1219: Aaron Lyons, CEO and Founder of Five 12 Restaurant Concepts

Summary

Restaurant Unstoppable #1219 – Aaron Lyons, CEO & Founder, Five 12 Restaurant Concepts Podcast with Eric Cacciatore | September 15, 2025

---

Overview

This episode features a candid, deep-dive interview with Aaron Lyons, founder and CEO of Five 12 Restaurant Concepts (Dish Society and Daily Gather). Returning for a follow-up to his 2019 appearance, Aaron discusses how his business weathered COVID-19, evolved operational models, embraced technology, and focused on growth, efficiency, and values-driven leadership. The conversation covers practical financial benchmarks, tech stacks, the realities of restaurant profitability, and philosophical reflections on industry change, consumer perceptions, and the future of hospitality.

---

Main Themes & Purpose

• Business evolution post-COVID
• Unapologetic pricing for quality and sustainability
• Shifts in service model and labor
• Tech and marketing evolution, third-party platforms
• The challenge of profit in today's market
• Leading with values and building culture
• The role of community versus digital marketing

---

Key Discussion Points & Insights

1. Pricing, Value, and Unapologetic Cost Increases

• COVID as industry correction: Aaron states restaurants have "undercharged for 20 years" and that recent years have forced a reset on pricing and labor standards. (00:10, 35:37)
• Differentiating by target customer: Quality at Dish Society isn't directly comparable to competitors like IHOP, especially given focus on sourcing and ingredient quality.
  • Quote: “People expect Four Seasons service and quality on McDonald's prices… If you want quality, you just gotta pay for it.” – Aaron Lyons, [00:32], [35:57]
• Unapologetic about price increases: 25%+ menu price growth since 2019, primarily to cover labor and food inflation, not higher profits. (00:00, 35:26)

---

2. Adapting Operations & Service Model

• Pre- and post-COVID shift: Experimented with "flex-casual" (counter service by day, full service by night). COVID forced a full move to counter service; streamlined operations and reduced turnover. (09:45–11:06)
  • Quote: "It really streamlined operations and really simplified things quite a bit." – Aaron Lyons, [11:06]
• Efficiency gains: COVID exposed where things were "bloated." Cutting menu and labor, focusing on fewer, higher-quality team members. (40:22–43:21)
• Parkinson’s Law realization: Less staff can mean more efficient operations when people are empowered and expectations are high. (43:44–48:04)

---

3. Financial Benchmarks, Unit Economics, & Growth

• Prime costs: Labor in low 20s %, COGS around 28–29%. Targeting mid-to-low 50s for combined prime costs, aiming for 6% or lower occupancy cost. (13:03–14:33)
• Profitability: Store-level profit varies (11–15% at lower-volume stores, low 20s% at higher-volume units). Delivery fees and G&A cut into margins. (14:47–15:54)
• Revenue growth via price, not headcount: Sales up about 25% since 2019, but guest counts flat. (18:15–18:39)
• Selective site growth: Suburbs underperform vs. urban units; location selection adjusted over time. (30:40–35:14)
• Healthy growth focus: Not all growth is good—“adding muscle rather than fat.” Reluctant to open more units until performance at current stores is maximized. (45:35, 89:38–90:46)
  • Quote: “Are you growing in a healthy way or are you just adding weight?” – Aaron Lyons, [89:53]

---

4. Technology as an Accelerator & Marketing Reality Check

• Tech stack investments:
  • Olo for online and third-party ordering aggregation (early adopter pre-pandemic).
  • Thanks for loyalty/app (allows sophisticated segmentation/custom rewards).
  • NCR Aloha for in-house POS.
  • HeyMarket for real-time, text-based in-store feedback. (49:14–54:37; 93:33)
• Migration strategy: Flyers, outreach, direct offers used to move orders from 3rd party to direct app/website ordering, avoiding third-party commission. (59:12–60:13)
• Third-party pros/cons: Necessary evil for exposure, but strips brand data/profit and is no longer only “incremental sales.” (60:23–63:56)
• Path of least resistance: Recognizes consumer habits driven by convenience—tech platforms win by making it frictionless. (63:56–66:47)
• Marketing—new challenges: Digital spend (SEO, SEM, social) now essential; rising costs and complexity. Community involvement remains the best "marketing" but is increasingly supplemented by digital content/data efforts. (70:17–79:37)

---

5. Culture, Leadership, and Values-Driven Management

• Values as compass: “There’s no growth in the comfort zone and no comfort in the growth zone.” (06:05)
• Culture, not just family: Focused on building "high-performing teams"—not “family,” but respect, shared mission, excellence. (108:13)
• Leaders’ evolution: More self-aware, less reactive, more positive intent—leadership means asking, “What am I tolerating?” and confronting issues quickly. (46:13–47:42, 105:41)
  • Quote: "What you tolerate in your presence is your standard." – Eric Cacciatore, [46:59]
• Handling feedback: All managers required to respond to every review within 24 hours. Real-time feedback systems preferred over automated review platforms to maintain accountability. (93:35–95:20)

---

6. Industry Philosophy and Realities

• False perceptions: Media and awards overhype profitability; most top-tier restaurants struggle with sustainability like everyone else. (110:42–111:52)
• Advice on priorities: Focus energy inside your four walls—community, hospitality, culture. Digital marketing necessary, but shouldn't eclipse the real work. (78:55–81:27)
  • Quote: “The best marketing you can do as a restaurant is just take care of business inside your four walls.” – Aaron Lyons, [77:23]
• Reflection on consumer mindset: Many consumers lack appreciation for what it really takes to run a restaurant; a generation never having worked in the industry likely contributes to unrealistic expectations. (98:34–100:53)
• AI in restaurants: Recognizes utility for efficiency, but wary of negatives (loss of trust, authenticity, potential for “dumbing down”). AI-assisted phone answering/services are on the horizon. (101:28–104:39)

---

Notable Moments & Quotes with Timestamps

• "People expect Four Seasons service and quality on McDonald's prices. If you want quality, you just gotta pay for it." – Aaron Lyons, [00:32]
• "There’s no growth in the comfort zone and no comfort in the growth zone." – Aaron Lyons, [06:05]
• "I’d rather have three studs than five average B or C players." – Aaron Lyons, [41:49]
• Parkinson’s Law realization (Doing more with less): “If you have 5 line cooks, they’re probably not working at 100%. Maybe they’re at 80%. If you have 3… at 95%, you’ll get the same result.” – [42:08]
• "What you tolerate in your presence is your standard." – Eric Cacciatore, [46:59]
• On authentic marketing: "The best marketing you can do as a restaurant is just take care of business inside your four walls." – [77:23]
• Growth philosophy: "Are you getting heavier or are you getting stronger?" – Aaron Lyons, [89:53]
• Challenge to industry narratives: "Everyone’s struggling right now. What we see of the restaurant industry online is usually just… publications are not really telling the full story." – Eric Cacciatore, [110:42]
• Values and leadership: “We are a values-driven company… it makes it very easy to make decisions, difficult decisions, any decision.” – Aaron Lyons, [106:34]

---

Important Segments & Timestamps

• Opening: Pricing, industry correction, COVID impact – [00:00–01:31]
• Business update, expansion, closures, service model changes – [06:21–14:10]
• In-depth unit economics & financial benchmarks – [13:02–16:19]
• Tech stack breakdown: Olo, Thanks, and feedback systems – [49:14–56:43]
• Third-party delivery, consumer behavior, and digital habits – [60:23–67:19]
• Marketing evolution and 'noise' in the industry – [70:17–77:23]
• Growth philosophy: Muscle, not fat – [89:38–90:46]
• Customer feedback systems & culture focus – [93:33–95:43]
• AI conversation, hospitality vs. convenience – [101:28–105:13]
• Personal transformation & wisdom – [105:41–110:30]

---

Summary for New Listeners

This episode is invaluable if you want to hear what it’s really like running and growing a successful multi-unit restaurant business in 2025. Aaron shares hard numbers, honest lessons, and actionable insights on leadership, embracing efficiency, leveraging technology, and the realities of running a values-driven company in a market tilted by consumer expectation, digital platforms, and fierce economic pressure. Whether you're an owner, manager, or aspiring restaurateur, Aaron’s unfiltered wisdom, joined with Eric’s probing facilitation, delivers a revealing blueprint that demystifies the “overnight success” myth and underscores the power—and necessity—of persistence, adaptability, and authentic leadership.

---

For more info, resources, and detailed episode show notes, visit restaurantunstoppable.com

Transcript

[Aaron Lyons]

Yeah, it's probably like if I looked at our average check in 2019 and compared it to now, yeah, it's probably 25% higher.

[Eric]

So you're, you're, you're unapologetic about charging what you need to charge to get.

[Aaron Lyons]

Yeah, and I think we were undercharging. I think the industry as a whole was undercharging for the last 20 years.

[Eric]

You think so?

[Aaron Lyons]

Absolutely.

[Eric]

I wouldn't disagree with that statement.

[Aaron Lyons]

I mean, and paying people, you know, too, too little. I mean, generally the industry is pretty messed up. Right. Like, it has been. Right. And I think Covid was a forced correction of things and.

[Eric]

Tell me more.

[Aaron Lyons]

Yeah, I just, I just think that, yeah, I just like, people expect, you know, Four Seasons service and quality on McDonald's prices. You just can't, you can't, you can't get there. And so if you want to be concerned about seed oils and you want to be concerned about where your food comes from, and you want to be concerned about what you're putting in your body, you can't complain about how much that stuff costs.

[Eric]

Right.

[Aaron Lyons]

And, and I think for a majority of, like our market, our target demographic and where we are, they get that. We don't hear a lot of that. It's in those, it's in those fringe markets where it's like, you know, they're comparing pancakes to pancakes or they're comparing a chicken sandwich to a chicken sandwich. And it's not, that's not how it works. That's not. If you don't care where the eggs come from and you don't care that they're pasture raised, then yeah, it's gonna be cheaper at ihop. Right. But if you're comparing us to ihop, you're not our target customer anyway. So, like, that's kind of where I'm at with that. But, but I do think the industry as a whole, things, things are expensive. It's just, they just are. And if you want quality, you just gotta pay for it.

[Eric]

What up, Unstoppables? Repeat guest Aaron Lyons on the show today, and I think you're gonna really enjoy this one. This is, this guy's sharp. I really had fun talking to him and I have a pretty good feeling he's gonna be making himself available in restaurant Unstoppable Live. So head over to restaurantstoppable.com live if you want a chance to connect with Aaron and ask your questions and get some mentorship. We're gonna try to set up a mentoring session. Haven't had that confirmed date yet. But stay tuned. And this is the week to join us over at Restaurant Unstoppable Live because we have our E Power Hour second session with Blake Winters. If you guys have been interested in eos, the entrepreneurial operating system a, a system, a strategy for growth, this is powerful. Then come hang out. And then we have a three part workshop series with the man, the myth, the legend, Rudy Mick. This guy has man. So much experience. This is going to be again a three part workshop series. Part one, Vision, Purpose and values as tools. Part two, Cartman's Drama Triangle Conscious Communication. And then part three, integrating these three pieces to define excellence. And I mentioned it last, have Sean Finter popping off his first ever bar operations power hour. Guys, the dream team is coming together. You can be a part of this for only $47 a month. And now's the time to join because you can get more facetime with these experts. We are here for you. You are the average of those you surround yourself with. And at Restaurant Unstoppable Network, you can surround yourself with the best. Come hang out [e-mail] live. We'll see you there. 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 made possible by me's MIES is a digital recipe platform that helps you stay creative, build profitable menus and nail food execution at scale. We know to scale you need consistency because consistency builds trust with your guests and your staff. We all want to know what the job done right looks like. And when you have systems, your systems are a picture of perfection, of what that job done right is. And that puts us to peace. We are so happy when we know we're doing a good job. Mies will be the one source of truth for your entire team. It's time to take control of your profitability. Learn more at www.getmes.com unstoppable. That's www.g e t m e e z.com unstoppable. Do you wish you could have all of your restaurant needs and solutions under one roof? Well, you can. It's called 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 restaurantunstoppable.com RSP with excitement, allow me to introduce you today's guest CEO and founder of Five One Two Restaurants Concepts, which consist of Dish Society in the Daily Gather. Aaron Lyons. My man. Are you feeling unstoppable today?

[Aaron Lyons]

Feeling unstoppable?

[Eric]

Yeah, man. Stoked to have you back on the show. You were on the show back in 2019. That was episode 608. Back then, you had five total locations. They were all in and around Houston. Lots of cool things were discussed. I can't wait to pick up where we left off. But let's get that motivational inspirational ball rolling with a success quarter mantra. What do you got for us?

[Aaron Lyons]

I would have to say there's no growth in the comfort zone and no comfort in the growth zone.

[Eric]

Okay. Dive. Pull back a layer, and it seems pretty straightforward. But go deeper.

[Aaron Lyons]

Hard to grow when you're trying to be comfortable. Yeah, right.

[Eric]

Yeah. Get used to being.

[Aaron Lyons]

You have to be comfortable. Being uncomfortable.

[Eric]

Exactly, man. It's so true. And so where are you today? Like, what has happened since I last spoke to you? How many total dish societies do you have now?

[Aaron Lyons]

We have six total dish societies. And then we have another concept called Daily Gather.

[Eric]

Got it.

[Aaron Lyons]

Which is a kind of more up upscale, casual dining concept.

[Eric]

And one location of the Daily Gather.

[Aaron Lyons]

One location of Daily Gather here in Houston. And we have. We have two dish societies in Austin and four in Houston.

[Eric]

Yeah. So when I spoke to you, four in Houston and how many in Austin?

[Aaron Lyons]

Two.

[Eric]

Got it. When I spoke to you in 2019, you said, quote, unquote, this is going to be a brand. We're going to create a lot of these. What has happened since then?

[Aaron Lyons]

Yeah, so Covid, you know, for one, a big kind of a big deal. I think you and I talked right before that. So, you know, we were. We opened multiple locations since then. So two of our locations have closed since then. One of them Was really. It was just a food hall. It was a smaller, like a 400 square foot food hall stall in smack dab in the middle of downtown Houston.

[Eric]

That was a dish society.

[Aaron Lyons]

It was a dish society. It was a limited menu because it was a, you know, it was basically operating a food truck inside almost more or less. And this was really at the heel, like really at the forefront of food halls. And then I think we had opened that right, right as you and I were talking, I think, and it was awesome. It was really, really fantastic. And then Covid hit and then downtown Houston just became a desert basically.

