Latest / The Inspired Stories Podcast / Innovation in Private Equity: Taylor DeHart's Operator-First Approach to Restaurant Investing

Transcript

Innovation in Private Equity: Taylor DeHart's Operator-First Approach to Restaurant Investing · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they've overcome
0:14
adversity. My name is Anthony Kotaspodi and
0:17
today's guest is Taylor Dehart, principal at Savory Fund.
0:22
Now, Savory Fund partners with growing restaurant brands in the
0:25
food and beverage industry, focusing on operator
0:28
partnerships and strong leadership to help these brands
0:32
thrive. Based in Lehi, UT, it works to
0:36
elevate concepts nationwide, providing hands on support from
0:40
veteran operators and finance experts.
0:43
Under Taylor's guidance, Savory Fund has influenced the growth
0:47
of multiple high potential concepts including technology
0:51
companies and emerging restaurant brands.
0:54
Taylor himself has a decade of experience in food and beverage
0:58
investments, financial strategy and transaction structuring, and
1:03
overseas 6 companies within Savory's portfolio.
1:07
He earned an MBA from Northwestern's Kellogg School of
1:10
Management, holds ABS in finance from BYU's Marriott School of
1:14
Management, and previously served as President of the
1:18
Finance Society at BYU. He's also performed diligence on
1:22
hundreds of emerging brands and advised on multiple buy and sell
1:26
side transactions in the restaurant space.
1:30
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2:02
All right, back to our guest today, the principal at Savory
2:05
Fund, Taylor to Heart. I appreciate you making the time
2:07
to Share your story today. Of course.
2:09
Thanks for having me on, Anthony.
2:11
OK, So Taylor, you studied finance at Brigham Young
2:15
University, BYU. What initially drew you into
2:19
that field of study? What was the attraction for you?
2:23
It's a great question. I, I actually wasn't quite
2:25
certain what I wanted to do until, you know, a handful of
2:27
years into school and I realized that I was a numbers guy, but
2:32
also that I had a passion for entrepreneurship.
2:34
And I felt like studying finance gave me the opportunity to tap
2:37
into that strength of, you know, being able to review and
2:40
understand numbers in a deep way, but also be more on the
2:44
strategy side. And so as I made the decision
2:46
between studying accounting or finance, felt like studying
2:50
finance gave me more of a forward facing, future looking
2:53
application of my skill set and have really enjoyed it ever
2:56
since. All right.
2:58
So then at some point, I think this was towards the end of your
3:02
education, you landed an internship at Apple in Cupertino
3:07
where you were part of their finance development program.
3:10
What was that like in turning there and working at Apple?
3:12
What? What did you learn there?
3:14
Yeah, it, it was incredible. It felt like at the time I'd hit
3:16
the jackpot, you know, in terms of respect that I have for
3:20
organizations across the world, you know, Apple is in the top
3:23
three. If not #1 so incredible
3:26
organization, incredible talent, the things that they were doing,
3:29
I was very bought in on, had a wonderful time out there in
3:32
California. And to this day, that experience
3:36
continues to kind of have its its imprint on even Savory
3:40
today, which you know, we'll talk about more later.
3:43
And as I understand it, you were actually offered a full time
3:45
position there. And after all the glowing things
3:49
that you just said about Apple, I'm a little surprised that you
3:52
turned it down. Why was that?
3:55
Yeah, it's a great question and it's one that led me to to
3:59
question, you know, my own decisions at the time.
4:02
But for me, I felt like I had seen the best of what the
4:05
corporate finance world had to offer.
4:07
And with everything that I just said about the organization,
4:09
about the people, it just didn't quite have that entrepreneurial
4:13
flair that I was looking for. I felt like my personality would
4:17
be better suited for a, a late stage growth company, you know,
4:21
one where I could kind of be in the middle of of the value
4:23
creation, whereas, you know, working for our incredible
4:26
organization. But they, they did some pretty
4:27
incredible things. And you know, for me, it just
4:30
felt like a little bit smaller company would be better suited
4:33
for, like I said, my personality, but also just my
4:37
skill set. Had you had a taste of sort of
4:41
the startup or the entrepreneurial world by that
4:44
point? I lived in a little bit in
4:46
college. I worked for a little bit
4:48
smaller company organization, but you know, it was very light
4:53
at the time. So, but it was just enough
4:57
because I'm just trying to get my head around, you had this
5:00
great offer from this company that you respected and you're
5:03
having a great time. What was it that in you that
5:06
sort of said, this is great, but I want smaller, I want startup.
5:10
Was it just like you felt like you weren't having enough
5:13
control or enough input into what Apple was actually
5:17
producing? That that's exactly right.
5:19
You touched on it again there. Just being able to contribute to
5:22
what makes it great. Obviously being part of a
5:25
broader finance work is is extremely important for any
5:28
company, but for me it was more wanting to be kind of at the
5:33
ground level of something a little bit smaller and to create
5:35
something, you know, for me, Utah is where I'm from.
5:39
I was born and raised here at the base of snow based and ski
5:42
resort where they where they held the 2002 Olympic downhill
5:46
and will also hold the 2034 Olympic downhill.
5:49
And so I have a lot of pride about this area and spent some
5:52
time in California, saw what the success story had become of
5:55
Silicon Valley and read all the books of the Titans that helped
5:59
build that and thought Utah's this young emerging state that
6:03
has an opportunity to do something pretty special the
6:06
same way that they've done in Silicon Valley.
6:08
And I felt like I wanted to do that early in my career.
6:10
So not only, you know, some of the size of the company, but
6:13
also felt like I wanted to be here in the state of Utah
6:15
building something great. Oh, interesting.
6:18
Come home and bring a lot of those ideas and the skills and
6:21
the future success that you see, the sort of the seeds that
6:25
already been sown for in Silicon Valley.
6:28
That's exactly right. OK.
6:29
So how did the opportunity to join Savory Fund coming back?
6:33
Yeah. So I mentioned in my college
6:35
days, you know, I had an opportunity to be mentored by
6:38
actually who is today, the managing Director of of Savory.
6:42
And while I was out in my one bedroom apartment in Santa
6:45
Clara, CA, he gave me a call and described to me what he felt
6:49
like he was going to create at the state refund.
6:52
At the time, it operated under a different flag and I'm happy to
6:55
share more about that later in our conversation.
6:57
But you know, I thought it sounded like something I was
7:00
very interested in. And so this mentor reached out
7:03
to me and just gave me the opportunity to join at the
7:05
ground level of something that I felt would be an amazing
7:08
opportunity coming right out of college to have a path to, you
7:12
know, being involved in M&A, being involved in a potential
7:15
investment practice, multi strategy, multi brand shop that
7:19
he was in the process of creating.
7:21
Oh, so you got in right at sort of the beginning, right at the
7:24
ground floor. That's right.
7:26
Yeah. Yeah.
7:27
Happy to touch on some of the background if that would be
7:29
helpful. Yeah, yeah.
7:30
You said at one point it was it was operating under a different
7:33
name, under a different umbrella.
7:35
That's right. Yeah.
7:36
So, you know, Savory Fund actually hasn't been Savory Fund
7:40
since its inception. For the first ten years of our
7:43
history, we actually were just an operator.
7:45
We're like like any other operating company out there.
7:48
We started our our founder open one restaurant in 2008 and you
7:53
know, they, he sent the team over time, but from that one
7:57
restaurant in 2008 to, you know, 150 restaurants in 2018 really
8:03
assembled a pretty impressive team.
8:05
I joined in 2015 and at the time they had roughly 25 locations
8:14
and restaurants and under the portfolio of 1 brand.
