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

Summary

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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

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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.

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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

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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])

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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.

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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.

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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])

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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])

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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.

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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.

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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])

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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]).

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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])

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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

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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)

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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.

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Contact Elliot:

• Instagram: @ElliotMcNelly
• Email: [e-mail]

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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Transcript

[A]

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]

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?

[A]

Man, I hope so, yeah. It's Monday, so yeah, I feel pretty unstoppable. I mean, the week hasn't gotten to me yet.

[B]

If, if this conversation is anywhere near as close as our first conversation, man, like, it's going to be good. It was such a great time. The first time talking to you. The episode was actually. I meant to look that up. I think it was like it was four years ago. So I want to say it was like in the eight hundreds. I'll find it throughout the conversation. I'll let the people know where to find that. But man, it was a great conversation. Your values came through. It's. You're really about creating opportunity for others. You're really about doing the. The hard thing, the slow thing. It's never been about the money for you. It's about doing the right thing. And I think when do that long enough, over time, it manifests and it was truly a great conversation. I cannot wait to get back into it. But before we do, let's get that motivational inspirational ball rolling with a success quote or mantra. What do you got for us?

[A]

Yeah, man, I think our, our mantra at the company is just to make our city better. One restaurant, one meal, one guest at a time.

[B]

Yeah, easier said than done, right?

[A]

Yeah, that's right.

[B]

So that was episode 781, if you folks want to go listen to that first episode. We cover 17 years in that episode. And you did a lot in that 17 years. And to give you some context, this is going to be episode 1,183.

[A]

Oh, wow. Over the past four years, you've been a lot. Been a lot less. Four years.

[B]

Yeah, it was a. It was 2021 when we first had you on the show. At that time, you had McNeely's Pub, McNeely's Downtown. McNeely's.

[A]

I did it again.

[B]

It's Nelly's, right?

[A]

Yeah, sorry.

[B]

McNelly's Pub. McNelly's Downtown. McNelly's Cell City, McNelly's Oklahoma City, El Guapo downtown. Howdy Burger, Faster hall times two. Two locations. Dilly Diner, Yokozuna, and the Dust bowl times two. How much has changed?

[A]

I mean, there were a few in there we probably missed. I mean, you still have the Tavern and Elgin park and Bull in the Alley, which is our little speakeasy steakhouse. I mean, those are all that been around in 21. I think since 2021, we've see. We've opened another Hattie Burger. We opened a place called Barcera. We just opened something called Malfi a few weeks ago, a little Italian restaurant. We're sitting in Jimmy's Chop House right now. This would be new. Since then, we opened Mr. Kim's, which is our Korean barbecue steakhouse. It was our executive chef, Corporate chef Ben Alexander got a James Beard nomination for that one. So let me think what else we've done in that time. There's probably a few I'm missing in there. We've been busy.

[B]

So that's two more.

[A]

You ex.

[B]

You opened two existing concepts, and then you started three new concepts. Did I get that right?

[A]

Yeah. But then Maple Ridge Grocer and Bishop Quigley are in there, too. So. Yeah, I feel like We've probably opened seven or eight things since 24 years. Yeah.

[B]

Yeah. You've been busy. I know. When we last spoke, you were. You were interested in ghost kitchens.

[A]

Yeah.

[B]

Does that interest.

[A]

It was a disaster. Okay. Yeah.

[B]

So where do you stand on ghost kitchens now? I'm curious.

[A]

Yeah. We could ever make the math work. So, you know, we tried. So we first started out with, like, a Chinese carryout because it was just kind of something missing in town. A lot of our Chinese restaurants were here when I was growing up, have shut down, so there's just not that many options anymore. So we did that and then we, we couldn't get it to where it would be profitable, so we started trying to bolt stuff onto it. We tried a fajita concept for a while, then we tried a sandwich concept for a while, but it just ultimately the, the math just never works out. By the time doordash takes their fees out of you and you pay for all the packaging and everything else. Plus when you, you look at your P and L and you're not really selling any appetizers or any drinks or anything, but just like just the math on a ghost kitchen, it's really, really hard.

[B]

Which is ironic because you think the math would be better because you need fewer assets.

[A]

Right, right.

[B]

So it's, it's the fees that are being taken out of you, the cost of packaging.

[A]

Yeah, man. Almost like your grocery marketing is just not there. Yeah.

[B]

The volume's not there.

[A]

Yeah, the volumes are tough. And I think it maybe works if you like bolted on to an existing restaurant. But for us, we were trying to run it out of our catering kitchen where you didn't have a. Just daily sales that you were trying to add to. So. Yeah, made it really hard. It's interesting. I don't know, we lost an incredible amount of money over a year and a half trying to make it work. And then finally.

[B]

You want to give us a number?

[A]

Oh, man, I can't, I can't remember. But I bet it ballpark, it was in the hundreds of thousands of dollars.

[B]

We lost for a ghost kitchen.

[A]

Yeah.

[B]

Wow.

[A]

I mean, I mean, low hundreds of thousands, but definitely, definitely a six figure number.

[B]

I mean, that's someone's salary. That's a, that's a, that's a chief salary right there. So I mean, it's interesting because like, it wasn't that long ago. 2, 4 years, 20, 21. Like everyone was saying the future is in ghost kitchens. You had Mr. Beasts, you had all the celebrities. And I think in order for it to make it work, well, I think the key variable there is an influence. I think you really need to tie your, your brand to somebody who has literally millions of followings and you need to like franchise it and do it. And even then it lasts like a couple months and like you take your profit and you get out of it.

[A]

Yeah, I mean, I would say yeah, if you get a huge volume over the course of a few months, like, yes, you can make money at it, but sustaining that, it's really difficult.

[B]

Well, I think it also proves at the end of the day, this industry is all about relationships, not ghosts.

[A]

Right.

[B]

It's not pretend.

[A]

That's right.

[B]

So any other lessons from that that's.

[A]

Worth, you know, I mean, I think ghost kitchens, but the whole door dash thing in general I think is, you know, there's, it taught us a lot about just kind of the price elasticity in the market. Right. To really make it profitable, we would had to keep pushing price and pushing price and then eventually get to a point where people just aren't going to pay it. Right. So, so that was there I think too for us. You know, in a place like Tulsa, Oklahoma, you, you just learn that what might be working in larger metro areas just not going to always work here. And so I know some ghost kitchens were working in a few places, I think. I mean I've read about some success stories, but I think that's the other.

[B]

Variable is the huge metropolitan rates like New York, Louisiana.

[A]

Yeah. If you got the density, I think you can make it work because then you look at kind of your delivery radius and you know, how many more people are in delivery delivery radius somewhere like New York than are here. Right. I mean it's, it's night and day. And so, you know, I think that's. And we've learned that. You'd think I would have stopped doing this stuff, but we learned that lesson over and over again. Right. I opened a craft cocktail bar in 2006 and the market just wasn't ready yet. People weren't going to pay that price. And you know, I think like Rand's lawroom was maybe a couple years old at that point in New York. And so you're like, oh yeah, this is cool. People are doing this. But then it took another probably six years from then until somebody opened a successful one. So I think too, you know, here we, we just got to be careful with how we tap into current trends and, and when, and when not our consumer base is going to be ready for them.

[B]

I've seen one other example of where it works I think is a good example that I'm hopeful for. And I think it's a stepping stone to a brick and mortar if you start as a pop up. So if you start as a pop up and you're developing a brand and you have a relationship with your guests and you're collecting emails and you're telling your story and then eventually maybe you have a food truck and maybe you're. Your ghost kitchen is the commissary for your food truck and you go up with a food truck to promote your food and to go to events. And then you say, hey, by the way, you can get us anytime. So it's like a way to kind of like have another channel of revenue while you're trying to build.

[A]

Right? Yeah, yeah. No, and I think that's. Right. Like, it's much easier to go from pop up where maybe you're serving something once a week, twice a week. Right. And you've really kind of cultivated an audience. And then, you know, at some point where the lines are so long, then you expand those offerings into maybe a ghost kitchen or a food truck or some other things. And. And then go into a full brick and mortar. I think it's much easier to do that than to just, you know, start a business one day and be open seven days a week. You know, lunch and dinner is a ghost kitchen. Right. It's just getting that volume where it needs to be. It's really hard. Yeah.

[B]

Hit me with those. The names of those restaurants you went so fast before. I. I kind of. I feel like I miss a few and I want to make sure I have it all. So you open four. Four new concepts.

[A]

Oh, man, let me. Hold on.

[B]

Good problems to have.

[A]

I know I have to do it like geographically in my head. So we shut down El Guapos. Never really, really opened post pandemic. We put a chicken place in there called Red light Chicken. It was an old brothel, so we didn't have to Red light and that. Actually, we've since moved. That facility ended up being too big for that concept. So we opened Red light Chicken. Then we open Mr. Kim's, which is Korean steakhouse and barbecue. Then we opened Jimmy's Chop House, which you're in now.

[B]

Beautiful spot, by the way.

[A]

Thank you.

[B]

It's gorgeous in here.

[A]

They're in a place called Barcera. Barcera is a kind of Mediterranean adjacent restaurant. Lunch and dinner.

[B]

So that's four concepts.

[A]

Yeah. Then we did a Malfi, which just opened a couple months ago. It's Italian, right around the corner from where we are now. And then we opened Maple Ridge Grocer. Actually, that Maple Ridge Grocer has been open now a little over a year. It's in a middle of an old neighborhood. And what was a grocery store is built in the 30s. And so we were able to get that old building and redo it.

[B]

What is that now? Is it like a full service?

