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Over the past 25 years, Ocean Basket has gone from a small restaurant with just six tables into an international food business hit. Fats Lazarides, who started the company with his brother George, spoke to finweek.
What did you do before you started Ocean Basket?
I left school at 16 and went to the military to get it behind me. After three years in the navy, I got a job at Squires Loft in Sun City, where I fell in love with the restaurant business.
Since I was a kid all I ever thought of and talked about was business and opportunities. So, after two years at Squires, I decided to broaden my skills base by learning plumbing and shop fitting. In the late 1980s I even opened a restaurant in Pretoria. It worked, but I realised it was not “the one”. So, I sold it after a few years. Thereafter, I worked as a receiving manager in Spar and continued to learn and look for business opportunities.
When did you start Ocean Basket? Why did it seem like a great idea at the time?
In 1995, while working at Spar in Bruma, my wife called me one day and told me that she had seen a site in Menlyn Park Shopping Centre. I shared my idea of having a seafood deli and small restaurant with the landlord, Yuri Haussmann, who gave me a break.
SA was in turmoil at the time. I, however, was excited. Because I came from a simple background and always saw only the wealthy enjoying seafood, I decided to focus on making seafood more accessible to the general population, by offering a simple menu with affordable seafood-only dishes.
The recipes were inspired by my mother. My brother, George, together with a staff member developed the rice and the creamy lemon sauce recipe.
My friends and other business people thought I was mad. “Fats,” they said, “people will not eat only seafood. This is SA. They’re used to chicken, burgers and pizza.” To which I replied: “Fantastic, that means seafood is missing.”
I always knew that I had to start something distinctive and couldn’t get lost in the sea of sameness. I had to stand out. Standing out is scary, however, as we usually feel safer doing what everyone else does. I had nothing. So, I had nothing to lose. I believed in my dream, had a solid plan and was determined.
Do you come from a family of entrepreneurs?
My father, Lefteri, was a carpenter, but definitely not an entrepreneur. He was a great believer in communist philosophies and taught me many fundamentals about money and how not to chase it.
My mother, Liza, is a true entrepreneur. After my father suffered a stroke, she started a baking and cooking enterprise in Pretoria. Her little home industry is still going today. At 85, she still bakes and cooks with a staff of nine. She taught my brother and I the skills and philosophies we needed to become successful entrepreneurs: “keep things simple”, “give people more than they expect” and “always make them happy”.
How did you manage to ‘make seafood more affordable’?
From day one I knew that the only way I could offer seafood at affordable prices was to buy more than I needed. We had a huge freezer in our first restaurant in Menlyn. It was, and still today is, all about scale.
Our restaurant and deli business was supported by a very strong wholesale business from day one.
My brother and some guys ran the back of house. They would fillet and portion all the seafood and we would supply many restaurants in Johannesburg and Pretoria. When Ocean Basket had scale, we focused on only supplying our own restaurants.
Where did you get start-up funding?
I had no money and the banks wouldn’t lend me any. I started by borrowing money at crazy interest rates. The people who built our first few restaurants were paid with PD cheques. There were people who believed in me and could see that we had something different.
How did you keep overheads low?
The business was built on simplicity, with very few items on the menu. We always cross-utilised ingredients; this meant that we didn’t need all the extra equipment or people usually required by a more diverse restaurant.
How did your marketing strategy change over the years?
We never had a huge marketing budget and still don’t. Our initial strategy was to open restaurants in high-foot-traffic areas, therefore A-grade shopping centres. The consumer walked passed the queues at the restaurant and word spread.
Our approach to sharing the story of our brand is just that – to share. We had so many strong cues, such as our addictive creamy lemon sauce, free bread and three sauces as you sat down, our pans and the slightly crazy, enthusiastic welcome. People talked about us.
What were some of your initial challenges?
The challenges helped us build a focused brand. We didn’t allow obstacles to get in our way. I always said if we cannot get over the mountain, we could walk around it.
At the beginning, for example, our landlord didn’t allow us to serve salad or desserts and we were only allowed to sell one red and one white wine. We wouldn’t let it get in the way and invited customers to bring their own brandy, salads and any other drinks. Customers today remember coming to us with a cooler box in tow. Another challenge, while we still had partners, was to ensure everyone was on the same page and ran the brand the same way.
