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Rock-Solid Restaurant Operations Fuel Traffic · Choppin’ It Up by Bloomberg Intelligence

0:16
Speaker 1: Welcome to Chopping it Up.
0:18
Speaker 2: I'm your host Mike Halon, the senior restaurant and food
0:20
Speaker 2: service analyst at Bloomberg Intelligence. Today we're joined by Ray Johnson, Founder,
0:25
Speaker 2: president and CEO of Rec's Restaurant Consulting Company. Thanks for
0:29
Speaker 2: doing us Ray.
0:30
Speaker 3: Thank you. Mikeel I'm so glad to be here.
0:33
Speaker 2: Good stuff, man, I'm glad I've got to meet you
0:36
Speaker 2: at the Prosper conference. Shout out to David Job and
0:40
Speaker 2: the team over there last August. You were one of
0:45
Speaker 2: the highlights of my trip.
0:47
Speaker 3: Well, thank you, I tell you David and Luke I'm
0:51
Speaker 3: going to shout him out also, just two great, great
0:54
Speaker 3: people in this industry and have a feign desire for
0:57
Speaker 3: this great industry of ours. Yeah. I love meeting you
1:01
Speaker 3: and the team and some of the people we got
1:03
Speaker 3: to meet there and Millie Island was awesome. Looking forward
1:07
Speaker 3: to next year.
1:08
Speaker 1: Yeah for sure. All right, let's let's jump in here.
1:12
Speaker 2: Man. Why don't you you know, you have a great
1:14
Speaker 2: career background. You worked at some fantastic brands over the years,
1:18
Speaker 2: So if you could tell the audience a little bit
1:20
Speaker 2: about your you know, career past.
1:23
Speaker 3: All right, Michael so Reda Didger's version of my great
1:27
Speaker 3: career in this great industry. I love this industry, Michael.
1:31
Speaker 3: I started out way back in the day at a
1:36
Speaker 3: franchisee of the McDonald's so QSR. And quickly I went
1:41
Speaker 3: to a fast casual steakhouse similar to a Bonanza U
1:46
Speaker 3: ponder Rosa, a concept called Wrestler Steakhouse that was owned
1:50
Speaker 3: by Marriott host Uh And right away I thought I
1:54
Speaker 3: was pretty good. I was pretty young, and I wanted
1:57
Speaker 3: to be with the very very best. And I heard
1:59
Speaker 3: about the concept that was just doing tremendous volume called
2:04
Speaker 3: TGI Fridays, and they were the king of the casual
2:09
Speaker 3: theme restaurant. And I would go in and just study them,
2:12
Speaker 3: and I go, if I'm that good, I want to
2:14
Speaker 3: go work for that brand. And I finally got a
2:18
Speaker 3: chance to go work for them, work for them twelve years,
2:22
Speaker 3: learned so much. My mentor was the founder, Dan Scoggins.
2:28
Speaker 3: He really taught me some very tough lessons that was
2:31
Speaker 3: very very good. And I left there in nineteen ninety
2:35
Speaker 3: six as director of operations. As I call it, the
2:38
Speaker 3: area of the Midwest capital of the world, vacation capital
2:43
Speaker 3: of the world. I should say Oklahoma, Arkansas, Missouri, and Oklahoma.
2:48
Speaker 3: So then I stepped out of the restaurant business Michael
2:53
Speaker 3: for the first time and only time, to get into
2:57
Speaker 3: the patrollingum C story business. And I had a great
3:01
Speaker 3: friend of mine, David Dornell, who was a president of
3:04
Speaker 3: Bank of America it was Nation's bank at the time,
3:08
Speaker 3: and we bought together at them, being our senior lenner
3:12
Speaker 3: me being an entrepreneur, we bought twenty five C stores
3:17
Speaker 3: in a gasoline and marketing distribution company called Saint Louis
3:21
Speaker 3: for Trollingman Marketing, and I was the CEO president CEO.
3:27
Speaker 3: And it was the greatest lesson I've ever learned about
3:30
Speaker 3: leading people because all I knew Michael before get into
3:34
Speaker 3: this business that the sign on the street and the
3:37
Speaker 3: price on the sign is what you paid for gasoline, right,
3:40
Speaker 3: and so, but it taught me a lesson that people
3:44
Speaker 3: who work for you have great skills and it really
3:48
Speaker 3: takes great leadership to engage them. Step back, be a
3:52
Speaker 3: servant leader, take to time to learn, get to know
3:56
Speaker 3: your people, and you don't give up power by being
3:59
Speaker 3: a leader. And it just helped me a lot. I
4:02
Speaker 3: would literally go in and ask many many questions as
4:06
Speaker 3: opposed to given directions, and so I did that for
4:09
Speaker 3: five years as CEO president, and I missed the restaurant
4:14
Speaker 3: business and I started my own concept called Village Cafes
4:20
Speaker 3: out of Saint Louis, and I literally created the concept.
4:24
Speaker 3: I was the CFO, CEO, the operations guy, and the
4:27
Speaker 3: whole nine yards, and I like to describe it as
4:30
Speaker 3: a poor man's version of Prener Bread. We were in
4:33
Speaker 3: office buildings and about two thousand square feet. It was
4:37
Speaker 3: an awesome, awesome brand created. And that was in two
4:42
Speaker 3: thousand to two thousand and eight, and then Crackerbrol came
4:46
Speaker 3: calling and I kept saying no to them, and eventually
4:51
Speaker 3: they wore me down and I sold my restaurant and
4:55
Speaker 3: went to work for Crackerbrow And my goal was just
4:58
Speaker 3: to work there for a couple of years back and
5:00
Speaker 3: get back into the entrepreneur world. And the problem was
5:04
Speaker 3: that kept getting promoted having success, and I became divisional
5:10
Speaker 3: vice president and I left there in May of twenty
5:14
Speaker 3: twenty two, and it was after fourteen and a half years.
5:17
Speaker 3: It was an awesome, awesome ride, and I started my
5:21
Speaker 3: consulting company, Recei's leadership restaurant consulting, and it's been an awesome,
5:27
Speaker 3: awesome entrepreneur ride. There's a lot of people in our
5:31
Speaker 3: industry that needed my help. While I was working for
5:34
Speaker 3: bands like Cracker Broil and was an officer of the company,
5:37
Speaker 3: and I would tell them, I go, I can't do that.