[A]

Yeah, Full service restaurant? Yeah. Breakfast, lunch, and dinner in the middle of the neighborhood. It's pretty cool, actually. It's our kind of big old neighborhood where all the old Homes are. And it's kind of right in the middle of it, which is. Which is cool. It's not a lot of opportunities exist like that, buildings these days. And then right next door to that, we built Bishop Quigley, which is Bishop Quickley. Bishop Quigley, Yes. It's a little Irish pub. You know, a lot of my passion still around Irish pubs. Yeah. So this is actually like when we were building that Maple Ridge Grocer, it was going to be that Bishop Quigley was going to be the private rooms for that restaurant. And I was in New York doing menu research and I was sitting at McSorley's. I was like, man, you know what? Like, I think I got to build a pub over there. It's four blocks from my house, so. So I scrap. We were already under construction and I called the architect and the contractor was like, yeah, I changed my mind. I'm building a pub here. So. But it's great. I hope you get over there before you leave town.

[B]

I'd love to.

[A]

It's. It's a really cool grab B roll somewhere. Yeah. Right. So it's 1100 square feet in the middle. Middle of a neighborhood, essentially. So you expanded two more locations? Yeah, we've opened another Hattie Burger.

[B]

That's Howdy Burger, right?

[A]

Yeah. I'm trying to think what else we've expanded. I feel like we expanded something else. I don't know.

[B]

You've been busy, man.

[A]

It's been busy. We're up to 27, 28 stores now. Something like that.

[B]

So when I first talked to you, it was 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13. You've almost doubled in size.

[A]

Yeah, I bet we. We must have missed a couple that first go around because I think we were probably sitting. I think. I think we're going into the pandemic. We were at like 19 stores.

[B]

Okay.

[A]

So. So. And then we shut down one and I've added nine. So. Yeah, it's.

[B]

It's impressive, man. Your. Your growth. And I mean, a lot of what came out of our first conversation is how you chose to grow. Wanna. So when I say that I'm. Do you what comes to your mind? I'm curious. This episode is brought to you by me's. Running the back of House brings a whole suite of challenges, like distributing intellectual property from your chef's brain to your back of all of your locations. Once that information gets distributed, you still have to train your backup house to ensure the recipes are being executed accurately and consistently. Once everybody is trained, you still have to nail down profit calculations, which can be a nightmare when your team doesn't fully understand theoretical food costs, factoring in yields and unit conversions. Then once all this is done, you still have to push the information across all of your locations in real time, factoring in the prices that are constantly changing. Are you kidding me? That's where me's comes in. With me. You can standardize your culinary intellectual property and stay in sync as a team. 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 ME allows you to calculate the yields of your ingredients with prep loss included. Create a free account by visiting getme.comunstoppable that's G E T M E Z.com unstoppable. And as a listener of Restaurant Unstoppable, you can get 25 recipes uploaded to your me account for free. Sign up today and learn [e-mail] Unstoppable.

[A]

I mean, I, I, you know, a lot of our growth originally was just trying to build a neighborhood. And so it was you. We built a pub first that was, you know, beer focused and, but it was really in the middle of nowhere, that part of downtown that was run down and dilapidated. And so, 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 from the baseball stadium, right? And okay, we need, we need a breakfast offering. So we built a diner, right? We made it, 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 just 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 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, you know, not. And along that way, you know, I was always trying to just 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 you Know, just a lot of it for me has just been about our downtown, my hometown, and just trying to make it better.

[B]

It kind of makes me think of Adam Smith, the economic or the, the, the economist, thank you very much. His whole mindset was like, your job as a business owner is to give back to society, to make society like to progress, to add value to people's lives. And not so much the other economists, you know, as Milton Friedman, who said it's about returning value for your stakeholders.

[A]

Right.

[B]

But I think who are stakeholders? Stakeholders is everybody your business touches. It's your community.

[A]

Right, right.

[B]

What are your thoughts on those two economists?

[A]

Yeah, I mean, I would say I, I think this might have been in Danny Myers book, like the Setting the Table. And at some point, you know, we decided like, okay, our most important stakeholders are employees. Right, Right. We need to take care of them first to make sure it's a great place to work. And still some we work a lot on is to try and make sure McNally's group is, is kind of best in class service industry job you can get. And, and then from there you went to our customers. Right. And so the, the financial results were always the last thing in line. Right. So, you know, I think the, the stakeholders for me a lot in large part are employees and then our customers. Right. And you know, I, I don't know not to go on an economics rant, but I think, you know, that.

[B]

Let's do it, man.

[A]

Yeah, right.

[B]

There's a business podcast.

[A]

Well, so, you know, I mean, I think, I think our country has, and this has been the case in Tulsa too. We have seen a lot of publicly traded businesses get gutted in the name of quarterly earnings calls, that short term earnings have now become a focus for so much of Wall street and the way this country's run and chasing stock price that you've seen companies that used to be the bedrocks of their communities get gutted and go away and get consolidated. And I think you've seen this kind of change where a company used to really see their community and the jobs they were creating and the non profits they were helping fund. And all of those activities is part of their responsibility. Right. It was the corporate responsibility of, okay, we have this company here. We are the largest employer and investing in this community. We still have companies like that here. But a lot of those companies now they're directors or from out of state. They don't care about Tulsa, Oklahoma or Rochester, New York or wherever. They just care about making sure that stock price is where it needs to be and that they don't have any direct reliability. Right. I think to me, our company and what we do, I see it as so ingrained in the community that we have a responsibility to, to constantly give back, to donate money. I mean, I have told our, our people that anytime somebody asks for a donation for a gift card or something, whether it be for a school auction, whatever is like to give it to them. Like we just say yes. Like it's not because whoever's on the other end of that ask that cause matters to them. Right. And they are part of our community and we need to constantly be giving back. And I just think, you know, if you kind of look at what it is to own and run a business that you know your bottom line, how much money you make. Like is that, is that really where you derive meaning and purpose? I just don't. I mean to me it's like, what is that at the end of the day, right?

[B]

We've proven that there, that you can never make too much. Like there's like you will, I think the number is like $10,000. Like they say that if once you reach that 10,000 or sorry, 10 million dollar mark, like you can literally not make any more money that will make you happy. Beyond that, it's like it's impossible to get more happy with money. It's like a drug, right. You start taking a drug, you're always chasing the dragon.

[A]

Right?

[B]

Right. Like, isn't that the expression or something? Like the magic dress?

[A]

That's right, yeah.

[B]

Like, because it will never feel, like it will never feel as good as the first time and like you need more and more and more and like you will never feel right, that, that thing that you're chasing.

[A]

Right.

[B]

But if you choose to chase what matters, what we need, which is personal growth, you know, which is being seen by others, being valued and loving others and finding your definite purpose in life that adds value to society. If you chase those things, you can, you can start today and start feeling the best way you've ever felt if you chase those things.

[A]

Right.

[B]

It's powerful. Why we know this. Yeah, it's common knowledge. What's going on?

[A]

I mean, I just don't think it's, it's just not celebrated that much. Right. I mean, I think you, you know, where a lot of press goes is the, the people who have the, you know, biggest checkbooks. Right.

[B]

We started talking about this in the pre interview chat. The conversation was, you know, you want to, you want to grow, you want to create more opportunity for people. Right? That's right. You know, talking about Danny Myers line hospitality starts with your, your inner guests, your employee. And I want to point out that it was, was it your COO James, that o', Connor, that was your first equity, Jim o'? Connor?

[A]

Yeah, Jim was the first guy equity too. And I think you might be talking to Jim later. But yeah, Jim, the first guy hired, not in a restaurant, and I gave him equity to do that because he was, you know, highly qualified guy. NBA had worked for, you know, massive publicly traded company and worked for some smaller companies. But to get Jim to, I mean, agree to it at that point, what was a really low pay scale for him, I had to give him equity. Right, right. But that also set us on a path now to where I think we have 10 or 11 people that work for us who have equity in the business. And it's one of the things to me like having other people vested and care about it like an owner, and also looking to this growth and the future and all the hard work we put in to grow something bigger and more meaningful, to have them vested along with me, I think is really important. I think that, you know, so often people want to maintain their ownership at any cost. And, you know, if we really are successful and we really grow, I mean, I'm not, I don't have aspirations to get huge, but as you go and you get bigger and there's, as you mentioned before, there's a amount of money and amount of profit that me having another 5% of, it's just not going to matter. Right. Whereas, you know, somebody else having 1 or 2 or 3 or 4 or 5% of it could make a huge difference. Right. And so. And they're putting in oftentimes more hours than I am. Right. So that to me it's about people getting rewarded for the worst.

[B]

You know, the reason, like you said, for some reason there's people can't get over that hurdle of, of sharing equity. And I think that reason is ego and control. If I, you know, I need to be the, the top dog, you know, I need to be in control. I need to be the boss. And that mindset, I mean, I think at the end of the day there needs to be somebody who is the, the leader, the visionary, but like to share, but to share that success, there's so much like to have that mindset of gratitude and giving. So I mean, I got, we got down this path because I was talking about basically just like you start by giving to your guests, you started by giving to Your community, in order to be able to continue to give, you need to continue to create opportunity for people. Right. So we started talking earlier this idea of like we live in this world where it's no longer enough to do to be really good at the thing you do. And in order to play the bigger game, to get the attention of investors, you need to put yourself out there, you need to market and promote yourself.

[A]

Right.

[B]

So do you want to continue on that?

[A]

Yeah, yeah. When we talk about it, I mean, obviously we got there talking about how we've recently engaged a public relations firm to help us do that. And in fact the idea being that, you know, we're trying to get our name out there more so we can expand a couple of brands and create opportunities. I think in large part for us it's the stuff that we do locally. These one off concepts, always a new concept, always a new menu. It's really hard, it's really hard to make money with. Much easier if you're rolling out the same menu 20 times over. Right. And you get really good at managing that. And, and so I think for us it's okay. We need to pick a few brands and expand them in a, in a way that gets us some of that efficiency of scale that helps you be more profitable in those brands to allow us to continue to pursue things locally that, that I really care about, you know.

[B]

So what are the things locally that you care about where you need to find brands that have legs?