8:17
And between 2015 and 2018 is when we really hit the
8:21
accelerator group from 25 locations to over 150 across 11
8:25
states, became one of the largest franchisees in the
8:27
country or consistently recognized as one of the fastest
8:31
growing operators in the restaurant industry on a
8:35
frequent basis. And you know, we, we were
8:38
excited about what we had in 2017, 2018, but we needed to
8:43
change in regard to our capital structure and that's when Savory
8:46
was born. Savory was born in 2018.
8:50
We raised our first fund which was $100 million fund debut
8:56
very, you know, coming out of the coming out of the gate.
8:59
And you know, thereafter we just realized we needed to come into
9:02
that new capital structure. And ever since we've raised
9:05
that, you know, we've continued to raise, you know, concurrent
9:07
funds. We've realized that we're really
9:09
able to kind of have the full package of capital available to
9:14
or the people who were investing into as well as expertise from
9:17
our histories being an operator. So what was the brand or brands
9:22
that you had in the early stages when you went from that one to
9:25
150 restaurants? Yeah.
9:28
So the the primary one was actually a big green cafe
9:30
concept here in the state of Utah.
9:32
It's very similar to a Panera Bread.
9:34
Many people are familiar with that early during the age of the
9:38
birth of what's called fast casual.
9:41
You know, for the listeners who have never heard of that,
9:44
that's, you know, it's, it's, it's elevated food, but then
9:46
it's still a quick service format.
9:48
So Chipotle really kind of invented the space.
9:51
This bakery Cafe concept was really one of the early adopters
9:54
of that space. And that was one where from 1 to
9:58
50 locations along the way we acquired roughly 70 Little
10:02
Caesars. So we became one of the largest
10:04
Little Caesars operators in the country.
10:06
That was more of what I would call the bond in our portfolio,
10:08
a little bit less growth, like more just you know, being there
10:13
cash flowing, a very stable brand been around through
10:16
multiple recessions. So like I said, a little bit
10:19
more of the bond and then we, we had bought three other
10:21
companies, a company called Swig, which is specialty
10:23
beverage concept as well as a wine BBQ concept and based here
10:28
in Utah and then an actual Southern BBQ concept all based
10:32
here in Utah as I mentioned. And so do you still have the
10:35
Little Caesars franchises? Do you still have the bakery
10:38
concept? We do not.
10:40
So in 2018-2019 when we started Savory, we made the decision to
10:46
shift our strategy slightly. Rather than continuing to grow
10:50
brands to hundreds, you know, eventually thousands of units
10:54
like we could have pursued, we decided to become the the core
11:00
and primary investor for emerging brands across the
11:03
country. So we sold our 50 bakeries, we
11:07
sold our 70 Little Caesars and that's when we started saving
11:11
and we, we brought Swig Mobetas and our BBQ, which we're
11:15
currently in our portfolio into savory fund and that's how we
11:17
kick things off. And so now you're the majority
11:20
owner of each of these concepts. Is that how it works?
11:23
The ones that you invest in or so different?
11:26
Structures we are and have been, we have added some additional
11:30
partners along the way and we've sold you know, portions of of
11:33
both SWIG and Mobetas to some strategic partners who have made
11:36
those investments recently. Makes sense.
11:39
And so the transition away from sort of the bond of, you know,
11:44
Little Caesars and this established bakery that seems
11:46
like it was doing well into these emerging brands.
11:49
Was this just more of a, hey, we love to create.
11:55
We'd love to be kind of involved a little bit earlier on.
11:58
Like there was a like a, a, a creative marketing itch that you
12:02
had to to scratch or what, what was kind of behind the, the
12:05
thesis here? I'd say the biggest thing that
12:08
we learned along the way and, and as you can imagine, we
12:11
learned some really lessons from a decade as an operator, some
12:15
expensive, some inexpensive, but all really important.
12:19
But you know, the, the reason we did this and, and the maker
12:23
acknowledgement that we made here is there are things that we
12:25
are good at and there are things that we are not as good at.
12:28
And when we started Savory, this was us doubling down on what we
12:31
know we're exceptional at. We know we're great at
12:35
identifying the next generation of great restaurant brands.
12:39
We know what it takes to successfully capitalize those
12:42
groups, to give them the leadership resources and the
12:45
other resources that they need to be successful and grow them
12:48
from a regional brand that's perhaps in just one or two
12:51
regions, in Q56 or seven regions.
12:57
And So what is it that you look for in the next generation of
13:02
restaurant brands? What kind of what are the green
13:06
flags? It's like, oh, these guys are on
13:08
to something that the world's really going to appreciate here
13:11
pretty soon. Yeah, I think it, it would be
13:14
probably helpful if it would be good if I paint the picture of
13:16
what the restaurant industry, everything we've kind of learned
13:19
in the last 1718 years and I think it will make more sense my
13:23
answer once I can give you that context.
13:25
OK, great. So the restaurant industry, it's
13:29
massive. There are hundreds of thousands
13:32
of restaurants across the country.
13:34
And this is an industry that in many ways has an undeserved
13:37
reputation for risk. And where that comes from is
13:41
it's highly entrepreneurial. So there's this early phase of
13:44
restaurants that exist where there are minimal barriers stand
13:48
for if you want to start a restaurant, you and you're a
13:51
passionate entrepreneur or founder, you usually can go in
13:55
and find a space that whether it was a previous restaurant or
13:58
some other, you know, operation, you can go in and for a
14:02
relatively small amount, invest in and create a menu.
14:05
Fall in love with the type of food, fall in love with, you
14:08
know, some type of aesthetic that you want to bring to the
14:11
community that you're passionate about so you can start that
14:14
restaurant. And that happens every day.
14:15
If you look here across the industry, about 70% of all
14:18
restaurants are operated by single unit operators, which is
14:21
a staggering number considering how large the industry is.
14:25
And every once in a while you start to see inside of this
14:28
early wave of restaurants, somebody start to rise above the
14:31
rest. And usually those people start
14:35
to open a second location and a third location and, and over
14:38
probably a 7 to 15 year period, they just stick at it.
14:42
And not everyone has that, you know, stick to itiveness, that
14:45
persistence to just keep going even in the face of challenges.
14:48
This isn't always the easiest industry to operate in.
14:51
And So what we look for is a founder that has stuck to it and
14:56
has built a pretty incredible culture and has built an
14:59
impressive leadership, but that is looking for someone to help
15:04
them take it to the next level. So what really sticks out to us,
15:09
they have the right culture that have a strong leadership team,
15:12
as I alluded to, that has to have strong unit economics.
15:15
They have to have figured out the profitability equation.
15:19
That's extremely important because the challenges that are
15:21
associated with scale, which is what we're very accustomed to,
15:25
they're very different than the challenges of starting the
15:27
restaurant and dialing in and perfecting the profitability.
15:31
The number of restaurants that approach me and say if I just
15:34
had your buying power or if I just had your great contracts
15:39
that you have with, you know, this vendor or that vendor, I
15:42
would be more profitable. My answer is usually that's not
15:45
true. You like there are costs
15:47
associated with scale that you don't even have any view into
15:51
yet. And scale is expensive in and of
15:53
itself. And so you can't rely on buying
15:56
power. You can't rely on, you know, a
15:58
stronger economies of scale as you grow to dial in your
16:02
profitability profile. That's the responsibility of the
16:04
founder. So when we look at brands, if
16:06
they have that trifecta of culture, leadership and strong
16:10
unit economics, that's we're ready to check it.
16:13
And are they usually approaching you?
16:15
Are you sort of coming through the the landscape of the US to
16:20
to look for these unearthed gems?
16:23
How does this come about South? Early in the days of Savory, I
16:26
would, I would describe that it was more of us going into a
16:30
city, trying to find the best restaurants in that city, the
16:33
ones that had, like I mentioned, 5 to 15 locations.
16:36
And it really started to kind of stand out above the crowd.
