Fonda On Why Creating “Real Culture” Means More Than Bar Tabs And Employee Awards

Editorial Team | Interviews

Fonda CEO and Co-founder Tim McDonald shares the business lessons he has gleaned from a decade spearheading the growth of a booming restaurant brand.

Many restaurateurs cut their teeth in a hospitality role before taking the leap to start their own thing. Be it as a chef, maître d, operations manager, or bartender, learning the ropes and building experience often fans the flame for owning a business somewhere down the track. But there are those that have no prior knowledge of hospitality but choose to start a business in the sector anyway; people who see a gap in the market and summon the courage to jump in blindly trusting that passion will get them going.

Tim McDonald and David Youl, co-founders of Fonda Mexican, entered the industry via this route. While McDonald was studying for a commerce and law degree, Youl was working as a firefighter. Although neither had any experience in running a restaurant, both saw an opportunity for an unfussy but well-put-together dining experience; a concept that they chose to uproot from the US and plant in the laneways of Melbourne.

“I said to my business partner,
this is a bit of a no brainer.”

“I studied in the states in 2007,” explains McDonald. “There was this wave of fresh, contemporary, healthy, Mexican cuisine that I never knew existed and I was so impressed by the flavours, the culture and the simplicity of the menus. In Australia, all we had was Montezuma‘s and Taco Bell, those outdated Mexican concepts from the eighties and nineties. I said to my business partner, this is a bit of a no brainer.”

Their first location was a modest 45-square-metre space in Richmond, what McDonald describes as the size of a medium to a large bedroom. “That was everything, that was storage, washing, dining… a few people made it feel and look really busy and that busy-ness created a great atmosphere.”

Recognising the need to pique punter’s interest, they teased of their opening early, using high-end exterior hoarding to attract the attention of passers-by. “I don’t think we were meant to do it but we got away with it,” he giggles. Their savvy guerilla marketing coupled with favourable press from websites like Broadsheet meant their brand got the necessary kick-start it needed to build local traction.

“The function of running a business…
has got nothing to do with hospitality.”

Over the last 10 years, McDonald and his vastly expanded team now run and operate nine locations in both Melbourne and Sydney and have dramatically shifted how they operate. Recognising that running multiple locations is vastly different to running one, McDonald’s business-first approach to operations and management has meant he has been able to spearhead organic growth whilst installing the necessary skills required to make individual locations function as required.

McDonald places the founding principles of the brand as paramount to the success of scaling Fonda, saying that “every decision” leads back to the “essence” of the business. This means any decision must align with the founding idea of affordable, family-friendly dining with great, fresh ingredients.

The charismatic CEO is a fountain of knowledge when it comes to what he sees as a good restaurant business and he makes a clear distinction between hospitality and the business of hospitality. “They are two different functions,” he says, “because the function of running a business, which is strategy planning, cashflow, recruitment, marketing, fundraising, dealing with the banks, has got nothing to do with hospitality. Hospitality is about food and wine and experience and customer service.”

“If you’re passionate around hospitality,
get some business coaching.”

Whether you run one or operate many venues, culture is key to ensuring everything from customer service to staff retention and Fonda has made this a priority in their business. “I’ve come to realise that maintaining the culture isn’t about having drinks nights and employee of the month awards… maintaining your culture is really about underpinning the business with good systems and good development and clear communication.”

Personal development is also a key consideration for McDonald who recognised early that you don’t know what you don’t know. “If you’re really passionate about hospitality, get some business coaching and business advice, whether that’s from an accountant or a business coach,” going on to say that leadership weaknesses are usually the downfall of a restaurant rather than the food or service itself.

This extends to having a clear end game, wherein a strategy to meet those ends can be put in place. “If you want to scale something, not scale it, sell it, franchise it, if you to be in there and be the manager, or if you want to be a passive business owner, getting clear on that is really important.” He adds.

McDonald also identifies that everybody has a point where they reach a natural add-value ceiling, where new blood and fresh ideas are required to keep forward momentum. “I think I was a successful leader for the business for the first six years,” he says, “the business has got to a point where it needed a leader that had different strengths and weaknesses than myself.”

Taking a step back is the next step forward for McDonald. As the business continues to grow, he is putting ego aside to do what is best for his staff and customers. With big growth plans set for the coming months and years, it seems McDonald enjoys keeping himself in a position of perpetual personal growth, forever leaping, much in the same way he did all those years ago when he decided to open a bedroom-sized restaurant on the edgier side of town.

“When the times are tough, that’s when you’re learning and that’s when you’re growing.”

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