1236: Jim Hallers, Founder & Managing Partner of Citizens Grill and Tailgators

Summary

Restaurant Unstoppable Podcast – Episode 1236

Guest: Jim Hallers, Founder & Managing Partner of Citizens Grill and Tailgators
Host: Eric Cacciatore
Date: December 1, 2025

---

Overview

In this in-depth episode, host Eric Cacciatore sits down with Jim Hallers, a tech-guru-turned-restaurateur who has helmed eight bars and restaurants with revenues topping $23 million annually. Jim dives into his transition from a 30-year tech career to building his own hospitality empire, offering a rare blend of operational insight, financial acumen, technology strategy, and wisdom about growth and partnership pitfalls. The candid conversation explores everything from profitability, POS selection, and partnership structures to menu engineering, market positioning, and the future of the restaurant industry.

---

Key Discussion Points & Insights

Jim’s Restaurant Portfolio and Business Model

[05:19 – 08:57]

• Current Concepts:
  • Four Tailgaters Pub & Grill sports bars (varying from 59 to 250 seats)
  • Citizens Grill (Americana, 300+ seats)
  • Good Charlie’s Oyster Bar and Seafood Kitchen (approx. 200 seats)
  • Multiple dive bars—all with distinct personalities.
• Profitability: Aiming for 10% net profit overall; some concepts have seen up to 20%, others have lost money. Sports bars hover around 10%; seafood aiming for 15%.
• Growth: Started as a side project; now manages eight restaurants and bars.

“You always have one problem child and you always have a couple superstars.”
— Jim, on the financial mix of managing multiple concepts [07:34]

---

Mindset, Motivation & the Work Ethic of a Restaurateur

[09:15 – 14:16]

• Success mantra: “There’s 100 things you’re supposed to do today and you’re most successful when you actually do all 100 of them…Reason people fail is they look at the list and say, I’ll only do 70 today.” [09:15]
• Jim’s passion lies in the business side and in building vibrant community spaces—neighborhood bars and repeat customers.
• Early years were a grind: investing every penny, driven by both necessity and love for the business.

“I got into this business to do one sports bar on the side… I certainly didn’t want to be in the restaurant business.”
— Jim [12:29]

---

Path from Technology to the Restaurant Industry

[13:39 – 25:27]

• Raised with entrepreneurial influences; entered tech during the PC boom.
• Built financial and accounting systems for businesses in the 1980s-90s.
• Early exposure to bars/nightclubs (parents owned a bar; early tech work for high-volume nightclubs in Houston).
• Pivoted fully into hospitality in 2009; cashed out tech investments (notably Apple, Google, Amazon stock) to do so, noting the long-term “ouch” of missing out on those stocks’ rise but never regretting the move.

“I’ve joked that I got into restaurants and bars so the buck stops here. There’s nobody to blame but me for every success and every failure.”
— Jim [13:39]

---

First Restaurant Openings & Growth Strategy

[32:15 – 66:34]

• Opened first Tailgaters in 2009, leveraging the recession to lock in favorable rent with a developer partner.
• Used personal savings, credit cards, and minimal bank financing (banks rarely lend to unproven food & beverage operators).
• Smart social media: Early adopter strategy, used “connectors” to rapidly build Facebook followers and word-of-mouth [45:03].
• Rapid expansion: From one to four locations in under two years, fueled by demand and adaptable operational models.
• Lessons learned about partnerships: Early pitfalls with problematic business partners; advice is to avoid operating partners where possible and instead attract silent investors.

“I wrote in my LLC operating agreement that we won’t drink in our place… It really doesn’t matter what you write in your operating agreement.”
— Jim, on the limits of legal protections in bad partnerships [63:14]

---

Partnership Structures, ACA, and Investor Strategies

[68:44 – 79:26]

• In response to the Affordable Care Act, Jim engineered ownership so that no entity has a >50% owner, avoiding “common control” and requirements for health insurance in small entities.
• Smartly rotates investors across multiple LLCs, keeps each entity’s ownership and risk siloed.
• “Investors are okay. Investors are not partners…You don’t have operational say so whatsoever.”

— Jim [67:04]

---

Scaling, Managing Teams, and Dunbar’s Number

[74:23 – 78:41]

• Noted group size challenges: Teams of ~40–50 work best. Once growing past key “group size” thresholds (50, 150, etc.), communication and cohesion challenges arise, requiring more formal systems and layers in management.
• Key inflection points at 1, 3, and 10 units in growth journey.

---

Transformative Moments & Upgrading the Org Chart

[99:00 – 124:22]

• Major shift in 2016: partnership breakup, lessons on buy-sell agreements, and importance of clear, flexible exit strategies.
• Organizational structure today: Each location is a standalone LLC with separate investors. Jim as Managing Partner oversees everything, with GMs, three managers per large location, and top-tier line cooks favored over full-fledged “chefs” for consistency and cost control.

“What I need are the absolute best line cooks I can find… not chefs bored after six months.” — Jim [123:01]

---

Tech Stack, POS, and Accounting

[119:28 – 164:46 continuous, particularly [119:28–153:59]]

• All entities operate on QuickBooks for core accounting due to standalone structure.
• Outsources much of bookkeeping—recently transitioned to a bookkeeping service ($450 per location/month).
• POS evolution:
  • Formerly Micros, then SmartTab for bars, now mix of Toast (2 units) and SpotOn (4 units) for restaurants
  • Chooses POS partners based on credit card processing fees and willingness to negotiate rates.
  • Uses multiple POS to keep leverage in credit card fee negotiations.
• Staffing and scheduling tools: Switched from ScheduleFly to 7Shifts; uses Workstream for recruitment.
• BEER tracking: Uses tap monitoring system USBeerSaver for draught beer variance/loss prevention.

“What are you really paying for with a POS? What you agree to pay for credit processing is tens of thousands [of dollars annually].”
— Jim [150:10]

---

Mergers, Acquisitions, and Real Estate

[95:10 – 106:19, various]

• Bought and rescued multiple failed restaurant/bar concepts on favorable terms (“no money down, profit-share with the exiting owner”).
• Favors ownership of land where possible to build equity, but remains opportunistic with leases.
• Savvy in negotiating with shopping center developers—emphasizes the value restaurants bring to centers and the critical importance of sufficient parking.

---

Insurance, Risk, and Industry Challenges

[168:14 – 174:44]

• Expresses alarm over rising liquor liability insurance costs—now $85K/year for some locations (with zero claims over 15 years).
• Notes a trend in Texas of smaller bar operators going without insurance due to unaffordable rates, despite risks and lease requirements.
• Advocates for dram shop reform and reasonable limits on liability.

---

Emerging Trends & The Future

[177:09 – end]

• Declining alcohol mix, rising demand for premium non-alcoholic/functional beverages (e.g., specialty water menus).
• Regulatory and demographic forces are rapidly reshaping the marketplace.
• Generational shift: Younger consumers demanding more transparency and wellness focus, but indulgence trends still strong.

---

Notable Quotes & Moments (with Timestamps)

• Work Ethic:
  “You’re most successful when you actually do all 100 of them [tasks]… Reason people fail is they look at the list and say, I’ll only do 70 today.” — Jim [09:15]

• About Partnerships:
  “Just don’t have partners… Investors are okay. Investors are not partners. There’s a big difference.” — Jim [63:14–67:04]

• On POS/Tech:
  “You're loyal to the rate, not the POS… credit card rates are tens of thousands; it's the real cost.” — Jim [149:40, 150:10]

• Silos and Risk:
  “All my LLCs stand alone… nothing you want, no liability; if one blows up, it ain’t taking anything else with it.” — Jim [125:44]

• On Learning from Losses:
  “When something doesn’t make enough money, keep tweaking it, keep changing it. Do not just keep doing the same thing over and over.” — Jim [120:57]

• Texas Restaurant Association:
  “I've been the squeaky wheel for years in the organization: the big guys don’t give a sh*t about independents.” — Jim [197:05]

---

Timestamps for Important Segments

| Topic | Timestamp Range | |--------------------------------------------|---------------------| | Opening, business overview | 04:45–09:01 | | Operational model & profitability | 07:27–08:57 | | Success mantra & motivation | 09:15–10:59 | | Tech background and early business lessons | 13:39–25:27 | | Partnerships—pitfalls and advice | 63:14–67:04 | | ACA, Partnership structuring | 68:44–79:26 | | Growth pain points & Dunbar’s Number | 74:23–78:41 | | Major pivot, 2016 partnership drama | 99:00–106:19 | | Tech stack, POS & accounting choices | 119:28–153:59 | | Insurance costs and risk | 168:14–174:44 | | Industry & consumer trends, the future | 177:09–end |

---

Memorable Moments

• The “What if…” Investment Story: Jim’s candid regret and calculated risk in cashing out early Apple, Amazon, and Google shares to open his first bar [32:15–33:04].
• “Bar rescue” strategies: Negotiating owner-friendly deals to take over failing bars/restaurants, then transforming them into successful units [55:02–88:10].
• POS Deep Dive: Real, unfiltered breakdown on why he splits between Toast and SpotOn, how to negotiate, and the single biggest tech expense being hidden in processing fees—not in software [139:33–151:17].
• Organization & Scaling: How every LLC is deliberately structured with siloed ownership to minimize risk—a critical lesson for multi-unit operators [119:28–126:14].
• Industry Context: Sobering perspective on how rising costs (insurance, labor, food) may soon make it impossible for small operators to survive—unless structural reform or new models emerge [196:06–197:11].

---

Key Takeaways

• Have Crystal Clear Partnership Agreements: Or better yet, don’t have operating partners at all. Investors should not have operational control.
• Control What You Can: From negotiating credit card processing and insurance to emphasizing parking, every detail matters.
• Adapt Quickly and Decisively: Don’t let underperforming locations linger—tweak, rebrand, or exit as needed.
• Embrace Technology—but Stay in Control: Use tech tools to gain leverage, but don’t rely blindly; read the fine print and don’t chase “shiny objects.”
• Support and Join Industry Associations: Be active in advocacy at both the local and state level to fight for small operator interests.
• Flexible, Disciplined Team Management: Structure teams to align with optimal group sizes; as you scale, prioritize communication, systems, and incentives.

---

Connect with Jim Hallers

• Facebook: Jim Hallers
• LinkedIn: [Not frequently updated, but available]
• Join the Restaurant Unstoppable Community for a live Q&A event: restaurantunstoppable.com/cwe

---

This episode is essential listening for anyone aspiring to scale in the restaurant industry, facing partnership or tech choices, or navigating the rising tides of cost and risk. Jim’s hybrid background and frank advice are a north star for operators committed to being truly unstoppable.

Transcript

[A]

What up Unstoppables? First and foremost, thank you so much for supporting this podcast with your downloads. We cannot do what we do without good people like you hit and play every day. So thank you so much. If you've been listening and we want your continued support. If you have not yet, please subscribe to this podcast wherever you listen to podcasts. We're also on YouTube. We're trying to grow that YouTube presence. So head over to YouTube and join our YouTube channel. Thank you so much and the best way to support this podcast is by joining our community. Head over to restaurantstoppable.com live. Everyone that I'm getting on the show, my goal is to get them to join us live in our community to take your learning to the next level. So get inspired by their story, get empowered with their knowledge, but transform by surrounding yourself with the best in the industry. And you can do that at Restaurant Unstoppable Community. Head over to restaurantsoppable.com live. Join the community. We'll see you there. Welcome to restaurant unstoppable. For 10 years and over 1000 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 US Foods and one of the pillars of the US Foods we help you make it promise is more Tools which provides resources designed to make running your food service operation easier and more efficient. From the all in one food service app Moxie, which goes beyond order placement to help manage every part of your operation 247 to the digital solutions like check business tools and vitals, US Foods delivers smart time saving tools built to simplify operations and support your success. To learn more visit www.usfoods.com. expect more this episode is made possible by Sir Bony, your all in one bookkeeping and financial solution. We're talking about reliable tax preparation, business incorporation, seamless payroll and compliance reports, strategic CFO services that drive business, detailed custom reporting for complete financial clarity Dedicated support for restaurants in multi location businesses. Did I mention bookkeeping? Let Sir Bony handle the numbers so you can focus on the vision. Call Sir Bony today at 281-888-2413 to schedule your free 30 minute consultation and discover how Sibonic can streamline your operations and boost your bottom line. Limited time Offer an exclusive to Restaurant Stoppable listeners. Mention this Message and get 20 off your first this episode is made possible by Meese 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 is and that puts us to peace. We are so happy when we know we're doing a good job. Me's 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 restaurant owners what if I told you there is a way to lower your prime cost by a thousand dollars and get paid a thousand dollars on top of that? If it sounds too good to be true, it's not. Systems Pro is offering that deal right now to 10 of my lucky listeners. Listen closely. Join the Restaurant Systems Pro 30 Day Prime Cost Challenge and if you successfully improve your prime cost by $1,000 or more compared to the same 30 days the year prior, they will pay you $1,000. Find the link in the show notes titled restaurant systems pro 30 day prime cost challenge. Click that link and and get signed up. Today, only 10 people are going to get approved into this program. Get on it with excitement. Allow me to introduce to you today's guest, tech guru turned cereal bar and restaurant entrepreneur, Jim Hollers. My man Jim, are you feeling unstoppable today?

[B]

I am unstoppable every single day.

[A]

Yeah man, I can tell. You know, when I started doing my research yesterday to really dive in to figure out who I'm talking to today, I felt like I was missing some things. I was like, I feel like there's stuff I'm missing. And I knew there was more. And I was. And I was searching for it. And then this morning I woke up and I had this list. I was like, that's what I was looking for. I knew there was more out there. And to date you have, as of right now, I should say you have eight bars and restaurants doing a total of 23 million per year in revenue across all of your concepts. But real quick, how many concepts currently and how many total locations with each concept?

[B]

So basically there's four sports bars, Tailgaters Pub and Grill. There's a kind of Americana restaurant, Citizens Grill, which is a single unit, but it was based on some other restaurants that I started a few years before that. So it's kind of a refinement of that. There's a good Charlie's Oyster Bar and Seafood Kitchen where we're sitting at today. And that's a seafood restaurant, which exists because I couldn't get good char grilled oysters anywhere around here. And I have a couple dive bars. Okay. And each one is always has a unique personality. That's the nature of that business.

[A]

So just from, like, just quick glance, I'm saying casual, elevated casual. With the exception of the dive bars.

[B]

Yeah, absolutely. I mean, sports bar is definitely that vibey feel. I always said I wanted a place that feels like the Chicago. Chicago corner bars that I grew up with as a, you know, young, younger teenager where you go out with your parents. Okay. To eat.

[A]

So tailgaters for total units, on average. How many seats per unit?

[B]

It varies depending on the location. So it can be 150. It can be 250. Got it.

[A]

And as.

[B]

And as little as 59 for my smallest one.

[A]

Oh, interesting. And what about citizens?

[B]

Citizens Grill will seat over 300, counting the patio. Huge patio seats 150.

[A]

I parked there this morning. I was like, this place just keeps going. From the outside looking, I could tell it was huge. And then right now, we're sitting at your newest concept. How many seats are here in the. Why did I lose the name of this one?

[B]

Good Charlie's.

[A]

Good Charlie's. Thank you.

[B]

Good Charlie's Oyster Bar. Yeah. Now in. In here, there's. Well, we actually just glassed in the patio to make it a year round, because here in Houston where we're at, it's often humid and hot all summer long. And you're just like looking at this extra 80 seats out there, that could be revenue year round. Yeah. So. So we've actually up here closer to the 200 seats now.

[A]

Okay, cool. So where are you hitting in terms of percent profit with your. Your concepts?

[B]

Anywhere. You know, overall, it's a good year if we hit 10 cents on the dollar of revenue.

[A]

Okay.

[B]

I've had concepts do as good as 20% at times, and I've had concepts that do as bad as. Lose money. Yeah, right. And so it's. It's, you know, sometimes one of you always have one problem child and you always have a couple superstars. So. But certainly in the sports bar business, right around the 10 cents here, here in the Good Charlie's, we'd like to get to the 15 cent mark.

[A]

Okay.

[B]

But we're not there yet. Okay. Closer to 10.

[A]

So is good Charlie's your, your star right now in terms of revenue and profit?

[B]

It's the up and comer. We spent our first year figuring out the seafood business, but we've got it figured out now and have a lot of good press, a lot of good reviews and all signs are that we should continue to rock and roll here.

[A]

Do you have a location in concept that's like a plow horse for you right now?

[B]

Yeah, yeah. The, the plow horse has always been one. One of my larger tailgaters, pub and grill locations, sports.

[A]

That's a 200 plus location.

[B]

It's the one that does 6 million a year. Oh, wow. Yeah.

[A]

That's awesome. And what are your percent profit?

[B]

So it's 6 million a year, but it doesn't, it's, it's low profit, but, but it's kind of like, do you want lower revenue, higher profit, or do you want, you know, high revenue? So we just, I kind of came. If you just jam more butts in seats and just go through enough volume, you know, pennies fall out at the bottom.

[A]

Yep, yep.

[B]

So.

[A]

I think we got everything we need. I know there's more that's going to come out as we go out. I want to get into it. But before we kind of dive into your story and find out more about who you are and how you got to where you are today, let's get that motivational, inspirational ball rolling with a success quote or mantra. What do you got for us?

[B]

I think the important thing for restaurant owners and operators out there is, you know, there's 100 things you're supposed to do today and you're most successful when you actually do all 100 of them, you know. And the reason people fail in this business is because they look at the list and they say, I'm only going to do 70 of them today.

[A]

How do you get through the entire list? What is it about you? What advice do you have to. To crush that list to manage that list?

[B]

I mean, for me, I was just always a workaholic. So, I mean, I just like to work. So people are like, what's your hobbies? And I'm like, running restaurants. You know, they're like, come on, now you have a passion. You know, it's like, well, okay, I'll go ride around on a boat once in a while. It's really, it's running restaurants, you know, and especially in the early years when I invested every penny I had into them, you know, it's either make them work or go broke. And that has a way of motivating you.

[A]

What part of restaurants are you. Is the hobby? Like, which element? I mean, there's so much that goes into running a restaurant. So you could be, okay, any one thing, your passion, which. What is it exactly?

[B]

I guess I'm the business side. I mean, I'm not a cook, right. I know what great food tastes like. And for years, nothing was on any of my menus. Probably for the first. If I've been doing this now 16 years, you know, for the first eight or nine years, nothing would be on the menu if I didn't like it, right? So period. And people are like, what do you mean? I'm like, no, I don't like blue cheese. There's nothing with blue cheese on this menu. It's just because I don't like it.

[A]

So when you say the business side, like, what? Like, even that is a very broad, like, vertical. There's a lot that goes into business. So what really pulls you in? Like, what are you most passionate about?

[B]

I mean, at the end of the day, it's successfully operating restaurants that people like to return to. And I was shocked early on in those early years at how much repeat business I would get. It's probably 80%, you know. Yeah, repeat business. Got it. And there are people that literally come into my places, some of them seven days a week, because you build this neighborly environment, you know, the corner bar, sports bar, where you can come hang out and see your friends, and yet families will come in and eat. And, you know, it's. It's just the whole vibe.

[A]

Is there a thing that you think it just has you hooked? Like, is it. Is it seeing the regular faces? Is it being the choice repeat restaurant to go out to? Like, is it. Is it the validation that I'm good at this and the recognition you get from the people that come in to see and. And love what you're doing?

[B]

I think certainly there's some of that. I think I got into the restaurant business when I was around 46, 47 years old. So maybe this was my midlife crisis. Clearly, I. Porsche. This is my porch. This is my Porsche. You know, going out and buying a Porsche, I didn't buy any nice vehicles for the first seven or eight years because I was like, it's all got to go in the. You know, it's all got to go in. I Bought a truck, a business truck. You know, it's like. And wrapped it up with the.

[A]

Yeah, my Porsche.

[B]

The first one, right? Yeah, exactly.

[A]

Truck camper. You know, all goes into the business when you're truly passionate about.

[B]

Was just. It was just everything. And I didn't intentionally. I got into this business to do one sports bar on the side just because I could. Because the. I mean, I wasn't sitting around going, I even wanted to be in the restaurant and bar business. I certainly didn't want to be in the restaurant business. I had already heard, you know, a million stories that, you know, running restaurants is hard.

[A]

Right.

[B]

And. And I wanted to be in the bar business, but I didn't even want to be in that. I. I was doing technology work. I was at that point, I'm like a vpit cto sitting in boardrooms, but sitting in boardrooms arguing over budgets and, and groups and, oh, you can't hire that guy and pay him more. But I'm like, but he codes more than anybody else. You know, it's like, oh, no, he would make more than the head of marketing. Well, but he writes your product. You know, people don't understand those things. So really, I guess I've joked over the years that I got into restaurants and bars fully so that the buck stops here. I don't. There's nobody to blame but me for every success and every failure.

[A]

Yeah. And that was a great little teaser. I mean, unusual path into the restaurant industry. I love what I do because I get to truly prove that no matter what walk of life you came from, what your background is, there's a place for you in the restaurant industry. Like, you can be successful in the restaurant industry. And you were a tech guy for 25 years. 30 years.

[B]

Yeah.

[A]

30 year career in technology before leaving that to start restaurants. And we have a lot to cover in your. Your career as a restaurant tour. I want to make sure we focus on that. But like, I mean, reflecting back on that past, like, how do you think that set you up for sex success in the restaurant and bar industry?

[B]

Well, there was a little taste of it When I was 18, 19 years old, I made it to college for one year. I would say, first off, I'll even back up. We'll back up a little further. I had an entrepreneurial grandfather, you know, used car lot, Friday night auction business. Just, you know, always taught me, you know, to run your own things, do things. I'd go spend the summers with him and taught me, you know, that individual responsibility, you know, he would go Sit me in a. Sometimes I could be 12 years old, he sent me in a store for the day, you know, sell stuff, you know, and so you get that little bit of taste of that. But really in my teenage years, the PC came out right, literally came out when I was that right age. And I became just a nerd before nerds were cool. I was a nerd when they were super uncool.

[A]

So, so what was your strength within technology? Like what?

[B]

Well, because you grew up with PCs, it was. You could build PCs, you could do networking. I started, you know, before there was either net that everybody takes for granted. There was arcanet, there was different, you know, you use coax cables to connect computers together and different things. And, and so you just, I just ate, slept and breathed everything. PCs in my high school years and moved to Houston, Texas in 1979. And my parents were like, well, we'll find you. You know, we're going to move in the middle of your high school, but we're going to find you a brand new high school that has computers, you know, coming from the Midwest and got down here and you know, basically, yeah, 79, 80, 81, you know, didn't drink, just the nerd, you know, didn't party, not, you know, not lots of girlfriends. Because when you get moved in the middle, you don't know anybody. But went to Texas A and M here, which is a big college for those that know it in this area, College Station, College Station, and basically made it through one year and basically they didn't want me to come back, so.

