One local entrepreneur has learned what does it take to launch a business during tough times

In this 2014 photo, Ray Wiley, founder of Hot Head Burritos and Rapid Fired Pizza, sits inside his Hot Head Burritos store at 1120 E. Stroop Road in Kettering. Wiley is also co-founder of another new restaurant venture, Wiley's Wings, Tenders and Fries. FILE
In this 2014 photo, Ray Wiley, founder of Hot Head Burritos and Rapid Fired Pizza, sits inside his Hot Head Burritos store at 1120 E. Stroop Road in Kettering. Wiley is also co-founder of another new restaurant venture, Wiley's Wings, Tenders and Fries. FILE

Ray Wiley opened his first Hot Head Burritos just as the Great Recession was starting, and now he’s at it again

Local restaurant entrepreneur Ray Wiley has unique experience in founding or co-founding new business ventures during challenging economic times.

Wiley was a Dayton-area franchise owner for the Subway sandwich chain for nearly two decades before he co-founded the Hot Head Burritos restaurant concept in 2007, just as the Great Recession was starting to suck the life out of the U.S. economy. The burrito chain, with a fast-casual service concept quite similar to the well-established Chipotle Mexican Grill national chain, flourished despite the competition, the anemic economy, and a crippling miscalculation Wiley made about his food costs. Today, there are more than 70 Hot Head locations in seven states.

Wiley next co-founded Rapid Fire Pizza in 2015 - somehow avoiding launching a business into the teeth of an economic storm.

But now, with the economy still struggling in the throes of the coronavirus pandemic, Wiley and his partners are gearing up to open a third concept. The first location of Wiley’s Wings, Tenders and Fries is set to open in a former Rapid Fired Pizza location in Huber Heights.

Wiley wouldn’t recommend that other entrepreneurs jump into the restaurant business right now, but he has insights on opening a new venture during a down economy.

When you started thinking about starting Hot Head, did the condition of the economy matter to you?

Not so much. I guess had I known then what I know now about economics, I might have thought twice. I do remember something Barbara Corcoran (Shark Tank) said: “If you have a great product that people want, a recession will not hurt your success.” So I guess with that thinking and being a glutton for punishment and adventure, we pushed forward and opened Hot Head.

As the economy tanked did you consider delaying your launch of your first store in Kettering? No, Actually, I think at that time my Subways were doing really good, so I felt financially stable and able to take on some risk.

How did the first year go – less or better than expected? Well, it was interesting to say the least. The good news is we opened up with strong sales, and we had a good team we brought over from my Subway company to back the operations. The interesting (actually scary) thing was I made a calculation error in the food cost that had a massive negative financial impact. You see, coming from the pizza business and Subway, both of which we did not cook raw meat, I did not know that when you cook a piece of raw chicken or steak, the weight after cooking was only about half of what it weighed before cooking, resulting in food cost being twice as much as I thought it would be, due to the fact it took twice as much chicken to make a burrito than I calculated.

So needless to say, we made a number of modifications to correct that situation (raising prices and changing portions). The funny (not so funny) thing about it was because our sales were doing well and I was working a lot in the new store, I really wasnt monitoring the checking account balance. Then one day my banker called and said “your overdrawn”. I said “no way”. So I looked into it and discovered our food cost was 70% which should have been 33%. A restaurant only makes about 15% to 20% profit, so I was losing about 20% on each sale. The higher our sales, the more I lost. As I said we made changes and got the profit back on track. Within about 6 months we had food costs under control and sales were holding steady.

What factors led you to launch the chicken venture in an equally (or maybe more so) challenging time?

Our Hot Heads have done fine through COVID-19, due to the fact they historically have been about 70% carryout, so the pandemic simply pushed our dine-in business to carryout. Rapid Fired, on the other hand, was a big Thursday, Friday and Saturday night family place, and with COVID, families are less likely to dine out now.

We had an Rapid Fired Pizza location in Huber Heights which had a drive-through, which RFP does not really use due to the cooking time of custom pizzas. The drive-through sector of restaurants is thriving right now, so we decided to start a Wings and Tender concept (dine-in and drive-through) to utilize those assets we had already invested in. We have developed a way to produce wings in about three minutes which can work in a drive-through.

What’s your advice for someone thinking of starting a business during this economic slowdown?

Well, the first thing I would say is be well-funded. Right now, things change quickly, and consumers want to change quickly. For a first-time entrepreneur, right now is probably not a great time to jump into the restaurant business.

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