How Franco Noriega Built 15-sq-ft Fellini Coffee Into One of NYC’s Most Viral Brands

Alan Li (00:01)
Today's guest, Franco Noriega, is the founder of Fellini Coffee, one of New York's most viral coffee spots, now with over six locations in under three years. Franco has an extensive career as previously an Olympic swimmer, model, creative director, chef, singer-songwriter. There's probably a few more that I'm missing there. Franco, thanks so much for joining the Opening Soon podcast.

Franco Noriega (00:23)
Thank you Alan, it's a pleasure to be here.

Alan Li (00:26)
Well, we're really excited to dive into what you've built with Fellini. But before we do that, I'd love to dive back into where this all started and your childhood. Talk me a little bit through qualifying for the Olympics for 2004 Athens.

Franco Noriega (00:41)
I was a professional swimmer for a long time. Since I was 12 to like almost 17. ⁓ I did it, you know, like every day we trained like hours and hours. And I feel like that, you know, swimming background and being a professional swimmer and a professional athlete really led to many things in my life and the way that I do things in life, right? Like you, you learn early on discipline, ⁓ you know,

focusing on a goal and making it happen, having a timeframe in order to achieve things. So there's a bunch of things that are so important, so fundamental in your life, I guess as an entrepreneur later on that I learned when I was a kid. So ⁓ I went to multiple ⁓ swimming championships, the world championships, South American championships, and eventually the Olympics. I couldn't go to the Olympics because I was injured, but

But it was a very interesting and informative period in my life.

Alan Li (01:46)
Yeah, and Franco, you grew up in Peru, is that correct?

Franco Noriega (01:49)
Yes, I am Peruvian. My mother's Italian, but I am Peruvian. And ⁓ I grew up in Peru and I was in Peru up until when I was 17 years old.

Alan Li (01:57)
Okay. I, so I read about that. You, I believe you qualified for the Olympics, but then you got injured. Talk me through that experience at such a young age. I'm sure that must've been maybe traumatic, maybe something difficult to overcome because you worked so hard for this goal, right?

Franco Noriega (02:14)
You worked so hard for the goal. mean, there's, there's a bunch of goals that you have, right? So, ⁓ at the time I was also a, you know, this was kind of like the last, you know, of course, like the biggest goal that you have when you are a professional swimmer. But, ⁓ I guess I was so young that I felt that there was another opportunity coming. So I didn't feel traumatic at all. I just felt like it was an injury. I'll go into the next one. It's just that they happen every four years. So, you know, like, it's not like so easy that you go next year.

Alan Li (02:41)
Yeah.

Franco Noriega (02:44)
But it was good, it was kind of also, when you're an athlete, you love to win, but you also learn how to lose, which is also important in life. And I felt like that this was one of those lessons, right? Like, you know, that you can't have, sometimes you can't have it all, or you can't have things that you really want, that you're working for, but then you just move on quickly and you move into the next goal that you have.

Alan Li (02:52)
Hmm.

⁓ no, it's fascinating. I think people that perform at such elite levels at such a young age, ⁓ there's probably a lot of lasting lessons that carry throughout the rest of your career. And let's go through a little bit of that. So, ⁓ what did you do after swimming? It seems like you did some modeling. You were also, ⁓ learning to be a chef and then opened a couple of restaurants. Walk me through the next few years.

Franco Noriega (03:36)
So, ⁓ mean, you know, the thing with swimming, is a great sport, of course, but it's more of a sport. It's a discipline, right? It's not like you say, let's go play swimming. You go to swim, right? So you're not playing anything. You're like looking at this black line for hours at a time. you're, it's almost like meditating really. ⁓ There's a bunch of, you're always in your head. You're not talking to anybody. And this goes on for like three or four or five hours a day.

A big part of your day really is being quiet with yourself, with your thoughts. So it's great, but it's also boring. And at the same time, I was like, you know, I've done this for like five, six years. I was tired of it. So at 17, I retired and I was excited to get out of, you know, out of this sport and also out of Peru. You know, I was lucky enough that when I was a swimmer, you know, almost every month I would be somewhere in the world, right?

competing or training or whatever reason so from a very early age I was really outside of of my hometown in most of the of the year, you know, I was You know also as a swimmer you have these exchange programs where you live abroad for certain periods of the year where you train with different teams and then that really was part of my life So I lived in Brazil. I lived in Mexico. I lived in Argentina I lived in Miami. So I was always in different places

So when I retired and then I realized that I was gonna be in Peru, I was like, there's no way I need to figure something out to get out of this. Cause I had been already leaving for so long. So I wanted to be an actor and ⁓ I almost like right away, I was like, I wanna be an actor in New York. So I spoke to my parents and they were like, look, ⁓ if you audition in a certain schools and you enter the schools, that's great, then you can do it. But if you don't enter the schools,

then we'll never hear about acting again until you finish your business career in Peru. So I prepared myself and I was able to audition to different schools in New York and I got in and that really changed my life, right? Because, you know, at 18 I moved to New York. I feel like, you know, at 18 years, I mean, you're pretty much grown up, but you're still growing up, right? Like you're still, so in, you know, half of my like later, I guess, you know, like younger,

period in my life. grew up in New York. I've been here for 20 years now and I felt like I came here super young. Now, you my sister, she's 18 and she came to New York when she was 18 also to study at NYU and ⁓ I see her and I'm like, wow, that's young. You know, I moved to city at a very young age. It's different for her because she has her older brother living in New York, but at the time I was alone. ⁓ So anyway, I moved to New York, study acting. went to American Academy of Dramatic Arts ⁓ and

Alan Li (06:21)
You

Franco Noriega (06:35)
You know, it was a two or three year career. I did a two year and at the end of my two year career, I was walking at Soho one day and I was discovered by this photographer, Mario Destino at the time. He was a huge photographer. He's like, hey, are you a model? And I was like, yeah, even though I wasn't, but it's like, can I snap some pictures of you? I said, yeah, for sure. So we went to the lobby of his hotel. He did a couple of pictures, like Polaroids.

