How I Made It: Ellen Chen and Mario Del Pero built Mendocino Farms by learning from mistakes

The gig: Mario Del Pero and Ellen Chen are the husband-and-wife team behind Mendocino Farms, a fast-casual restaurant chain specializing in gourmet sandwiches. The Studio City company has 13 locations in Southern California, with another two slated to open soon in La Jolla and Tustin (the latter inside a Whole Foods Market).

Del Pero, 44, is in charge of food development, while Chen, 43, handles marketing, finance and human resources. The couple split day-to-day operations.

In the blood: Both Chen and Del Pero come from entrepreneurial families. Chen, who emigrated from Taipei in 1977, watched her father run a Taiwan-based manufacturing firm. When Chen was growing up, her father would hop between continents, spending a month in Northern California with his family and another in Taiwan to watch over the business.

Del Pero’s grandfather founded a meat processing company in Marysville, Calif., which his dad took over (it sold to Cargill in the 1980s). At age 12, Del Pero began working for the family business, cleaning the outside of the plant. He eventually worked on the roofing crew and the processing line.

Del Pero said his father made sure he held positions that were considered “the worst” in the entire plant, to hammer home that their comfortable life was built on hard work.

“No matter what age, he made sure I was the lowest paid employee in the entire company," Del Pero said. “The running joke is the roof never leaked more than the year after I got done roofing it.”

Two paths: Thanks to an older sister already in the corporate world, Chen headed to college with a plan of working as a consultant — a job that would expose her to many industries. She studied economics at UC San Diego, and then went to work for Andersen Consulting, which eventually morphed into Accenture.

“I knew that somewhere in my career I would want to create something on my own," Chen said. “I also knew I wanted to work for some type of Fortune 100 company to be able to learn.”

An international relations major at USC, De Pero was destined for law school — he had already been accepted into a few law schools, and his father was pushing for a career that was more stable than the entrepreneur’s life. Instead, Del Pero, anxious to avoid corporate life, went to work for a friend’s father at Sharky’s Woodfired Mexican Grill. He started as “the bar back’s bar back,” and eventually worked up to director of operations, Del Pero said.

“My dad had every intention of not wanting me to be in the family business,” he said. “What they didn’t realize was that in every aspect prior to college, they were injecting the entrepreneurial bravado in me.”

Bento: By age 25, Del Pero had saved about $80,000 — enough, he thought, to strike out on his own. Along with two business partners, he opened a Manhattan Beach restaurant called American Bento Company, a teriyaki joint that riffed off the short-lived bento lunch box craze.

After six months, the restaurant was teetering on the edge of bankruptcy. His partners bailed (one, ironically, ended up going to law school and now represents Mendocino Farms). Del Pero asked his younger sister for a $10,000 loan — money that went toward revamping the concept, including a name change to Skew’s.

“I had to get a loan from my 20-year-old sister," he said. “I was paying all my team members from my credit cards. I was an inch from bankruptcy. I probably had two months left.”

The name change worked, and he soon opened a second Skew’s in downtown Los Angeles.

Working relationship: Chen and Del Pero met in 2000 when Chen’s friend was dating the “unbelievably handsome” manager at Skew’s, Del Pero said. Chen’s friend begged her to come out one night to entertain Del Pero so she could get some one-on-one time with the manager. At that point, Chen was taking time off from work and contemplating her next career path.

Chen eventually came aboard as an investor. The pair also started dating. They acknowledge it could have gone badly, but luckily it worked out (the friend and manager, however, lasted for only a few dates).

“When we started dating, she told me, ‘If we break up, I still own 50% of this thing,’” Del Pero said, laughing. “I actually married my investor.”

Skew’s to sandwiches: In 2004, Chen was pregnant with their first child. She was also running the downtown Skew’s after the general manager quit, while Del Pero was managing their third location in Westwood. The small chain was eking out a minor profit, but they decided a change was needed. They sold Skew’s, intending to sink that money into a new venture.

“We were living in a tiny apartment,” Chen said. “I said ‘If we are going to continue in this business and have a family, we have got to do something different.’”

After kicking around ideas, including better Mexican and better burgers, they finally decided on sandwiches. They saw an untapped market between Subway sandwiches and boutique eateries such as Joan’s on Third and Dean & DeLuca.

“We thought there was a real opportunity to be right in between — to have a gourmet high quality but with the volume to sell at $10,” Del Pero said.

A big chunk of the produce comes from Scarborough Farms in Oxnard. Sauces and other ingredients such as pickles are made from scratch.

Mentorship: The first location, in downtown Los Angeles, across from the former Skew’s, was a hit from the start, they said. But as the chain slowly expanded, both Chen and Del Pero said they got invaluable advice from mentors.

An accountant in the early days taught Chen how to go over the books to make sure the company was on a sound financial footing. Tom Simms, of Mimi’s Cafe, urged them to open in suburban neighborhoods, which cater to an entirely different audience, Chen said. John Mackey, co-CEO of Whole Foods, also offered guidance when the grocery giant took a minority stake in Mendocino Farms last year.

“They help you avoid mistakes based on their own mistakes,” Del Pero said.

Pivot: They offer this advice to aspiring entrepreneurs: Reflect on your failures and make changes accordingly. A big portion of Mendocino Farms’ success, Del Pero said, can be attributed to what they learned from Skew’s, which started out too niche, too urban and too small.

Del Pero said they have also made many adjustments to Mendocino Farms over the past decade, driven often by customer feedback.

Off-hours: Chen and Del Pero say that they love taking research trips with their kids, Joe, 11, and Ella, 9, which revolve around eating. Chen said they have tried to make it a priority to find hobbies that they enjoy. Del Pero, for example, is getting back into golfing.

Follow Shan on Twitter @ByShanLi

An earlier version of this article stated that the meat processing company owned by Mario Del Pero's family was based in Yuba City, Calif. It was based in Marysville, Calif. Also, Del Pero was accepted into a few law schools, but he was not admitted into Berkeley Law.
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