[Eric]

Right.

[Aaron Lyons]

And you know, we tried to kind of start and you know, open, reopen again. It just didn't work out. You know, I think because of the way that deal was structured of. With the landlord basically providing all the upfront equipment and the build out and everything like that. And we were just paying a percentage of sales. So if we weren't open, we weren't paying rent or anything. But they really wanted us to reopen. We tried. It just didn't work in downtown Houston, just much like any other central business districts across the country, just still not back to where it was. So. So that was a. That was a slight casualty, but you know, it wasn't that big of a deal. And then our original location, that, the very first one we opened in 2014, the lease expired, 10 year lease expired at the end of 23. And we just closed that. We just didn't. That was it, our lease, our 10 year lease was up. And so that was. We didn't want to renew or extend or anything like that.

[Eric]

What was the reason for that? Was it just underperforming or.

[Aaron Lyons]

It was underperforming. It was small, it was our first location. So it was about 7, 800 square feet smaller than our seats. Probably 60, 70.

[Eric]

What's your sweet spot now when you're looking at a spot, how many seats you want?

[Aaron Lyons]

About 90 to 100 with. With a patio that's got 50 to 60 or more. We just were limited on what we could do there because of the size.

[Eric]

Right.

[Aaron Lyons]

So we had it. We always had like a carve out for that location. We couldn't do our full menu there. So it was always like treated kind of separately different. We just kind of had. It just. It didn't work for us anymore with, with the direction that we were going. And so rather than, you know, invest money into getting it to where it probably needed to be after 10 years, landlord really wasn't willing to work with us. On that, we couldn't expand the square footage, so just. It was just kind of easy to walk away.

[Eric]

Yeah, you also, I think in 2019, you were a kind of a hybrid where you were doing full or like, kind of like a counter or fast casual QSR service. Counter service.

[Aaron Lyons]

We called it flex casual.

[Eric]

That was breakfast and lunch, and then you would shift towards a full service for dinner. Is that still the standard operating procedure?

[Aaron Lyons]

No, we actually. So during COVID we, you know, we. We went just a full counter service.

[Eric]

Okay.

[Aaron Lyons]

And then we tried to kind of come and do the full service model at dinner again, and it just didn't really work. It wasn't the same. What was the challenge with that staffing, really? So, you know, our price points relatively low. Right. Like, our check average back then was, you know, probably around 20, $23, like low 20s. And our standards for servers and bartenders were. Were still were high. And, you know, they just weren't making a lot of money because the check average was low. So we just couldn't keep really good servers. And so the turnover, our turnover as a company, 80% of it was our PM staff. And so we saw that and I was like, it's costing us a lot of money. It's also very. It became a little bit more of a struggle through Covid to do the table service and the full service. And so it was just really easy for us at that time to just go full counter service and never look back. And I'm glad we did because it really streamlined operations and really simplified things quite a bit.

[Eric]

Yeah, I was curious about that when we first had you on the show. Cause I know it can just cause confusion, you know, for the guests and the team. Like, it's harder to cross train people that way too. If you want to pull from an AM shift to cover a PM shift, they also have to know how to do full service.

[Aaron Lyons]

Right, Right.

[Eric]

So it does complicate things a little.

[Aaron Lyons]

Yeah, I would say it was definitely more stress from an operational standpoint and an efficiency standpoint. I actually think the guest. It was. It was less confusing for the guests than you might think. I think a lot of them appreciated it. You know, we definitely kind of turned some people off by going to counter service at night. You know, those people that wanted to be waited on, they wanted to come in for that experience. And so, you know, I definitely think there was somewhat of an impact. I think the net was positive though, for sure.

[Eric]

The thought process makes sense. During breakfast and lunch, people are typically in a hurry. They're not looking to sit down and spend time, but dinner, you know, people want to slow down. They want to, you know, sit down and have somebody serve them. So, like it makes sense. Like the thought process makes sense.

[Aaron Lyons]

Well, 50% of our sales after Covid for dinner were off premise. So it really didn't, you know, before COVID people actually went and ate at restaurants, you know, for dinner on a Wednesday night. At least our, our restaurants, I mean, people still eat out, obviously, but a dish society, you know, people would come and eat in the dining room. After Covid, half of our sales during dinner left in a bag. So that was another reason that we weren't really super concerned about switching because half the people didn't, you know, partake in our service style anyway, so it didn't matter.

[Eric]

Right. So again, if you guys want to go Back to episode 608, we talk about how you scaled from one to five units in five years. And you know, I'm curious, let's get into the numbers real quick. In terms of where you are today, are your per unit economics up?

[Aaron Lyons]

Yes.

[Eric]

What are, what are your prime costs? Starting with labor.

[Aaron Lyons]

So labor, we try to be in the low 20s.

[Eric]

Okay.

[Aaron Lyons]

You know, we have some stores that, you know, from the spectrum, we have stores that do in the low 3 millions to the mid mid to fours to up to 5 million. Oh, wow. So we're kind of, you know, across the board. So the stores that are lower volume, which we have one or two that are kind of in the threes, those are, you know, more in the 25, 26 range. From a labor perspective, the higher performing stores, obviously the labor is lower. Right. And so for cost of Goods, you know, 28, 29 is really where we want to be. You know, depends on the month because of, you know, things outside of our control, inflation and things like that, eggs and, you know, everything that's going on with that, we try to bake some of that in. When we do our pricing, we do change our menu or certain items on our menu seasonally. So we're able to kind of take price if we need to without having to sit for too long.

[Eric]

So you're, you're floating somewhere in the mid-50s for prime costs.

[Aaron Lyons]

Yeah, low-50s. Mid-50s is probably like a worst case ish scenario. Low, low-50s is where we really want to be.

[Eric]

Got it. And in terms of like your occupancy rate, where do you like, what is your aiming point?

[Aaron Lyons]

Six percent.

[Eric]

Six percent.

[Aaron Lyons]

Yeah, that's, that's, that's our aiming point. So when I'm looking at a new location, I'll usually look at like year five of whatever the projected rent and triple nets are going to be in a lease and kind of back into that at 6% and see what our sales need to be.

[Eric]

Got it.

[Aaron Lyons]

And if I feel pretty confident that we can get there, then, you know, I usually do the deal. If not, if it feels like a stretch, you know, it's, it's probably not something that we're going to do.

[Eric]

Got it. And in terms of percent profit, where are you guys landing?

[Aaron Lyons]

So in the lower, the lower end stores that are doing, you know, in the low to middle threes were anywhere from like 11 to 15% on a store level profitability standpoint. Our higher performing stores, low 20s.

[Eric]

Okay, so where is the, the gap? So you know, where is that like that? If we're at the 50, low 50s plus 6, we're close to 60 now. Just shy of 60 and anywhere from 10 to 20%. You know, for the 20% profit, you're at 80%. Like what's that other 20%? Where's that going?

[Aaron Lyons]

Yeah, I mean, look, GNA marketing, facilities maintenance, that kind of stuff.

[Eric]

What's GNA?

[Aaron Lyons]

Just general administrative costs. So you know, just the cost of kind of running the business. There's a lot of stuff that gets lumped into that. But you know, having, you know, restaurant supplies, cleaning supplies, marketing, advertising. A big one is third party delivery service fees which we put in there. And that can be anywhere from, you know, 4 to 7% of sales, depending on the store. So that's a big chunk. Yeah, we do markup.

[Eric]

Okay, so does marking up offset that percentage?

[Aaron Lyons]

Yes and no. I mean you do you record higher gross sales right on that when you, when you mark up that price. But then you're also paying, you're still paying whatever fee, percentage fee, depending on the platform on that as well. So it still gets recorded. But it's because it's such a big part of our sales. It is a big item on our, on our P and L for sure, the, the delivery service fees.

[Eric]

So with gna, what is your. So do you have any chiefs?

[Aaron Lyons]

Yeah, we have, so we do corporate, like our corporate gna. We, we basically, that's a below the line expense. So we take that out after. I'm not including that in store level operating profit. Yeah, got it. And that runs between 6 and 9%. As a, from, from a total perspective.

[Eric]

Is it weird that I'm asking these questions? Do you think it's weird?

[Aaron Lyons]

I don't think it's weird. I think there's a lot of people that are probably trying to benchmark their metrics, and I'm one of those. I'm always fascinated by those things. And it's. It's not information that you can readily find.

[Eric]

Right.

[Aaron Lyons]

And, you know, you can read 10Ks on, you know, Shake Shack and Kava and Sweetgreen and all these things, but it's not necessarily in Chipotle. But those are sort of anomalies and.

[Eric]

Completely different.

[Aaron Lyons]

Completely different. And it's hard to. It's hard to benchmark, you know, economies of scale, like.

[Eric]

And it's so hard to figure out how you're doing. And not to mention. So. And then there's just different business models within the independent sector that, like, you can't compare apples and apples. It's not comparing apples and apples.

[Aaron Lyons]

Right.

[Eric]

And then you have apples and bananas.

[Aaron Lyons]

Correct. And like, you know, the large national brands, they have stores all over the country. Right. We're limited to, you know, regions or, you know, Exactly. Just be Houston.

[Eric]

Right.

[Aaron Lyons]

So if there's a hurricane like there was last year, and we have to close all of our stores for three to five days, that affects. I mean, that's a. That's a huge loss in our quarter. Right. Compared to. We had 102, 100, 500 stores across the country.

[Eric]

So many variables. I almost want to avoid markets like Miami and New York, just because, like, you're, like, those numbers aren't going to be correct. Universal.

[Aaron Lyons]

Well, you see that a lot with. With brands and chains that start on the, you know, east coast or the west coast, and they have really high average unit volumes, and then as they start to expand, those unit volumes, you know, get cut in half. I mean, the same thing happens anywhere, right? Like, once you remove a brand from its sort of home base, you know, and you. And you have to educate people on that, you know, it does become harder and harder to maintain those average unit volumes, but there certainly are exceptions to that for sure.

[Eric]

So you said your. Your per unit volume with Dish Society is up since 2019?

[Aaron Lyons]

Yeah, I mean, I would say a lot of that's due to price increases. Right? Over. Since in the last six years, we've probably increased prices 25%. Okay. So. So, I mean, I would say our guest count is, you know, probably flat almost. You know, we're serving about the same amount of guests as we were, but. But our sales are up because. Mostly because of price increases.

[Eric]

Yeah, I want to get into that, but I also want to Hear real quick before we start to really dissect this and talk about how you move the needle and why, like when and why you made the decisions you made in the past six years. What about daily gather? What's going on here? What's this all about?

[Aaron Lyons]

Yeah, so that, that probably, that deal probably happened right after you and I spoke the first time. So we had a opportunity on the table for a second gen location here in Houston. Great location and a really prominent mixed use development. And it was actually, it was international. Smoke was the brand which was like Michael Mina Aisha Curry's concept. And they've been open for maybe a year and then I don't know the details of why they closed, but they closed. And so we had an opportunity to take, take that location. 6,000 square feet, full service, huge bar, a lot of money in FF&E and we were able to get in there. But you know, it's funny because once we got the, the loi and then we went to lease and we started kicking the lease around, it was March 2020 and then the world shut down. So we just put that on hold for about a year and then we kind of revived it and then we opened that store January 2022.

[Eric]

Got it. So tell me more about like the, the business model economics.

[Aaron Lyons]

Is it similar to Dish or it's full service? It's about. Our check average is about double what it is at dish. So we do lunch and you know, big social hour, dinner during the week. We do brunch on the weekends as well. But yeah, it's just your, it's just your kind of more traditional casual dining establishment. And we use a lot of the same infrastructure and components as Dish Society, which, which helps. Right. To run a one off brand, it helps to have sort of like a mothership that you can support one off brand. So we're able to leverage a lot of our technology and systems and training and you know, corporate overhead, staff and all of those things to really make it operate at a high level. Same suppliers. You know, we're farm to table and we source a majority of everything locally, so we're able to use those same suppliers and even bring on new suppliers because of the menu there is different. And so we're able to, you know, do more seafood and do more things like that that we're not able to.

[Eric]

Do at Dish Society and full service. So are you in terms of the, the prime costs, are those higher prime costs?

[Aaron Lyons]

I'd say the food cost is a little bit lower because alcohol is about 25 to 30% of our sales. And so our cost of goods on alcohol is a little bit better than food. And so, yeah, definitely, it's, it's, it's low 50s. There are occupancy high. Our occupancy cost there is much higher.

[Eric]

How many seats?

[Aaron Lyons]

There's about 120 inside and, and probably about the same on the patio.

[Eric]

Yeah, like 10%.

[Aaron Lyons]

It's close to 10. It depends on the month, but yeah, it's close to 10. And part of that is just, it's a, the rent there is just, it's outrageous and it's a 6,000 square foot space. And, and I would say if, if we're going to open a second one, a second daily gather, which we probably will at some point in the near future, that'll probably be a 4 to 5,000 square foot space. And I think honestly, if the space that we're in now was 4,500, we would do the same amount of sales. Yeah, it's just that was the space, so that's what we got. And like, we couldn't carve out, you know, 1500 square feet or whatever from that space. And so.

[Eric]

Right.

[Aaron Lyons]

We knew that going in.

[Eric]

So your vision in 2014, I'm just curious, what was like, what did you see Dish Society being like? What was your dream? What were you aiming for? What did you want in 2014?

[Aaron Lyons]

14.

[Eric]

26 years old, 27 years old?

[Aaron Lyons]

I was 30.

[Eric]

Yeah, yeah, you're 25 when you were doing your masters.

[Aaron Lyons]

I was, I was, yeah, 25 to 27 when I was getting my masters. And then we, by the time I turned 28 when I graduated and then we opened, I had just turned 30 right around that time when we opened. But my vision, honestly is very similar to what we've just opened in Austin over the last year, year and a half. So we opened two locations in Austin over the last, you know, 14, 15 months. And that's really my vision. It took, you know, 10, 11 years to, to kind of come to fruition in several iterations. But yeah, I mean, my vision was, and I think I said this on the first podcast, was a 30 experience for $15. And, you know, through inflation, that's changed a little bit. And so you, you know, the challenge is how do we stay in our category and provide, you know, chef driven, locally sourced, high quality food at that reasonable price point and we don't price ourselves out of our category and how do we deliver value? Right. And so that's been a big challenge. But my vision Was to always have an experience that exceeded expectations where you could really come in. It was very accessible. You could come in, you could, you know, cool atmosphere, cool vibe, strong culture, energetic staff, you know, locally roasted coffee, great cocktails, really exceptional food. And then just. You're just kind of hanging out at your own pace. Right. You know, and if you have 30 minutes for lunch, you can do it. If you want to hang out for two hours, you can do that too. If you want to come after the gym, you can do that. If you want to have a business lunch, you can do that. Kind of that neighborhood kind of go to spot that I felt was lacking everywhere that I had been up until that point. You're seeing a little bit more of that now, of course, but back then, there just really wasn't anything in that. In that gap, I would say, between like a Panera Bread and a Houstons. And I really wanted to, like, be in the middle of that.