5:40
Speaker 3: It's a conflict of ventance. So I saw the need
5:43
Speaker 3: out there and it's been awesome to get out and
5:45
Speaker 3: help people run restaurants right now.
5:49
Speaker 1: That's great.
5:51
Speaker 2: At TGI Fridays. Did you have any overlap with Alan Stillman?
5:56
Speaker 3: Absolutely, he was. I didn't know Alan, but I knew
6:00
Speaker 3: of Allen. He was Dan's partner, right founder partner, Yeah, yeah, yeah.
6:05
Speaker 2: I think he started the brand with a he said,
6:07
Speaker 2: a five hundred dollars loan from his mom.
6:10
Speaker 3: Yeah. You know. The story, Michael, is that they started
6:14
Speaker 3: the brand in New York and it wanted it was
6:22
Speaker 3: a brand that was started. The tells of the story
6:25
Speaker 3: goes as they wanted to have a place for pilots
6:28
Speaker 3: and flight attendants to be able to go as they're
6:32
Speaker 3: laying over in these different cities, to go and just
6:35
Speaker 3: have a great time. It was an awesome some of
6:37
Speaker 3: the stories Dan till was just awesome. Yeah, a great brand.
6:43
Speaker 2: Yeah it's cool, and yeah, I bet you a lot
6:46
Speaker 2: of gen z Ers didn't didn't realize it started as
6:48
Speaker 2: a singles bar, you know.
6:50
Speaker 3: That's that's right, that's right, and when you go into
6:53
Speaker 3: I don't think they have him now, but I remember
6:56
Speaker 3: one of our templars was a three tier phone booth
7:00
Speaker 3: that people would say, what's a phone boot? But you
7:03
Speaker 3: would go in and you would have one level that
7:05
Speaker 3: you go up. On the next level you can use
7:06
Speaker 3: another phone on the next level. It was an awesome,
7:09
Speaker 3: awesome stuff. So yeah, I enjoyed it.
7:11
Speaker 1: Yeah, that's great. Alan's a legend.
7:13
Speaker 2: I got to I was lucky enough to meet him
7:15
Speaker 2: a few years back and I met I met his
7:17
Speaker 2: son Michael as well, who's running the family business.
7:20
Speaker 1: Now.
7:20
Speaker 2: They own the Smith and Wilenski's in New York and
7:24
Speaker 2: a whole bunch of and a great new brand, well
7:26
Speaker 2: not really new anymore, but quality branded restaurant in Manhattan.
7:30
Speaker 2: So next time you're in Manhattan, check out Quality. Absolutely
7:33
Speaker 2: my favorites.
7:35
Speaker 3: Yeah, well I'll give a plug. It's the one when
7:38
Speaker 3: I sit back and look over my career, it's the
7:40
Speaker 3: one brand that taught me the most and the most
7:44
Speaker 3: disciplined brand that I have ever worked for even to
7:48
Speaker 3: this day.
7:49
Speaker 1: Cool, very cool, all right.
7:52
Speaker 2: So for the audience, the reason why I approached Ray
7:56
Speaker 2: is because he shared this amazingly inspirational story at prosper So, yeah,
8:02
Speaker 2: are you willing to share that story with us here
8:07
Speaker 2: for the pod?
8:08
Speaker 3: Absolutely, Michael. So. I shared this story because it's really
8:15
Speaker 3: meant for the leaders and people in general who maybe struggle,
8:21
Speaker 3: maybe sometime wants to give up. Maybe sometimes things are
8:24
Speaker 3: not happening for them as quickly as they would like
8:27
Speaker 3: for them to happen. Maybe they feel they should have
8:29
Speaker 3: gotten promoted and got in a position that they didn't get,
8:32
Speaker 3: and they might give up or get discouraged with the industry.
8:36
Speaker 3: But the reader's digest version of the story was, I
8:40
Speaker 3: was this guy with a TGI Friday, unbalanced in my
8:45
Speaker 3: home life, in my work life, I just want to grow,
8:48
Speaker 3: I want to be successful. And so I'm this young
8:52
Speaker 3: African American leader working in an area where my staff
8:58
Speaker 3: was probably about ninety nine percent sent not African Americans,
9:04
Speaker 3: and so I had to lead this great group of
9:07
Speaker 3: people every single day, every single day. And so I
9:11
Speaker 3: would go into work. I would give it my all.
9:14
Speaker 3: And over the years I got to a level that
9:17
Speaker 3: I was ready to be promoted. And my boss was
9:19
Speaker 3: telling me you're the next guy up. You're the next
9:22
Speaker 3: guy up, and so that just fed me more. I
9:26
Speaker 3: got more inspired. I put in the extra work. I
9:29
Speaker 3: went beyond the call of duty. I had this thing
9:33
Speaker 3: that says, excellence is doing more than most people think
9:37
Speaker 3: is required. That was my logo, that was my statement.
9:40
Speaker 3: So I would give the extra effort. And so I
9:44
Speaker 3: wanted to be this district manager, and so I wanted
9:50
Speaker 3: to be the obvious choice. So when it came time,
9:53
Speaker 3: based on my evaluations, based on my results, time to
9:57
Speaker 3: be the guy that's going to get promoted. Yet I
10:00
Speaker 3: had this leader who pulled me aside and he said, hey, listen,
10:04
Speaker 3: we're going to make a decision. And the decision is
10:07
Speaker 3: we're not going to promote you. And I was devastated,
10:13
Speaker 3: and I think I stared at him, Michael, for about
10:15
Speaker 3: ten seconds before I said a word. And he said,
10:19
Speaker 3: before you do this, I want to tell you something
10:21
Speaker 3: off the record, and I go, okay, I'm listening. And
10:26
Speaker 3: he said to me, you are a great leader, but
10:31
Speaker 3: I'm going to protect you, and I'm not going to
10:35
Speaker 3: give you this position that you've earn. I'm going to
10:37
Speaker 3: wait for something more suitable. And he said, because the
10:42
Speaker 3: position you would have to have, the position that I
10:45
Speaker 3: would promote you to, you'd be leading about seventy eight
10:48
Speaker 3: to eighty five percent Caucasian employees and leaders. And I
10:54
Speaker 3: don't think I'm set you up for success. If I
10:57
Speaker 3: would put you in that position, you would be in
10:59
Speaker 3: an area where no one in the area would look
11:04
Speaker 3: like you, and it would be tough. And I didn't
11:07
Speaker 3: know how to respond to that, Michael. I had never
11:09
Speaker 3: had it to hit me in the face like that.
