It was like getting advice from an older brother! Jiā Food Blog is thrilled to bring you an exclusive conversation with David Zhao, the co-founding partner of the renowned X Pot and the mastermind behind his venture, Chubby Group.
From discussing what I initially mistook for an incredible gaming setup to opening up about shared childhood experiences, David graciously hopped on Zoom with us to share laughs and impart some brotherly wisdom on his entrepreneurial journey to success in the restaurant industry.
Do you have any words of encouragement for aspiring entrepreneurs facing typical schoolyard challenges in high school?
Jacob: Jia Food Blog started with a mission to support struggling Asian restaurants during COVID-19. I picked up the torch to showcase the post-COVID era—highlighting resilience, diverse stories, and breaking stereotypes. It's more than just dispelling misconceptions; it's about exploring the rich narratives behind Asian cuisine.
I had a friend in eighth grade who faced severe bullying, enduring hurtful remarks such as being called names like 'dog eaters' and more. This is what inspired me to continue Jiā Food Blog. I aim to convey that there's a deeper, richer story beyond such stereotypes and show people the multifaceted nature of Asian culture.
David: I can definitely relate. I grew up in Long Island, and English wasn't my first language. Middle school was challenging; kids can be mean. However, it gets better in high school, I'd say, and continues improving in college. Middle school was probably the roughest time, but I'm happy to chat about it and share my stories as well. I would say you have to realize and celebrate what your cool thing is. For me, not speaking English became a significant hurdle. I was even ostracized from Chinese ABCs born here because of the language barrier. So, within my own community, I felt like a stranger. But the cool thing is, I was able to still find my community. Even though I faced antagonistic situations in middle school and high school, I found my own group. We were all learning English together, and now, those good friends from that time are still my friends. So, I would say after you get through it, you find your passion, you find your people, and in life, you'll continue to find those who resonate with you.
What inspired you to open so many restaurants around the US?
David: My journey started because I had an unconventional childhood in China and then moved to the US. Despite being an average student in China, I became academically successful here. Growing up, I had to handle responsibilities beyond my years, helping my mother with tasks like filing taxes and managing her finances. This early experience taught me that there's no predefined path for adults; I could do things beyond my age. In seventh grade, I stumbled into entrepreneurship by creating websites and offering services. This venture, coupled with other unconventional choices like taking a gap year, eventually led me to co-found a restaurant, Chubby Cattle, with a then-stranger and now my brother and partner. We aimed to elevate Asian cuisine and introduce mainstream diners to concepts like hot pot. Despite facing stereotypes about Chinese food during my school years, life has come full circle, and now, with 15 restaurants and more on the way, we've made a mark in the food and beverage industry.
Jacob: That’s impressive that you helped your mom file taxes at a young age.
David: I must admit, I probably didn't file correctly. Maybe I made some mistakes. But the key thing is, I made those failures. I was young, and despite the mistakes, I learned from them. It taught me that it's okay to fail and make errors; what matters is the learning process. Don't let your environment dictate that there's only one right way to do things. There are multiple paths to success, and success means different things to different people. I grasped this lesson through my unique opportunity, given my mom's lack of education and English-speaking skills. I turned what might be seen as a weakness into a strength, and I believe many people can transform their perceived weaknesses into strengths in their own lives.
What was the strategy behind your expansion plan?
David: Our goal is to expand globally, starting in culturally diverse cities that are already familiar with East Asian cuisine. We began in Vegas, a hub for food and entertainment, followed by LA as a proof of concept. Now, we're expanding to places like Seattle, Michigan, Atlanta, suburban areas of Chicago and Illinois, and Texas, tapping into the growing popularity of Asian and Latino foods in the US over the past decade. We aim to be a part of the cultural shift and promote unity among different cultures.
The mission is to make Asian food a norm worldwide, connecting people through shared culinary experiences and breaking down stereotypes. The success we've seen, from overcoming initial doubts from small landlords to public landlords now inviting us to open more locations, reflects a positive change in the perception of Asian culture and cuisine.
The recent recognition of Asian achievements in the film industry and other fields further contributes to fostering cultural understanding and appreciation. Food plays a significant role in bringing people together and eliminating prejudice, and we're proud to be a part of that journey.
How did you and your business navigate the challenges presented by COVID-19?
David: Despite the immense challenges brought by COVID-19, we managed to navigate through it. At the time, with three locations and plans for our largest project, X Pot, everything suddenly shut down. We had to close our restaurants while still dealing with rent payments, employee wages, and the uncertainty of the situation, all before the Restaurant Revitalization Fund and PPP program were available. Moreover, we needed capital for X Pot, a $10 million project, a scale we hadn't tackled before, as our previous projects were all under $2 million.