And your challenges today?
Every business has challenges. Most of ours are probably the same. We concern ourselves with sustainability of resources and our brand. Protecting the oceans is a huge focus in our business as ‘pesticide, antibiotic-free’ protein is rare and in such demand worldwide.
As far as sustainability of our brand, I am concerned about its longevity and keeping our unique and disruptive way for many more years. To stay relevant is the most critical thing for any business.
Did you ever feel like quitting?
Never. I always said “fight, fight, fight”. I had a solid dream and vision and that’s what kept me going. Nothing could get me down. Lots of grappa also helped.
What do you see as one of the tipping points for the business?
The brand flew from the outset, because we were so different. But over time I realised that things had to change if I wanted the brand to remain strong for generations to come. As a teenager, I saw so many café keepers hold on to their businesses till the end. They would never let go of their keys, and then, when they turned 70, all they had left was a bunch of keys.
I realised the only way to prevent this from happening with Ocean Basket was if the founders stepped down, a process that started in 2012.
How did this influence your business model?
We started with company-owned stores. In 2000, we converted to a franchise model. Firstly, because I wanted the brand to provide opportunities for entrepreneurs and, secondly, because growth through franchising requires less capital investment. Having owner-run restaurants proved to produce better results as there was a vested interest in the business.
How has the business grown since 1995?
Today, Ocean Basket is nearly 25 years old and operates restaurants across SA as well as in Cyprus, Mauritius, Dubai, Malta, Nigeria, Saudi Arabia and recently Moscow. The brand employs over 6 000 people with annual system-wide sales of over R2bn.
How do you ensure the best franchise outcomes?
Ocean Basket is run by a team of professional leaders and specialists in their field. I’m one of three shareholders. The shareholders are no longer involved in the running of the business. Our role is to mentor, support and keep our vision alive and relevant in the minds and hearts of our leadership team. We need them to remain deeply in love with the brand.
I believe the biggest pitfall for any brand owner is holding on and resisting change. Or believing that nobody can do it like you can. It’s the start of the end. You have to learn to trust people, to coach and to guide. We are extremely close to our people and we don’t go to the office.
What is the restaurant business like at the moment?
In SA the restaurant business, as with many other businesses, is in a hugely transformative state. We are being forced to evolve quicker than we imagined. Our focus on the wellbeing and sincere partnerships we have with our franchisees, customers, supplier partners and colleagues are our priority.
Our competitive edge is that we keep things simple. We do not chase money, but sustainable success. Decisions made by our executives are for the benefit of all involved in our brand. The foundations of the brand have not changed over the years: Serving delicious seafood at a price that’s worth it in a warm, modern environment is still our differentiator, as it was from day one.
What are the biggest challenges for restaurant owners currently?
There are many. From quality produce, good prices, rentals, the cost of gas, electricity and labour. And these challenges are worldwide. The biggest challenge is acknowledging that things have to be “un-thought” and done in different ways. To let go of the fear of change and to find new ways to achieve goals. People still love going to restaurants – I don’t believe that will change.
What has changed, is that the restaurant business has shifted from one where charm and great recipes was all you needed, to becoming a complex business that needs all the acumen, systems and strategic muscle of any other major industry.
What is the best business advice you have ever received?
When I received the lease for our first restaurant in 1995, I went to see my lawyer, who is also a great friend of mine. I was hesitant about the huge commitment as the monthly rental alone was over R13 000. He told me to go for it: “What do you have to lose, Fats? The shoes on your feet?”
I have received so much good advice from many mentors, from my dad and my greatest mentor, my mother, who taught me from a very young age to be generous, keep things simple and to never give up. I owe my fighting spirit to her.
What are your plans with the business for the next five years?
Ocean Basket is now in the hands of our exec team headed up by Grace Harding. The shareholders’ brief is to continue ensuring the longevity of the brand. We do not like speaking about what we are chasing, or how many or how much. Our plans are to stick to our strength and to continue to add value to all our people.
This article originally appeared in the 29 August edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.