[A]

Yeah. So I mean, so we gotta, you know, the brands, we think we have legs, you know, like Barceres one we're gonna try to pursue. And, and I think if you. One thing for me, if I look at locally at Tulsa, our, our population base just isn't growing that much. Right.

[B]

We're your population mix.

[A]

No base, just the, the population itself is. It's not stagnant, but it's growing at a very slow rate. Right.

[B]

I had the thought this morning I could live in the Midwest while. Yeah, here I was like, it is almost 8 o'. Clock. I am on the highway. I'm five miles up from the city. There is no traffic.

[A]

Oh yeah, right.

[B]

It's like, it's nice. I parked my camper. There are spots in, around me, like there's space.

[A]

Yeah, it's pretty good. I mean, yeah, the pace of life here is pretty nice. You know, I mean I get to the airport from my office in eight minutes and I get a flight to 20 different places. Right. It's pretty good. So, yeah, so I look at Our community. And so much what I'm trying to focus on now is how we build something as a city that attracts people and begins to grow. Right.

[B]

So your issue is that you run out of people to attract. Well, market you need to bring.

[A]

Yeah, we need. We need more market, but also we need to continue to try and attract people. So at some point, some of the other businesses you need to really drive the market take off. Right. I mean, you can't. I don't think you can do it from a hospitality perspective. Right. Unless.

[B]

So I want to make sure I understand before you get too far ahead. So you need to bring in more market to drive other business to support your restaurants.

[A]

Yeah, and it's not just about our restaurants necessarily. I think it's about the long term sustainability of the city itself. Right. Tulsa's where RMSA is a million people. So it's not going away, but I think it's always right on the cusp of being something that becomes very much an also ran in the 21st century economy. Right. It's not yet thriving to the level that I think you would hope. Right. Especially if you compare it to North Texas, which is right down the road, which at this point I think is still the fastest growing economy in the world. I mean, it's crazy. And so. So for, for me, it's okay if I feel like I can build the things here that make this city attractive enough that other people want to move here or stay here. Like, you know, you mentioned the kind of pace of life, how easy it is if you can have that pace of life, but also have access to incredible food, dining and other things. We already have incredible cultural assets for, I think the smallest city in the country with her own symphony and her own ballet and her own opera. I mean, like, so. And that's a legacy of the kind of oil philanthropy of the last century, right. That all this kind of oil money was here, that that endowed all these arts. And so we have a lot of assets, but. But we're not necessarily on the map either in a lot of ways when it comes to tourism or food and beverage and other things. And that's sad. I mean, we have a ton of James Beard nominated places here. Lots of people, lots of successful restaurateurs. But we need to get people here visiting them and experiencing them. Because right now we don't have a lot of transient dollars coming through the market. Right. It's just a lot of tourism. Right. All of us all is fighting over the same pool of customers.

[B]

So basically your. Your Mark or your industry, the. The hospitality industry has hit a ceiling on potential market?

[A]

I think so, yeah.

[B]

So you're trying to draw. So when you say grow to get exposure, are you saying you want to get into different markets?

[A]

Right. Yeah. So I think we need to get into, you know, we're going to continue to grow in Oklahoma City, which is right down the road. We have restaurants that are ready, but I think we need to get into North Texas. I think to ignore it is, you know, ignored at your own peril, probably. But. But I also don't have a passion for those cities like I do here. Right.

[B]

I mean, I think that is one thing that came out in your first conversation is that, like, what drives you, what your passion is, it isn't, you know, was Irish food and beer. Right. But then as you grew, as you matured as a man, it was about transforming your community.

[A]

Yeah, that's right.

[B]

And, you know, but I'm curious, did you also say at one point, maybe I misunderstood you, that you want to. You want to grow this market? Are you looking to get into other, not necessarily markets, but like different verticals within your own city?

[A]

And we've talked about other verticals. You know, I mean, I do a lot of real estate development, historic development. We just finished 184 unit apartment building, finished office building. I mean, we were doing other stuff. Right. But all of it, to me is still with this kind of singular focus of, you know, trying to make Tulsa better. Right. Trying to make this city a place that, you know, maybe at some point my kids want to move back to or at least try and create some relevance out of it that maybe has been lacking. Right. And I think part of that for me is wanting the market to grow, but also just wanting it to be sustainable. And right now it worries me that a city like this, you're two or three of our big publicly traded companies away from, if they leave, like, you're in a really bad spot. And so we need to create some insulation from that. I think part of that is trying to attract people here through our, you know, food, beverage offerings that maybe is a little bit stickier, makes it one stay.

[B]

Yeah. So my mission statement is to inspire, empower, and transform the industry. And it's that transformation part that really gets me excited. And, you know, I try to echo my mission statement as much as possible, but when I think about that transformation part, it's like, okay, well, I feel like for a long time society has been very reactive to the market. Like, we're constantly reacting to the consumer reacting to like, what does the consumer want? Give the. Get the consumer what the consumer wants. Make the consumer happy. But I think at some point we have to start turning around and saying, hey, consumer, have you thought about this? And like, how do we influence. They say we're in the experience economy and we're going into the transformation economy. And the idea of the transformation economy is, is it's like literally transforming human beings, taking them from point A to point B, making people either happier, healthier or wealthier. You know, if you can focus on those things, happier, healthier or wealthier, and transform people from point A to point B, I think that we can collectively as an industry say, okay, how do we make people happier, healthier and wealthier? Right. And start using the food in restaurant industry to influence. And like, we're at the, like, we're the keystone food. You know, as you're. I'm saying this, what's going through your mind?

[A]

Oh, man, A few things. One is, you know, the happier piece is something we focus on a lot internally, which is, you know, we have opportunities every day. I mean, across all our stores, you know, I don't know how many people we serve on average a day, but, you know, thousands, you know, a few thousand people a day that we interact with, we have a chance to make their day better, right? We have a chance to make them happier. We have a chance to, you know, maybe they come in and they're not having the best day, but if we give them great service and engage them and meet them where they're at, we have a chance to maybe just improve somebody's day a little bit. But we also have the opportunity to make special occasions and memories that much more memorable. Right. And to kind of serve as the backdrop for people's life's biggest moments. And so that happiness piece is big to me. I think also when you talk about this, you know, there's so much focus on AI right now, and I go to a fair amount of conferences and things to try to stay on top of what's happening in the world. I think our industry is one of the few that, that I don't think is going to get touched that much. I mean, it's going to be around the edges of what we do. Yeah, but answering phone calls, automating, like.

[B]

Like summarizes menu, Right?

[A]

That's right. Yeah. Yeah. But at some level, you know, to cook the food, really cook higher touch food, you're gonna have to have a.

[B]

Person to make people feel seen and valued and loved Right.

[A]

And to really provide that great hospitality and service. It's human, human interaction work. We might end up being one of the few industries left where you really get that.

[B]

I'm super hopeful for the future because I think that a lot of white collar jobs and blue collar jobs are going to go away with, you know, AI and then automation and robotics, machine learning, when these things start to slingshot off of each other. The restaurant industry. Not just the restaurant industry, the food industry. Because I think though, as we back to happier, healthier and wealthier, 100% happier, our job is literally to give love. Right? Like that is hospitality, generosity, giving. But healthier too, because as we learn more about food, we're realizing that, you know, food is really at the keystone of health. And if we can start influencing people about, like if you source your food from farmers and if we get more people working in farms to make better food and we. It blows my mind that we live in a world that supposedly there's not enough food. We can't create enough food for the amount of people in the world. And you drive across this country and all you see is open land that's. That's all capable of making food. You know, that maybe we just need more people focus on making food.

[A]

You know, did you see the other day there's an article that they might have misjudged the population by a billion people?

[B]

I mean, there's a lot of people out there that are in the Journal.

[A]

The other day, they think they miscalculated the rural population of the world by.

[B]

Maybe over or under.

[A]

They're. They underestimated it by a billion people maybe. So we're at 10 now, nine something. Yeah. Yeah.

[B]

That's crazy.

[A]

I mean, there's no, you know. Really? No.

[B]

So I think we're so. I think we're positioned to make people, you know, healthier. And then the last part is wealthier. I think you're. And you skip right over that part because look at what you're doing, dude. Like your employees, you're giving people opportunity and you're creating like you're literally transforming your employees into better people. You know, like this industry is so well positioned for the future. It gets me so excited.

[A]

Yeah, no, I think you're right. I mean, yeah, it's funny you talk about that. I had a, one of these like annual planning things you do. You know, like one of my stated goals a long time ago when we started giving people stock is that if we can see 10 people retire from our company as millionaires, it's going to take a long time of us doing this. I've been doing it 20 years, doing another 20 or 30 years, probably. But if those people stock, we can grow it in a way that's meaningful to them, where they get to really retire in a way that is comfortable and. And provides them a great retirement life. And then I think we did a great job. I mean.

[B]

Yeah. Do you think in the future more and more people will come to the Midwest?

[A]

I think so, maybe. I mean, there's a pace of life to it that's easier. Right. Especially in a town like this, you know, a town like Tulsa or Omaha or Des Moines or, you know, these kind of these cities where, you know, I believe we have everything to offer but professional sports. Right. I mean, it's the only thing you don't get here.

[B]

Got college sports, though, professional sports in many ways.