I don't think there was.

Alan Li (07:05)
Did you recognize him when

he asked you or was that after the fact?

Franco Noriega (07:10)
No, no, I don't think I recognized him to be honest. mean, I, maybe I just, no, I don't think so. I just felt like he was a big photographer or whatever, but I didn't know exactly who he was. So, ⁓ he did a couple of pictures of me and, next thing I know, ⁓ two weeks later, I am the face of Dolce and Gabbana. We're flying to London doing this campaign. ⁓ I signed a contract.

Alan Li (07:13)
Okay.

I

And you had

never modeled before then.

Franco Noriega (07:36)
I mean, I had modeled in Peru, like some local brands, I guess, but nothing like major, know? like really nothing like that to the level of what I was doing. So ⁓ that really changed my life. Like that was a big moment that changed and shifted everything that I was doing because, you know, when this happened, then, you know, I was able to sign with an American agency for modeling. I really wanted to stay in New York.

Alan Li (07:39)
Okay.

Franco Noriega (08:07)
even now, but you the time it was super hard, like you needed to either get married or you needed a working visa and like as an actor, it's very tough because you know, you need to, somebody really needs to believe in your talent and when you're that age, you kind of need to land a role very early on in Hollywood or something for them to give you a visa. So there were a couple of things, hurdles that I would have needed to go through.

Alan Li (08:13)
Hmm.

Franco Noriega (08:32)
⁓ and this changed, they gave me a green card basically, like because I was a model and you know, I started working with all the European fashion houses and I did London, Paris, Milan, Sao Paulo, New York. Like I did the whole thing for like a good 10 years. and it was amazing. It was, it changed my life. It was, changed my perception. I was able to, I was exposed to very high levels of taste, which now I translate into my business. ⁓ you know, so.

many things were very formative also at the time. guess, know, I also, know, everything comes full circle, right? ⁓

But at the time also like, you, you need a lot of discipline in the modeling business, even though, you know, it's super glamorous and cool and fun. There's a bunch of things that, you know, you need to wake up early. You're always on red eyes and you sleep very little and you're always on time changes. ⁓ and a lot of, and of course you are, you know, partying a lot. So a lot of ⁓ people lose themselves in this business, right? Like they, a couple of years go by and you know, the drugs.

come in and the poor sleep and the temptations. And I guess because I was so focused and I was so disciplined already from coming from swimming, ⁓ where I was also waking up at four in the morning, where I was like traveling nonstop, it felt like I was kind of following the same lifestyle, just totally different. There was no sports involved, but there was a lot of what I was doing already. So.

I was able to save some money to kind of think what else was I doing. But after 10 years, one thing that happens with modeling is that with men...

There doesn't exist like the male supermodel, right? It's only women supermodels one of the only businesses in the world where women make more money than men ⁓ And even though men work up until they are 40 or 50 or 60 years old doesn't happen with women ⁓ The career is very long, but the the pay is not as high so So the ceiling is very low and it's very you know once you do Dolce & Gabbana and Hugo Boss and

Alan Li (10:45)
It's a low ceiling.

Franco Noriega (10:51)
Calvin Klein and all these big brands, it's almost the same jobs and you're doing the same and it doesn't really change. So for, you know, my twenties, it was amazing. But by the time I hit 26, 27, I was like, okay, this is not changing. It's not evolving. I'm doing this great campaigns, but I'm a very ambitious guy and I wanted more, right? So I was okay. I need to do something else. So I come from a family of restaurateurs. My parents in Peru owned a chain of bakeries that it eventually

sold. So I and you know, Peru is a very gastronomic, you know, country in Latin America. So we are very much exposed to all these things. So I was like, OK, I need to do something else and it might have to do with food. So at 26, I went to I went to International Culinary Center and I studied to be a chef, which is basically a year. Right. It was like a fast track program. I never really wanted to be a chef.

Alan Li (11:28)
Yes.

Franco Noriega (11:51)
in the kitchen, but I kind of wanted a change of career slash I wanted to understand what being, you know, like a chef meant so that I could actually, you know, manage whoever I was, ⁓ you know, hiring, let's say. So I went to school after a year, I graduated and I opened my first restaurant.

And that is Baby Brasa. ⁓ It was a hole in the wall in the lower east side on Allen and Delancey. It only seated eight people in the bar. There were no tables and chairs. It was literally a bar. And it was rotisserie chicken with sides. I was, you know, I was self-funded at the time. I was lucky enough that, you know, I invested all of my savings into an Amazon stock that six months later quadrupled in like insane.

Alan Li (12:40)
Wow.

Franco Noriega (12:41)
I had put every single penny that I had in that stock randomly because a friend of mine kind of in a dinner table said like, Hey, Amazon is going to explode. need to put your money. I mean, thank God it was great. And it was great advice, but it could have also gone south and I could have lost everything. But I was like, I guess naive in the, in the level where I didn't really know investing so well. I was like, I'm going to put everything that I have and it quadrupled. And I'm super happy for that because for that reason, I was able to open my first restaurant.

Alan Li (13:08)
Wow.

Franco Noriega (13:11)
with debt free and it was great. had no investors. ⁓

Alan Li (13:15)
⁓ Listeners,

this is not financial advice, obviously, ⁓ but these things can happen too. Yes.

Franco Noriega (13:22)
But

financial advice is for sure invest because you need to invest a portion of your savings in the stock market because it's proven. And even though now with much more knowledge, I still invest in the stock market and I still am investing in crypto and you invest in whatever you think is worth, but you definitely need to move your money. cannot just be sitting in the bank. And that's something that I learned also early on with my parents. They were very much reluctant of having money in the bank, sitting in the bank. It's like, if you have 10, 15, 20, 100K in the

Alan Li (13:25)
Yes.