[A]

So your first year gpa?

[B]

It was actually pretty good. But then they, they. Luckily all of this happened before everything was digitized so nobody can google any of this. So it's awesome. You're gonna have to find the microfish.

[A]

Why weren't you.

[B]

You're have to find the microfiche though.

[A]

What's the story?

[B]

No, they, they. I changed some grades of people just because to see if it would work and they charged me with tampering with governmental records, you know, blah blah, blah and this and that. And they then they charged me with like scholastic dishonesty and they turned some of my A's into F's. And I didn't know any better. I should have hired better lawyers, but I was, you know, had no money. You're a kid, you know, your kids, your kids, the parents are like, what the hell? That my parents had moved at that point back to Illinois, right when I went off to college and they moved back up to Illinois to Actually. And they bought a bar.

[A]

Interesting.

[B]

And they, they had it for 10 years. Haller's Tavern in a little town called Taylor Springs, Illinois, which is.

[A]

So your grandfather was in the business. Your parents got into the business business.

[B]

Not the restaurant business. My parents did go into the bar business and I would go visit him once or twice a year. But I, I stayed down here in Houston. I was like, see y' all later. I'm. I'm never going to go back and shovel snow again or anything.

[A]

Reason why I drive south in the winter. So you, it seemed to work out for you even though you got kicked out of school?

[B]

I got kicked. I got kicked out of school. I went to work for a little local video store and computer store, taught some people how to use their brand new Apple II computers and met a guy that owned four nightclubs. Okay, and these were high volume nightclubs here in the Houston area. One rock and roll, one Hispanic club, or they were Latin clubs back then, and two black clubs. And these were the kind that packed, you know, thousand people in them kind of restaurants. And he hired me because he had bought a computer and he wanted help doing his accounting and his payroll and his inventory. Okay, that's smart.

[A]

I mean, back in the day to use technology for those things. Most restaurant owners today don't use technology.

[B]

So people back then in the 80s, they would buy computers and then they'd be like, all right, what do they do? Right, I want them to help. And so I would help people doing that. And actually in the mid-80s, I started a company called PC Solutions and did five years of literally going around. People would go out and buy a PC like the IBM XT original, and they buy like in a canned accounting system. And they'd go like, okay, now how does it run my business? How does it help me and my business? And I go like, well, now we have to write those parts. They don't exist. Right.

[A]

Right now we just have the tools to.

[B]

And I, I didn't go to school for accounting, but I would say I spent most of my 80s, probably well over half of it, helping people build accounting and inventory control, sales order entry. I find that so those kind of things. And, and of course that's, you know, hugely helpful. Later when you need to read balance sheets, profit and loss statements, I think all of this, I find it very.

[A]

Interesting that restaurant owners suffer from that same infliction today where they think they buy the thing and their problems are solved. And you see it like, like they just go buy the computer. All right, my Problems are solved. I'm just gonna go buy restaurant365. My problems are solved. I mean, that's just the foundation to be able to start. You gotta talk about.

[B]

We can talk about Restaurant365. Because I dabbled. I dabbled with it briefly, and then I was like, oh, my gosh.

[A]

But it's just the beginning. You gotta. You gotta swing the tools. You gotta know how to use the tools. So what lean did you develop? By the time you're. You're pumping on all cylinders.

[B]

So in the. In the nightclub business, the real things that I learned there was cash management. You know, they'd carry briefcases of cash out. The owner of the company took a liking to me, so I hung out with them every day. You know, hung out in all the bars. And we. I built computerized light shows. I became a dj, started dating the bartenders.

[A]

This is where you get the bug.

[B]

Started dating the bartenders. It certainly exposes you to a lot of that. And in 1985, I just said, I gotta leave all this behind because I'm gonna. You know, there's a path. Well, there's two, you know, sex, drugs, and rock and roll. Yeah, it's. Except it's. The order is probably drugs, rock and roll, and not much, but, you know, but. But you literally get away. And I had. Somebody had bought a PC and they literally gave it to me and said, hey, you're the super genius. Come automate our laboratory. And I just literally left it all behind.

[A]

Yeah, I was looking at some, like, liquid laboratory.

[B]

I was like, what was going on? There was a thing. So I went and helped the laboratory automate themselves in the 80s. I went and helped that same laboratory in the 90s do another round of it. And then in the late 2000s, I helped that same laboratory do their third generation of software. And that's where I was sitting around with the sons of the owners of the laboratory, who were in their 30s. And we were all lamenting the fact that there was no good sports bar in the Woodlands, Texas area, nor here, North Houston, where we're at, there was two crappy old dirty ones with restrooms that we don't know how the girls even went into them.

[A]

So are there any other, like. I mean, we're still on your timeline right now we're at, like, 85 to 1990.

[B]

Right.

[A]

Another 20 years in the world of technology before leaving to open your first bar in 2009. I don't want to skip.

[B]

I had to go. I had to go through the dot Com. Boom, right? And I did end up going to work for a company and actually a lot of the 95 to 2000 period, I started doing a lot of credit card back ends for websites. They wanted to do these subscription models, they bought these engines and stuff. And so I had to learn how to talk to credit card process.

[A]

Man, this is going to be a good conversation. I have a feeling we're going to be getting credit card processing rate and.

[B]

You can, yeah, you can get into all, all of that. And then Google Ads, Words was even born in the early 2000s. I was working for a company and I started as basically, it's kind of like you were talking about technology. A sales guy had come to a $150 million VC funded startup, sold them a billing engine and then they're like, okay, make it work. And we're like, well, you bought an engine, now we got to build the whole car around it, right? And that's the. So I would, I would sit there day and night because they're like, hey, we want to go live. And you know, 90 days, 120 days. We bought this so we didn't have to. I'm like, no, no, no.

[A]

That's how I felt when I bought these cameras. I was like, okay, I got the cameras, now we can just go. And I was like, oh, now I gotta figure out how this thing turns. Like it was like, now you got to figure out how to use the tool. It's like, it's just technology doesn't take care of itself. You still got to learn how to leverage it.

[B]

Yep.

[A]

Yeah.

[B]

So, you know, you sit around a company, they had 300 employees. You look around this company and you go, there's 80 some people in marketing. There's, you know, 60 people in the IT. I look around, I say I could run this place with like 10 people. Well, the dot com bust happened and we. I got to run this place with 20 people because I was the last consultant to in the place when they made me like the VP of IT and got rid of everybody, downsized, moved office buildings, liquidated. So went through all of that, that, that bus, but kept the company alive to where they could sell it. You know, they probably got some of their money back. I mean, they maybe sold it for 40 or 50 million, you know, after burning through a lot. But that was an interesting time. I sat in a boardroom then where Ken Lay was on the board. He's the Enron guy. And Rod Canyon was on the board. And Rod Canyon was the founder of compaq and I would sit with him and he would look at me and go, we're just gonna do what that guy says, you know, and technology wise, because they don't understand it. And the same way when you come into the restaurant business, people don't understand the technology. Right. You just hope it works, you buy it.

[A]

And so at the peak of your technology career, what were you doing?

[B]

Well, at the, at the peak, instead of just being a software development, a coder, I was a coder for a long time, coding, but always business coding, you know, not games, that stuff. I made a career out of coding the financial back ends. I tell people like the plumbing for websites, the plumbing for businesses, you know, the money flows, you know, if you take care of that, you know, somebody else, you know, I'm not a graphic designer. I don't make something look pretty.

[A]

Yeah, I can't wait to get into the point of our conversation where you are today with your tech stack and why you're using what you're using. And I did a little bit of digging around because this guy knows technology. So I want to see what he's using and I want to get into that because I know that you're going to have very educated decisions that went into what and why you do what you do in the back end of your business.

[B]

Right. And how, and how it's changed over.

[A]

The last few years and how it's going to be changing in the next two years. It's like I sometimes, man, I throw my hands up, I'm like, what's the point? Like in the next five years like, like Google's going to own all the restaurants. Like we're moving in that direction of like a corporate, a corporate accuracy is. Am I saying that correct? Is that the right term? This episode is made possible by US Foods and one of the pillars of the US Foods we help you make it promise is more tools which provides resources designed to make running your food service operation easier, more efficient. From the all in one food service at Moxie, which goes beyond order placement to help you manage every part of your operation 247 to the digital solutions like check business tools and vitals, US Foods delivers smart time saving tools built to simplify your operation and support your success. With Moxie alone, you can browse products with AI powered search, manage lists, track deliveries with the AI powered Where's my Truck? By US Foods reorder with just a few clicks and you can do that from your phone, tablet or desktop. Here's a bonus. You can even browse moxie without signing in. And we can't forget Check Business Tools, which is essentially a suite of vetted third party solutions that help operators solve critical business challenges such as drive traffic to their location, simplify staffing processes and modernize operations for greater efficiency. To learn more, visit www.usfoods.com. expect more this episode is made possible by Sir Boni Siboney is your all in one bookkeeping and financial solution. Refer to me organically in episode 1200 by Mama Betty's founder Jason Carrier. You gotta hear what Jason had to say about Sir Boni. Anything that comes remotely close to your financials, Sir Boni has your back. Reliable tax preparation and business incorporation, Seamless payroll and compliance reports, Strategic CFO services that drive business growth. Detailed customer reporting for complete financial clarity and dedicated support for restaurants and multi location businesses. Did I mention they do bookkeeping? They do it all. This is an end to end financial management solution all under one roof. Let Sir Bony handle the numbers so you can focus on the vision. Call Sir Bony today at 281-888-2413 to schedule your free 30 minute consultation and discover how Sir Bony can streamline your operations and boost your bottom line. Limited offer and this is exclusive to Restaurant Unstoppable listeners. Mention this Message and get 20 off your first month of services. I don't know what the future looks.

[B]

Like right now, but at the, at the peak there, I mean, you know, I was, I was one of the top 10 advertisers for in the Google AdWords program. We were buying thousands and thousands of keywords when they first came out. Before people had figured out today that's a nothing. Right. But it was when it was brand new, it was a something.

[A]

You must have been doing good financially.

[B]

I mean in the technology world. I mean. Yeah. I mean you make for 1995, let's say the 2000s, you know, you're making 150, 200,000 a year in stock options. Yeah. Good money. Well and that was the problem. Even in the 80s, early 80s, people were paying me like 50 an hour to do computer work for them. And in 1980, you know, 3, 4, 5, 6, 7, 8. $50 an hour, $60 an hour. That was good money compared to today. Today you go out to make $50 and you're like hey, doesn't even cover groceries.

[A]

I know. I think the average household, if you want to have kids, the average household, if you want four kids, they say you got to make at least 200,000 between the both parents.

[B]

That's so so the career I should have went on was I should have been one of the tech billionaires. I was supposed to stay in tech even after 2005. I was not supposed to move in 2009 to the restaurant business. Many people in the tech space that know me are like, what the hell are you doing? And I'm like, I'd rather. And at that time I was maybe 8 or 10 million of year of revenue when they would talk to me. And I'm like, I'm just going to sit over here in my little happy pile of shit doing 8 or 10 million a year and I don't have to argue with nobody. Okay? You know, it's like, yeah, well, yeah, we'll talk about that. But it's, but it's a, it's a different thing. It's like. Because yeah, I could have stayed in tech and tried to cash in, you know, and, and I could have flown to California, anywhere along the way. But I really like Texas. The, the, the. No, the no state tax, the whole vibe.

[A]

2008. And then 10 years later, even flying back to Texas just like everybody else.

[B]

Yeah, exactly. So it was there. And There was a 20078 where I went to Austin and did work for a tech company over there on their website called Stratford. But what it came down to in 2008 was moved to Austin. And then I'm like doing work for this laboratory. I'm like, you know, and we were talking to the guys and we were like, there's no good sports bar. And I'm like, you know what? I can just open a sports bar. Literally, that's how it started. I was just fixing a problem because in the computer technology world for all those years, what I'm really doing is fixing problems. So to me, the sports bar, a quality sports bar, was fixing a problem. We had a Buffalo Wild Wings, but that's the corporate chain thing. And we had the, the competitors that were old and dirty. Right. And literally when you say we had.

[A]

He's talking about the neighborhood ad.

[B]

Yeah, neighborhood, yeah, the area had. And you know, we would go out and so literally I went out and yeah, I'd been to my parents bar in the 90s and they had already. I had three kids by then and they'd already moved back down here. They weren't in the bar business. They just did a decade of it. And as my dad said, it put my sister through college. Right. You know, they didn't have to pay for me to go to college. And it was fun going up there. But those. My visits up there was like, at Christmas or Thanksgiving or getting on a plane and like, forgetting I'm leaving Texas. And you get up there and I'm like, oh, I didn't even bring a coat or passing out on a pool table because you're drunk. You know, it's like. It was just like, oh, let's go see your parents for three days. Drank a lot. And that's what you do when you're in your 20s and you know those things. But there was no business, no running the business. None of that was going on. But when I did open, it was 2008, I said, I'm gonna open a sports bar. I didn't have enough money.

[A]

Would this be. This would become Tailgaters Tailgaters Club and Grill. And you didn't have any money after.

[B]

All that work you're doing? I had. I had $300,000 of stocks invested in Apple, Google, Amazon, and I cashed them all.

[A]

Oh, my God.

[B]

To open my first bar.

[A]

Ouch, dude. Oh, my God. I just feel that in my core right now. Now, what if.

[B]

Did you ever. And those were the primary things I was invested in, but I cashed them all out.

[A]

If you didn't cash out, I just need to know, how much did you have? What would that be today? Do you try to bury that knowledge?

[B]

Yes, yes, yes. Now. And would I have held them?

[A]

That's a good point.

[B]

Right? Would I have held them or not? Right? I mean, you like to gamble. You open the bar, right? Exactly. So would I have been a day trader? This or that. But. But I cashed out that. Cashed out the 401k, sold all the stock options, literally, put. Put all of my pennies into this bar, but I was still working. And here's the deal. I opened the first bar, and I'm like, I had no intention of stopping working. You gotta understand, I was still generating income. I was still consulting. I was still making very good money. You know, I could. I could go work 50, 60 hours a week, and they're all billable hours.

[A]

And if things get bad, you can go Uber. Well, the relative.

[B]

But literally, I can just go back and do software development or I can go to Austin and work. Somebody will pay me big bucks to.

[A]

Go dig yourself out of the hole.

[B]

And, And. And, you know, the. The other thing I look back on is, you know, after 30 years of technology work, you know, a little carpal tunnel in the wrist, a little this and that. It was just in that midlife crisis of let's do Something different.

[A]

Yeah.

[B]

So I didn't. I literally just started looking around at least spaces. It was 2008, 9. We were coming into a real recession. There was a whole crash in the market.

[A]

Sport bars do really good in recessions.

[B]

People told me that you can't be building a business right now. You know, it's bad. Times are bad. Right? Times are bad. And we opened the first location. And when I say we, me and my father, because I had to drag him in for, you know, a little bit of money along the way too. It's like, hey, dad, and you thought you retired. I drugging them in, my parents, because they're, you know, your parents are always older and fiscally responsible, but I drug them in for 30% ownership. And they were kicking and screaming that I was spending way too much money. This was way too fancy. Mind you, they come from small town, little bar, you know, a whole different mantra. But actually got my parents to work during the day. My mom was a little clean freak. She'd run around, clean tables and stuff. And they were probably. They were high 60s.

[A]

So you didn't have to take out. You didn't have to go to the bank. So you can't.

[B]

Oh, I went to the bank. I went to the bank.

[A]

How much money do you need to get started?

[B]

I went to the bank and talked to banks, and they're like. I said, wait, I have great credit. My dad has great credit. We just need.

[A]

And the industry doesn't have great credit.

[B]

They're like, we do not loan money to bars and restaurants.

[A]

Not right now.

[B]

Okay. And really, today, they still don't loan money to bars and restaurants. They'll loan money for dirt.

[A]

Right.

[B]

And we'll talk about that. But, you know, I. In a lease space, an inexperienced operator. I had a bunch of credit even.

[A]

With being on 30% of the partner. Like, they weren't considered an experienced operator.

[B]

Yeah, no, they don't. 2008, recession. Right, right. Yeah. It's like I had, at that time, I had a bunch of credit card offers, like, get 10,000 for 0% for two years. Get 20,000 for 0% for a year. Those were very popular back at that time. So I advanced some credit cards. I took all my money out all in.

[A]

How much did it cost to get open?

[B]

Well, I made a deal with the first guy, and because it was the recession, the guy that showed me this lease space that wasn't too far from this laboratory I was working was the owner of the shopping center, and he was in his 60s and he had built a 30 or 40 shopping centers all over the country. And he was kind of like retiring, but he came in and he told me I didn't have enough money and we left it at that. I'd found the spot and I was never not going to do it. A couple months later he called me up and he said, you know what, I'll build it for you. I think I can build it cheaper than you think you can build it for. And, and I still had to spray the acid on the concrete. I still hung all 40 of my TVs. I, you know, wired everything. I did it a lot of the labor to keep it down and it cost exactly what I said. And I even asked him afterwards, said, hey, why'd you call me back and do this? And he said, eh, I lent money. Or I did a deal on another lease a year before with a tech guy and it worked out real well for me.

[A]

Well, I mean I would imagine that.

[B]

Your brain would do really well since you. So he just took it and took the gamble and he's like. A successful restaurant or bar in a shopping center adds millions to the value of the shopping center. Because we're a huge traffic driver. This is important for you to know when you go negotiate with shopping centers, you know, it's like, make sure you have lots of parking if you're a huge traffic driver. But really negotiate, say, look, I'm bringing value to your center. Yeah. And didn't think about it that at the time, but. And we, we opened in March of 2009 and I was able to get a lot of real high quality staff because it was a recession and everybody was being laid off. There was a real downturn. People didn't know what was going on. So I had a real experience staff and we opened and we had crickets.

[A]

Yeah, crickets.

[B]

Well, you know, people were like, ooh, where are all your customers?

[A]

I want to touch on something you said, and I think that you're talking about the strip malls and restaurants, how they bring traffic to strip malls. This is going back what, 14 years ago? 15, 16 years ago almost. Do you think that's still the case? Do you think that holds true or do you think there's a shift happening in the marketplace? Are strip malls oversaturated with restaurants?

[B]

Well, I mean if you're talking about this area now, of course the area of Houston, in Houston's one big strip center center right there, everywhere.

[A]

Oh my God, you fly over Texas.

[B]

But I will tell you, a shopping center that's dead doesn't have value to the other tenants. You know, you want to have a direct. You want to have all these little. That need traffic.

[A]

Well, this is also 2008, and I think it's just before. I think it was around the 2008 recession where things really start to shift. Consumers don't buy things out anymore. They don't. They buy everything online today. So you. You have this. This situation where you have these developers building strip malls all over the country, making millions and millions, if not more, hundreds of millions of dollars. And all that retail space now has no purpose. The only thing that works in that retail space is restaurants. And there's like this over saturation of restaurants. Would you. I get behind that.

[B]

I agree to a point. There's. But quality restaurants are not necessarily over saturated. Right. There's plenty of restaurants that come along that just, you know, here today, gone tomorrow.

[A]

Yeah.

[B]

And sometimes they're even really good craft, you know, like a young person getting into this business, because I've met a lot of great chefs. Right. They just don't realize the work of going into a restaurant. You know, they'll do it for a few years. Basically. They're super successful to their burnout. Right. And then they're gone. Right. You know, it's. They're here today, gone in a couple years. Restaurant.

[A]

Yeah.

[B]

Thing. And for. For me, you know, I opened a sports bar. I opened it in the suburbs where the, you know, the family.

[A]

I think that's where the opportunities are.

[B]

Absolutely. People are like, oh, you need to go into town to open restaurants and be trendy. And I'm like, no, no.

[A]

Yeah.

[B]

No, not at all.

[A]

Maybe you might get the media that, you know, that the big cities attract. You might win some awards or get some publications.

[B]

People are like, you need to come open your sports bars in Austin. And I'm like, well, first off, I wouldn't open them in Austin. They'd be in Round Rock. They'd be in Pflugerville.

[A]

That's where the opportunities. Where the families are.

[B]

Right. Where the families are. Where the transplants are. They want to come watch their sports on the weekends, watch their football team that, you know, see their team. Right. They're a Packers fan. They're whatever.

[A]

And I do think, if you, like, I always make this analogy, you fly over Dallas, right. And I don't know, it's literally just as far as the eye can see. Oceans of developments, homes. And there's so many homes per square foot. And up until like the this century, whenever there was a town being Developed in the middle of that town. There was always a town center. There was. When we were establishing and developing and colonizing the Americas. You needed a pub, a public house in order. The first thing you need to do to qualify to be a town, you need a public house. Usually next to that was. Eventually there would be a church and a post office, but you needed. That was the first thing you needed. And that would be the center, the. The hub and spoke. You know, like, the center of that town was always like the downtown area. And there would be fewer homes in that town than. There isn't a, like a 10 by 10 square mile, like, you know, footprint in Dallas with all these homes is packed. But there's no. There's no community center in that space. Like, you gotta. I feel like you gotta drive like 15, 20 minutes away to a strip mall sometimes. Is that. I mean, I don't know this area as well as you do, but I feel like there's more. I guess what I'm trying to say is I think there's more opportunity right now. If you, like, take down a couple houses and just put the restaurant in the middle of the community.

[B]

Look, this sports bar down the street, that's $6 million is miles away from the interstate.

[A]

Yeah.

[B]

Miles away from any chain restaurants. There's a Chili's half mile away from it. And normally Chili's. I happen to know the director of operations for Southeast Texas. He's like, chili's do really good, except for the one by your place. Right. And I'm like, well, you know, it's. It tells you something if you can give people a quality product. Because they're like, normally if a restaurant opens next to a Chili's, it doesn't do as good.

[A]

Right.

[B]

They say their statistics. Right. And. And I'm like, well, you're the boring place, I'm the fun place. Yeah.

[A]

And I know it's. It's more complicated than just putting a restaurant in the middle of a residential. It's a residential. You can't put a restaurant out there. It's. It's not zoned.

[B]

But. But. Well, luckily here in Texas, we don't have a lot of zoning.

[A]

Well, that's good.