[Eric]

This episode is made possible by me's. ME is a digital recipe platform that helps you stay creative, build profitable menus, and nail food execution at scale. Consistency builds trust with your guest and and your staff. No more messy spreadsheets or scattered systems. Whether they want to admit it or not, your team loves systems because systems equals peace of mind, because we all want to know what the job done right looks like. And Mises paints the picture of perfection and is the one source of truth for your entire team. By locking in recipes in training before service starts, Mees makes sure every dish is consistent, every team member is aligned, and every location runs like clockwork. So when the report rolls in after sale, they tell the story you're after. Higher profits, better margins, and repeat guests. It's time to take control of your profitability. Learn more at www.getmes.com. unstoppable. That's G-E-T M E-E E Z.com unstoppable. So it's safe to say that you met your per unit vision.

[Aaron Lyons]

Oh, yeah. I mean, originally, you know, I thought, man, if we were doing, you know, 2 million a unit, we would be killing it. Right. And at that time, you know, like, when I was writing the business plan, I think Chipotle's average unit volumes like 15 or 18 or, you know, even hovering around 2. And so I just thought that that would be like, a really awesome benchmark. Yeah. So now we're doing changed a lot. It's changed a lot. You know, we're doing about double that. But, you know, costume almost doubled as well. Yeah, I mean, that's the other thing too, is the. The math that just doesn't necessarily work out very well. It doesn't. Math. Opening new locations is very difficult. You gotta be very, very careful on what you do and how you open new locations, which is part of why we've. We were pretty aggressive during COVID You know, we did. We. We ended up getting a large commissary space. We ended up doing the Daily Gather deal, and we ended up relocating our. Our second location because the lease was up on that. Coming up on that. And we ended up going to a bigger space and Katie in the same shopping center. And so it was kind of like we reopened that store in a bigger space, and then our sales went up 50% just from that relocation. And then we had. We opened a location, our. Our West University location here in Houston. We opened that in 2020 as well. So we were. We were making moves during COVID but I think, you know, and then afterwards it was just. She'd been so inconsistent. You know, we closed the food hall, which, you know, like I talked about earlier, I mean, I was kind of.

[Eric]

Surprised that you guys went into a food call because it doesn't really feel like then you were very much. A food hall doesn't really cater to that full service experience that you want it. Like, you don't have control over the atmosphere. Right?

[Aaron Lyons]

Yeah. Well, I think our food, though, from like a breakfast and lunch perspective was very. Made a lot of sense for that. Right. So, you know, if you. If you have 30 minutes for lunch, because you work in the building upstairs or down the street, you could come in and get, you know, a salad or a hot chicken sandwich or, you know, brisket, sweet potato or breakfast even, or whatever. And I think in a relatively quick amount of time and sit there and eat and go back or get it to go or even get it delivered. And then there was like, you know, 12 other options in there. So if you didn't want that or if your coworkers wanted, you know, Asian food or Mexican food or pizza or whatever, they could do that. So it was really cool. I was really. I was really bullish on the food hall model until Covid.

[Eric]

Well, I mean, yeah, that food hall model was on fire. That was all the ra. That was the trend.

[Aaron Lyons]

Right.

[Eric]

And then Food hall took a back seat to Ghost Kitchen for a solid year and a half, two years now. Ghost Kitchen is like, wait, people? Like people?

[Aaron Lyons]

Yeah.

[Eric]

Who would have thought?

[Aaron Lyons]

Well, it got. Ghost Kitchens got so saturated, too. I mean, that became so much Noise. You open up an app and you just see all these.

[Eric]

And dude, that's the thing. There's too much. There's so much noise, dude. And a lot of it is just people always like, it's. It's like shiny ball or like, you know, shiny object syndrome in this industry. We're always like, what's the next thing? Like, we want to be ahead of it. We want to capitalize on these opportunities. But like nine times out of 10, it's just. It's just hot air.

[Aaron Lyons]

Right. You know, like 100.

[Eric]

Like, is the food hall thing still interesting to you or.

[Aaron Lyons]

No.

[Eric]

Why not?

[Aaron Lyons]

It's just it. Because typically where you're gonna find. I haven't seen one be successful in Texas, except for like, maybe there's one in Dallas, I think. Yeah. Legacy hall in Plano I think does really well. But they. They activate it. They have the brewery, they have bands, they. And it's around other stuff.

[Eric]

It's an event center with food.

[Aaron Lyons]

Most. Most food halls are like in central business district, areas that revolve around daytime, you know, high density, daytime population.

[Eric]

Right.

[Aaron Lyons]

And that just doesn't really exist anymore. Right. I mean, you get away with it. New York, probably, and some of these, like, major hubs, Chicago maybe. But like, I don't post pandemic.

[Eric]

Everyone's like, we're out of here.

[Aaron Lyons]

Yeah. It's hybrid. People are working one or two, three days, you know, and work. That was the other thing about our first location that I would mention, that once their 10 years was up on that lease, you know, we were surrounded by a lot of office buildings that nobody came back to work, nobody was working in, and nobody was catering, and nobody was doing all that stuff. And so like those groups of people walking across the street for lunch disappeared. And so, yeah, that was another part of walking away from that location.

[Eric]

What are the markets you're looking for now? When you're looking at markets? You know, you said we were talking about Brandon Hunt.

[Aaron Lyons]

Who?

[Eric]

Somebody who goes to your Austin location.

[Aaron Lyons]

Yeah. Big fan.

[Eric]

Yeah. Love Brandon. Love Zane. Via 313. Got me a Via 313 T shirt. I'm gonna be rocking it on the show eventually. So he. He isn't within walking distance. That.

[Aaron Lyons]

Yeah.

[Eric]

Does he live in the city?

[Aaron Lyons]

Yeah, yeah, yeah. He lives. I don't know where he lives, but he lives within a walk.

[Eric]

Don't share his address.

[Aaron Lyons]

Yeah, I don't. He lives close by. But what.

[Eric]

What's that location?

[Aaron Lyons]

It's in Austin, South First Street.

[Eric]

Okay.

[Aaron Lyons]

So it's Just parallel to South Congress, just south of downtown. Okay, very like cool. Next to Zilker Park. It's in the Boulder Creek kind of neighborhood area.

[Eric]

So, so you're still, you're still targeting because what I'm poking, prodding around right now back in 2019, you said we do not want to go to the burps. We're not a burbs concept.

[Aaron Lyons]

Yeah.

[Eric]

Do you still feel that?

[Aaron Lyons]

No way. Yeah, I think I, yes and no. I think it depends on the suburb. I, I so our suburban location, our lone kind of suburban location, which is Katy, Texas, which is just outside of Houston. It's always our lowest performing store.

[Eric]

Yeah.

[Aaron Lyons]

And you know, part of that I think is because first of all, you don't have the off premise sales. And so, you know, 40% of our business, any of our other stores is off premise catering, third party delivery, whatever between.

[Eric]

So you said 40% of that? 40%. What's the split between catering and third party?

[Aaron Lyons]

You know, catering's probably 5% of our sales. Third party deliveries probably 25% of our.

[Eric]

Sales is take out the rest.

[Aaron Lyons]

And then. Yeah, and then we have like our, we launched an app a year and a half ago and so we do quite a, we try to migrate as many people over to our app as possible that they can order directly through us on our app or even on our website or whatever. And we, and we try to migrate as many people over and you know, capture that as best we can. So that, that's a majority of our sales of, of the 40% is, is majority of that's third party delivery. And in suburbs you just don't have a lot of people doing uber eats and doordash. Just don't, you don't have a lot of people ordering out. And I also think that suburbs are the most price sensitive because they're typically feeding a family of three, four, five, six people. Right. More urban areas, you're looking out for yourself or young couples or maybe they have a kid, you know, small family or whatever. So it's a little bit different, I think, and they're less price sensitive. It's real easy to like, you know, just make spaghetti at home. And that's our biggest competition in the suburbs. Right, right. But in urban areas, like people still.

[Eric]

Eat out pizza and pasta. Feeding the family.

[Aaron Lyons]

Yeah. And so I think that that's, that that's hasn't really changed. That's been my viewpoint for a while. I think, look, suburbs are different. Right. There's suburbs in Dallas that operate differently. You Know, I don't know. I would say there's a lot less risk involved in going into high density urban areas where like we know what we're getting. Right.

[Eric]

Right. Well, it's interesting and I've had some people on the show that say the opportunity is in the suburbs because.

[Aaron Lyons]

Yeah, it depends on the concept.

[Eric]

I think there's in. There's different markets in different concepts. Right. There's so many variables, which is why I like to get these like benchmarks, like what works where. Right. But it's interesting, you know, and I kind of. I feel like I pick on Texas a little bit, especially up in Dallas. Because if you ever flown into Dallas. Have you ever flown into Dallas?

[Aaron Lyons]

I used to live in Dallas. Yeah.

[Eric]

Oceans of communities.

[Aaron Lyons]

Yeah.

[Eric]

Just like as far as you can see.

[Aaron Lyons]

Rooftops.

[Eric]

Like rooftops.

[Aaron Lyons]

Yeah.

[Eric]

And that is truly unprecedented if you look at how people over time have like co. Mingled. It was always like communities. In the center of that community is like a community center. There's usually a church and you know, a post office and a restaurant.

[Aaron Lyons]

Like the pub.

[Eric]

The local pub. And that was the gathering place. Those are, those are the places that you, you gathered. And these, these oceans of communities don't have those same gathering space spaces. There's more homes in one of these ocean sprawling communities than there was in an entire town 100 years ago.

[Aaron Lyons]

Yeah.

[Eric]

And there's no city center, there's no community center. And those. It's like we kind of like there's.

[Aaron Lyons]

A bunch of like strip malls, a bunch of strip centers and a bunch of like chain restaurants.

[Eric]

But sometimes you drive 20 minutes.

[Aaron Lyons]

Yeah.

[Eric]

Like it's 20 miles outside.

[Aaron Lyons]

Some of those neighborhoods are so big it takes 10 minutes to get out of the neighborhood.

[Eric]

Right. It's crazy. So I think that there is an opportunity if it's the right concept. Concept. If it's a family oriented concept where you can like, you know, have good perceived value.

[Aaron Lyons]

Yeah.

[Eric]

You know, which we do.

[Aaron Lyons]

And I think like, look, Arcady location will serve the same amount of dine in guests or more than all of our other locations.

[Eric]

Yeah.

[Aaron Lyons]

Like physically serve, put more butts in seats. But because of nobody's catering out there, because there's not a lot of businesses or offices or whatever. And because dinner time people are making dinner at home, they're not uber eats. They're not, they're not going out for dinner a whole during the week. Right. You know, I think that that's the, that's the big massive drop off. And so you still have to have you know, salary, general manager, you still have to have staff, you still have to build out the restaurant, you still have to pay rent, you have to do all that stuff. And so when you're not able to capture that chunk of sales, it's very, very difficult. And so, you know. Yeah, I just think it's, I'll also say this, you know, I don't hear as many complaints from our other locations about, you know, how much our chicken sandwich is. Right. Or how much like, our eggs and bacon and toast and are like our traditional breakfast.

[Eric]

That's a good segue because I was gonna ask, like you said, your unit, your per unit sales are up since we last spoke. In 2019, you said a big re. Increase in food costs by 25%.

[Aaron Lyons]

Yeah, it's probably like if I looked at our average check in 2019 and compared it to now, yeah, it's probably 25 higher.

[Eric]

So you're, you're, you're unapologetic about charging what you need to charge to get. Yeah.

[Aaron Lyons]

And I think we were undercharging. I think the industry as a whole was undercharging for the last 20 years.

[Eric]

You think so?

[Aaron Lyons]

Absolutely.

[Eric]

I wouldn't disagree with that.

[Aaron Lyons]

I mean, and paying people, you know, too, too little. I mean, generally the industry is pretty messed up. Right. Like, it has been. Right. And I think Covid was a forced correction of things and it.

[Eric]

Tell me more.

[Aaron Lyons]

Yeah, I just, I just think that, yeah, I just, like, people expect, you know, Four Seasons service and quality on McDonald's prices. You just can't, you can't, you can't get there. And so if you want to be concerned about seed oils and you want to be concerned about where your food comes from, and you want to be concerned about what you're putting in your body, you can't complain about how much that stuff costs.

[Eric]

Right.

[Aaron Lyons]

And, and I think for a majority of, like our market, our target demographic and where we are, they get that. We don't hear a lot of that. It's in those, it's in those fringe markets where it's like, you know, they're comparing pancakes to pancakes or they're comparing a chicken sandwich to a chicken sandwich. And it's not, that's not how it works. That's not. If you don't care where the eggs come from and you don't care that they're pasture raised, then yeah, it's gonna be cheaper at ihop. Right. But if you're comparing us to ihop, you're not our target customer anyway. So like that's kind of where I'm at with that. But, but I do think the industry as a whole, things, things are expensive. It's just, they just are. And if you want quality, you just gotta pay for it.

[Eric]

Ye, I, I get behind that. And I think a lot of people are afraid to charge what they have.

[Aaron Lyons]

I hate raising prices. I hate it.

[Eric]

Why?

[Aaron Lyons]

Because I know I'm going. I mean, it's just economics 101. I mean, I think you learned that the first day. It's like you raise price and demand goes down. I mean it's, it's, that's the, that's the, you know, relationship there. And so if you. And I also think pigs get fat, hogs get slaughtered. So if you get, you can, if you go too much, you can really. You know, like I said earlier in this, in this segment here, I don't want to price ourselves out of a fast casual market. I mean, at the end of day we're still counter service $30 experience at.

[Eric]

$15 worth of cost. Right?

