauce and changing the format a little, because all of our ingredients are Korean. That's something I'm very excited about. With all the R&D we've been doing recently, we just put out our salads for the first time about a month ago. We're coming out with a Korean fried chicken menu, which we're very excited about, and another category of authentic Korean bowls. If we go into a bigger city, let's say New York, when they see Korean barbecue in a cup, they have certain expectations of what that is, because people there are a lot more familiar with Korean food than, say, in Utah. So we have an opportunity to capture that customer base as well. We're working hard on the R&D side and are very excited for what's to come.

[19:36] Chris Hatch: That's amazing. So the food truck started in 2013?

[19:39] Dok Kwon: '13. Yeah.

[19:42] Chris Hatch: And today, in 2025 as we're recording this, you have about 60 restaurants in the U.S.

[19:48] Dok Kwon: Yep.

[19:49] Chris Hatch: And you're working on your first opening in the UAE.

[19:54] Dok Kwon: Yeah. That should open the first week of July.

[19:59] Chris Hatch: Okay. That'll be nice and chilly in July.

[20:03] Dok Kwon: Yeah, it'll be... very, very painful, probably. And then we'll have a couple more in Dubai opening in September as well. Ultimately, in the UAE, we should have at least 10 units. We have an amazing partner out there. Big shout-out to [Ramal]. Great group, unbelievable operators. So we're very excited about that. We'll be making our way into Canada as well, with an amazing partner we found who's very sophisticated in the food space. We're actively looking for units in Canada right now.

Except for international, we've traditionally been all corporate, with exceptions. There's a big group that was grandfathered in before my time that owns about 20 units at this point. But other than people internally, we haven't opened things up for franchising. We've just started testing the waters on that. The reason we haven't is that we just felt we weren't ready, the biggest piece being the supply chain side. Our proprietary items, including our meats and our sauces, were a lot of them done regionally and at the store level. You can't scale doing that. It's much harder: consistency issues, this and that. So we finally got all of that dialed in, produced at central locations and distributed. That just happened earlier this year.

[21:49] Chris Hatch: You brought a couple of commissaries online, then?

[21:53] Dok Kwon: No, we outsourced it. We found great partners and completely outsourced it. So they produce it and plug it into Sysco, and there you have it. And that took some time. With the meats, we used to do the marinades inside the store, at every location. Now we've been working with an amazing partner to make sure we improve the quality while centralizing the whole process. We're working with a plant out in California where they marinate everything, it plugs into Sysco, and it gets distributed. So consistency is good, and now it's scalable. We're very excited for what's ahead. This is probably the first time I'm talking about it in more of a public forum, because we haven't really gone public with it. I think there have been rumors around, and we've had a lot of people reaching out.

[22:54] Chris Hatch: Listen, we love when new information gets dropped here on the Dirt Dog Pod. That's what Porter and I really look forward to, these little tidbits. So as you've thought through the process of how to bring on additional operators and potential franchisees, step one really was to dial in the whole operational side and how you supply it at scale.

[23:20] Dok Kwon: Yes.

[23:20] Chris Hatch: And is that just because you haven't chosen to take on capital? If you do open it up to franchising, I assume what's going to happen, like every other franchise concept we've had on here, whether it's Hangry Joe's or Dave's Hot Chicken... we've had a lot of these hyper-growth franchisors. I would assume your concept is just going to go nuts across the whole country.

[23:45] Dok Kwon: I think we'll have a very exciting growth curve. But we'll make sure we're responsible with it, right? That's the whole reason why, post-Shark Tank three years ago, when we got flooded with franchise requests, we said, "No, we're not going to do it right now, because we've got to dial it in." That's where our long-term mindset comes in. So we're going to be very picky about working with the right operators. We're really only thinking about multi-unit people with experience in food. Fit is also important, obviously. We need to have that fit, because ultimately there has to be trust between the franchisor and the franchisees. If you have all of that together, then yeah, we'd be excited to partner up and see what we could do.

The good thing is, we've really proven out the model ourselves, so we have a lot of conviction. And a lot of our people internally joined us for this opportunity, really. That's been exciting, because our people know our brand the best, and seeing the conviction from our people is always a good thing. But we'll be responsible. The worst thing you can do, in any business really, is grow too fast. There are industries where it makes way more sense. If it's SaaS, sure: raise a lot of money, bring on a bunch of developers and a massive sales team, go grow revenue, become that first mover, bam, bam, bam. Because it truly is much more scalable than restaurants. With restaurants, the operational intensity is where it gets really hard, because a restaurant is only as good as the leader operating it. We've got to make sure we find the right operators. So yeah, we're being very picky, for sure, and we'll take it slow.

