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Richmond restaurant struggling after ex-employee opens similar eatery in same food court

Some Richmond food courts don't allow a new restaurant to enter if there is a similar one already existing; others don't have any such policy

Richmond resident Tina Tan was looking forward to her new life with the opening of her Shanghai cuisine at Admiralty Centre food court, after investing nearly half a million dollars purchasing and renovating the store, and spending seven months on refurbishment.

However, just four months after she opened her Hao Chi Lai restaurant, another Shanghai cuisine restaurant opened in the same food court, selling hand-made dumplings just like hers.

And to her surprise, the owner of the new restaurant was her former employee.

“I was shocked when she told me she was going to open a similar store in the same shopping mall. I was so angry that I couldn’t sleep at night. There are so many food courts in Richmond and why does she have to open one here,” said Tan.

“And she worked at our store so she knows our business model and which products sell better, which does not sell as much. She even used the same containers as us and followed our pricing.”

What concerned Tan even more is that the former employee is not someone new to the restaurant business, but the owner of Long’s Noodle House, a 22-year-old Vancouver restaurant that was closed due to a fire in May.

“They have an established brand built up over the past 20 years, and their store is much closer to the entrance than ours. How do we compete with that? It’s really threatening our business and pushing me to the corner.”

Tan complained to the mall’s property manager but said she was told there was no policy forbidding the opening of a restaurant if there is a similar one already existing in the food court.

Tan then talked to the owner Sandy Shi about her concerns and Shi agreed to not put Xiao Long Bao, a signature Shanghai cuisine which is handmade dumplings filled with pork and soup, on her menu.

However, Tan later found out people can buy the dish from Shi off the menu, according to Tan.

Since the opening of the other dumpling restaurant, Tan’s business has been hit hard.

She used to sell more than 200 dumplings every day - she now only sells around 50.

“I think what Shi did is unethical…and the property manager failed to protect us business owners’ interest,” said Tan.

“I chose this location in the first place specifically because there was no one selling what I do. It’s such a small food court and how can it have two dumpling restaurants?”

Tan said she hopes Shi will stop selling Xiao Long Bao and stick to her menu.

Shi: I’m following the rules and have compromised

Shi told the Richmond News she had worked at Hao Chi Lai for two months after the closure of her Vancouver restaurant, but added there is no rule forbidding selling similar products in the food court at Admiralty Centre.

Furthermore, she said, she has the freedom to reopen her restaurant at any location she chooses.

“There are two Shanghai restaurants in the Crystal Mall food court in Burnaby and they are fine. Each restaurant has their own style and specialties,” said Shi.

Shi said she didn’t put Xiao Long Bao on her menu to show respect to Tan but she has to provide it to her old customers who come to her shop and ask for the signature dish.

Shi said she also made other compromises including not selling two popular dishes at her previous restaurant – bacon vegetable rice and spring onion oil noodles, because Tan sells them.

“I have lost a lot of business for not putting Xiao Long Bao on the menu and not selling those dishes, but there is no way I don’t sell Xiao Long Bao at all. If I do that, I will lose my customers and I can’t afford to do that.”

Shi denied Tan’s accusations of copying her prices, packaging and business model but said she instead shared a lot of her experience in the restaurant business with Tan when she worked for her.

Shi said she also adjusted her prices to match Tan’s for fair competition even though she thought they were a bit too high.

“Some people may say from a moral perspective, I shouldn’t open one in the same mall, but this is my right and I didn’t break any rules. And it's not my fault to have built up my customer base over the past 20 years of hard work,” said Shi.

“I’m open to communicating with her to see how we can collaborate, but I don’t have the energy to argue with her. My focus is on improving my food quality and how to serve my customers faster.”

Rules vary in different food courts

When contacted by the News, Edward, the property manager of Admiralty Centre who didn't want to give his last name, said he had nothing to comment on regarding the issue and “this is about our strata policy,” but he refused to say what the policy was.

There are many shopping malls in Richmond with food courts selling a large variety of food. Some of them have policies that restrict the type of restaurants allowed in the food court, and others don’t.

“When we have new tenants coming in, we do our best to select ones that offer a different cuisine that no existing tenant offers. It’s based on the style and region of the cuisine, such as Shanghai cuisine, Sichuan cuisine, etc,” said a spokesperson at Aberdeen Centre.

It’s easier for Aberdeen to select its tenants as the mall owns all the stores, but many older malls in Richmond have their shops owned by individuals and the strata has no right to tell them what to sell or not, according to Kenneth Ho, secretary of Pacific Plaza’s strata council and owner of Origin Café.

“What we can do is to try to negotiate with the business owners to see if they can sell different products or, even for the same cuisine, if they can focus on different items to differentiate from or complement each other,” said Ho.

He said failing to differentiate usually resulted in one of the restaurants being pushed out of the mall.

“The thing with food courts is it only has limited capacity for certain number of customers and if you divide the customers, you probably won’t have enough to keep your business alive,” said Ho.

Mike Mei, owner of Nine Ninety at President Plaza, said some Richmond mall's strata council check the menu before a new store enters and try to avoid restaurants of the same type, but "it's hard to avoid it completely as restaurant owners can change their menu afterwards.

"Running a restaurant is tough – if a person’s business is going well, other people will undoubtedly want to copy it. At the end of the day, everyone relies on their own abilities,” said Mei.

Got an opinion on this story or any others in Richmond? Email your thoughts or story tips to [email protected].