February 12, 2024 • 44 mins
Collaboration and alignment between restaurant operations and marketing teams is critical to driving traffic without hurting the guest experience, Ray Johnson, Founder of ReCee’s Leadership Consulting Group, tells Bloomberg Intelligence. In this episode of the Choppin’ It Up podcast, Johnson sits down with BI’s senior restaurant and foodservice analyst Michael Halen to discuss how better employee retention and ease of execution can generate long-term, sustainable sales growth. He also commented on depressed productivity levels, the importance of team-member training and how a greater mix of off-premise sales has hurt restaurant-level execution.
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Speaker 1 (00:16):
Welcome to Chopping it Up.
Speaker 2 (00:18):
I'm your host Mike Halon, the senior restaurant and food
service analyst at Bloomberg Intelligence. Today we're joined by Ray Johnson, Founder,
president and CEO of Rec's Restaurant Consulting Company. Thanks for
doing us Ray.
Speaker 3 (00:30):
Thank you. Mikeel I'm so glad to be here.
Speaker 2 (00:33):
Good stuff, man, I'm glad I've got to meet you
at the Prosper conference. Shout out to David Job and
the team over there last August. You were one of
the highlights of my trip.
Speaker 3 (00:47):
Well, thank you, I tell you David and Luke I'm
going to shout him out also, just two great, great
people in this industry and have a feign desire for
this great industry of ours. Yeah. I love meeting you
and the team and some of the people we got
to meet there and Millie Island was awesome. Looking forward
to next year.
Speaker 1 (01:08):
Yeah for sure. All right, let's let's jump in here.
Speaker 2 (01:12):
Man. Why don't you you know, you have a great
career background. You worked at some fantastic brands over the years,
So if you could tell the audience a little bit
about your you know, career past.
Speaker 3 (01:23):
All right, Michael so Reda Didger's version of my great
career in this great industry. I love this industry, Michael.
I started out way back in the day at a
franchisee of the McDonald's so QSR. And quickly I went
to a fast casual steakhouse similar to a Bonanza U
(01:46):
ponder Rosa, a concept called Wrestler Steakhouse that was owned
by Marriott host Uh And right away I thought I
was pretty good. I was pretty young, and I wanted
to be with the very very best. And I heard
about the concept that was just doing tremendous volume called
TGI Fridays, and they were the king of the casual
(02:09):
theme restaurant. And I would go in and just study them,
and I go, if I'm that good, I want to
go work for that brand. And I finally got a
chance to go work for them, work for them twelve years,
learned so much. My mentor was the founder, Dan Scoggins.
He really taught me some very tough lessons that was
(02:31):
very very good. And I left there in nineteen ninety
six as director of operations. As I call it, the
area of the Midwest capital of the world, vacation capital
of the world. I should say Oklahoma, Arkansas, Missouri, and Oklahoma.
So then I stepped out of the restaurant business Michael
(02:53):
for the first time and only time, to get into
the patrollingum C story business. And I had a great
friend of mine, David Dornell, who was a president of
Bank of America it was Nation's bank at the time,
and we bought together at them, being our senior lenner
me being an entrepreneur, we bought twenty five C stores
(03:17):
in a gasoline and marketing distribution company called Saint Louis
for Trollingman Marketing, and I was the CEO president CEO.
And it was the greatest lesson I've ever learned about
leading people because all I knew Michael before get into
this business that the sign on the street and the
price on the sign is what you paid for gasoline, right,
(03:40):
and so, but it taught me a lesson that people
who work for you have great skills and it really
takes great leadership to engage them. Step back, be a
servant leader, take to time to learn, get to know
your people, and you don't give up power by being
a leader. And it just helped me a lot. I
(04:02):
would literally go in and ask many many questions as
opposed to given directions, and so I did that for
five years as CEO president, and I missed the restaurant
business and I started my own concept called Village Cafes
out of Saint Louis, and I literally created the concept.
(04:24):
I was the CFO, CEO, the operations guy, and the
whole nine yards, and I like to describe it as
a poor man's version of Prener Bread. We were in
office buildings and about two thousand square feet. It was
an awesome, awesome brand created. And that was in two
thousand to two thousand and eight, and then Crackerbrol came
(04:46):
calling and I kept saying no to them, and eventually
they wore me down and I sold my restaurant and
went to work for Crackerbrow And my goal was just
to work there for a couple of years back and
get back into the entrepreneur world. And the problem was
that kept getting promoted having success, and I became divisional
(05:10):
vice president and I left there in May of twenty
twenty two, and it was after fourteen and a half years.
