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One on One: Mike Lee

By James Wright
July 01, 2007

Should a restaurant ever assume its owner's personality, Cracked Crab in Pismo Beach, Calif., would be it. It's where the waitresses plunk down big steel buckets of steamed crabs in the middle of the tables. It's where no-jacket-required casual meets world-class seafood.

The owner of this come-as-you-are crab shack is Mike Lee, 55, a self-titled corporate dropout who opened the hot spot in May 1999. Raised in Cleveland, Lee worked for 20 years in corporate-restaurant management until 1998, including 13 years as an executive with Carlos Murphy's and the now-defunct Famous Restaurants of San Diego, the final three as president and CEO.

But life and work couldn't be any more different for Lee now; he says he hasn't even seen someone wearing a tie for months. Pismo Beach, which is about a four-hour drive from both Los Angeles and San Francisco, is a draw for people who like fast cars, but not the fast lane (it's one of the few remaining beaches that allow vehicles to drive on the dunes); it's a popular getaway destination for Bakersfield and Visalia.

While many Cracked Crab guests walk in right off the beach in their flip-flops, Lee says don't confuse low key with low quality. High-end seafood items like Alaska king crab, Canadian snow crab, Dungeness crab and locally harvested rock crabs are menu staples, along with slipper lobsters, Australian coldwater lobster tails, Alaska salmon and halibut, mussels and shrimp. I caught up with Lee in April to talk seafood and ask him what it's been like to see his laid-back concept come to life.

WRIGHT: How is the restaurant doing?

LEE: We do more than $2 million a year in sales with just 17 tables, 80 seats. It's only 2,000 square feet, with no bar. It's amazing what we do in this space. We're just kicking butt. Our sales for eight straight years have increased.

I told my wife the other day, "We created a monster - we're too busy!" We never thought we'd be doing this much business. We're pushing the limits of the building. It's a good problem to have.

You give equal credit for the restaurant's success to your wife Kathy. What are your respective roles?

Kathy runs the books and also places orders and sometimes picks them up. But she does a ton of R&D. She's got every magazine, every cookbook you can imagine. She keeps me filled in, because I don't have much time to read. She reads SeaFood Business religiously. She keeps me abreast of what's happening in the industry.

I'm more on the operations [side]. I also go to every single table when I'm here. If I'm here, you'll definitely meet me. I'll talk them through the menu and recommend things that I think are special. I tell them I purchase only the highest quality ingredients you can find on Earth. Everything here is made from scratch. It takes an hour and 20 minutes to make our clam chowder, but we don't cut any corners. We cut every lime for key lime pie. We buy produce year-round from a local greenhouse. I like to tell our story to the people; that's my favorite part of the job. And people love meeting the owner.


What lessons did you learn from corporate that still apply?

A lot. The thing my employees like is it's very structured, because of my background. But it's also a mom-and-pop place, because here you don't need to wait two or three weeks to change something. If it needs to be changed, let's change it today. But the chowder should taste the same today as it did last year. All that is taken from corporate: clean, organized, structured.

But I'm laid back. My waitstaff uniform is blue jeans with a black Cracked Crab T-shirt. That's what I wanted to create. If you go to New York, you don't go to a seafood restaurant in jeans. It's the same in California. If you go to a seafood restaurant, it's white tablecloth, it's waiters in bow ties. But we're on the beach, man. You want to be able to get the best seafood but stay casual.


Did you work more hours as a CEO or do you put in more time now?

Now, because I'm online at home all the time. All issues come through me, and a lot is [handled] through e-mail. I work a lot, because every decision is mine. I used to work open-to-close. We lived up here [in the office upstairs] for two years when we first opened. Now I've got two managers, so I still work every day, but not every night.


How often does your menu change?

We print the menu every day. If you come in my restaurant, we'll have wild Alaska salmon one day, local Pacific snapper, harvested two miles away, on another. I don't order [local] fish, the fishermen call me and tell me what I'm running today, then I buy it from my vendor.

It costs about $1.20 to print each menu, and we go through about 30 of them a day. Do I think it's worth it? Yes. In the long run, it's cost effective. If the price for crab goes up, I can change it on the menu tomorrow.


What's your most popular crab?

Probably the king crab and snow crab. We keep local Dungeness and rock crab in live tanks, which are popular. When seasons overlap, we'll have as many as 15 types of crab on the menu, usually about springtime. Today there are nine.


How many seafood vendors

do you buy from?

Two. I use Central Coast Seafood [based in Atascadero, Calif.] locally and I buy frozen crab from Sysco that was supplied to them by The Crab Broker in Las Vegas.


How do you ensure you get 
top-quality product?

I've gone to Alaska twice, to Nome and Dutch Harbor. I used to think Alaska king crab was expensive; now I don't. I have a lot of respect for the people they buy from and the way it's harvested. I market that to my customers, telling them they can't buy a better crab than what they're eating right now.


Assistant Editor James Wright can be e-mailed at jwright@divcom.com


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