Franco Noriega (13:52)
What

is that doing for you? It's doing 1 % a year in interest. That's nothing. The stock market minimum gives you 7%. In my case, it gave me 400 % return, which is insane, but you know, at least it could give you 10%, you so you definitely need to move your money. So anyway, long story short, I opened this business and it was a success since day one. It was a success for many reasons. Because first of all, because the rent was $3,500 and I found this crazy rank. It was super small.

So the overhead wasn't high payroll couldn't be that high either because it was you know, a very small location so for many reasons it worked and ⁓ and you know, I was

Alan Li (14:34)
How did

you get the word out for the restaurant? Was it through your personal social media or was it just from passersby?

Franco Noriega (14:42)
I think it was a mix of many things. I was a model at the time, so I had a hookup with a bunch of medium outlets. I remember GQ and Vanity Fair and Vogue, they all covered the story, like model turned chef. At the time, I think now it's a little more normal with social media. At the time, it didn't exist. So to have a chef that looked like a model was totally opposed

right? ⁓ kind of like images in your mind, because you think of a chef, like a guy that's not in shape, maybe a little fat, you know, and like not looking like doesn't have a six pack, you know, and at the time I was a model, so I had a six pack and I still do though. But anyway, it was like kind of that and that became a story to cover. ⁓ So we got a lot of medium outlets. And at the time social media kind of started. So yeah, we did a combination of everything.

Alan Li (15:28)
Ha

Franco Noriega (15:42)
and it worked, it just worked. ⁓ We also had a low price point. Rotisserie chicken was something that people were kind of like used to, I guess. Like you get rotisserie chickens at Whole Foods, know? So it's not like an idea that's kind of out there. So anyway, we did that ⁓ business. ⁓ opened that in 2016. 2016,

Alan Li (16:00)
Franco, what year was this? This was 2016. Okay.

Franco Noriega (16:07)
⁓ so anyway, we opened that business and then, you know, it was so good that I was, need to scale this. And this was the moment where I felt that it was the first time that I really started, you know, this conversations with investors. And I was really growing up in my entrepreneurial business where I needed to fundraise at least a million dollars, right? Like it cost me, ⁓ $250,000 to open this first business. Again, I did it alone, so it was fine, but to go into a second location, into a

I needed investors. So I started fundraising. for those of you who are starting to fund raise or who have fund raised, it is a big process, you know, they say like out of like, you know, the hundred percent, maybe 1 % is going to say yes. So you speak to 10 people and maybe not even none of them say yes. You need to speak to like 30, 40, 50 people for one of them to say yes. And it was my experience at the time. ⁓ spoke

to so many people and everybody tells you like, love your idea, it's great, but when you say, okay, let's deposit the money, then something happens, know, they needed the money for something else, somebody died, they're moving countries, like whatever, it's always an excuse. But I was able to find a group who fundraised, who basically invested on this idea to make Bayer Raza bigger. So I fundraised half of it, I think it was like $500,000, $600,000, the rest I put myself, and we went into the second location

It

was a much bigger location on the corner of 7th Avenue South and Perry in the West Village.

it's, it, it sat like 120 people. So if we went from eight seats to a hundred seats, uh, you know, in a second location, and these are things that I, mean, I wouldn't do ever again. Um, I was also naive. So I thought that, you know, maybe because I was operating and it felt so easy and breezy, then this was going to be the same, but it's not the same because you're going from $3,500 to $35,000 in rent and less property taxes.

Alan Li (18:12)
Wow.

Franco Noriega (18:14)
as a crew of eight or 10 people just to turn the lights on and make the restaurant function. So there are so many things. And I scaled the concept from rotisserie chicken to rotisserie chicken, but it didn't translate as well from the Lower East Side to the West Village because the West Village is a more high net worth ⁓ neighborhood and they are not willing to eat chicken every day. So I needed to now bring fish and steak and vegan proteins.

So there was a bunch of things and it was a very hard, hard, hard learning curve. I almost went down a couple of times throughout my experience of those 80 years. And I was lucky enough that eventually I was able to, know, you know.

switch the business and I went to Peruvian food. ⁓ But a couple of things happened during this journey. So my, my, my idea always was to open a chain. I always wanted to scale the business to make it a chain and scaling Peruvian food was almost impossible. And scaling a restaurant that big was almost almost impossible because it's too big. mean, there's a bunch of people that do it. There's Boucherie, this French place that has multiple locations. There's, know, of course,

incredible tower group that has a bunch of locations in the do. So there's people that do it, but in my experience it was a lot more difficult and I felt that I was almost pushing so hard just for this business to happen. ⁓

Alan Li (19:45)
And Franco, from going from the eight seater to the 120 seater, what gave you that confidence? It couldn't have just been complete naiveté. must have been there was good business coming into the Lower East Side and you thought you could replicate that on the West Village. Was that it? That's a big jump. It's just naive. Okay.

Franco Noriega (20:03)
Yeah, I was naive to be honest. I was naive and

kind of like not like knowledgeable enough because I wouldn't do the jump knowing what I don't know now ⁓ to that level. Like it's just make no sense. But I felt narcissistic, I guess, at the time I felt I could do it. And, you know, as an entrepreneur you're and I think it's very, it's a very, it's a key ingredient that you need to have in order to make it is that almost this ⁓ kind of like delusional

way of thinking that you know, everything will work out, right? And that's why you risk it all. That's why you risk all of your savings and you open a restaurant or you open a cafe or you open whatever it is you're gonna open because you go into the business thinking that it will change your life. you know, funny thing is most, think the statistics is like 80 % of the time it doesn't work. Only 20 % works for entrepreneurs. But we have this feeling and I feel like

it's such a key ingredient because it's impossible to be and to risk it all and go full at it if you don't have this delusional way of thinking that it's going to work out. ⁓ So of course I had it and I went for it and you know it worked out eventually right but I had very tough moments where I was about to go bankrupt, I was about to close, I was like I've had so many weeks where I had no money for payroll on Friday and Monday I had

to

pay and I was praying to the gods for the weekend be like a good sale so that I could actually pay my employees. And I've had many of those situations throughout my entrepreneurial career. But then eventually the pandemic happened.