It was an awesome, awesome ride, and I started my
consulting company, Recei's leadership restaurant consulting, and it's been an awesome,
awesome entrepreneur ride. There's a lot of people in our
(05:31):
industry that needed my help. While I was working for
bands like Cracker Broil and was an officer of the company,
and I would tell them, I go, I can't do that.
It's a conflict of ventance. So I saw the need
out there and it's been awesome to get out and
help people run restaurants right now.
Speaker 1 (05:49):
That's great.
Speaker 2 (05:51):
At TGI Fridays. Did you have any overlap with Alan Stillman?
Speaker 3 (05:56):
Absolutely, he was. I didn't know Alan, but I knew
of Allen. He was Dan's partner, right founder partner, Yeah, yeah, yeah.
Speaker 2 (06:05):
I think he started the brand with a he said,
a five hundred dollars loan from his mom.
Speaker 3 (06:10):
Yeah. You know. The story, Michael, is that they started
the brand in New York and it wanted it was
a brand that was started. The tells of the story
goes as they wanted to have a place for pilots
and flight attendants to be able to go as they're
(06:32):
laying over in these different cities, to go and just
have a great time. It was an awesome some of
the stories Dan till was just awesome. Yeah, a great brand.
Speaker 2 (06:43):
Yeah it's cool, and yeah, I bet you a lot
of gen z Ers didn't didn't realize it started as
a singles bar, you know.
Speaker 3 (06:50):
That's that's right, that's right, and when you go into
I don't think they have him now, but I remember
one of our templars was a three tier phone booth
that people would say, what's a phone boot? But you
would go in and you would have one level that
you go up. On the next level you can use
another phone on the next level. It was an awesome,
awesome stuff. So yeah, I enjoyed it.
Speaker 1 (07:11):
Yeah, that's great. Alan's a legend.
Speaker 2 (07:13):
I got to I was lucky enough to meet him
a few years back and I met I met his
son Michael as well, who's running the family business.
Speaker 1 (07:20):
Now.
Speaker 2 (07:20):
They own the Smith and Wilenski's in New York and
a whole bunch of and a great new brand, well
not really new anymore, but quality branded restaurant in Manhattan.
So next time you're in Manhattan, check out Quality. Absolutely
my favorites.
Speaker 3 (07:35):
Yeah, well I'll give a plug. It's the one when
I sit back and look over my career, it's the
one brand that taught me the most and the most
disciplined brand that I have ever worked for even to
this day.
Speaker 1 (07:49):
Cool, very cool, all right.
Speaker 2 (07:52):
So for the audience, the reason why I approached Ray
is because he shared this amazingly inspirational story at prosper So, yeah,
are you willing to share that story with us here
for the pod?
Speaker 3 (08:08):
Absolutely, Michael. So. I shared this story because it's really
meant for the leaders and people in general who maybe struggle,
maybe sometime wants to give up. Maybe sometimes things are
not happening for them as quickly as they would like
for them to happen. Maybe they feel they should have
(08:29):
gotten promoted and got in a position that they didn't get,
and they might give up or get discouraged with the industry.
But the reader's digest version of the story was, I
was this guy with a TGI Friday, unbalanced in my
home life, in my work life, I just want to grow,
I want to be successful. And so I'm this young
(08:52):
African American leader working in an area where my staff
was probably about ninety nine percent sent not African Americans,
and so I had to lead this great group of
people every single day, every single day. And so I
would go into work. I would give it my all.
(09:14):
And over the years I got to a level that
I was ready to be promoted. And my boss was
telling me you're the next guy up. You're the next
guy up, and so that just fed me more. I
got more inspired. I put in the extra work. I
went beyond the call of duty. I had this thing
that says, excellence is doing more than most people think
(09:37):
is required. That was my logo, that was my statement.