In the initial phase, we couldn't even deliver food, and while we tried, it was less popular than traditional Chinese food delivery. Fortunately, my partner and I shared the same vision. We liquidated our personal assets, including selling our homes and cars, to fund X Pot. This enabled us to weather the storm, receive support from the PPP loan and Restaurant Revitalization Fund, and not only survive but thrive. We successfully opened X Pot, offering a fine dining hot pot experience with the finest global ingredients. This momentum allowed us to open an additional eight locations since then, with our latest in Rosemead, Cerritos, and Beverly Hills (Chubby Curry)!
Did you experience any uncertainties or hesitations when undertaking such a significant investment risk?
David: When looking back, it seems like a no-brainer given the success and positive feedback we've received from customers. However, at the time, it was a significant gamble. Opening a fine dining hotpot on the strip in Vegas, especially during a time when people had doubts, posed its challenges. There were concerns about the cost, the potential lack of interest in hotpot from international tourists and locals, and whether customers would pay over $100 per person for our unique hotpot experience. Contrary to expectations, both Asian and non-Asian customers loved it, appreciating the Wagyu, fresh seafood, and innovative elements like the 5D projection room and robot servers. The feedback, as seen in the press, has been consistently phenomenal.
Our expansion has been the fastest in our history, nine years in the making. In the early years, we opened one location every two years, gradually shifting to one per year. This year, we opened 7 locations, essentially doubling our size to 15 locations. Over the years, we've experienced significant growth, starting from a $1.5 million valuation for our first location of Chubby Cattle to recently completing a round at a $200 million valuation. By the end of 2024, we expect to have 40-50 locations under Chubby Group with various CPG lines along with a loyal customer base of 1 million members within the Chubby Club.
We're also excited about integrating cutting-edge technology into all our concepts and partnering with others to create a unique loyalty program, akin to those in the hotel and airline industry. There are a lot of exciting developments on the horizon.
What inspired the name of some of your iconic chain of restaurants like Chubby Cattle?
David: Chubby has often carried a negative or fat-associated connotation, but for us, it signifies abundance and quality. It's a play on words, much like how Chinese food was often linked with being cheap, dirty, and fast. We aimed to elevate that experience. Hence, Chubby Cattle became our name, emphasizing our focus on premium ingredients. We source our cattle, including Wagyu, from our ranches in California and Oregon.
The name resonated well with our customers, and now our holding company is called Chubby Group, encompassing various concepts like Chubby Curry, Chubby Nori, and Chubby Bowls (our delivery concept). We also house other restaurants that don’t carry the iconic “Chubby” name, such as Mikiya, X Pot, and Wagyu House. Our goal is to keep expanding the brand with more concepts, serving nutritious and delicious food while creating moments of joy for our customers and their loved ones in the years to come.
What advice would you share with young people interested in entrepreneurship?
David: Entrepreneurship, in general, is unpredictable; You have 10 ideas and maybe 2 of them are amazing and the other 8 have to pivot and readjust. The challenges brought on by COVID-19 taught me the vital importance of having a unified vision with your partner and team for your company's goals. Our journey had its ups and downs—initial profits, the need for more capital, and understanding how to generate profit—but having a product that was loved by the customers kept us going. When COVID hit, and revenue vanished, leaving only expenses, the strength of our foundation, shared vision, and a dedicated team saw us through. Our team leaders shared the same outlook; we weren't aiming for short-term gains or compromising on our product. Convincing each other wasn't necessary; we were all ready to go all-in, partly because we were young, without family or financial responsibilities beyond building our dream for investors and the team.
The luckiest part of this journey was finding a partner and team who shared the same mindset. Wiring 40k to a partner without much due diligence might have been naive, but it was also fortunate. Learning from this, finding a trustworthy partner with a shared vision is a rare and crucial aspect of your entrepreneurial journey.
Thank you, David!
In the spirit of Jia Food Blog, David's journey is more than a restaurant success story; it's a source of entrepreneurial inspiration and empowerment. From navigating school challenges to steering through the complexities of the food industry during COVID-19, David's experiences echo the struggles and victories familiar to many of us.
His advice reminds me of something I’d hear from my older brother. I especially appreciate how he underscores the transformative potential within challenges and the strength found in unity and community. Thank you, David, for taking the time to share your story and advice with us. We wish you even greater success and can’t wait to see what innovative culinary ventures you launch next!
This interview has been edited for length and brevity.
Check out Chubby Group!
Website: www.chubbygroup.com
Instagram: @chubbygrouphospitality
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