Family Business Confidential / Canter’s Deli – 92-Years old and open all night

by Allen Esrock | Oct 10, 2023 | Celebrating Family Business

Facade of the famous Canter's deli in the Fairfax district of Los Angeles, across the street from CBS.
Shutterstock Alex Millauer

Alex Canter
Canter’s Deli
G4
Los Angeles, California

Can you share a short history of the business?

Canter’s Deli was originally founded by my great grandfather, Ben Canter in 1931. Canter’s opened in Boyle Heights, which was the central hub for the Jewish community and population in Los Angeles. In the late 1940s, the Jewish community migrated towards the Fairfax area in West Hollywood and so did Canter’s.  My grandfather came into the family business at a young age and worked there for 65 years before he passed. My father came into the family business and took over at 18-years old and has been there over 40 years now.

Canter’s is 92-years old, fourth generation, and already planning and thinking about the next 100 years.  We’re one of the largest and oldest restaurants in all of LA.  It’s a 24/7 business including a bakery, bar, deli, and full-service restaurant.  Canter’s has been the go-to place for many celebrities including Taylor Swift, President Obama, Joe Jonas, Guns N’ Roses, Haim, and many others.  A number of television shows have been shot here including “Curb Your Enthusiasm”, “Mad Men” and “Entourage”.

How old were you when you started working for the family business?

I couldn’t tell you.  Even growing up as a little kid, I would always be running around the restaurant.  A lot of the employees called me “Mini Patrón,” or “El Patrón” which is little boss.  I was around 13-years old when I started waiting tables.  I enjoyed working in the front of the house including waiting tables, bartending, host, walking around filling coffees and just introducing myself to all our customers.   However, my dad had me work in the back of the house, so I’d learn all the various positions in the restaurant.

Were you expected to go into the business?

Probably, but it didn’t matter because I always knew I was going to work in the restaurant.  When I was at the University of Wisconsin – Madison, I was exposed to the latest trends in the industry and bring them to our old school family business.  I would attend restaurant conferences, and I was like a kid in a candy shop.  I’d bring back ideas to my dad like, “Dad, there’s a new automatic orange juice machine that can squeeze the oranges”.  Or there’s new software that will help us with marketing.  Or let’s make our website mobile friendly.

How excited was Dad  to get all your suggestions?

Not very.  Our motto for the family business is that if it’s not broken, don’t even bother to talk about fixing it.  That’s understandable, there are not many 100-year-old businesses in LA.  It takes real passion not to mention blood, sweat and tears to keep a family business alive for that time period.  But it’s also important to be thinking about the future and how to reach customers outside of our four walls and creating new ways of conducting business.

Are there other family members that work in the business?

I have a younger sister who’s not involved in the day-to-day operation of the restaurant, but she runs Canter’s Instagram account. Canter’s is really a big family operation and there are lots of cousins in the business.  My dad’s sister is the HR person.  Now that we’ve reached the third and fourth generation, there are family dynamics because everyone has a different opinion and vision for what we should be doing.

Most businesses of this scale have formal org charts and clear areas of responsibility.  But in our family business, each person wears many hats and is responsible for everything.  We’re all just trying to help out and keep moving forward. But it does get chaotic when decisions have to be made such as do we want to franchise, launch new products, or seek out new channels or directions.  There’s always going to be different opinions.  This has been something of a challenge for me because I’m always thinking about how to take this 100-year old brand and capture its essence and create opportunities from there.  Not everyone in the family is on board with that plan.

Are there family business rituals or occasions that developed because of the family business?

Christmas Day.  It’s the busiest day of the entire year for Canter’s which is ironic being a Jewish deli. It makes sense because we’re one of the few restaurants that doesn’t close so it’s become a tradition for many families to come to Canter’s to celebrate Christmas.  As a result, everyone works on Christmas.  Every employee, every family member, even my mom who’s not affiliated with the business is plating pickles or handing out rugelach (Jewish pastry) to the people who are patiently waiting in line.  It’s all hands-on deck every year on Christmas Day.

Canter’s is open 24 hours a day, seven days a week, all year long.  The only exception are the Jewish High Holidays of Rosh Hashanah and Yom Kippur.   We close for 12-hours each of those days so that my dad can do all maintenance and change out the equipment.  You can’t run heavy equipment or knock down walls when there are customers in the store.  So, we’d wait for the holidays when all of our customers, Jewish and non-Jewish, expected us to be closed, and we’d make all the changes we could squeeze into those time periods.

Do you have any special event for employees?

Everyone in my family has always had this mentality that if you treat your employees like family, they’ll treat the business like it’s their own. We have some pretty incredible stories of employees who have worked with us for decades.  George, the deli man, for example, has been Canter’s for 59 years, which is one-year longer than my dad has been alive.  While he’s watched everything change, but he’s been there serving the same deli sandwiches for so many years.   Our regulars know the employees by name, and the employees know the customers by name.  When President Obama came in, in 2014, he personally shook hands with all the different employees took pictures with them.

Here’s one employee story that personifies the legacy vs. technology challenge of family businesses.  I brought in the first point of sale system computer system a number of years ago.  Prior to that, we were doing handwritten checks for decades.  We had our first training for the waiters and waitresses, and I was trying to teach them how to create their own pin number to log into the computer.  Penny, who had been there for 35 years, was having none of it.   She said something like, Honey, I don’t do pins. Like, I think this is my last hurrah here”.  She retired that week and I felt terrible.