11:13
Speaker 3: But after being sitting there for a couple of minutes,
11:17
Speaker 3: I asked, two, could I be excuse and I'm going
11:21
Speaker 3: to leave now. I'm going to go home. I got
11:24
Speaker 3: in my car. I was devastated. I drove all the
11:27
Speaker 3: way home. Michael, I don't know why I drove all
11:30
Speaker 3: the way home, but I drove all the way home,
11:32
Speaker 3: got in my driveway, turned around, never got out of
11:37
Speaker 3: my car, went back to the restaurant. I'm having a
11:40
Speaker 3: conversation with myself and my boss was at the restaurant,
11:46
Speaker 3: and I said, I need to talk to you, and
11:49
Speaker 3: I said, I appreciate you telling me the truth. At
11:53
Speaker 3: least you was honest with me. I said, but I
11:58
Speaker 3: don't agree with it. I absolutely. I need to make
12:02
Speaker 3: sure you know I don't agree with it. That's number one.
12:06
Speaker 3: Number two. I need to let you know that you
12:09
Speaker 3: have lit something inside of me fire and desire that
12:14
Speaker 3: the next time the position comes open of anything that
12:18
Speaker 3: I'm qualified for, it's going to be such an obvious
12:23
Speaker 3: choice promotion for you that you cannot choose me. And
12:29
Speaker 3: the third thing I said to him at the time,
12:31
Speaker 3: and I remember saying this to him, and I said,
12:36
Speaker 3: I am a leader that lead people, and I don't
12:41
Speaker 3: even look in the mirror and see color. I look
12:45
Speaker 3: and I treat people for who they are in the
12:48
Speaker 3: behaviors that they exist. I said, I just do not
12:52
Speaker 3: think of it that way, and you need to know
12:54
Speaker 3: that by me. So I'm not saying that to you
12:56
Speaker 3: to go back and have you to change your mind.
12:59
Speaker 3: I just need to make make sure you understand how
13:01
Speaker 3: I felt. So go. He didn't say a word. I
13:08
Speaker 3: go back. I have to have this conversation with my
13:10
Speaker 3: wife that all the unbalanced hours that I've been working
13:14
Speaker 3: all these years, I mean, in these months, I have
13:17
Speaker 3: to go back and say, Hey, the reason I wasn't
13:20
Speaker 3: there for a kids and this and that, and I
13:24
Speaker 3: told you that I was going to be the next
13:26
Speaker 3: guy up. It didn't happen, and I need to tell
13:30
Speaker 3: you that that's the bad news. The good news is
13:33
Speaker 3: I'm more inspired and energized to be the obvious choice next.
13:39
Speaker 3: Six months later, Michael I was promoted to a district
13:44
Speaker 3: manager and a year after that, I was promoted to
13:47
Speaker 3: director of operations for a TGI Fridays. And it was
13:51
Speaker 3: just a lesson of perseverance. It was a lesson of
13:55
Speaker 3: don't let people tell you who they are who you are.
13:58
Speaker 3: It's a lesson of it. It's about treating people with
14:02
Speaker 3: dignating respect and everybody for the values of who they are.
14:06
Speaker 3: And it helped me for the rest of my restaurant career.
14:10
Speaker 1: It's a testament to who you are. Man, I'm sorry
14:12
Speaker 1: you had to go through it, but.
14:15
Speaker 2: Man, it's so moving and I love how that you
14:19
Speaker 2: use that to even motivate yourself more.
14:21
Speaker 1: Man.
14:22
Speaker 3: Fantastic, Yes, and Mike as a plug, I use I
14:26
Speaker 3: don't use that story, but I use that event to
14:31
Speaker 3: speak to the college students, especially with eighth SPCU students.
14:36
Speaker 3: I have programs where I help walk them through a
14:39
Speaker 3: runway from a freshman in college through how you can
14:43
Speaker 3: get into our great industry. For example, you might be
14:47
Speaker 3: a shift leader a freshman year in college. The second year,
14:50
Speaker 3: you might be a shift leader again. The third year
14:53
Speaker 3: you're going to get some more training and some mentorship leadership,
14:58
Speaker 3: and by the time you're ready to grad, way, you
15:00
Speaker 3: have a runway or a path that you can understand
15:03
Speaker 3: if you want to be in this industry. You have
15:05
Speaker 3: some experience how you continue to continue to grow in
15:08
Speaker 3: this industry. So it's been awesome for me.
15:10
Speaker 1: That's fantastic, all right.
15:12
Speaker 2: We I can talk to you all day about, you know,
15:15
Speaker 2: the history of the restaurant business.
15:17
Speaker 1: I love it, but I'd.
15:19
Speaker 2: Like to talk a little bit about what's going on
15:22
Speaker 2: now and kind of catch the point on some of
15:25
Speaker 2: the hot topics. You know, Yes, I guess how how
15:29
Speaker 2: should some of these restaurant chains solve for the solve
15:32
Speaker 2: their problems for the long term, right like consumers have
15:35
Speaker 2: options right now, It's not easy out there, Michael.
15:39
Speaker 3: I think you're absolutely right. I think the muscle that
15:44
Speaker 3: the restaurant industry had pre tempt. Pandemic was a good
15:49
Speaker 3: muscle to use. It was the muscle we all knew
15:52
Speaker 3: no one had experienced, thank god, the pandemic before right
15:56
Speaker 3: and and during the pandemic, there was a lot of
15:58
Speaker 3: things that happened that people nobody knew how to manage
16:03
Speaker 3: against it, you know, off premise, third party delivery, restaurants,
16:07
Speaker 3: dining rooms being closed. And then post pandemic, thinking that
16:12
Speaker 3: we could go back to that type of management or
16:16
Speaker 3: that type of the guest experience, it wasn't there anymore.
