Time for Thai

The Chaophraya and Thaikhun brands have made their names in the North of England and in Scotland but now they’re ready to go national, says Tom Holman

For Thai Leisure Group co-founder Martin Stead, it was an unusual route into casual dining. He ran a family business selling industrial power tools before meeting his Thai wife, Kim Kaewkraikhot, on a trip to Bangkok. 

Back in the UK the pair established the first Chaophraya restaurant in Leeds in 2004. A Manchester restaurant followed a few years later, and Liverpool, Birmingham, Glasgow and Edinburgh openings have taken the brand to six in all. 

Chaophraya’s operations director, Ian Leigh, met Stead while consulting for his industrial power tools business, and soon came on board full time. He describes the two founders as a harmonious alliance of Stead’s rigorous, Yorkshire-style approach to business and Kaewkraikhot’s creativity and passion for Thailand. 

Now into its second decade, the Chaophraya brand is well established in the big northern and Scottish cities, but it is a more recent spin-off that will be the group’s key focus in the years ahead. Thaikhun is a fast-casual counterpart to the original, revolving around Thailand’s street food traditions, and launched in Manchester’s Spinningfields area just over a year ago. Oxford, Cambridge and Aberdeen have since followed, although like all operators that launch spin-off concepts, the group has been sensitive to the risks of cannibalisation and brand convergence. 

It deliberately put the first Thaikhun close to Chaophraya in Manchester to test that out, but claims to have seen no downside at all—only incremental business. 

Distinctiveness
Leigh puts this down to their distinctiveness. While Chaophraya gets the special occasion diners, and an average spend in the mid-twenties, Thaikhun gets a younger, social media- savvy crowd and a mid-teens spend. “They share the passion and food, but they’re pretty different,” he says. “Chaophraya has the opulence and the glide of service, and Thaikhun is more quirky and edgy—a bit of an outsider. One is here to make you feel special, the other is here to take you to Thailand.” 

Both brands are benefiting from surging interest in Thailand, with nearly one million UK residents visiting the country last year. Particularly significant are the generations of young people who included it on their gap-year trips—the “retired backpackers”, as Leigh calls them—and who are now acting as valuable marketing for Thai food and introducing their children to it. 

With greater knowledge of Thailand come greater expectations, Leigh says. “There’s been an explosion of knowledge and enthusiasm for Thailand, and people are very well versed in it. We’re having to move everything along fast. We’re looking now at dishes that would have been considered far too niche in the past, but as people’s palates get more sophisticated they’re looking for more adventurous things. 

“Before it was enough to have a Thai green curry, but now that’s old hat,” he says. Authenticity has to be everywhere and is evidenced in the regional specialities on the menu and the restaurant artefacts imported from Thailand. 

Rolling out
The group has the green light for expansion after it secured a £10m investment deal with Santander earlier this year. Its expansion will see four more restaurants added before the year is out. The total by then will be 17, made up of seven Chaophrayas and seven Thaikhuns, plus two Chao Baby formats in Manchester and Sheffield shopping centres and a standalone Yee Rah bar and grill in Liverpool. 

Stretching from Oxford to Aberdeen, the group already has a decent footprint but knows there are plenty of areas to fill, with the South Coast, South West, the Midlands and Ireland all on the hit list. Seven or eight new openings are coming in 2016, and it wants to reach 40 restaurants in the next three years. Leigh thinks Chaophraya has scope for about 25 in all and Thaikhun, 40-50. “We want to be a national operator, not a regional one, and we’ve got a good drumbeat of openings going,” he says. 

It will inevitably mean opening in London at some point. The group wants to make a big splash in the capital with Chaophraya and constantly scans the market, but property availability and costs are stumbling blocks so Thaikhun is a more likely fit for now, perhaps in the City, Shoreditch or Islington. “Thaikhun’s got a bit more bandwidth, and there’s a lot of scope for it in London, “ says Leigh. “The brand’s more flexible. You could see it in a basement or second floor, whereas Chaophraya needs more of a showcase—a head-turning space.” 

At a time when most hot concepts are fired up in the capital before moving beyond, this group is taking an outside-in approach. “It’s sort of making a virtue out of a reality, but we think it’s a better way to go,” says Leigh. “In places like Manchester and Leeds, the task of building a loyal customer base is a bit harder. You’ve got to be stronger and truer to survive out in the provinces, and we’ve done that. If we were going from London out, it would be more of a worry.” 

Besides, he says, it can be easy to overplay the importance of the city. “I don’t understand the obsession with London. We know that a twelfth of the population live there and a massive proportion of the restaurants, but you can be a national brand without being there. We’ll get to London in due course, but it’s not the be-all and end-all.” 

Paving the way
The team has been putting in better processes and training and recruitment strategies to pave the way for the roll-out. Industry veteran Kevin Bacon has been an important addition to the personnel roster as a non-executive director. “He’s fitted our energy and business perfectly. He very politely nudges us on a continual basis, he’s always ready to be a critical friend and he sees around the next corners,” Leigh says. 

Other significant developments have included the installation of business managers in all restaurants. “These places are doing £2m or £3m a year. Running them as a business manager—looking at the P&L and all the numbers—is very different to running them as a restaurant manager,” Leigh explains. 

Marketing is similarly decentralised, with each restaurant getting its own dedicated marketing manager and database. Leigh thinks it helps sites respond better to local opportunities. “As more and more technologies and channels of social media come through, creating rule books is a minefield. Best to give our guys the freedom to use them as they think best. They know what their brand means locally, so they know how to maximise it,” he says. 

It is a sign of the emphasis the group puts on its people policies. “We help people flourish, and we’ve taken a lot of people from good to great. We reward talent, we let people fly and we let them make the odd mistake. I don’t think any restaurant business empowers its managers as much as we do.” 

Express yourself
The business encourages all staff—60% of whom are Thai—to express themselves. “If we’ve got the right people on board then their instinct will ensure good delivery. You empower people not by telling them what they should do but by telling them what they shouldn’t. Don’t upset a customer or colleague and don’t harm the business, but do anything else you want to do.” 

Leigh fits into this non-corporate mould himself: he tweets from behind the scenes of Chaophraya from a dedicated account, @jianleigh. “It’s like having a relationship with someone – you’ve got to be interesting to interact with. We’ve always been very clear about staying non-corporate. Act big, think small.” Retaining this spirit will be the big challenge in the next few years. “We’ve got to hang on to it, and wed othat by devolving more and getting our managers buying into it,” says Leigh. 


CHAIN REACTION
The UK is homes to about 1,800 Thai restaurants but, until recently, few multiples. It is a sector of the market that immigrants and independents have dominated, but that is now attracting more UK-based operators and investors. 

Leigh says: “I’m amazed that more [multi-site] operators haven’t emerged. They’ve missed a trick. “It sounds a bit arrogant, but we think we almost own Thai in the North.” 

Chaophraya and Thaikhun aren’t going to have it all their own way, however. Several small groups are emerging in the South, and the biggest challenge comes from Busaba Eathai, the concept founded by Alan Yau in 1999, which Jason Myers is now driving beyond its London heartlands. He told CGA Peach’s Future of Finance and Development conference this summer that it was lining up openings in cities including Manchester, Leeds and Liverpool—Thai Leisure Group’s own turf, in other words.

“We’ll lock horns with them,” says Leigh. “We need to be cautious, but we’re reasonably confident that what we’ve got will prevail. No doubt we’ll take a hit when they open [in northern cities], but we’re well established and people trust our brand. We think we’ve got that X factor—that spirit and soul. It’s a concern, but I think we’ll be fine.”