[B]

Especially where there's no incorporated areas. Well, it's good and bad. You get real now. We're a traffic parking lot, and everybody has moved. Montgomery county, where we're sitting, has more people. Like the number one or number two destination for the whole United States. We're literally a parking lot. And 10 years ago, they predicted it. And they said, well, let's plan for the roads. And they said, oh, you can't do that. So what do you mean? I said, oh, you have to get the crowd, you have to be a parking lot before you get the money to build the roads. So we're at the parking lot part of this phase without enough roads right now.

[A]

Yeah.

[B]

And I moved to this area where we're at, to live in the country on a couple acres rather than be, you know, a sardine and right in a box.

[A]

You know, it was the end of the industrial age that maybe it was the second industrial age that, you know, people went from. Everyone was spread out. It wasn't until the 19th century that there were more people living in cities and across the country. And, and it was because that's where the opportunity was. Because when the industrial age came to a screeching halt because of the advancement of technology, it was about corporate America. And you had to go to the city to get the corporate job. But now that there's a swing happening in the opposite direction, everyone's vacating the big cities because they can work remote. Why would I take this New York City paycheck and live in the city when I can go to Idaho and buy a golden toilet? Like, sign me up for that.

[B]

And not only that, the quality of life is to.

[A]

We're not meant to live on top of each other.

[B]

Right. Surprise some people that love the city life, but it's. It's not what it used to be at all. And it's. A lot of cities are very kind of broken. We need to spread out inside.

[A]

Yeah, there's a ton of all the momentum markets. The Midwest is on fire right now with opportunity. And there's so much opportunity. If you don't need to live on the water, go to the Midwest. You'll. There's opportunity there. So 2009, you get your go.

[B]

So we, so we crickets. We open crickets. We're like, oh, well, this Facebook thing I knew a little bit about from being in technology, but it was still back then, they were even called fans, not followers. You know, you had fans. And I was sitting there in that first month and what I, what I, looking for and, and I knew it even back then was really, it's. It's just unluck. But you're looking for the connectors, right? The customers that are connectors, the influencers, the. The 21 year old female. Yeah. That I'm like, hey, if you get me a thousand fans on my Facebook page, you know, I'll throw you a party, right? And I'm thinking it'll take her a month or two, right? And like two days later, she has me, a thousand fans and I'm like.

[A]

Okay, I'm onto something here.

[B]

And basically back then when we opened, I literally took probably in the, in the six years that restaurant was there, but for the first three or four years, I took over 10,000 pictures, posted them all myself, put them on the screens. Years later, had to stop posting pictures of my customers on the screens because they literally had new girlfriends, new wives, new everything else. And they didn't. They're like, I can't come to your place anymore because you have pictures of me from two years ago on your screens.

[A]

Oh, man.

[B]

And the things you learned. But literally, hey, honey, who's that? You're watching the tv. I did all of the fake posting. I did everything. And literally we opened in March. Few months of slow and then people kind of discovered us. And then football season hit and we had a line out the door. What was your first year revenue?

[A]

Do you remember?

[B]

It was, we were hitting like at that time, I was excited when I hit like 180, 200,000amonth. I thought I was, I thought I was super excited.

[A]

What was your best year with.

[B]

We were selling five dollar pitchers of beer. I was selling at that original location. Really good. Months were like 250, 300,000.

[A]

Okay, so.

[B]

But we sold things cheap in volume. And when I was building the place, one, one little story, I was playing a little poker before poker rooms were popular. Actually, they were all illegal back then. But I would. And I didn't hire an architect to build my restaurant. The first one, actually, until the last few years, never hired architects. So every mistake is mine and mine alone.

[A]

With the exception of the first one because the developer built the first one.

[B]

He built it to my plans, got it to my plans. And I just built restaurants from that lifetime hanging out in bars, right? I did a lot of partying, saw nightclubs, saw this, saw that. But I built it from my perspective. Like if I'm building a sports bar, don't mount the TVs too high. Get them down here at eye level. Do you know all of the things and the flows and as a customer, you know, like, oh, let's put the pool tables by the restroom. So when the girls go to the restrooms, all the guys playing pool are happy looking at the girls because they need an excuse to have the girls to walk by them. You know, it's like all the little things you can do. And I mean, I mean we're talking to 4500 square foot place.

[A]

Something to be said about the engineering of getting people to intentionally bump, bump against, against each other.

[B]

Yeah. And my first place, you know, it's like two pool tables, two steel dart boards. You know, back then I don't remember if there was golden tea yet or if that came along a few years later, you know, and karaoke, you know, little stage area, you know, a four by eight stage area that you could flip down and do things on. And I ended up doing the hundred ounce beer, we call them torpedoes, the beer tubes. And we would do a lot of cheap beer promotions, you know, had, you know, 16 beers on tap back then. Today, Today I do places that have more taps. But basically it was just I was the low cost guy next to this, next to the woodland.

[A]

That's the guy you want to be during the recession.

[B]

Yeah.

[A]

Because hard times, people still want to feel good and there's not much out there. You know, alcohol makes you feel good.

[B]

We became the bar that all the industry people came to. So when they all got off work at 9 or 10 or 11 o' clock at night, what time did you close? 2am Okay, 2am Seven days a week.

[A]

I would have been at your bar about 15 years ago if I lived right.

[B]

And Everybody showed up 10 or 11 at night because like the Mexican restaurant across the street, 20 of their employees would show up. The other restaurants, all these different restaurants get that last wave they get. They would have contests to see how many people they could get from each restaurant. They'd make rows out of their tables and they'd have the little wars. And I did for years I did 25 wings on Tuesday nights for 10 bucks, you know, and I kept that special way past where I should. I mean the wings were costing me 10 bucks and I was still doing it.

[A]

How much money were you making on alcohol?

[B]

Yeah, and that. Well, that's just it. We always laughed and told people because our alcohol sales started out at 70%, 30% food. I didn't really want to be in the food business at all. How I. But like you can't be a sports bar without food. Is that the.

[A]

I know certain states have like you have to sell a certain amount.

[B]

There's no law in Texas, although landlords can enforce. Yeah. Whatever percentages they want on you. But basically I came along and said, well, I want wings because I, you know, I was kind of a Buffalo Wild Wings fan. Mango Habanero, Buffalo Wild Wings. I kind of like that and it's like. So I said, well, I'm going to have wings. Well, if I'm going to have wings, I'm going to have chicken fried steak. I'm going to have chicken fried steak. I'm going to have X item, X, Y, Z. I'm going to do. And I love Cajun food. So I became a sports part. Tailgaters pub and Grill. It's G A T O R S like an alligator and it's a sports pub with Cajun flair. But I'm not from Louisiana so I'm not a real Kunis. I just love Cajun food.

[A]

How do you feel, how do you feel about walk ons?

[B]

I love the original walk ons and then they came over here and did one by one of my spots and the place sucks. Whoever designed it, whoever laid out the TVs who architected the bar, I'm like. It was total retardation. And the look anyway, I'm just like. I just get mad when I see somebody.

[A]

Is it Landry?

[B]

I see something when I see somebody has a good concept. But then what are you. Because we'll talk about, you know, franchising or how people spread. When a lot of people say oh we've got to open 50 wine bars. It may not be a good idea to open 50 Weimber if you don't have 50 good people to run them or a good design or a layout or whatever. Right.

[A]

I think what happened, I mean no matter how good your concept is and I've had. Is it Land? His last name, his first name is Exceeding. Is it Landry's or Landers?

[B]

Scott Landers Landry's Landry.

[A]

I think it's Scott Landers founder. He was a great interview, great guest and I'm very grateful for all my interviews and people make time for me. I think they were onto something really good early on. But I think once you try to take over the country, once you. It's all about scale, scale, scale. Can you scale that? Magic. Can you scale that? Those people that helped you build it and make it special in the first place. And I wish them the best, but I think, I think they're close. I don't know how many locations are now, now, but they're scaling fast. And maybe the, the layout has something to do with the trying to keep up with.

[B]

Yeah, well, no, I'm just saying the one by me I've been to walk ins that are fine and they do fine and they're, they're in the concept in space of What I kind of do. So there's no. There's no doubt about it.

[A]

In fact, it shows that your concept had legs.

[B]

Well, there was a real deciding time when. So we haven't got into the fact that this was 2009. I had a customer come in and go, hey, I want to be your partner and open another bar. You know, I want to open my own bar. And I'm like, dude. And then I'm like, you know, you give people the list of a hundred things, you know, that you need to do to be in a bar. But anyway, this guy wouldn't leave me alone. He wanted to open a bar, and I said, look, a lot of my customers want one on the south side of this suburban area. We're in. Go find me a spot down there, and I'll talk to you again. So, like, a few weeks later, he's actually back, and he's like, I found a spot. I'm like, are you serious? You found a spot? And I'm like, and you have any money? I'm like, so he literally found a spot. It became the second Tailgaters pub and Grill.

[A]

How many. How many a year and how many months after?

[B]

Well, we started building it in the winter of 2009. So literally, I'd been open less than a year, and I'm building the second location, and it opened in May of 2010.

[A]

Okay, so like, a year and a couple months from.

[B]

Yes.

[A]

Open to open.

[B]

Yes. And. And it was like. And it opened with a boom, doing 250,000amonth out of the get go.

[A]

And how many seats were in this second location?

[B]

150.

[A]

So, like, about 100 less than the original or more?

[B]

No, the original. No, the original only had occupancy of, like, 140.

[A]

Oh, wow. So you're doing close to 4 million a year with 140 seats. That's pretty good. That's pretty good.

[B]

Yeah. Yeah. So. So that original location, though, was the 3 million. The new one opened up at 250amonth. It was going much stronger. And it turns out that maybe you shouldn't be a partner with, like, random guys that walk in and say, I want to become your partner.

[A]

That was my next question. You've been sharing a lot of success. What were your challenges in the first year, the challenges of that partnership?

[B]

Well, so. So I opened the second one. Boom. And there. So it was interesting. So the money to open the second one came from me having made a little bit of money out of the first one because it was actually generating Positive cash flow to my friend in the technology space. One of my friends that had made money who wouldn't invest in my first one with me when I asked him, suddenly was interested in investing in the second one. And the guy that showed up, basically I, me and my friend were 51% and this, this guy I found and a guy he found was the 49%. Right. And, and actually he only owned 20 hit the guy he found was the investor friend that owned like 29. And he owned 20 and for 20% and his 20% it turns out like his parents had left him some money. He inherited it. So he, he didn't know how to earn money. He just had some money.

[A]

Gotcha.

[B]

So anyway, anyway, we can fast forward to number two. But it lasted like a year and a half and you got to get divorced.

[A]

Yeah. So you know, you know, 2009 you open your first within a year and a couple months you have your second location. In 2010, December 2010 you open Stadium Bar and Grill. And then December 2010, is that the same year?

[B]

Yeah. So you'll be your third.

[A]

So you go to from one to four units in a.

[B]

Right. And at that my food supplier Cisco thinks that I'm going to be the next guy to open 50 units. You know, all over town they're like so excited. You know, they're like hey. Because basically what happens is I open that the second one in May. Boom. It's booming. Another empty shopping center. Because remember this is the 910 recession so there are a lot of empty space sitting around. There's a. My third tailgaters Pub and grill was a sports bar that had people are.

[A]

Looking for like, like this guy's got it. Throw them opportunity.

[B]

Landlord. Right, Landlord. You know, people resolved. Yes. They come make opportunities for you. Now the Stadium Bar and Grove is a little different. One of my bartenders, one of my guy bartenders, that man, he was the anchor in the well high volume bartender. His parents owned a bar and you know, 10, 15 miles from it's called Stadium Bar and Grill. And I'm like, how come you don't work for your parents? And he's like oh no, I can't work for my parents. You know.

[A]

So this is your first bar rescue?

[B]

This is my first bar rescue. But he's like, but my parents, the tax man is going to lock the door and maybe you can go help him out. And so I go down and see him and sure enough the tax guy is going to lock the doors on like a Friday. And I look at everything with them. And basically, like. Like, you have nothing to sell me. I mean, but how about we figure this out? And I'll tell you what, I'll just, you know, take over the lease, right? And I'll go pay the tax man, and I'll run your bar, you know, and you're out. Right. And. And I found one other of my vendors, my amusement vendor actually came along and was like a 40% partner with me. Very silent. And. But I bought this bar and, you know, basically it was doing 25,000amonth when I bought it. And six months after, I headed up to like 80 or 90,000amonth. And it's 95% alcohol, 5% food. Damn. Yeah, it's a little party bar.

[A]

Okay. And then around that same time, you open your third tailgaters.

[B]

And the third tailgaters, because the one in May had done so well. Boom, 250. The people that owned this and this. The third tailgaters got to go in a spot that had been a bar that had opened in like six months, later closed.

[A]

So it's kind of turnkeyish.

[B]

It was more or less turnkeyish. It needed all the tv, it needed equipment. It had no equipment. No. No furniture furnishing. And actually it had turned. It went. Been a sports bar. Then it turned into what was called Coconuts, which was a. They were playing big band music and trying to be a piano bar. That lasted very short amount of time. And it's again, the only reason this third one exists because it was near where I lived, so I was driving by it every day.

[A]

Yeah, I mean, you know, yeah, this.

[B]

Is a lot of growth. Literally, the. The. And that one was truly in the sticks. Meaning, like, when it opened, none of my staff. When I opened it In December of 2010, we fixed it all up. Boom. I opened in. In December 2010, and none of my staff wanted to work there.

[A]

I was curious.

[B]

My staff wanted.

[A]

How many seats was this one?

[B]

195 occupancy.

[A]

Okay. So we're looking at right now about two years. This is just before your second year. About two years of operation. You're growing really fast. Hindsight being 20 20, like, what were your biggest challenges in that in those two years?

[B]

Well, the fact that I was. Still Had a day job.

[A]

Oh, right, you're still coding on top of all this.

[B]

Yes.

[A]

I mean, do you know your numbers during this time? Are you like an operator who's like, I'm.

[B]

I'm literally. I'm in my places seven days a week from 5 o' clock till 2am and then I was actually sleeping at my job during the day a lot. And eventually probably, and it was probably opening of the, of the third tailgaters was when I finally said, all right, I'm in the bar and restaurant business, I'm not going to code anymore.

[A]

I mean, you got.

[B]

And I told them we gotta, you know, I can't do it anymore. But, but that gave me. By having a steady job all of those first two years that I was, you know, I had my day job, it gave me the confidence and even, even when I gave it up, I could always go get another. Like I could call tech people and go, all right, I need a job. Yeah. So I always had an out. Right. So I could take this risk, you know, being a gambler. But I was like, if it doesn't work, I go back. And you know, so if you were.

[A]

I'm kind of curious. So like you're making money with these bars, you know?

[B]

Yes. You're.

[A]

You had decent cash flow. I mean, yes, you're doing over a million dollars of revenue between all the locations is probably what, like 150,000 per location on average?

[B]

Yeah, I mean I bought, I bought some trucks. I bought a truck for my father and me and paid cash. I, you know, suddenly there was money. You know, back when trucks cost 30,000 a year.

[A]

Like why even do that if you're, if you could have just gone all in on the restaurants.

[B]

Lots of money. Yeah, lots of money. In other words. And I had my parents at the first one during the day and hired people and everything just worked. Now the third one that opened though was not a money machine. It was a break even at best. Oh, it's the flagship.

[A]

Oh, really? It's funny how the, the out far out there location is probably now.

[B]

Well, because, because the burbs moved it. Yeah. Okay. It became literally within two miles of. It is a hundred thousand people today. Wow. You know, you can get ahead of.

[A]

That curve if you see that momentum and you can get that, I mean, go to where the opportunity is going to be, not where it is.

[B]

Right. Well, except you. You might go broke waiting for them to show up.

[A]

I mean, not everybody has that privilege of having that long of a Runway.

[B]

I, I knew they were going to open up a road. It was on the plans to have a road opened up that literally all these people trapped in the back of this neighborhood that it was a 30 minute drive to the front of their rest of their neighborhood to get to restaurants. But I could be five Minutes away.

[A]

Yeah.

[B]

Soon as that road opened up, and it did open up after the third or fourth year.

[A]

Yeah. So this is like almost 16 years ago. Right. Knowing what you know now about bar and restaurant operations, looking back at that version of yourself in these early years, I think something's going to come out real soon about partnerships. But before we open that can. What advice? Like, what were you. What advice would you give yourself knowing what you know now, Looking at that past version in terms of.

[B]

Well, you've. You've probably heard it a million times. Just don't have partners. Yeah. Just don't have partners. It worked out because the second. The partner that got me in the second one, I wasn't really thinking about doing a second one, but he kind of like found the spot. I looked at it, I was like, we have lots of customers down here. We can make a go of it. I wrote in my LLC operating agreement that we won't drink in our place. That we won't do. I put a list of things we won't do because I kind of saw the nature of this guy. Right. And it turns out it really doesn't matter what you write in your operating agreement. Right.

[A]

I mean, those operating agreements give you the ability to get out of agreements if. If things are being broken or you can prove that they're not operating to the agreement. But they're still going to happen until, you know, somebody gets called out.

[B]

So we. It was 2012 when that second tailgaters location, basically. And I didn't. We. We basically sued each other. And, you know, he was wanting to have, you know, sex with the employees and do cocaine on the bar. Yeah. You know, all of the kind of things.

[A]

Yeah. You wouldn't get out of there.

[B]

Those kind of people want to. Want to do. And we're in serious business now. All of my staff love me and they wanted the real problem, what I had, what I got taught the big super important lesson. My lawyers taught me, take the money and just go build more things. But I truly wanted it to be mine and to save it. And this guy was just so fixated on. He wanted to be in the bar business, to do all of those things that, you know. And he's passed away today from, you know, liver failure.

[A]

Big surprise.

[B]

Big surprise. But my lawyers were like, just take the money and open one across the street, whatever, you know.

[A]

So you won the loss. So, like, take the money. What do you mean? So did you take them to court and did you win?

[B]

Yeah, well, basically, no. Well, we went to court and the judge says, because I'm like, here's an operating agreement. He's breaking all these rules. And the judge looks at us like, this is a business dispute. Get the hell out of my courtroom. Somebody go buy somebody out. Yeah, get out of here.

[A]

Yeah. And get lawyers to negotiate that buyout.

[B]

Right, right. And that was it. So you go to mediation, and I offer him way more per share, and he just. Just won't take it. So what are you doing in mediation? And so finally, he and his investment partner, they put the money together and they paid it, they bought it. They bought the 51% they didn't own. And the staff and I thought you.

[A]

Were 51% and they were 49%.

[B]

Yeah, they bought the 51.

[A]

Got it.

[B]

They owned the 49, and they bought it. And I let them keep the menu. Just change the name. Boom. Change the name. Let's go down the road.

[A]

Did it. Change the name because.

[B]

Yeah. Oh, yeah, they changed it. Do me a favor.

[A]

Take that microphone and just shift it to the center of the table, just the whole bass, and put it, like, a little bit in front of you if you need to.

[B]

There you go.

[A]

Yeah, perfect.

[B]

But it became a bar called Two Belows.

[A]

Okay.

[B]

And. And he just kept doing all those same things that had a sub rate, but it didn't matter at that point.

[A]

So vacation two, which was up in.

[B]

It was on Rayford Road. 2907 Rayford Road.

[A]

Rayford, that's right. And that's no longer in the family anymore. You take that.

[B]

Yeah, I sold that in 2012, and we used it to go on and do more things. And my friend, remember, the friend that wouldn't invest in the first one, had invested, so he got, you know, he got paid, I got paid, and we went down the road. He has invested since then in every other concept that I've done.

[A]

Oh, cool. There's a little note here. It says llc, operating agreement values. So I think there's some lessons you learn from this agreement, do you not? I mean, you still have partners.

[B]

There was. There was no but. Well, there was no buy sell. So after that, I was like, no more partners. Right. It's like, investors are okay. Investors are not partners. Yeah, there's a. They don't have opera. It's a tran. You're investing in me, and you're rolling the dice that I'm going to do a good job for you. And you. You don't have any operational say so whatsoever. They can't come in and tell you how to run your business. Now I'm a managing partner. There's a avenue for them to vote you out. Like, they could fire me. Technically, except if you have effective control of the membership. So. And we'll talk and we'll talk about this. So in the early days, those first bars, like the very first one, I owned 70%. My dad owned 30%. Right. The second one, my friend owned, you know, a chunk. I owned a chunk. And, you know, it's like My friend owned 10 or 20%. I owned 31% or whatever. And those other guys own the other part. And the third one, it was me and my dad. And when I did that third tailgaters, my dad was like, hey, I'll take 50%. And I'm like, no, you'll get the same 30% deal. You could have had 50 had you been nicer on the first one, but he was 30. And I sold 10 to my friend, and I was like, the remaining part. Okay, okay. So I sold. I was like, 60%. And then we can jump around here. But the Affordable Care act came into existence.

[A]

What year did that come in? Was that 2000?

[B]

I don't know. Somewhere around this time, I will tell you this. The Affordable Care Act, I decided to tackle it a little differently. I decided to make nobody a majority owner of any of my entities. Entities.

[A]

Okay, so you decided to make nobody a majority owner of entity.

[B]

Any of your entities, and different investors in different ones so they would not combine for purposes of the Affordable Care Act.

[A]

Get into the details of that. So I pulled up the Affordable Care act as a result of significant effect, most notably its historic reduction in the number of unshoot, uninsured Americans through medical expansion in the health insurance.

[B]

Talking about this basically as a small independent. They basically said, you have to provide insurance. Right. Or you have to pay a $2,000 penalty per employee over so many employees. But you have to have at least 50 employees. Yeah. And you get 35 exemptions per employer, not per location, per employer. Very important definition. Because what. What happened with it is, is if you could be nobody, if no one, if there was no common control and there was no majority ownership, my locations did not combine for purposes of the Affordable Care Act. So basically, and this, we jumped ahead to 2015-16. This was more of a 2015. Yes.

[A]

This is 2014. 14 is when the Affordable Care act came out.

[B]

Right. And so it was a 15 issue. We'll get there. But I structured everything from then on and restructured everything that I had to sell off more pieces. So I found some More friends to buy more pieces.

[A]

So you're making sure that every entity had different owners so that you going.

[B]

Over that me and my father could not own more than 49% of any location. Okay. Okay. Because your parents combine with you for purposes of stock calculations. Your sister and brothers do not. Okay. So you could sell to them. And it does not combine for purposes of ownership calculation.

[A]

So you intentionally stayed under 49% so you wouldn't be.

[B]

So, so now you cut down your, your take home money because now I'm selling chunks of business off, but I sell them to friends. 10% to you, 10% to you, you know, 20% to you. And, and that's. From then on, every time I do a deal, I would go find investors.

[A]

Okay.