16:39
We would drop into a city, we would meet with six or seven
16:42
founders. They would all give us the full
16:44
spread. And so a story for another day.
16:46
But by about the fourth nil, you're, you're, you're, you're
16:49
pretty spent at that time. But you know, we, we spent a lot
16:52
of early days just getting to know the regions that we wanted
16:55
to be in and founders across the country because the success of
17:00
our industry is so visible, meaning you can drive by and see
17:03
how many locations are popping up.
17:06
We have had a lot of people reach out to us as of late.
17:10
And you know, we meet them just through our kind of standard
17:13
channels. They reach out to us and say,
17:14
hey, I saw what you did for this brand.
17:16
Would you be interested in helping me do it for my brand?
17:19
So a lot more of it has become inbound in today's day and age.
17:22
But we're still out in the community.
17:23
We're still out spending time in the varying cities that are out
17:26
there. We're constantly with our own
17:28
portfolio companies and that gives us a glimpse into kind of
17:31
what's happening in the market. And so we always have a a beat
17:34
on what brands are the most successful across the industry.
17:38
So what are you looking at in terms of geography?
17:41
And I don't know either size or where they are in the life
17:45
cycle. You know they've got 5 units or
17:47
they've got 15. Yeah.
17:50
So our sleep spot really is you know 5 to 15 locations and then
17:56
from a cash flow standpoint you know between 2:00 to $4 million
17:59
in in positive EBITDA from a revenue standpoint anywhere
18:02
between 15 and 45 million in, in top line sales.
18:08
Geography. You're agnostic.
18:09
Are there certain parts of the country that you're more
18:11
interested in? Yeah, geography agnostic, you
18:14
know, certain parts of the country are more difficult to
18:17
operate in and we take that into consideration.
18:20
But if you're in one of those states, it's a little bit more
18:22
difficult to operate in and you have everything that I described
18:24
earlier in terms of, you know, team and great margin profile.
18:28
We'll absolutely make an event. Taylor, I wonder if we can pick
18:32
maybe one of your portfolio companies and kind of go?
18:35
Through. The life cycle from how you
18:38
found them, you know, how that sort of courtship happened, what
18:42
it is that you've been able to help them with and where they
18:45
are today. Sometimes the specificity of one
18:49
particular example can really help people kind of, I don't
18:52
know, visualize what it is that you guys do a bit more.
18:56
Yeah, one, the one that I'll call out is a company called
18:58
SWIG. They're a specialty beverage
19:00
concept. They've really created the
19:02
movement behind what's today more commonly referenced to as
19:05
dirty sodas. You know, they have well over
19:08
100 locations across the country.
19:11
Very successful franchise program, very successful
19:13
corporate store program. But when we got involved, they
19:17
were what I described as a, you know, fledgling shop that was
19:20
based in St. George, UT, the southernmost
19:22
town in in Utah, right on the Nevada, Arizona border.
19:26
And, you know, when we got involved with them, it really
19:29
just started out of a conversation between, you know,
19:33
our, our team and the founder was really not even coming in to
19:37
talk to us about our potential investment.
19:39
They came in, we was asking for advice.
19:41
So in the franchise, did we not franchise?
19:42
How can we grow our brand? And the relationship started in
19:45
in that capacity and, and through the giving of that
19:48
advice and just being willing and open to share best
19:52
practices, that founder ultimately left that meeting
19:55
that day, gracious for the advice that she had received.
19:59
And about an hour later, jumped on the phone and called our
20:02
managing director and said, hey, I liked everything that you
20:05
said. Why don't we just partner?
20:07
And so, you know, after, after some time considering that and
20:11
contemplating it, we said, yeah, let's jump in.
20:13
Almost. So, you know, they've grown to
20:15
17 locations. They were, you know, in the Utah
20:18
market and it started to grow down to Arizona.
20:20
But I would describe the state they were in as they'd kind of
20:23
outgrown their ability to operate in in those states,
20:26
which is very common inside of your food and beverage you as
20:30
you grow. They outgrew it like they didn't
20:32
have the supply chain infrastructure.
20:35
To more of the leadership, more of the leadership infrastructure
20:38
and more of just the ability, you know, it's really difficult
20:40
in this industry to work on the business and in the business
20:43
every single day. They were just trying to show up
20:45
for their team and be supportive to everybody who had helped them
20:48
build it to that day. But every once in a while, you
20:50
need to be able to take a step back and look at the strategy
20:53
and look at the types of, you know, systems and processes and
20:56
tools that you're bringing to the business to make it more
20:58
efficient and effective. And that's really exactly what
21:00
Savory did. We, we ended up buying a
21:02
majority stake in that business, partnering with the founder, who
21:06
you know, is a phenomenal individual and she continues to
21:09
be the face of the brand today. But we helped them through about
21:13
a six month period to, you know, double the profits, you know,
21:17
seeing enhancements in, you know, the kind of the key costs
21:19
of food and and labor, you know, enhancing, making, you know,
21:23
creating better systems and processes and technologies
21:25
around that business. And then we grew from 17
21:28
locations in 2018 to you know, when by the time we, we brought
21:34
on our new partner who were the former owners of the Utah Tias,
21:37
the Mary H Miller group, who were incredibly well respected
21:40
group here in the state of Utah. We had 55 locations around that
21:43
time. And then you know, we, we stay
21:45
very active and involved with that Business Today with earning
21:47
partnership that we formed there with that group.
21:50
And today they have well over 120 restaurants across the
21:53
country with, you know, 3 or 400 under development.
21:57
Oh my gosh, that's significant growth coming.
22:01
Yeah, pretty phenomenal outcome. We're thrilled and and we
22:03
continue to be involved in the state of that concept and it's
22:05
been amazing to be long for the ride.
22:07
And this one is a franchise concept.
22:09
So these new locations that are coming are all or mostly
22:14
franchises? So I would say it's probably
22:18
5050 at this point. We still, you know, we, we take
22:22
a view in franchising where we like to have significant skin in
22:25
the game. We know what it's like to be on
22:28
the other side of, of a franchise relationship.
22:30
We have a franchisor who, you know, come rain or sign
22:34
commodity pressure, no commodity pressure, labor pressure, no
22:36
commodity pressure. Yeah, they, they take their cut
22:40
and, you know, and, and you're expected every single day to
22:43
show up and live with what's left over.
22:45
And look, that's a system that works.
22:47
It's been very successful across the country.
22:48
And there's a lot of alignment. We know what it feels like to
22:53
have to live with what's left over at the end of the day.
22:55
And so we try to have a lot of alignment with all of our
22:58
franchisees in all the brands in which we partner with.
23:02
And so it's, it's really important to us that they also
23:04
see someone who has skin in the game, who's in the countries
23:07
with them operating that business every single day the
23:09
same way they are. Oh, that's great.
23:12
You mentioned with this company brought in some technology to
23:16
help with their processes. I'd be curious to hear a little
23:19
bit more about what some of that technology look like and if you
23:23
find it difficult sort of layering in some new technology
23:28
ideas into an otherwise sort of conservative, conservative and
23:33
traditional industry. Yeah, it's, it's definitely
23:38
interesting to even watch the technology adoption in this
23:40
industry over the last few years.
23:43
Our founder with the technologist for 11 years before
23:45
he started this company, I worked at a tech company as
23:47
well. A handful of the people who are
23:49
in executive leadership positions at Savory have more of
23:53
a technology background and spend a decent portion of their
23:56
career, you know, focused on other industries.
23:59
And I think that the lens has has really benefited us.
24:02
You know, we, we really focus on before we go in and just adopt A
24:07
technology understanding what KPI matter to the food and
24:10
beverage industry. A lot of times private equity
24:13
has a reputation inside of many industries, but in food and
24:17
beverage specifically where they come in, they, you know, hack
24:21
portions, they, you know, lower the service, all in an effort to
24:24
drive EBITDA upwards so that they can ultimately drive to an
24:27
outcome and to a sale. And that does happen.