[Aaron Lyons]

Right. And now, now it's probably a $30 experience for $23. You know, so it's like, you know, how do we create that value and what are we doing to still give people that value? But you know, I'll tell you this. I went to Chick Fil a the other night and just with my, I took my kids there, I think we spent like 60, 70 bucks chick fil A and we didn't order like crazy stuff. I mean, so I mean it's just expensive to eat out anywhere I think right now. And I think your people are voting with their, their feet and their, their wallets right now and eating at home more or trading down or getting creative on, on what they do.

[Eric]

Yeah, you know, it's interesting like in order to provide the, if in order to be the best, to attract onto the best to, to, to pay for the training to, it takes resources. So you have to figure out like if I really wanted to deliver that thirty dollar experience, then I have to be able to get the, the fiscal, you know, responsibility in place to, to train my staff up to purchase good quality goods to spend money on marketing. Like if you're not charging what you need to do charge to, to offset the cost, then you're gonna fail.

[Aaron Lyons]

Right.

[Eric]

Like you, you, I understand you're afraid that if you charge anymore though, the consumer might not come back, but you won't be able to bring them back if you're not charging what you need to take care of your staff. And to train people.

[Aaron Lyons]

Yeah, it's a tightrope. It's a balance. I think that I still look at our. I hate raising our prices. It's just. But we have to do it. But I also will look at things and think there's still, like, we still probably need to go up on a few items. But I'm just really reluctant to do that because I do. I know that at some point there. There is a threshold where you get diminishing returns on that. And maybe we've already hit it. But, you know, it's. It's. There's a. There's like a volume balance of, like, you know, if you can keep your prices at a certain point and still attract the crowd, then your sales will take care of themselves. And then costs fall in line and whatever. Your cost of goods might be up, but then your occupancy costs are lower and your labor is lower, so your profitability's, you know, better or whatever. So it's always. It's the tightrope. It's. It's a balance. And looking at ways that we can. Because I'm not going to, like, shrink our portions. I'm not going to cut corners. There's certain things on the menu, like salmon, that are ungodly expensive, especially for a concept like us. But that's like the number one protein, or it's number two protein behind chicken, that people add on salads and put on do, you know, order. Right. And so it's a healthy. It's a healthy dish, so people want it. So we're not going to take salmon off the menu.

[Eric]

Yeah.

[Aaron Lyons]

What are.

[Eric]

So you increase your prices to be able to, you know, cover the liability that you have. And I think that is something people are afraid of. I encourage people to be unapologetic about it. You need to be fiscally responsible. What are some of the other things you've done to evolve, to get more efficient, to increase your margins?

[Aaron Lyons]

You know, look, I think one of the silver linings of COVID and I would bet most restaurant. Not all restaurant operators would agree with me on this, is it kind of like put a spotlight on how inefficient and bloated maybe we were. Right. I know for us, it's almost like when you're forced to run the restaurant with fewer people, you. And then you start cutting things that. That you thought were so necessary at one time, and then just by circumstance, you have to. You don't have a choice. And then you. You see how things operate. You're like oh, wow. Like, we actually don't. We didn't really need to have those five items on the menu. We just really didn't need to have these extra five people working every shift or whatever. You just, you, you start to feel like more efficient and you start to see those things, and people you hire, you hire better people. And like, you know, I'd rather have three studs than five average, you know, B or C players. Right, right. And so you start to. You start to kind of hone in on those things. And I think for us, you know, our technology was in place. Right. You know, before COVID So that, that really helped us get through that time and push people onto that platform. But then just running with fewer people and seeing how we could streamline operations.

[Eric]

How did you take me through the process of being able to run with fewer people? What were the biggest changes you made in order to do that?

[Aaron Lyons]

Well, look, I forgot. It's called, like, there's like a. It's like a rule or a law or something of, of whatever effort or something, but, you know, where your, your effort or something expands to fill the amount of time that you have. Right? So if you, if you give somebody, you know, five hours to clean their room, they're gonna take five hours to clean their room or whatever, right? If you give them an hour, they'll do it.

[Eric]

I know what you're talking about. It's the profit first uses that analogy.

[Aaron Lyons]

I don't know what it is. But anyway, you know, look, if you have five line cooks, they're probably not working out all at 100%, right? Maybe they're at 80% or 70%. If you have three and they're working at 95%, you're gonna accomplish the same thing. Right. And then what you can do is pay those three people a little bit more. Right. And so now they're happier and they're more efficient. And so you're getting a better product, you're getting more consistency, and you have happier team. I think the more people you have, like, there's a diffusion of responsibility sometimes where it's like, oh, somebody else is going to do that, or that's somebody else's job or whatever. But when you start to pull some of that redundancy out, people get more efficient. People rise to the occasion. The right ones do the. The wrong ones self select out you typically. Or make those make themselves very obvious.

[Eric]

Yeah, I'm like, I'm secretly trying to figure out what the name of that law is, because I want to know now you have me. So I'm listening with one ear. And like, the big takeaway I'm getting from you essentially is, you know, we think we need all these people, but the, the truth is we operate at our best when there's a certain level of stress.

[Aaron Lyons]

Sure.

[Eric]

And that's our peak. And if we can find that sweet spot of like, high intensity, if they're, if you're fat, dumb and happy.

[Aaron Lyons]

Yeah.

[Eric]

You know, people, that's when mistakes happen.

[Aaron Lyons]

100.

[Eric]

But if you're, if you limit the amount of time and resources you use to get a job done, you're just going to operate more efficiently, and that's what happens. And in profit first, Michael McCallowicz, he's talking about. The analogy is like the, the idea is like, have you ever heard of profit first?

[Aaron Lyons]

Yeah.

[Eric]

So, like, it's, it's the, it's the cash flow management system where you're using checking accounts instead of envelopes.

[Aaron Lyons]

Yeah.

[Eric]

But what you do is you take. You have your income, and then you're basically moving your money onto smaller plates. So you get much more conservative. If you have a giant plate and all this money on this plate, you're like, we're rich.

[Aaron Lyons]

More money you have, more money you waste.

[Eric]

Right. But if you take all of the money off that, you know, you cover your taxes, your owner's pay, your, Your film, like any. Whatever's left over your operational expense. Right. If you're just looking at what actually you have to spend, then you get more conservative and you get more efficient.

[Aaron Lyons]

Yeah.

[Eric]

It's the same principle. What the hell is it called? It's killing me right now. I'm trying to find it.

[Aaron Lyons]

Is it the Pareto principle?

[Eric]

Pareto principle.

[Aaron Lyons]

I think something else that's another.

[Eric]

It's like the time of Pareto's principle is the 8020 rule. I think that's the principle. There's so many laws out there right now.

[Aaron Lyons]

Well, they're all, they all make sense.

[Eric]

Oh, man, it's. It's going to bug the crap.

[Aaron Lyons]

But I think, to your point, and we were kind of talking a little bit about this before we started recording about growth, you know, like, what does growth mean? And I'm kind of in the process of like, writing this semi, I don't know, manifesto or something to the team right now about muscle versus fat. And, you know, I've always worked out and, and I've always been healthy and I've, I've always. You know, there's a saying, muscle weighs more than fat. I mean, that's obviously not true, because a pound of muscle weighs a pound and a pound of fat weighs a pound. But if you've seen what a pound of muscle looks like versus a pound of fat, totally different. You can have two guys or women or whatever that weigh the same, that look totally different. Yeah. And their clothes fit totally different. And one's healthy and one's not. Same with companies. Right. And I feel like, you know, where we're at as a company and where I'm trying to get us to be. Especially over the last 12 months, we've really shifted our mindset into we need to put on more lean muscle, we need to get more athletic, more versatile, we need to get rid of the fat, we need to get rid of the bloat. And, you know, are you adding people? Are you adding stores? Are you adding things and it's just making you heavier or is it making you stronger?

[Eric]

Yeah. You know, when you started down that path talking about the principle, I thought you were going to say, I can't remember who said this, but it's. This idea is you wanted to. You know, it's like you find the B players, the B plus players, and you're trying to make them into A players, and if they're a B or lower, like a B minus or lower, you just get rid of them and you replace them with more Bs. And like, I think a lot of people are willing to carry dead weight right now because they're just. They can't find anybody else.

[Aaron Lyons]

100.

[Eric]

But it's just gonna slow you down.

[Aaron Lyons]

Everyone's guilty of that. I mean, we are too. And it's like, you know, one of the things I constantly ask myself and I ask my team, when I have one on ones with my team, I ask them, what are you tolerating right now? What are you tolerating?

[Eric]

Yeah.

[Aaron Lyons]

And. And a lot of times it's people and it's. It's a certain. You know, maybe it's a way of doing things or it's a person on the team, or it's multiple people on the team or it's a manager or whatever. And it's just like, well, I can't find a replacement. And having somebody is better than having nobody. And I would argue that most of the time that's not actually the case. And so, you know, a C player can turn a lot of B's into C's, you know?

[Eric]

Yeah. Yeah. So was it you that said what you in the last episode, like, what.

[Aaron Lyons]

You tolerate in your presence is your Standard. Yeah, yeah.

[Eric]

And that is the reality of your culture, Correct?

[Aaron Lyons]

Yeah.

[Eric]

You know like what? Like perception is reality. It's not what you say you are, it's what is actually what you do.

[Aaron Lyons]

Yeah.

[Eric]

So if you accept those people and you don't cut those people, then that's the reality of your culture.

[Aaron Lyons]

And you tell everybody else, well, I'm accepting it on this person. So then those people start to do those things. Right. And so it's, it's hard. You can't be consistent. You can't hold somebody accountable for being late and not this other person. Right. And so, you know, it's just about making quick moves and, and identifying those people and, and making hard decisions. And this goes back to, you know, you have to be comfortable being uncomfortable.

[Eric]

Right.

[Aaron Lyons]

Making difficult decisions and having difficult conversations. It's. It's hard. It's hard to do. It's not a natural thing that people want to do or they're good at, so they avoid it. And then you just get this mountain of stress and problems.

[Eric]

Yeah. What was the law you said you thought it was?

[Aaron Lyons]

I don't know, Pareto or.

[Eric]

Okay, it's Parkinson's law.

[Aaron Lyons]

Parkinson's law.

[Eric]

Yeah.

[Aaron Lyons]

That's what it is.

[Eric]

I found it.

[Aaron Lyons]

Yep.

[Eric]

I knew it started with the P too. I was like, what?

[Aaron Lyons]

Yeah, yeah.

[Eric]

Small plates is based on Parkinson's law, which says that the demand for something expands to meet its supply.

[Aaron Lyons]

Yep, exactly. So if you have five cooks, you're gonna get it done with five. If you have three, you'll figure out a way to get it done with three.

[Eric]

Right.

[Aaron Lyons]

I mean, it's gotta be the right people. It's not as simple as that. Right. Like you have to have, you know, if you have a 30 foot line, it's really hard to run that with two or three people.

[Eric]

Yeah. And that's the cool idea with Profit first too, is that like you take your profit because you're in business to earn a profit. So if that's why we're here, and it's not to get rich into flying our pockets, it's so we can invest in assets and get better and put money away and create opportunity for other people. So you take your, you take your profit, you take your taxes that doesn't even belong to you, that's not your money. And then you. And then whatever's left over is your operational cost and you just make it work. And you operate lean and you're taking care. You got owners pay, you got profit, you're happy, you're healthy. And it just kind of determines your growth. You don't over extend that way too. So you, you said that your, your tech stack was ready to go and that was a big part of your success in 2019 going forward. What was your tech stack in 2019?

[Aaron Lyons]

Well, we had just implemented Olo at that time. Right. Which allowed us to consolidate all of third party delivery and then also offer online ordering through our own internal platforms through, through our website. And so when Covid hit, you know, there were a lot of people that hadn't really done that, especially like in our space in the merging emerging brands. Right. If you have a couple of units, maybe you don't have online ordering, especially back then. Right. It was kind of wasn't new, but it was, it was actually, you know, it was a lot costlier than it is now. Right. And so it was somewhat prohibitive for some people. But we had that in place and we had, you know, other, other systems and other things in place that just made it easier for people to do that. So, you know, from day one people were already on that platform and then we were able to add things to that platform to support our local partners and farmers and ranchers. And we were selling like.

[Eric]

What were you adding?

[Aaron Lyons]

Oh, we started a virtual farmers market so you could buy a box of produce, you could buy eggs, you could buy bacon, you know, anything from our suppliers that we, you know, we had, we were selling toilet paper, we were selling sanitizer, we were selling gloves, you know, latex gloves, you know, we were selling all kinds of stuff on there that people wanted, you know, bread, tortillas, just whatever. Right. And so that was a big deal that we could just. It took us one day to add all that stuff on there and then the next day we were live.

[Eric]

So you were for your online ordering, you're using olo, had Noah Glass on the show. Awesome organization. What do you get with olo? Like what is the, what solutions are you being provided with that option?

[Aaron Lyons]

I guess at the highest level we are. It just consolidates all of our third party delivery. It integrates with thanks, our loyalty app. So you can order through our app, you can order through our website catering, all of those things go, go through olo. Just, you know, I'm not the tech guy, so I don't know all the ins and outs on how it works on the back end or whatever. But from a customer perspective it just allows you, you know, more opportunities to get our food with easy access.

[Eric]

And you're using. So it's kind of, is it Like a, kind of like a marketplace or what's like a dashboard for third party delivery. So it takes all the third party options and it kind of like, like brings it to one place so you can see what's happening.

[Aaron Lyons]

So what, what it does is when you order on Uber Eats, you don't know anything about it. Like a customer doesn't know anything about olo. Right. They don't know what that is.

[Eric]

Right.

[Aaron Lyons]

So you, you order on UberEats, it gets routed through Olo and it just shows up on our kitchen screen instead of having five. An iPad, iPad for every option. Right, right. So it does that. Right. And then if you order from our website and essentially bids out the delivery order to uber eats or DoorDash wherever, and then that, that third party comes and picks it up and delivers it to you, even though you order directly through us.

[Eric]

So you order directly through your dishsociety.com website and that order gets taken in and then UberEats gets to decide whether they want to take it as they bid. Whoever has the highest bid gets to the privilege to deliver your food.

[Aaron Lyons]

Correct. I don't know exactly the ins and outs of that. I don't know exactly how that works, but yeah, somebody comes and picks it up and takes it to you. Yeah.

[Eric]

Okay. What was it about OLO that made you say that this is our option? Like we want to go with these guys. You know, this is 2019. I know, yeah.

