Why Vietnam is Freer than America (Part 2): Small Restaurants

Phuong Anh.jpg

Pictured above is Phuong Anh. She's one of the thousands of locals in Da Nang who runs a small restaurant out of her house. Among other classic local dishes, she makes a mean Bò Né which, if you're not in the know, is basically Vietnamese steak and eggs—the true breakfast of champions. She's kind and chatty and is popular with locals and foreigners alike. And hey, in case you need another reason to like her, she likes cats, too.

As a brief aside from the main topic of this post, I'm showing you the picture below because it's delicious and whether you've been in Vietnam a while and haven't had it or whether you've never been here, this dish should certainly find its way into your repertoire of local foods. 

Medium-rare steak, runny-yolk egg, pork and mushroom meatball and sauteed onions on a sizzling plate, warm baguette, lettuce for some reason, and my attempt at using a photo filter.

Medium-rare steak, runny-yolk egg, pork and mushroom meatball and sauteed onions on a sizzling plate, warm baguette, lettuce for some reason, and my attempt at using a photo filter.

A Bò Né at Phuong Anh's place, along with an iced coffee, comes to about 55,000 dong—around $2.50. 

A Low-Risk Venture?

One of the reasons Phuong Anh and others like her are able to charge such low prices, while still maintaining a semblance of quality, is the low cost of opening a small business here. Really, really low. 

I've opened two food and beverage businesses here in Vietnam, and the more expensive of the two cost around $5,000 to put together. That included rent, deposit, renovations, business licensing, equipment, furniture, decorations, and food and booze stock. Mind you, that was in a nice part of Saigon, not some rathole. 

Sure, I could've paid more, but it was my first time opening such a place, and minimizing risk sounded like a good idea. Of course, starting many restaurants, especially high-end ones, may cost much more than that, but even the pricey places here are a far cry from the extraordinary costs in both money and pain-in-the-ass factor that an American (or pretty much any other 'western') entrepreneur must endure. 

And when I say extraordinary costs, I mean extraordinary—it can, and usually does, cost hundreds of thousands of dollars to open a restaurant in the USA. That's especially true in trendy and generally more expensive cities. If you manage to not have your eyes glaze over when you look at the results of that survey, you'll notice that while the lower quartile of restaurants only took 1 month to be profitable, their average yearly profit was around $12k—putting the owner well below the poverty line. Bust your ass, put in all your money, and come out dirt poor. Sounds like fun, right?

Sure, there are some restaurants that do very well for themselves—but even average-profit restaurants in the poll took 18 months to make a profit. And that's before even recouping the average $500k investment. Most small business owners don't have the time or the financial backing to wait a year and a half to lose more money after they've just chucked hundreds of thousands into a new venture. 

Considering that a large percentage (the number of which is hotly debated, by the way) of restaurants fail within a few years of opening, the money involved represents taking a huge risk. 

What that means is that many fewer people are willing to or capable of taking that risk. Were the enormous costs lower, you can assume many more people would be willing to throw their hat in the food and beverage ring. Plenty of people in western countries fantasize about opening a restaurant, but will never be able to afford to do it. 

Opening a small restaurant in Vietnam represents much less of a risk than in the US and is far more feasible, even for a local who earns a fraction of what an average American earns. Bear in mind, the vast majority of these small restaurant owners are not wealthy people—but they're self-employed, their own bosses, calling their own shots. That's its own variety of wealth and an underappreciated one. 

Caveat Emptor (Buyer Beware)

When I think of true hustling and entrepreneurship, or when I'm just hungry, I frequently recall a Mexican lady in Austin who sold tamales door-to-door. She'd come knock on my door every Sunday selling homemade pork or chicken tamales out of an insulated box. Of course I bought them—I'd have been crazy not to. They were fantastic, and something like $8 for a dozen. I got so used to it that every week I'd have a pot of beans, some good cheese, and my favorite hot sauce ready and waiting to smother the tamales. It only occurred to me years later that what she was doing was illegal. 

There are basically two sides to the argument as to why it's illegal.

  1. She probably wasn't paying taxes. I've got my opinions on that, but that's outside the scope of this post.

  2. Since she said the tamales were homemade, she was almost certainly making them at home, in a non-inspected kitchen, and was probably operating without a food handling or a food manager's license or a business license. That means they could be dangerous!

As to the supposed illegality of her method of preparation, I'll proudly say: fuck that. Anyone who knows Mexican food knows that the best tamales come straight from a Mexican woman's kitchen. Besides, tamales existed long before tamale licenses. 

Neither I nor the Mexican lady considered the poor, neglected government in this situation. I gave her the money and she gave me the tamales. End of transaction. I was happily oblivious to the heinous crime we had committed. I guess we were really getting away with something. 