24:30
It has happened historically and we're very sensitive to that
24:33
because we spent 10 years as an operator.
24:35
We know that that is, is the kiss of death.
24:37
And we've watched that happen too many times.
24:39
And we know what it feels like from the inside to to know what
24:41
that looks like. And so for us, we are very
24:45
focused on let's identify the KPIs that matter and then let's
24:48
use technologies to support the achievement of this.
24:53
So when I bring that up, I'm saying, is labor cost extremely
24:57
important for a restaurant? Of course it is.
25:00
But also if I cut that back too much, then the person who's
25:03
across from me is having a bad experience.
25:05
And they're very, they're, they're less likely to come back
25:09
again and again and again and bring their friends.
25:11
And so, you know, we're hyper focused on this.
25:14
We call it a productive tension between we have to have our our
25:17
teammates in stores being productive and efficient, but we
25:20
can't cut back so much that we're not creating value for the
25:24
person on the other side of the counter.
25:26
So we're monitoring labor KPIs and using technologies to tell
25:30
us what's the right way to predict sales to ensure that we
25:33
have proper levels of staffing at all hours of the day.
25:37
Instead of just saying let's cut labor, we're saying let's
25:40
optimize our labor model and ensure that we have all the
25:43
personnel that we need to support our guests coming in our
25:46
door and giving them the best experience we possibly can.
25:48
So you have to make sure through technology adoption that you're
25:51
making you really understand what actually matters.
25:54
And it's that person coming through the door making sure
25:56
they have the best food possible with the the appropriate service
26:00
levels and they're being treated well when they walk in the door.
26:03
And so is an example of the tech that you introduced here just
26:07
about sort of that optimal scheduling.
26:10
We've got enough people, but not too many given what we've seen
26:13
in the historical sales trends when the busy times are busy
26:16
times of day, busy times of years, ETC.
26:20
Yeah. So we, I actually one of my
26:21
first projects when I joined Saery was I wrote an algorithm
26:24
that predicted sales down to the hour.
26:28
And then we ended up building our own software inside of our
26:32
our company that allows us to take that algorithm, overlay it
26:35
on the schedule, and then recommend what the schedule
26:39
should be. So we really make it simple.
26:41
It's not always the case that you have a manager on the other
26:45
side who has to operate and deal with the challenges of every
26:48
single day that has the time to sit there and really, you know,
26:52
build a perfect meticulous schedule that's backed by data
26:55
and science. And so we partner with them.
26:57
We say, OK, here's your recommended schedule based on
26:59
the software that we've built, the hourly sales, Here's the
27:02
people that you need, they review and then they adapt for
27:07
their specific location. They might know something that
27:10
we, the, you know, the algorithm didn't know.
27:12
I have some big birthday party that I have to later something
27:15
else. And so the other thing I'd say
27:16
about technology adoption is you have to keep the human element
27:20
in to ensure that there you can accommodate for things that are
27:24
unpredictable by an algorithm or by some type of AI.
27:27
But yeah, that's a perfect example of how we came in,
27:30
adopted technology, built it when it wasn't there.
27:33
Nowadays there are better labor scheduling softwares, but when
27:37
we were first getting involved, you know, there, there just
27:39
wasn't anything there. And so, you know, we're now
27:42
partnering with third parties more effectively than we were
27:45
able to a few years ago. But that's a perfect example of
27:48
free technology adoption. We're able to create value just
27:50
because of our unique lens in the industry.
27:53
What's some of the emerging trends or tech that you see in
27:57
the food and beverage industry that you're particularly excited
28:00
about, Taylor? Yeah.
28:03
So I would say if we go back to 2020, what COVID caused was
28:08
probably 10 years worth of technology adoption in two
28:11
years. And so a lot of the technology
28:15
that was adopted at that time was around how do I get my food
28:18
to my guests, no matter where they are because they can no
28:21
longer come to me. And so you see the advent of
28:24
DoorDash and Uber Eats and a lot of marketplaces were positioned
28:28
extremely well to kind of capture that.
28:30
What I'm very interested, what I'm very interested in in the
28:34
future is where how restaurants bring that back native to
28:41
themselves and how they're they're trying to get back to a
28:44
place where their guest is one-on-one as opposed to having
28:48
to interact with them through a marketplace.
28:51
Meaning like sort of getting away from sort of this trend of
28:54
like Uber Eats and DoorDash and that sort of thing.
28:57
Am I understanding that? Yeah, so not.
29:00
Necessarily in some ways, yes, but not not entirely so.
29:03
Meaning a lot of customers are going to go to a marketplace
29:06
like Uber Eats and DoorDash to order their favorite food.
29:09
It's out of convenience. They have a loyalty to the
29:11
simplicity that they have created for them.
29:14
But what has always been the hallmark of restaurants is
29:16
having people in the restaurant experiencing the culture,
29:20
experiencing the menu in real time and also being able to
29:23
interact with them on a one-on-one basis, even when
29:27
they're taking and eating that food outside of the restaurant.
29:31
So to give you an example of that, Kleeson's Hot Chicken is
29:33
one of our portfolio companies. They are extremely meticulous in
29:38
how they design their to go packaging.
29:39
They know their guests love to eat their food on the go.
29:43
They know they love to eat it, you know, at home and in other
29:46
places. And so they're not, they're not
29:49
always engaging with HHC, which is, you know, what it goes by.
29:52
This is not taken, but HHC has been very meticulous around how
29:55
do I design my packaging to ensure that my brand, which is
29:59
very strong, is experienced by the customer even when they
30:03
order off premise and they're ordering through one of the
30:05
marketplaces. And so where do you see that
30:09
going, How to, how do brands sort of refine that?
30:14
So a lot of the technologies we're seeing today in terms of
30:17
loyalty and value creation are aimed at at just that helping
30:21
individual brands engage with their employees more on a one to
30:25
one basis. So loyalty programs are
30:27
becoming, you know, far more popular.
30:30
Loyalty programs can sometimes feel like a discount program.
30:32
And not very many brands that are in this emerging elite phase
30:36
that we operate in are seeking to become a bargain brand or a
30:40
discount company. So what they're doing is they're
30:42
coming up with extremely innovative ways to create
30:44
loyalty programs where they're giving these loyalty members
30:47
special offers. And there's and sometimes there
30:50
might be a secret menu or something like that that only
30:52
loyalty members get to participate in.
30:55
You know, others might be considering, you know, just
30:58
certain swag or other other offers.
31:02
They're kind of they're choosing to provide more value instead.
31:05
Of them just achieving. What's already exactly forgiving
31:08
what they already give, just at a lower value.
31:10
And it's it's really exciting and fun to see what some of the
31:12
brands that they want. To do.
31:14
Oh, that does sound cool. Let's see Taylor, I don't know,
31:18
maybe maybe there's, you know, you've done a lot of sell side,
31:22
a lot of buy side transactions. Is there one that was
31:26
particularly challenging that you can kind of take us behind
31:29
the scenes on and talk about it, how you worked through it, how
31:33
it's kind of shaped your philosophy today?
31:38
Yeah, that's a great question. There have been multiple that
31:40
I've learned from. I I often say find me an
31:43
investor that, you know, has an experience, some type of
31:46
adversity or hasn't, hasn't had to navigate through some
31:49
potential losses. And I'll tell you that investor
31:51
hasn't been in the game long enough and they're about to find
31:53
out. That's OK.
31:55
I, you know, I'll talk about one, I will say we're
31:59
entrepreneurs, but we're also investors.
32:02
And that's what's interesting about savory that makes us
32:05
unique. If you, if you think about the
32:06
mindset that an investor needs to have, they need to be highly
32:09
disciplined, you know, be very rules based, make sure that
32:13
they're recognizing patterns and they say no 99 1/2% of the time.
