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:
