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KBC Relay Interview with Dan Vroon (June 24, 2011) - "Specializing in Wholesome Food, High-Quality Spirits and, of Course, Amazing Ale Craft-Brewed Right Here in Korea"
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June 24, 2011 - KBC Relay Interview"Specializing in Wholesome Food, High-Quality Spirits and, of Course, Amazing Ale Craft-Brewed Right Here in Korea” Dan Vroon Managing Partner of Craftworks Dan was interviewed by Anne Ladouceur of Korea4Expats.com, your one-stop source of information on life, work and fun in Korea. (Click here for Anne's relay interview.) |
ANNE: We met about 10 years ago when I was working at Housing & Commerce (now Kookmin) Bank. How long had you been in Korea then?
DAN: I arrived in Korea in spring of 2000, so I guess it would have been about a year. Time sure flies, huh?
ANNE: You've had a number of interesting jobs while in Korea, and you are now an owner and manager of Craftworks. You came as a teacher and are now a restauranteur - what this your plan all along? If not, what let you here?
DAN: I wouldn't say it was my plan necessarily, but opening my own business certainly was. In fact, I tried to open a consulting business when I first arrived, to help Korean restaurants and small businesses translate their menus for the influx of tourists we were expecting, but Korean bureaucracy got the best of me at that time.
I first came to Korea, actually, to be the best man at by best friend's wedding, but when I saw how many opportunities there were here, I decided to stay. It only took a few month of being here before I sent a letter of resignation to my employer back home!
ANNE: There are an increasing number of foreign nationals investing in restaurants/pubs? What recommendations do you have for someone thinking of going that route?
DAN: DON'T DO IT! No, seriously, it is the hardest thing you will ever do. If you enjoy time off and crave a work-life balance, the food and beverage industry is not for you. There is always something breaking or staff getting sick or a million other little things that will occupy every moment of your day. And doing it in a foreign country is immeasurably harder! I would say that it is something to be taken on only if you have a wealth of experience in the field, the ability to communicate in Korean, and a good lawyer.
ANNE: What kind of capital would someone need to set up a restaurant or pub? You're part of a consortium of investors. Can you tell us a little about how that works?
DAN: The start-up capital varies for a restaurant or bar varies, but there are certain things you will invariably have to deal with. The first in gwaligeum, which is the premium you pay for an existing business to pack up and leave. This can vary from around 30M won in a lightly trafficked area of Itaewon, up to 100M or more. Then there is the key money you will pay to the landlord as a deposit, which is roughly the same amount. After that is the monthly rent, plus any renovations you want to do. I would say 100 million is the cheapest you'll be able to get away with for a place with 40 or so seats.
When I started Craftworks, I wanted to do it without a Korean partner, to avoid complications later. Instead, I reached out to my friends, fellow expats who I thought would be interested in investing. Luckily they all did, and that's how Craftworks was born.
ANNE: Were there any hiccups as you went through the different procedures - registering the business, getting the liquor/food licenses? How about immigration issues?
DAN: Oh, yes, always expect the unexpected in Korea! We opened Craftworks as a locally-invested company, which gave the local tax office conniption fits, as we did not have a local partner. After intensive lobbying from our legal team, they finally relented and gave us a business licence, causing the Immigration office to swoop in and declare our business illegal. A few million won sorted that out and we learned a valuable lesson: have an immigration lawyer work with you from the start. It may cost a bit, but it will save you a lot off hassle later!
ANNE: What are some of the special challenges of operating a restaurant/pub that potential investors should be aware of?
DAN: Getting high-quality ingredients has been one of our biggest challenges. Korea's blockage of agricultural imports, for example, means our potato varieties change every season and strawberries and other fruits are only available one month per year. If the government were interested in fostering a truly foreign-friendly atmosphere in Korea, they would look at easing the restrictions on foreign imports of food products... especially produce!
ANNE: That is a challenge you wouldn’t face in the same business back home, that’s true. Probably why many of us aren’t aware that restaurants face that particular challenge. Anything else we customers show know about?
DAN: None that I can think of, except that everything costs double what you expect it will, even if you already doubled it! There is no end to the things you have to shell out for, so profit margins, especially in the beginning, may be slim until you learn the ropes.
ANNE: What do you like the most about what you're doing now?