32:20
Hopefully the .5% of the time that they're making investment
32:24
decisions, they're choosing the right one, but they're not even
32:26
perfect. Even after saying no as many
32:27
times as they have on the other side, entrepreneurs say yes most
32:31
of the time as long as they're focused on an opportunity that's
32:34
exciting. And so we kind of balance that
32:36
and we we try to be recursive and disciplined on one side, but
32:40
also create value with an entrepreneurial lens on the
32:43
other side. So I will say there have been
32:45
times as we're trying to strike the right balance between those
32:47
two. And one of the deals took place
32:49
in 2020 when we made an investment.
32:52
I think we probably over complicated it a little bit in
32:55
an effort to just continue to invest through those COVID years
33:01
and make sure that we continue to, you know, assess price and
33:05
take risks. That's what we do as investors.
33:08
But I think we probably over complicated a little bit because
33:10
we're in our entrepreneurial mind maybe a little bit too
33:12
much. And so one of the things that we
33:15
learned through that process was that deal structure can kind of
33:18
strangle opportunities. There really shouldn't be any
33:22
reason to over complicate something.
33:23
So we've shifted so much the other direction, keep it sent
33:27
aware. That's right.
33:29
We just keep it simple and and rely upon alignment more than
33:32
contracts, if that makes sense. I, I often say to the
33:36
entrepreneurs that we partner with that now that I've gone
33:39
through this and probably negotiated well over half a
33:41
billion dollars in transactions, whether it's debt or equity
33:44
financing. But I often say that the the
33:48
paper that we are going to put in place and we're going to
33:50
negotiate is really just protections for both sides, for
33:53
fringe cases, the decisions we make on a day-to-day basis and
33:56
how we're going to manage our relationship based on stress.
33:59
And the moment you and I start pointing toward our agreements
34:01
is probably the moment where things are falling.
34:05
That's exactly right. So we rely more on alignment.
34:09
We make sure we protect ourselves and our investors
34:11
who've entrusted us with their capital.
34:13
But we rely far more on alignment than we do on the
34:16
constructs of a legal document. And we've learned that along the
34:19
way. Yeah.
34:20
So you guys are real big on this sort of like operator
34:23
partnership model. There's a lot of collaboration
34:27
on a day-to-day basis. Talk us through what that looks
34:31
like a little bit more from a practical standpoint.
34:35
Yeah. So we, as I mentioned before,
34:37
Saviorly is this balance of we do have capital, but capital is
34:41
in many ways a commodity, right? You have to find other ways to
34:44
be valuable to, you know, the people that you partner with.
34:47
And so we bring our, you know, call it 17 years of operating
34:50
expertise in the industry, having learned the lessons that
34:52
I've described before. And but we also bring a team of
34:55
experts that's been doing this for 17 years as well.
35:00
The combination of all of those is really impactful for a brand.
35:03
So, you know, we recently invested in two companies.
35:06
One of them was up here this last week and we were sitting
35:08
down with the team that they had assembled, which is really about
35:10
half a dozen individuals who were either one of the founders
35:13
of the brands or they've helped bring the stores to life or
35:16
they've helped bring the food to life.
35:18
But beyond that, they really don't have this massive
35:21
infrastructure to support them. So day one, after a savory
35:24
partnership, they have access to real estate construction and
35:27
development expertise, they have support on human resources to
35:30
ensure they're remaining compliant.
35:32
They have accounting and finance support and not just hiring
35:35
somebody off the street who has those abilities.
35:38
They're bringing on people who have sold half a dozen brands in
35:42
the last five years and know exactly what the next buyer is
35:46
looking for. So from pretty much day one,
35:49
we're setting them up for success, ensuring that we're
35:51
applying best practices and what we know from having lived, you
35:54
know, what is going to be important to them over and over
35:57
again over the last few years. That's just a quick tangent on
36:00
finance and accounting, but we're also bringing recruiting,
36:02
right? People are the lifeblood of this
36:04
organization. We have a strong recruiting
36:09
practice that we bring to there and these brands have that they
36:12
want. Again, they're just getting
36:14
these experts that they probably wouldn't be able to afford
36:16
otherwise. But because we have a whole
36:18
portfolio that we're able to spread them across, we get to
36:21
give them everybody. And there's a handful of people
36:24
here at our office and other functions that we perform.
36:28
And there's about 50 of us here that are constantly supporting
36:31
our brands, you know, and performing every function that
36:34
you would need inside of a restaurant from real estate and
36:36
development all the way down the way.
36:38
Say more about what you guys have found to be effective on
36:42
that recruiting and retention standpoint for employees.
36:48
Yes. So we benefit from the fact that
36:49
we buy cool brands. If I can be that casual in the
36:53
way that I describe it, you know, the brands, they stand for
36:58
something and whether that is, you know, doing good, you know,
37:02
we bought a company recently called S Block and they're all
37:06
about building healthier communities one block at a time.
37:08
And that is a that's a message that resonates with so many
37:13
people. And So what you have to do is
37:16
you hiring practices, you have to be identifying people that
37:18
align with your brand and they kind of self select.
37:20
We don't have to really search too hard.
37:22
Like if you have a great brand and people align with, they're
37:24
going to come to you. And so, you know, we benefit
37:28
again from buying cool brands that already have very
37:31
interesting missions and values that they bring to bear.
37:35
But then we also are looking for ways financially to ensure that
37:38
our employees benefit when we benefit.
37:40
So one of the things that we did early on was find a way to
37:44
simulate some skin in the game for people from assistant
37:47
general managers. Sometimes they're 1617 years
37:50
old, but how do we give them a career path that when they
37:53
resells its position or when the founder is able to take some
37:56
cash off the table that they benefit as well?
37:59
And we've been able to see, you know, people cash checks that
38:05
have changed their life because of that program.
38:08
And it's, it's the most rewarding thing about what we
38:11
do, whether it's a founder or whether it's an assistant
38:13
general manager who just had their mortgage paid for for six
38:16
months. That's it's such a, it's such a
38:18
cool experience to be able to live that.
38:20
And so it's some sort of like like a profit share without
38:23
having to deal with sort of the messiness of equity so that in a
38:27
liquidity event that some other folks get to take part in the
38:30
upside. That's exactly right.
38:32
Yeah. So we're we're very intentional
38:33
about our bonus programs and ensuring that our people have
38:36
the ability to win what we think.
38:38
That's really cool. How about red flags as you're
38:41
evaluating deals and you know, now that you guys have got a
38:44
track record, you're seeing a lot of them.
38:46
What are some very common red flags that you see that maybe
38:52
our listeners could benefit from, especially if they're, you
38:55
know, in startup kind of restaurant mode, like, oh,
38:57
that's a pitfall I need to avoid.
39:01
Yeah. I think my message to founders
39:03
is if you want to grow, you have to be prepared to share the
39:08
operational control and the decision making for your
39:12
business. There really is.
39:14
It's really difficult as an individual to try to stay the
39:19
single decision maker when you are responsible for thousands of
39:24
people's jobs. And you know, we are responsible
39:26
for a large organization. So it's difficult for founders
39:30
and, and we've lived through this.
39:32
I've had multiple conversations, but they go through this
39:33
evolution where they build this ground.
39:35
They feel like it's an appendage to them, like it belongs to
39:38
them, it is theirs. And no one reveres and respects
39:42
that more than us. But there has to be this shift
39:45
in your mentality from I'm going to I'm going to do what I say
39:49
to, I'm going to do what I feel is right.