And ⁓ it was the best thing that happened to us. were at a, we are in the West Village, so we had this crazy frontage, 50 feet of frontage, which at the time meant nothing. But at the pandemic, when the pandemic came, it changed everything because you could do outdoor seating and you couldn't do indoor seating. And the minute that they said that you could put tables and chairs outside, we could do 150 people outside. So we basically had a bigger

restaurant outside inside that inside and on top of that everything was closed because you know most of entrepreneurs didn't react quickly enough and not everybody had an out had a frontage not everybody had the outdoors so the minute they say yes we put

tables, chairs, palm trees, and we brought this, you know, sensation of the beach and dreaminess and kind of ludic, ⁓ you know, restaurant outside of New York and it worked and we were beyond successful. ⁓ We made more money than we ever did in the, you know, five years of being a business owners, you know. ⁓

We were open for like two and a half years after the pandemic and we, it was great. It was, was a very good time. While most of the restaurants were suffering and were closing, we were having like the best numbers, right? ⁓ Also at the pandemic when before the whole outdoors, ⁓ we also had a catering business. So we reacted quickly and we were serving all of the hospitals in New York. We were doing burgers.

Alan Li (23:06)
Wow.

Franco Noriega (23:30)
and wings, nothing that had to do with our type of cuisine, but it was like reacting to see where the business was. And it's funny because in moments of crisis, and I feel like this happens to all entrepreneurs, whatever crisis, you're always living in some type of crisis. ⁓ You need to react quickly and understand where is the money moving, right? Because the money's always there. Money doesn't stop. It's just like sometimes it changes forms and it changes ways of coming in. ⁓ And for us, you know, we

Alan Li (23:58)
Mm-mm.

Franco Noriega (24:00)
saw that, you know, there was like, you know, the demand wasn't restaurants, but the demand was in hospitals, because you had 20 hour shifts for doctors that needed to be fed. So we we, you know, partnered with City Harvest, we partnered with God's Love We Deliver, so that we can actually start putting meals away. And then eventually, we opened the outdoors. So we have the catering business plus the outdoor business. So we were like banking a lot. ⁓

Alan Li (24:26)
Mmm.

Franco Noriega (24:28)
And this takes me to 50 minutes.

Alan Li (24:28)
How are you all able to be so nimble? Were

you just, you know, driving the driving force behind all of this and just figuring out like what's going on? We're in survival mode, the pandemic's going on, and you we need to figure out how to, you know, make money to survive or?

Franco Noriega (24:39)
you

Yeah, of course. mean, we were always looking at ways to look, I mean, of course you need to still maintain your business. ⁓ And we refuse to give up.

refused to say this is it, we're going to quit, we're closing now. We were like, no, we need to figure it out. So every day, of course we had crazy stressful days, but the moment that we saw some light at the end of the tunnel, we were going to take that route. And hopefully that's going to lead us to a bigger and broader and sunnier day. And it did in the pandemic moment with ⁓ catering meals it did, and then eventually with the outdoors. And that really took me to Fellini, which is a crazy transition. ⁓

so busy with the restaurant that we ran out of tables and chairs on the weekends. So my neighbor was a pizza place. ⁓ He'd been open for 35 years. Like imagine a pizza by this lies kind of like old and like never renovated New York style pizza. And ⁓ I would cross the street and be like, Hey, I need tables and chairs. And he would rent chairs for $5 and tables for 15. So I would basically rent his tables and chairs for a couple hours whenever I had rushes.

and just literally give them back whenever I was done. And this happened every Saturday and Sunday. ⁓

So we developed a relationship aside of, you know, being neighbors for like eight years, we developed this relationship where we knew each other. And eventually, you know, he said, you're doing so well, why don't you take over? I was like, take over what? Like this pizza shop, maybe you need it. So I was like, okay, this kind of like, I kept this in my mind. And with the catering business that we had, we were growing so much that I needed an extra kitchen. And, you know, I could have done a ghost kitchen in Times Square, which is what I have now.

But at the time I didn't want to go to Times Square and also have the catering coming out of the West Village because I had to control two separate operations. I eventually went to, ⁓ I bought the restaurant across the street and bought his lease out and operated this pizza shop, but I was using the kitchen. So I had Baby Brass across the street, which was this nicer restaurant. And then the pizza shop across the street, which I was basically selling the same style pizza that he had. But

I was using the kitchen for catering. And then one day I was getting the trash out and then I go where they store the trash for 35 years and I realized that it was a window and it was the corner of the building and it was this window on Perry and 7th and I was like there's no way that this is a window and this is where they store trash. I said this has to be whatever but a trash storage. This needs to be a business. Like I need to do

some type of cell whatever cell charms cell juices cell something because it's such good exposure it's a corner of the building it's a beautiful window and i'm basically i can put this trash in the back of the building and this could be something else so was starting to thinking about what what this could be at the time i didn't drink coffee now it's almost every day but

Alan Li (27:54)
the time you didn't drink coffee.

Franco Noriega (27:55)
didn't drink coffee. I didn't drink coffee in New York literally 18 years before I opened Fellini. And so I didn't think of...