[A]

And the Thunder just down the street if you really need to go. But. But we have tons. I mean, Tulsa's, year in and year out, one of the best concert cities in the country. We have a couple of venues that are some of the best in the world. And so we. We have all the concerts you want. We have cultural stuff. Our. Our food and beverage scene's getting there, Right. I mean, you're never going to be New York, but, yeah, the best stuff here competes with the best stuff and most other cities, at least in this part of the country. And so I think that. I think that at some point, the cost of living here and the ease of living here is going to appeal to a fair amount of people. Right. Oklahoma, unfortunately, is always. We're going to have a political hurdle because the way our state constitution is done, it gives a lot of power to the rural population, which means we always have some laws and things on the books that skew towards our rural population. Even though Oklahoma City and Tulsa metros make up 70% of the state, we don't have that kind of control in the legislature, which. Which gets you some kind of weird results. You're kind of like, even though you drive the economy and have the majority of the population, you don't necessarily drive the policy that creates problems for a place like this. Because, you know, if you're leaving L. A, you know, or wherever, and you see something like this is a great place based on the cost of living and the ease of living. At some point here, some of the Oklahoma stuff kind of, you know, gets in the way for people. Right. Even if you're a political refugee from one of those places. Right. So you Know, there's challenges, right, but, but there's also some real benefits too. And I always look at it, you know, if you, if you're here with this kind of cost of living pace of life, I mean, the amount of expendable income you have to then go to New York and really eat at the places you want to eat at when you're there is far greater.

[B]

Yeah, right. What are the specific political things that you think is holding, you know, Tulsa, Oklahoma City back?

[A]

Yeah, I mean I, I think if you really look at it, Oklahoma is towards the bottom in education, education attainment rates. We're at the bottom in terms of healthcare.

[B]

Like, like high school or college.

[A]

High school, yeah. Elementary and high school ed or public education system, our health systems, the decisions we make around health care and kind of, you know, there's a reluctance to take any federal money, but because of that you end up just putting the population behind. You know, there's so, and I think there's a lot of things too that, you know, I mean, I know a lot of young women, I mean just around reproductive rights and other things like, you know, Oklahoma can be a very, is very conservative on a lot of those things, which just in and of itself will drive away a lot of people who've grown up here and like it here, but just said, you know, I can't live in a place that wants to take away my rights like that and I don't want to wade into a lot of that. But the reality of Oklahoma right now, especially in Tulsa, is that we have a lot of kids who grew up here, go out and get a four year degree and move away and never come back. And our population, we replace those kids with people from rural Oklahoma who have high school degrees. And so our, our education attainment rate as a city is, is constantly going down. And our, our, our native kids to this city that have sought higher education leave and never come back. And one of the things we know is that a lot of that has to do with the political climate. And you know, I'm not trying to make any statements. It's just we have data, exit interviews and all kinds of stuff that tell us that. Right. It's just part of it.

[B]

No, it's interesting. I think that's a universal trend. I think that as, as the world we live in changes and as we can go, like the school system got out of control, you get four star experience at college now, like it costs so much to go to school and education is getting so.

[A]

I'm a freshman of college it's outrageous.

[B]

Yeah. So like, can you blame people for not wanting. I wouldn't go to college if I was an 18 year old. If I knew what I know now and I was 18 years old, I'd be like, no way am I going to college. Like, I'm going to go figure out what I want to do with life and then maybe spend some money on my education. But I think what, there's also hope here because I think that, yeah, we need government, but we also need, we need market. Right. I think that there's a huge opportunity for the people who are willing to educate their employees and to provide literal, like on the job education and experience, like attract onto yourself people and then give them the skills, give them the opportunity, give them the career.

[A]

Right.

[B]

You know, and I don't, I think we always just point to the government and point to other people and say somebody has to do something about this. But you're an example of somebody who's doing something about it. You know, like, I think we all need to take on some responsibility and say, what can we do about it?

[A]

It.

[B]

And I think that's where transformation happens, is on the inside.

[A]

Yeah. And I'll say, I mean, yeah, yes, but you know, then what happens? You know, things like health care. Right. And we offer health care to people. Right. And our health care costs over the past couple of years have gone up by like a quarter million bucks. Right. As a company. And we know that that is specifically related to some drug costs. And we know those drug costs are driven by companies that have manipulated the patent system to keep their drugs in the patent system longer and they've been able to drive their price up. So there's a couple of drugs. We know that, we don't know who because of HIPAA rules, but we know there's three or four drugs that we have employees on that cost almost $100,000 a year that are available for about five grand a year in Canada. Right? Yeah. And it's left to a business like ours to foot the bill, to foot the bill in tribes. Right. So I mean, yes, but like we need to do all that stuff, right? And do it from the private sector, but there's also a piece of the government that's, that's failing us on some of that stuff. Right. And putting too much back on small businesses like ours. I mean, Even though we're 27 restaurants, we still see ourselves as a small business fighting to make it, you know, and so that, you know, there's, there's still gotta be There's. There's gotta be a government element to it that helps absorb some of this stuff. Otherwise, you know, as a swamp. I mean, there are times when I look at our company and our profitability, you know, effectively, we're just. We're just an employment service. There is no profit. Right. We're just out there providing jobs and healthcare to people, and we don't. There's nothing else to show for it. So, I don't know, there's some frustration for me on how we've kind of let, at times, big drug companies and the big guys really kind of push their way through the system that gets put back on everybody else.

[B]

We're pretty heady right now in the conversation. I usually save this stuff for the end of the conversation. We talk about your career, how you got to where you are, how you evolved, where you are today and where the industry is going. Right. But, you know, we. I wanted to get into it earlier with you because I listened to our first episode and you said something that really resonated with me, and it was more independent restaurants need to figure out their network and to find the place or to find a place basically for influence, I think, is what you're saying, and to influence dictators and into. In policy. So basically we have to, like, figure out what's going on.

[A]

Right.

[B]

We have to understand what's happening on a higher level and to. To network into and to do something about it.

[A]

Right.

[B]

And I think we're just so ignorant, and I don't think ignorant is a negative word. It just means we don't know better.

[A]

Yeah. And, well, I think so much of it, you know, if you're running a restaurant, especially if you're, you know, one unit or two units, and that's impossible work. Right. I mean, you're doing 89 hours a week. How do you even have the. The bandwidth or the time to. To. To lean into that stuff? Right. You're just trying to make ends meet. Right. Trying to make the next payroll.

[B]

Yeah. You follow that up by saying much of what influences and dictates policies, the influence from the corporate restaurants, I. E. The McDonald's and the cheesecake factories of the world. And, you know, I think that that is one thing I've identified too, that, you know, it's. It's getting harder and harder for. I mean, I started this podcast for independent restaurant owners. I wanted to learn, you know, what my parents were doing wrong. Like, they opened a restaurant. They had it for 10 years, lines out the door every weekend. Couldn't Pay the mortgage, didn't have a big fancy house, you know, like what were, what didn't they figure out that I can help other people figure out so you don't have to work as hard as my parents did just to get by. And the more I started getting into it, the more I started realizing, look, I should go to these big corporations and start learning from them because I need to get that information and make it accessible to other people. And I don't think giant, all giant big companies are evil. But the resources follow the money. The most successful people, like opportunity follows money because if you want to, the resources want to tie themselves to that resource. If you want to go lobby and do things, it takes money. So you're going to go to work for the people who have the most money. It's just human nature, right? So as I'm saying this, what are you thinking?

[A]

Thinking? I mean, you talk about the big companies. I mean, you know, they can afford to have lobbyists on staff, right? And they can afford to like employ people that just work on policy on their behalf. Right. And, and I, you know, for a long time I chaired the Government Affairs Committee of the Oklahoma Restaurant Association. I did it for, I don't know, 10 or 15 years, long time. And you know, I was on behalf of our restaurant association, you know, responsible for interacting with a lot of our legislative members in D.C. and at the state. And even then, you know, like, I mean, I got to know a lot of those people and trying to fight the big money and the lobbyists, I mean, it's just really hard, you know, and it, even when you can have conversations with people and they understand that certain policies are harder for, for the little guy, they still got to answer to their donors, right? They're still going to answer to, to the people that show up every week in their, in their office. And, and the people who can show up every week are the people who are just paid to be there every week, right? I mean like CEOs and business owners can't show up every week. We have jobs. And so, you know, it's, it's a frustrating system, right? And, and I'm not sure how you ever, I mean, you know, I think you can, you know, maybe get romantic about like the system in the UK where they have like a six week election cycle and everybody gets a certain amount of money or something. I don't know, you know, is that possible? No. Because now there's been such a apparatus built around elections and there's so many people that make so much money off of it.

[B]

Right.

[A]

It's hard to imagine the cat ever getting back in the bag. Right. So, I don't know. I, I. You know, have you ever heard the.

[B]

Expression, whoever spends the most money wins?

[A]

Yeah.

[B]

Especially in the. The world of marketing.

[A]

Right.

[B]

You know, it doesn't matter how good you are, what you do, or how much you care about your people. At the end of the day, if you have. Have endless marketing budget, you can control the narrative.

[A]

Right.

[B]

And I think that's kind of what I'm trying to create awareness of. And honestly, you know, I'm pretty public about taking, like, a $100,000 pay cut this year because I started to realize that if I wanted to continue down the path I was on getting sponsorship from the biggest organizations in the company, it meant that I would have to filter what I was saying at the expense of making my sponsors unhappy, you know, and then also, if you want to demand the money that I was demanding for sponsorship, then there's strings attached, right? Like features with the CEO, you know, getting testimonials. Now my podcast is no longer journalistic. It's fulfilling sponsorship obligations. And when that starts to outweigh the purpose. And this is the world we live in. And that's what's happening with lobbyists. You know, it's not about doing what's best for everybody. It's about keeping the people who are controlling the agenda, I. E. The people who own and control the technology that steer the ship. And I think the only way we can pull against that is by having honest conversations. And that's what I'm trying to do, you know, so thank you for. Not everybody would be willing to. To be vulnerable and to say what they believe politically. Like, it can be dangerous in this.

[A]

Oh, yeah. I'm sure I'm gonna get crushed online for some of this, but whatever, you know, it's fine.