39:51
Almost more of a stewardship. There's this shift that takes
39:55
place when you have to realize that you're no longer just
39:58
responsible for building something that you you had in
40:00
your head. And then you're very proud of
40:01
what you've built. You have to be mindful of the
40:04
thousands of jobs or that you have created or have the
40:08
potential to create. You have to be mindful of that,
40:11
you know, all of the people who around you that rely upon this
40:14
organization you've built to support their lives and their
40:17
families. And if you really want to grow
40:20
to a large point and you want to create through enterprise value
40:24
in your business, just be prepared to and know that it's
40:27
going to take other people around you to support you to do
40:30
that. And so once you've made that
40:33
acknowledgement and you're able to gain comfort with it, then it
40:36
becomes extremely important who you align yourself with.
40:39
And that decision is perhaps the most important decision you'll
40:41
ever make with your life, particularly in in the in the
40:45
lens of the founder. Because if you align with the
40:47
wrong group, you know, they can take your vision, you know,
40:50
somewhere very differently. But if you align with the right
40:53
group, they'll help your vision become a reality and actually
40:56
help you get there, as opposed to you having to do it all by
40:59
yourself. Yeah.
41:01
That's interesting how you put that.
41:03
You know that the, the founders, they see the business as an
41:07
appendage. You know, I've, you know, I've
41:09
never done restaurants, but I've had my own businesses before,
41:12
created my own brands. And it feels very much like a,
41:15
like a labor of lot like a child.
41:18
And so when somebody comes in and they're trying to do it in a
41:23
different way, albeit to help the overall vision, that can be
41:27
difficult. I got here because I did things
41:30
this way. I made a lot of hard decisions.
41:33
Not all of them are right, but my path has generally proved
41:36
successful more times than not. And now I'm going to turn over a
41:40
lot of that decision making or a lot of the idea generation
41:43
process to some folks who understand how to do this on a
41:47
higher level. But that's still a hard
41:50
transition to make. Is there a way, is there
41:57
something for the founders themselves?
41:59
Because I hear the second part of what you're saying is make
42:01
sure as the restaurateur, the brand owner, the the startup
42:06
person to make sure that you choose the right partner going
42:08
forward. Any advice that you can give to
42:11
people on best way to sort of evaluate things from the
42:17
starters, the startup entrepreneur's perspective and
42:20
finding the right partner for themselves?
42:24
Yes, I would say be very thoughtful about what you want
42:27
before you run a process to find a partner.
42:31
Trying to go out and find capital is extremely
42:33
distracting. It takes a lot of time and
42:35
energy, and you need to be very thoughtful about what you want.
42:40
If you are trying to maintain control and you're like, hey, I
42:44
have a vision, I want to execute on it.
42:45
I'm not quite ready to, you know, invite an equity investor
42:48
who's going to have a say. The very definition of equity is
42:52
that it's fairness. You're you're going to be
42:54
treated fairly, right? In the financial context, that
42:56
means we're going to distribute money fairly.
42:59
But from a governance standpoint, it means that, you
43:02
know, we need to be fair to one another in the decisions that we
43:05
make. And so you're not quite ready to
43:07
kind of bring that on and share that burden.
43:11
I would encourage you to look after debt, right?
43:13
And debt providers like, look, I'm going, I'm more than happy
43:15
to let you retain control of your business.
43:19
I just need my money out first. And you can do whatever you want
43:22
thereafter based on some rules that I'm going to lay down for
43:24
you. And equity investors going to be
43:26
different. They're going to put money in
43:28
your business. They're going to, you know, just
43:30
like you, they're going to wait for what's leftover after the
43:34
end of the day and then you get to split that.
43:37
But an equity investor taking more risk than a debt investor,
43:40
they don't get their money out unless you do.
43:42
And therefore you need to know they're going to have a seat at
43:45
the table. They're going to have an opinion
43:48
and and they've effectively purchased their right to have an
43:51
opinion. And so you need to figure out,
43:52
you know, what exactly are you looking for?
43:55
A minority investor will have an opinion, but they won't be able
43:58
to control the decision making. Overall, a majority investor has
44:02
taken a large enough risk where they're likely going to want to
44:06
be able to influence the decisions in a big way.
44:10
You know, Savory is a majority investor because we feel like we
44:13
bring a lot to the table. But I know I'm maybe going to
44:17
say something that will help kind of round out my commentary
44:20
over the last couple of questions here.
44:22
But it's founders are the lifeblood of consumer
44:24
organizations speculator in this space.
44:27
So there is nothing that's more important to us in the
44:29
investments that we make than the relationship we have with
44:31
our founder and the team that we're helping them to build.
44:35
Some of the relationships we have are they're our deepest
44:37
friends. We've spent, you know, as much
44:40
time with them as we can. We know their families.
44:43
We know what's important to them.
44:44
We know what they value. And we believe that they are
44:46
absolutely political and essential.
44:48
And so it's not as if everything they're doing and everything
44:52
they're creating has to be muted by bringing on a financial
44:56
partner. It's quite the.
44:58
Opposite, right, especially the partnership model that you guys
45:00
are talking about, like you wanna keep building on the
45:03
foundation that they've put in place?
45:05
That's exactly right. So it's extremely important.
45:08
So to go back, I'm gonna come full circle to your question
45:10
around red flags. If we identify a founder who
45:13
wants to just keep all control, who's unwilling to take advice
45:17
and, and unwilling to recognize that if you take on an
45:20
investment, you are now a steward of, of the jobs you're
45:23
going to create. You are a steward of the capital
45:26
that you've been entrusted with. If there is a founder who's
45:29
unwilling to acknowledge that and reverence that moment, it,
45:32
we really end up in a, in a stalemate.
45:34
And the reality is us investing in that, it won't be a good
45:37
experience for them or any investor because they're not
45:40
quite ready to, you know, be able to kind of share in that
45:43
stewardship and responsibility to build the great brand the way
45:45
that it's envisioned. Taylor, where do you see savory
45:49
funds being in? Gosh, we used to say 5 to 10
45:54
years, but that just seems so long.
45:55
So call it the next two to four years.
45:59
Yeah. So I've done this before.
46:00
Savory will not depart from what it knows.
46:03
It's good at our hallmark. Our core will always be finding
46:07
the next generation of American restaurant brands and allowing
46:10
them and giving them the resources that they need to be
46:13
successful on the scale nationwide.
46:15
That will always be our core. In the future, we might consider
46:18
other ways in which we can expand on that.
46:21
You know, is there a way where we can benefit the rest of those
46:24
who are in this massive industry through some type of a debt
46:27
offering or some type of a minority investment offering or
46:29
something like that? But we we're not quite there
46:33
yet. We believe that we still have
46:35
work to do in terms of, of staying very disciplined.
46:38
Again, we know what we're good at.
46:39
We know where we can have the most impact.
46:43
So we still think there's work to be done.
46:45
I do believe that Savory and its reputation will continue to grow
46:48
in the industry and we'll continue to find ways to
46:52
leverage that in the future in in a way that we feel like we
46:56
can be the best in that space. I will say we jump into whether
47:00
it's an investment option or some type of operating or
47:03
consulting support unless we feel like we can be the absolute
47:06
best to do it. So I hear all that and I take
47:11
that to mean that you want to continue to grow the brands that
47:14
you're already invested in while also looking for new
47:18
opportunities to be involved with.
47:20
That's right, yeah. And we expect that there will be
47:22
some other ancillary opportunities that grow out of
47:25
that and we're excited to figure out what those are.
47:29
Oh, that sounds mysterious. Are you ready to say more yet
47:33
about those ancillary opportunities or is that a
47:36
revisit down the road? That'll be a revisit down the
47:39
road. We'll figure that part out in
47:42
the coming years. All right, fair enough.
47:44
I want to shift gears now, Taylor, and talk about a serious
47:48
challenge that you've overcome in your life.
47:51
Maybe it was something professional career oriented.