So I would give the extra effort. And so I
wanted to be this district manager, and so I wanted
to be the obvious choice. So when it came time,
based on my evaluations, based on my results, time to
be the guy that's going to get promoted. Yet I
(10:00):
had this leader who pulled me aside and he said, hey, listen,
we're going to make a decision. And the decision is
we're not going to promote you. And I was devastated,
and I think I stared at him, Michael, for about
ten seconds before I said a word. And he said,
before you do this, I want to tell you something
(10:21):
off the record, and I go, okay, I'm listening. And
he said to me, you are a great leader, but
I'm going to protect you, and I'm not going to
give you this position that you've earn. I'm going to
wait for something more suitable. And he said, because the
(10:42):
position you would have to have, the position that I
would promote you to, you'd be leading about seventy eight
to eighty five percent Caucasian employees and leaders. And I
don't think I'm set you up for success. If I
would put you in that position, you would be in
an area where no one in the area would look
(11:04):
like you, and it would be tough. And I didn't
know how to respond to that, Michael. I had never
had it to hit me in the face like that.
But after being sitting there for a couple of minutes,
I asked, two, could I be excuse and I'm going
to leave now. I'm going to go home. I got
(11:24):
in my car. I was devastated. I drove all the
way home. Michael, I don't know why I drove all
the way home, but I drove all the way home,
got in my driveway, turned around, never got out of
my car, went back to the restaurant. I'm having a
conversation with myself and my boss was at the restaurant,
(11:46):
and I said, I need to talk to you, and
I said, I appreciate you telling me the truth. At
least you was honest with me. I said, but I
don't agree with it. I absolutely. I need to make
sure you know I don't agree with it. That's number one.
(12:06):
Number two. I need to let you know that you
have lit something inside of me fire and desire that
the next time the position comes open of anything that
I'm qualified for, it's going to be such an obvious
choice promotion for you that you cannot choose me. And
(12:29):
the third thing I said to him at the time,
and I remember saying this to him, and I said,
I am a leader that lead people, and I don't
even look in the mirror and see color. I look
and I treat people for who they are in the
behaviors that they exist. I said, I just do not
(12:52):
think of it that way, and you need to know
that by me. So I'm not saying that to you
to go back and have you to change your mind.
I just need to make make sure you understand how
I felt. So go. He didn't say a word. I
go back. I have to have this conversation with my
wife that all the unbalanced hours that I've been working
(13:14):
all these years, I mean, in these months, I have
to go back and say, Hey, the reason I wasn't
there for a kids and this and that, and I
told you that I was going to be the next
guy up. It didn't happen, and I need to tell
you that that's the bad news. The good news is
I'm more inspired and energized to be the obvious choice next.
(13:39):
Six months later, Michael I was promoted to a district
manager and a year after that, I was promoted to
director of operations for a TGI Fridays. And it was
just a lesson of perseverance. It was a lesson of
don't let people tell you who they are who you are.
It's a lesson of it. It's about treating people with
(14:02):
dignating respect and everybody for the values of who they are.
And it helped me for the rest of my restaurant career.
Speaker 1 (14:10):
It's a testament to who you are. Man, I'm sorry
you had to go through it, but.
Speaker 2 (14:15):
Man, it's so moving and I love how that you
use that to even motivate yourself more.
Speaker 1 (14:21):
Man.
Speaker 3 (14:22):
Fantastic, Yes, and Mike as a plug, I use I
don't use that story, but I use that event to
speak to the college students, especially with eighth SPCU students.
I have programs where I help walk them through a
runway from a freshman in college through how you can
(14:43):
get into our great industry. For example, you might be
a shift leader a freshman year in college. The second year,
you might be a shift leader again. The third year
you're going to get some more training and some mentorship leadership,
and by the time you're ready to grad, way, you
have a runway or a path that you can understand
if you want to be in this industry. You have
(15:05):
some experience how you continue to continue to grow in
this industry. So it's been awesome for me.
Speaker 1 (15:10):
That's fantastic, all right.
Speaker 2 (15:12):
We I can talk to you all day about, you know,
the history of the restaurant business.
Speaker 1 (15:17):
I love it, but I'd.
Speaker 2 (15:19):
Like to talk a little bit about what's going on
now and kind of catch the point on some of
the hot topics. You know, Yes, I guess how how
should some of these restaurant chains solve for the solve
their problems for the long term, right like consumers have
options right now, It's not easy out there, Michael.