[B]

But it's just one perspective, too. It's my job to hear different perspectives, you know, So I appreciate you getting into that, and I do think that there's hope. I think one thing that I've identified that needs to happen and it's happening, is people need to spread out. There's so much money in New York, you know, Los Angeles, Miami, Chicago. There's so much opportunity in the center of this country, and you can live like a king. You can have a gold toilet if you just choose to get away from these giant cities. And I think that people are starting to realize, too, that it's better for your. You, Your mental health to Spread out. So I hope the future is more markets like, you know, Tulsa, like Oklahoma City, like Boise, Idaho, like, you know, Dayton, Ohio. Like, these cities with bones just are gonna really explode over the next couple years.

[A]

Well, let's hope, you know, we're sitting here waiting on them. Yeah, I've unfilled reservations. I'm happy to take whoever wants to move here.

[B]

So we kind of started with the end of mind today, but we still have more time to kind of talk about the past four years, Right? So you said, you know, you're trying to focus on concepts with legs. You identified Barcera as one of those concepts. What's another concept?

[A]

So Malfi, our new Italian restaurant, You know, I mean, some of the things we've started to learn the past few years is that. So when I. Early on, when I started, right, I was not scientific about the way I built restaurants, how I designed them. You know, I mean, I was just. When I was 23 years old, when I, you know, finished the blueprints on our first restaurant, I didn't know what I was doing. And so now that we've kind of got clear line of sight, post pandemic economic realities, what it looks like, you know, we now know that labor's gotten much more expensive. Our average labor hour post pandemic stuff, it costs us about 25% more, and our labor is less efficient than it used to be. Just, you know, people's mentalities have changed. And so. So the labor's driving a lot more of the cost structure than it used to. I mean, it always drove most of it along with your food costs. But so really trying to design restaurants that take less back of house, less labor, and that have smaller footprints, so your rent numbers aren't as high, your. Your monthly overhead, you can manage a little bit better, but also you can keep them full, right? And I think forever. You know, I would build a restaurant that would be big, and you. When you fill it on a Friday or Saturday, it feels great. And you do, you know, hundreds of covers, but. But trying to identify, you know, in terms of use of capital and profitability, you know, it's not always the best roi, Right? And so for us, it's focusing on a couple of these brands where we can manage the back house labor better, and we do that with a smaller menu. I want to make sure you said.

[B]

Focusing capital and profitability is not always the best roi.

[A]

No, no. The big restaurants, the big sprawling ones, I mean, they're really expensive and they take a ton of labor. And so it's not always a great use of capital or great roi.

[B]

So one thing I was kind of curious about prior to 2021, when I was first here, could you, like, create, like, if you were to take a mix of all of your concepts, like, what is, like, the general, like, size, like, volume, like, ballpark, like, that's the problem.

[A]

Right. So, you know, we were all over the place. I mean, we had a couple of 10,000 square foot restaurants.

[B]

How many seats is that?

[A]

A few hundred.

[B]

Got it.

[A]

250, 300 seats. That. And the problem is you would have these huge weekends. This had a lot to do with our location being in downtown Tulsa. And you, you know, we get. When there are a lot of concerts happening or ball games or whatever, you know, like the minor league ballparks right next to us, like, you'd be slammed, right? Fill every seat, you turn it several times and. But then on a Monday night, I mean, you're just dead, right? So that, that use of space and how much that space cost you when it's empty and you know that it's just a. A lot of inefficiencies to having restaurants that size. So, I mean, like, you know, I would say, you know, in 2021, the first time you hear, like, our best restaurant in terms of sales per foot is a place called the bowl in the alley. It's our little speakeasy stick out.

[B]

You're starting to get into, like, the entertainment world.

[A]

Yeah, yeah, man, we got a. There's a piano in there and stuff. But. But, you know, that, that store does, oh, I don't know, 13, 1400 a foot, something like that. And, and revenue. It was a tiny space, you know, 28 or 2900 square feet. That does three and a half, four million bucks a year. I mean, it's, you know, it does really, really well. But, you know, then McNelly's, our pub, is huge. Does about the same amount of volume, right. But it's over, you know, 10 or 12,000 square feet. So just seeing what those P. Ls look like at the end of every year, you start to say, okay, as we grow, we need to focus our capital on slightly smaller footprints that we know we can manage the profitability easier. And those. So those are the brands we're going to try and grow. You know, we'll see if that's right or not. Yeah, but you never know, right? I mean, we haven't. We're just now starting to try. So we'll probably be three or four locations in before we really have an answer, right?

[B]

And I think this is definitely going to be a big trend. I mean, you used to hear. I would hear it a lot. You know, know Whether you have 300 seats or 50 seats, it's almost the same amount of work. The same things need to happen in a day to execute. Like, the. The standard operating procedures are the same. It's just a matter of, like, volume. Right? So, like, if you're gonna do it, you might as well do it big because it's all about throughput, and that's how you make money in the industry. But now, the reality of the industry with now, well, it's. If it's about throughput, you need labor and people to execute that, and the cost of labor is going up. It's like, is it really the best way? And if you have like a giant menu and you're trying to make everybody happy, is that even like. Like, how many skilled employees with high salaries are you going to need to execute that? Right. So I think you're right that the future is in focusing on doing one or very few things and being the best at it. Filling holes in markets where no one else is touching those things yet and making it so, like, anybody off the street can execute that standard to keep your operational expense low. So the. Since 2021 and since kind of having this like, aha moment of like, maybe we need to decrease our footprint and maybe focus our menu. Like, what is Sarah Barcera and is it Malfi?

[A]

Yeah, thank you very much.

[B]

Like what? Like, get into the economics of that.

[A]

Yeah, I mean, you know that each one of them, you know, the line can be run with three people. Right. And on slow nights, we don't even have a dishwasher. Right. So you're three people in the kitchen, period. And that, that labor model is just so much more efficient. Each one of them, you know, we try to keep the menus to under 20 items. So, you know, 20 items that we really feel good about, we execute well and we know the quality is there. So trying to get them to a point where they're. They're easier to execute with less people, but also where you can keep them full, you know, And I think that helps, you know, as they kind of stay full, you know, you don't have a ton of front of house people either. The fullness of it drives an energy in the room that I think encourages higher alcohol sales and some other things. You know, just kind of. We found that it's just easier to make money. It's not easier. It's easy. But, you know, we feel better about those investments and. And getting them to a point of profitability than we do these, like, big, sprawling places. And now the cost, too, has gotten to, you know, pre pandemic a new restaurant. We could take a blank space and get it to a restaurant for 300, 350 bucks a foot. Now it's 500 to 550 a foot. So as you take on more square footage, you know that you look at those costs, man, it's. It gets kind of scary. Yeah.

[B]

Behind every great restaurant is a great person. The key to being great is to be of service to others. And this holds true for all organizations, not just restaurants. After spending a month in Phoenix, Arizona, being hosted by Restaurant Systems Pro CEO Fred Langley, I got to experience firsthand Fred's desire to serve. It all started when I got there. Fred gave me the keys to his house and to his office building. When Fred leaves work every day, I witnessed him go coach one of his two sons baseball teams. And when Fred's neighbor lost power when they were hosting their son's birthday party, Fred offered to host the party at his house. Eric, why are you sharing this? Because how you do one thing is how you do everything. And believe me when I say that the desire to serve extends to Fred's restaurant clients. There are no secrets or shortcuts to life or restaurant success. There's only discipline, hard work, and the desire to do the right thing. Fred and his team at Restaurant Systems Pro are here to serve you with the systems and resources to be more disciplined so you can do the hard thing, which nine times out of 10, is the right thing. With Restaurant Systems Pro, you get accounting systems, budgeting systems, costing systems, purchasing systems, inventory management systems, labor management systems, training systems, and the systems to create and implement checklists. On top of all this, Restaurant Systems Pro also has their own native general ledger, and they're in the process of launching their own pos, which they are so appropriately naming Serve. And you know what? If you don't want to change your pos, that's absolutely fine, because Restaurant Systems Pro integrates with all major POS providers. To learn more, head over to restaurantunstoppable.com RSP and you will find a link to schedule a demo with their sales team. A demo I personally did with Restaurant Systems Pro CEO Fred Langley and all 18 of our testimonials that we've recorded since the beginning of Restaurant unstoppable. Again, that's restaurantunstoppable.com RSP in terms of like like prime costs and like percent profit on you know, what is like with these new, how many seats are the new model? Like the.

[A]

Yeah, we try to be called 90 to 110, something like that.

[B]

Okay. So I mean that's for some people, a big restaurant. Yeah, we're in.

[A]

But they're casual. Right. They're lower price points. So. Yep, yep.

[B]

What are the, what are the, the, the prime cost targets that you have right now?

[A]

I mean it's historically. Right. We were always trying to hit a prime cost of cost plus labor at 60%.

[B]

What was the mix between cost of.

[A]

Goods and that's the thing. It, it varies restaurant to restaurant. Right. Like in our steakhouses you're running 38 cost to 40 costs, but you might be running a high teens labor. Right? Yeah. And the sushi restaurants the same. The labor's really expensive or. Sorry, it's the opposite. Labor's really expensive, but the cost of goods sold is lower and effect in large part because this part of the country, you're making a lot of rolls, a lot of rolls with like, you know, rice imitation crab and rice. Right. This stuff that. So, so you know, you get there in a different way. These new restaurants that we're, we're trying to focus on, we're still in that, you know, high 20s, 30ish cost of goods sold range. But, but we can manage the labor usually into like a low to mid-20s. And that, that labor savings is really what drives the bottom line. Yeah. Pre pandemic, I would have told you a good restaurants, you know, if we can make 10 to 12% profit margin, it's a really good store for us. Last year, our all in profit margin, I think, man, our EBITDA was like we might have been sub 5% after corporate overhead. I mean it was so. Well, I think that's another variable rough out there right now. Right. So.