Ofellini as a, ⁓ I didn't think ofellini as a, you know, as an option. ⁓ So I started thinking maybe juices, maybe I could do a juice bar, but I needed a lot more equipment. So I was like, the only thing that fits is a coffee machine. So I'm going to do coffee. So I ⁓ got together with a couple of people that were very good. We started doing some blends. had no idea for me to coffee always tasted bitter and horrible.

so I had no idea what is good coffee and what's bad coffee. So I got together with some very good professionals and we opened Fellini. I decided to open this. Yeah, I'm also happy you.

Alan Li (28:46)
Franco, you're also half Italian.

and

you didn't drink coffee, that's incredible.

Franco Noriega (28:50)
I didn't

drink coffee. Yeah, I don't know. I almost felt like I went, you know, against, I mean, I did drink green tea a lot, but I don't know why. I felt like New York run on coffee and it almost made me cry that I said I don't drink coffee. It's so dumb, but I didn't and it was cool. And I didn't really like the taste because it really is an acquired taste. So I didn't do it and whatever. So I decided to open Fellini and because it was so small, it's only 15 square

It's the smallest coffee shop in the city. ⁓ I decided to do it luxury. I was like, I'm gonna go all out and I'm gonna do wood. I'm gonna do like marble. I'm gonna do something like ⁓ incredible. wait a second,

Alan Li (29:37)
Yeah, no

worries.

Franco Noriega (29:38)
⁓ And you know, it was ⁓ super luxury, but it didn't cost me a lot of money because it was so small. long story short, that's how Fellini started and then the Fellini evolution has been crazy.

Alan Li (29:46)
Yeah.

it.

And sorry, the Fellini, you noticed that because you bought the lease out of what is like bar Fellini now? Was that the pizza restaurant that you're talking about?

Franco Noriega (30:02)
No, the pizza place was called Rivoli. Rivoli. ⁓

Alan Li (30:06)
⁓ okay. And that was like close

by, separate from the building where the seventh street Fellini is.

Franco Noriega (30:14)
Wait, what's your question? What's your question?

Alan Li (30:16)
My question

was the pizza restaurant that you took over, where was that located?

Franco Noriega (30:20)
It is literally across the street from Baby Raza on the corner of 7th and Perry. So I was in 7th and Perry, but on the other side of the street. And then I took the corner across the street on 7th and Perry. It's just that this restaurant, because it's in the corner, the whole restaurant is the corner, but the actual point, the little, like the actual corner, right, was trash. And they had trash stores for 30 years.

Alan Li (30:31)
Ow.

They used to put trash there.

Wow, that's incredible.

Franco Noriega (30:49)
And when

I started operating, because I took over the restaurant and I didn't care about the business, it was basically petty cash to have a pizza place, but I was really in it for the catering business side of it. I was using the kitchen. Then I didn't really care so much about the looks, the place, whatever. I just painted it, did a paint job and kept operating the way it was. But then one day I actually went to the trash storage and when I saw it, I was like, there's no way that this could be trashed, like trash.

Alan Li (31:18)
Yeah, I see.

Franco Noriega (31:19)
there's some way. So anyway, this is how I've started. ⁓

Alan Li (31:19)
Yeah. Okay. And then for listeners ⁓ who haven't been to Fellini ⁓ in the West Village, it's literally a triangle that's, as Franco mentioned, 15 feet with, I believe there's a window on like, you know, facing the seventh ave and it's connected to this larger building, but it's one of the most viral places to get coffee and everyone is always there.

Franco Noriega (31:46)
you

Yeah, it has two windows actually on both sides and it's really narrow. You can only fit two people inside, right? The two baristas. ⁓ And it's funny because the concept of Fellini with having a window came about, I mean, now we have windows at all of our locations, but the reason why it became so much of the DNA of Fellini is because we only could serve coffee through a window because there's no way for people to come inside. So we needed to break that wall, make it a window. And that's how

Alan Li (31:48)
Or two windows, yeah.

Franco Noriega (32:16)
started serving coffee. ⁓

Alan Li (32:19)
And Franco for

like the branding of Fellini, the name, the concept and all this build out, you know, how long did it take you from when you were like, Hey, this should be something different to opening.

Franco Noriega (32:30)
⁓ It was pretty quick. So the reason why it's called Fellini is because my grandmother, she's Italian, she wanted to be an actress, reason why I also wanted to be an actor is she always talk about like how she would have been the next Sophia Loren, but she wasn't because her grandparents didn't want to. it's funny because when she was a kid, like 19 years old or 18, she was from Milan, she went to Rome to do a casting for Federico Fellini, which is this Italian director for La Dolce Vita.

And she did the casting, she was selected, she went back home so excited. And they were like, no, that job, being an actress at the time, it was viewed as basically very low for prostitutes. were like, you are not gonna get out of this house until you get married. So she got married, eventually she left home, but she had this frustrated dream of being an actress. ⁓ And we have at all of our locations, my grandmother's picture for the casting of Fellini. ⁓

So she's, that's my grandmother. ⁓

Alan Li (33:30)
that's your grandmother, I see. And then you

have your famous drink, La Dolce Vita.

Franco Noriega (33:36)
Exactly, have the dolce vita drink which is basically like a caramel latte. ⁓

And that's how Fellini started. it was quick. ⁓ It took us maybe like two months because it was so small. So there was not a lot of construction to do. And then, know, it was such a success that we opened two or three months after we opened our Soho location. Soho was extremely successful. Three months after we opened Chelsea. Chelsea was great. That's when the brand started getting kind of New York recognition that we are not owned.

Alan Li (33:48)
Yeah.

Franco Noriega (34:12)
only in one location, maybe New York, West Village, Soho, then Chelsea. Then we renovated ⁓ Rivoli, this not nice pizza place, into Fellini. So that was our biggest location in the West Village. Now it's all of it, it's Fellini. And that's actually the only restaurant that we have because it's a full kitchen. So then we did West Village. ⁓ Then we opened Upper West Side. Then we opened Meatpacking.

and we just opened last week ⁓ the upper east side. So every three months we're opening a new filming location.