[Aaron Lyons]

And I think too, at that time we were probably had to be one of their smallest accounts.

[Eric]

Well, I was curious about that.

[Aaron Lyons]

They didn't even really want to talk to you unless you had 20 accounts. And so we just kind of, you know, told them that we're going to be, we're going to be 20.

[Eric]

And so your vision was to get to 20 locations?

[Aaron Lyons]

Oh, my vision to get more than that. You know, we've, we're, we're. Sometimes you got to get small to get big. And I think that's the phase, that's the season of life we're in right now. But, but yeah, I think they, at the time, there wasn't a lot of options, to be honest with you, that I think met our needs and they were the best. Like I said, I'm not the tech. My partner kind of handles a lot of that stuff.

[Eric]

And so is that like an over expense for you because you don't have the units to offset the costs or are they working with you for that?

[Aaron Lyons]

Yeah, I mean, I think we had to pay a little bit more than we Would have liked to, but the alternative was we still, we're not, we don't, we don't have it. And we knew this is before Toast.

[Eric]

Really got to where it was.

[Aaron Lyons]

Correct? Yeah. And I think, yeah, there just weren't a lot of options. Right, right. And so a lot of times if you wanted those things, you had to like, be. You had to play in that SMB or like enterprise space. Right. To get it. And my whole like, hypothesis with this, you know, since day one, was we're going to open a bunch of units. So like the things that we integrate now have to make sense when we have 10 or 20 locations or 50 locations. Right. And things will evolve, of course, but like, I'm not going to do something now that's not going to get us to where we want to be. So I was okay making investments early on in those things because I knew that, you know, at some point and the earlier you integrate it, like, the easier it is.

[Eric]

You're building the house before you move into it.

[Aaron Lyons]

Correct? Yeah. Yeah. So there was a lot of those investments that we made that I was totally fine making and was very justifiable and I wouldn't do anything different. And back then too, there just weren't, there weren't a lot of options either, just in general for anything, for like anything.

[Eric]

So I'm curious, so OLO is your online ordering management platform. Your, your dashboard, it manages all of your online orders. What about in house? Do you have a, what's your POS?

[Aaron Lyons]

We use NCR Aloha.

[Eric]

Okay. And in terms of third party, you're saying 40% of your total revenue is coming from third party and you're using an app and you're trying to migrate people from third party to your app.

[Aaron Lyons]

Correct.

[Eric]

What did you build that? Like what platform?

[Aaron Lyons]

Thanks.

[Eric]

Thanks. Why? Thanks. What was it about?

[Aaron Lyons]

Thanks again. You know, there's a handful of, of app developers that work in the restaurant space and look at, they're all like, you know, kind of like white label off the shelf deals and they just, you know, put your, your brand on it. The back end's relatively the same for everything. I liked the brands that were using things. I felt like they were kind of in our peer group of serving kind of similar customers and similar vibe and similar, like, you know, just I felt, you know, I felt like if, well, if they're doing it, then, you know, it's probably good for us. Right. There's, there's, there's an element of that. But then I also like the thing I Like, about thanks is it's not your, like, traditional buy nine, get the 10th free thing or whatever. Right. You have the option to segment out different people within the loyalty platform. You can run different offers. You can do things that are just different than your traditional loyalty program. And I just did not want to be like a conventional loyalty program. I wanted to be more like, surprise delight, more spontaneous. Do things that other people are. Like, for instance, you can use your loyalty points and buy. You can donate 10 meals to the Houston Food Bank.

[Eric]

That's cool.

[Aaron Lyons]

Or, like, you can do things like that. Like, I mean, you don't just have to, like, redeem it for a free pancake or whatever. I mean, you can do whatever you want. But we're trying to do things, like, in an unconventional way that I think, like our target demographic, they. They actually care about. And so I. That's why I liked thanks because it allowed you that opportunity to do that versus some of the other ones.

[Eric]

How is things gathering this. This ddo? Like, is it the purchasing behavior? Is it. Is it capturing emails and phone numbers for you, too?

[Aaron Lyons]

Yeah. When you sign up for the app. Yeah. You have to, you know, enter your information. So.

[Eric]

Got it. And how are you using segmentation?

[Aaron Lyons]

So, you know, for instance, if we wanted to send out a promo to, like, I could see that Eric has come in for breakfast nine times. He's never come in for dinner, and he's never ordered delivery from our app. He's only come in for breakfast. So I can either a send you breakfast promos or I can send you an offer to order from our app to try to get you to use both. Right. So once you see how easy it is to just order from our app, then maybe you're more likely to do that. I can invite you to come back for dinner. A different day part. Right. You've never experienced this for dinner. So maybe I try to give you a dinner offer. So now I try to increase your frequency there. Right. So that's just one example of how you can segment. You can do, like, lapsed users where you know this person and they haven't come in 60 days.

[Eric]

Is that a trigger? It's automated. Like, if they haven't come in 60 days.

[Aaron Lyons]

Some of it, yeah, some of it, yeah, some of it. We do have automated. And then some of it is just kind of whatever we're feeling. Right. Like, we can, you know, we can say, hey, we're doing this special. Let's maybe anybody that's ordered kids meals, we know they have kids, obviously, so we're gonna do this. If we do like a kids promotion or family promotion, we're going to target them. I don't need to target the guy that orders Uber Eats or the guy that orders from our app. One chicken sandwich, you know, four times a month. Like you, you can get smarter about how you target, I think. So that's kind of how we use it.

[Eric]

Are you doing one on one marketing where you're sending a customized message to an individual, or is it being like, oh, these are all the people who only come in for breakfast. We're going to group them.

[Aaron Lyons]

It's both. I mean, you, you can target it to where it says, hey, Eric, we, you know, you haven't been in a while, we'd love to see you come back. Right. Because it has your information. Or we can just send like the, the Easter bunny promo for Easter for your kids to get a picture of the Easter bunny to the people that have kids. Got it.

[Eric]

And so people, when you're talking about your app and people are ordering through your app, they're ordering through thanks.

[Aaron Lyons]

Well, they're. If they order through the app, yes, they're ordering through thanks, but olo's running the back end, so they're, they're ordering through olo.

[Eric]

So thanks integrates with olo.

[Aaron Lyons]

Yeah, got it.

[Eric]

So they're on the, the thanks app, but they're doing the transactions through. Through OLO links. Thanks and third party.

[Aaron Lyons]

Correct. Yeah, got it.

[Eric]

How are you migrating people from third party to thanks? What's that strategy?

[Aaron Lyons]

I think just being so, you know, a, there's no markup on our app. Right. So if you order through a third party, you're paying a markup.

[Eric]

Are you clear about that? Are you?

[Aaron Lyons]

We're working, we're working on our messaging on that. One thing we do is like if we get large orders from inconsistent orders, we try to reach out to those people directly and try to just try to migrate them over. We put flyers in bags just saying, hey, order through our app and your first order free or you get free delivery or whatever the promo is to get you to next time you order. Instead of ordering through Uber Eats, you just order through our app or just go to our website.

[Eric]

So 40% of your total orders are off premise. What percentage of those are coming of the delivery and takeout are third party versus thanks?

[Aaron Lyons]

I think it's probably around 20 to 25% or third party, about 10%. It's probably like first channel or like, or our own organic platform.

[Eric]

Got it.

[Aaron Lyons]

Yeah. Being thanks and Then we do like Easy Cater and the people will call in or you know, place orders, like larger orders and things like that. That's, that's a smaller percentage.

[Eric]

Got it. Generally, what are your feelings on third party in these, these marketplaces like Triple C or EasyCater are the positive, negative.

[Aaron Lyons]

I mean, look, I think they, they serve a tremendous purpose and they expose your brand to a lot of people. It does come with, you know, challenges. It does come with financial obligations. It comes at a cost. Right. And, and, but I do think that I don't know if we could recreate those, those generate those sales or get exposure to those customers necessarily without them. I mean, to some degree, yes, because people were doing it for years before they came along. But I do think it's created almost an entirely new subsegment of diners.

[Eric]

Well, yeah, I think that, you know, is Blue Ocean effect. Right. People who weren't necessarily, necessarily in the industry, maybe they were, I don't know, they saw this opportunity to say, hey, we can create this marketplace and we can provide a solution delivery for restaurants who don't have it. But I think the issue with that is now that this, this third party controls the marketplace, controls the game. And to get access to their market, you got to play by their rules.

[Aaron Lyons]

Right? Well, I think originally as it was build was these are incremental sales. These are sales you wouldn't have gotten normally. So it's okay to give us 25% or whatever the outrageous commission was at that time. Then it became not all these sales are incremental. Right.

[Eric]

What do you mean by incremental?

[Aaron Lyons]

Like, if you weren't on the platform, you wouldn't get these sales. So if you weren't on UberEats, you're not going to get these sales. So, so Uber Eats, when they, when they came into the on the Scene and Doordash, they said, hey, look, every, every sale that you get from us is a sale that you wouldn't have gotten because they're on Doordash and they're on Uber Eats looking for a place to eat. They're not driving to your restaurant.

[Eric]

Right, Right.

[Aaron Lyons]

And if you're not on that platform, you don't get seen, you don't get this order. Anyway, that was their pitch. Some of that's still relevant, but a lot of it's not, it's lost its luster a little bit because people are, because so many brands like ours have their own apps, have their own, but they have the ability to do these things. And so I think it's. The value proposition has shifted for sure. But it's a messy environment because, I mean, I don't even know how much I know DoorDash is, I think, profitable, but I don't know if Uber Eats makes money. I mean, if they did, it took them years to figure it out. And so it's, it's just kind of a weird deal. But there are people that will not leave their house for dinner and they are going to order on UberEats, and if you're not on UberEats, they're not gonna order from you.

[Eric]

Right.

[Aaron Lyons]

And if, if you're not on DoorDash and you don't have the fast pass on DoorDash, you're not a part of that. And like, nobody's gonna order from you. Yeah. There are people that are brand specifically say, I want Dish Society tonight. I'm gonna order Dish Society. And they'll either get on UberEats or they'll get on DoorDash, or they'll go directly to our site or they'll take drive to our restaurant. But I think there's still a lot of people that are app oil. Like I'm, I'm an Uber 1 user or I'm a DashPass user. And so like I'm going to use, I'm going to look on there and it's kind of like tender for, for dinner, right? Yeah, that looks good. I'm going to do that. Right.

[Eric]

Well, I think what it comes down to is these marketplaces get really good. They have, they, they are getting a ton of data.

[Aaron Lyons]

Right.

[Eric]

Not just your email and your phone number, but your consumer behavior.

[Aaron Lyons]

Yeah.

[Eric]

And they've optimized these platforms to be a path to least resistance to food. So you pick up the phone, you tap the app, you tap the thing that memorizes your favorite order from your favorite place, and you're done.

[Aaron Lyons]

Yeah.

[Eric]

And your payment information is already there.

[Aaron Lyons]

Yep.

[Eric]

So I think it's like what it comes down to is they don't just own the marketplace, they own consumer habits. And I think that's the barrier that's hard to get over. 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 stoppable. Again, that's restaurantunstoppable.com RSP.

[Aaron Lyons]

We have gotten so lazy as a society, especially during COVID that, you know, like you said, the path lease resistance. I mean, you have to have a frictionless model. It's got to be Amazon easy, one click, right? And. And those are the. Like. I think Chipotle's app is probably the best, right? I mean, it takes me, like, seven seconds to order Chipotle.

[Eric]

Well, it's not even a click now. And now with, like, you know, AI Voice. AI, like, hey, serial order from Dish Society.

[Aaron Lyons]

Yeah.

[Eric]

You know, and like, it's a. Got it. So, like, it's hard to overcome those barriers. Right?

[Aaron Lyons]

Like.

[Eric]

And like consumer people, human nature, we're lazy.

[Aaron Lyons]

Yeah, We.

[Eric]

We take the path of least resistance, and that is just baked into our human behavior. That's why we all take. That's why there's paths in the woods. Right? Like, from as long as we've been moving or. Or trying to get our food, we were taking the path of least Resistance. Game trails.

[Aaron Lyons]

Yeah.

[Eric]

Right. That's what we did. And that hasn't changed. The path of least resistance is I'm in like 10 years. It's going to be. I'm thinking about food and neural link's going to be like, gotcha. Yeah, I know where you're at.

[Aaron Lyons]

Yeah. Yeah.

[Eric]

You know, so it's hard to become overcoming human laziness by default because we're saving energy.

[Aaron Lyons]

Yeah.

[Eric]

You know.

[Aaron Lyons]

Yeah.

[Eric]

It's. What are your thoughts? As I'm sure.

[Aaron Lyons]

Oh yeah, I totally agree. I mean it's just human nature. I mean I do the same thing. Right. Like, right. I'm not trying to take the long way home from work or whatever. Like, you know, I'm trying to find the quickest way to do, to solve any problem, to do anything. So. Yeah. And I hate thinking about food. I hate thinking about what's for dinner. And if I don't have to think about it, that's the best. Right? If the decision is already made for me or you give me two or three options versus give me the question of what I want to eat for dinner. Like, I mean that's just, I think that that's where we're at. People get decision fatigue. They get, you know, there's so many options, they don't think about it. So they revert back to, you know, like their top three to five kind of, you know, subset of the group that they choose from and that's, that's where they live, you know.

[Eric]

So we've talked about how you, you were unapologetic about raising your costs to be fiscally responsible. We talked about Parkinson's law and how you're learning how to do more with less. We talked about how you've built systems and leaned on technology to migrate people from third party to your own platforms. In terms of technology and evolution and continued growth, is there anything that you've changed since 2019 in terms of improving your tech stack?

[Aaron Lyons]

I mean we added the app, we didn't have that in 2019. So that's, that's the. Been the one big technology improvement that we've made. We've updated our website, some stuff like that.

[Eric]

What's your website built on now?

[Aaron Lyons]

I couldn't tell you. I mean we, we hired a company to do it and I'm not a thousand percent happy with it right now. I mean it still needs some, some tweaks and I, we did, we did like a, we, we try and we were, we were on Bento Box before and our Daily Gather website is still on Bento Box. And that's a one off, you know, brand. So that, that kind of makes sense. Bento Box doesn't make it super, I guess, easy and friendly to do like third party SEO and SEM stuff. And so they want you to use their own, like, SEO and SEM. And so our, our digital marketing agency that we're using at the time suggested building our own custom website that was built with SEO and, and search and stuff in mind from the beginning, which is what we did. But I think those are really the only changes that we've done, I would say from a marketing standpoint in general, the landscape has changed huge over the last six years. Since the last time we talked. Just advertising and reaching people has become easier in some ways and much more difficult in some ways. It's costing more money to, to get in front of, you know, the same group of, you know, the same thousand people or whatever you wanted to get in front of, you know, six. Six years ago.

