Jilli Is a Success Story in Knowing When It’s Time To Flip a Restaurant
In 2024, at least one of your favorite Los Angeles restaurants probably shuttered, leaving you without a place to hang your hat and eat your carbonara. This year has proven even more challenging for restaurants, with many donating to wildfire relief while skating already-thin margins.
That come-to-Jesus moment often hits a restaurant owner late at night while doing payroll in a quiet office, when they ask themselves, “Is it time to close, or do I have the power to do something else with this space?” It’s not always a given — reopening as a new concept is often contingent on significant capital expenditures, along with ownership of the space or a lease extension. But for In Hospitality Group, owner of Jilli and Chimmelier, knowing when to flip a restaurant concept has been crucial to their success.
Flipping means transforming an existing space into a whole new restaurant: a fresh menu; revamped interior design; updated marketing, branding and graphic design. Boisterous, unpretentious gastropub Jilli rose from the ashes of their much-loved fine dining restaurant Kinn, while crushable Korean fried chicken joint Chimmelier replaced Hanchic, their experimental stab at Korean global fusion. The flips were fast—In Hospitality would metamorphosize quickly, reopening within a month or two.
We chatted with the hospitality group’s CEO, Dustin Dong Hyuk Lee, to find out how his restaurant group surfs the turbulent waves of the fickle, fast-moving Los Angeles dining scene.
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Hanchic opened in August 2020, with the pandemic still raging—a rough time to start. You flipped to Chimmelier in January 2023. How did you know it was time?
Dustin Dong Hyuk Lee: When we opened Hanchic, my partners and I didn’t have a lot of choice in our location–we just needed a space where we could afford the rent and the renovation. There wasn’t a lot of foot traffic, but because of Covid, the landlord had been letting us do outdoor dining, so we were doing okay. After two years, we weren’t allowed to do al fresco anymore because we were using up parking spaces. Our indoor dining was less than 400 square feet, so we only had six tables max. Our sales decreased by about 60 percent, right away—and that was an immediate sign that we needed to pivot, quickly. We started doing more takeout orders and outside events to bring in extra revenue, and that’s how Chimmelier came to be: just trying to survive.
What’s the hardest part about doing your first flip and how soon did you know it was going to work?
The first few months were so tough emotionally and physically, we were worried about whether it was going to work out. We had to do a lot of renovations, bring in more equipment, weather low finances, and strategize our marketing. After a few months, it started to pick up, and we had an opportunity to work really closely and exclusively with one of the delivery apps, UberEats. They helped us out a lot, so our delivery sales increased. After that, our momentum started growing, and a lot of influencers started coming into Chimmelier and posting about it, and that’s when it became successful.
So many concepts are turning casual and straightforward. Do you think an experimental menu takes longer to gain traction?
It was definitely tougher. When we started Hanchic, modern, fusion-style Korean food was still a newer concept in Los Angeles. I know there are a few restaurants that do it, but K-town was known more for serving traditional Korean food. Our menu was very experimental, unique, and more fusion than modern, but maybe it was too soon. I wish I had opened Hanchic now, because now a lot of people are open to modern Korean food and Korean culture is becoming very powerful these days. You never really know when something is going to become popular, so you’ve got to keep trying.
How do you know the exact right moment to flip?
If you’re waiting for the perfect moment, it’s really hard to find. We never opened up a restaurant in a perfect situation. You just start at one point facing the difficulties and hardship, and then later you look back and realize you learned so many things. You just open and keep fine-tuning. The numbers will tell you if your concept isn’t succeeding, even after you do your marketing and the food and drink are right.
Has anyone in the industry served as a mentor and offered you good advice, to help you weather all the changes you’ve gone through?
David (Kuo), owner of Little Fatty, has been a huge help, and has been a mentor. He’s been helping me out, and sharing his experience. He flipped Status Kuo, modern Chinese or Taiwanese food, which wasn’t doing so well after a few years, to Little Fatty, and it’s one of the most successful restaurants in Mar Vista. He would always tell me to do a restaurant where people could come in more regularly, rather than a special occasion restaurant. He told me to make the food that everybody loves—even if it’s not always pretty, even if it doesn’t have some kind of fancy gel bubble.
Kinn wasn’t molecular gastronomy, but it was still fine dining and offered a tasting menu. So many Angelenos were sad to see it go. How did you know when it was time to pivot away from fine dining to Jilli?
Having Kinn was such a great experience, and it was one of the toughest businesses that we ever ran, because I’ve never done any upscale restaurants. Fine dining is really difficult and the profit margin was close to zero for us because our restaurant was tiny. Everyone wanted to come in at 7 p.m., but we could only accommodate 20 seats, so the first turn or third turn would never be at full capacity. We also wanted it to be an affordable tasting menu, but the labor costs and food costs were so high, we just really had to make a hard decision to close Kinn and go our own way.
Kinn closed in late November 2023, and by January 2024 you had opened Jilli in the same space, which is an incredible speed for a turnaround.
At that point, I almost wanted to give up on my career, because I had lost confidence and was going through a personal moment of … I don’t want to say depression, but an emotional time. I thought about myself and the team behind Chimmelier, everyone working for our company who believed in it, and I kind of wanted to prove not to other people, but to myself and our team that we could really do this. It helps to have the right partners to collaborate with, who share your vision and know how to work together.
What works with Jilli?
Practical things are so important—ways to minimize your costs. I wanted to have one central kitchen to make sauces for Jilli and Chimmelier, which would cut down on labor and food costs, especially since Jilli is such a small space with limited kitchen storage. To raise revenue, we have to have alcohol. Thankfully, the beer and wine license from Kinn applied. Alcohol sales have a great profit margin, but alcohol also enhances the food we’re serving and makes for a much better environment. We work closely with local makgeolli makers and customers now are much more willing to try out different artisanal soju or makgeolli than when we first opened Hanchic and modern Korean cuisine was new and still on the road to being accepted.
You’re packed most nights—weekends at Jilli are like a mini club. Most industry folks would consider you a success and say, “Congratulations.”
What’s funny is it really doesn’t make sense to keep going, because even now, we’re not making a lot of money. We’re still working on it. Sometimes we make a bad decision and every time we make that decision, it hurts us financially, physically and emotionally, but we just keep going because we want to prove to ourselves that this is something we want to create and achieve, so that later on, when we look back, we’ll have our legacy. That’s something that we really tell ourselves—not just us, but our whole team. I really want to create a great place to work where everybody shows their talents, where we can really build something together.