47:54
Maybe it was personal. Maybe the two overlapped.
47:56
How did you get through it and what did you learn, Taylor?
48:02
Yeah, I, I think I'll probably make it.
48:05
Obviously everyone has personal challenges that they face.
48:09
You know, for the group today, I think I'll, I'll reference more
48:12
of a of a professional challenge.
48:15
I think one of the first deals that that we ever did didn't go
48:19
as planned and it started to unravel a little bit.
48:22
And I remember being in that situation and I've been through
48:25
this earlier, right, finding an investor that hasn't experienced
48:27
some adversity in their portfolio.
48:29
And I'll tell you they've not been doing it long enough.
48:32
But you know, it was one of the first deals.
48:35
I had a lot of pride of authorship and ownership in it.
48:38
It was a partnership that I helped pull together and, you
48:41
know, it started to unravel, you know, we and, and when it first
48:46
started to unravel, I looked at that situation and I spent a lot
48:51
of time mulling it over and trying to figure out, OK, why
48:54
did this happen? You know, why did it play out
48:56
the way that it did? What could we have done
48:58
differently? And all those were extremely
49:00
important. What I felt was more important
49:03
about shaping and, and like growing from it was is the quick
49:08
pivot. We immediately pivoted, probably
49:12
we spent maybe a day or so kind of mulling it over, trying to
49:15
figure it out. But we benefited from our and I
49:19
benefited from just my years in the industry knowing exactly
49:22
what we needed to do, realizing what we have versus what we
49:25
don't and finding an alternative solution fairly quickly.
49:29
And so it was one of the situations where what could have
49:33
been a pretty significant failure and what felt like a
49:35
meaningful failure, failure at the time, we just had to see
49:39
what we had left in our arsenal and figure out what tips were
49:42
still on the table, pick all those chips up and make the most
49:45
out of the situation. And I won't go too much more
49:49
into detail in that, in that specific one because there's,
49:52
you know, some, so a lot of the people that were involved in
49:55
that are still involved with us today.
49:58
But it was a difficult situation for us to go through being young
50:00
in my career. And then it was now it's become
50:05
one of those moments in time where I draw the most
50:07
inspiration from because it was one of those things that should
50:09
have been a death blow. And it ended up being one of the
50:11
most important things that we ever did as a firm.
50:13
And we grew A capability that day that, you know, we'll have,
50:17
you know, for the future. Yeah, and I know the listeners
50:20
are like, oh, I want the specifics, give me The Dirty
50:22
details. But you know, I respect why you
50:24
want to kind of keep that under your hat.
50:26
But can you say more about sort of that response?
50:30
What did you say, 2448 hours where it looked like this was it
50:35
the this was the death blow and how you and the team kind of
50:39
rallied together and what sort of those internal steps look
50:42
like to turn it, you know, from disaster into something that
50:48
continues on? Yeah.
50:50
So remember I was at a conference when I got, you know,
50:52
this, this initial phone call and I've never returned to that
50:55
conference because I get sick to my stomach every time I think
50:58
about it. So I ended up spending just the
51:01
time sitting in the hotel room just managing the situation.
51:06
And the feeling was again like we we take very seriously our
51:10
obligation as investors. We've as as a private equity
51:15
investor and I don't think many people really think about it
51:18
this way. I think that this is a fairly
51:21
unique view. Maybe they do, but again, I've
51:23
used the word stewardship a lot. We're responsible for investing
51:27
the savings of other individuals that they've worked hard to to
51:31
earn, whether that be for a large institution or a pension,
51:35
who's investing on behalf of fire or police or anything else,
51:39
or whether it's an individual who started the business, took
51:42
massive amount of risk themselves and decided to
51:44
entrust you meaning savory with their capital.
51:48
And so that's the immediate reaction.
51:50
And it's like, Oh, my goodness, I wanted and did everything I
51:55
could to be successful in this and to ensure that we, you know,
51:59
we're good stewards of this capital.
52:03
And it's kind of potentially falling apart.
52:08
And then you just take that moment and then you have to have
52:13
a moment of realization and say adversity comes every single
52:16
time. That's kind of what we reached
52:17
about that 24 to 48 hours. But we can no longer sit here
52:20
and just Mull it over because it's over.
52:23
It's behind us. We have a decision we need to
52:25
make. Are we going to just lay down or
52:27
are we going to fight for that same pause that I just described
52:30
to you, just in a different way than we fought for it in the
52:33
first place. And that's really the the shift
52:35
that we took. So we ended up taking, like I
52:40
said, what chips were still left on the table, which were the
52:42
assets that we'd invested into and finding a way to convert
52:46
those into another concept. And, and found a way to ensure
52:53
that we were able to take everything we'd invested and
52:56
ensure that we keep that. And our investors are able to
52:59
keep that in a way that was valuable, but also set them up
53:03
for successful sale in the future.
53:06
And so it's phenomenal. It was very cool.
53:08
It's one of those situations where I don't think that every
53:10
investor can do this. A generalist investor that
53:12
doesn't have knowledge of the space they're investing in and
53:16
all they're doing is just allocating capital would have a
53:18
really difficult time doing what we did.
53:20
They wouldn't understand sort of the operational aspects of being
53:23
able to reallocate those assets and how to do it, but actual
53:26
strings that were available to pull.
53:28
Exactly. And so that's where us being a
53:30
specialist fund really helped us because we we've been doing this
53:33
for 17 years. So we knew what vendors to call,
53:35
we knew how to repurpose equipment.
53:37
We knew what types of businesses would use the same type of
53:40
equipment. There's so many things that we
53:41
that we were able to do because of that specialist lens.
53:44
And as I mentioned, part of being a great investor is when
53:48
things don't go right is ensuring that we maximize
53:52
whatever we can. And that's exactly what we did
53:55
in the situation. So huge lesson learned.
53:57
But it was a pretty tough 48 hours time.
53:59
We figured out and rolled over, but it didn't last long.
54:02
And I'm super grateful for that experience.
54:04
It's it's shaped who we are today and will make us better in
54:08
the future. Well, I hope at some point you
54:10
feel comfortable returning to that trade show.
54:14
In the meantime, Taylor, what what's your superpower?
54:16
How would you characterize that? Oh man, I would say I can take
54:22
significant amount of complex inputs and find a solution that
54:26
can as much as possible check the box to solve for all of
54:31
them. You know, I kind of drive in
54:34
chaos and complexity. I've learned a lot along the
54:38
way, but just love problem solving.
54:41
And yeah, I'd say, you know, the other thing I would probably add
54:45
is just bringing the team along for the ride and allowing, you
54:49
know, others who are around me to participate in that.
54:51
It's extremely rewarding when you get to have a diverse array
54:55
of portfolio companies, each of them having their own particular
54:58
challenges that they're facing to be able to show up, see
55:01
those, you know, that complex criteria that we have to solve
55:04
for solve it. It works.
55:06
Growth happens, people are happy, jobs are created.
55:09
It's a pretty phenomenal experience.
55:11
And I'd, I'd say sometimes it helps me, sometimes I end up
55:15
just, you know, there's good and bad with all of your strengths
55:18
and your superpower. Sometimes I'm, I'm solving
55:20
problems for people that I probably shouldn't.
55:21
Other times I'm solving bigger problems for, you know, for our
55:25
organization. So I'd say that's that's my
55:27
superpower. So if I'm hearing you correctly,
55:30
you're a guy who sees the chess board pretty well.
55:33
You understand how the pieces can move, how they can come
55:36
together, how they can solve different problems, how they can
55:39
all be used to kind of push forward towards a common goal.
55:44
That's right, yeah. Let me see two more questions
55:48
here. How about some daily practices
55:51
that you find helpful, Taylor? Maybe something that gets you
55:54
started in the day? Maybe something that helps keep
55:57
you on track when you know. Curve.