[Eric]

What was, yeah, what was your strategy six years ago?

[Aaron Lyons]

I mean, you could boost a Facebook post for 30 bucks and get in front of 20,000 people, right? And now you just, I mean, now it might cost you a thousand. I mean, I don't know. It's just, it's. Everything's got out of whack. And I mean, just using like the, the marketing platforms on these things, it's like you, you got to like, hire somebody almost. You got to like, like, it's, it's very difficult. You have to really know what you're doing. Whereas before, you know, it was, it was, it was a lot easier and you could reach a lot of people. And now it's, it's, it's become more difficult and, you know, more expensive. And so you got to be really smart. You got to create really good content and, you know, you got to go, you got to find out where the people are and try to try to get in front of them.

[Eric]

You know, I talk about this a lot and I, I worry that I'm gonna sound like a crazy person or just like a, like a, like a, just a, like a negative Nancy. Like I'm going to marginalize myself or alienate myself because I'm like, why are we okay with this? You know, I've been, there's like, been this, like, underlying theme that I picked on, picked up on is that, like, there seems to be this trend where increasingly the restaurant owner is not the beneficiary of their business. Like, we're making other industries rich. And it Trickles down when we can't do well, we can't create opportunities for our staff even either. You know, like. And I. I wonder about market. Like I've said before, and I'll say it again, I've. I believe marketing is the bane of human existence. It has ruined society as long as it's been the most important thing. And to your point, it's getting more and more difficult to. In, like, we're getting to the point where we need these platforms to. To stay in business if we're not. Like we. Like you said, we need to create really good content. Think about that statement. We're restaurant owners that need to create really good content. What are we? Are we restaurant owners or are we content creators? Well, the answer is we're both. Yeah, but why do we settle? Why? Why is that? Okay? You know what I'm saying?

[Aaron Lyons]

I mean, look, I think everything's evolving, right? It all makes sense. In a. In a noisy, crowded space, you. You have to find ways to stand out. And that's always been the case, no matter what. Now there's just so much noise, there's so many channels, there's so many opportunities. And I think it's easy for companies to attract restaurateurs that aren't super savvy in certain things, like SEO and SEM and digital marketing and social media and all these things. And because they don't understand it, it's almost like, I have to trust you. I have to. Yeah, I'm overwhelmed. I have to try. I got to do something. And you're telling me you're gonna get me these results? I trust you and I'm gonna pay you to do it. And, you know, I think, you know, a lot of times you're just at the mercy of somebody else. And then, oh, by the way, in six months, Google's gonna change their algorithm. And all this stuff you've been doing, it doesn't. It's not relevant anymore. Now you gotta redo it. And it's like, as a restaurant owner, I can't keep up with that.

[Eric]

Right.

[Aaron Lyons]

That's not my job. So I have to surround myself with people that understand those things, that are keeping up with those things and trust that they're doing what's in my best interest to keep me relevant, to keep me where I need to be on those platforms.

[Eric]

Well, I think what frustrates me about this whole thing is there's really like, three companies that control the narrative of what, how you market your business. Can you. Any guesses what those three Companies are.

[Aaron Lyons]

You know, Google and Meta are definitely, you know, those two for sure.

[Eric]

Maybe TikTok. Yeah, maybe Yelp is high on that list probably somewhere.

[Aaron Lyons]

You know, I'd be interesting to see what Yelp at one point.

[Eric]

Maybe not so much anymore.

[Aaron Lyons]

Probably not so much anymore. I still think. I mean, we still get a ton of page views on Yelp. I mean, it's still a big deal for us. You know, we don't want to get negative ads on Yelp, but we are getting a lot fewer reviews than we did five, six, seven, eight years ago. More people are leaving reviews on Google, you know, or whatever other platforms. Mostly Google. But yeah, it's interesting to see that dynamic change. I think people probably trust Yelp a little less than maybe they did in the past because of just some negative publicity. True or not? I don't, I don't know. I can just, just. That's just kind of anecdotal from like, you know, what I've seen and heard and experienced myself. But yeah, I mean, if you're not really just crushing it on Meta or Google, like, it's really easy to just get completely lost. And I know a lot of people too, younger generations specifically, are using Meta and TikTok as like their search engine. They're not going to Google. They're searching like brunch on TikTok and like, that's how they decide where to go. So if you're not on there and you're not providing great engaging content and you're just missing out, right?

[Eric]

And I don't disagree with that statement and I don't disagree with the idea that if you're on these platforms, there's opportunity for you to drive traffic to your restaurant. I think my, my pushback is that the, the game is there's an imbalance in the game, right? And the fact that three companies own all the marketplace in the world is like, that's an imbalance and it's, I just don't think all the people that are, that consider themselves marketers are just taking the information. They're on this like, you know, special like influencers list from that Google sense. Like, here's the newest algorithm that you're, you need to tell your clients, like, this is how you do it. So you have this like, short list of, of very privileged people that get drip information who are just parroting what Google is telling them to tell their clients. And meanwhile, like, you have no option. When you, when you are Google or Facebook, you have billions of people using you. That is a Recipe for coercion. Absolute power corrupts absolutely. Historically, always. And I. And there's nobody talking about why that's not a good thing for everybody. You know, like, that is not a good thing for society. But everyone just says, well, we have to because we have no choice. And I don't disagree with that. But, like, why aren't we talking about why this isn't a good thing?

[Aaron Lyons]

Yeah.

[Eric]

You know what I'm saying?

[Aaron Lyons]

Well, I mean, I think, look, there's different ways to look at any of that stuff. Right. I think you could. You could take the narrative of. Because of the accessibility of. Has created a lot of opportunities for people who otherwise would not have been successful or gotten to where they are in traditional means. Right. Like they can't afford a Super bowl commercial.

[Eric]

Right.

[Aaron Lyons]

But if they put out a piece of viral content, it has maybe more of an impact. Right. And that didn't cost them anything. And that can change your life. Right? Yeah.

[Eric]

In many ways it has leveled the playing field.

[Aaron Lyons]

Yeah.

[Eric]

That is an argument for sure.

[Aaron Lyons]

It's level the playing field. It's just created a lot more noise that you have to sift through. And you. And it just, it. It's. Everybody's attention span is. Is like non. Existent almost. So you have to be. You got to figure that out. You got to play the game.

[Eric]

Well, that's. Yeah, you got to play the. I mean, and I think that that is a true statement, and I don't disagree with that, but I think that we could be better as a society to recognize that the game at the end of the day really only serves the people who are controlling the game.

[Aaron Lyons]

Yeah. I mean, look, I also think from a marketing perspective, the best thing you can do as a restaurant is just take care of business inside your four walls. Right.

[Eric]

100%.

[Aaron Lyons]

And I think that. I think that can get lost on people sometimes. Yeah. I think it's like, hey, look, at the end of the day, people want to feel important. They want to feel taken care of. They want to feel better when they leave than they did when they came in. Right. They want good food, they want a good experience, and they want to feel like there's a human connection. Because Covid and all this other stuff, people still yearn for that human connection. Right. And I really think that that's not going to change. That's like, that's like in our human nature. Right. That's. That's how we are. And so at the end of the day, I mean, if you just take care. I would say, like the best marketing, if you want to call it marketing. But the best, you know, thing that we do is just. We're just involved in the community. Like, we just are. You know, one of our core values is connectedness. Like, we build connections within our community. We facilitate connection building at our restaurants and through the events that we go to and things like that. And so, you know, I think that that's important, like, when you build that trust with the community and you're there for them during hard times, and you're the only restaurant that's open after a hurricane and everybody's lost power, and when you sponsor the swim team and when you're there at the school and you. You donate to the Teacher Appreciation Week and you, you know, you're helping, like, people. That goes a really long way. Yeah. And I think that that is still core to human beings, and I think that that goes a really long way. And you. And you have to do that, but you still have to do all the other stuff too. Right? So.

[Eric]

Right.

[Aaron Lyons]

It's like.

[Eric]

Well, that's the thing that. So that's my biggest pushback. Right. Is that we are only given 100 units of energy a day, and we have to choose where we put these 100 units of energy. Energy. And we could put all 100 units of our energy into the four walls of our restaurant, where we're giving our time and energy to our staff, empowering them, educating them, lifting them up, and then spending time with our.

[Aaron Lyons]

Our.

[Eric]

The people who are in our four walls, our guests, and beyond that, our community. But the truth is we have to take some of those units of energy and put them into creating content or developing a strategy. And it. At the end of the day, it's not making communities better.

[Aaron Lyons]

You know what I'm saying? Well, I think most people suck at allocating those hundred units, too. Right. I know. I mean, like, I know I do. I'm. I'm probably all over the place on. I should be spending more over here and less over here. But, you know, just doing the best I can, I guess. But, like. Yeah, no, you're right. It's a balancing act. Nobody's got it figured out.

[Eric]

Right. Well, I think of, like, Aaron Franklin. Right. Most recent interview I did, and Aaron is kind of a unique. Like, I wonder. This, like a little recording, I was like, is Aaron Franklin the. The. The. The End of a Dying Breed or the Last of a Dying Breed, where, you know, he started Franklin's barbecue in 2009. He wasn't on social media. He had a Trailer and he was obsessed with barbecue and he just got better and better and better every day until like, he just caught fire. And he like literally just like created this like whole new like, like, like, I guess, segment within the world of barbecue. And to this day he's like, he is an influencer and he wasn't on social media in 2015 and it was strictly because he put all of his energy into doing the thing thing to like putting his energy into being present and hospitable and seeing each one of his guests. And like, that was how you got successful in the past was by being the best. And today I think there's some truth that you could be okay at the thing and be really good at convincing people that you're the best online.

[Aaron Lyons]

Yeah.

[Eric]

And I don't like that. That's a true statement. If I'm being.

[Aaron Lyons]

Well, it's true, but if you don't back it up, you just, you don't get the second visit.

[Eric]

Exactly.

[Aaron Lyons]

So there's.

[Eric]

True to that.

[Aaron Lyons]

There's a lot of those places, places that, that come and they're, they're fatty and they, they put all the stuff on the walls and they do the little whatever and stuff and then they don't, those don't tend to stick around because at the end of the day.

[Eric]

It'S about the repeat visit.

[Aaron Lyons]

It's about the repeat visits. And once you go there and you get the photo op or whatever and you've, you know, made your post that you went to this cool place but you didn't have a great experience, you're not gonna go back.

[Eric]

Right.

[Aaron Lyons]

And if a lot of people have that same experience, they're just not going to come back. And it doesn't matter how cool you are, how good your content is, if you're not, if you're not, you're not serving like quality product, people just won't come back. And, and because there'll be a new cool place that opens up and a new cool place and it's just, it never stops. Right. And so I still think you have to like, you have to be really good and the concepts that are really good, there's longevity in that and people appreciate that. And, and so, but yeah, there, there is a lot of, of, you know, lipstick on pigs out there for sure.

[Eric]

Right. You know, I am seeing a, a trend among restauranteurs where, you know, in the past it used to be like the famous visionary integrator, you know, like comps. You know what I mean by visionary integrator? Integrator. Being like the operations person, visionary, CEO, like it was like the chef and general manager. It was like the famous duo that always like would go further together. Now you're seeing more and more like the, the, the visionary, like entrepreneur and then part of that integrator operations. Like you need a chef in the kitchen and you need a chef online, you know, who's just a badass marketer. And you're seeing that it's almost creating opportunity for this whole segment of people who are just like plugged into the world of marketing. So I guess an ancillary benefit of it is that there's like this whole new segment of like the world of marketing. And marketing is becoming more and more important to all restaurants. But I guess it's creating opportunity for marketers. Right?

[Aaron Lyons]

I mean, look, if you think about the restaurant industry, it really didn't evolve like a whole lot for like 50.

[Eric]

Years before COVID Like it just really head down, just.

[Aaron Lyons]

Yeah, it was just, yeah, direct mailers.

[Eric]

This is what my boss did.

[Aaron Lyons]

This is, yeah, general managers and people that have been there for 20 years. And you know, it's just there wasn't third party delivery you had to deal with. Like you just had your customers in the dining room and you took care of them and that's what it was. And then technology and Covid and all of these things and social media just completely changed the game. And it almost went from like no innovation to rapid innovation. Like every six months there's like new stuff. Like you just can't. You're spinning. Yeah.

[Eric]

What are you doing today that's working in regards to marketing?

[Aaron Lyons]

We started some new digital marketing campaigns doing SEO and SEM and targeted stuff that targets to more, I would say more targeted to our demographic, not just like casting a huge neck net.

[Eric]

What is SEM?

[Aaron Lyons]

Search engine marketing. So marketing on Google. And so like, you know, you think about SEO, it's like you want to show up when somebody searches. You know, best brunch in Houston or, or Austin or whatever. Right. You want to show up there. That's, that's part of SEO. And then running ads on certain platforms is like SEM. So you're like actually marketing. So you know, we're, we do that. We're doing a lot of social media stuff. We do a lot of community stuff. Like I said, we spent a lot of time on that. We spent a lot of time, energy and money on trying to get loyalty signups once we launch.

[Eric]

How much do you budget for marketing? Marketing?

