Transcript

A (0:00)

A lot of our growth originally was just trying to build a neighborhood. And so it was, you know, we built a pub first. I was beer focused and. But it was really in the middle of nowhere, part of downtown that was run down and dilapidated. You know, we were trying to build stuff that just made the neighborhood better and get more people down there. And so bit by bit it was like, okay, what else do we need? Like, so, you know, one point, like the new baseball stadium open. Like, okay, we need a sports bar across in the baseball stadium, right? And okay, we need, we need a breakfast offering. So we built a diner, right? We made, you know, the Tavern, which is one of our best restaurants. I think. Day in and day out, the Tavern was our, that was 2010, that was our seventh restaurant down there. And that was with the idea that, okay, we need to have a place that's a higher price point, right, the more chef driven. So, you know, at that point downtown Tulsa, man, there wasn't anything a higher price point. So it is bit by bit trying to build the neighborhood and round out the offerings in a way that got people used to coming downtown again. And along that way, you know, I was always trying to round out the neighborhood. And so we just finished this huge project that I've been working on for 20 years. It's two city blocks. It's office building, apartments, retail space, this big kind of central plaza. We're going to open an Italian restaurant on there later this year. And so a lot of it for me has just been about our downtown, my hometown and just trying to make it better.

B (1:24)

Welcome to restaurant unstoppable. For 10 years and over 1,000 episodes, I've been traveling the country chasing word of mouth leads and having in person only long form discussions with the industry's finest owners and operators. Our mission is to inspire, empower and transform the restaurant industry by bridging the gap between this generation's leaders and the next. Listen to today's guest and so many others and get one step closer to becoming unstoppable. This episode is brought to you by me. With me, you can standardize your culinary IP in state in sync, giving the culinary team the ability to both create recipes and distribute them from the same platform. You can train your team quickly and maintain dish consistency by turning your recipes into interactive training material. And you can get laser accurate food costs because M allows you to calculate the yield of ingredients with prep loss included. Create a free account by visiting getmeats.com unstoppable. That's G E T M E E Z.com forward slash unstoppable. And as a listener of Restaurant Unstoppable, you can get 25 recipes uploaded to your me's account for free. Sign up today and learn more at G-E T M E E Z.com forward/unstoppable. Do you wish you could have all of your restaurant needs and solutions under one roof? Well, you can. It' Restaurant Systems Pro. And with Restaurant Systems Pro, you get accounting systems, budgeting systems, costing systems, purchasing systems, inventory management systems, labor management systems, training systems, and systems to create and implement checklists. And on top of all this, Restaurant Systems Pro has their own native general ledger. And they're in the process of launching their own pos, which they are so appropriately naming serve because that's exactly what they do. To learn more, head over to restaurant unstoppable.com RSP where you can schedule your own demo, watch a demo that I did with Restaurant Systems Pro CEO Fred Langley, or catch every and all testimonial we've ever recorded on the show. That's Restaurant Unstoppable.com RSP with excitement, allow me to introduce to you today's guest CEO and founder of McNeely's group, Elliot Nelson. My man. Elliot, are you feeling unstoppable today?

Summary

Restaurant Unstoppable Episode 1183: Elliot Nelson, Founder/CEO of McNellie’s Restaurant Group

Date: May 12, 2025
Host: Eric Cacciatore
Guest: Elliot Nelson, Founder & CEO of McNellie’s Restaurant Group

Episode Overview

In this episode of Restaurant Unstoppable, host Eric Cacciatore sits down for a return conversation with Elliot Nelson, the prolific restaurateur at the helm of McNellie’s Group in Tulsa, Oklahoma. The discussion focuses on sustainable growth, values-driven entrepreneurship, scaling concepts, operational challenges in the current environment, and the responsibility of restaurateurs to their communities and teams. Filled with practical insights, candid lessons from failures and successes, and forward-thinking perspectives, this episode serves as a must-listen for anyone navigating the complexities of owning or growing a multi-unit independent restaurant business.