16:19
Speaker 3: We didn't have the employees there, and it didn't come back.
16:23
Speaker 3: People had transitioned out of the restaurant industry that had
16:27
Speaker 3: gone over to e commerce, the Amazon's in the Walmarts
16:30
Speaker 3: of the world. And so now you're paying someone twenty
16:33
Speaker 3: five dollars an hour, doesn't mean that you're going to
16:35
Speaker 3: get twenty five dollars to productivity. Twenty five dollars is
16:39
Speaker 3: just to get the person. And so once that that happened,
16:44
Speaker 3: is that the muscle that's needed now in the industry
16:48
Speaker 3: is the muscle of her attention of employees and to
16:52
Speaker 3: create these great experience for our employees to create great
16:56
Speaker 3: experience for the guests because the guests learned something doing
16:59
Speaker 3: the pandemic. From my point of view that I'm forced
17:04
Speaker 3: to make meals that are in ways that I could
17:08
Speaker 3: get pretty close to the restaurant industry, and I was
17:12
Speaker 3: forced to do that. So now when I come out
17:14
Speaker 3: and I don't have the hospitality value and I don't
17:17
Speaker 3: have it's a higher price, it's less selection, it's a
17:24
Speaker 3: service is not there. So now I get to pick
17:27
Speaker 3: and choose where my one hundred dollars are spent and
17:30
Speaker 3: I get to evaluate that that's the value that it's
17:34
Speaker 3: just spent one hundred dollars. Was it worth your experience?
17:37
Speaker 3: Was it worth off premise where I had to pay
17:40
Speaker 3: thirty percent more to get a hamburger, where it wasn't
17:45
Speaker 3: really transportable, It wasn't the quality I expected. And I
17:50
Speaker 3: think our guests are so smart that they started after spending,
17:56
Speaker 3: they start evaluating was that value for what I spent
18:01
Speaker 3: on my family of for worth going back again? Or
18:06
Speaker 3: I used to go there three times a month, it's
18:09
Speaker 3: not worth it anymore. Now that is one and a
18:12
Speaker 3: half time, or it's one time for a month. And
18:14
Speaker 3: I think the restaurant muscles now, is that how do
18:18
Speaker 3: you leverage the cycle of what's creating a great guess
18:21
Speaker 3: experience that is different from post pandemic, that's different than
18:27
Speaker 3: pre pandemic. And I think that that's been a challenge
18:30
Speaker 3: for restaurants.
18:32
Speaker 2: Yeah, and last time we spoke, you mentioned too how
18:34
Speaker 2: you felt that the marketing and operations for a lot
18:37
Speaker 2: of the restaurant chains are going in opposite directions versus
18:42
Speaker 2: pulling in the same direction.
18:44
Speaker 3: Yeah. I think that everyone is trying to figure it out,
18:50
Speaker 3: and I think marketing is running in a lane and
18:53
Speaker 3: they have trends and they have things they want to do,
18:56
Speaker 3: and it probably will drive traffic. The collaboration in the
19:01
Speaker 3: alignment has got to be can we sustain traffic? Are
19:04
Speaker 3: we driving these our great guests into the door? And
19:07
Speaker 3: can we sustain them? Can we give them a great experience?
19:12
Speaker 3: Is operations all bought in under direction? Marketing wants to go.
19:17
Speaker 3: So I could have a great marketing campaign, but if
19:20
Speaker 3: I can't execute it in the restaurant it takes too
19:23
Speaker 3: many steps in the restaurant to execute it, then I'm
19:26
Speaker 3: going to get bad service and I'm going to get
19:28
Speaker 3: bad guess. Experience, and it's also going to turn the
19:32
Speaker 3: employees because employees are not going to work in a
19:35
Speaker 3: stressful environment. I got options now, right, And so my
19:40
Speaker 3: biggest thing that I talk about to leaders now is
19:43
Speaker 3: that the collaboration from the beginning, the the agreement, the
19:49
Speaker 3: alignment from the beginning, and what's the why why, what's
19:53
Speaker 3: the strategy? Is operations all in on the direction that
19:57
Speaker 3: we're going. And the last part I'll say is that
20:01
Speaker 3: I think operations spends a lot of time taking directions
20:06
Speaker 3: of this is the way we're going for marketing. By
20:08
Speaker 3: the time it gets to operations, it's pretty much baked
20:12
Speaker 3: into the directions and strategy.
20:14
Speaker 2: Yeah, for sure, operations are I mean, they're so key,
20:18
Speaker 2: and I feel like there's distill, like undervalued, right. But
20:23
Speaker 2: when I see a new company, name a new CEO
20:25
Speaker 2: and they bring in an operator, I get excited about that.
20:29
Speaker 3: Yeah, you know, I tell people it's the motor of
20:33
Speaker 3: the car, Michael. I could live with my windows not
20:36
Speaker 3: working and my radio or not playing, but I could
20:39
Speaker 3: still drive a car. And I think operations is such
20:46
Speaker 3: a vital, if not the most urgent part, because I
20:51
Speaker 3: could have the greatest plan in the world but if
20:54
Speaker 3: I can't execute it in the four walls of the restaurant,
20:58
Speaker 3: it's not going to work. So I tell a lot
21:03
Speaker 3: of clients that really, we have to make sure that
21:09
Speaker 3: if we're going to put something into the building that
21:13
Speaker 3: it is going to be executable, not only in terms
21:17
Speaker 3: of driving sales, but can I really make it into
21:21
Speaker 3: a great experience in the restaurant. And so it might
21:25
Speaker 3: be that I have thirty items on my menu, but
21:29
Speaker 3: maybe only ten of them are selling. I might te
21:32
Speaker 3: mix at about seventy five to eighty percent. I might
21:36
Speaker 3: be selling the other five at a three percent clip. So,
21:40
Speaker 3: but I have to prepare as an operator to be
21:43
Speaker 3: able to sell that for the one or two guests
21:45
Speaker 3: that might come in and got And that's where I
21:47
Speaker 3: think marketing and operators have to get together in a
21:50
Speaker 3: line to say, Okay, this is great to have, is
21:54
Speaker 3: it really providing value? Am I losing? Execute? Is an
21:58
Speaker 3: ease of execution? And that's the conversation I think needs
22:03
Speaker 3: to be had more now today. It's more urgent today
22:06
Speaker 3: than it was in the past.