[B]

And the same five or fewer couldn't invest in two or more. So you always had to bring in 25% new, new money.

[A]

And that was to keep the certain percentage of ownership below 50%.

[B]

Yeah. And below the same five or fewer not owning 80% of multiple. Okay. It's a Treasury rule for common control, for defining common control.

[A]

And under 50 employees.

[B]

And under 50 employees. Or I have some locations that are over 50 employees today, but some of them are part time, you know, and I push it. But now. So the answer is I might owe a small penalty. You know, like after you use up your 35 exemptions, after you use up your PTEs and you calculate everything out, you only owe this. So by not offering benefits to my employee, and you might be saying, oh, what a horrible person you're not offering.

[A]

I was like, he's going to get some pushback on this.

[B]

And, and the answer is, well, at that time, especially the insurance that they required you to offer for the Affordable Care act to make the minimum, you only had to offer this 60%. Blah, blah, blah. You had, the stuff you offered was shitty. Okay. It was actually like the employees wouldn't want it. But if I had offered it, okay, you had to get a certain amount of uptake and it would cost you money and it would have to raise your prices. Right. And people are like, well, that's being irresponsible. Blah, blah, blah. First off, guys, restaurants are not large businesses. They should have never defined it at 50. It was a horrible restaurant. 50, come on. And we're a large employer.

[A]

Yeah.

[B]

We could go on about this for a long time. It should have been like a hundred.

[A]

Right?

[B]

Okay. But basically by me not offering it, people then qualified for the exchange. They could go out and get better and get the subsidy. Now we'll talk about subsidies. Today is a whole big problem because they all, it's all gone to crap.

[A]

But so you're actually looking out for your.

[B]

We employ, well, we employ, we employ a ton of single moms. A lot of times they have benefits and things. They don't want any of this. They certainly don't want crappy insurance. Right. Okay. Or they already get it from their spouse. Or I employ young people who just think they're bulletproof and they don't want anything. Or by me not offering it, you can go on the exchange. You make 30,000 a year. Go on the exchange and get the gold plant. Get the, you know, you can get your subsidy and you can get better insurance than what I could offer you because when you offer it, you, you, they have to pay for part of it too. Like 9% of their annual take home pay can go towards paying for their insurance. And, and it basically, it's like I'd rather have low prices for all my customers and keep cheap drinks and keep everything going and that, that's the path we went.

[A]

Are you familiar with Dunbar's number? No, it's. So it's basically this idea that people are optimal in certain groups of like numbers. So it's from counting down from 150, which is where people basically, that's the, the most amount of relationships that a person can handle is about 150 meaningful relationships. Meaning you go out of your way to see this person at least once a year. The amount of people that you would invite to your wedding.

[B]

Right.

[A]

150. Then the next circle, the centrifug circle below that is 50 and the next one below that is 15 and the next one below that is 5 and the next one below that is like 1.5 or something like that. And in those 1.55, 1550 and 150, like you have to get to that next group as fast as possible when you're scaling. Because in between those numbers, things just don't work. And I saw that all of your locations had about 50 people working for them. I was like, I wonder if this is strategic because that 50 employee number seemed, there seems to be a magic there. And when you get beyond 50, there becomes divisiveness. People need like there, who's the leader, you know, and you have to get to 150 with new systems and structure in order for it to work. And then the next number is like 500, then it's 1500. It's like this weird thing. It's, it's Robin Dunbar established this thing. It's a. He writes about it in the social brain. Brain. And I was like, I wonder if that was strategic. Because I was like, you can. There's. I think there's something to be said about that number of 50. That's also magic when it comes to scale. It seems like groups of people work really well. If you stay under that number. When you hit 50, open a new location. But now there's, there's, there's benefits in insurance too.

[B]

I didn't even know certainly the lower. So my smaller locations that employ like a team of 40.

[A]

Yeah.

[B]

Probably are more cohesive unit that works better together and covers for each other. And the largest locations that are 70, 80 people with total, you know, but with part times and everything mixed in there and, and they're not as cohesive. You know, the 80 number is not as.

[A]

It's weird.

[B]

It's weird. You are 100% right. And now when I'm there and I'm personally involved every day and know everybody's business, business, it's different. Late in later years, you know, when I no longer know the name of everybody that works for me, which is sad, super sad. But it just got to. I think also it happened as, you know, at 52 I could remember 400 names. At 62, I remember.

[A]

Yeah. I got to the point where I like, I can't remember, like, it's hard to keep track of my past guests and all the people I've spoken to. And you got like 1300, 1500. So like, if you're at say 50 employees, the goal is to get to 150 as fast as possible. And for some reason, I think it's, it's a way we divide and conquer. But for you, 150 would be three locations.

[B]

Right. I, I've told people along. Well and like the Stadium Bar and Grill is a 1012 employee kind of place. You know, the, A lot of little places, you know, can operate with smaller teams. It's only when you build the big sports bars that you hit the big numbers.

[A]

But what's interesting, you know, I've identified and other people who study scale in the restaurant industry have identified that, you know, the, the real points of like evolution are obviously zero to one getting started because that's. You're learning how to run a restaurant and then you can get to about three and then you hit a wall and you have to figure out the. Build the house before you move into it. To get to like to get to 10. Right.

[B]

There's no doubt that the second and the third is the hardest operationally because you don't have the depth of staff.

[A]

Right.

[B]

And when you get to the four or five, when I have a bunch of little, you know, when you have six things going on, if somebody doesn't show up somewhere, move somebody around. Right. You know, it may be inconvenient, but your depth, your ability to handle problems, you know, the odds of me having to go in and manage a shift today are near zero, right? Not zero, but near zero. Whereas I could do it if I had to do it. But you know, there. But in those early years, the odds of me managing a shift was Almost a. Sure 100. Yeah.

[A]

It is just interesting because there is a correlation with the Dunbar's numbers and the points at which people start to hit resistance and scaling their restaurants. So like that, that 1 to 3, getting the 3, then 3 to 10 or 11, and then the next one is like trying to get, you know, beyond like 20 or 30.

[B]

Right.

[A]

And those numbers tend to correlate depending on the, the size of your, your units. Maybe you can have more units if you have a smaller footprint, but there is definitely correlation. I was just curious. I digress. But before we, we go forward, I want to just kind of point out your, your timeline right now. So on the timeline it's 2014, you start to kind of figure out how to work the Affordable Care act where it actually benefits your employees by not getting, by keeping the numbers under a certain.

[B]

That was our, that was our take. Look, it's all about money, right? Right. If, if I can charge 10 or 20% less than everybody else and not just be giving it to the government in the form of those $2,000 a person penalties, which was, doesn't benefit anyone.

[A]

Right. And honestly, this is like, this is such a moot point anyway because it's like putting a band aid on a fucking axe wound. Like, there's the government first.

[B]

First off, there's a, there are ton, there are a ton of small independent restaurants that, that had more than 50 employees who never have paid the penalties. And I think the government just now is getting around to starting to send out letters going, hey, did you know you owe these $2,000 times, 20 times the last five years? Yeah, I'm starting to see and hear about those things. I don't know. Obviously the shutdown probably wrinkled, probably slow on things.

[A]

Yeah. So it is my forgiveness in my school loans, unfortunately.

[B]

But it's interesting, you know, and really it's just one of those things we did where we said, look, look, we're gonna have partnerships. And it's just the strategy I developed and said, yeah, we'll go down the road. And it's helped me in the later years because if I want to open a place, I can choose to borrow my own money to do it or use my own resources. Right. Or I can just go get investors.

[A]

Right now you have the ability to get that money because you have a proven concept. You can attract. Don't go get money. Attract money.

[B]

Right.

[A]

Get it. Be something worth investing. Investing in.

[B]

Correct. And so now I was hoping, of course, that. That maybe they were going to make some changes to the Affordable Care act this year. I've been waiting all year to see what they would do, but it has not. You know, it doesn't look promising to be helping the employer. You know, they got rid of the Affordable Care act mandate for the employee. They're no longer required. Remember how you were required to buy insurance before you got penalized? Yep, they did get rid of that, but they did not get rid of the employer mandate.

[A]

Interesting. So I think in the timeline, we got to the point where it's 2014, you start opening more restaurants. 2013, you opened two pools.

[B]

Yeah, we back up in there. The Stadium Bar and Grill was one in 2010. And in 2013, my 40% partner, that silent partner.

[A]

Yep.

[B]

Decided to buy it from me.

[A]

Okay.

[B]

And I was like, okay, here you go. And then he had an accountant that wanted to get into the bar business or something. And what was interesting about the stadium was, remember, it was 30, 40,000amonth. I bought it, had it 90,000amonth. I brought in a general manager who was a real promoter, a go hung promoter. And this is a little hiring thing. He came in and. And this was 2013, probably, I think 2012. And he came in and he's like, I need to make $75,000 a year. And I looked at him and said. I laughed and I said, this is a little bitty divey bar. The Stettle Stadium bar. Said it's doing $80,000, $90,000 a month of revenue now. Said the GM job here is a 45, $50,000 a year job. It's like, this is what it is. And he's like, well, I need to make 70. And I'm like, dude, then you're not gonna work here. I'm like, unless you can move the needle to this much in sales.

[A]

Right? And I love that, man. And don't say no, but. Okay, you want that? Then let's go.

[B]

I Said this is what it would take to pay you that salary. And he's like, I can do it.

[A]

Nice. So how did you approach that? Was it profit sharing or how'd you.

[B]

He literally took me from 90 to 150,000amonth in six months. So you just paid liquor, beer, wine, and I just raised his salary and then he imploded not too long after that. Because he was a fabulous promoter and not a good HR person.

[A]

Yeah, I mean, you need a team, you need a.

[B]

He, he brought the, he got the staff, the, the wait staff. He would hire 18, 19 year old girls, got him to wear bikinis and.

[A]

They'Ll bring in business pack the bar.

[B]

Packed it.

[A]

So where did, where did we go wrong with hr? Was it just filing the paperwork or was there something else going on there?

[B]

No, no, no, he, he didn't drink. He, he was not a someone drinking. Because we've had plenty of managers who have problems with alcohol. Plenty of problem managers have problem with dating staff. That's not, you know, secretly, you're not supposed to do it. There's plenty of war stories on these things. But basically just, just demanding. You know, his, he had a great philosophy. I mean, not people management, but he's like, every day here is Disneyland. In Disneyland or Disney World, everybody comes to work, they got the costumes on. You never see anything. You never see anything but the show. Okay. And he would just demand people to deliver that show. And it just, it's just, everyone's got a breaking point. We're.

[A]

Especially when you're trying to sand her.

[B]

My philosophy is, let's not be assholes. Yeah. Okay. And if I, if we hire, let's try to get rid of them as quickly as possible.

[A]

Right?

[B]

Yeah. Because. And today that's even more than ever. I just feel like we're, you know, we're in business to be nice. Yeah, let's be nice. So. That's right, let's try that. I had. Anyway, so that one the. It was making really good money. So my partner buys it and he brings in his accountant who wanted to be in the restaurant business was up.

[A]

To like 120,000amonth, 150,000amonth.

[B]

Music is loud, girls are scantily dressed. This is back when the restaurant scene was still growing. It was their early, you know, it wasn't even Twin Peaks crazy. By then they were growing.

[A]

It wasn't criminal to use sex to sell.

[B]

And, and it was, it was going well and they bought it and they, the wife of the accountant came in and she's like, these girls can't dress like this, and the music's too loud. And they chopped their sales in half within three months. And my staff that was there was like, what the hell did you do to us? So literally, it was November of whatever that year, 2013. I'd sold it a few months before, and I was drinking with a customer at the stadium, and he's a motorcycle rider guy, you know, with his cuts on and stuff. And he's like, hey, there's a bar across the street. I think that it's all fucked up over there. He took me over there, and we walked in and we're like, who owns this bar? And it was two mules. And who we thought owned it didn't even own it. They were just running it. And a week later, the owners are in my bar, and they're like, yeah, we. My son opened this a year ago, and we spent, you know, a couple hundred thousand dollars, and it makes no money. And I'm like, yeah. And I'm like, tell you what, how about you sell me the bar? And they're like, great, we want to sell you the bar, but I'm not going to pay you any money. They're like, what? And I'm like, nope, I'm not going to pay you any money, but I'm going to fix your bar, okay. And I'm going to keep you owning 40% and pay you on the profit. And pay you on the profit.

[A]

This is. What was it? Corey Sanchez from Main Street Millionaire. This is her approach. If you're. If you're taking over a bar, go be someone's exit strategy. No money down, and just take over and then give them a check every month. Here's your cut. Here's your cut until you And I pay him back.

[B]

And I told. And I told him, you're. You're going to start getting a check. You're. It's not a loan, it's not an investment. You know, you're now a partner 40% forever. And for two years of that way. And then the dad bought the business back from me for his son because he'd gotten a girl pregnant and he needed all the income from the bar. Yeah. On the bar. And the bar still chugging along. And so many.

[A]

Yeah, go ahead.

[B]

Yeah. And. And I sold another 10% of it just to another friend. In other words, just to get the percentages right. They. I think he. They had 45. I sold 10 to a guy, and I had 55. 45. No. Or I had. Anyway, I had to have 45, they had 40, somebody had 10. Anyway, we kept it all. So there was no, no majority.

[A]

There's so much opportunity right now. Boomers, they are, there are a lot of boomers and a lot of them own businesses on Main street, you know, and Main and Main. And they, their kids don't want to take over the business. They have no exits plan. And you know, if you just start approaching, if there is a place in town that you admire, the location, the vibe, just go in and start establishing a relationship. You know, start there and find out some information. If it seems like the, you know, like, oh, what's your plan for the future? Just start collecting data and you know, establish rapport and make an offer. Like, what's this place valued at? Like, don't try to screw people over. Create a win win. Like you want to get out of this? You're getting old and tired. I love this place. Like I'm looking to get in like that approach I think is the way.

[B]

And the ones with profit, of course, are a lot easier. I'm. I'm only looking at the ones that are broken, right. Seriously broken. I walk the Two Mules bar. When I bought it, they had built the bar for walk up height and then they put bars, regular bar stools at it. Awkward when the female sat there. I think their neck was at the bar height. Okay. Literally we bought it or made the deal. Didn't really, you know, made the deal. And two weeks over Christmas we closed it and I chopped the bar down, put the pool tables where they should have been all along. Destroyed a big office that they had put up front where I'm like there should and made a micro office in the back, you know, where one person could barely stand in it. You know, you do not make big offices. That's just a strategic point. Put it right where you don't want.

[A]

Any orders come in.

[B]

Yeah, you don't, you don't want to make an office where anybody can hang out. Right. I've inherited a few places that have offices like that and just, it's, you know, I know from the get go, do not make, do not make comfort. But it worked out there. And then about this time back and there's a little story I battled with. My very first bar happened to be in the city limits of Conroe, Texas. And I normally like to be in the county because there's a lot less regulations to deal with. But the city came along and passed a no smoking ordinance. And I'm in the sports bar business where we have smoking, and this is 2010. People smoke in bars, things like that. And I'm like, wait a minute. Everything else is in the county around me. I'm in the city limits because you came down and annexed this one little corner of the world. And I'm like, I got involved at city council and would go up there and like, what are you guys doing adopting this? They adopted a no smoking. No smoking on patios within, like, 50ft of the doors. It's like. Like, you can't even smoke on the patio. That's ordinance that they did. I was up there and. And they passed it, but they delayed the implementation for six months. And I was like, what. What is this? Like, okay, now I'm having to get politically interested. This is the very. The original tailgater. The original tailgater. And I had to literally learn a little bit about politics in the local community anyway, meet a few people, blah, blah, blah. And we fast forward six months. And when it's time to implement, the city council does say bars that sell 51% or more alcohol are exempt. So common sense prevailed. But it's interesting that it doesn't prevail by going and talking at city council meetings. It prevails by meeting people.

[A]

Yeah. At the end of the day, it's all relationships. But this is going back in 2010, so we're going to rewind.

[B]

Yeah, just. Just that. And I brought it up only because me being in the newspaper and the city council, because a few people that work for the newspaper in town smoked, and they were like, you know, they were calling me up. Do you know, city council's doing this? And they do this. And anyway, some people call me up around then and say, hey, we're starting a new chapter of the Texas Restaurant association here in this area, and we think you should be involved with us. Right. You're standing up there, you know, arguing over politics. And so the restaurant association stuff comes in and 2011 to 20. Yeah, right in there. And so we. We form this new chapter. They get you going. But the important thing here is I meet a guy that does credit card processing. He wants to sell to restaurants and stuff. I'm, you know, back when you could select your processors.

[A]

Right.

[B]

You know, there was nothing bundled back then. All right? And he was. He had a good deal. He had a, you know, 15 at this time. You know, 15 basis points in a nickel. And just. That's the deal, you know, like, let's go get customers. You know, boom.

[A]

Catch.

[B]

No, there wasn't. And for even Little independence. And he just made that deal and kind of stuck with it. Anyway. He wanted to be more involved in the restaurant association, but he's an affiliate, you know, because he's just, oh, I went in there. Texas restaurant association, because you get to sell more credit card processing, you know, more people you can meet. But anyway, he's riding with me to these restaurant association meetings as an affiliate member. We're chatting and talking, and he's like, he's found this lease space. Here we go. We found a lease space. Right.

[A]

So which location are we talking about now?

[B]

We're talking about 2014 and the Republic Grill.

[A]

Okay, let's. Let's tap the brakes real quick. 2014, Republic Grill, you're four years in to owning. You've opened, you've bar rescued, you've sold. In 2014, how many total restaurants do you own before purchasing Republic Grill?

[B]

So there's the first tailgaters, the third tailgaters, the stadium bar and grill, but it had sold. And two mules.

[A]

Two mules. Okay, so you have four total restaurants under your belt. Four years into being a restaurateur bar owner. Real quick, just to kind of give the Hit a timeline. Just the.

[B]

To.

[A]

To kind of give the. The listeners an idea of where you are in 2014 and where you go throughout the rest of your career. Let's just go down this list and just. I just want to kind of paint that, like, because we got a lot to unpackage. We're already at it.

[B]

I know. I'm sure. I'm sure most people are probably already tuned us out. Okay.

[A]

So much I want to talk about.

[B]

You're gonna have to edit this into a second one where it starts at the interest.

[A]

We're going over three hours.

[B]

We leave all this other stuff out.

[A]

Yeah. Now there's. So this is like zoom at 30,000ft. So you're about to get into opening the Republic Grill in 2014. 2014. You also do a bar rescue, halftime, sports bar. Another tailgaters number four opens in 29, 20 spring, whatever.

[B]

Right. So. So at the time of. So basically what happened in 2013 is you start. You get. You still have lots of people excited about tailgaters. So I formed another investment group, was looking around for land, and that's the fourth tailgaters that actually finally got opened in 2014. But it was developed through 2013, and it was the first time where I bought the dirt.

[A]

Okay. A hospital buys out the original location lease. What? Original tailgaters?

[B]

Yes, the original tailgaters closed in 2015, okay. It was super sad. It was a packed house. People are crying. There had been a lot of tailgater babies made over those six years by the customers.

[A]

You opened your fifth tailgaters, Willis. That was another rescue. A bar, restaurant, or restaurant rescue that you converted into a tailgaters, I presume 2015, 2016, you run into other partner problems, lawsuits. We'll get into that. 2017, you opened your six tailgater. I'm not even gonna try to say the name of that town.

[B]

Yeah, Kirkendall did. Just his name. And it had been a previous bar for a year.

[A]

2018, you opened Thirsty.

[B]

I bought the. Took over Bart Rescue. The Thirsty Texas.

[A]

2019, Citizens Grill number two, Citizens Grill.

[B]

Wait, Citizens Grill.

[A]

The Republic Grill is different than the Citizens, Right?

[B]

So Citizens Grill is down the corner. Is the successor to the Republic Grill.

[A]

Got it. And we'll get into that Minus.

[B]

Minus the partner.

[A]

Okay. 2020 to 2022, we're just trying to survive Covid. 2023, you opened your last 2023, we.

[B]

Opened good Charlie's Oyster Bar Seafood kitchen.

[A]

Which is where we're sitting today.

[B]

We're sitting today. And it was a. It was a restaurant that failed during COVID and. But it was just concrete in here.

[A]

And then 2024, you do another bar rescue, Parrot Pub. 2024, you do your seventh tailgaters. So we're up. And now you without.

[B]

Without a kitchen because it's waiting on water and sewer services. And the AP Tailgaters opened up on Lake Conroe this year. This year. It opened in April, and it's a 7,100 square foot. It's the shiny example of all the culmination. Everything I know. And it was built from scratch, not a rescue or inherited. So, you know, so many of my locations are. Had Been something else along the way. You just make do with what you can have.

[A]

I mean, I do want to get to where you are today eventually to kind of do a snapshot of what your business looks like today. But I don't want to skip over any like. Like really transformative times for you where you kind of shifted the gear into who you are as a, you know, improving as a operator.

[B]

Transformer. Transformer time is in 2016, when. When the. My Republic Grill partner there we opened up the first one and two years in, it was going like gangbusters. 20% profit, doing so well that he decides he doesn't need to be in the credit card business anymore. He's ready to be a restaurant operator, and he Wants to open a second one. And he had picked a spot for it, and I told him it's a horrible spot.

[A]

Okay.

[B]

And so we. Then he came back and just. He devised a plan to buy out all the investors because I taught him how to sell to investors. We sold through limited partnerships, little 5% shares in it. Boom. And anyway, he went and bought everybody out, including me. And he thought I should let him out for a. Let him have it all for a low price. And he had to pay me. So it probably made him unhappy because there was no buy sell agreement per se. There's just the. Well, I own 25% of it, and it's super successful. You're gonna have to pay, you know. And Anyway, so.

[A]

So 2014, you opened the Republic Grill, and by 2016, you're breaking it. And there was this one location, or.

[B]

Were there two locations at those one location? He wanted to do a second one, and he's off to do a second one and. And buying me out.

[A]

Okay. What was going on is, can you share a lesson from this partnership, A lesson learned of why I would. Cause you go your own ways.