Main Themes

Community-building and purpose-driven growth versus profit-first expansion
Adapting to post-pandemic operational realities: labor, tech, real estate
Why transparency, collaboration, and generosity with equity matter
The limits of ghost kitchens, takeout, and current delivery app economics
Regional challenges and the transformative potential of Midwestern markets
The critical importance of sharing data and forming mastermind groups
Advocacy, lobbying, and the impact of big corporate influence
Using technology to streamline operations without sacrificing guest experience

Key Discussion Points & Insights

1. Building for Community, Not Just Revenue

Elliot’s philosophy: Growth should be a response to actual neighborhood and city needs, not just an ambition for scaling profits.
- “A lot of our growth originally was just trying to build a neighborhood... at that point downtown Tulsa, man, there wasn’t anything a higher price point. So it’s just bit by bit, trying to build the neighborhood and round out the offerings in a way that got people used to coming downtown again.” ([00:00], [16:27])
Recent projects include multi-block developments integrating restaurants, apartments, office, and public space, all designed to make Tulsa more desirable and livable.
Success Mantra: “Make our city better. One restaurant, one meal, one guest at a time.” ([04:47])

2. Expanding the Brand & Diversifying Offerings

Since 2021, McNellie’s Group has opened multiple new concepts (Mr. Kim’s Korean BBQ/Steakhouse, Jimmy’s Chop House, Barcera, Malfi, Maple Ridge Grocer, Bishop Quigley) and expanded others, growing from 19 to 27-28 stores. ([05:45]–[14:24])
Growth is measured not just by number, but by strategic fit: filling local gaps (e.g., breakfast diners, sports bars near the stadium) and creating unique community hubs.
The hard lesson: not all concepts or trends translate across markets—especially in mid-size cities.

3. Ghost Kitchens: Hard Lessons Learned

Elliot candidly shares their failed experimentation with ghost kitchens:
- "We lost an incredible amount of money over a year and a half trying to make it work… definitely a six figure number." ([08:18])
- The math didn’t work: high delivery platform fees, packaging costs, and no way to sell profitable extras (appetizers, drinks) as in dine-in.
- “I think it maybe works if you bolt it onto an existing restaurant. But for us… the math just never works out.” ([07:56])
The Tulsa market (and similar mid-size cities) lacks the density for stand-alone ghost kitchens to be sustainable, despite national hype.
Takeaway: Ghost kitchens may work for mega-influencers or in high-density metros, but the future for independent operators is rooted in relationships and trust.

4. People, Equity, and Shared Ownership

Elliot’s most significant long-term move has been granting equity to key team members, including COO Jim O’Connor:
- “I think we have 10 or 11 people that work for us who have equity in the business... to have them vested along with me, I think is really important.” ([23:00]–[24:35])
He stresses that holding onto ownership at all costs is short-sighted; shared success builds organizational resilience and drives quality.
Success is measured by impact: “If we can see 10 people retire from our company as millionaires… then I think we did a great job.” ([36:10])

5. Operational Wisdom: Choosing the Right Concept Size and Model

Smaller, focused restaurants with tight menus (under 20 items), fewer staff, and manageable real estate are more profitable post-pandemic:
- “Now that we've got clear line of sight, post-pandemic… labor’s driving a lot more of the cost structure than it used to... So, really trying to design restaurants that take less back of house, less labor, and have smaller footprints, so your rent numbers aren’t as high.” ([51:15]–[56:38])
High-volume, high-touch operations are increasingly risky unless you have exceptional demand predictability.
Profit margins have compressed dramatically: “Pre-pandemic, I would have told you a good restaurant… 10–12% profit margin. Last year… sub 5% after corporate overhead.” ([61:47])

6. Advocacy, Policy, and the Power of Networks

Lobbying and politics matter: Independent operators are often disadvantaged versus large chains that can afford constant lobbying presence ([46:33]–[48:23]).
- “Even when you can have conversations with people and they understand… certain policies are harder for the little guy, they still gotta answer to their donors.”
- Real hurdles: surging healthcare costs due to pharmaceutical pricing, regressive state policies, and unsustainable labor burdens ([39:25], [42:24], [44:15]).
Solution: Collaborate in mastermind-type peer groups (Elliot’s YPO “CEO group” with industry leaders across North America) for benchmarking and mutual support ([64:49]–[65:41]).
Candidly sharing data and benchmarks within industry networks helps operators calibrate expectations and foster collective sustainability.

7. The Midwest Advantage and the Challenge of Market Size

Tulsa and similar cities have quality of life, cost benefits, and cultural assets, but struggle with population growth and systemic political challenges ([26:53]–[39:41]).
Elliot’s mission: “Trying to make Tulsa better... trying to make this city a place that, maybe at some point, my kids want to move back to.” ([30:50])
There’s massive untapped potential as remote work and cost-of-living questions push more people to the center of the country.

