Most people think, when they step into one of the seven Padthai Wokbars, that some trendy international franchise restaurant chain has set up shop in Budapest. In fact, it is a 100% Hungarian story, which started with the idea of four people back in 2010. And it is not a franchise chain either. Padthai rents the restaurant premises itself and has its own central preparatory kitchen as well as a special mindset. But let us not get ahead of ourselves.
Instead, we will begin with the source of the original idea, which came from Ágnes Horváth. A former architect, she had, thanks to a friend, spent some time in Thailand. She designed hotels there, and found herself enraptured with the Asian lifestyle and unique atmosphere, spending many years there and returning often. Many well-to-do Hungarians at the time had fallen in love with Thailand and the neighbouring countries.
After one of her trips to Thailand, she started to develop the idea of importing into her homeland the Asian street food experience, something which the average Hungarian only knows from films. Of course she also planned to make some adjustments to flavours and appearance in order to suit local tastes. She shared her first ideas with a good family friend, Máté Kanóczky, who was graduating from Budapest’s Corvinus University at the time.
Máté was so enthusiastic about her initial plans that Ágnes continued to work on them and also involved two other owners. Gergely Simon had a lot of experience in the catering and hotel industry, and the fourth team member, Gusztáv Lovas came from the construction industry and also had a tile shop, Decor Floor.
All in all, they had the entrepreneurial experience, but all of them were working in full-time jobs at the time, and only one of them had actual experience in the restaurant business. Hence, they spent one year preparing for the opening of the first restaurant on Budapest’s Október 6 Street in the summer of 2012.
At the time, the street looked very different than it does today: it was filled with heavy traffic which only tapered off after the street was recovered with fancy pavement, and—as the founders recall—at the time, the only other eateries in the neighbourhood were one lunch counter of dubious repute and some small shops. The current bustle and the fancy restaurants in Október 6. Street appeared only in the recent years. The first Padthai Wokbar was one of the early birds in the neighbourhood. Its interior designer was, of course, Ágnes, who had the necessary architectural knowledge, while Gergely had created its menu adapted to local preferences. Everything was ready for the opening.
One important aspect from the very start was that they didn’t want to make a restaurant.“I am not the classic restaurant manager type who always chats with regular clients, supervises the waiters, and counts the money at the end of the day”, says Ágnes Horváth. Instead, she sees their project as a professional business, just like Máté Kanóczky, who wrote his thesis in economics about the newly opening first restaurant.
While they were setting up the equipment, furnishings, processes, design, concept, and business model, they also kept in mind that they wanted to open more in the future. However even they never thought that their plans would become a reality so soon and so spectacularly. They opened another unit at another booming city centre location, Gozsdu-udvar. Ágnes explains this by saying that if you know the city, you soon learn to identify the locations that are working or that could be. They were also good at finding true market niches. For example, the only Asian cuisine available in Hungary is either of the very lowest quality or completely unaffordable. Mid-range products, like what Padthai offers, are still rare.
An important feature of their business model is that it is always the client who matches the base dish to the topping, meaning that even students and clients less open to exotic combinations can enjoy a tasty and healthy meal. Besides, the food is not only made from raw materials prepped and inspected through their own system, but also cooked totally fresh, right in front of the client’s eyes. The whole preparation process is quick, healthy, and yet of high quality. The restaurants have a great interior design and excellent locations, meaning that they offer great value for money. What more do you need for success? Hardly anything.
Only small changes have been made to this exceptional business concept in the course of its impressive growth over the subsequent years. The only change they made in the aforementioned second restaurant in Gozsdu-udvar, opened in 2013, was the introduction of the Wok2Go sub-brand, under which they offer meals in sturdy boxes for take-away, but also for eating on the spot, as an alternative to serving food on plates, which would require dishwashing facilities.
Their own central preparatory kitchen started operating before they opened the third restaurant. Although many in the industry proclaim that they never drop their standards, Padthai actually means it. It is in part for this reason that they chose not to turn their growing network into a franchise chain. Although they have not yet ruled out the possibility of setting up a strictly controlled franchise system in the future, they think that they are not yet capitalised enough to do so, as they have been expanding from their own resources, re-investing their profits every year.
It is true that the opening of their restaurant in the Mammut shopping centre in 2016, after two others elsewhere in Budapest, meant a substantial step forward—despite the fact that this was not planned, says Máté. They had just heard that the McDonald’s in the Mammut shopping centre was closing, and they were especially surprised when they heard that nobody had shown an interest in the vacated premises.
Rents are, of course, higher in shopping centres, and the floor area was at least twice what they were used to. But the owners were in complete agreement: they wanted to do it. And they did not regret it, as 2018 saw them open their sixth restaurant on Nyugati Square, next to the famous clock, and the seventh in the Árkád shopping centre.
Moreover, they are about to complete the eighth restaurant in Győr, and have already completed the designs and secured the contracts for a new location in Buda as well as one on Corvin sétány. Meanwhile, their headcount has increased to 230.
Looking at this growth rate, they appear bold; but in fact, the owners and managers tend more to be cautious. For example, they have not set up a lucrative home delivery service so far because they have not found the right delivery partner and they do not want to set up their own. Now they have, however, contracted a new provider, Wolt, a startup that provides food courier services. They hope that, at last, they have found a partner who provides quality services, instead of one with couriers who just rudely toss orders in front of the customer’s door. Ágnes is clearly horrified by the mere thought of this kind of service. Wolt however offers verified, assessed, and continually monitored quality and uniformed delivery staff, meaning that this year, they can finally launch their home delivery service.
They are not only active in business, but also in terms of social responsibility and supporting the needy: they regularly make food donations on Klauzál Square in cooperation with the Menedék Egyesület (Shelter Association). This is by no means an advertising gimmick or a way to offer free samples—they prepare traditional Hungarian food to give to the needy.
Their future plans are even more promising than their results so far. They are first looking for locations and opportunities in bigger Hungarian cities and other major cities of the region. But they do want to accumulate a couple of years’ experience. While they have their own central kitchen and works in Budapest; other locations would require similar logistics to ensure the same quality and price level. Such quick expansion might also require further resources in a couple of years; they are, therefore, considering options like entering the capital market or going public. One of the tasks for the forthcoming one or two years is turning this medium-sized enterprise into a company ready to go public.