[26:11] Chris Hatch: It's interesting thinking about that. I was sitting on a Dutch Bros earnings call a couple of weeks ago, and the person relaying information about where they were at talked about how they had about 150 new store managers in training who were ready to roll.

[26:35] Dok Kwon: That's unbelievable.

[26:35] Chris Hatch: What an asset, right? And I thought, boy, that is not reflected on a balance sheet.

[26:41] Dok Kwon: My goodness. That's everything. And scale is kind of a self-fulfilling prophecy, in that scale also allows you to do that and attract the best talent. But the great brands like Dutch Bros, and the great local brands we've seen come out of Utah, it's just unbelievable what they've done. Huge respect to honestly anybody running a business, but especially restaurants. It's a tough business. I told Jung, "Man, Cupbop is my last restaurant. This is not easy."

[27:13] Chris Hatch: Well, I was going to say, you went from googling the highest-paying jobs on Wall Street... and historically, at least, most people would tell you that you were nuts if you were still anticipating a high-earning job and said, "Let's go dive in and run a whole bunch of restaurants."

[27:34] Dok Kwon: Yeah, a little bit crazy in that sense. I'm a big risk-taker. I take risks, and I go all in when I think it's the right opportunity.

[27:45] Chris Hatch: I have celiac. I developed it a few years ago, and one of the serious downers of life, besides not eating bread, which is its own thing, is that you just can't really eat at very many Asian food places, whether it's a local restaurant or a chain or whatever. There's just not much. Now, one thing I have noticed: your restaurants are ones I can eat at.

[28:13] Dok Kwon: That goes back to the sweet potato noodles.

[28:16] Chris Hatch: Right. Those are gluten-free, which is great, and so many of the sauces are just tremendous. The thing I've noticed, and I appreciate your approach on slow growth, is that no matter which store I've gone into, they know what's going on. They understand that I have an allergy. They take the care to make sure I'm addressed and that there's no cross-contamination. The staff has been very well trained across the restaurants.

[28:44] Dok Kwon: That's great to hear. We've been moving that way for sure. Right now, our big goal is to make our whole menu gluten-free by default. The main ingredient that generally gets in the way is soy sauce. There's gluten-free soy sauce; it's an easy switch, but it generally costs unbelievably more. But we have great connections, and thanks to some of our partners in Korea, all the soy sauce we now source through them is gluten-free. That's why we're able to have a lot of these gluten-free sauces, and we're in the process of trying to get everything gluten-free by default.

[29:28] Chris Hatch: Once that's here, I'll be very happy. Celiacs across the country just rejoiced as you said that, let me tell you.

[29:35] Dok Kwon: Yes. No, that's a good thing.

[29:37] Chris Hatch: It's also such a weird thing. Who thought we should put wheat in to ferment soybeans to create soy sauce? When I got celiac, there were so many random food items that had wheat in them that I had no idea about, and that's one of them. It's literally soybeans. It's soy sauce. And almost any Asian cuisine has soy sauce, and not very many are thinking about using gluten-free soy sauce.

[30:05] Dok Kwon: Right.

[30:06] Chris Hatch: That's interesting. I think that's a great move, personally.

[30:09] Dok Kwon: Yeah, I think so too. Hopefully it works out brand-wide. I think it will.

[30:15] Chris Hatch: Well, that's good. So, okay, you've moved out of the food truck, and you've gotten into the footprint. I think we forgot... you forgot to mention that you just casually have 200 restaurants in Indonesia.

[30:27] Dok Kwon: We have a lot in Indonesia.

[30:31] Chris Hatch: My first reaction is, what in the world? How did you end up with more restaurants in Indonesia than everywhere else combined?

[30:39] Dok Kwon: Great question. This was back when Jung was running his food truck. There were a couple of U of U students, Indonesian students, brothers, who just loved Cupbop and were following the truck everywhere. Their names are Alvin and Devin. Big shout-out. One day they went to Jung and said, "Hey, we want to take this to Indonesia." And Jung said, "Hey, I have one food truck. I can't go anywhere. I barely get out of Salt Lake." Jung felt bad, and he said, "Come back to me in a year. If you feel the same, let's try to figure something out," almost just to push them off. They came back exactly a year later and said, "Jung, you promised. Okay, what do we do now?" Jung said, "Okay, I don't know. What do you guys want?" They said, "Come to Indonesia with us."

So he ended up traveling to Indonesia. And it turns out that the family these two brothers come from is something like the 10th largest company in Indonesia. A very prominent family. And they said, "Hey, we have all the infrastructure here. We run a huge F&B business, several hundred locations already, and we want to partner up and bring Cupbop over." They did a handshake, and here we are.