Speaker 3 (15:39):
I think you're absolutely right. I think the muscle that
the restaurant industry had pre tempt. Pandemic was a good
muscle to use. It was the muscle we all knew
no one had experienced, thank god, the pandemic before right
and and during the pandemic, there was a lot of
things that happened that people nobody knew how to manage
(16:03):
against it, you know, off premise, third party delivery, restaurants,
dining rooms being closed. And then post pandemic, thinking that
we could go back to that type of management or
that type of the guest experience, it wasn't there anymore.
We didn't have the employees there, and it didn't come back.
People had transitioned out of the restaurant industry that had
(16:27):
gone over to e commerce, the Amazon's in the Walmarts
of the world. And so now you're paying someone twenty
five dollars an hour, doesn't mean that you're going to
get twenty five dollars to productivity. Twenty five dollars is
just to get the person. And so once that that happened,
is that the muscle that's needed now in the industry
(16:48):
is the muscle of her attention of employees and to
create these great experience for our employees to create great
experience for the guests because the guests learned something doing
the pandemic. From my point of view that I'm forced
to make meals that are in ways that I could
get pretty close to the restaurant industry, and I was
(17:12):
forced to do that. So now when I come out
and I don't have the hospitality value and I don't
have it's a higher price, it's less selection, it's a
service is not there. So now I get to pick
and choose where my one hundred dollars are spent and
I get to evaluate that that's the value that it's
(17:34):
just spent one hundred dollars. Was it worth your experience?
Was it worth off premise where I had to pay
thirty percent more to get a hamburger, where it wasn't
really transportable, It wasn't the quality I expected. And I
think our guests are so smart that they started after spending,
(17:56):
they start evaluating was that value for what I spent
on my family of for worth going back again? Or
I used to go there three times a month, it's
not worth it anymore. Now that is one and a
half time, or it's one time for a month. And
I think the restaurant muscles now, is that how do
(18:18):
you leverage the cycle of what's creating a great guess
experience that is different from post pandemic, that's different than
pre pandemic. And I think that that's been a challenge
for restaurants.
Speaker 2 (18:32):
Yeah, and last time we spoke, you mentioned too how
you felt that the marketing and operations for a lot
of the restaurant chains are going in opposite directions versus
pulling in the same direction.
Speaker 3 (18:44):
Yeah. I think that everyone is trying to figure it out,
and I think marketing is running in a lane and
they have trends and they have things they want to do,
and it probably will drive traffic. The collaboration in the
alignment has got to be can we sustain traffic? Are
we driving these our great guests into the door? And
(19:07):
can we sustain them? Can we give them a great experience?
Is operations all bought in under direction? Marketing wants to go.
So I could have a great marketing campaign, but if
I can't execute it in the restaurant it takes too
many steps in the restaurant to execute it, then I'm
going to get bad service and I'm going to get
(19:28):
bad guess. Experience, and it's also going to turn the
employees because employees are not going to work in a
stressful environment. I got options now, right, And so my
biggest thing that I talk about to leaders now is
that the collaboration from the beginning, the the agreement, the
(19:49):
alignment from the beginning, and what's the why why, what's
the strategy? Is operations all in on the direction that
we're going. And the last part I'll say is that
I think operations spends a lot of time taking directions
of this is the way we're going for marketing. By
the time it gets to operations, it's pretty much baked
(20:12):
into the directions and strategy.
Speaker 2 (20:14):
Yeah, for sure, operations are I mean, they're so key,
and I feel like there's distill, like undervalued, right. But
when I see a new company, name a new CEO
and they bring in an operator, I get excited about that.
Speaker 3 (20:29):
Yeah, you know, I tell people it's the motor of
the car, Michael. I could live with my windows not
working and my radio or not playing, but I could
still drive a car. And I think operations is such
a vital, if not the most urgent part, because I
(20:51):
could have the greatest plan in the world but if
I can't execute it in the four walls of the restaurant,
it's not going to work. So I tell a lot
of clients that really, we have to make sure that
if we're going to put something into the building that
(21:13):
it is going to be executable, not only in terms
of driving sales, but can I really make it into
a great experience in the restaurant. And so it might
be that I have thirty items on my menu, but
maybe only ten of them are selling. I might te
mix at about seventy five to eighty percent. I might
(21:36):
be selling the other five at a three percent clip. So,
but I have to prepare as an operator to be
able to sell that for the one or two guests
that might come in and got And that's where I
think marketing and operators have to get together in a
line to say, Okay, this is great to have, is
it really providing value? Am I losing? Execute? Is an
(21:58):
ease of execution? And that's the conversation I think needs
to be had more now today. It's more urgent today
than it was in the past.