8. Tech Stack, Systems, and Streamlining

Recent switch from Aloha to Toast POS, for handheld/table-side payments and better chip security ([77:50]–[79:03]).
Tech like Sunday (pay-at-table app) is being piloted; staying nimble with new tools, but adoption requires cultural buy-in across the team.
Investment in AI solutions for events/large party bookings is on the horizon, but human interaction remains core to hospitality ([80:00]–[80:24]).
Cautionary tale: “Do you ever get concerned about companies like Toast getting too big?” — “Oh yeah, always. I feel like that’s what happened with NCR and Aloha, right?” ([81:02]–[81:15])

9. Industry Transparency and the Power of Honesty

Both Eric and Elliot emphasize the critical need for open discussions about financial benchmarks and struggles:
- “It’s important that we get benchmarks out there because otherwise we just think we’re floundering.” ([62:36])
- “There aren't any secrets... I could give you all our recipes and all our numbers and say, good luck. And if you don’t have the ability to really go out… there’s a lot that goes into it.” ([73:34])
The rise of mastermind groups and peer collaboration: “People at the top are the ones willing to go further together.”
The importance of knowledge transmission, mentoring, and generosity to sustain the independent restaurant ecosystem ([74:36]).

Notable Quotes & Memorable Moments

On Purpose and Community:
- “It has never been about the money for you. It's about doing the right thing... when you do that long enough, over time, it manifests.” – Eric Cacciatore ([04:01])
- “Is your bottom line, how much money you make... really where you derive meaning and purpose? I just don't.” – Elliot Nelson ([21:26])
On Ghost Kitchens:
- “...just the math on a ghost kitchen, it's really, really hard... We lost for a ghost kitchen. Definitely a six figure number.” ([08:18])
On Equity & People:
- “If those people’s stock, we can grow it in a way that's meaningful to them... then I think we did a great job.” ([36:10])
On Market Trends:
- “It's much easier to go from pop up... cultivating an audience, then expand those offerings... than to just be open 7 days a week as a ghost kitchen.” ([11:18])
On Profitability:
- “Pre-pandemic, I would have told you a good restaurant… 10–12% profit. Last year… sub 5% after corporate overhead.” ([61:47])
On Transparency and Sharing:
- “My most cherished relationships in the industry are the guys I call and talk to and we have real conversations about this stuff.” ([62:55])
- “There aren’t any secrets. You’re either good at it and you’re willing to put in the time and the effort... or you’re not.” ([73:34])
On Midwest Opportunities:
- “There’s a pace of life here that’s easier… We have everything to offer but professional sports.” ([36:52])

Timestamps for Vital Segments

00:00 — Elliot’s origin story and purpose-driven growth
04:47 — Company mantra: "Make our city better..."
05:45 — Post-pandemic expansion and new concepts
06:46 — Ghost kitchen experience & lessons
16:27 — Growth as a tool for community revitalization
23:00 — Equity for staff: strategy & philosophy
26:34 — Markets with growth and population challenges
39:25 — Political and societal challenges in Tulsa/Oklahoma
51:15 — Concept selection, labor, and footprint strategy
61:47 — Current profit margins and operational struggle
64:49 — Mastermind/networking group for owners
77:50 — POS and technology stack evolution

Featured Names, Resources, and References

Books/Influence:

Setting the Table by Danny Meyer
Adam Smith vs. Milton Friedman economic paradigms

Peers & Groups Mentioned:

YPO (Young Presidents’ Organization) mastermind
Fred Castellucci (Atlanta), Max & Ben Goldberg (Nashville), Levi Good (Houston), Scott Slater (Boise), PJ LaRue (Canada), Joe Lonnie (Cincinnati)

Technology:

Toast POS, Sunday App, Beta-testing AI for reservations/events

Oklahoma Industry Mentors:

David Egans (Cattleman’s Steakhouse), Joe Pritchard (family-run Italian restaurant, Krebs, OK), Keith Paul (Oklahoma City)

Takeaways for Aspiring and Established Restaurateurs

Purpose and mission-driven growth cultivates staying power, brand loyalty, and personal fulfillment.
The current climate demands nimble concepts—smaller, less complex, more focused, and efficient.
Sharing wins, losses, and numbers reduces isolation and helps the entire industry resist corporate consolidation.
Mastermind peer groups create invaluable sounding boards and accelerate knowledge-sharing.
Investing in people with equity and genuine opportunity is not just ethical, it’s essential to sustainable restaurant growth.
Advocacy and involvement at the policy level is necessary if independents hope to compete with institutional players.
The Midwest and other “secondary” markets offer unique opportunities—if you’re willing to invest for the long-haul.
Transparency and honesty—internal and external—are the keystones for survival, growth, and true impact.

Contact Elliot:

Instagram: @ElliotMcNelly
Email: elliot@mcnellys.com

Listen to earlier episode:

Episode 781 (2021), for a full backstory of Elliot Nelson’s first 17 years in the business.

Find show notes and resources:

RestaurantUnstoppable.com

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1183: Elliot Nelson, Founder and CEO of McNellie’s Restaurant Group