Alan Li (34:50)
That's incredible. And we love supporting y'all with your mirrored signs. we always see the people taking photos, which is great. ⁓ What was the rent for the 15 square feet, Fellini?

Franco Noriega (34:55)
Yes, and we love it because people love it and it's such a viral moment.

It was nothing crazy, but I don't want to say how much, but it was like not that expensive, but also not cheap because it's the West Village.

Alan Li (35:16)
Okay, because I know, I don't know if you know this photo spot called Memento a few blocks down. There's also a tiny space also on Seventh Avenue. We interviewed her. Yeah, she her space is also 15 square feet and she's paying I think five or 6000 for for her space.

Franco Noriega (35:24)
no. Yeah. yeah. Okay.

wait, sorry, no, how much was the space for the corner? It was mine! This was part of the building. Yeah, was like, that's the thing. I was taking trash outside and I just replaced the trash for a coffee shop.

Alan Li (35:42)
⁓ that, cause that was a trash room.

⁓ yeah. Okay. Cause yeah, no one owned it before. That's true. Okay.

Franco Noriega (35:55)
Yeah. That's why it was

such a misused space, because exactly, not exactly what you're talking about, momento. And yeah, it's always village. everything can be used. New York is the most insane place for real estate, right? Anything could be a moment, either a photo moment, a selling moment. So having a storage is such a misuse of space.

Alan Li (36:21)
So for brick and mortar owners out there, wherever you're storing your trash, maybe there's something you could do with it. ⁓ For Fellini, now that you've had six locations, how was this funded? Was it all self-funded? Did you raise funding for Fellini? And how are you balancing that with your other endeavors? Or is Fellini your sole focus now?

Franco Noriega (36:27)
Totally. Totally.

No, Feliz is my sole focus. So basically I closed Baby Brazza, installed that lease. transferred, I still have the catering business. So I have a ⁓ couple of ghost kitchens in Times Square. ⁓ So the catering business is still going. ⁓ then, you know, once I realized that Fellini was really the scalable business that I was always looking for, I was like this Baby Brazza thing, it had its run, the pandemic was amazing, ⁓ but it's not scalable. I didn't want to, it felt like it needed a

lot of my attention. So I let that go and now I'm only focused on Fellini. I have no partners or investors. ⁓ I'm bootlegging myself for every location that we open. ⁓ was very hard on the second or third location, third and fourth, between the second and fourth location, it was very hard to bootleg because you only count with one or two cashflow, know, ⁓ kind of like incomes.

Alan Li (37:20)
Wow.

Franco Noriega (37:39)
But and at the time it's funny how things change, you know, quickly for entrepreneurs all the time. But at the time I was looking for investors, right? I was looking to raise some money in order to keep growing with Fellini. And, you know, funny enough, I opened the fourth location and I had some people aligned and I was like, you know what, maybe I could do this on my own. And I did the fifth location. And then now we're on our seventh location and it's feeling more and more easier to do because, you know, now

have seven different incomes that could build the next location. And the more, ⁓ you know, I did like this, you know, very,

very kind of like interesting cash flow metrics between, when do I, you know, how many locations could I open while more locations come into the equation? you know, seven is kind of like this moment where everything changes. ⁓ then I know basically I don't need ever to think about, you know, raising capital or even going into debt. So we are at the moment right now, we're opening our next location on 24th and Park Avenue. That's our flat iron location.

Alan Li (38:35)
Hmm.

Franco Noriega (38:47)
and will probably be open hopefully by the end of May. ⁓ yeah, so yeah, I'm happy that I don't need to deal with investors because they are the pain in the ass.

Alan Li (38:48)
nice.

you had a deal

with it for baby brasa were you okay

Franco Noriega (39:01)
Of course, I had, and

that was also a huge learning curve in my life. I eventually bought all my investors and partners out of that business, but it was a struggle because, as an entrepreneur, you make decisions based on the health of the business and you are the only one that knows what's going on. And investors are just looking at numbers and they don't care about excuses or things.

So of course I always say like, if you are able to own your own business without having investors, that is like the dream really. ⁓ But if that's not the case, because of course you need to fundraise, then of course you need to do it and that's totally fine also. But yeah, I have no investors now.

Alan Li (39:40)
Yeah.

And Franco, I mean, there's so many coffee shops in New York City. What do you think makes Fellini stand out or how are you able to separate from the noise? it, is it the branding? Is the marketing? Is it you? Is it the combination? Like, what do you think is driving the success of Fellini?

Franco Noriega (40:01)
Look, don't think I honestly don't think that there's anything in the market that looks like Fellini. ⁓ Coffee is very utilitarian, right? You come in, it's normally a very simple, minimal everything like minimal wall, minimal design, very like, you you come in, you get your coffee, you get out. Fellini is totally different. It is totally designed. It feels like you're in Milano. ⁓ We invest a crazy amount of money on, you know, on each store. So

⁓ They cost a lot of money to build. We use a Ravascato marble. ⁓ We use wood paneling for all of the store. ⁓ We use Murano chandeliers that come from Italy. And it just feels that it is a totally different feeling. It's too expensive for coffee. So when you walk into a Fellini, you think that, wow, you're spending, you could spend a lot of money, but then you realize that you can get an espresso for $4.

You can get this lifestyle that is very, you know, opulent Let's say that it has nothing to do with coffee because coffee is the opposite and and you can be part of this Dolce Vita lifestyle for like, you know an espresso or a cappuccino for six bucks Of course, you can spend a lot more money We have signatures that are 12 bucks and and you know, there's food and there's a bunch of components So like the average ticket is clearly not four dollars But you can experience that for four dollars and I think that really

sets us apart because we are comparable to, let's say, New York restaurants, like let's say a San Am Bros or a Chipreani, but these are restaurants. We are a coffee chain. So we are giving you all of this, you know, let's say expensive vibe that you would spend 80 to a hundred dollars to sit in these places and you are spending a fraction of that. ⁓ So I feel like, you know, we are one of the first luxury coffees

in New York.