Speaker 2 (22:09):
Yeah, we saw on an example of this not working.
I guess it was a couple of years ago with
the Burger King Chick King fried chicken sandwich.
Speaker 1 (22:16):
It was a great sandwich.
Speaker 2 (22:18):
It was probably better than all the other Burger qsr
Chains made. But you know, trying to make a sandwich
that was very labor intensive in a restaurant that frankly
you know was understaffed or very lightly staffed became completely untenable.
And I think it was taken off the menu maybe
six months after it debuted.
Speaker 3 (22:40):
Yes, yes, And it's even more important now because productivity
levels have gone down wages have gone up. So I
don't get the same type of grill cook or the
same type of prep cook for twenty five dollars an hour.
But my expectations are this, so I can't have seven
(23:00):
steps to produce a menu of plate presentation that is
too complicated and volume wized to be able to execute
it in the kitchen. So this is where I think
from the beginning, when the strategy is being put together
as a brand, I think everybody should come together collaborative
(23:23):
and and talk about it and put the plan the
strategy together from the beginning. And I think that that's
the one piece that's different Michael, that in post pre
pandemic you could get away with it today, it's tough
to get away with it.
Speaker 2 (23:40):
Yeah, and you know impact of increased delivering and catering
is really pressured operations.
Speaker 1 (23:46):
Correct.
Speaker 3 (23:47):
Yes, I also the velocity of third party off premise
is coming at you in a way that that was
probably your week. It's muscle because you know it's the
demand has gone up. But you know the muscle that
you had in the facilities that you built wasn't built
(24:08):
for that type of volume. So now you're trying to
execute that, and you're trying to execute the dining room,
and you're trying to execute it maybe with less skill
employees or the training hasn't been there, and it gets
into a whirlwind and all of that comes in and
takes away of eroding the guest experience. Now, I got
a decision to make. I was in your brand, I
(24:32):
had dinner. You charge me more twenty to twenty five
percent more, and my experience was less. And as I'm
driving home, I get to evaluate that, you know what,
I can't create the experience at one hundred percent, but
I could do it at my home at about seventy
five percent and save myself a lot of money. So
(24:54):
I'm choosing not to go back in on that third visit.
And I think that's a big missed in an industry.
And I think that that's where we need to focus
an alignment. Ease of execution. What's really going to drive traffic?
Can I sustain it? Is it? Ease of execution for
my employees is creating churn in the restaurants?
Speaker 2 (25:18):
And I think you you know, and I know you've
said to me that you think a big, a big
onlock for that is really the retention of people.
Speaker 3 (25:30):
I think it's Michael. It is the number one thing
that operators are struggling with. So the way I would
ask a question when I go into restaurants, if I
would ask two questions, I would get two answers. One
I would say, hey, tell me what you're doing to
grow sales and how you're growing your business, whether it's
(25:50):
right or wrong, Michael, I would get some answers right.
The second question is, hey, tell me what you're doing
that I can touch and feel for your employees and
to retain your employees. And I would get the stare.
I would get the repeated of the question, repeat of
(26:11):
the question, but it's it's it, or I would get
the stock answers. But when you go and talk to
employees and say do you feel you're a part of
this restaurant, and they go, no, I work for this restaurant.
And so I would make statements like why don't you
put up a sign to say what can we do
(26:31):
for our restaurant? The key words being we and are
it's not my restaurant, it's our restaurant, and what can
we do together to improve it? And I think that
that's a retention miss that's in the brands now that
we don't spend a lot of time and I think
we spent a lot of time of getting employees, Michael,
(26:53):
I don't think we spend a lot of time of
keeping and growing employees making it the obvious place to work.
If I'm going to work in a cure CURSR, feel
I'm going to work in a fast casual. I want
to be the obvious place to work. I want to
create an environment that people say, I want to work
in this business and I want to work for you.
(27:15):
And I think those behaviors and those tactics and actions
from leaders and operations are missed right now.
Speaker 2 (27:24):
I agree, you know, how much of a role can
you know menu reduction play in this too.