22:09
Speaker 2: Yeah, we saw on an example of this not working.
22:11
Speaker 2: I guess it was a couple of years ago with
22:13
Speaker 2: the Burger King Chick King fried chicken sandwich.
22:16
Speaker 1: It was a great sandwich.
22:18
Speaker 2: It was probably better than all the other Burger qsr
22:22
Speaker 2: Chains made. But you know, trying to make a sandwich
22:27
Speaker 2: that was very labor intensive in a restaurant that frankly
22:30
Speaker 2: you know was understaffed or very lightly staffed became completely untenable.
22:36
Speaker 2: And I think it was taken off the menu maybe
22:38
Speaker 2: six months after it debuted.
22:40
Speaker 3: Yes, yes, And it's even more important now because productivity
22:44
Speaker 3: levels have gone down wages have gone up. So I
22:49
Speaker 3: don't get the same type of grill cook or the
22:52
Speaker 3: same type of prep cook for twenty five dollars an hour.
22:55
Speaker 3: But my expectations are this, so I can't have seven
23:00
Speaker 3: steps to produce a menu of plate presentation that is
23:07
Speaker 3: too complicated and volume wized to be able to execute
23:11
Speaker 3: it in the kitchen. So this is where I think
23:14
Speaker 3: from the beginning, when the strategy is being put together
23:17
Speaker 3: as a brand, I think everybody should come together collaborative
23:23
Speaker 3: and and talk about it and put the plan the
23:26
Speaker 3: strategy together from the beginning. And I think that that's
23:29
Speaker 3: the one piece that's different Michael, that in post pre
23:34
Speaker 3: pandemic you could get away with it today, it's tough
23:38
Speaker 3: to get away with it.
23:40
Speaker 2: Yeah, and you know impact of increased delivering and catering
23:43
Speaker 2: is really pressured operations.
23:46
Speaker 1: Correct.
23:47
Speaker 3: Yes, I also the velocity of third party off premise
23:56
Speaker 3: is coming at you in a way that that was
23:58
Speaker 3: probably your week. It's muscle because you know it's the
24:02
Speaker 3: demand has gone up. But you know the muscle that
24:05
Speaker 3: you had in the facilities that you built wasn't built
24:08
Speaker 3: for that type of volume. So now you're trying to
24:11
Speaker 3: execute that, and you're trying to execute the dining room,
24:13
Speaker 3: and you're trying to execute it maybe with less skill
24:18
Speaker 3: employees or the training hasn't been there, and it gets
24:21
Speaker 3: into a whirlwind and all of that comes in and
24:24
Speaker 3: takes away of eroding the guest experience. Now, I got
24:28
Speaker 3: a decision to make. I was in your brand, I
24:32
Speaker 3: had dinner. You charge me more twenty to twenty five
24:36
Speaker 3: percent more, and my experience was less. And as I'm
24:41
Speaker 3: driving home, I get to evaluate that, you know what,
24:44
Speaker 3: I can't create the experience at one hundred percent, but
24:49
Speaker 3: I could do it at my home at about seventy
24:51
Speaker 3: five percent and save myself a lot of money. So
24:54
Speaker 3: I'm choosing not to go back in on that third visit.
24:58
Speaker 3: And I think that's a big missed in an industry.
25:02
Speaker 3: And I think that that's where we need to focus
25:05
Speaker 3: an alignment. Ease of execution. What's really going to drive traffic?
25:10
Speaker 3: Can I sustain it? Is it? Ease of execution for
25:14
Speaker 3: my employees is creating churn in the restaurants?
25:18
Speaker 2: And I think you you know, and I know you've
25:21
Speaker 2: said to me that you think a big, a big
25:25
Speaker 2: onlock for that is really the retention of people.
25:30
Speaker 3: I think it's Michael. It is the number one thing
25:35
Speaker 3: that operators are struggling with. So the way I would
25:38
Speaker 3: ask a question when I go into restaurants, if I
25:42
Speaker 3: would ask two questions, I would get two answers. One
25:45
Speaker 3: I would say, hey, tell me what you're doing to
25:47
Speaker 3: grow sales and how you're growing your business, whether it's
25:50
Speaker 3: right or wrong, Michael, I would get some answers right.
25:54
Speaker 3: The second question is, hey, tell me what you're doing
25:58
Speaker 3: that I can touch and feel for your employees and
26:03
Speaker 3: to retain your employees. And I would get the stare.
26:08
Speaker 3: I would get the repeated of the question, repeat of
26:11
Speaker 3: the question, but it's it's it, or I would get
26:15
Speaker 3: the stock answers. But when you go and talk to
26:18
Speaker 3: employees and say do you feel you're a part of
26:21
Speaker 3: this restaurant, and they go, no, I work for this restaurant.
26:25
Speaker 3: And so I would make statements like why don't you
26:28
Speaker 3: put up a sign to say what can we do
26:31
Speaker 3: for our restaurant? The key words being we and are
26:37
Speaker 3: it's not my restaurant, it's our restaurant, and what can
26:41
Speaker 3: we do together to improve it? And I think that
26:43
Speaker 3: that's a retention miss that's in the brands now that
26:47
Speaker 3: we don't spend a lot of time and I think
26:50
Speaker 3: we spent a lot of time of getting employees, Michael,
26:53
Speaker 3: I don't think we spend a lot of time of
26:55
Speaker 3: keeping and growing employees making it the obvious place to work.
27:01
Speaker 3: If I'm going to work in a cure CURSR, feel
27:05
Speaker 3: I'm going to work in a fast casual. I want
27:08
Speaker 3: to be the obvious place to work. I want to
27:10
Speaker 3: create an environment that people say, I want to work
27:13
Speaker 3: in this business and I want to work for you.