[B]

Yeah. Yeah. Well, I mean, he's a micro. He. His management style is very micromanaging, which works real well for one or two spots, but not. It doesn't scale at all. And. And my strategy has always been I make half the profit, like the 10 cents instead of the 20 cents, but sell way more volume. And, you know, and I'll do a little ad for John Taffer. I attended one of his seminars in 2008 or 9. And the thing I remember the most from that is you don't have an expense problem if you get more butts in seats. Okay? And so I've lived to that. And even when I built my first restaurant, I was playing some poker back then. I would bring blueprints to playing poker because these old guys, these old guys sitting around the room, I'd roll my plans out, say, hey, I'm going to build this sports bar. Here's. Here's what? They'd look at it and they'd look at me, and they go, not enough butts in seats. And I'm like, huh? And I would go back, and I'd come back the next week, jammed in more tables and chairs, and they're like, you know, and that's it. And so I would say, between the. Just sell your way out of a losing situation. In other words, throw more volume in now. You can throw today. I know you can throw more volume on losing. And Just lose more money. It can be. It doesn't know how to capture that volume. But in the bar business and selling alcohol, usually selling enough will cover a lot of cracks. Right. Right. You know, so.

[A]

So you. This guy wants to micromanage so that doesn't. You see a good.

[B]

Right. And he really wants to do his own thing. And, and that at that time I'd. What did I do? You know, I. I think changing life, partying some myself to this, that. But some of my investors in some of my. In the tailgaters to get the fourth. So to. So the story is tailgaters number four introduced some new outside investors that I had not done business with before to buy the dirt. The guy that wanted to sell this old Sizzler that had shut down and had been gutted. It was just a shell building, but it was in a Kroger parking lot with tons of parking lot parking. Tons of parking. I need my 120 parking spots. Okay. I need. Just trust me. A major failure for so many restaurants is you go in a strip center that gives you not enough parking and you'll never make enough money.

[A]

Yeah. And even if it's a big parking lot, count how many restaurants there are that are sharing that part.

[B]

Yeah. You can't. You cannot go into shared spots. People are not gonna walk. And if you're the only restaurant, that's it. There's.

[A]

Make sure you stay the only restaurant. We put that into the lease.

[B]

We can talk parking lot parking. I'll even write into leases. If you reduce or give up any of the parking spots by more than like 10%, my rent goes down. You know, not everybody will go for it. But. But no if they'll go for it.

[A]

Your livelihood hinges on that part.

[B]

No, I, I must have enough parking. And I knew that from the get go. You got to find the. The hardest spot in finding a location is the hundred parking spots.

[A]

Absolutely. Yeah. Unless you're doing qsr, you're a big part of your game is takeout and delivery.

[B]

There's infinite throughput and now there's takeout delivery. Everything's changed today.

[A]

Yeah.

[B]

With. With that. But I would say if you, if you go back and, and look at this now I'm. I'm buying land to get the seller to sell. I Hatch, he owns eight Denny's restaurants and, but everybody likes tailgaters. You know, you like the name. You like, you have that good vibe. You have. You have capital in your name and excitement in the area. So I got him to be like a 5% partner for reduction in the sales price and brought in another outside investor for another piece. And we got built, we got opened. The hospital bought us out of the first one. And I had done a. When I again, the very first tailgaters, I did a 20 year lease. Like, I'm not investing my life Fortune without a 20 year lease. So the hospital had to buy out 14 years of my lease. They didn't buy the business. They just wanted me to leave because they needed a driveway right where my building was at. And they literally. And I said, I want to be a bar, sports bar, right next to this big beautiful hospital. Are you kidding me? Doctors, nurses, business. You know, I already had one hospital not that far away. It was another one. It was like sweet. They're like. And basically they said, no, no, we gotta, we need your spot. And this is, you know, medical has more money than the rest of us all put together, right?

[A]

I mean, you had a lot of leverage to be able to.

[B]

I did. So what I did, I calculated my profit it for the next 14 years, including growth discounted to today's dollars, and said, that's what I want. And they said, that's too much. And I said, then I'm not selling. And then a couple months later, they said, okay, yeah, well, good for you.

[A]

For.

[B]

There you go.

[A]

Your value.

[B]

Well, it was a crazy amount for lease, you know, but you just like, you felt like you had all the leverage if they really wanted it. Yeah, you want it, you know, and.

[A]

You can have it.

[B]

Here's the price, you know, there you go. So they, they did it. And that, that, you know, that money helped fund the tailgaters for construction over here. I shifted money over there. Didn't have to. I was doing a bank loan. That was the first time the bank actually would loan us money to, you know, dirt, you know, to buy the land and do the build out. And then you had to do these draws. It was. I learned something interesting about banks. I didn't really know how it was going to work. I had like a half million dollars. And then it's like, they give me the loan and they take my half million dollars. I'm like, wait a minute, I was going to use that. What the hell just happened here? No, no, you have to give us all that money that's going into the project and then we give it back to you along with the money you're borrowing on a draw schedule. And I'm like, what kind of stupid shit is this? I'm like, oh my God, this is.

[A]

The stuff, there's just no matter.

[B]

I learned. I learned a lot about more money, more problems, right? Yeah. And the administration and the oversight of the bank. I was like, oh, man, all this crap. So it made me not want to go borrow money again. You know, just get investors, people that like, here, here's your investment. Now, they're not loans. Some people in some of my other restaurant buddies are like, why do you give away parts of your business forever? I'm like, well, they took a risk. Yeah, they took a big risk.

[A]

What is you think of the biggest reason you choose that approach? Because of the. The lack of hoops and things like all the. Why? Why that approach for you? What is the big benefit? Is it because you can lean on relationships and not on all the red tape?

[B]

Yeah. I mean, look, creating an LLC is $350. Yep. An operating agreement has now gone through enough lawyers. It's from the different investors. It's dialed in. Yeah, I just changed that. I don't even have the lawyers look at it anymore. I just changed the name, Right?

[A]

Yeah.

[B]

And the percentage is the deals and the people just buy in. And here's the money and let's go down the road. Partnership agreement. But now there. Well, now there are buy sells and there's drag alongs. Yeah. And there's voting rights that do not extend to spouses. If you die, I'm putting you on the spot right now.

[A]

Would you be willing to do like a walkthrough and how you structure your partnership agreement like a later date or like.

[B]

Sure. Oh, yeah.

[A]

That'd be fun.

[B]

Yeah.

[A]

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 consistency builds trust with your guest 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 Meese paints the picture of perfection and is the one source of truth for your entire, entire team. By locking in recipes and training before service starts, Mies makes sure every dish is consistent, every team member is aligned, and every location runs like clockwork. So when the report rolls in after the 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 un unstoppable. That's G-E-T M E-E-Z.com unstoppable restaurant owners. What if I told you there is a way to lower your prime cost by a thousand dollars month over month and get paid a thousand dollars? That sounds like a deal too good to be true. But that's exactly the deal that Restaurant Systems Pro is offering 10 of my lucky listeners. So why are they doing this? Because they consistently help their clients get between 15 and 25% profit in their business. And when they approach new clients and say, I can do the same thing for you, met with a lot of resistance. And because it sounds too good to be true, most restaurants think if you do between 5 and 10%, you're doing good. So to hit 15 or 25%, like what do we have to sacrifice? What, what scam are you throwing at me, sir? No, thank you. But the truth is they really do help people hit these numbers. And the way they do it is by having all the most important systems that are tied to profitability fully integrated into an enterprise solution. I'm talking like, like counting inventory, scheduling, checklists, training systems, general ledger, balance sheets, costing cards. So when you have all those systems dialed in, ironclad, tied, connected, fully integrated in an enterprise solution, you get data. And when you have data, you can make little tweaks here and there. And those little tweaks, you can see the fruits of your labor, the, the effects of your efforts. And that's how you hit 15 and 25% profit. And on top of all this, they also have support, which is unheard of in today's age. So you get all these things compound that help you hit that 15 to 25%. And if I have your attention, keep listening. Join the restaurant systems pro 30 day prime cost challenge. And if you successfully improve your prime cost by $1,000 or more compared to the same 30 day period last year, they will pay you $1,000. If you're listening on YouTube, iTunes, Spotify, find the show notes and we will have a link titled restaurant systems pro 30 day prime cost challenge. Click that link and get signed up today. Only 10 spots, guys. Do not wait. Get your spot, lower your prime cost by a thousand dollars and get paid that $1,000. They're actually calling this a reverse guarantee. Get on it.

[B]

But, but, but we, we get there the tailgaters for but. So one of the guys that I brought in had owned a bar down in Houston and he's an older guy, 60s, and him and his, his wife, they're like, like they're investors, right? But then he likes to meddle. He he's like, he wants to manage a location. I had bought this Halftime bar and I. And I brought him in for like half and I said, just little bar, 10 employees, whatever. But he's like, I want to go manage it. And I'm like, how about you just buy it?

[A]

How do you approach those conversations? That's got to be awkward because I.

[B]

Mean, well, I had learned then by then, like, you know, from the divorce back in 2012. How about you just buy it?

[A]

Yeah, I've been down.

[B]

Okay, change the name and do whatever you want to do, but it's not going to have my name on it.

[A]

Yeah.

[B]

It's not going to be associated with me.

[A]

Yeah.

[B]

And. And so they did it. And he also owned the part of the Tailgaters number four and stuff. And then the employees that are there don't want to work there for them anymore. And then they think it's me telling them not to work there. So then they're mad at me. The people that bought the. Bought it because the employees are like, I don't want to work for people that are assholes.

[A]

Right.

[B]

Or problematic or what. Right. You know, and that's why I'm selling the bar, because I'm not going to make you a manager because you're going to run business different.

[A]

If I'm reading between the lines.

[B]

So the less. So. Yeah.

[A]

Really be rigid about your agreements. And if you're going to take this approach of getting investors and dial in that partnership agreement, I'd love.

[B]

Right. Well, if they want, if they want to be run a bar and restaurant, okay, let's go buy you one and you go do your own thing and it not involve any of us at all. So. So what happened was, is they bought it, they get a little resentment. They're running it. I mean, it's doing okay, but they're probably not making any money.

[A]

The terms in the beginning, it's.

[B]

That's why I'm having you buy it. You can run it your way. In fact, they get kind of mad and they're like, they're going to show me how to run it. So they're going to show me that they know how to make more money. Right. You know, it's like because we're chugging. When we first bought Halftime, it was just a little crappy bar. It was making small amounts amount of money. And they're like, hey, we can make more money. And anyway, it leads to then them going on the Tailgaters four, that's open, doing a couple hundred thousand month And I'm using it to pay down debt, not paying out much in the way of LLC distributions. And they're like, we can take it over. And they get with the Denny's guy, and they're like, we can take it over. You know, and again, they. They don't own. Between the Danish guy and these people. They do not own 50%. I mean, there are minority owners, but they come along and they send a letter to the bank saying I'm no longer the operating manager, and they take over the bank account illegally. And it's like, nobody has sued anybody yet. But it's like, okay, so now we're like, just because you were mad at the Halftime deal, and now we're doing this. But it's like. So they bring in forensic auditors and they audit the hell out of everything because I'm driving a new 2016 Tesla at this time. It's like, 2016. Yeah. And they're like, who paid for that Tesla? And I'm like, the Republic. Real money that I just sold for a lot of money. I. I paid the tax man a lot of taxes that year, you know, And. And anyway, it turns out that they just did a bunch of wrong things I'm probably not supposed to talk about in a podcast, because it's all. All agreed to, and they just paid me.

[A]

Yeah. So, I mean, what's the under the underlying.

[B]

But the underlying lesson is just to really have really good agreements where anybody can buy anybody out.

[A]

Yeah.

[B]

Because if they really had that trigger, why not just execute the buy?

[A]

Right. And I would love to get you.

[B]

To come talk about.

[A]

I think that'd be a really cool mentoring session if you're so.

[B]

But yeah, but they learned, and it's like, they learned in. And I mean, you know, they made payments for three years, and there you go.

[A]

I would love to get into.

[B]

But they bought. They bought. They bought that location. They bought the Halftime and they. The Willis. We packaged them up a nice big thing. They Two mules sold at the same time in the Republic Grill. So I actually went from having a lot of restaurants in 2016 to having a lot of lot less restaurants in the end of 2016.

[A]

And the Republican Grill becomes the Citizens. That's still going today. You have one citizen.

[B]

Well, Republic stays. I opened citizens in 2019.

[A]

Got it, got it. 2019. So today you have one citizens.

[B]

Yes.

[A]

Eight tailgaters or four. There were eight in total. That's right. So now you're at five total locations, plus you have this current good charge restaurant that we're in.

[B]

And then the Thirsty Texan and Paul Parrot Pub.

[A]

So.

[B]

And those are. And those are just two little neighborhood dive bars, bar rescues there. Yeah. And. And if the opportunity comes along, you grab them. If there is no opportunity, I'm not actually out looking for them. Right. It's like somebody's just kind of got to say, hey. So what happened was the. The fifth till the six tailgaters. What's called Tailgaters, Kirkendall. There was a bar that opened near where I was living at the time called McArdle's. It had been there a year. It sucked. It's in my neighborhood, my local bar, where I could stop in to have a drink on the way home. Sucks.

[A]

Yeah. So you have a vested interest.

[B]

So, you know, at the. After a year, you know, you just literally walk in and go, who owns this place? The same story as two mules, you know, and you find the investor and he doesn't want to stay in it at all.

[A]

Same structure as offering to not pay.

[B]

I offered to not pay anything. He's invested like $750,000 and has nothing.

[A]

Just collecting a paycheck.

[B]

He just was an investor. He's a multimillionaire. He's a guy that made a lot of money in life. He's in his 60s and he did this bar and he did one other bar. And he had the time of his life.

[A]

Yeah.

[B]

Until his lawyers told him, you need to not be having the time of your life. So he'd put him on their. His jet to fly him to Vegas. You know, that kind of investor.

[A]

So basically, same deal here where you offer to pay, send him a check where it's just mailbox.

[B]

So here he had an asset. There were $750,000 of build out. I said, this is an asset sale. Then you don't want to. He doesn't want to remain any owner. It's an asset sale. I add up the value of the assets, which is, you know, in a used bar sale, the value of your assets is 10 cents on the dollar, you know, and I just say, I'll make you payments for a year or something.

[A]

So you're taking front profit to pay off the total amount of the assets.

[B]

What he was really doing with getting out of the lease. Yeah, right. And even then, the shopping center still wouldn't let him off the personal guarantee. They're like, no, we're not going to let him off that personal guarantee forever. Right until the end of the lease. Well, that's an interesting thing I learned. I'm like, guys, I'm gonna come in and turn it into a tailgater. So we love tailgaters. But we're still not letting him off of his personal guarantee because we don't have to. And that's something very interesting. When you're signing your personal guarantees, sometimes you're stuck on them till the end of the lease, and that's when you can get off. You know, I might renew the lease. And at the renewal point, there's, you.

[A]

Know, what was the personal guarantee? Can you, can you share?

[B]

Yeah, well, most. Most retail leases, the personal guarantees are. You're just guaranteeing the lease. Yeah. The performance of the lease period. You owe the rent.

[A]

Yeah.

[B]

Till the end of the term you've agreed to on that piece of paper.

[A]

So here he is still paying the guarantee, and you were paying on top of that with a new lease.

[B]

No, no, no, he's. No, he's got a guarantee. He. He's just putting money into the business every month. Oh, it was losing like five grand a month. He was just putting five grand a month in. I mean, they were paying the business. The legal entity was paying its rent. They were not behind on rent, per.

[A]

Se, but it was coming out of his pocket.

[B]

It's coming out of his pocket.

[A]

He was in the red.

[B]

Yeah, he's in the red.

[A]

All right. So I want to find out where you are today. Org organizational structure. I love getting that org chart, what that looks like, how you build your organizational structure, if you can share that. And then I also really want to get into tech because, you know, you're a nerd, and you're a nerd in the restaurant industry. And I don't think you just randomly pick your. Your tech partners. So let's start with org chart. Like, what is the organizational structure today? You have lots of partners, right?

[B]

So basically, the partners have no operational control at all. I just want them to be good customers, or some of them even live far away. They're just silent partners. They just want. They just want money. Restaurants that do good, they're super happy. Restaurants that I have some that have not paid back, you know, the investments over time yet, and they're less happy. But, you know, the tip credits are good. The tax, I mean, you know, even when you send out a, you know, K2s that are losses, there's tip credit, there's tax credits, there's depreciation expense. I'm like. It's like getting a return on your loan. That's better. You know, think of it as you put it in a CD and the bank's only paying 3%. Well, you're. I'm probably giving you that in tax credit, but those are, you know, those are the bad years. Okay, but. But most of those people have invested with me in those where they've gotten their money back and more so they're, you know, you know it all. It's. Yeah, it balances the economy peaks and valleys. Right. You know, you, you, you, you, you make it happen, happen. And nothing has ever shut down, failed. Meaning even when something doesn't make enough money, keep tweaking it, keep changing it. Do not just keep doing the same thing over and over and over. Change the staff, change this, change the that, change the name. Do something right. Because, you know, you've got to until you get it right.

[A]

So, so what is your title? Do you have a title?

[B]

Just Managing partner.

[A]

Managing partner.

[B]

When you think of LLCs having members and, you know, managing a managing member, if you want to talk about legal title, managing member of each of these different entities and they all stand alone. I mean, I have a. If you want to talk about organization chart. My girlfriend for the last 10 years does, like, decorating, like this beautiful restaurant you're sitting in right now. Yeah. And. And she likes to say she's the heart of the. She actually knows the names of all the staff and knows who has kids and knows who has stuff. Well, you know, and, and takes care of those things. And, you know, and she's like, I'm the numbers guy or this or that, but.

[A]

So you're the numbers guy. She's the emotional support.

[B]

Emotional support, you know, for this, that, and, and, but really for the large units like the one we're sitting in here, you. You have to have a general manager. And basically I'll run a place like this with three managers. Okay. Okay.

[A]

How many seats does this have?

[B]

This one's. What? Well, now with the patio expansion, it's probably 200 breaks. Probably 200.

[A]

We're around 203 managers. Is there a GM?

[B]

GM is one of the managers.

[A]

So GM to ag GMs.

[B]

Yes. Got it. There you go. And executive chef. And so. Well, so let's talk about. We. We can have a whole discussion on chefs. So when I opened the very first location back in 2009, I'm like, oh, I need to hire a chef. Right. So I'm hire a guy that's from Louisiana, you know, makes a few menu items and stuff. But he's a real temperamental, as I think chef chefs were in 2009.

[A]

Right.

[B]

Because they were allowed.

[A]

That was the way to be.

[B]

That was the way to be. What I learned in that first year or two is I don't need chefs. What I need are the absolute best line cooks that I can find. Yeah. Period.

[A]

Go to the chef to, like, do a short contract where it's about getting the intellectual property.

[B]

Yes. Chefs want to create something new. They're bored easily. They don't want to make the same food. Like, I'm in the sports bar business. I have a menu. I have items on that menu. We've been making the exact same way for 15 years, and people love it. And don't you dare screw it up. And the only screw up is when you're not consistent.

[A]

Right.

[B]

Okay.

[A]

That's where the line cook comes in.

[B]

Right. And you want the best line cooks you can find.

[A]

Right.

[B]

Period. End of story. So that's. That's the secret to success.

[A]

Have that executive chef come in to develop the recipes. The then help you build systems and consistency the costing, getting everything dialed in. And then a kitchen manager will maintain the standards and also maintain the P L. The cost of goods and all that stuff.

[B]

Making sure that you're in a perfect world.

[A]

In the perfect world. Right.

[B]

Most of mine, most of my kitchen managers are not real kitchen manager. I mean, they're real kitchen managers. Don't get me wrong. I'm not insulting any of my kitchen managers. Managers. But they're not always responsible for a P L. Got it. So they're responsible for staff.

[A]

Got it.

[B]

And making sure it works. And some of them don't even know if they're overstaffing or understaffing unless I'm telling them, hey, you're spending too much money.

[A]

So what about outsourcing? So do you. I'm assuming you have a lawyer.

[B]

I have them available. Okay. I do not have a full time one. It.

[A]

And are you the accountant or do you outsource your financial services?

[B]

Until six months ago, I was the accountant and we. I have basically either one or two back office people.

[A]

Okay. And is that so like a bookkeeper that you outsource?

[B]

Yeah. So. So. So basically, like, my girlfriend's daughter runs payroll and does the QuickBooks entries. I. I run each entity on QuickBooks entirely online. And six months ago, with me opening the lake here, I finally broke down and have. Have a bookkeeping service. That is now the problem with bookkeeping services is I have a lot of entities.

[A]

Yeah.

[B]

Okay. And they all want to charge you like a thousand. Fifteen hundred each.

[A]

Right.

[B]

Okay. That's A lot of money a month, you know. You know, you know what I'm saying. To do your books. And I'm like, like I'm cheap. You know, I'm like, you know, and if you have eight entities like I do today, why am I gonna pay 8, 10, $12,000 a month to have you do my bookkeeping? That ain't gonna happen.

[A]

So if it was just one entity with eight locations, it would be a different game.

[B]

I think so. I think so. I think they would charge less per location, but they still would probably charge something thing per. Yeah, yeah. And the reason to keep. So none of my entities combined, even the tailgaters locations are all completely separate legal entities with no ownership in common. Super important when you sell lots of alcohol that nothing you want, no liability. If one blows up, it ain't taking anything else with it.

[A]

Yep.

[B]

It's just how it is. Yeah.

[A]

And also different, different investors with each.

[B]

One of those and different investors different everything else. Else we have to keep track of intercompany transfers, all that kind of stuff. Now there's some core investors and some of the tailgaters that have, you know, that are shared across because I only have to have so many different ones per. So there's a few core. Okay. But you, you, you come along and I finally broke down because basically I was either going to have to hire another accounting person, a second accounting person, which would cost you 50, 60,000 a year. And I finally found a bookkeeping company. I was at the last Texas Restaurant association show, which I highly recommend anybody go to their restaurant association shows, you know, whatever state you're in, or go to the NRA show in Chicago. But they have a good sized show.

[A]

Second largest association in the country only to the National Restaurant association.

[B]

So. And the NRA show is, is epically huge and big and multi days to look at and all the equipment. It's a, it's an incredible show.

[A]

They've been good to me.

[B]

They've helped. I've been going to the nightclub and bar show for years because I like to go to Vegas every year.

[A]

First time I ever won. The only award I ever won was in 2020, the nightclub and bar best podcast in the industry.

[B]

Congrats.

[A]

Oh, I'm saying the one time I actually get recognized, I had. They shipped it to me in the mail. They said sorry, we're not going to do it this year year. Not that it's about that, but I.

[B]

Just thought it was funny. I was of course, but would go and it's evolved. They've tried to evolve that show into being more of a restaurant show and stuff too. But you know, my goal in going to shows and I, I'm a strong believer in, you know, join your trade associations network, meet people. It's been invaluable over the years because occasionally you'll have a real problem and we can talk about some of those real problems that have happened. But I did hire an accounting firm. My accountants are actually in India, but it's a Dallas, Texas firm. But it's like $450 a month per location.