Speaker 3 (27:30):
I think that without eroding your brand and who you are,
if you are a brand, you have to carry the
type of items you need to carry. I don't think
you need to try to be everything to everybody. I
don't think our guests are asking us to be that.
I believe that ease of execution and menus and finding
(27:53):
out what is selling and what you need to have
to have your brand be sustainable and desirable is what
you need to do. Now, there's some things you're going
to carry that you're not going to sell one hundred
percent of, but you need to have some of those.
But I don't think that you need to carry everything
(28:13):
you maybe cared before, because it's going to create a
lot of extra work that right now, it's not ease
of execution.
Speaker 1 (28:23):
All right, good stuff.
Speaker 2 (28:25):
Obviously, costs have been a huge topic of discussion for
the last couple of years, so you know how our
chief operating officers driving costs out of the system.
Speaker 3 (28:35):
In twenty twenty four, I think cost is going to
be something that on an ongoing basis that operators and
leadership have got to look at and the balance between that,
if my costs are going up. I can't take it
all in venue price. I just can't. At some point
(28:58):
you're going to get to a price that you're not
your brand anymore. So if you're a fast catal, you
can't have an eighteen dollars plate that now is going
to throw you into another category. So I think a
lot of what needs what has happened falls back on
the brand and marketing and operational leadership. And so what
(29:22):
are the brands that creates the value that I could
serve fast that it's not going to be a high
priced menu item that I that doesn't affect my brand.
And I think that that's the challenge. And then how
do you store it? How do you keep it? How
do you make it productive? How do you eliminate waste?
(29:42):
And I think that all falls into the operational bucket
and it falls into a mastery of operations. I believe
if you believe, the kitchen is the motor of the
car and the front is about hospitality. So therefore, everything
I do in the kitchen, I'm going to make sure
that motor is purring. And I think that every day
(30:06):
that's got to be the focus from marketing and operation
to us lead the branch service.
Speaker 2 (30:12):
Yeah, that's the long term view, right I mean, just
shrinking your portion sizes and raising the prices is not
the long term answer right now.
Speaker 3 (30:22):
I think that at some point I've gone to restaurants recently, Michael,
where I walked away and I said, I just spent
ninety bucks in this restaurant. And one it was okay, Two,
I'm not really that full. Three the portion fives were
than where they needed to be. Plate pleasentation wasn't good.
(30:45):
Nobody cared about my service. It was the average service.
It took a long time, And I think all of
that plays into the bucket and you can tell when
restaurants are doing that, Michael, to your point, you can
tell when restaurants are spending more time weighing things out
than they care about it took thirty minutes to get
(31:06):
my food out, or it wasn't hot. And I just
think that that is the the you know, where restaurants
are not aligned at what's what's important to I.
Speaker 2 (31:15):
Guess, and we see it in the traffic numbers for
the last couple of years now it's glaring.
Speaker 3 (31:22):
Yes, And I think that the challenge is and what
I'm seeing today is the number one move. Brands are
using to compensate for a cost either than the labor
and in the supply bucket is pricing and you just
(31:44):
it can't be your only tool. So in other words,
how do you ask brands right now, how do you
increase productivity? What's the training and development development now that's
different from before? That could make my easier that I
can become more productive. And I think sometimes brand have
(32:05):
cut training to get costs back. I think sometimes training
is not as many days, or it's not as relentless
as it choose to be. I think a lot of
brands have looked at portions and say, hey, we could
get away by couldn't it ounce and a half and
keep the price at the same or raise the price.
And I think it's a bad, bad cycle to be
(32:27):
involved in for our guests.
Speaker 1 (32:29):
Yeah, and as a consumer, I definitely agree. I have
a big appetite ray, so you.
Speaker 2 (32:34):
Know, I definitely have left a few restaurants hungary recently.
All right, So, so once once you know a clienteers,
gets their operations nailed, gets the engine of the of
the car really running in tip top shape, how should
(32:56):
they approach growth?
Speaker 3 (32:59):
Well, I think that can I populate it. You know,
do I really feel good about the enterprise? Do I
really have it nail down? And so when I go
out to populate it, is it simple? Is it align?
(33:20):
And you know? Is there clarity about what we're trying
to do? And I think it's got to be more
than about the numbers or the number of units. Really
it's about how can I make it easier for my franchise.