27:15
Speaker 3: And I think those behaviors and those tactics and actions
27:19
Speaker 3: from leaders and operations are missed right now.
27:24
Speaker 2: I agree, you know, how much of a role can
27:27
Speaker 2: you know menu reduction play in this too.
27:30
Speaker 3: I think that without eroding your brand and who you are,
27:34
Speaker 3: if you are a brand, you have to carry the
27:40
Speaker 3: type of items you need to carry. I don't think
27:42
Speaker 3: you need to try to be everything to everybody. I
27:45
Speaker 3: don't think our guests are asking us to be that.
27:49
Speaker 3: I believe that ease of execution and menus and finding
27:53
Speaker 3: out what is selling and what you need to have
27:56
Speaker 3: to have your brand be sustainable and desirable is what
28:02
Speaker 3: you need to do. Now, there's some things you're going
28:05
Speaker 3: to carry that you're not going to sell one hundred
28:07
Speaker 3: percent of, but you need to have some of those.
28:10
Speaker 3: But I don't think that you need to carry everything
28:13
Speaker 3: you maybe cared before, because it's going to create a
28:17
Speaker 3: lot of extra work that right now, it's not ease
28:20
Speaker 3: of execution.
28:23
Speaker 1: All right, good stuff.
28:25
Speaker 2: Obviously, costs have been a huge topic of discussion for
28:29
Speaker 2: the last couple of years, so you know how our
28:31
Speaker 2: chief operating officers driving costs out of the system.
28:35
Speaker 3: In twenty twenty four, I think cost is going to
28:40
Speaker 3: be something that on an ongoing basis that operators and
28:46
Speaker 3: leadership have got to look at and the balance between that,
28:52
Speaker 3: if my costs are going up. I can't take it
28:54
Speaker 3: all in venue price. I just can't. At some point
28:58
Speaker 3: you're going to get to a price that you're not
29:01
Speaker 3: your brand anymore. So if you're a fast catal, you
29:05
Speaker 3: can't have an eighteen dollars plate that now is going
29:08
Speaker 3: to throw you into another category. So I think a
29:12
Speaker 3: lot of what needs what has happened falls back on
29:17
Speaker 3: the brand and marketing and operational leadership. And so what
29:22
Speaker 3: are the brands that creates the value that I could
29:25
Speaker 3: serve fast that it's not going to be a high
29:29
Speaker 3: priced menu item that I that doesn't affect my brand.
29:34
Speaker 3: And I think that that's the challenge. And then how
29:36
Speaker 3: do you store it? How do you keep it? How
29:39
Speaker 3: do you make it productive? How do you eliminate waste?
29:42
Speaker 3: And I think that all falls into the operational bucket
29:45
Speaker 3: and it falls into a mastery of operations. I believe
29:50
Speaker 3: if you believe, the kitchen is the motor of the
29:53
Speaker 3: car and the front is about hospitality. So therefore, everything
30:00
Speaker 3: I do in the kitchen, I'm going to make sure
30:02
Speaker 3: that motor is purring. And I think that every day
30:06
Speaker 3: that's got to be the focus from marketing and operation
30:09
Speaker 3: to us lead the branch service.
30:12
Speaker 2: Yeah, that's the long term view, right I mean, just
30:15
Speaker 2: shrinking your portion sizes and raising the prices is not
30:19
Speaker 2: the long term answer right now.
30:22
Speaker 3: I think that at some point I've gone to restaurants recently, Michael,
30:27
Speaker 3: where I walked away and I said, I just spent
30:32
Speaker 3: ninety bucks in this restaurant. And one it was okay, Two,
30:38
Speaker 3: I'm not really that full. Three the portion fives were
30:41
Speaker 3: than where they needed to be. Plate pleasentation wasn't good.
30:45
Speaker 3: Nobody cared about my service. It was the average service.
30:49
Speaker 3: It took a long time, And I think all of
30:52
Speaker 3: that plays into the bucket and you can tell when
30:55
Speaker 3: restaurants are doing that, Michael, to your point, you can
30:58
Speaker 3: tell when restaurants are spending more time weighing things out
31:03
Speaker 3: than they care about it took thirty minutes to get
31:06
Speaker 3: my food out, or it wasn't hot. And I just
31:09
Speaker 3: think that that is the the you know, where restaurants
31:13
Speaker 3: are not aligned at what's what's important to I.
31:15
Speaker 2: Guess, and we see it in the traffic numbers for
31:18
Speaker 2: the last couple of years now it's glaring.
31:22
Speaker 3: Yes, And I think that the challenge is and what
31:27
Speaker 3: I'm seeing today is the number one move. Brands are
31:32
Speaker 3: using to compensate for a cost either than the labor
31:37
Speaker 3: and in the supply bucket is pricing and you just
31:44
Speaker 3: it can't be your only tool. So in other words,
31:48
Speaker 3: how do you ask brands right now, how do you
31:51
Speaker 3: increase productivity? What's the training and development development now that's
31:56
Speaker 3: different from before? That could make my easier that I
32:01
Speaker 3: can become more productive. And I think sometimes brand have
32:05
Speaker 3: cut training to get costs back. I think sometimes training
32:09
Speaker 3: is not as many days, or it's not as relentless
32:12
Speaker 3: as it choose to be. I think a lot of
32:16
Speaker 3: brands have looked at portions and say, hey, we could
32:19
Speaker 3: get away by couldn't it ounce and a half and
32:22
Speaker 3: keep the price at the same or raise the price.
32:25
Speaker 3: And I think it's a bad, bad cycle to be
32:27
Speaker 3: involved in for our guests.
32:29
Speaker 1: Yeah, and as a consumer, I definitely agree. I have
32:32
Speaker 1: a big appetite ray, so you.
32:34
Speaker 2: Know, I definitely have left a few restaurants hungary recently.
32:43
Speaker 2: All right, So, so once once you know a clienteers,
32:46
Speaker 2: gets their operations nailed, gets the engine of the of
32:50
Speaker 2: the car really running in tip top shape, how should
32:56
Speaker 2: they approach growth?
