Originally setting out to be an architect, Hot Palette America CEO Troy Hooper found himself at culinary school at age 17 and spent six years working his way up in fine dining. However, “Coming from a family of entrepreneurs, the business side was more interesting,” he says. Now, he’s been a CEO for over 20 years at his own managing and consulting practice.
Two years ago, Hooper became CEO at Hot Palette America, the parent company of the North American branch of Japanese-based teppanyaki chain Pepper Lunch. “[Joining] wasn’t just a business transaction … I saw some differentiation with this brand. It’s highly marketable and very interesting and had a lot of runway in front of it.”
Pepper Lunch is a fast-casual restaurant created in Tokyo in 1994 by master teppanyaki chef Kunio Ichinose. Hooper says Ichinose wanted to make beef more accessible, as its high price tag in Japan was due to it being imported from America. The primary dish is pepper rice with a cooked protein, which is a common family-style dish in Japanese homes. “So he created this category and this concept around [pepper rice], and it’s just blossomed over 30 years,” Hooper says.”
Within the same year of opening Pepper Lunch, Ichinose began to franchise. The brand now boasts more than 500 stores in 16 countries over the three decades since opening.
In 2018, Pepper Lunch came to the U.S. There are seven stores across California, Nevada, Utah, and Florida.
Upon opening locations domestically, Hooper says the menu has not been Americanized, and in fact, has even more flavor options. “We quadrupled down on the Asia recipes, reformulated [them], and made sure that the U.S. stores that were open were re-trained and following the Asia recipes,” he says. “We wanted that global brand continuity.”
He also hopes utilizing original recipes will help bring new flavor profiles to guests.
“We want to introduce [the brand] in the authentic version of itself because there’s nothing about it that’s unfamiliar or foreign or otherwise intimidating,” Hooper says. “Really it’s just about explaining what this dish experience is, and once they see it and understand it … they’ll try it and love it.”
About 20 percent of the menu is localized. In the Philippines, products are more cheesy and saucy while American locations have four steak options. However, the beef pepper rice and other offerings are very similar. The U.S. locations also incorporate sauces with nontraditional flavors. While Japanese restaurants serve only their signature honey brown sauce and ginger soy sauce, American customers see Korean gochujang and kimchi on the menu.
Hooper cites Pepper Lunch’s margins as a main attraction for franchisees. The labor model doesn’t require kitchen experience. Rather, ready-to-eat products, such as authentic Japanese rice, are prepared through a semi-automated process that churns it out fresh. There is also little to no prep in the back of house. “We’re not cooking anything. We’re just portioning and assembling and delivering the product to the table. The customer is actually using the hot plate to cook it themselves.”
Another selling point is the experience, with sizzling plates brought to customers’ tables. Many restaurants use a similar concept, but Pepper Lunch’s price point matches a typical fast-casual meal rather than a higher-end Korean barbecue or Japanese yakiniku spot. Hooper estimates the average cost for a meal is $17.50.
“Experiential for the customer is huge. They come in, they see it, they hear the sizzle, they see the steam, they get to smell the aromas,” Hooper says. “Then they get to control how they cook it. Do they mix some things together? Do they mix it all together?”
Pepper Lunch offers six sauce flavors. The protein options include kimchi beef, chicken, tofu, shrimp, and salmon, all served with rice. The customer can also opt for a side of teriyaki sauce and vegetables to complete their protein or a variety of Angus steaks, all cooked at the consumer’s tableside. Hooper encourages diners to “sizzle it their way and make it what you want.”
The brand continues to grow, not just in the North American market, but in the Middle East and South America, which will take several years to launch. “This is a growing brand that’s picking up steam, and it’s gonna have exponential, compounding growth over the next 10 years,” Hooper says.
Pepper Lunch North America hired staff to assist with localized brand development. The concept has 70 stores under active development nationally, 30 of them in Southern California. Hooper says the chain’s average franchisee or franchising group has 10 stores a piece, all at various points in the restaurant pipeline. Upcoming locations are in Irvine, California; an on-campus spot in Tempe, Arizona at Arizona State University; an outdoor food hall spot in Salt Lake City; and St. Petersberg, Florida. Hawaii, Florida, and Southern California will soon get more expansions in the coming year, spanning Pepper Lunch’s range from the beaches to the deserts to the metropolitan centers.
“This concept was made 30 years ago for today’s challenges,” Hooper says. Fifty percent of the brand’s U.S. customer base are under the age of 30, so “This [concept] was really made a long time ago for a generation who now today really loves it and adopts it,” he adds.