Alan Li (42:02)
Yeah, I always love getting iced Americanos and this is not just to pull your leg, but Fellini iced Americanos are one of my favorites in the city. It's delicious.

Franco Noriega (42:12)
Amazing

We take pride in our coffee blend. We also think, of course, the product is incredible. we have, ⁓ I've now become a coffee connoisseur. drink four coffees a day and I'm always drinking coffees at different locations, not only Fellini, but different brands, because I need to know how good the Fellini coffee is. And I truly believe that we have a very good coffee. So of course, having a good product is a big part of it. And ⁓ there's also a luck component, right? With every

Alan Li (42:24)
Ha ha ha.

Franco Noriega (42:43)
entrepreneurs being at the right time at the right place. I was reading something interesting at a business page on Instagram and it said that, you know, investors are now not only looking at how many products you sell when they want to invest in your business, because eventually I want out of this, you know, like not far away from where I am. I want to exit the business. So I'm prepping myself for that. But I was reading that investors are not only looking

to see how much product you sell now, but if the demand can sustain in time, right? Similar to what happened with Laboogooz, right? Everybody wanted Laboogooz, they were selling like crazy these charms that people put on their... Right, right. But probably you have one, but I don't know if you're buying another one anytime soon, right? You just bought it.

Alan Li (43:27)
Yep, yeah, yeah, no. I have one.

Now, I waited two hours

and I said this is the worst decision I've ever had.

Franco Noriega (43:39)
Right.

But at the time it made sense because everybody had it, you had the hype. So it's like, how much can you sustain? And I really think that, you know, the brand that we've created, ⁓ it's only two years old, but it feels that it's been forever. Like it's not like something that feels new. It's something that feels like it could, whenever you walk into a Fellini, I mean, this happened to me last week, whenever we opened the Fellini in the Upper East Side, we had two days opening and I was sitting there having brunch and I was like, it's incredible. This feels like this has been here for years.

And it just has two days, but the feeling, the textures, the way that people were sitting and enjoying and just the vibe that Fellini gives you, it almost feels like a vintage coffee shop, but it's totally new. mean, it had like hours of opening. So I think that that is something that you need to strive for as an entrepreneur to really make sure that whatever you're building is not a hype that is a moment, but it's something that can translate in time and that the demand will

sustained throughout a good period of time.

Alan Li (44:43)
Yeah. And Franco, talk to me a little bit about the future because you mentioned an exit, you know, how many stores do you want to get to before potentially exiting the business and who are the potential acquirers for something like Fellini?

Franco Noriega (44:56)
Well, I'm starting to have these conversations with some VCs. mean, are, you know, the idea is we're opening three more locations this year and maybe four next year. So by then we should be at around 13 or 14 locations. And that could be our first exit, right? I mean, it's not gonna be a full exit immediately, but that could be our first exit.

And also getting some money. at this point, know, I am, you know, risking all of my capital because even though I am growing, ⁓ you know, my accounts are very low because, know, all of the money is being reinvested in the business. because Philly needs extremely expensive, doesn't, it's not cheap to build. eventually I feel like by next year, we should have our first exit where I get to keep a good amount of money and use the rest of the money.

to bring us to 30 or 40 locations and that should value the company around 150 million. And then maybe I could do a second exit where I am out of the operation, keep a percentage for future growth, but you know, like cash out in a way and be out.

Alan Li (46:13)
Yeah. And then for listeners, ⁓ sort of what Franco is talking about is raising both primary capital and secondary capital, secondary buying out some of the existing shareholders, which is, I think just you Franco right now, primary capital is additive to the company to fuel the expansion. And this is very common in venture capital and fundraising, but ⁓ no, that's incredible. So is the model that maybe you are looking to sort of similar to like a blue bottle?

Franco Noriega (46:24)
This is it.

Alan Li (46:40)
where you tried to expand to hundreds of locations ⁓ throughout the US and even internationally.

Franco Noriega (46:48)
Yeah, I I think that there's a big opportunity in the market and we get so many requests to open Fellini almost all over the world. Japan, ⁓ France, Spain, there's so many people that they're telling me, I see a Fellini working so well in this market and I do think Fellini works well in a lot of markets. really do believe that. So I feel like the opportunity is incredible. Scaling coffee is

extremely ⁓ easy compared to Peruvian food because I don't need to teach you what you know ceviche is but I you need coffee I don't need to tell you like how great coffee is like even if it's not that great Which is not the case of Fellini, but even if the coffee is not that great You still need it for the energy. So you're gonna get it Conveniently wherever you are located like for instance, I live on 27th ⁓ and 7th Avenue and I have a Fellini on 22nd and 8th Avenue So just like five blocks away

Alan Li (47:23)
You

Yep.

Franco Noriega (47:49)
And it's my business, right? And I go to that location a lot for breakfast. But whenever I'm on the run, I go to variety that's on the corner of 26 and 7th, because it's two blocks away and it's two blocks shorter than going to Fellini. So this kind of teaches you like how for coffee, you're not really willing to walk four or five blocks. You're just going to the closest coffee shop around you. And this also proves the Starbucks theory that they could

Alan Li (48:02)
Ha

Franco Noriega (48:18)
open a coffee shop every three blocks because people walk a max of three blocks for coffee.

Alan Li (48:24)
I'm on 31st

and 6 and we have a Starbucks on one corner and the same block on the opposite end there's another Starbucks on 32nd.

Franco Noriega (48:31)
Great.