32:59
Speaker 3: Well, I think that can I populate it. You know,
33:04
Speaker 3: do I really feel good about the enterprise? Do I
33:11
Speaker 3: really have it nail down? And so when I go
33:14
Speaker 3: out to populate it, is it simple? Is it align?
33:20
Speaker 3: And you know? Is there clarity about what we're trying
33:23
Speaker 3: to do? And I think it's got to be more
33:26
Speaker 3: than about the numbers or the number of units. Really
33:30
Speaker 3: it's about how can I make it easier for my franchise.
33:34
Speaker 3: Does the system work? Can can the process and system
33:38
Speaker 3: help me with some tweaking of I might need to
33:43
Speaker 3: check in Ray about this, but I don't need ready
33:46
Speaker 3: to come in and do it. And once it gets
33:48
Speaker 3: out there, is it broken? If everybody is failing at it,
33:53
Speaker 3: there's something wrong with it. And I think that we
33:56
Speaker 3: have to do inside out leadership before we go there.
34:00
Speaker 3: We have to slow down to go fast. We have
34:03
Speaker 3: to make sure that the foundation, as I call it,
34:06
Speaker 3: the enterprise, is really really solid, because Michael is not
34:11
Speaker 3: going to get better by being from going from one
34:15
Speaker 3: unit to thirteen units. In other words, the thirteen unit
34:18
Speaker 3: is not going to be better than the mothership. So
34:21
Speaker 3: I have to really, on a scale of one to ten,
34:23
Speaker 3: I have to have the mothership at eleven. So when
34:26
Speaker 3: I go out and I'm doing more units. I really
34:29
Speaker 3: have had systems and processes that populate its ease of execution.
34:34
Speaker 3: It's simple, there's clarity, and there's alignment.
34:38
Speaker 2: Cool And is there an in that calculus about opening
34:42
Speaker 2: that second third up to the thirteenth store? You know
34:46
Speaker 2: how much did they think about maybe talent dilution in
34:51
Speaker 2: the present stores?
34:53
Speaker 3: I think a couple of things. I think that that's
34:57
Speaker 3: got to be the premise of what you thinking about.
35:01
Speaker 3: So when I say populating, so I'm already populating in
35:06
Speaker 3: my first store for my second and third store, and
35:08
Speaker 3: I'm building inside that first store for my second and third,
35:12
Speaker 3: and I'm constantly populating the second and third for my
35:15
Speaker 3: fourth and fifth. Because the one thing I learned in
35:18
Speaker 3: opening stores in California, Michael, people don't leave Indianapolis to
35:24
Speaker 3: go to California open restaurants. And one of the learning
35:28
Speaker 3: one of the lessons I learned is that when you're
35:30
Speaker 3: opening brand new stores in California with brand new people
35:34
Speaker 3: who have never heard of the brand before, you're learned
35:37
Speaker 3: that population process quickly because you don't have the tenure
35:44
Speaker 3: talent to go in and open a store that that
35:49
Speaker 3: people might have twenty years of experience. It's all new.
35:53
Speaker 3: So the lessons is to get learnings from the first
35:56
Speaker 3: unit for the second and third, not only in people,
36:00
Speaker 3: but in processes and systems. And I think that this
36:03
Speaker 3: is where brands struggle a little bit. I think it's
36:06
Speaker 3: more sometimes about the number of units as a as
36:11
Speaker 3: opposed to process and systems and people. And that's got
36:15
Speaker 3: to be uh, you know, thought about when you do that.
36:21
Speaker 1: For sure.
36:22
Speaker 2: All right, so, uh, you know, since I do cover
36:26
Speaker 2: Cracker Barrel and you've had extensive experience at that, you know,
36:30
Speaker 2: great brand, you know, if you're willing to share your thoughts,
36:35
Speaker 2: I'd appreciate it right Like it's been a it was
36:37
Speaker 2: a couple of tough years. They brought in new senior management.
36:40
Speaker 2: You know where what do you think about where Cracker
36:43
Speaker 2: Barrel is right now?
36:46
Speaker 3: Wow? Let me say I love this brand. It's an
36:54
Speaker 3: iconic brand. It exceeded my expectations when I was working
37:01
Speaker 3: through the years at Cracker Barrow. The one thing I
37:04
Speaker 3: tell people about Crocker Brow. If you think about Cracker
37:08
Speaker 3: Brel and who they are, who's their true competitor in
37:11
Speaker 3: this space? There's not another concept. There's three day part
37:18
Speaker 3: that you can get breakfast all day long, that it's
37:23
Speaker 3: you know, comfort food and all of that. So with
37:26
Speaker 3: that being said, it's been a tough couple of years
37:31
Speaker 3: for them, and from the outside looking in and knowing
37:34
Speaker 3: the brand, I think it's going to be tough for
37:38
Speaker 3: them to get back to where they were. I believe that,
37:45
Speaker 3: and I'm choosing my words carefully. I believe that there's
37:50
Speaker 3: been a lot of people that have left the brand
37:53
Speaker 3: that created the brand and created what was special about
37:57
Speaker 3: the brand, and that's a lot to lose. And that's
38:01
Speaker 3: a lot to lose. And I also think that it's
38:05
Speaker 3: going to have to have the muscles to evolve from
38:11
Speaker 3: where it was three, four or five years ago to
38:15
Speaker 3: where it is today. And so it breaks my heart
38:19
Speaker 3: to see the struggle. I know the stock prices had
38:23
Speaker 3: struggled over the last couple of years, and you're speaking
38:27
Speaker 3: to someone who owns a lot of stock and still
38:29
Speaker 3: do so I hate it. I hate with what they're
38:34
Speaker 3: going through. I can't, honestly, Mike, I can't say I
38:40
Speaker 3: can see the light at the end of the tunnel.
38:42
Speaker 3: But I do wish them well. I have a lot
38:45
Speaker 3: of friends still there. I just know what they're going
38:51
Speaker 3: through and it's going to be a challenge for them.
38:54
Speaker 2: Yeah, well, hopefully they can succeed in bringing in a
38:57
Speaker 2: younger customer base. I know that's been something that they've
39:01
Speaker 2: been focused on and I guess that's also part of
39:03
Speaker 2: the reason why they, you know, got into the fast
39:06
Speaker 2: casual breakfast biscuit business with Maple Street Biscuit Company.