[A]

So I'm kind of.

[B]

So for 450amonth I'll do it.

[A]

Yeah.

[B]

Okay. Because the math worked out. Meaning it's for me hiring another human resource to do the accounting for 50 or 60 a year. Oh, they just offered to do it for the same price. And I get a fractional cfo. I get actual full time bookkeepers that are doing all the daily entries which lessens the load on my one resource.

[A]

I'm happy you said that.

[B]

To do that.

[A]

I do believe that the future of independence will hinge on fractional executives because it's getting more and more like you have to learn how to do less with more. So your first thought is oh, leverage technology. But the truth, back to your point earlier. You can buy the technology, you can get the hardware and the software, but you still need to know how to use that. And there is a huge learning gap for most people who are on the job market. General managers that have an enterprise solution background where they know how to onboard a general ledger do to get that thing to the point and done right. That's like you can buy a restaurant365 or a restaurant systems Pro enterprise solution but if you don't have somebody who knows what they're doing to actually do it right then you just have an additional expense that it could help you save thousands. But if you're not doing it right, it will cost, cost you.

[B]

You, you need to have like you need to be a multi unit operator to really justify the expense of like a restaurant365.

[A]

Right.

[B]

And you need to have two or three staff just to sit around to feed it. Okay. Which is where the care and feeding of it. It's just there's way more work involved in doing, in doing those systems which.

[A]

Is where I think the fractional CFO comes in. So if you're, if you're looking to scale a couple concept and that's your intention, I would say build a house like if you have legs, if you've proven a concept and you have legs and you want to scale that. I think partnering with an enterprise solution, but also having that fractional CFO who has enterprise solution, restaurant specific enterprise solution experience. And they are, they have bookkeepers, tax people, CPAs, they have certified or, you know, chief financial officer CFOs on staff. And then what happens is you can all kind of pull your, like all these restaurants can pull their resources to this financial service and that cost is way lower than would be if you were had an in house cfo. And I think. But you need those services, you need that expertise today because margins are so razor thin to be able to really wring every ounce out of your operations. But if you don't know how to use those tools, you're just going to leave money on the table. I think.

[B]

Yeah, that's what I'm starting. Well, they sell you the tools promising so much. But you know, I, it's like, here's.

[A]

Some wood and some nails and a hammer.

[B]

I bought Marge, I bought margin edge for 300amonth for Citizen Squirrel over here. And I mean they're just a couple years later, maybe they're finally getting good enough at using it. You know what I'm saying? Like the staff, because you got to get buy in, you know, you got to get them to take the inventories. You got to get them to take them to take pictures of every invoice. You got to get them because I'm trying to give them more actionable information. Yeah, for them.

[A]

Yeah.

[B]

Okay. And you know, it's a test, like, okay, let's try it over here. Let's see if I can get you guys to actually use it and use the information, you know, and to help you cost the menu the best, you know, because obviously if you're taking pictures of all your invoices, you're getting, you know, live updates, you know, you had to build all your menus, you know, and it takes work to build all your menus. It takes time to maintain all that stuff.

[A]

And you're working a 70 hour a week, then you have to build that stuff.

[B]

They got to run a restaurant too. But you know, I've changed a couple managers since I got it and the current one's now more or less very. I think he's loving it. He's got it figured out. He's got it figured out. He's driving it. And you know, like when a menu item sent out an alert that it hit a 35% cost, he's like, like, hey, we got to do something about that. You know, it's like, hey, no kidding, right?

[A]

Well, it's cool. But that every game, every, every business needs a scorecard. And that's what your P and L is. But you need accurate scoring to know. And if you have those, all those data points, you can see how your efforts manifest on the P and L. And that's where it becomes fun. Because now you can be like, okay, like we're, we can be doing better with our cost of goods. Like, let's start looking at, at every one of our systems and backup houses. See, maybe we're not doing good portion control. Maybe there's waste. And then, then you start moving the points. You know, you start getting a point here and there and then it becomes fun. Then if you incorporate things like profit sharing or anything like that, like, or incentives, bonuses that are based off.

[B]

You gotta make a game.

[A]

You have to. But you can't play the game unless you have the score. Right? And that's where these tools come in. But that, the, the, the mind, that data is also a challenge in its own. And I think that if you have the experts that specialize, they're gold miners, right? They know how to go get that data and show you how your, the fruits of your effort manifest on the P and L, then, then you can start playing the game real well. But I gotta be honest, I was a little surprised when you said that you're still using QuickBooks because of your b, Your past experience with building out these.

[B]

Well, again, I don't need enterprise reporting. Every location stands on its own. Yeah. What do I need out of my accounting system except to have the P and L and the balance sheet?

[A]

So have you looked down that path?

[B]

And, and QuickBooks integrates with the banks and the credit cards. So the transactions all load in. You just go in and code them. They're pretty much the same every month. Yeah, I would say. Why? Why would you what? What? But since you've talked about all these other tools, what other tool would do more for an entity like that? Because my answer is because I've really been the CFO all these years. Right. I was gonna say, I think effectively I'm a cfo, so I, But I'm also, I'm also the, the cobbler. So my kids have no shoes. Right. The old, old adage that, you know, the cobbler. Sons get the crappy stuff. So because I know how to do all this stuff, I refuse to pay somebody to do it. Okay.

[A]

I think you're an exceptional, an exception to the, the I don't know what I'm trying the rules because it's a.

[B]

Rule and, and it's the good or bad. So when it works it's great. And when it doesn't work or when I'm busy and don't have my eye on the ball everywhere the way I should than bad on me.

[A]

Yeah. Before we go down that package your tech stack because I'm curious on some other things. Are there any other services you've outsourced to to do things better that you don't do in house?

[B]

Well. So I used Schedule Fly for years.

[A]

Well Bradley great dude.

[B]

We, I. We loved it. The staff loved it. They had some tech problems and it forced me to move. Okay.

[A]

And well they.

[B]

And I was a long time user. A long time longtime user.

[A]

Will. I know Will Bradley pretty well. He's a great guy and he's very upfront and transparent about we just want to be a simple solution.

[B]

Oh no. They kept it simple. Kept this but they had to keep it running.

[A]

Yeah.

[B]

And when they blew up for a long time that I, I had to move. So I'm with seven shifts today.

[A]

So Will Brawley is the sole proprietor of Schedule Fly now and I'm pretty sure that's public knowledge that the sale has gone in and he's looking to integrate and and a lot of the things that is that they were they weren't doing to stay simple stupid. I think the name of the game has to be integration going forward because you want things to play.

[B]

Right? Yeah.

[A]

And I know that they're talking he just announced he and Restaurant Systems Pro, one of my sponsors. I don't know if you saw the Restaurant Systems Pro branding out there. Fred Langley, they are doing an integration. So if you are a schedule maybe we can bring it back to Schedule 5 because I think Will's a great guy.

[B]

It was very similar was does and you know in seven shifts. You know found it along the way. Another tool that helped me hugely during COVID when no one wanted to work. I imagine that why would you want.

[A]

To go to work?

[B]

Why would anyone want to go to work? Right. I started using a work stream to do all my hiring. It works and it works well. And for you know, $100 a month a location it's so you know and we literally we just like like a busy location. Maybe they have their server job or bartender job posted all the time or pretty much all the time. They can turn it on and off as they.

[A]

So is it just for fire like for finding putting the posting jobs or is there also HR in house? Like system of onboarding?

[B]

We, we don't use any. So all of these systems like Work Stream. So I started using Workstream before they had all the HR onboarding. So I don't use the, like those features because we had the process in place already. Of course with i9 audits and different things potential these days with all the ICE actions and everything. I've. I've added a second person in my office just, just a junior associate. But we've gone through, we've completed our own i9 audits across all locations to make sure everything is perfect. Because we're like, you know, we're not, we're not gonna have it. And, and we actually are using seven shifts to store digital versions of all of the documents. Now because they have a document upload.

[A]

Feature, basically every employee has like a profile that has their, their documents tied to it.

[B]

Yeah.

[A]

So.

[B]

And here, here in Texas we have like their TABC certification, their alcohol certification, and their food handler certifications and stuff.

[A]

And I, I see of that you in terms of point of sale, you currently. So 1, 2, 3, 4, 5, 6, 7.

[B]

Okay. Eight locations and three different POS's.

[A]

Yeah, you're using focus with.

[B]

No, not Focus anymore.

[A]

No more. Okay.

[B]

No more. Well, smart. Smart Tab has two bars because I love them for bars. Okay. I have spot on at four tailgaters locations and I have toast at two restaurant locations. Citizen Square and Good Charlie's.

[A]

So.

[B]

So why.

[A]

My head spins.

[B]

Why, why would I do that to myself?

[A]

So, like, it seems like the newer.

[B]

Well, first. Well, first off, I was a longtime micro 3700 res user. I could maintain my own hardware. I bought all as restaurants, closed all through the 2010s. I would buy stuff on ebay. I could, could. You know, we literally. I paid no maintenance fee, no monthly fees, no nothing. You know, you bought res 3700 up front. And honestly, I wasn't going to buy micros at all when I started, but it was 2009, 8 9. And the micro sales guy came by and I'm like, get out of here. I can't afford no Cadillac, okay? I'm not going to pay your expensive prices. And they're like, no, sir. There's been a downturn in the economy and we've been told to leave no deal undone. And I'm like, well, this is what I'm going to pay somebody else over here. And they're like, we'll match it. I'm like, okay, I'm a Micros customer.

[A]

And you're Micros for one of your concepts for until 2023, I was Microsoft.

[B]

Microsoft Microsoft all the way to 2023, man. I was maintaining that hardware. But those things were bulletproof. I mean, that's a testament to the touch. I would just have to change the little touchscreens on the front of them, take them apart, change the little touch.

[A]

Not everybody knows how to do that.

[B]

I know, but we would do it and we'd buy our own equipment and I could flash my own drive if the thing broke again because I could maintain all of my hardware. I am the IT for the entire organization.

[A]

You're an accession of the rules.

[B]

So when the router breaks, I have to go fix it. I don't have, you know, your own. I have one maintenance guy now, but I try not to have them do it stuff.

[A]

So it seems like right around 2019, so.

[B]

So the reason I liked Micros is because you could pick your own credit card processor. And my credit card processing cost for years and years stayed under 2%. Yeah. Because you could just go negotiate. I got volume. Let's go make a deal. Right? Yeah. Y. And then it all changed. Right. Well, well, first off, Oracle bought Micros and totally trashed that. So now Micros is, you know, they. Anyway, Oracle thoroughly.

[A]

Are they cloud based now? And still is cloud.

[B]

It's cloud based and there's nothing wrong with the product today, but it's. They want to sell the stadiums. They don't. They're not for independent little restaurant. They're not. You know, you might, you know, there used to be a Micros dealer network. There used to be independent dealers. Used to be all kinds of things. They just shit all over all of those people.

[A]

Right. You might have Micros hardware and software, but at the end of the day, the customer service is coming from whoever is. And that could be different all across the country.

[B]

Yeah, it was wild. And so they moved. So there was no way to continue with microso you start looking around for options. Right. I tried. Even when I look, I even sometimes forget the names of all of them. Right, right. It's like one of the places I bought was using toast in 2017. It was horrible. The books wouldn't even financially add up. They wouldn't close out correctly. I'm like, who can use this Toast system in 2017 where they can't even tell you why the numbers don't balance?

[A]

So is that still the case today, seven years later?

[B]

No, it balances today. But, but, but in 2017, it did not. I tried to use it for a few months before I was like, this is out of here. It didn't, it didn't pass the financial smell test.

[A]

So relative to today. Right. And because I don't get to talk to people, and I'm sorry if I'm, I'm pushing you to where we are today, but I, I don't always get to talk to people who are currently using Spoton Toast. And I, I think Focus still has somewhat of a good reputation. I haven't heard horrible, horrible things about it.

[B]

And I picked Focus because I could pick my credit card processors, I could get them to bid different way it was open and, and I thought that would work out. But then today, all these integrations, you know, the Ubereats, the door dashes, the seven shifts, the everything being integrated, you really want you now today you kind of need to start looking at the, the people that'll play together and things. Now I have Toast and I have Spot on. And if I didn't have one or the other, I wouldn't have as good a credit card rates.

[A]

So you're playing them against each other.

[B]

Absolutely.

[A]

Okay.

[B]

Absolutely.

[A]

So which one's winning right now on the credit card? Are they tied?

[B]

They're pretty, they're pretty close. Okay.

[A]

I mean, will you share what you're, you're getting or.

[B]

I don't know if they want to. I don't know if they want to. You know, when you sign the agreements, I don't know if it said, hey, confident. I don't know. There might be. I don't, I don't know all. Look, in the old days I just wanted pass through.

[A]

Yeah.

[B]

And the tiniest little off hit and the in the basis points should be not much.

[A]

What do you mean by pass through?

[B]

Oh, so, so rates. So you know how they come along and say, oh, your credit Card rates are 2.49% or 3% or whatever. You don't want that. Pass through is just the actual cost charged by Visa. MasterCard discovered the processing companies, okay. So they keep jacking it up every six months to a year. That like the, the cost of processing, just the core cost. Yeah. Has never been higher. It's an industry where they make billions of dollars unregulated. They have feels like they only have thousands of employees making billions of dollars. And we, we work on legislation like, like, like, like we pay. Everybody goes, you know, you pay your credit card fees on the sales tax you collect too. Right. You're, you know, your government mandate, you're Paying a fee on it. So you're the eight and a quarter percent tax. Oh no, you're paying more on that too, right? It's like.

[A]

So you're paying fees and fees.

[B]

Yeah. And it's like what's happening today in the industry is the credit card processor just buying point of sale companies. Companies, okay. Locking you to their processing and that's the deal. Right. And then when they go out after the little smaller independents, they, you just have to pay the 2.49 or 3% or the whatever they're going to do. But when you hit more volume, say 10 million of processing a year and more, you're in the mid market, you can negotiate, you know, better deals. But still if it's with a POS company that's tied processing, you know, if it's, you have to go, you, you either have to make the choice of. All right, I'm gonna go pick a processor or a POS company that isn't tied to anybody. But maybe they're not the most hip cool on the integration front.

[A]

Right.

[B]

Or maybe it works. Or maybe it's still PC based where you gotta run a PC in the house. And you know, I did micros for all those years. I, yeah, I backed up my PC. I kept, kept it running. But when that PC crashed your, your rest, you know, your POS is down.

[A]

I think again, you are exceptional in this department. Right. And I don't think the average restaurant tour is going to be competent enough the same level of conf. So confidence that you bring to the table relative to system, like techno technology systems.

[B]

So the big thing is, is you have to read your agreements very carefully. So like, like spot on will come on and they'll go like hey, we're going to give you five basis points in nickel, you know, just a small markup. And you read the agreement, you know your agreement and it's like oh, that's the rate for the first year and then it goes up a whole bunch. Yeah, look up, you know, it's like no, you like throw that agreement in the trash. But that's the standard agreement that probably most of their customers sign and don't know anything.

[A]

Don't know to look.

[B]

They don't know to look. They don't know it's going to go up. And look, if you're. Again, if your volume is small then the interchange is small. But if your volume is large then the interchange is a real problem. You know, I've restaurants, you know, 10,000amonth of interchange fees. Yeah, you know the pass through. So, and so you've got to try and negotiate as low as you can. Am I at the absolute lowest? No. I'm sure I could probably go find an agnostic POS provider and really jump up and down today on some processor.

[A]

If I introduce you to Merchant Advocates. Merchant advocates, excuse me, they're a company that was referred to me by the Red Parka Pub in, up in Jackson, New Hampshire. And all they do is they negotiate credit card processing rates for, for restaurants. That's all they do.

[B]

You see, it's entering negotiate because at that point they already know what it is. You know what I'm saying? It's. But, but they're going to have to have an agnostic POS partner to pair people with. So.

[A]

No, they, they, yeah, they, they all, they do and they know all the, they know the game for every provider and what they do and they just go and they just negotiate on your behalf and.

[B]

Right. They don't even, they should just be saying, hey, I'm bringing you X dollars of transactions. And this is, they should already know the price. They don't even have to negotiate. They should just be like, hey, I.

[A]

Don'T know much about how it works. I'm hoping to get them on the show real soon to learn more. More about. This isn't my area of expertise like this. This subject is not my strength. I'm not good in the details, if I'm being honest, man. I, I, my, my days are spent cruising at 30, 000ft. Like, how'd you get here?

[B]

So credit card processing is a scammy, swarmy deal. You know that you used to be. You didn't even get a day go by without 10 people trying to sell you credit card processing.

[A]

Yeah, I thought they introduced you to those folks though, because you really know this stuff.

[B]

But there are, I'm sure there are people out there. There were people years ago. You could go send your credit card statements to them and they would give you an analysis and stuff and help you figure out if you're paying the right price. But today you're trying to pick a POS vendor that gives you the features you want.

[A]

So yeah, let's get to that. So, POS vendors, why? Spot on. That's the most recent one you tried out.

[B]

Right. So Spoton is there and spot on. I like the interface. I like how it scrolls up and down for picking the items really fast. The integration was good. In other words, it was all there. And, and they weren't really in the running until they Got the processing rate, you know, and agreed to it, you know, over time, over like at least a minimum three year period. You want to like get something like for three years, I. And Toast, you know, came back and basically what you have to do with Toast and Spoton is like, you know, you don't want to give me this, then I'm gonna go sign up with the other guys. And back and forth.

[A]

Yeah, there's.

[B]

There's just no.

[A]

And then make sure you lock in whatever they. They sell you on. Make sure you lock that in.

[B]

They do. And if I add another restaurant, Toast, I'll give you another one. But we have to go fix the rate even better on the other ones.

[A]

So you're loyal to the rate, not the pos.

[B]

Well, because the rate is tens of thousands. Is understandably, is.

[A]

It's smart.

[B]

I've never heard people are like, the cost of the POS bill, whether they charge me 200amonth or 400amonth, isn't the cost. I'm like, so it isn't the cost when you do. When you process $5 million a year at a single store, what is 1% of that? A lot? 50,000, right?

[A]

Yeah.

[B]

Okay, well, that's the 1% difference between negotiating and not negotiating. And sometimes it's 1 and a half or 2%.

[A]

Right.

[B]

Okay. So what are you really paying for? POS. What are you really paying? When you agree to just pay the standard fee that they collect, you're sending the salesman on really nice vacations.

[A]

Yeah, I hear you.

[B]

Really nice vacations. Like, they're smiling from ear to ear.

[A]

I still think most restaurant owners are like, like me where they didn't get into this business or don't love this business for the technology. I'm not to say that that's why you love the business, the technology, but you have a mind for it. I think you're very left brain. You're very attention to detail, tactical or, you know, precision, numbers, logic. I think most restaurant tours lean right side of creativity.

[B]

Right?

[A]

The creative live in the moment. The here, the now. I don't want to have to learn another freaking piece of technology. It's so. I can't keep up with it. It's so like.

[B]

Right? No, no, they, they want to cook great food and take care of guests, and those are side effects of running a successful business.

[A]

And you have that emotional intelligence. I can tell talking to you like you have both sides of the brain. You're very well rounded.

[B]

I mean, I. I mean, you got to take care of guests and we can go in on. On, you know, all, All. All of the.

[A]

I'm gonna have to come back.

[B]

There's whole another podcast we're talking about. I know. And you.

[A]

I love it.

[B]

And tell me to stop it.

[A]

No, I would go three hours every day.

[B]

But let's talk. Let's talk the skinny about this. So Toast charges the most. They supposedly still don't make any money. I don't know how they don't make money spent, you know, charging the most. In my mind, they charge the most, you know, the monthly fees. They've raised the monthly fees again here in the last six months. And I look at their level of support and the quality of their support. It's not the best. It's helpful if you know what you're doing. Like, we build our own menus. We build our, you know, like, we're like advanced users. Any pos I use, we're like the advanced version of their customer base. And, and. But their offline mode works, you know, and we're in a couple weeks ago. No, the offline mode works. Right. So when Amazon east crashes. Right. The restaurants are still running in offline mode. Okay. And it works. Spoton's luckily not on Amazon East. Right. Because if Spoton gets taken out today, they're desperately working on it. They bought another company or made a deal with somebody. They need standalone mode. You know, they've switched their hardware from just plain browsers to being like Android back, and they're trying to build apps. They're going to get to standalone mode eventually, but they don't have it now. And so, yes, I bought Spoton, but I buy it with backup, sell, backup, sell. I got three ways to get to the Internet because I know that you're dead in the water when you lose your Internet through any particular way, I would imagine. And that's a huge risk. I mean, you know, when things crash, it's always Friday night. It's never Monday. Slow, slow. Monday mornings, it's Friday night. And the problem is if somebody attacks the cloud they're running on, then every Spot on customer is just dead in the water. There is no backup and you. So to use them, you have to gamble that they have the infrastructure wherewithal to keep it up and running even when the world's under attack. And trust me, the world is under attack.

[A]

Yeah.

[B]

Okay, Every financial anything, every denial of service, I know it better than any. And I really wasn't going to buy Spot off until they got my credit card rate down to the point where I Just couldn't say no. But, but that, that doesn't mean it was a, you know, but I've heard.

[A]

And maybe you can support this. What makes them stand out is customer support. Can you validate that or.

[B]

I would say they have better customer support than Toast. I would not say that. It's better than the old days of local dealers, you know, where they. You call somebody locally in town.

[A]

Well, that's the thing that scares me.

[B]

I don't think so.

[A]

Yeah.

[B]

So the answer is you still need to know what you're doing. You know when printer routing stopped working at one of my spot on stores a week ago for no particularly good reason. And my manager called support. And the first level support people are like, it all should just work, right? And then finally they're like, well, you really need to talk to the printer department. But do they work on weekends or do they, you know, it's like. And then blah, blah. Anyway, they got it working, but it took them hours of the kitchen tickets not showing up on KDs. They were just all printing on the bar terminal. At least they were printing somewhere and they could carry, hand carry them. And it's a smaller location, but it's like, hey, spot on. That kind of shit just shouldn't happen, right? Just shouldn't happen.

[A]

How long ago was this?

[B]

Two weeks ago. Week ago.

[A]

Yeah.

[B]

And. And again, there's other little technical glitches. Like out of my nuke store in Conroe. I mean, it's my fault. Like maybe I have a bad power circuit. Like in the bar where they get something wet, it pops the GFI. Nobody pays attention to the fact that their GFI's pop.

[A]

What's the GFI?

