Chinese food is at a crossroads in the U.S.
The cuisine is underserved in the fast-casual space, and the count of traditional, family-run Chinese restaurants is shrinking as original owners near retirement and next generations venture into different careers.
Yong Zhao, CEO and cofounder of Chinese fast-casual chain Junzi Kitchen, is working to veer the cuisine onto a more successful path. This year, he discovered a way to leverage Junzi’s successful fast-casual model for the continuation of traditional mom-and-pop operations.
“Instead of the Americanization of Chinese restaurants, it’s the reverse—we’re taking this American model and making it work with Chinese food,” he says.
In 2015, Zhao opened the first Junzi location in New Haven, Connecticut, near his alma mater of Yale University. He’s opened three other brick-and-mortars in New York and one ghost kitchen since, and now he’s experimenting with growth strategies for the brand that efficiently expand Junzi and also revive family-run Chinese concepts.
In November 2019, he finished raising $5 million from investors for the purpose of revitalizing traditional takeout spots. The idea is to try out a range of updated models, menu simplifications, and other updates on older restaurants that lack a succession plan, adding them to the Junzi fold in the process.
“This project is mutually beneficial; we want to reform and inherit tradition but also grow Junzi. This isn’t a charity fund, and there are lots of transitions and challenges down the road as we begin working with these establishments. It’s sad we’re seeing the decline of Chinese food and we’re looking for more reliability and consistency in order to scale these traditional restaurants,” Zhao says.
Recently, The New York Times reported that, according to new Yelp data, the percentage of Chinese restaurants in the top 20 metropolitan areas has fallen from an average of 7.3 percent to 6.5 percent over the last five years. That fall is equal to the closure of around 1,200 restaurants.
Zhao says that this decline reflects a business model that fits the situations of older immigrants, but hasn’t evolved along with the education and lifestyles of young Chinese-Americans whose parents started the restaurants.
“Family-based Chinese restaurants rests on an immigration system that has changed over the years—these older immigrants need to retire, but their sons and daughters have received a better education than they did, and they don’t want to work in restaurants,” Zhao says.
In addition to this lack of successors for current operators of smaller, older Chinese dining spots, Zhao says that the labor practices in place in many of these establishments are unsustainable. Staff members are often immigrants who are frequently paid low wages for work that requires a depth of specialized kitchen knowledge.