DAN: I guess being able to realize a project like this from its inception is something every entrepreneur dreams of, so that is intensely gratifying. As well, hearing our customers thanking me every day for brining a concept like Craftworks to Korea is very rewarding. It's hard to have a bad day when everyone is showing you so much love and support!
ANNE: Craftworks opened last Fall so I expect you’ve heard this question a bunch of times, but I have to ask it. Why ‘Craftworks’?
DAN: Why Craftworks? I chose the name for several reasons. First of all, we are purveyors of fine, craft-brewed beer. The name Craftworks actuaally comes from the german word "kraftwerk," which translates to "power plant." In my hometown of Edmonton Alberta, our university bar was called The Power Plant, and I met many people there that I'm friends with to this day. So I kind of wanted to pay tribute to my hometown as well, I suppose.
ANNE: Thanks a lot, Dan – for your time and for the frankness of your responses. Cheers!
Replies to This Discussion | 이 토론에 대한 답글들
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Permalink Reply by Eun-Shil Park on -
Its interesting what Dan is saying about import regulations according to Food Products. Here in EU we have wonderful agricultural companies/farmers who grows organic vegetables, potatoes and so on and would love to export to Korea for instance. Also their production method is from the highest standard but its still way too difficult to get a sustainable supply chain to Korea. The Korean government is for them a not understandable -jungle- out there.
If the Korean government really meant well with the SME in Korea as they do say right now in the media they should do something about that one! And sorry the FTA is in this case NOT working for SME, which is accountable right now for more than 80% of the economical growth and not even to mention the SME are hiring much more quicker new employees than LE. And that is the real fundament of a sustainable growth in each country around the world!
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Permalink Reply by Daniel on -
Eun-Shil:
You need to realize the nickname of this President: The Bulldozer. He was a vp of a conglo too. Bulldoze your way to the top and SMEs is not at the top of the food chain here. I really don't think he cares one wit about SMEs since only "small people" work at SMEs and no way does he care about them. My opinion only!
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Permalink Reply by Daniel on
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Dan, thanks for sharing. I know your pain about importing produce. Potatoes can only be brought in fresh from two small places from two countries: Australia and USA. Canada, Europe, all are magically not allowed to import their produce. Legalese to protect Korean growers.
I have known about Craftswork for a long while but have never been able to get it down and visit your guys. I am so waiting for a good beer and a good steak.
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Permalink Reply by Steven S. Bammel on -
Dan - Just read in the paper today that Canada and Korea inked a deal to allow Canadian beef into Korea... But the potatoes import prohibition is a bit baffling...
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Permalink Reply by Wally Nes on -
Good, affordable beer right next door for me.
I'm in this place a lot.
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Permalink Reply by Steven S. Bammel on
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That's a great case study into opening a restaurant in Korea... The parts about getting raw materials and dealing with the Korean legal system are particularly telling.
If you got opened up for W100 million or thereabouts, I'd say you did a great job on the cheap! A friend of ours was thinking of changing her restaurant to a bakery... until she found out the incredible royalties she'd be having to pay both up-front and on an ongoing basis if she wanted to work with one of the national chains.
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Permalink Reply by Jay Juhyung Kim on -
Thanks for fun interview. It could have been better if I know you when I was doing my social commerce company. haha.
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Permalink Reply by Eun-Shil Park on
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Dan, nice 'short' interview in the Joongang Daily recently about entrepreneurship in Korea! All together with other interviewees an absolutely worthwhile story to encourage future entrepreneurs in Korea due the difficulties it does brings with it...
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Permalink Reply by Steven S. Bammel on
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Dan - I heard that it's illegal to brew and sell beer in Korea unless the brewery meets a minimum quantity threshold. Is that right? What do you know about the laws on this?
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Permalink Reply by Dan Vroon on -
If only it was a minimum quality threshold!
Yes, this is true. One can be licensed as a "small" brewer, but then MAY ONLY sell their product in their own facilities. The law has recently changed to allow "medium-sized" breweries to exist, which means they can distribute their products more widely but MAY NOT serve beer on their own premises. As far as I know our brewery is the only one to have achieved this classification in the country, but undoubtedly more will come on the scene in the next few years.
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Permalink Reply by Daniel on
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Small and medium size brewery means what? Refers to how many liters? If I may ask...
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Permalink Reply by Steven S. Bammel on
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Oh, very interesting. I was surprised to hear about that law; hopefully those laws will get relaxed soon. Do you know the initial rationale behind the law (other than to keep competition out)?
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