39:10
Speaker 3: Right. So yeah, yeah, I think that the frequency program
39:20
Speaker 3: that they just launch, I think it's very good, but
39:24
Speaker 3: that's not new, right, you know, everybody's doing frequency, so
39:28
Speaker 3: you're joined the party there. I also think that Maple
39:33
Speaker 3: Street is going to it's still new enough. A very
39:38
Speaker 3: good friend of mine is the founder of Maple Street
39:41
Speaker 3: that we talk a lot, and I think that that's
39:45
Speaker 3: going to be a challenge for them because he's no
39:48
Speaker 3: longer with the brand also, so I just think that
39:51
Speaker 3: it's overall as a brand, it's it's going to be tough.
39:54
Speaker 3: It's going to really take some tough muscles to move
39:58
Speaker 3: the brand in the direction that they want to go.
40:00
Speaker 3: And as far as the tenured based customer, we knew
40:05
Speaker 3: this several years ago that we were going to have
40:10
Speaker 3: to evolve in a a different customer, a younger based customer.
40:18
Speaker 3: And I think we I think they're trying to do that.
40:23
Speaker 3: It just hasn't attached. And the one might question did
40:27
Speaker 3: we start too late to try to did we Did
40:32
Speaker 3: we not be aggressive enough over the last several years
40:38
Speaker 3: to do that. So it's going to be a challenge.
40:42
Speaker 2: Yeah, and maybe they need to find, uh, maybe they
40:44
Speaker 2: can find, you know, the guy or girl that runs
40:48
Speaker 2: like the slim gym or the radio shack Twitter accounts,
40:52
Speaker 2: somebody that has absolutely helped some of these brands blow
40:58
Speaker 2: up on social media.
40:59
Speaker 1: Maybe maybe that's.
41:00
Speaker 2: Part of the answer in terms of attracting you know,
41:04
Speaker 2: gen Z through TikTok and Twitter and LinkedIn, I'm sorry,
41:09
Speaker 2: Instagram stuff like that.
41:10
Speaker 1: You know.
41:11
Speaker 3: Yeah, it's interesting Michael that I have a twenty three
41:15
Speaker 3: year old daughter that's aid you know, she's getting her masters,
41:20
Speaker 3: And I talked to her a lot, and she used
41:23
Speaker 3: to work at Cracker Broll and so even while she
41:26
Speaker 3: was working there, if I really want to know the
41:28
Speaker 3: truth that was going on in the restaurant, I would
41:29
Speaker 3: ask her and she didn't know. She was telling me
41:32
Speaker 3: things that I did not want to hear. So I
41:34
Speaker 3: had to pretend like, I really want to hear did
41:37
Speaker 3: you really get the truth? And what you just said
41:40
Speaker 3: is exactly right. It is so it's not her obvious
41:44
Speaker 3: choice place to go when she's thinking about going out
41:46
Speaker 3: to dinner. It's not her place obvious choice place to
41:49
Speaker 3: go when she's thinks about going in for breakfast. And
41:52
Speaker 3: when I asked her why some of the things that
41:54
Speaker 3: we talked about, those are actually they're validated that those
41:58
Speaker 3: are the reasons why. It's just not know my radar, dad.
42:01
Speaker 3: It's not a place that I feel welcomes me. It's
42:04
Speaker 3: not a place that I feel that I I want
42:09
Speaker 3: to be it. It doesn't it doesn't draw me in,
42:12
Speaker 3: and and I think that that's going to be a
42:14
Speaker 3: challenge for them to figure out. I I love the
42:17
Speaker 3: brand still, I still have stock in the brand. Wish
42:20
Speaker 3: them nothing but the best, but it's been disappointing and
42:24
Speaker 3: and and and and heartbreaking to see the struggles that
42:28
Speaker 3: they've gone through over the last couple of years.
42:31
Speaker 2: Yeah, I think, I think, uh yeah, I'm hopeful that
42:34
Speaker 2: the new management team can can turn things around because
42:37
Speaker 2: it is a great brand. I know a lot of
42:39
Speaker 2: people have very strong feelings towards the brandy, you know,
42:45
Speaker 2: so so yeah, you know, hopefully things things turn around there.
42:49
Speaker 2: You know, as a financial guy, I always like the
42:51
Speaker 2: fact that that they never closed the store and that
42:55
Speaker 2: uh and that their maintenance CAPPACX was so much lower
42:59
Speaker 2: than their everybody else because you know, it was part
43:01
Speaker 2: of the vibe, part of the being an old country store.
43:04
Speaker 1: Right.
43:04
Speaker 2: So there's there's definitely some really you know, interesting attractive
43:10
Speaker 2: aspects to the story. So so yeah, I'll be I'll
43:13
Speaker 2: be waiting, I'll be watching closely, for sure, I'll be.
43:16
Speaker 1: I'll be there. I'm here watching pretty closely, paying close attention.
43:19
Speaker 3: So absolutely absolutely I wish to nothing but the best
43:23
Speaker 3: going for same.
43:25
Speaker 2: All right, thanks again, Ray, that was awesome man, Thank you.
43:29
Speaker 2: What's what's the best way for members of the audience
43:31
Speaker 2: to get in touch with you?
43:34
Speaker 3: Well, absolutely you are. I am available. I will give
43:39
Speaker 3: you my business number. I'm at six one eight three
43:44
Speaker 3: oh four three two two. I love this business. If
43:48
Speaker 3: I could help any brands, my email account is reces
43:54
Speaker 3: R E C E E s l LC at gmail.
44:01
Speaker 3: Please reach out to me and you could also reach
44:03
Speaker 3: out to me on LinkedIn. I appreciate you, Michael.
44:07
Speaker 2: I appreciate you too, and I also appreciate the audience
44:10
Speaker 2: for listening in. If you liked the episode, please leave
44:13
Speaker 2: us a review. Check back in a couple of weeks
44:15
Speaker 2: for a discussion with Charlie Morrison, CEO of Salad and
44:18
Speaker 2: Go