[32:06] Chris Hatch: So this would have been 2015, '16, '17?

[32:10] Dok Kwon: Yeah, 2015-ish. When I joined, they only had three or four stores in Indonesia, back in '19. And then COVID hit, and we almost shut down Indonesia. This brings back the importance of partnership. A lot of brands were just shutting down, because it's very hot in Indonesia, everything's inside malls, and the malls all shut down.

[32:40] Chris Hatch: Sure.

[32:40] Dok Kwon: So we were thinking about potentially having to shut it down, because there was pressure from the chairman. But at that point, the two brothers and I had become very good personal friends. They love the brand, and they have conviction in the brand. And the younger brother, Devin, had become CEO of the F&B business; from a student to leading the whole group. And he told the chairman, "I'm not shutting this down. I believe in this brand. We're going to keep it alive." Through that, we were able to get through COVID. And post-COVID, they just started expanding like crazy.

[33:30] Chris Hatch: I was going to say, 200 restaurants in five years, then?

[33:35] Dok Kwon: Yeah. Wild. Good for them. It's been an unbelievable partnership. I see them quite often. They actually have a house in Utah, so they visit at least once a year. Amazing people, and we're very grateful for this partnership.

[33:54] Chris Hatch: That is wild. Has the menu stayed consistent, back to the sauces, between Indonesia, the U.S. and now as you go into Dubai?

[34:08] Dok Kwon: We've had to localize it a little bit. We have our core concept of our bowls, but in both the UAE and Indonesia, we've got to go halal, obviously. And consumer preferences are a little different over there, so we'll tweak it here and there. There are some more universal menu items, but we'll look for the particular categories each region likes, do our own version and go at it. Indonesia, I would say, definitely has more Korean street food and snack items than we do here, and that's worked out extremely well for us.

[34:55] Chris Hatch: The sides, the corn dogs, those kinds of things.

[34:59] Dok Kwon: Yeah. So that's been really good to see. And with them growing quite a bit, it's really cool, because you drive down the streets of Jakarta and you see Cupbops literally everywhere. It's wild. And the amazing thing is that even our UAE partners actually found Cupbop in Indonesia. I think one of their board members was traveling in Jakarta, went into one of our stores, really loved the concept, started researching us and found out we were U.S.-based. So it's been amazing exposure for us as well.

[35:41] Chris Hatch: So, having never spent any time in Indonesia myself: with 200 stores, do they have room for more? Is there more growth there?

[35:51] Dok Kwon: Absolutely. Room for a lot more growth. Most people aren't aware of this, but Indonesia has the fourth-largest population in the world. There are a lot of people in Indonesia.

[36:04] Chris Hatch: So there's tons of room for growth, then?

[36:08] Dok Kwon: A lot. We could easily triple, plus. Easily.

[36:12] Chris Hatch: Wow, what a good partnership. And it all came from the University of Utah connection, eating at the food truck.

[36:22] Dok Kwon: Yep. A lot of our core people got to experience Cupbop during its food truck days.

[36:29] Chris Hatch: I'm just trying to envision these two students showing up and hanging out with Jung on a regular basis. They're students, right? Talk about never judging a book by its cover, because you have no idea.

[36:45] Dok Kwon: Yeah. Jung actually thought they were just really hungry, poor Asian kids, because they would always get the food and literally eat it right by the truck, and they'd always finish it so quickly. And Jung would just give them extra: "Hey, you guys still hungry? Give me your bowls. I'll get you some more food."

[37:07] Chris Hatch: It goes a long way, man. That is funny.

[37:10] Dok Kwon: It goes a long way. You never assume anything in life, right? You don't know where it's going. And I remember Jung said, when he found out where they came from, "Hey, give me all that money back. I gave you so much free food."

[37:28] Chris Hatch: Okay. So you've got just under 300 stores open, with the concentration there in Indonesia. Considering this multi-unit franchising, I'd say you've got a pretty intense next five-to-seven-year run here.

[37:41] Dok Kwon: I think so. We're definitely excited for it. It's an exciting time for Cupbop.

[37:50] Chris Hatch: Well, that's amazing. And Jung's still there every day?

[37:52] Dok Kwon: Every day, yeah. Integrated fully into the business. 100%.

[37:56] Chris Hatch: All right. So walk us through what an ideal space is for you. Maybe we stick to the U.S. here. If you're looking at a U.S. space in a new trade area, what are you looking for? Because I know how the site rides go. A broker shoves you in the car and tells you this is the best thing you've ever seen in your life, or walks you through the space. And you're just trying to decide, does this work for Cupbop? What's going through your head?