[Aaron Lyons]

We're between 3 and a half and 4% right now is kind of where we're at. I feel like that's a sweet spot. Last year we were really inflated 5 to 6%. That's because we launched our loyalty program. We were giving away a lot of offers and doing a lot of things to get people to sign up. And those hit the, those hit the marketing line item. And so we had like a lot of one time expenses last year on that as well. But those are the things, you know, we do. We run some ads on Yelp, really like a lot of social media stuff. We'll do some direct mailers every now and then depending on the market and depending on the message. Like when we open a new store typically like around the neighborhood just to like let people know that we're there. What we do, give them something to come try us. You know, like Katie, for example, that suburban market responds really well to direct mailer. And so we just kind of revamped our social hour menu so we'll send out some direct mailers to kind of announce that. And because that's like a very value driven community, I think we're going to get a lot of, we'll see an uptick in business from, from that because people and, and I'm not a discount person, I don't like to give away free stuff. So a lot of the marketing and the things that we do are unique so that it's not the predictable come in and get a free this or 50% off of this or discount, you know, for this. It's usually tied to joining a loyalty program so that we have you as a customer and we can market to you directly. Correct or value ladder or it's come try us for our social hour. And our social hour is our value. Right. And so you can get a $10 burger up until 6:00 o', clock, right. From, from you know, two to six. So if you, if you come at 5:45 for dinner, you get a $10 burger, right. And for some people that might be the difference between going here or somewhere else for dinner because we offer that. Right. Or $7 cocktails or whatever it is. And to me during those times of the day that was a big opportunity for us to drive traffic and we want to drive traffic into the restaurant. So we want to create value for the people that come in continuing to serve, you know, high quality food. Obviously we were really focused, we've been really focused on our ticket times and our guest experience the last six months, 12 months. So getting our ticket times down to like an average of like 8 minutes versus kind of in the 10, 11, 12 range. Whereas where's. Where they were before?

[Eric]

What. What did you do differently to make that happen? How did you achieve that?

[Aaron Lyons]

We started measuring it, started learning how that works. Yeah.

[Eric]

What gets measured gets minded.

[Aaron Lyons]

Yeah, exactly. So we started measuring it. We started doing competitions. We changed our KDS screens in the. In the kitchens. It can tell you what percentage of your orders are, you know, at the. At the target. Right. And we. We really only factor in dine in orders because that's. Those are the orders we care about. You know, if an Uber eats order takes 18 minutes, I don't. I don't really care about that that much. Right. If you're in my restaurant and you ordered an omelette at 8 o' clock in the morning and there's like five other people there and your omelet takes 20 minutes, you're probably not gonna come back.

[Eric]

Yeah.

[Aaron Lyons]

You know, so we really wanted to focus on dine in customers, but we kind of gamified it into just measuring it and putting a scoreboard on there for the kitchen and for everybody to see kind of where they're at. And it changes, you know, every minute.

[Eric]

So, yeah, it's the game of. It's.

[Aaron Lyons]

It's.

[Eric]

KPIs have a magical power.

[Aaron Lyons]

We just started talking about it and measuring it, and then it got better. We didn't. We didn't really do anything.

[Eric]

Yeah. So when we had the conversation back in 2019, you started by saying, you know, we want to. We want to get. We want to scale. This thing was the goal. We're going to have a lot of these things. We wrapped up that conversation saying, we're going to slow down. We're going to put our energy into what we're already doing better. We don't want to scale too fast, but you still have the goal to, like, is there like a switch sweet spot, like a. A minimum amount of locations you want to see?

[Aaron Lyons]

You know, I think that we, you know, I want to get to a place where we can open three to five a year, and that will just see where that goes. Right. I mean, we can open a couple more in Houston, probably. We can open a couple more in Austin. We haven't even been to Dallas Fort Worth yet. And so, I mean, we could spend the next several years just in Texas because it's so big in the cities and the markets here are so big that we could spend the next several years growing and expanding our brand. You know, I think getting to I. It's just. I don't know if it's an arbitrary number or not, but, like, you know, getting 25 units puts us, you know, roughly around 100 million in revenue. That's just kind of like a maybe a midterm goal for me personally that I would. You know, that's. That's kind of what I see us. Where I see us going off air.

[Eric]

Before we started officially recording, I think the conversation we had, like, what is growth?

[Aaron Lyons]

Right.

[Eric]

Is a question. What is growth?

[Aaron Lyons]

Yeah.

[Eric]

If I ask you that question.

[Aaron Lyons]

Yeah. So I think growth. And it kind of goes back to what I said a little bit earlier about muscle versus fat, you know? You know, are you growing in a healthy way or are you just adding weight? You know, are you getting heavier or are you getting stronger?

[Eric]

Right.

[Aaron Lyons]

And so I think you can grow without adding unit count, which is what we're focused on now. I had a lease that I was 11th hour, goal line, about to sign for a third location in Austin. And two weeks ago, I made the decision to pull out on that because I didn't feel like we were operating at a high enough level at our existing stores. And if we're focused on opening new stores, we're kind of. I felt we were very, very close to really diluting the kind of credibility of the brand and really diluting the experience. And I just didn't want that. And I wanted to kind of get back to basics, and I wanted to work on growing our existing brands, our existing units, and maxing those out. And once those are maxed out, then we open new stores.

[Eric]

What are the KPIs you need to see in order to open a new store?

[Aaron Lyons]

Store? Well, a. I think it's, you know, we need to generate enough cash flow internally to not be dependent on investors or debt to open a new restaurant. So that's part of it. And we opened two restaurants in the last 14 months, so we. We had a lot more money going out than we had coming in.

[Eric]

Right.

[Aaron Lyons]

And because we were so focused on the Austin market for the last almost two years, I don't want to say we ignored Houston. We. We did take off the ball a little bit because we were focused on a new market. And you only get one chance to, you know, when you're going into a new market, you gotta. It's a first impression. Right, right.

[Eric]

Well, back to that 100 units of focus. 100 units of energy like that. 100 units goes in all directions.

[Aaron Lyons]

There was a disproportionate amount of those units being, you know, focused on one store.

[Eric]

Right.

[Aaron Lyons]

You know, when we had five here.

[Eric]

Right.

[Aaron Lyons]

So, you know, that, that was, you know, and because of that, Right. Some things got a little, like, loosey goosey and some standards fell and just because we weren't, you know, mom and dad weren't there every day. Right. And so when that happens, and I don't think a lot of it was deliberate. I think it's just when it's not pointed out or corrected on a regular basis, you. You tend to kind of get a little bit sloppy and a little lazy. And that's kind of what happened. And so I just didn't like the results that I was seeing on in the financials and then just in the store as an experience. I just thought we could do better. And so I'm really. I wanted to take a step back and not spend my time deciding what tile is going to go on the walls at a store that's going to open in, you know, 12 months and focus on, like, growing the sales at our existing stores.

[Eric]

Yeah. Are you measuring customer feedback?

[Aaron Lyons]

Oh, yeah, absolutely.

[Eric]

Are you using any tools to do that?

[Aaron Lyons]

Well, of course, we get the Yelp and the Google reviews, so all the managers, everybody. As soon as anybody leaves a review, it's a notification. So we read the review. If anybody posts pictures, we can see that through the app. You. You're able to leave feedback on the app? Yeah. And so we. We track those and we get those reports and we look at them. I mean, it's real time, so we see things real time. And the other thing we do is on the tables, we have table tents in the restaurants that have a unique text number that you can text. So if you're sitting at the restaurant, you're like, hey, you know, Jennifer's awesome. Great. You know, food was awesome, blah, blah, blah. We're like, oh, that's cool. And we know what store that's for. Right.

[Eric]

She asked for my number and it made me feel uncomfortable.

[Aaron Lyons]

Or if it's like, hey, I've been sitting here for 30 minutes and my food's not out yet.

[Eric]

Right.

[Aaron Lyons]

Well, a manager sees that immediately, can address that and resolve that before that person doesn't get their food or waits 30 minutes for the food, leaves and leaves a Google. Right. And leaves a bad review. Right. And so that's one thing we. Those are the areas. That's how we capture feedback.

[Eric]

Is that through? Thanks.

[Aaron Lyons]

No, that's through. That's through a platform called HeyMarket.

[Eric]

Okay.

[Aaron Lyons]

Which really isn't set up for that purpose. We just kind of like configured it and rigged it to use for that.

[Eric]

But are the customer feedback platforms more like the Ovations and the Sunday apps of the world on your radar? Are those things you've looked at?

[Aaron Lyons]

No, we've had a few in the past that we've used to consolidate and do this and that and, and honestly I, my personal experience with it, when, when you make it easy to automate some of some things, the, the managers don't focus on it as much. So we require our managers to respond to every single Yelp review and Google review within 24 hours.

[Eric]

So if you increase the rate of reviews, then they're being pulled off of other things?

[Aaron Lyons]

No, no, no, no, not necessarily meaning that we want them to read the reviews. We want them to see what people are saying and they're not being inundated with reviews all day. It's, you know, they might get two or three a day or whatever, but what are people saying? Yeah, and I'm gonna thank this five star. I mean they need to respond to the five stars, the four stars, the one stars especially. And you know, we try to do some damage control on the 1 and 2 stars and 3 stars that maybe had a less than exceptional experience try to get them to come back and, and you know, reconsider their review. But, but I want the managers and the team engaged on real time feedback. So sometimes when those things get automated or you outsource the people that you all have somebody in the home office that replies to all of the reviews, it's like, well, what are the managers? Are they seeing that? Do they know? Like, because a lot of times you can catch a theme like, oh, the food was so salty. It was like, well, let me go do a line check real quick. Let me do, let me take, oh, it is salty. I wonder what happened. You know, whatever. Now I, and correct it. And now the next 100 people come in. Don't get salty.

[Eric]

There's value there for sure, for sure. Are you using any like in terms of like the, like Google, Yelp and all like the, the digital platforms, like a dashboard, like marquee? Are those on your radar?

[Aaron Lyons]

We used to use a couple different ones. Again, you know, it's really just Yelp and Google that are the main feedback platforms and we just, everybody gets the push notifications when those things come through so everybody can see them.

[Eric]

So I do love some of the, the feedback tools that are out there right now for QSR and fast casual. I think Ovation is optimized for those platforms for the Full service. It seems like Sunday App is a better option because they also offer payment solutions where you can have a better, like pay at the table. Like, you know, you can split up the check better and then you can also leave a review. And then with Marquee, it's all like the digital side of things. Like, how do you get all these things brought into one dash Dashboard. Right. So the point I'm trying to make is I think that it's getting just so. To your point. So overwhelming.

[Aaron Lyons]

Yeah.

[Eric]

How much digital presence you need and how much influence Google and Yelp and all these, like, platforms, these marketplaces have on your overall performance digitally, your SEO. And it's almost to the point where it's like, I mean, most of the people who are leaving reviews are. Are people who have good things to say. Don't leave reviews.

[Aaron Lyons]

Right. Yeah, yeah, yeah.

[Eric]

So the platform is inherently flawed to draw bad reviews.

[Aaron Lyons]

Right.

[Eric]

So the only way to fight fire with fire is to work the system and incentivize good reviews to create a bounce.

[Aaron Lyons]

Yeah.

[Eric]

You know, and that it kind of hacks the system.

[Aaron Lyons]

Yeah.

[Eric]

And that's one of the reasons why I love it because it's just like, it's not a fair playing game.

[Aaron Lyons]

Yeah.

[Eric]

Or a playing field. And the only way to like get a little bit of foothold is to use these. Is hacking the hack.

[Aaron Lyons]

Yeah. You know, the best. The best is like, like, you know, I've been coming to Dish Society for years and it's always been great, but today my soup was cold.

[Eric]

There was parking. One star.

[Aaron Lyons]

Yeah. Yeah. And it's like, so you can't 20 times and you never left a five star review on those five star experiences. But the one time we dropped the ball or you have to wait in line or whatever, it's like, then you're gonna leave the. The one star review. It's like, oh, God, it's. But, you know, kind of what you're talking about earlier, I think people in general, people are very much persuaded by. They want sort of peer reviews, they want to see, you know, whatever. But I also think there's a. Everybody understands. There's like a level of trust. But I think people understand, especially through Covid, that like the people that do leave one star reviews and the people that did, like, it's like, okay, man. Like, you know, just don't go back.

[Eric]

Oh, they infuriate me.

[Aaron Lyons]

Yeah.

[Eric]

Reading them, I'm like, these people. But I think the stuff that really bothers me is when Yelp start, like saying, hey, like, we'll rank you higher if you pay us a little something. And that's just misleading, you know, like, that's just not good ethics, in my opinion. Yeah, man. I've really enjoyed reconnecting with you. This has been a lot of fun. Is there anything we haven't discussed up to this point that you want to get out?

[Aaron Lyons]

Man, I don't know. Yeah, I don't. I can't think of anything. I think it was good. Good conversation.

[Eric]

So thank you. The mission statement is to inspire, empower, and transform the industry. I think we can change the industry. We can change the world. Is there a direction you think we need to go in in terms of evolution and changing the industry? Like, if anything could be better about the industry, what would that be for you?

[Aaron Lyons]

You know, I don't. I don't know what I would change about the industry. I might change how consumers view the industry and maybe have a more realistic lens that they look through when they're evaluating restaurants because it's such a difficult business. And. And it's like, yes, things have evolved. We talked about a lot of technology, and it has made things easier, but it's also made things a lot harder as well. And so I would. You know, I really, truly believe that restaurant operators and I can't think of any that don't embody this. I mean, I think everybody that I've talked to, they want the best for their employees. Right? They want to build strong cultures, they want to build teams, they want to take care of their staff, they want to do certain. They want to serve great food, they want to be members of the community. They want to do the right thing. It's just like your hands are constantly tied, and you're. You're. You have headwind after headwind after headwind, and it just makes it, you know, very difficult to constantly stay in this game when it's like, every six months, there's a new challenge. It's the bird flu, it's tariffs, it's Covid. It's inflation, it's supply chain issues. It's. It's wildfires, it's hurricane. It's like, Jesus, like, we're hanging on by a threat. Yeah. Can we just catch our breath? Like, can we have, like, two or three years of, like, normal where everybody can just like, catch their breath and enjoy some profitable years, you know, maybe reinvest back into their stores or, you know, training or whatever they want to do or whatever they've been putting off, because it's. Yeah, it's just. It's brutal. It's very, very difficult. What's that?

[Eric]

How did we get here?

[Aaron Lyons]

Yeah.

[Eric]

Like why do you think the consumer's perception is so wonky?

[Aaron Lyons]

That's a great question. I don't know. I, I think maybe just been being jaded. Sense of entitlement. You know, I, I think there was and I, this is an assumption. I have no idea. There's a, there's like a large contingent of people whose first jobs were in restaurants. You're not really seeing that anymore. And so because of those people haven't done it, they don't appreciate it and they're the first ones to yell and, and complain because they've never done it.

[Eric]

Right.

[Aaron Lyons]

You don't see people that, you know, waited tables in college or worked in the kitchen or were a dishwasher. They're not really the ones complaining a lot because they know how hard it is.

[Eric]

Yeah. It's also our job to create an illusion.

[Aaron Lyons]

Yeah.

[Eric]

So people's perception of the industry is literally a false reality.