[B]

The, you know, the little push buttons in your kitchen. You know, like in kitchen plugs near water have ground fault interruption circuits. And so these things, if you get them, the bartenders get them the slightest bit wet, they're not going to reset until they're dry, right? Okay. Whatever it is, right? So. So then the battery. But I then have battery backups running all of my point of sale equipment at the bar, right? But it lasts like 30, 40 minutes, right? And then suddenly the terminal's down and the, well, printer's down.

[A]

So you have stacks of batteries?

[B]

No, well, no, but the point is I only normally need 20 or 30 minutes. Like if the power fails for the whole restaurant. But this is then. Okay, everybody get your tickets printed right now. We're gonna go down in 15 minutes. Okay?

[A]

Close the doors like, right?

[B]

You have that kind of thing but here they had the couple stay, a server and a bartender and the well printer go down and we're like what's going on? And they couldn't get it to reset, right? And then, but that's my kind of problem. But then Spot on weirded out and sent the tickets over here. And then when they went and got an extension cord and went to an outlet that would work and plugged it in, it still wouldn't print. Huh, okay, still wouldn't print.

[A]

Did they ever say what it was?

[B]

It had to do with the computer? When it came back up with a certain IP address assignment, it wasn't working correctly. And unplugging and plugging in the device would not fix the problem until you unplugged it and waited at least 25 seconds. And we were all doing it for 5 or 10 seconds. Okay. Weird friggin stuff, right? So what it was is there's some memory that it's using of the IP it had or something, you know, just this technical.

[A]

If you're listening to this and you're spot on crashes, let it be 25 seconds before.

[B]

Well, literally. Yeah, I, I didn't even believe them when they finally got me to elevated person to say because like they all tell you unplug it and wait so long and he's like no, no, wait 30. And I'm like come on dude. He's like no, no, I mean it, right? And so I, I'm, I'm a little incredulous. I'm not believing this. But I wait the time, plug it in and it fixed the problem. And I'm like, yeah, that's the kind of dumb you get with Spot on.

[A]

Yeah, I mean I, I've been an advocate for Spot on because I see it coming up and honestly. And you said dark times are coming or I don't know the words you use or maybe.

[B]

Well, I'm just, I'm just saying financial systems are under attack all the time from all around the world. They're trying to wreck havoc on our systems, on our airline systems. You know. You know, half the times we, of course now it's air traffic traffic control and the government shutdown. But you know, half the time, you know, oh, look at that airline cancel a thousand flights today. What happened? They're not going to tell you. Cyber attack. They're not telling you the real truth. What's going on? Don't you think the credit card processors and everything else. You really need a POS that is bulletproof, that can run inside your four walls. If the whole world is blowing up.

[A]

Around you, you've done your research and I would imagine.

[B]

Okay, and so Toast does this spot on. I'll probably have this capability in another year or two. Yeah, so you're still rolling the risk. Now with that said, I like the features like this. And I just backed up this, you know, cellular and fiber and you know, just have your. I literally carry in my car a spare cellular backup cube because if every from a different provider than the ones which we use.

[A]

So basically you're getting satellite service push.

[B]

Well, it's kind of like carrying a Starlink around with you, but it's just the cellular version. But actually I've thought about buying Starlink for restaurants. Now you understand why, right? Yeah, I mean, because. Tell me you understand, because. Well, look, the Houston. We get hurricanes. We get. Get what if the cell towers whacked?

[A]

Hey, Starlink, if you want to sponsor this podcast, Elon, I'll take a ride down to Starlink City or whatever you guys call it.

[B]

And so it comes down to a monthly recurring cost. Look, look, give me a standby Starlink for 49amonth. Yeah. You know, and I can take low speed because credit card processing doesn't need speed. And high speeding just used it.

[A]

I mean, yeah, as long as I pay for Star League mobile, which is expensive because you can literally be running down the highway and have high speed Internet. And sometimes I'm uploading videos and I can't be in one spot. I have to be on the move. So it's like 400amonth. I don't have it turned on right now because I'm like, I don't need it. It's not that bad. But when you're like on the road for months at a time, like you, it's nice to have that. You know, if you're in the middle of the west, going out west or something. I am curious. One of the things, and I'd love to get your take on this because you're just very knowledgeable on the subject. The thing that scares me is this idea. How many, how much percentage of the market would you say toast has or toast and square combined?

[B]

I have not looked lately to know. It feels, it feels like we're still very fractured, you know, like, like the market leader has 20%, you know, it doesn't feel like the market leader has 60 or 70. 70%. Toast does not have 50 or 60%. I'm sure. I'm sure toast and square and toast here in Texas took over a little more than Some places, yeah.

[A]

I will say this. In my travels, I can see just. And I'm sure there's restaurants.

[B]

Here's the deal with Toast. You might use them, but it's getting kind of on the expensive side. And, and if you can't. As a volume user, as a higher volume user, if I can't get rates and monthly fees that are in line, you will force me into going to a competitor.

[A]

Right. I can say from my perspective when I'm traveling across the country and I also talk to very, I guess leaders in this space who are very smart about the technology they're investing in. I would say leading restaurant tour of that slice of leading restaurant tours, I see about 50 to 60% of the restaurants I go into are using toast.

[B]

And my integration partners, I use a draft beer monitoring system, US Beer Saver or my guys, the US Beer Saver is the company. US yeah. USBiersaver.com I reckon I've used them for years because we. And they integrate with your pos and, and they integrated with Micros back in the day. And I used to, in the early days when I got it back in like 2012 or 13, I stuck a iPad right next to the beer taps that showed the variance from what was poured and rang right in real time for the bartenders. Make it like a game for them. They would watch the iPad and do the game. We don't go to that extreme anymore. Although I should because I have some places that.

[A]

What is it called?

[B]

US tap USA tap usbeersaver.com There are different competitors that do it, but for a couple hundred dollars a month for a location, they monitor all my taps and give me a variance report. So every pour, you know, you want to make sure 15, 15.2 ounces came out 16 ounces, 15.3 came out 16, 18. And a lot of times it's 18, 19, 20 ounces were poured for a pint. Yeah. Where are they? Because, because they're just foam based. I think on the east coast somewhere. They and, and, and I've liked them because. And they have a little app for your phone and stuff and it's a small company, but they're scrappy but, but their stuff just works. And they did the integrations. Now one of the gripes about Toast came from them. They're like, oh, when you went to Toast here, they're like, you know, Toast charges us to integrate. So Toast not only charges us, they also charge them. They also charge, charge them. So this is the kind of stuff. And they were happy when I Like went with Spoton because they're like, ah, spot on. We integrate and they don't charge us.

[A]

Yeah, well, I mean I think these.

[B]

Things add up, right? If you piss off integration partners enough, they're, they're like literally like the beer saver guys came down and I, and I can show you system later but, but they came down and they're like, I'm like, well I bet you know guys that you like to integrate with, they're like, yes. Would you like a list? You know what I'm saying? And it neither. And it wasn't spot on and it wasn't toast. Right, Right.

[A]

I just, I, I read this one book and my, my listeners know exactly what I'm about to say, but it's called Power in Progress. Akamul. I can never remember how to say so bad with names, man. It's horrible. But he's a MIT professor, I believe, or Harvard professor, the author he wrote the why Nations Fail. I don't know if you ever heard of that book book. And this book's called Power and Progress. And he basically just says his narrative. As long as there's been technology, whoever controls the technology controls the, the narrative controls the agenda. And I worry about, I think that we are hardwired to go with word of mouth. And that's fine in when marketplaces were the size of a city, but now marketplaces are the size of a country or the globe. And when everybody in a marketplace, I. E. The nation and or globe is all following word of mouth meaning in today, word of mouth isn't necessarily what you think it is because.

[B]

I know, because word of mouth is third parties. Right?

[A]

Third part. Like people are more loyal to third parties than they are to people because third parties, there's just too many people in the world to pay attention to what everyone's saying. So you have to rely on third parties. And third parties have a vested interest to make the people who are paying them happy. You know, so like it's people are bought. To your point, you can pay people. Well, I worry about these companies having a very big marketing budgets to influence the consumer. And the restaurant owner at the end of the day just wants to make a decision so they can move on to the next thing. And they're just going off of word of mouth like what does the Internet say the number one podcast is? But that can be influenced very easily and I just don't think it's on our radar. And I worry about, about this stuff and I'm so happy you're Shaking your head? Yes. Because when I talk about this to other people, they're like, at the end of the day it's just whatever technology is the best is what the client. I'm like, no, short term, yeah, long term.

[B]

We gotta really be conscious so many costs. And I'm sure even sitting Here there's probably 10 POS companies going like dude, you should call us, you know, and we can let you be agnostic and we're great. And, and it's fight getting enough market share that I think they're going to hang around. Right. But I, I use Smart tab at two bars, right? Dive bars, very low food volume. Why do I use them? They actually charge me high credit card processing rates because they wouldn't give me lower. Because it's just two little shitty bars that do like $90,000 a month and a $50,000 a month month bar. Right? And they're like, yeah, here's the deal, you want it, right? And I mean maybe if I gave them a third or fourth I could finally twist their arm. But the system is so awesome for bartenders and a high volume bar. The extra percentage on a hundred thousand a month of processing is worth the price. So the technology can be good enough to justify the credit card rate.

[A]

Interesting.

[B]

Yeah.

[A]

I mean this is a.

[B]

But I would not, but I would not use them in a high volume place. Right. Because the, their food stuff and coursing and none of that is good enough. But for walk up to a bar, here's my card. Yeah, it's literally a two second tab. Here's your drink. See ya. Yeah. You know, it's like bam.

[A]

Is there anything we haven't discussed that I would say.

[B]

I guess the only things, the other things to talk about. Insurance is out of control. And I know a lot of small bars in Texas are starting to fly without liability and liquor liability insurance.

[A]

You hear what's happening in Charleston right now? There's only one, there's only one insurance company that will cover liquor liability and monopoly because the, the laws are so.

[B]

State by state, it's wack. So what I used to pay for the like and tailgaters. I sell more food than alcohol. 60% food, 40% alcohol, $6 million a year. My liquor liability insurance used to cost me 25, then 30, then 35, then 40. Today it's like $85,000 a year, you know, and it's like and, and at a local, this location, 15 years with no claims, you know. You know what I'm saying? Not like now I've had some small bars where so. And you should know that like the little alcohol bars, they have more issues, you know, more things go on. You try real hard, you put all the processes in place, but things happen, you know.

[A]

Yeah, we're talking about dram shop, Laos.

[B]

And stuff like that and how you can do it. You know, I learned really early on, like back at that stadium bar and grill, back in the wild days of 2010, 11, like, I had a guy come in, do some drinks, leave, go and pick up his buddy, come back hours later, just pays his tab, leaves, rolls his car is. Rolls his Ford Explorer and makes his buddy a quadriplegic. Okay. I'm like, what have they been doing the two hours they left, you know? Anyway, it's like, well, the care cost for a quadriplegic, the lifetime care cost is this. And even if we find you only 10% responsible, that's 10 of that. Yeah, it's like, it's like, holy cow.

[A]

Yeah, I mean, I hear like being, having to be more careful, right? And like we all have to bear someone.

[B]

You have to, you. But, but here's the deal. People will sue you for, but the.

[A]

People carry zero liability, right? Well, that's the issue.

[B]

Sometimes I think I should move to Nevada, right. Because I hear there that the casinos keep, keep it where it's all personal responsibility, right? So they can serve you the bottle of alcohol you can pass out on the floor and they can sell you and they can just keep on selling you the bottles with. Clearly here we have to not serve people to the. When they're, when they show signs of intoxication, we must stop service. You know, we must do all of these things.

[A]

Sometimes people are really good at hiding it.

[B]

Well, or maybe they know now they mix in drugs, thc, everything else.

[A]

What's going on.

[B]

So there are so many ways to get sued. You might wonder why you still want to be in the bar business.

[A]

Sometimes I've been scared straight. I think sometimes there's a, there's a.

[B]

Look, look, the restaurants have much lower risk, okay? And that's why the, the premiums are such as what they are for bars. But at the end of the day, I mean you need, need state level dram shop. We need laws in place that limit live. You know, we, we've got to put, we got to put guardrails on these things because you have to make a market where the insurance companies can operate and not just. They've got to give a product. You know, if you're going to make something Legal, we got to have a way to sell it and we got to come up with ways that works for everybody.

[A]

Right.

[B]

And but it's crazy. So liquor liability, I would say in Texas has gotten so bad, had that, that I'm talking about the tiniest operators, friends that I know that run little bars. You know, Maybe they're doing 30,000amonth. They're like, I don't pay for insurance. Yeah, they're like, they're like, they're like, they're like, if somebody sues me, here's the keys.

[A]

Yeah, you know, that's not an option in every state. I think Texas has one.

[B]

Well, well. And a lot of shopping centers require you to have insurance. But you know, typically if you're us either, maybe they've been around a lot of years.

[A]

So what do we do? Right? What's the, what's the answer? Get out, get involved with, with local government. Create awareness.

[B]

Well, you know, the answer all along is, oh, just take an Uber, you know. Well, my restaurants out here in the country, in the, the distant suburbs didn't even have Uber until.

[A]

Yeah, that's when you live in city. But.

[B]

Right. It was never an option out here. But it's, it's, it's real problems. But even it affects restaurants. You know, restaurant you've, you're a restaurant that serves two margaritas to a female. They're probably 0.08 or close to it because the way most places make margaritas are probably 2 ounce pores, 4 ounces in you 120 pound girl. The math says, you know, no matter what. And so. But how do we get people personally responsible or how does it work? Right. Because it's not the person that drinks that sues the restaurant. It's. Well, I'm right. It's the person they hit. Right. Okay. And it's hugely unfortunate and this and that, but I mean, we're selling a legal product. If we follow all the rules, should we be liable? Well, we have, you know, the certifications and this and that, but at the end of the day, you still get sued. It still costs money. It still costs the insurance companies money. It doesn't matter if you can say, hey, we're protected by the dram shop laws. You know, everybody was certified. All this you can dismiss. But the lawyer still cost a hundred thousand dollars. Right? Yeah. You know, it's like, it's like there's no winning.

[A]

I think the only way to win is to put the liability on the patron. And I think that that's the thing is and if there is. If there. If they're. So I think. Look at England, right?

[B]

I think there can be shared liability because otherwise you'd have the wild, wild west people.

[A]

People are still going to want to socialize and drink. That's a part of their human nature.

[B]

There are bad operators, though, that would. If they didn't have the restaurant hook, they would just be worse operators. So we've got to say, but can we just agree to put a price on it such that, you know, like, I had one of my shopping centers.

[A]

Agree to put like a ceiling on the. The rates.

[B]

Well, look, look, a lot of shopping centers make you carry a million dollars of liquor liability insurance, okay? So you can guess that I probably have a million dollars of liquor liability insurance in a lot of places, right? I had one that came along recently. They were in negotiations for sale, and they're like, we need $3 million of liquor liability. And I'm like, what are you talking about? I said, I don't even think you can buy $3 million of liquor liability. And they're like, oh, we're not going to renew your lease if you don't get $3 million dollars of liquor liability. Turns out they were trying to sell the center, and I guess I'd. Anyway, it took months of going back and forth for them to understand that insurance companies don't want to sell $3 million of liquor liability to anyone. Because imagine the lawsuits that'll start when you know, you can go out.

[A]

They're gonna be like, free money. Everybody, let's go.

[B]

Everybody's got. Got $3 million of liquor liability.

[A]

Who owns most of the billboard?

[B]

So. So, holy cow. So you understand it's like it's actually bad to require that much liquor liability insurance. And so, you know, working through the restaurant association and different things, we've all got to keep screaming about it, but it seems like there's so many other fish to fry. It's not really getting screamed at, you know, that. That much.

[A]

The mission statement of this podcast is to inspire, empower, and transform the industry. I think you inspired us by starting where you did with not, I mean, a ton of restaurant experience and coming out of the gates and making something special happen. You empowered us with a lot of great detailed knowledge and in recommendations today. And the transformation part is, where are we now? And how can we start sharing knowledge so that the restaurants in the restaurant industry can be the beneficiary of the hard work? And there's a lot of parasites in this industry is what I'm learning. You know, and there is so much industry that the food and beverage industry is responsible for. At the end of the day, everyone's getting their cut. It's like, how do we, like how do we become more self aware within the industry to understand how can we share knowledge? So we all win because we, we are in competition with each other and I think it's at our own demise.

[B]

Yeah. Well, today I think what we're seeing is that the percentage of people who are drinking alcohol is dropped quite noticeably.

[A]

I think the percentage of people who are doing other things has risen.

[B]

Yes.

[A]

I don't know if we're sober.

[B]

Yes, yes, I think so. But it's having a financial impact on the mix and the profitability of restaurants. I'm actually talking to managers down at another restaurant here, like we're going to develop a water menu, you know, and bring in three or four different high end bottle waters because a lot of people don't want to drink today. But if I say, ooh, you can get this water from a glacier and you can get this water from France and you can get this water and they'll be, oh, I'll take the glacier water for eight bucks. Yeah, you know, it's like, it would be interesting.

[A]

I think there's going to be different experiential models out there as the world evolves. I think psilocybin, there's a marketplace for experience. Tying experiences with psilocybin in a safe closed space with that would have to be regulated, obviously. I don't know what the future looks like.

[B]

I, I mean I'm a, I'm an advocate for psilocybin being legalized at least in some kind of, I'll put it.

[A]

This way, I drink a whole lot less today.

[B]

Yeah.

[A]

And there's some other things that I do more than I did 20 years ago.

[B]

You know, the other thing that we didn't really talk about was the whole tax strategy of why would he be doing 16 projects in 16 years? Well, some of them happened during the first Trump presidency when we had bonus depreciation and things. But literally the years that I open a restaurant, me and the investors, we all get nice tax breaks and you know, the big beautiful bill has been made permanent. Bonus depreciation is here. So.

[A]

So it's a race to get the doors open while that president's in.

[B]

No, no. Well now it's permanent past, so it should stay around now. So basically, and it was kind of silly, you might have thought like when a restaurant has their pizza oven break and let's say it's shot and they have to go out and spend 30 grand to get a new one. You might think that they got to deduct, deduct 30,000 from their income that year when paying tax. Right. You would be wrong. They require you to depreciate that oven over 15 years or 10 years. Right. So you can only deduct 2,000 this year, 2,000 the next year. 2,000. But yet I had to pay 30,000 this year for the new oven. I have to pay tax on 30,000 of revenue that I didn't get because I bought a pizza oven. Right. Well, with the depreciation laws now been made permanent, so section 179 and bonus depreciation is there. We can now build restaurants and independent restauranters can now operate their restaurants and go buy equipment and deduct the full expense of the equipment in the year starting here in 25. Again, it was being phased out. It had started back in 2016, 17. It was doing good. And so a lot of those years I built restaurants where last year, like, ah, all the equipment is a deduction. So I open gangbusters, have a lot of profit that first year and I get to deduct all my equipment against it. So you actually make some money. Yeah, in that early year and then you can roll that money into building another restaurant. Ah, whereas if I had, didn't have that ability to, to expense it in the current year. It's huge.

[A]

I saw that you got surge.

[B]

I was like, you gotta understand, it's huge right now with the, with the big beautiful bill passed. So. And really it's just bonus depreciation. And depreciation has been made permanent. So now as an investor, as a builder of restaurants, I can choose to go build more restaurants. I just opened, I opened a small little bar here and spent $350,000.

[A]

Spatial Award Awareness with that camera. You've been doing circles around it this whole time.

[B]

Sorry, I think that was aimed at you. But I spent like $350,000 building the, the small tailgaters over here, rebuilding it. No kitchen in it yet. But of that expense. Now you don't get to depreciate leasehold, like walls and stuff, but we're talking about equipment. But you know, If I spent 100 grand on equipment, air conditioners and the kitchen equipment and bar equipment and everything else.

[A]

Deductible.

[B]

Deductible, yeah. 100%. Boom. So now instead of me paying the tax man 20 or 30 grand on 100,000, that's my money now, I roll it into the next year. I have 30,000 more dollars. It sounds like I'm rich, but it's. It's not quite like that. But. But the answer is I can now go build another restaurant liquid and keep going. And. And if I build a restaurant a year, literally, I can pretty much get my tax bill to be close to.

[A]

Zero, because it costs as much money to build a restaurant as it is.

[B]

Between all of the tip credits, all of the things, you know, all these.

[A]

Eight restaurants, profit is going into assets. But you're still paying yourself owner's pay, right? You still have.

[B]

No. I only take distributions. Okay. I don't llc. So your. Your members do not give. I could have a guaranteed payment in my agreements. I have some agreements where I've put in there. I could take it one day if I. So if I want it. But I don't. I do not get a paycheck in 16 years.

[A]

So if you are.

[B]

If I don't make money, if my investors don't make money, I don't make money.

[A]

Right. But what I'm curious about, if you're not taking a paycheck, and if you're. If your profit is going towards assets to build, how are you. Is it just other ventures you have, other investments?

[B]

Yeah, literally enough of these that are making money. It's not all. In other words, you make enough. And again, I'm a. I'm a working guy, and there's. There's a certain amount of money that falls through the cracks. Cisco, rebates, you know, you can negotiate. So. So I get. I generate between 50 and 100,000 a year in rebates. Are you from manufacturers? Yes.

[A]

Can you say who you.

[B]

It's a source One Purchasing. But again, they give me a quarterly check for four or five grand, but there's 20, you know what I'm saying? I had problems with. So let's talk about food vendors. We could do a whole show just on. Just on food vendors. Okay, here's the deal. Your food vendor will screw you the moment you don't hold their feet to the fire.

[A]

This episode brought to you by US Foods, everybody. Which they. Which.

[B]

And I. And I love Cisco. I love US Foods. I love my scarato. I love. I love all you guys. But, man, you know, if I don't hold your feet to the fire, you will screw me. And you've proven it time and time and time again over the years. I would love to just be able to partner with one. And they guarantee me the lowest prices but it does not work that way. Do not believe your food rep. If they're telling you that, don't go for it.

[A]

I am working with these foods right now. I been very strategic about my partners.

[B]

And US Foods and PFG are getting together right, doing the merger so they can compete better with the Cisco Monster. And look, when I opened my very first sports bar, this old guy walked in and he's like, you're going to buy your groceries from me. And I'm like, who are you? And he's like, I'm Cisco. And I'm like, I'm not going to buy your frozen already made stuff. And he's like, it doesn't work like that. I'm going to sell you flour and salt and stuff. I now mind you, I'm not a trained anything. I didn't think about, you know, we. So the other thing that you should know, we make all our food. We don't buy frozen. And well, the only thing we buy frozen are french fries. Because Americans like frozen french fries.