[38:28] Dok Kwon: Generally, when we're looking for a new location around Utah, it's so close that we know. We have a much better feel for which sites are good and which aren't great. But if we're going outside the state, into a new region or a new state, what we've found over the years is that nothing beats primary research. We're going to a new state where we're obviously not very well known; people generally aren't going to know who we are. So, number one, we want to be by strong players. If our neighboring tenants are national brands, Chipotles, Pandas, that's a big, big plus for us, and that's what we want. Because it gives us an opportunity with people who come to a certain area to eat, who haven't necessarily decided where yet, and they might try us. And if we convert them, amazing.

So that's one thing we look for. And then what we generally do is map out all the Pandas and Chipotles, visit those stores and talk to the store managers to get a lay of the land. We'll say, "Hey, we're a Korean QSR brand. We're new here and we don't know anything about this area. Can you give us some color on your stores in this region, your best-performing and worst-performing?" And they've generally been pretty kind about letting us know and giving us a general picture of performance. We've found that's the best barometer at the end of the day: knowing how they're doing.

[40:26] Chris Hatch: And there's a direct correlation: if you're able to land a store next to a high-volume Chipotle or Panda Express, that's going to result in a high-volume store.

[40:39] Dok Kwon: 100%. And we'll use things like [SiteZeus] to supplement. But we just love doing our primary research and really having confidence: "Okay, there's that kind of traffic here every day. That gives us a chance."

We don't have a lot of drive-thrus, given we've had to grow organically and they're more expensive. We've got a few now, and on average they're definitely higher in volume, which is great. But our bread and butter, given our history, has been, "Hey, let's find amazing second-gen spaces, convert them, go in, get our returns and look for the next one." Rinse and repeat. That's been our playbook.

[41:31] Chris Hatch: Do you find more of your customer traffic is coming in, sitting down and eating, or are you filling that through third party?

[41:41] Dok Kwon: Definitely a lot from third party. We're at 35 to 40% third party, which is a big portion. And even the consumers who come inside the stores are, more often than not, picking up. That's one advantage we have, along with the fact that our DNA goes all the way back to food trucks: we can be very flexible with the size of the space. We don't like big spaces; we like smaller spaces. Our first store, my favorite store and everybody's favorite store, is our Provo location by BYU, and it's a walk-up window. It's a couple hundred square feet, that's it, with another couple hundred feet of storage downstairs. We can work with a lot of different spaces, which allows us to be efficient. And I think smaller spaces just have more energy than bigger spaces, so we like that. That's what we look for.

[42:56] Chris Hatch: I love that. It's so interesting. I think we're at episode 21 here, right, Porter? I've asked this question to 20 other people, and it's always interesting hearing the different tactics and nuances people use. But I think the one people fall back on more than any is co-tenancy.

[43:21] Dok Kwon: Yes.

[43:22] Chris Hatch: Finding the right co-tenants.

[43:24] Dok Kwon: 100%.

[43:24] Chris Hatch: Where there's a better correlation with how someone is doing. That's very fascinating. How's it going as far as meal delivery? You started in 2013 in the truck. When was your first brick and mortar?

[43:39] Dok Kwon: 2015, the Provo store.

[43:41] Chris Hatch: Okay, 2015. So really, you kind of grew up with it and immediately had to figure out third-party ordering, right? And of course, with COVID, that advanced 10X.

[43:54] Dok Kwon: Well, yeah. I joined in summer of '19, and I quickly found that we weren't working with any third parties. We didn't even have a website. I said, "You don't even have a website? That's crazy." "Do we need one?" "Yes, we do." And thankfully so, because COVID hit about six months later. One of the first things we did was create a website. And I thought it was a huge positive that they'd gotten to 10 stores without even having a website. That's amazing. That speaks to the brand, right? So we immediately got on building a website and getting partnerships with all the third-party delivery services, starting really in the winter of '19. And that's what saved us, because we were able to hit the ground running as soon as things started coming back post-COVID. There was a lot of low-hanging fruit back then. Still now, I think there's a ton of low-hanging fruit for us. Those simple things, just establishing your brand and pushing it out on the various channels, seem so mundane and so easy, but think of what they do.

[45:17] Chris Hatch: The impact is gigantic.

[45:18] Dok Kwon: It's a huge impact. And I'm very glad we got in when we did, because the commission rates now, if you want to get in, are just very tough for restaurants.