[Aaron Lyons]

Correct.

[Eric]

Because our job is to, to transport them to a place where they can forget about the realities of life.

[Aaron Lyons]

And I also think you're just seeing less career minded people in the restaurant business. You know, it's a, it's a bridge. It's always been a bridge to some degree, but for the most part, I mean people took service and hospitality and they took that seriously like back in the day. And now I think people are just losing that a little bit. And so it's just really harder to find people that want to serve other people. Yeah.

[Eric]

We didn't talk about AI. Any thoughts on AI?

[Aaron Lyons]

You know, I use it to help, I'll use chat, GBT and things to help me kind of clarify my thoughts or, you know, things like that or to come up with ideas when I hit a wall. I think just like everything else we talked about today, it's just so. There's so much.

[Eric]

Yeah.

[Aaron Lyons]

It's like, where do you even start? But you know, I think it's going to do some positive things for the industry and I think it's probably gonna do some negative things in the industry as well.

[Eric]

Like what are the negative things you think?

[Aaron Lyons]

I just think it's gonna make, it can make things just like, you know, we were talking about like tick tock, whatever. It can just make, it can make it easier for bad things to happen or for people to say things or do things that aren't necessarily what's real. Right. And there's just a lack of trust in general, I think in, in the world. And so, yeah, it's just be interesting to see. I, look, I'm not a tech guy. I'm not like a expert in any of this stuff. I dip my toe into it, but I'm not, not, you know, I'm not an expert. And so I know I'm just using maybe a half a percent of what AI is capable of doing. I wish I knew more. I try to learn more. I'm trying to, you know, figure out how we can use it as a business to, to better, you know, elevate what we're doing.

[Eric]

Right.

[Aaron Lyons]

And really, like, enhance people's, you know, jobs and make it easier for them to do things. You know, I think that that'll be a huge benefit. But I also think it kind of dumbs people down when they don't have to think and solve problems for themselves and they rely too much on that. I think it can create some bad things.

[Eric]

Yeah, it's pretty cool what the AI answering services are doing right now. You have no clue that you're talking. It has gotten so good. It is only getting better, exponentially better every day.

[Aaron Lyons]

That is something that I would probably. That is on our list of things. Like, you know, we try to not get phone calls at the restaurant because it's very disruptive. It pulls people off of focus on the guest and the team or whatever. And so we use sort of some call routing stuff that's just very basic, like nothing crazy, but using some AI things to even just, you know, do automated ordering.

[Eric]

And every phone call gets better. Yeah, it gets better because it's taking all that data and it's like, oh. And it's like, these are the questions and like, it's just amazing.

[Aaron Lyons]

I think that's interesting.

[Eric]

Yeah, it's cool. But at the same time, it's like, is it deceitful that you could literally have somebody talking to an AI and they would not know?

[Aaron Lyons]

Yeah.

[Eric]

Is that hospitality?

[Aaron Lyons]

Yeah.

[Eric]

I don't know. Like, it's a weird gray area.

[Aaron Lyons]

Right?

[Eric]

Like. Well, I also think you are providing a convenience.

[Aaron Lyons]

I think, you know, I think it's, I think people's people, I think more, more so than ever now are willing to trade convenience for hospitality. Right. In a situation like that. I don't know if they care.

[Eric]

They just want the information.

[Aaron Lyons]

UberEats, there's nothing.

[Eric]

Don't make me wait.

[Aaron Lyons]

There's Nothing hospitable about UberEats or DoorDash other than like, you ordered because half the time my order's wrong. The driver doesn't speak English, goes to the wrong street, leaves it on the wrong chargebacks. Yeah. It's like it's, it's, it's almost like never a great experience. But I continue to do it because, like, I don't want to get the kids in the car. I don't want to drive 30 minutes in traffic and then sit in a restaurant. And it's just like I'm willing to make that trade.

[Eric]

Yeah.

[Aaron Lyons]

So to your point, is it less hospitable? Sure. But I think people are okay with that and they're willing to make that trade. I think, think the four Wall experience is where I think too many people probably, and I know I've been guilty of this, is like I'm focused on the people that I don't ever see. Right. Instead of focusing on the people that are there that drove there, that made the choice to come to us.

[Eric]

Right.

[Aaron Lyons]

And they're coming. This is their third time or their 30th time or what, or maybe their first time. And let's blow them away and let's take care of them and let everything else take care of, of itself. Right?

[Eric]

Yeah. And that's, that's my concern too, is that we're, we're losing sight of what matters, you know, at the exp. Because we have no other choice. Out of fear. It's really fear based. If we don't do this, we're going to miss out, correct?

[Aaron Lyons]

Yeah. Right. For sure.

[Eric]

So I've love this conversation. Again, the mission statement is to inspire, empower, and transform the industry. And we're going to do that by transforming one owner at a time with these stories, this, this, this perspective, the, the, the knowledge. How have you personally transformed. How are you a better man today than the man you were back, back in 2014?

[Aaron Lyons]

That's a great question. I mean, I've grown as a, as a leader, you know, the things that used to set me off back then. I've learned to manage. I've learned to hold up the mirror. I've learned to, you know, ask myself.

[Eric]

Sniff your own pits.

[Aaron Lyons]

Yeah, that's a good one. I've learned to, you know, ask myself how I'm contributing to, to the things I'm frustrated by. Yeah. And so, you know, and I also have learned to assume the best and assume positive intent and other people, team members, guests, managers, whatever. And when you look at things through that viewpoint, it tends to change how you approach a situation and you tend to get better results. Yeah.

[Eric]

What is one thing about your restaurants? A way you do think a system, process of value that's truly uncommon and makes you unstoppable?

[Aaron Lyons]

That's a good question. I, I would, I don't know how uncommon it is, but we are a values driven company and we lead very clearly by our values. And, and it makes it very easy to make decisions, difficult decisions, any decision. And I think we put so much emphasis on that. I don't know how many other restaurants do that because I'm not in their organizations. I know the good ones do for sure. But.

[Eric]

Yeah. Where'd you go to learn more about getting your culture on paper and communicated and surfaced regularly?

[Aaron Lyons]

I mean, I've always been a big culture guy. I've always, I've, when I like, I would say like the, the corporate jobs that I did have, I've only had a few were at places that had tremendous cultures and I saw the importance of it there and I heard about it there and I saw it in like live in the flesh. Right. And so I always understood that. I always, I mean, even when I had my landscaping business in high school and college, I always took really good care of my, my team and I've, it was always important to me. And so that's always been something that I've always just naturally felt like. It's also like you want to work around people that you like and you want to, you want to have fun doing it. So you, you have to have a culture, but you also have to get shit done. I think the other part of that too is like I've always, I played sports my whole life and I would, I would equate I like the team or we used to have our, one of our core values used to be family, spirit. Spirit. And really we're not a family, we're a high performing team. And you'll hear you're seeing a shift in the industry. I've heard a lot of people start to go away from family and there's some negative connotations to that, but we're a high performing team.

[Eric]

Yeah.

[Aaron Lyons]

And you know, you don't always like everybody on the team, but you respect one another. You got each other's backs.

[Eric]

We have the same mission, the same purpose.

[Aaron Lyons]

Exactly. You're there to win, you're there to kick ass. And it's like, hey, let's do this together. We're in the trenches, let's go. You know. So I think I've been on some really good teams and I've been on some bad teams and I've seen how the culture differs in both. Right. And I think in general, you're just taking little bits and pieces from every life experience and everything you see, hear, and read, and you just try to put it together and do the best you can. So I would say, like, that's kind of where we're at. It's still not, you know, where I would ultimately like it to be, even though I think it's better than most. I think that it's something that evolves, it's dynamic, and it's never. You're never done.

[Eric]

Yeah. I can't remember if I asked you this question the first time around. I didn't finish the episode when I listened to it on my way here. But if you got the news, you'd be leaving this world tomorrow. All the memories of you, your work, and your restaurants will be lost with your departure, with the exception of three pieces of wisdom you could leave behind for the good of humanity and your legacy. What would those three pieces of wisdom be?

[Aaron Lyons]

Man, I think you did ask me that, but I. I fumbled. I. I feel like that's such a deep question that I just don't imagine it's your kids.

[Eric]

If you could give three pieces of wisdom to your kids. Things to leave them with, to be better people.

[Aaron Lyons]

Look, it's just. It's. It's like I say, like, I. I won't do anything that'll keep me up at night. Like, I think if you're making decisions, you're doing the right thing and you can sleep at night, then you're doing the right thing. Right. So that would be one. Like, make decisions that.

[Eric]

That you feel good about.

[Aaron Lyons]

You feel good about. You can sleep at night. Doesn't mean you're. You're not going to make mistakes. But don't be a dumbass.

[Eric]

Right.

[Aaron Lyons]

I would say, you know, one thing. Just be kind to others. And. And, you know, everybody's going through stuff, and you don't always know what they're going through because not everybody's public about it. Right.

[Eric]

And so until they become a guest and restaurant.

[Aaron Lyons]

Yeah.

[Eric]

And then I air out your dairy line.

[Aaron Lyons]

Yeah. And so just, you know, I would say, like, kind of back to what I was saying earlier, like, assume positive intent in others. Number three, the third. There's no shortcuts. Yeah. You got to do the hard. You just got to do it. You got to do the hard things. You gotta. You got to do it. There's no substitute for hard work. And there's. That's the other thing about social media right now. Everybody's Showing you their shortcuts. And so you think, oh, everybody's making all this money and they're not doing anything and this and that and whatever. And it's like, no, man, that's not reality.

[Eric]

What's one of the real reasons why one of the, you know, intent. The byproducts of asking people to share their numbers and to get into the economics. And what you start to realize is that everyone's struggling right now.

[Aaron Lyons]

Right now. Yeah. Brutal.

[Eric]

And, you know, what we see of the restaurant industry, the representation of the restaurant industry online is usually, you know, just. What's the word I'm looking for? Publications. And these publications are not really telling the full story. They're telling the story that the consumer wants to hear. So we compare ourselves to false realities.

[Aaron Lyons]

Yeah.

[Eric]

And when you really start talking to these. These people who are supposedly the best of the best, the James Beard winners, the Michelin star winners, and you start talking to them, and you realize they're only doing, like, 8%, 5% profit.

[Aaron Lyons]

Yeah.

[Eric]

And they're charging crazy money. Their labor costs are through the roof. Their cost of goods are through the roof. Like, no one's really doing great.

[Aaron Lyons]

Yeah, yeah. Nobody's crushing it. Like I said, there's a few.

[Eric]

The people who aren't winning the awards are.

[Aaron Lyons]

There's a couple of anomalies out there that. That, you know, be interesting to see what their. What their Runway looks like. It's funny. My professor in business school used to call it startup porn. So when, you know, you're taking entrepreneurship classes and you got these people that are trying to start businesses and start, you know, restaurants or whatever, all you really see in the media is the. The, you know, the unicorns. Right. That's what you hear about. And so you just think, well, if I'm not that I'm failing or, like, that's, you know, it's like, that's not. That's not reality.

[Eric]

Right. And that's one of the big reasons why I avoid those people. Like, I. I really. Word of mouth is my North Star. I had two people during this conversation say, you should talk to Aaron. You know, and I had already spoken to you, so I knew what I was in for. But I think that word of mouth needs to be king again.

[Aaron Lyons]

Yeah.

[Eric]

And it needs to be word of mouth from, like, actual spoken conversations, not online review platforms, because those aren't reality either.

[Aaron Lyons]

Yeah.

[Eric]

You know, so I think we need to start being better about taking a wider cut, a wider swath of the industry to share that perspective.

[Aaron Lyons]

I Think authenticity is huge. I think people can sniff that out whether you're being authentic or not.

[Eric]

Not right, man. Well, thank you so much for.

[Aaron Lyons]

Thank you. I appreciate it to be open, to.

[Eric]

Be generous with your knowledge and you're invulnerable. I really appreciate you. I can't do what I do without people like you. So who do you respect and admire?

[Aaron Lyons]

Who.

[Eric]

If you found out there were a guest on this podcast and they're in there spilling their guts and they had knowledge to share, you'd listen to that episode.

[Aaron Lyons]

You know, look, some, some cliche stuff, right? Like Danny Meyer, of course. Sam Fox, I think for me is kind of like I had Regan Jasper on the show, one of that name.

[Eric]

He was Sam Fox's right hand man.

[Aaron Lyons]

Okay. I mean, anything Fox does is, is incredible. I think he's a great brand builder. In that same vein, I would say Jack Gibbons for FB Society. I mean, those guys, yeah, they do, they, they make incredible concepts, very well trained staff, great products, great service, great execution. They do some really phenomenal things. So if, if, if those guys are talking or they're on something, I'm definitely listening to it, you know, for sure. So those are all, you know, there's so many people that are. I admire in this industry that, that, I mean, it's so. I admire everybody in this industry. The people I, you know, the people that have one mom and pop restaurant or whatever that I've never met, I mean, they're just grinding it out, man. Everybody's just grinding it out. They want to, you know, make a better life for themselves and for those around them. And I've, you know, I've been there and, and, and so I, I respect the hell out of everybody that's doing this, for sure.

[Eric]

I'd love to get Sam Fox on the show. He has an open invitation. Jack was on the show about two years ago. I thought about reaching out to him when I was in Dallas, but I was like, I'm gonna let more time pass.

[Aaron Lyons]

Yeah, he's been opening a lot of stuff in Houston lately, so.

[Eric]

Okay, yeah, cool. And how can we connect with you if we want to maybe come work for you or maybe we just have some follow up questions. Maybe we want to come check out your restaurant or whatever.

[Aaron Lyons]

So. Website, dish society.com dailygather.com those are the two. Social media is just Society and Daily Gather. And you know, I'm on LinkedIn if you want to kind of find me personally, but don't, don't spam me with your your services because I get so much of that. But. But, yeah, no, I. I love helping other people out. I love sharing my story and my struggles because, again, I do think a lot of people. You only hear the best. You don't hear the. The bad stuff.

[Eric]

Right?

[Aaron Lyons]

So I think it's very powerful to, you know, surround yourself with the right people in the right environment and. And get you, you know, some cheerleaders. You gotta have. You got people in your corner rooting you on for sure.

[Eric]

And I just cannot do what I do without people like you. You make my work possible. Thank you so much. There is no questioning. You are unstoppable.

[Aaron Lyons]

Thank you.

[Eric]

Cheers.