It

makes sense because the people I mean sometimes you don't even walk up like a block You know, like you if you have Starbucks there You're gonna go to that location and the demand is so big on some pockets in New York that that you could have I mean multiple a you know coffee shops and they are so busy at the same time So they are all doing great Of course, I also saw that this this metric a couple days ago that out of a hundred coffee shops only 20 %

keep open the first year, which is also crazy because, you know, it's it's a very small percentage. And if you think about, there's so many coffee shops that it also makes sense because the, competition is incredible. I mean, when, know, there are, in our Soho location, ⁓ I remember, you know, showing my dad, our Soho location. was so excited. was our second location. He comes to see it and we're walking the neighborhood, like literally two blocks around. And he's like, Frank, are you sure? Did you sign the lease? And I'm like, yeah, I was like, so.

said it. He's like, well, because you know, since you're signing whatever, but there's 13 coffee shops on the two block radius. 13. I said, are you sure this is a good place to open a coffee shop? Now I love competition because I feel like we kill it and you know, we, we almost are incomparable. And if I'm selling you a $4 cappuccino, which a $4 espresso, which is the same price as the other people, you're going to come to Fellini because we're going to offer you a lot more. So the more coffee

Alan Li (49:39)
⁓ man.

Franco Noriega (50:02)
shops the better for me. ⁓ But of course it's a big thing you know because ⁓ it's the competition is real and more in New York.

Alan Li (50:08)
Yeah. And Franco, I want to also touch briefly on your team to be able to support these types of expansion and sales ⁓ outside of, ⁓ you know, the people working at the actual locations. Do you have a corporate team that's helping think through the strategy and growth and marketing with you as well?

Franco Noriega (50:26)
Yeah, I mean, have, of course, we have the locations run by itself and have managers and all that, but we do have like a higher level team where we're constantly brainstorming and trying more and more to make the stores self-sufficient. We started using AI in most of our processes and systems, and ⁓ that is helping us a lot because it's giving us the ability to hire people that are not so

expensive ⁓ to run the locations because we're able to give them the information that they need as opposed to making them think with us. We're trying to making them think less and we are the ones at higher level who are thinking a lot more.

Alan Li (51:14)
and you're doing AI or you're using AI to help with that process?

Franco Noriega (51:17)
We're

using AI for most of our inventories, for most of ⁓ you know, how we control products. And, you know, we have a central kitchen for all the Fellinis because we don't have the back of the house at any of the locations. So before we use the manager's Intel and capabilities to tell us what they needed. Now we're sending them what they need based on sales, based on reports. And that is a lot of it has to do with AI. Of course, we still need the support of

Alan Li (51:37)
Hmm

and data.

Franco Noriega (51:47)
of

the stores, but that is giving us the capability not to hire four managers, but just to hire one manager. And that is saving us a tremendous amount of money in payroll. Cause you know, we, now we pay by the hour as opposed to pay a salary. So like there's a bunch of things that AI is doing for us. I am, I am obsessed with AI. I love it. And I'm happy that we are now, you know, I mean, I was benefiting on my private and personal life, but now I'm benefiting

Alan Li (52:08)
Same here.

Franco Noriega (52:17)
from it on my professional ⁓ life with Fellini and I'm seeing how that's saving us money, so I love it.

Alan Li (52:25)
I love that. Thanks for sharing that anecdote because we also leverage AI a lot in our businesses and it's been an incredible leverage tool ⁓ to do things a lot more efficiently. ⁓ Awesome. Well, Frank, I know we're wrapping up on time here, but I wanted to end this with looking back on your journey over the last 10, 20 years, even when you were swimming to opening Baby Brasa to now six locations at Fellini. Having the insight that you have now.

⁓ Is there anything that you would have changed if you could go back in time?

Franco Noriega (52:59)
If anything, the review would change. ⁓ I wish I discovered coffee sooner.

But.

Alan Li (53:06)
Funny stories, I also didn't drink coffee till I was over 30 as well. Yeah.

Franco Noriega (53:11)
no way.

We share that similarity. ⁓ Yeah, no, I don't think I would change anything, to be honest. think, you know, similar to what Steve Jobs says, like you connect the dots, right? And then eventually everything, you know, I also think that, you know...

Alan Li (53:15)
Yes.

Franco Noriega (53:27)
maybe if I discovered coffee sooner, I wouldn't have done what I'm doing. Baby Raza was also a big university kind of for me into making things happen. So I think like things happen for a reason, you just have to roll with the punches and keep growing. So I'm very excited where I'm right now. I feel like I have a key and this is like important for, I mean, it's exciting for, I love to grow. So it's exciting to know that I have

a product that is scalable enough ⁓ and it's working so I'm excited for where we are right now and for the future of course.

Alan Li (54:06)
Awesome. All right, Franco, well, if people want to follow along the journey or reach out, what is the best way for them to do so?

Franco Noriega (54:13)
Well, you can definitely you know follow felini it's at felini coffee on Instagram and my personal ⁓ Handle is at Franco Norja, NORHAL ⁓ I post like stuff constantly about our new openings and you know a little bit of the journey of What felini looks like before and after it takes us a month and a half to open a new store so ⁓ you see like the You know the change is pretty quick along along

those six weeks so it's a fun moment.

Alan Li (54:46)
Very cool. We'll include links to those in the show notes. And I also know that you have a million followers on Instagram. How did you do that?

Franco Noriega (54:52)
Yeah.

I mean, I don't know how, but I guess it had to do with modeling translated into being a chef, into living in New York. and yeah, I mean, it's just, it's all connected in a way.

Alan Li (55:10)
incredible. Awesome. Well, Franco, this has been a lot of fun. I love Fellini and what we'll be stopping by frequently as I have been. So appreciate you opening a lot more locations so I don't have to walk as far.

Franco Noriega (55:22)
Thank you, Alan. It's a pleasure. Thank you so much for everybody listening.

Alan Li (55:25)
Alright.