[A]

There are really cool things happening right now. I'm thinking of Dean and Peeler based in San Antonio, Texas which controls vertically integrates a beef farm. From selecting the seamen to the insemination to creating their own feed, to raising the animal, to butchering the animal, to processing the animal. They own everything vertically integrated and they will work with you. Say you're like a Mexican restaurant, like how do like what are the specs you want on your fajitas? We will process that and we will use your ingredients to marinate it and we will use US Foods to it's everything up to distribution. So I think that there is something to be said with working with local to collaborate and to have some of that that like the, you know, do you want to have a butcher in house that's going to like be consistent with how they cut that skirt steak in house like. Or can you outsource to a local business? Business? You know, I think there we can be smarter about working with local business. I mean do we want to have a huge conglomerate that does all the distribution?

[B]

Maybe. Look, look, the packing houses should have never become not local. Right, exactly. But that's, I mean but big industry came in and allowed them to buy everybody out and now we have to.

[A]

Be conscious to move in the other.

[B]

We have factory farms for sure. I, I love regenerative farming. I wish we could all go back to start. I wish we could go back and respond, affect the farmers. I wish we could have non gmo, more non GMO products because I don't want more pesticide stuff.

[A]

It comes down to the consumer at the end of the day, like they have to be willing to pay for it and they aren't.

[B]

Well, because.

[A]

Because they're.

[B]

Because they're broke.

[A]

Exactly.

[B]

It's not that they don't want to eat organic, but also that they can't eat organic.

[A]

How they can they afford how many streaming services, a new pair of shoes and a new car?

[B]

Your one netflix a month for 20 bucks is different than eating every day. Here's the problem is that we have metabolic dysfunction. I mean, I'm a restaurateur. I don't want to sell less food and we sell a lot of good food. But I can put 10 organic, healthy things on a menu right next to 10 unhealthy things. And the unhealthy things are going to outsell the other things like 90 to 10.

[A]

I think there is a shift happening, but I don't think you're going to see that flip overnight.

[B]

People go out. So people go out for an experience. They go out to relax where they just, they're going to treat themselves, they're going to eat bad, they're going to drink bad, they're going to, you know, they're going out to get away from the grind of what reality is today. And I truly believe that for the mass market restaurants that you got to present to people, you've got to give them what they want. I can try to force you into these things. And yeah, I mean like my chicken fried steak is a fresh chicken fried steak from a certain packing house vendor that made a good deal. It's super tight, tender, we like it and stuff and it comes in from a certain supplier and it's great when you can make those relationships. But at the end of the day, if my double bone and pork chop that is amazing is the one that has fat injected back into it and it just kicks the butt out of a non fat injected one. You know? You know what I'm saying? It's just like, like in the taste test people are like, it's the best ever. Yeah, right.

[A]

And what we're describing is consumerism. At the end of the day, the consumer drives the market and what they want is what we have to give them. And I think that there is a shift in consumer behavior slowly. It's definitely still tipping in the direction that you're talking about.

[B]

Well, like, like we said, drinking less right. And doing other things more right.

[A]

But I think that the, the next wave of professional Consumer the. The now teens, early 20s are much more conscious of what they put in their bodies and there's more information about.

[B]

It than they're conscious about it. But at the end of the day, they whip into the counter service place up and down the road and eat 8 out of 10 of their meals, as evidenced by the metabolic dysfunction we now see in a large percentage of the population.

[A]

Yeah, I'm really excited for Joe Pine's book to come out. Have you ever heard the Experience economy? Joe Pine? It's a. You'd be. Based off of what I've told. Yeah, you'd be really into that book. His latest book is coming out. He's saying we're going out of the experience economy into the transformation economy, where it's a more about taking individuals on transformations, whether it be a new learning skill or a new habit or a becoming a better version of you. Like people like the future is very much about optimizing for me.

[B]

Well, yeah. I mean, look, when I'm 62 today at 55, I'd gotten in the bar business partying pretty hard. Right. I've. It got to the point where hangovers just were just killing, making me unproductive.

[A]

Yeah.

[B]

You know, you enjoy your. Hey guys, enjoy your 30s, 40s and mid-50s. But one day it comes, it catches up. But I looked at my health, you know, blood pressure markers, this and that. You know, today it's like take NAC and glycine to get more glutathione, 5 grams of each.

[A]

I have the news that I'm pre diabetic.

[B]

I inject NAD every day, NAD plus because it's like I don't do weight loss drugs. I don't do things. But I the things that natural amino acids your body needs and stuff. Today I have lower blood pressure and better blood chemistry than I have had in 10 to 15 years. And it's like just. You got to identify, you know, Sugar is the enemy. Yeah. You know, and I think everything in moderation, guys. But. But here's the thing. I don't think all sugar is the enemy, but certainly the ultra processed 14 Ways and Snuck into your meal, you know, way more ways than you know, and salt and everything else. So. But if I give you the bun that has three simple ingredients, you ain't gonna buy my hamburger.

[A]

Right. It's weird. I mean, but I do I.

[B]

Even if I told you this one is super healthy, organic and has no.

[A]

Nothing in it, there are shifts happening and I get to your point, I don't think it's going to be a.

[B]

You'll go broke as a restauranter trying to serve that market at scale. I hear you, as a little niche place, you can maybe get enough customers to take care of you. But I'm talking about these, you know.

[A]

You gotta look around over your shoulder, make sure.

[B]

No, I'm just saying. But I'm just saying at a place like this where you need, you know, where we feed hundreds and hundreds of guests a day in volume and, and it's your average consumer.

[A]

I am not on with you on this. I with you. I agree with you. I mean, again, I think the. So again, inspire, empower and transform the industry. That's the mission. And I do think that if we can transform the industry, I think the industry, if there is an industry that has the ability to influence and change consumer behavior, it's the restaurant industry. Because we touch so many lives and we're at the core of so many communities and we get to influence young people, people. And I think that if we can, if we can. I don't think it's going to happen overnight. I do think there's a balance between trying to make good in the world and also survive. And you, you can't bury yourself and trying to change the world. Like, you can't do that, but like you can start creating awareness, you know, And I think that there are like, there are things that are happening, trends that are happening. There are more solid QSR concepts today than ever before, you know, and like.

[B]

Right. And what just happened to it?

[A]

What, what's that?

[B]

The salad. Salads. The salad goins. They all collapse. Yeah, the ones that opened, I had.

[A]

Them on the show. So that there's a story behind that. His name, Tony something, some Greek last name. He sold salad and go.

[B]

He.

[A]

And he opened Annie's or not Annie's. He. He sold salad and go. Because the corporation came and he learned his lesson. They were taking it away from what he wanted to do. And he opened something prime. Annie's Primer, Angie's Prime.

[B]

I got it. But what happened to Salago?

[A]

I don't probably scale too fast and collapsed.

[B]

Right, Exactly.

[A]

So. But.

[B]

Exactly. Because at the end of the day, people don't eat that healthy.

[A]

Well, but his concepts, Angie's prime and Angie's Lobster and like those are doing really great. But he's also using vertical integration now. He went out and he, he's selling 9.99 lobster rolls in Phoenix, Arizona. And the only way he can do that is because he bought the pure and he bought the boat.

[B]

Oh, I was going to say. Yeah, because I was going to say Nobody can sell 9.99 lobster rolls. So.

[A]

But this is another example. Yeah. And it's only because he sold his share of salad and go for millions of dollars so he was able to be liquid to invest in these things. But he did the same thing in a usda, like, you know, all like, like, like, like, I don't know the proper term, but like he's basically doing the same thing with beef where he bought the farms and he's doing it right. And his whole vision and mission is to get good food into hands of more people who can afford it by vertically integrating the entire supply chain. So there's some really cool happening out there and like his name is escaping.

[B]

But those are just little bitty little slivers of hope.

[A]

That's how it starts, right? It starts cracks, dude. And we just keep swinging that sledgehammer together and the more people that swing, the bigger the cracks.

[B]

If he's successful at it, you know, the big guys will come by them and tuck it away and it disappears.

[A]

I'm very much for profit, Right. I think that we need to be fiscally responsible organizations, but I think we're learning. I think we had these conversations earlier before we hit record. You can make all the money in the world and we're starting to realize, people are starting to talk that you can have all that money but you might not be happy. But if you put purpose impassion ahead of profit, but you're still profitably, you're still fiscally responsible and you look at that profit as a way to, you know what? I can use this profit to feed my purpose. And the more we feed, the more we start prioritizing purpose over profit, but still have fiscal responsibility. We realize we can make a difference here in my community. Maybe not across the world, but right here. I can change lives. And if every restaurant owner across the country starts thinking like that, man, maybe I'm, maybe I'm bright eyed and I just eclipse 40. So maybe I'm still a little, you know, overly optimistic. Maybe there's still hope.

[B]

I don't know. You've got a few more years.

[A]

I know, but I'm starting to get a little bit of the cynicism. Cynicism.

[B]

The, the, the problem with that is, is that we have out of control cost.

[A]

Right.

[B]

And that's going to break all of those dreams.

[A]

Universal high incomes right around the corner. So it's not even worth that, you know.

[B]

You know what my greatest Fear. And, and what makes me think, oh, I should just go sell all these things and you know, go live in an island and is that my staff isn't going to be able to afford. Right to be here anymore.

[A]

Owners have to start talking. Restaurant owners have to start talking. It starts with that.

[B]

And that's affordable, affordable housing things. You know, these companies, the conglomerates that have come and bought all the rentals and raise all the. They raise all the rents, right? They raise all the rents.

[A]

And it's like, but how do we change it? What's the answer, Jim? Well, you know, I think we're doing it right now.

[B]

Yeah, but I mean, I've been a member of the Texas Restaurant Association. I'm board of directors for 12 years. They made me a merit of status these last few years. Just so I keep showing up, you know, because I'm like, oh, guys, even.

[A]

Like the national, the Texas Restaurant association.

[B]

You know, you fight these things. But man, for the majority of those.

[A]

State and national associations existence, how much did they exist to serve the little guy and not how long were they serving the big guy?

[B]

Well, here, well, here's. I've, I've been the squeaky wheel for years in the organization of the big guys. Don't give a. About us independents. Yeah, but the restaurant association is made up of.

[A]

I bit my tongue earlier.

[B]

The answer is, I don't know how it is in every state, but I have to believe it the same way. The Texas Restaurant association, the board and everybody there, we're almost all small scale independents and small chains. Yes. The big chains, they join.

[A]

For lobbying purposes mostly.

[B]

Right. For lobbying. And even McDonald's just quit the NRA the other day. You want to talk about that story? Right. Do you know why?

[A]

No.

[B]

Because they were complaining about the tip credit and that they could no longer support the National Restaurant Association. Support for tip credit, which is huge for anybody that's. That's in the tip business. And because, you know, McDonald's is having to charge 15 bucks for a burger and fries. And they're like, Chili's is charging 12 because they only have to pay their employee $2.13 an hour. And at McDonald's we have to pay them 17 bucks. Right. And it's not fair.

[A]

Now, are you saying there's hope, Jim, now?

[B]

Well, the answer is, of course the person at Chili's isn't just getting too an hour. They're probably making 25 an hour with their tips. I mean, my staff averages and. But we're good. I mean, if you care if you're a restaurateur that cares and your staff takes good care of people. They average. Like in my restaurants over all these years, they average 22% tips, you know, 22%. That means some of them are making more than 22% a lot. I had my first bartender a few years back make over a hundred thousand dollars on our W2. You know, it's like there are. There and, and, and look, we got the lease. Staff will get a 2 or $3,000 refund this year from their, from no tax on tips. But, but it's, everybody's like, but now people are like, oh, you're not going to pay tax on tips. It's not like, are you doing tip pulling here? We have tip pools for bartenders, but not for sure. And yeah, you tip out like your busers and things like that.

[A]

I do think that is a.

[B]

A.

[A]

Sliver of a better approach.

[B]

But, but it's not tip pooling at the server, right.

[A]

I think.

[B]

And the bartenders are tippling just because like at this location there's two of them that have to work at night. So you're gonna tip, you're gonna, you're.

[A]

Gonna tip pool tools like K kick fin, and there's another one out there, tip something mini tip or there's tools that are making it easier. Even Toast has their own proprietary tip solution.

[B]

Right. And, and, and I'm actually finally going to break down and look for, look for somebody like a debit card, you know, solution. I have a, I've been looking at tip house H A U S. That's a, that's a. They, I, they don't know me. But that's an endorsement just because I kind of look at the different, different ones and how they integrate and work. But because I don't want a solution that charges my staff at all. You know, no fees for them, no this, no that, you know, and not a lot of fees for me because we're already getting taxed to death. So here's my answer. We still pay our staff their cash tips every day. And guess what? It's a competitive advantage. I've had staff come work though, you pay them cashes. So you're. No, we pay their credit card tips advanced in cash. In cash every day.

[A]

Can every restaurant do that?

[B]

Every could.

[A]

Yeah.

[B]

You just have to go to the bank and get money. In the old days where it was 60% cash, 40% credit card, it was real easy to pay everybody there. But now it's like 70, 30 or 90, 10, 9010. So it's a lot of liquidity. Yeah. I'm not going to tell you on camera how we manage our cash, but we have to manage cash across locations. But it's a competitive advantage. And there's some people that work for me because they get their cash every day. Well, in the world of when they've worked, when they've worked other places, they're like, I don't believe they paid me all that, my tips, you know what I'm saying? Just, just that they get their check. They just, they, there's a disconnection for them and hopefully I can switch to one of the tip cards to where we. At the end of the shift. It's just instantly on your card because I'm looking for one that instant on the card. Kickfin has more fees than I like because, you know, they're all making money on the float. They're all making, you know, come on, guys. So, yeah, don't charge.

[A]

Well, it goes back to, it goes back to the restaurant industry not being the true. There's just every, every, like everybody wants these little features and these conveniences and that all comes at a cost. And I think that the restaurant industry industry can be much better about communicating the details and also like existing to serve the restaurant. Like, there's, there's got to be with the, with the, with AI evolving and the ability to code and program at the foot, like snapping your fingers. Like, I, I have hope for AI because I think it's going to make the world much more competitive and creating solutions and, you know, like anybody will be able to fix things with the, the aid of AI. Theoretically, not that far, maybe five years.

[B]

Chat GPT and Grok are great right now. As a tech guy, of course I have, you know, you pay for the script subscription so you can get the good stuff from them all. But I mean, you can load a P mix in right now and ask questions. Okay. You can toast, just launch their AI features. And my manager's been playing with it down the way, asking questions and it's. Yeah, it's just, you know, it blows.

[A]

My mind, honestly, and I shouldn't be talking about this.

[B]

But more importantly, you can go to Chat GPT and say, hey, I want to open a seafood restaurant. I need a menu with five appetizers. I want to feature these kind of foods and I want to have some paired drinks to go with them. Can you give me a menu for all of this stuff and include all of the recipes? I'll throw recipes and, and it does.

[A]

It yeah.

[B]

And it's not bad. So you know what?

[A]

I'm probably sure shouldn't say this because it doesn't do me any services, but I Recently, this past year I launched Restaurant Unstoppable Network. Restaurant Unstoppable Community. And the whole idea was that was to, to bring together my, my network through word of mouth. Over the past 13 years I've been doing this and we have our own custom GPT that we uploaded all the transcripts so you can pull from all these conversations and ask it questions and ask questions.

[B]

That's cool. Yeah, that's cool.

[A]

But at the same time I'm like, this isn't going to. This, even this. The fact that it comes from a pure closed source of nothing but restaurant owners talking with nothing to gain, no outside influence. There's value there. But at the same time, the rate AI is moving so fast that like, I don't, I don't like. To your point, you can literally ask the Internet any questions. The, the answers are going to be similar. Like people are spending thousands and thousands of dollars a month to be a part of these groups where they get access to these coaches and these consultants. And I'm like, it's not, I don't like that's there's money better spent because you can get instant access to this, this data, this like, like what's the point? You know?

[B]

So I, I actually hired one of the coaching companies a couple years ago just because I was like, I'm ready for a refresh. I know everything about everything. Right. But I'm ready to just get lectured to for a little bit because I knew what I was signing up for. I think there's value in signing because I go to the show. Well, no, I chip close. Yeah, yeah, yeah. I joined his thing and did, you know, six months with him and stuff and went through it and you know, all he reminded me because he's, he beat into me one thing which is figure out how to get your 20%. Yeah. You know what I'm saying? That's his mantra. And he's like, it can be done. And I'm like, dude, here I'm giving you my numbers. This location makes like 8 cents. He's like, you can fix it. He's like, we did improve. He really. The net takeaway was to go back and raise prices.

[A]

But is that fixing profit or is that fixing systems? Is it just. You're not charging enough.

[B]

We're not charging enough in a lot of locations.

[A]

I think sometimes you need the grace, the permission to do that. Which is, there's benefits to that.

[B]

Well, I've always said, well look, if I'm making enough, it is 8 cents on the dollar. Why raise the price? But, but the insurance and the, everything else is eating up so fast. You can not, not raise prices anymore. Anymore. You want to not be greedy. You want to not be.

[A]

But as a greeter, is it survival?

[B]

Well, now it's now it's survival.

[A]

You gotta pay your staff.

[B]

There's now it's now, now it's flat out survival.

[A]

Yeah. And I know Chip, I think he does great work and I think that's a blanketed term. And I'm not trying to single anybody out with like the, the, these fees that consultants are paying to get access to their knowledge. I just think that that Runway is very short because there's, it's, it's. I see where it's going and I'm like, why do I want to build up a community?

[B]

I can hire a consultant.

[A]

I don't want to rip people off.

[B]

I can, I can hire in a consultant today. Take him down to my place. He's going to look at my menu. Your menu's too big. I know, it's, it's like it's taken 15 years to get this big. And even when we take things off the menu, we still make them, so might as well leave them on the menu. I mean, you know, and, and I said 80% of my customers come in and don't even look at the menu. Right. You know, and, and we're a high volume place and it's just, you know, we, we just figure out how to make money.

[A]

There's nothing about the restaurant industry if you have, if you're good at speaking to AI and you give it the right prompts and you can give it the data it needs. You'd say that same thing to a consultant. Consultants are really good at fishing for the information that you aren't aware of. But like there are going be to be prompts that you can just copy and paste a prompt and put your uniqueness into it and that prompt will be able to give you just as good, if not better advice than any consulting. And I'm not saying consultants aren't, I'm just saying that the AI is getting that good. And it's like, we see where this is going, you know, like, no, no.

[B]

You can now not only plug in your pmix, but you plug in your balance sheet and it'll just start to lecture you, you know, like the consultant would, you know, and it's, it'll give.

[A]

You step by step and it will recommend the services and the tools. And it's just like, I, like, I really try to stay optimistic sometimes. Like, how are we supposed to. Like, I'm like, oh, I'm just getting ready for that high income universal. I mean, I think, I think, I.

[B]

Think Elon might be honest. Well, this is the real problem is that I think we're going to see more job losses. I think costs are going to continue to. There's going to be a scale period. There's a weird, weird period now where people are graduating school, they got sold the bill of goods that they should go get all this education. And what I need is more plumbers.

[A]

What time is that, man? I got another interview. Oh my God. I actually have to get going real bad.

[B]

Hey, coming off. But anyway, yeah, the world needs more plumbers and electricians and they'll pay you to learn those jobs and you'll have a six figure income. Please go become a plumber or electrician.

[A]

Yeah. So we're gonna wrap this up because I'm way over time and I have another interview I gotta get to. But this has been a lot of fun. Who do you respect and admire? Somebody that you think I should get on the show.

[B]

I was thought about, thought about it and I, I really like Louis Rainey up in Duncanville, Texas. It's near Dallas. He's somebody that's in the Cajun food business. And you know, and we've, I don't know how we've talked for three hours and then talk about crawfish. I'm the largest seller of crawfish in this county by far. And, oh, it's a whole new. Another story about selling crawfish. And it's a huge part of my business. I'm actually in the crawfish business six months of the year, football business three months of the year. And you know, in the sports bars.

[A]

Well, give me that name one more time.

[B]

All right, Lewis Rainey up Pelican House. I'll get you his contact information. He came from New Orleans when Katrina ran him out and he's opened a restaurant up there. There. But he has some really interesting stories about how to sell crawfish, how to, how he as an operator has figured out how to drive a truck across Louisiana helping other restaurants.

[A]

That's cool.

[B]

While getting his crawfish.

[A]

Look up, man, I'm coming after you. I'd love to get you on the show.

[B]

How can we get to talk to him? And for me, you know I'm on Facebook, Jim Hallers and LinkedIn. Although I haven't updated my, my LinkedIn in years. Just felt like something I haven't needed to do in a long time. I looked at it before, but we.

[A]

Can add this list of things he's accomplished to his. Just, just, just give me that list and I'll upload your LinkedIn.

[B]

He's like, I'll have a. I fix it for you. Right?

[A]

This has been a lot of fun, Jim. I literally cannot do.

[B]

Thank you for reaching out. The best of luck to you. You know, getting restauranters to actually listen to your podcast is, it's like gold. It's like free money for them if they would listen, listen, because each and every one, you can get something out of it.

[A]

Jim, thank you so much. I feel bad to Rush, but I gotta get to the next interview. You're. There is no question, my man. You are unstoppable.

[B]

Thank you.

[A]

There's another episode wrapped up here at Restaurant Unstoppable. Special thanks to our guest today, Jim Hollers. And if it was up to me, I'd go three and a half hours on every episode. Jim's unique background, though, was special. You can tell the world of tech his perspective that, that unique entry into the industry with just coming from the world of tech, I think that he offered a lot of unique perspective I don't always get. So I hope you enjoyed it as much as I do. And if you want to connect with Mr. Jim Hollers, he will be live in Restaurant unstoppable community on December 29th. We're going to be live at 11am for coffee with Eric and you can join this conversation and all live events. My goal with the podcast is to be a connector and the best way I can serve you is by helping helping you connect with these badasses. I'm getting on the show. So we're going to be trying to get all my guests going forward into the network to do a Q A, engage you in conversation during coffee with Eric. And if you just want to join this single conversation with Jim, head over to restaurantstoppable.com CWE stands for Coffee with Eric. We'll get you the link for this conversation because most importantly, we want to serve you. And if, if connecting with Jim, if he has some questions that you think is week could, or if you had some, if you had some questions for Jim that would really help you, we want to make sure you can get that help. So we'll, we'll make sure you get this connection. So head over to restaurantsoppable.com CWE and we will make sure you get the link to Coffee with Eric. But we could use your support. So if you want to sign up to the community, head over to restaurantunstoppable.com live and be a part of our community. We'd love to have you. That's it for today. Until next time. Peace.