How did you develop Ordermark?

Canter’s delivery business started to boom in 2015 and 2016.  We were signing up for all these different delivery apps including GrubHub, DoorDash, UberEATS, Postmates, and delivery.com.  Each time we signed up for a new platform, we increased the number of orders because each platform brought new customers.  Delivery became a multi-million-dollar business and accounted for over 30% of our revenue.  It was amazing, but the technology to manage all these incoming orders was a disaster. We had nine computers, including tablets and laptops, and a fax machine to manage all these systems. We started thinking there has to be a better way to organize all this chaos.

In 2017, I brought in a couple of LA-based technologists, and we put our heads together, and started working on a solution which eventually became Ordermark.  Ordermark pulled in all the orders from DoorDash, UberEATS, and all the services into one device so Canter’s could manage all their incoming orders from one place, one menu on the boarding system. We built the product behind Canter’s deli counter and tested it in our very high stress environment.  Everyone was working for sweat equity, so nobody was getting paid.

After a couple of months, two things became obvious, one – we were on to something and two – we couldn’t ask people to work for free for that much longer.  We started talking to people about raising a friends and family pre- seed round. I had never fundraised before, but some of my co-founders had some experience doing that.

We quickly strapped together the first million, which I thought was going to take longer than I did.  One of our initial big investors talked to restaurants and discovered everybody shared the same problem.  So, with the right product and the right timing, we started gaining momentum.  We called on restaurants around Los Angeles saying we’ve built this software that brings all these systems together and everybody signed up for it.  Within a couple of years, we had scaled to partner with 1000s of restaurants across the United States from mom-and-pop businesses to large chains like Subway and Sonic.

We started raising venture capital funding and going through the different growth stages for a start-up company. We also discovered that we designed the software so that restaurants could sell more food through what are called virtual restaurants which we called NextBite.  We started upselling this new product and helping restaurants sell food under a different brand name on the different delivery platforms.  We experienced tremendous success during the pandemic, particularly because many restaurants had to shut down their dining rooms, and they were looking for ways to get more orders.  For us, Ordermark would help restaurants organize their kitchen and then upsell them NextBite to generate more orders flowing into their kitchen.

In 2020, we ended up doing a fairly large financing round led by Softbank, which is the largest investment fund in the world. They put in $120 million to help accelerate our growth and our ambitions. At that point, we rebranded the company as NextBite, because that represented our core focus and the future of our business.  We hired  hiring hundreds of employees to scale and grow these businesses.

Unfortunately, Softbank had large scale financial issues in 2022-2023.  Therefore, we split up our companies and sold Ordermark to a company in India, and Nextbite to Sam Nazarian from SBE Hospitality Group.  It wasn’t the outcome I was hoping for, but it was quite a run.  We had this incredible opportunity to build and scale a business and I learned so much along the way.   I met amazing people, and ultimately helped 1000s of restaurants embrace new technology.  In many ways, I was a restaurant’s owner “young son” coming into their business and helping inject life and technology into the business, similar to what we did at Canter’s.  It’s gratifying that the technology lives on under the new ownership.

What’s next for you?

I’ve been going really hard at the startup journey for six and a half years. From the moment I woke up to the moment I went to sleep, I was always on Google, Slack or LinkedIn, just constantly in back-to-back meetings all day.   It’s nice to take a step back right now and enjoy some traveling and thinking about how I want to spend my time.

I have a tremendous understanding of the startup journey and, right now, I enjoy advising startups and also started an Angel fund to invest in them as well.  I really enjoy sharing feedback and providing my experience to people who are at earlier stages going through similar challenges. However, there will be a next company or business and I’ll be bringing in my experience, relationships, understanding and a lot of scar tissue.

And of course, there’s Canter’s.  I’m as excited as ever to contribute to the business and keep it going for future generations of Canters.

About You

Biggest non-family idol or inspiration?– My Mentors
What keeps you up at night? – Too many problems to solve
What are you streaming? – Chef’s Table
What’s on your turntable or Spotify playlist? – Everything but country
Godfather I or Godfather II? – Godfather 1
Favorite SoCal Sports team – Not SoCal, but go Packers!
Favorite SoCal College – UCLA
Favorite venue to listen to music.– Red Rock
Quintessential SoCal activity or experience – Eating
Desert, Beach or Mountains? – Love them all!
What do you like most about SoCal? – Incredible weather and diverse food
What don’t you like about SoCal? – Traffic
Favorite restaurant – Anajak Thai
Best junk food -Sour gummies
SoCal Social Causes – I’m on the Board of Big Sunday, a non-profit that I’ve been involved with for many years

Alex will be one of featured panelists for our Driving the Family Business Future event on November 2 at Beverly Hills Porsche in Los Angeles.

 

Allen Esrock is the Founder of NxtGen Nexus, a platform for the next generation of family business owners which is based on his experience of growing up in a family business. Prior to that he started Jitter Fingers, the first safe, social networking website for tween girls and their bffs with Jitter Finger clubs in 12+ countries and 250+ cities in the US.

About the Author

Allen Esrock is the Founder of NxtGen Nexus, a platform for the next generation of family business owners which is based on his experience of growing up in a family business. Prior to that he started Jitter Fingers, the first safe, social networking website for tween girls and their bffs with Jitter Finger clubs in 12+ countries and 250+ cities in the US.