56:00
Balls are thrown your direction. What are some things that you
56:03
find helpful to rely on? Yeah, and I'm going to, I'm
56:08
going to share some advice that's been helpful for me.
56:11
You know, I'm, I'm not so arrogant to think that this is
56:13
what should apply to everybody, but in my mind, I've been at the
56:15
same place since I graduated college.
56:18
And that's not a super popular path in today's day and age.
56:23
My thought would be is commit, Commit to something like find
56:28
what you're going to commit to and stick to it.
56:30
It's really easy to jump side to side these days and in many ways
56:33
you're rewarded for it in the job community.
56:37
But the success that I've been able to have is by choosing to
56:39
commit to something, lean into it.
56:41
Spend the time understanding, you know, what are the most
56:45
important areas to, you know, spend your time and to invest
56:48
into and then lean in. Everybody I talk to on my team,
56:52
just lean in. The last thing you want to do is
56:55
lean out because that's the only way to guarantee a mediocre
56:58
support outcome. So MIT and lean in.
57:01
The other thing, you know, I'm I'm a Family Guy.
57:04
The other thing that I would recommend in terms of just kind
57:06
of daily habits is I include my wife and everything she feels,
57:11
you know, she has, you know, other things that she's focused
57:13
on. She runs a business herself, but
57:15
she is my biggest advocate. She's also the best consultant I
57:21
have in my array of the people who are around me.
57:24
She's fantastic sounding board. She's a phenomenal strategist.
57:28
And so whether it's a spouse or whether it's just your person,
57:30
have somebody that's there who can keep you honest with
57:34
yourself makes it so you won't just believe in your own, you
57:38
know, the own story you're telling yourself.
57:40
It will help. You can call it how it is and
57:43
really just find yourself a person who's going to be an
57:44
accountability partner and someone you can share that with
57:46
so that you can make it safe. She's, she's controlled to me on
57:50
multiple occasions and helped me make a better decision for our
57:53
organization. And we all benefit from that.
57:56
Is she actively involved in the business or this is something
57:58
she's doing it as a supportive spouse?
58:01
Just as a spouse. Nope.
58:02
So I include her on, you know, and obviously if he thinks
58:05
confidence doesn't need to stay confidential, you know, but you
58:08
know, for the most part when it comes to, you know, decisions
58:11
we're making for growth and you know, whether it's a portfolio
58:14
company and leadership and things like that, she, she keeps
58:17
me grounded and, and understands kind of what, what we're going
58:20
through. Yeah.
58:22
OK. Last question for you, Taylor.
58:24
But before I ask it, I'm going to do 2 things.
58:26
First, everybody listening, just pause for a second.
58:30
Go hit the follow button on your favorite podcast app.
58:32
We've had a great conversation here today with Taylor Dehart
58:35
from Savory Fund. And I want you to continue to
58:37
get more great interviews like this in your feed.
58:40
Taylor, I also want to let people know the best way either
58:42
to get in touch with you or the company or to follow your story
58:47
or that of savories. What would be the best way for
58:49
that to happen? Yeah.
58:52
So LinkedIn would be a great place to connect.
58:55
That's where, you know, you think we need to kind of follow
58:57
along, do everything we can to share updates along the way of
59:02
brands we're acquiring and their successful growth stories.
59:05
You can reach out to me via e-mail.
59:06
You can find that, you know, through LinkedIn as well.
59:09
If you're a restaurant operator, come to restaurantology.
59:12
It's Savory's unique conference that we host every single year
59:15
here in Salt Lake City. So we have a 7th year doing it.
59:18
This year we had a private concert taking place the day
59:21
before that. Everyone is welcome to join.
59:24
And you know, it's a conference built for operators between 2
59:28
and 20 units. So if you want to learn more
59:30
about Savory's approach, but not just our approach, we're going
59:33
to bring people from across the industry to help you have the
59:36
resources you need to be successful.
59:37
Whether we're your future partner or not, you know, we'd
59:40
love to have you come. We have a lot of our team
59:42
members who are up on stage kind of sharing best practices.
59:45
So that would be probably the most effective for those who are
59:49
in the industry and for those without who just want to follow
59:53
along for, for the story about, you know, a specialist fund kind
59:57
of taking a niche and, and seeing it come to life.
1:00:01
I think LinkedIn and obviously we have a, we have a strong PR
1:00:05
team, so follow us on other news channels as well.
1:00:07
So restaurantology, where do we find the link for that?
1:00:13
It's Restaurantology summit.com and yeah, that's that's record.
1:00:20
You can also go to staterefund.com and there's a
1:00:22
link. There's a link.
1:00:23
Inside there. And when is the next one again,
1:00:25
Taylor? It's September 10th and 11th of
1:00:28
this year. OK, great.
1:00:31
We'll find a link to that and include it in the show notes for
1:00:34
everybody. So last question for you,
1:00:36
Taylor. You and I reconnect a year from
1:00:38
now and you're celebrating. You're super excited about
1:00:41
something. What is that thing that you're
1:00:43
celebrating a year from now? You know, we, we recently made
1:00:48
an investment into a company who, you know, they're
1:00:51
phenomenal. They have, they have the right,
1:00:54
they have everything. It takes 3%.
1:00:57
Sabre made the investment and allowed them to.
1:01:00
This touches back on what I said before, really simplify their
1:01:03
capital structure and and give them the appropriate capital
1:01:07
structure to be successful moving forward.
1:01:09
All the resources that they need to be able to get back into the
1:01:11
growth phase. I think this company one year
1:01:14
from now will be one of the most attractive restaurant companies,
1:01:16
not just in the emerging elite phase, but in the entire
1:01:19
country. I'm excited to celebrate that
1:01:22
with them. When you know we're able to
1:01:24
point towards our partnership is a moment where we were able to
1:01:27
give them all the things they needed to be successful.
1:01:30
It has massive potential. It's going to continue to grow
1:01:33
and I'm excited for what they look like when you're from
1:01:36
there. Can you give us the name or do
1:01:38
we need to revisit with you in a year?
1:01:40
No, it's, it's hawkers, Asian street food.
1:01:43
It is an incredible company that has done some incredible things
1:01:48
and we couldn't be, couldn't have been more excited to put
1:01:50
more fuel in the tank to see them grow under the food.
1:01:53
What? Is it specifically about this
1:01:55
particular concept that has you so excited?
1:01:58
You know, I'd say it resonates and connects with Gen.
1:02:02
Gen. Z and millennials better than
1:02:05
really any other casual dining in the country.
1:02:08
And so you have a lot of these, I would say some of the the
1:02:12
concepts that we are all familiar with that we've known
1:02:15
since we were kids, let's call them Applebee's, Olive Garden,
1:02:19
Chili's. They're phenomenal.
1:02:21
They're big brands. They've grown, but I think that
1:02:24
they've been around for some of those earlier generations.
1:02:27
This is kind of that next wave of casual dining where it's
1:02:31
experiential, it immerses you in Asian culture, it takes you to a
1:02:35
place you've never been before, and it allows you to explore
1:02:38
while sitting in the four walls through a restaurant.
1:02:40
There are very few restaurants that can successfully say they
1:02:42
do that. We like to think that all of our
1:02:44
portfolio does that, but I was grateful for the opportunity to
1:02:47
partner with them and to be able to scale that and to give them
1:02:49
the capital structure and resources they need to be
1:02:52
successful. Super cool, well tailored to
1:02:55
heart from Savory Fund. I want to be the first to thank
1:02:57
you for sharing with your time and your story with us today.
1:03:00
I really appreciate it. Thanks, Anthony.
1:03:02
Appreciate you having me on. Folks, that's a wrap on another
1:03:05
episode of the Inspired Stories podcast.
1:03:08
Thanks for learning with us today.