[B]

And this is one of the reasons why I'm having this conversation. It's not easy to get people to open up and to talk about percent profit. But I think that we're all in our own bubble right now. Nobody shares this information because you don't talk about money, you don't talk about how much money we're making. You don't talk about relationships. Like those are just things that you just respectfully don't talk about out of. I mean, maybe I'm just super disrespectful, I don't know. But I feel like it's important that we get benchmarks out there because otherwise we just think we're floundering. We're like, I had somebody almost not want to do an interview with me because they said in their mind, like, they've been listening to the show for 10 years. They're like, I'm not where I need to be to be a guest. He's like, I want to. I want to come on your show. When I'm like, doing these numbers, I was like, what are your numbers? I was like, you're exactly where everyone else is that's doing great in the industry right now, trust me. And it's because we don't share the numbers and people or they inflate reality.

[A]

Right, right.

[B]

And I think we're literally in the job of creating, like, this false reality. That's what we do. We project an image to the consumer that everything is amazing. We're here to transport you so you can escape your world. Meanwhile, it's a facade, right? You know, so, yeah, I mean, to.

[A]

Me, you know, like, my most cherished relationships in the industry are the guys I call and talk to. And we have real conversations about this stuff. Right? And it's funny, I mean, like, we all will have these conversations too. We'll hear about somebody like, doing X amount of volume or X amount of profit. That's gotta be bullshit, right? So we'll, like circle back to our food purveyor, like, hey, how much are they buying? You know, you always like. And then you always end up like, oh, yeah, it was all ps, Right? So it's, it's. It's hard right now. I mean, the profit piece is really, really hard. And it's every piece of the P and L. Right? I mean, like health, not just health insurance, but property and casualty insurance went up. You know, all the to go where stuff went up. It's just like everywhere you look, credit card fees went up. It just. Every single line has gotten more expensive over the past five years. And so you've got. For us, you know, we're trying to find these ways where we can at least save on the big two, you know, save on cost of goods sold and labor.

[B]

I want to talk about what you guys learned, but I also want to point out how important it is that you get together with people in the industry and you talk. And I think that is one thing we haven't been great at historically. I think we're getting better at it. People are. It's absolutely a trend that I picked up on that the people at the top are the ones that are willing to go further together. It's they collaborate with the best in the industry, and that's why they are the best, because they lean on the strengths of the individual strengths in that group of people that. That network. Right. It's exactly why I started Restaurant Stoppable Network of like.

[A]

Like.

[B]

No, we need to come together and share this knowledge because if we don't, then we're gonna lose independence. To the argument that you're making earlier, like, we're not going to be around much longer. It's going to be like five companies that feed America.

[A]

Right.

[B]

You know, like, that's a scary place. So who they is this book group are you talking about?

[A]

Yes, man. I got a something called ypo, which is Young President's Organization. Young President's Organization. Okay.

[B]

Is that. What is the Young President's Organization?

[A]

So it's an international deal that you apply to join. And I think when I applied, oh, man, I've been in it for, I think, 12 or 13 years now. But different industries have different requirements. But in the restaurant industry, I think it was either 15 or 20 million dollars in annual volume. You had to have to qualify. Right. So it's making sure that you are running a business that has some scale to it so that they put you in these groups with similar people.

[B]

People.

[A]

Right.

[B]

They're segmenting, essentially.

[A]

Yeah, exactly. And so anyway, I'm a CEO group with. You know, he just talked to Fred Castellucci in Atlanta and Max Goldberg and Levi, Good guy, Scott Slater, who's out in Boise. You mentioned earlier. Scott's just moved out there. He just opened a new name again.

[B]

Scott who?

[A]

Slater. He just opened a new concept out there and he's getting ready to do another one. A guy in Calgary, actually. PJ LaRue, who you should talk to if you ever get up north. PJs. He's actually. Actually he's getting ready to open in Dallas probably. I bet it'll be early next year. And then Joe. Lonnie. Joe's in Cincinnati. I don't know if you ever met Joe.

[B]

You're going too fast.

[A]

Scott, what was it?

[B]

Scott who?

[A]

Scott Slater.

[B]

Scott Slater. And where is he?

[A]

He's in Boise now.

[B]

Boise. And then you say PJ LaRue.

[A]

Yeah, PJ's in Calgary, but he has stores Calgary, Vancouver, Toronto.

[B]

And that's in. Oh, yeah.

[A]

Frozen North.

[B]

And then. What was that last name?

[A]

Joe Lonnie. L A, N, N I. And then. And then Levi Good. Down in Houston.

[B]

Yeah, I've already reached out to Levi. Levi. I'm trying, man. I'd love to make it happen. I'll be in Houston in a couple weeks. So you guys get together, like, what's. Like, is it once a month?

[A]

No, we have. We have zoom calls probably, I don't know, three or four times a year. And then we tried to get quarterly. Yeah, more or less. And then we tried to get together in person three times a year.

[B]

What happens when you get together in person?

[A]

Usually it's a pretty heavy eating and drinking agenda because we're going somewhere and, you know, having three dinners a night. But I think there's something to be.

[B]

Said about drinking together.

[A]

Yes.

[B]

You know, like, alcohol gets a real bad rep lately. Yes. Anything in an obsession, like, a lot, like anything obsessively or abundantly used can be bad for you. Right. We're in. The world's. Like, America is the best example of what happens in a world of abundance.

[A]

Right.

[B]

We're all fat and unhealthy and addicted. But there is something to be said about alcohol and its ability to bring people together. It shuts down your frontal lobe a little bit. So you get open, you get honest, you get real and transparent, and you also bond during that time. It's. We literally evolved alongside alcohol. It goes back from when we were monkeys. Like, it's. Have you ever read that book Drunk How We Sip, Stumbled and Dance Our Way Into Society? Edward Door or Ed Slinger? Edward Slinger, I think, is the author.

[A]

Yeah.

[B]

It's fascinating. Like, we. I don't need to go down that road, but I highly recommend it. So brings us together. But. So you guys get together?

[A]

Oh, yeah.

[B]

You have fun?

[A]

Yeah, but, yeah, we, you know, we're all working on the same stuff all the time. Right. I mean, whether that's your insurance or your HR or credit card fees or whatever it happens to be. I mean, even new concepts like talking about new menu items and price points and the amount of seats and, you know, how you do the service. And so. Yeah, but we talk about everything. Right. And. And so that. That sharing process just really helps. Right. To know there are other people out there. I mean, people like, you know, Max and Fred, who I see as. And Levi. All of them. Joe, too. And you know these guys in many ways. Like, I look at them and think, man, they're just like, you know, best in class in the whole country. Right. I mean, they're killing it. And. And then you're having these conversations and, I mean, they're struggling for the same stuff. Right? Yeah. I think a couple of his profit margins are way bigger than Mine, but that's. All right. Well, they're. They're better at it than I am.

[B]

If you can pull off a michelin star restaurant in Tulsa. I mean.

[A]

Yeah, I don't think. I don't think Michelin's gonna review Tulsa anytime soon. They have to run out of world before they come here.

[B]

But, you know, I. I think I didn't plan this. I literally, in order, spoke to Fred Castellucci. Then I. I've had Fred on the Show Back in 2018, I reconnected with him. I had Ben Goldberg on the show in 2021. I reconnected with Max this time to get the other side of the story and then you. In that order. And I had no idea that you guys were all part of essentially what is a mastermind.

[A]

Yeah, right.

[B]

It's what you. It's a. It's a way to come together, share knowledge, go further together. Yeah, right. And you all have the same values is something that I picked up on. You all give equity, you know, I mean, Fred has family members right now. He also gives equity to his ongoing partners.

[A]

Fred also really values Burgundy, which I don't. That's the difference between us. I'm pretty happy with Guinness.

[B]

But, you know, Ben and Max have the same values that, you know, we're about creating opportunity for other people and just trying to find these incredibly talented people and then giving them support, whether that be financial or management support. Right. And you have that same value of, like, you know, I don't know if you guys all structure it the same way of, like, using equity to grow and create opportunity, but, like, the values are there.

[A]

Yeah. I'll tell you that. We were all doing some semblance of that. Some semblance of that before we met.

[B]

Birds of the same feather.

[A]

Yeah. And it's interesting now, though, you know, whenever one of us is making a big hire, you know, some executive position or general manager, whatever, we bounce ideas off of each other. Right. What are you guys doing right now? How you seeing this? You know, what's that job description look like? What's the comp package look like? That kind of stuff. You know, I think Max is. Max's system, to me, is fascinating. I mean, the amount of talent that Max is able to work with and to cultivate and support me, It's. You know, he's somebody I look at, like, man, that's just incredible. Right? I mean, he's. He's taking that dining scene there. And, I mean, they've got, you know, the best restaurants across the whole City, right? And a city that's really blowing up. And he's done it, I think, in large part just by, you know, through his own humility and, and, and putting, you know, boosting other people up. It's incredible to watch.

[B]

I had to say it for him. I was like, you are so humble, man. Like, you can. The human, the humility is there for sure. But, you know, you and, you know, the Goldberg brothers have something in common. You both grew up in the city that you're now improving. Fred was 14, I think, or 13 when he moved to Atlanta. But, you know, very much, you know, family run business. It's about family, it's about community. Very important to him. You know, I love finding people like, like you guys, you know, like, I feel like my job is to find you. And like, if your job is to give your team a picture of what the job done right looks like, and they give them the tools and the resources to do their job, where the, does the restaurant owner go to get that same picture? Like, where is it? Where's that for me? And I think you, you know, Ben, Max, Fred, you guys are the picture and so many other people I've had on the show. And it's just so. It's an honor to be able to like, like, and you're so open and vulnerable, but I feel like I'm gonna ask you anything. You're just gonna tell me, you know, but, like, we need that picture if we're gonna move forward in the right direction. What are your thoughts?