[45:33] Chris Hatch: So if you're a new restaurant signing up now with some of the third-party services, the commission rate has gone up, whereas you're sort of grandfathered in?

[45:44] Dok Kwon: Yes. And that gap is big. You can renegotiate the rates if you're able to grow and get to a certain size; you can obviously do that. But what I've heard is that even with DoorDash, if you're a mom-and-pop trying to open, I think the starting rate is something around 35% commission.

[46:06] Chris Hatch: Which ultimately, I guess, gets reflected back in the price of the product you're selling. You're still going to make your spread.

[46:15] Dok Kwon: But not fully, right? A lot of brands will pass that on, or the majority of it, if the spread is, let's say, 15 to 20-ish percent. But if it's 35, how do you fully pass that on? I don't think you can. Because on top of that, you've got to tack on delivery fees, this and that. Sure, we're working with consumers who are generally less price-sensitive, since they're ordering fully knowing it's generally a little more expensive, but there's still that line, right?

[46:54] Chris Hatch: And back to your point, you've got to benchmark it against your peers and ask what this meal costs in total for that consumer.

[47:04] Dok Kwon: Right. It's a balancing act. It really is. So we're grateful we got in when we did.

[47:12] Chris Hatch: All right. With your COO hat on, what's the biggest challenge you're facing in the next year?

[47:19] Dok Kwon: The biggest challenge in restaurants, I think, is always finding amazing people. That's always the biggest challenge. Especially if you're doing more corporate stores, which is the path we've walked: if you have 100 amazing leaders, you're going to have 100 amazing stores. It goes back to finding amazing people. And frankly, we want to do more for our people, too. But when you're a 10-unit brand, like we were five years ago, trying to self-fund and pay for all of your stores while growing your team, and Chipotle is out there offering benefits you can't match, it's hard. You try to close that gap one step at a time, which is what we've been doing. We've closed the gap quite a bit, which I'm very proud of. But the biggest challenge is always finding amazing people.

[48:22] Chris Hatch: What are you seeing in turnover at the store level?

[48:28] Dok Kwon: At the leader level, it's been relatively stable. The industry itself generally has a higher turnover rate, and a lot of our crew members are students, so they'll come and go. The good thing is we have leaders who've been with us since I've been here, which is great. Overall, I wouldn't say we're significantly below or above average. I think we're right in the mix. I'm proud of all of our leaders, and there are a lot of things we want to do to show our appreciation for them. That's why our shoulders are heavy: there's a lot to do.

[49:17] Chris Hatch: We have a lot of younger people in business and real estate who listen to the show. So if you were talking to the 20-to-25-year-old version of yourself, what's the best piece of advice off the top of your head?

[49:40] Dok Kwon: I would say, in your 20s, you just have to grind. Always raise your hand for everything. Be that go-to person and just deliver. Get noticed as somebody who's always willing to take on more, and somebody reliable whom people can count on. If you do that early in your career... sure, it takes more time and more work, and your work-life balance is going to be below average for sure. But I think you get that back on the back end quite quickly. So always raise your hand, and grind.

[50:12] Chris Hatch: Great thoughts. If you go into a Cupbop today for lunch, what are you ordering? What's your go-to?

[50:13] Dok Kwon: Oh, it's the Piggy. It's spicy pork, man. Koreans are all about that.

[50:14] Chris Hatch: Really?

[50:14] Dok Kwon: Yes.

[50:14] Chris Hatch: And do you go with the 10?

[50:15] Dok Kwon: No, I'll go with a seven and a half. And I'll grab myself a K-dog on the side. That would be my combo.

[50:16] Chris Hatch: There you go. Spicy pork, seven and a half. Now, just throwing it out there: for me, is a seven and a half going to tear me up?

[50:18] Dok Kwon: No, it's not too bad.

[50:19] Chris Hatch: So do I need to pull it back from there?

[50:19] Dok Kwon: Probably pull it back a little bit. Not crazy. But yeah, Koreans love their spicy pork. Our most popular is the beef and our fried chicken. But I'm personally a spicy pork guy.

[50:23] Chris Hatch: Porter and some of our development team like to take one of our construction managers out and feed him spicy food, because he does not agree with spicy food at all. So they'll have to take him to Cupbop next time.

[50:25] Dok Kwon: Please do.

[50:25] Chris Hatch: Porter, just sneak a four in there and see if Russ can handle it. Dok, we appreciate you joining us on the Dirt Dog Pod today so much. It's been so fun to hear about Cupbop. For anybody out there listening who hasn't been, go check it out. Go see what Korean barbecue in a cup is all about.

[50:29] Dok Kwon: Absolutely. Thank you so much for having me.