Red (White and Blue) Tape

One of the main hurdles that Americans restaurants, bars, and even food trucks face that the majority of small Vietnamese food and beverage establishments don't is—you guessed it—regulations and governmental red tape. This is not to say there isn't red tape related to business here, but it's many orders of magnitude worse in the US. 

Imagine you're a local here. Do you want to go set up a noodle soup cart or a milk tea stand down the street? Go for it. There is nobody you need to talk to except maybe your neighbors. Do you actually want walls? If so, you can run it out of the front of your house to save on rent. If you really want your own place away from home, rent is cheap and zoning negligible. 

That's it—buy the equipment, maybe get a license ($50), maybe rent a place with three or four walls. Maybe just put some plastic chairs on the street and cover your patch of concrete with a tarp. It's all totally kosher (not in the literal sense, certainly), normal behavior. Personally, I love it. 

Only the largest and most conspicuous restaurants have to get a restaurant license which, I'm told, may cost around $500. 

Compare that to Texas, which is one of the more lenient states when it comes to opening a restaurant. You'll need licenses, permits, inspections, government-approved equipment and training for yourself and for staff, and you'll need to remember you can be fined or shut down should you fail to jump through any of these hoops. Jumping through these hoops, by the way, can take many months, delaying the opening of your business and potentially costing you a small fortune. 

Speaking of a fortune, booze (where the easiest profit is) is regulated very differently between Vietnam and the US, and deserves its own post. It will get one. 

Regulations and Safety: Who are we kidding?

The biggest argument in favor of the 'western' model of kitchen management is that clean and healthy food leads to a healthy population. I am completely in favor of the spirit of this thought and appreciate the importance of correctly handling food. I had to take a food manager's course back in Texas, and will gladly admit I learned some important things. I believe that food safety and handling should be taught along with mandatory cooking classes at every school worldwide. That's one thing you'd get if you elected me world dictator—something to consider.

It's the idea that public health is a good thing that led to the creation of so many regulations and laws for restaurants in the US. Unfortunately, the spirit of the law is often corrupted by the letter of the law, and is then negated by the implementation (or lack thereof) of the law.

I've got some experience here. Not only have I watched a lot of Kitchen Nightmares, but I've also worked in commercial kitchens in the US, and can tell you a few important tidbits:

  1. Some nasty, nasty things happen in commercial kitchens that inspectors never find: rotten food recycled at a salad bar because of cheap-ass owners, rodents and other vermin, moldy drink machines, staff hooking up in the walk-in fridge...the list goes on.

  2. Most restaurants get a warning when the inspectors are coming so they can 'get ready' i.e. try to clean up as best they can. It's like that emergency scrubbing you do behind the toilet when a girl is coming over that you really like, and you know you haven't done it in months and don't want to look like a slob.

  3. The vast majority of the 'inspection' and 'health and safety' stuff is a dog-and-pony show, kind of like airport security, to give you the impression of being safe while accomplishing dick all. The vast majority of the time, it's nothing but a psychological placebo.

There's a reason for this great hullabaloo about health and safety—insurance companies. Restaurants constantly need to be in cover-your-ass mode so they can say they did their legal duty in case somebody gets sick and sues them. If they have to settle out of court or, worse yet, go to court, their insurance (which restaurants are of course legally required to have) will become wildly expensive. 

In Vietnam, it's much simpler. If you get sick from a restaurant, you first kick yourself and remember that eating oysters that cost $5 per kilo is risky and, second, tell your friends that you got sick there. Then you might not go back for a while. Problem solved. There's no need to get the law involved, and any government official would look at you like you had two heads if you suggested they do anything about it. Then they'd probably call you stupid and tell you to go away.

no big difference to me

I'll be honest with you: I've lived long-term in five different countries, two of which (the US and France) could be considered 'fully developed.' I've had the shits or an upset stomach due to food in just about the same proportion in each country. Location hasn't made a difference—you can find tainted food anywhere. Hell, the worst shits I've ever had were from a trendy Korean restaurant in LA with an "A" for its health inspection proudly displayed at its entrance. Second to that was some dodgy chicken at a bus stop in Thailand, but I really should have known better—they at least weren't pretending to be clean. 

Overall, I prefer to use my own judgment when it comes to my food: if a place looks dirty to me, then it probably is and I'll avoid it. If I'm worried about the food somewhere, i'm not going to eat it. I'll also trust friends' and locals' suggestions: if a place looks dirty but it's packed full of locals, it's probably fine. Dependence on regulations to protect you from something like food dulls your senses and reduces your critical thinking. 

And hey, just for fun, I'll point out that there are more regulations on selling hot dogs in most states of the US than there are on buying guns. 





Sam McCommon