[A]

Yeah, I mean, I, I will tell you that when it comes to information sharing and, you know, I help. I mean, there are a lot of people that I'll just sit down and help and, you know, talk through, whether it's a new project concept or, you know, local person who's trying to figure something out. I'm pretty open with people, I think, in large part because in this industry, one, there's a, there's a shared suffering. We've all been through it, but also there aren't any secrets. Right? I mean, you're either good at it and you're willing to put in the time and the effort it takes to make it work, or you're not. And there's nothing that I can divulge to someone that's gonna give them that right. 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 and put in that effort and, you know, put together a team and take care of your customers in the right way. I mean, like, there's a lot that goes into it. Right, right. So it's simple.

[B]

So sharing very difficult things.

[A]

That's right. That's right. I mean, so I don't think, you know, and this is something I learned from a lot of. There's a lot of guys here in Oklahoma, older guys, been doing a long time, who mentored me when I was. When I was young, first in the industry, you know, and they're just great. I mean, they're some of my favorite people. I'll be back in Ireland with them this October. But they were just so kind to me and. And I could call and ask them anything and they would help. Right. And I learned from those guys that this is not. There's not trade secrets. There's not anybody really out to get you. That's, hey, this is how we found success. This is how a way it could be done. And you're either going to go out and grind it out like you need to in this business, or you're not. And so that I got a really good example as a young entrepreneur and restaurateur of what it was to be a mentor and to, you know, help people in this business. And it's something that I think touched me and something that I feel like I need to kind of carry on and pay forward. Right. Yeah.

[B]

I mean, I thought you. You were gonna take it one step further and get. I mean, all of that is the mindset, right? Yeah, it's the mindset. Who was that guy?

[A]

So, a couple, actually. This guy, David Egans, he's Cattleman's Steakhouse in Oklahoma City. David's a great guy. And another guy, Joe Pritchard, who owns a family restaurant in Krebs, Oklahoma. Krebs is southeastern Oklahoma. It was. It was settled. And the early 1900s is a coal mining community. There's some, like, coal in the mountains, if you want to call them that, in southeastern Oklahoma. And anybody. But it was settled by a bunch of Italian immigrants who moved there to mine the coal. And Joe's grandpa was there, and some. For some reason, he couldn't work in the coal mines. I don't know if he was injured. I'd have to ask Joe again. But he started a restaurant in there. And the kitchen of their house, feeding the coal miners, Italian food. And. And since then, they've just expanded and expanded. And the original house is still, like, there in the middle of the restaurant. I mean, the restaurant now must be, I don't know, 10,000ft. It's enormous. But. But you can still, like, walk in and joke and show you where the original walls of the house were and walk you down into the basement, the original basement of the house from, like, the 1910s or whatever. So. But anyway, Joe's. Joe's a great guy. So he's third generation. His kids now run it. They're fourth generation running that Italian restaurant.

[B]

I would love to get Joe.

[A]

Oh, Joe's a fascinating.

[B]

Or maybe one of his kids or whatever, the. Whoever's carrying the torch. I think, you know, you actually mentioned his name the first time I was here, and for some reason, that name did not make it to my spreadsheet of names. I think it's because I had a fight immediately after. I mean, I have openings on Thursday and Friday. Joe, if you want to connect later this week, I'd love to make it happen. And, you know, I like this. This mindset of, we all are here, but we all stand on the shoulders of giants, right? And I think that's one of our unique human traits, is that we are able to, through story, pass down knowledge, and we compound on what those who've come before us have figured out. And once you figure that out and you realize that you can, like, like expedite that and, like, amplify that by creating a platform for giants to share, to stand on, to share their perspective. You said something that was really, you know, really resonate with me. You said, this is. He said, this is a way. There is so many different ways. There isn't one way. There's a million different ways. It depends on who you are and where you're going, what your values are, what your concept is, what, you know, so many variables play into it. I've driven, almost driven myself crazy trying to figure out, like, what is the way? And I think I've realized that it depends, right? It all depends. There's. I think the best thing we can do is just give ourselves as much perspective as possible and to cherry pick and pick and choose the way that makes sense for us. So back to, like, you know, you getting together with these people, sharing information. Where are you now? Like, I think when I spoke to you, you were using Aloha and you were talking about Doordash was a tool that you were using. Basecamp is a tool you're excited about. Has there been. In terms of tech stack and evolution systems, has there been evolution?

[A]

Yeah, man. The tech stack now is, you know, we're. We're moving away from Aloha into Toast a lot of that has to do with chip reading and pay at the table.

[B]

And are you using Toast to go to Sunday app?

[A]

We're using Sunday in a few stores right now.

[B]

How's that going?

[A]

It's cool. Yeah, we like it. And the customer likes it too, which is important. Important.

[B]

Customer likes it, as always.

[A]

Yeah.

[B]

Is there any data that support. I actually had Victor Lugger when I was in. In Atlanta.

[A]

Did you talk to him about Sunday or you talked to about his restaurants? Both. Okay.

[B]

We only had an hour.

[A]

I've been to his restaurants. They're incredible. Oh, my gosh, dude.

[B]

I was like. I was like, how am I doing this in an hour? Like how you scale the 30 locations across seven countries and you launched an app that's a really valuable asset to the. I was like, we made it work somehow, but really impressive guy.

[A]

Yeah. So. So we're. Yeah, we're using Sunday, but I think one of the big ones for us, you know, some of our places are so big and sprawling. Getting to handheld devices at the table to get, you know, speed of service and speed of drinks to the table is really important. And it was something we asked Aloha for forever and they just couldn't produce it.

[B]

That's crazy.

[A]

It's crazy. I mean, like, they were best in class software forever. Right.

[B]

And I think it's a great example of both fat, dumb and happy wouldn't support it.

[A]

And then we started one of the big ones for us. We started having these credit card chargebacks that if you had a chip red credit card that wasn't read with a chip reader and somebody disputed a charge, the credit card companies would automatically honor the dispute. Even if we had a signed receipt. Even if I had a video of the guy in the restaurant, like, you know, like. Well, you didn't use a chip reader.

[B]

How's that not fraud?

[A]

Well, I mean, there were some people that found. There were some people who learned about it that. That it was for. They were taking advantage of. We had to fire a couple of customers because we recognized was like, oh, you're. The guy's been coming in.

[B]

Yeah, there's a pattern here.

[A]

And are you.

[B]

What are you using any video surveillance that is like using AI to like, there's. I know there's some overlay.

[A]

That's right. But we have video cameras in a lot of places largely just for lawsuit mitigation, you know, but there's some AI.

[B]

Overlay with video now where, like, it looks for patterns.

[A]

Okay.

[B]

Yeah. Like, it can see. Like, that's crazy. Create Like a, like this, this thing like bring your attention. I can't remember the name of it. Sorry, I'll keep going.

[A]

So. So anyway, the chip reader deal was a big one that Aloha couldn't get us the chip readers we needed either. So we're losing money just from credit card disputes and they couldn't figure out how to help us fix it. You know we are, we're going to beta test some AI stuff here on some reservation software and some other things that'll be happening in the next month or two. So I'm excited about that.

[B]

So what's. What are you able to talk about the AI you're looking?

[A]

I don't know if I am or not.

[B]

Is it home baked or.

[A]

No, no, no, it's a third party.

[B]

It's amazing how many people are home baking like their own AI solutions right now, like restaurant tours, developing their own AI phone answering systems. That's crazy.

[A]

Yeah, this one's interesting. It's, you know, it's really designed to help with large party bookings which can be really useful or bowling alleys and a couple other places where we get a lot of large party requests. So. So yeah, I mean the tech stack overall though, I mean that's, that's pretty much it. You know, base camp didn't work. Nobody can you. Nobody wanted to use it. Right. The company still largely run off of imessage but you know, what about Slack?

[B]

Have you guys explored?

[A]

We've tried that too. You know a lot of it's just getting people to buy into using it.

[B]

Right? The habits. Yeah, it's not easy to get deform new habits, you know, even if they're the no brainer like right path to use. Do you ever get concerned about companies like Toast getting too big? Big?

[A]

Oh yeah, always. I mean I feel like that's what happened NCR and Aloha. Right. I mean it's so big they just stopped caring. Yeah, yeah, yeah, always.

[B]

Were you shopping any other POS systems?

[A]

Yeah, we looked at a bunch.

[B]

Was Toast just the best option or.

[A]

Yeah, yeah, yeah, yeah.

[B]

What about credit? You, you mentioned during your, your meetups that you talk about credit card processing. Did you learn anything in terms of like how to navigate into like, like negotiate rates?

[A]

Man, there's just so little leeway because so much of what's happening with the rate, I mean you've got the base rate which is, you know, the state of red from MasterCard and Visa and Amex, but, but so much of the rate right now is being driven by these rewards cards, and they all have separate individual rates. Like, if you look at one of our statements, I bet there's.

[B]

You talk about, like. Like the credit card rewards, like, you know, American Express and stuff like that.

[A]

Yeah, Like. Like a, you know, Delta Airlines card.

[B]

Right.

[A]

Like a Delta Airlines card has a different exchange rate than a, you know, Chase Sapphire card. Right. But they're all a higher rate than the Visa base rate. Right. So effectively, the rewards that people are getting on the back end of their credit cards are all being coming out of the restaurant born by the merchant. Right. So, you know, that. And that just makes it really tough to, like, negotiate all those. And what's happened on top of that is that base rate has got.

[B]

Or the.

[A]

The base rate has gone up, but then the rewards rate has also gone up. So our credit card rates, I think, are up like 60 basis points in the last seven years. Something like that. Yeah. And if you look at Visa, MasterCard, I think they're still the two most profitable companies on the stock exchange. It's just like, they just. It's a tax on the consumer, and it's. Or not a tax on the business, the consumer. But I've, you know, and my lobbying efforts, one of the things I'm really big on right now, I Not getting a ton of support on it, but I just had lunch with the congressman last week that I think that credit card payments have become so indispensable in commerce that they need to be. I think they need to be managed like utilities. I think they should be just like a public utility is. They get a set amount of profit they're able to make, and that's it. Right. I mean, you cannot conduct business without them. Them. Right. And. And yet we're letting them just rake all these merchants.

[B]

You look at it, it's like, you know, like, I'm a fan of Joe Rogan. I know not everybody loves Jogan. He has some controversial things that he says, but he. He makes this point, like, he. He started off, he was a very, like, liberal person. And then over time, he kind of started to move more to the right. I consider myself very moderate. I'm in the middle. And he uses this analogy of, like, some parts of socialism are good, like firefighters. You know, like, we all. When there's a fire, we all want somebody to put our house out. Right. And I think that, you know, there are certain things that the government, like, whether it's the mail or even. They're not really doing a great job with that now. Like. But you Know what I'm saying? Like, at a time, mail carry, you know, firefighting, police, you know, military, you know, like, there's a certain. Some things make sense. And I think you're right. Credit card processing is getting to that point where it's becoming universally necessary to, like, conduct business. Like, it should be controlled by the government.

[A]

It should be regulated.

[B]

Yeah. 100.

[A]

And you look at the rates in Europe, they're like, oh, I want to say they're like a quarter of what we pay. Something insane. Yeah.

[B]

I think, again, it goes back to the ignorance of the consumer and the people who do business here. You know, we just don't share information. It's just. Does it work good.

[A]

Right.

[B]

You know, so there's this company that was referred to me called Merchant Advocates. Have you heard of them?

[A]

I haven't.

[B]

And what. Basically, it's a company that exists to negotiate on behalf of. Of the restaurant the best credit card rates. I'm working on getting them on the show. I was hoping to get them on the show when I rode through New Jersey, but maybe on my way back east. I want to get them on the show. Honestly, dude, it's my goal with this podcast to, like, have somebody, like, I want to piss off so many rich people by, like, blowing the whistle on stuff that, like, there's a hit put on my life. That's my goal, is to piss off so many rich people, to create so much awareness that, like, people just start, like, voting with, you know, their money. Money.

[A]

Right.

[B]

You know, and how, like, who are these organizations that are doing it right, that don't have the marketing budget to let the world know that they're doing it right?

[A]

Right.

[B]

Who are those people? And I. I feel like I'm in this position with this podcast. If you Google search restaurant podcast, or if you go on Spotify and type restaurant podcasts or itunes, like, restaurant Unstoppable, at least right now, is the number one search result. I don't want to jinx it, but I feel like, like, have you ever heard of Seth Godin, marketer? He wrote this book, I think it was in Purple Cow, where he talks about. I can't remember, like, the name of this, if it's a law. But the difference between number one and number two is almost, like, always, like, a hundred percent. So if number one is making a million dollars, number two makes $500,000. So, like, there's this law that, like, the difference between number one and number two is, like, always almost double. And I feel like I'm in this position right now where I have to use this influence while I can to, like, just go tell the truth. Because otherwise all the other messaging is going to be bought, right? And it's scary. Dude, what are you, like, do you think that, as I say that, what goes through your mind?

[A]

Well, I mean, everything gets spot around, right?

[B]

So how do we keep it honest?

[A]

That's a great question.

[B]

So again, my. My mission is to put. Get a hit, put out on my life. The only way to stop this podcast, only to stop me. Otherwise I'm unstoppable. But have we. Is there anything we haven't talked about? Lessons?

[A]

No, I don't think so. I mean, we've covered a lot. I can't remember what we covered last time. I should have listened to it before, but I hate listening myself talk. So, you know, so, I mean, it.

[B]

Was a lot of fun. You know, we. We did start talking about this idea of marketing, you know, and how you're, for the first time really investing in marketing. And we started saying, you know, we're at this point where, like, I, I get it, like, marketing is a part of the future, but I think we need to know at what cost. And I know you have opinions on that. Like, so when I say that, like, you know, what are we giving up to put time and resource and energy into marketing? What do you think?

[A]

Yeah, I mean, to me, it's, it's. It always to me comes back to our values, right? Like, it's about staying true to who we are, staying true to our values and what we believe in. And, you know, we're out there now, you know, with a PR firm trying to, like, just work on getting the McNelly's group name out there a little bit and the name a few concepts out there to try and create some opportunities and some places we might like to grow, you know, just to effectively open some doors. And at least when I call somebody, maybe not be cold calling them, but them, have a little bit of knowledge of who we are, right? But I think that ultimately for us, it's always looking back at the reasons we do the things we do, right? And so long as I continue to put our employees first and do things that I think make my community better, you know, I mean, one of the things for me is with the PR firms that. Look, one of my priorities is Tulsa, right? I want people to come here. I want them to visit the city, I want them to experience it. I want to know what is here and how great I think it is. And it is. And so we have this like, you know, we're engaged with them to do all this marketing for the restaurant. But also I said if anything pops up or there's an opportunity for the city, even if it's not just me, like, you know, let me know, like let's do it, let's push it. And so I think that's always for me just trying to figure out, you know, even we're doing something like that, which feels awkward to me. I don't like going out there and, you know, tooting our own horns, so to speak, but trying to do it in a way that still aligns with who I am, what I believe in and what I want to accomplish. So, you know, it's, there's always push and pull.

[B]

What are some of the other markets that really have your attention right now in terms of growth?

[A]

Yeah, I mean, I think the growth in North Texas is staggering. And I've Dallas Fort Worth and I've looked a lot down there over the years and gotten close a couple times on doing a project and just never have. And I think at this point now we're like, you know, so at least with Tulsa we feel like we've built a lot here. Maybe we haven't maxed out the market, but we're going to be very selective about the projects going forward. Yeah. And we have opportunities in Oklahoma City, which we're going to pursue. But I love Oklahoma City and then northwest Arkansas too. It's crazy. I don't know if you've spent any time over there, but just drove through it. That market's booming. Yeah. So we're getting ready to do a store over there later this fall and so we're going to keep looking there too. But you know, I, I want to be within a four or five hour drive at home. I don't really want to get on a plane and go somewhere, but I.

[B]

Do think the opportunities in the Midwest right now. As somebody who grew up on the coast, I grew up in New Hampshire, like 10 minutes from the ocean. It's getting so expensive. The cost of living is just getting outrageous and so many people are being priced out of those markets. And the other variable too that we haven't talked about is more and more people are working remotely so you can go make that multi six figure paycheck and come to the Midwest and just have so much more freedom. Yeah, you know, it's just, it seems like a no brainer. I mean I, I do think part of the solution to our problem is, is spreading out and taking the money from these big cities where they're. These HQs are and bringing them to the Midwest. We need to spread the money out.

[A]

Right.

[B]

You know, that's part of the answer. Are there any concepts out there that you're really following that you think are doing good that have your attention mentioned?

[A]

Oh, man, that's a great question, Dallas.

[B]

This is a selfish question because I'm heading there. I'm getting lanes on Lane's chicken fingers on the show. L A Y N E S. Oh.

[A]

I don't ever heard of that. Look it up. Yeah, yeah, yeah.

[B]

Have you thought about getting into QSRs or fast cash?

[A]

I mean, we got the burgers, the Howdy Burger places. We have two of those and we've yet we turned our chicken place into. Into fast casual counter service. So I'm at a little bit. It's not really our. It's not our lane. Right. You know, but both those are on Route 66 and it just kind of makes sense over there on 66. So I'm trying to think who now. I need more time on that. I don't have an answer. Yeah, yeah, yeah.

[B]

Well, you've mentioned some names for me today. I'm not gonna have you call anybody else, but if you could echo those names. So, like, you know, I'm always looking. This is my North Star, like future people to get on the show. So who are those names one more time?

[A]

Yeah, I mean, I think there's a. We talked about this before. I probably mentioned last time my good friend Keith Paul in Oklahoma City I think is somebody you should talk to. Keith's great for a long time. It's probably been my closest friend in the industry. You know, Joe Pritchard, who we talked about earlier. David Egan too, who we mentioned. You've already talked to Max and Fred. I mean, those are my two celebrity restaurant friends that I would suggest.

[B]

So yeah, they're amazing. I feel so lucky to be able.

[A]

To get them on.

[B]

They're so generous.

[A]

And you know, if we can get you in touch with Levi. Yeah.

[B]

Awesome. Thank you so much. And this is episode 1,183. If you want to go search for the episode and find summary and we'll have some links, any tools or services that are recommended. And I literally cannot do what I do without people like you getting open, getting honest, getting vulnerable. I'm actually going to be talking to Jim, Jim o' Connor in a little bit, your coo. Before I go into that interview, is there anything I should know?

[A]

What questions should I ask oh, man. With Jim. You know, this is interesting. So Jim, depending on how much you want to dive into it, deals a lot with the, call it business operations side of the company, less so than, like the restaurant op side. So I think. I think, you know, one perspective you might get from Jim that you won't get from a lot of the other, the recipes to talk to is just, you know, all of the, like, the overarching HR issues with restaurants, the overarching legal issues in terms of tort reform and things. You know, there's. There's just a lot of stuff out there all the time that. That I think a lot of people talk about. The gym will have a lot of knowledge on.

[B]

Okay, so the. The more general business operations, not necessarily the ones that are specific to restaurant.

[A]

Yeah, I wouldn't. I wouldn't ask Jim about, like, ticket times or, you know, ingredients, but. But I think the. The real, like, kind of nuts and bolts of the business side. He's. He does all that. He's in charge of our marketing. He's in charge of hr.

[B]

Got it.

[A]

Yeah.

[B]

Look, I'm looking forward to that, Jim. We're gonna have fun. And how can we connect with you.

[A]

Social handles at Elliot McNelly. It's my Instagram, which I'm not on that much, which I guess my new marketing people are telling me I should be. Otherwise, just [e-mail]. that's my email. It's the easiest way to find me.

[B]

Thank you so much, El.

[A]

Thanks.

[B]

There is no question, my man, you are unstoppable. Cheers.