Does the system work? Can can the process and system
help me with some tweaking of I might need to
(33:43):
check in Ray about this, but I don't need ready
to come in and do it. And once it gets
out there, is it broken? If everybody is failing at it,
there's something wrong with it. And I think that we
have to do inside out leadership before we go there.
We have to slow down to go fast. We have
(34:03):
to make sure that the foundation, as I call it,
the enterprise, is really really solid, because Michael is not
going to get better by being from going from one
unit to thirteen units. In other words, the thirteen unit
is not going to be better than the mothership. So
I have to really, on a scale of one to ten,
(34:23):
I have to have the mothership at eleven. So when
I go out and I'm doing more units. I really
have had systems and processes that populate its ease of execution.
It's simple, there's clarity, and there's alignment.
Speaker 2 (34:38):
Cool And is there an in that calculus about opening
that second third up to the thirteenth store? You know
how much did they think about maybe talent dilution in
the present stores?
Speaker 3 (34:53):
I think a couple of things. I think that that's
got to be the premise of what you thinking about.
So when I say populating, so I'm already populating in
my first store for my second and third store, and
I'm building inside that first store for my second and third,
and I'm constantly populating the second and third for my
(35:15):
fourth and fifth. Because the one thing I learned in
opening stores in California, Michael, people don't leave Indianapolis to
go to California open restaurants. And one of the learning
one of the lessons I learned is that when you're
opening brand new stores in California with brand new people
who have never heard of the brand before, you're learned
(35:37):
that population process quickly because you don't have the tenure
talent to go in and open a store that that
people might have twenty years of experience. It's all new.
So the lessons is to get learnings from the first
unit for the second and third, not only in people,
(36:00):
but in processes and systems. And I think that this
is where brands struggle a little bit. I think it's
more sometimes about the number of units as a as
opposed to process and systems and people. And that's got
to be uh, you know, thought about when you do that.
Speaker 1 (36:21):
For sure.
Speaker 2 (36:22):
All right, so, uh, you know, since I do cover
Cracker Barrel and you've had extensive experience at that, you know,
great brand, you know, if you're willing to share your thoughts,
I'd appreciate it right Like it's been a it was
a couple of tough years. They brought in new senior management.
You know where what do you think about where Cracker
(36:43):
Barrel is right now?
Speaker 3 (36:46):
Wow? Let me say I love this brand. It's an
iconic brand. It exceeded my expectations when I was working
through the years at Cracker Barrow. The one thing I
tell people about Crocker Brow. If you think about Cracker
(37:08):
Brel and who they are, who's their true competitor in
this space? There's not another concept. There's three day part
that you can get breakfast all day long, that it's
you know, comfort food and all of that. So with
that being said, it's been a tough couple of years
(37:31):
for them, and from the outside looking in and knowing
the brand, I think it's going to be tough for
them to get back to where they were. I believe that,
and I'm choosing my words carefully. I believe that there's
been a lot of people that have left the brand
(37:53):
that created the brand and created what was special about
the brand, and that's a lot to lose. And that's
a lot to lose. And I also think that it's
going to have to have the muscles to evolve from
where it was three, four or five years ago to
(38:15):
where it is today. And so it breaks my heart
to see the struggle. I know the stock prices had
struggled over the last couple of years, and you're speaking
to someone who owns a lot of stock and still
do so I hate it. I hate with what they're
going through. I can't, honestly, Mike, I can't say I
(38:40):
can see the light at the end of the tunnel.
But I do wish them well. I have a lot
of friends still there. I just know what they're going
through and it's going to be a challenge for them.
Speaker 2 (38:54):
Yeah, well, hopefully they can succeed in bringing in a
younger customer base. I know that's been something that they've
been focused on and I guess that's also part of
the reason why they, you know, got into the fast
casual breakfast biscuit business with Maple Street Biscuit Company.
Speaker 3 (39:10):
Right. So yeah, yeah, I think that the frequency program
that they just launch, I think it's very good, but
that's not new, right, you know, everybody's doing frequency, so
you're joined the party there. I also think that Maple
(39:33):
Street is going to it's still new enough. A very
good friend of mine is the founder of Maple Street
that we talk a lot, and I think that that's
going to be a challenge for them because he's no
longer with the brand also, so I just think that
it's overall as a brand, it's it's going to be tough.
(39:54):
It's going to really take some tough muscles to move
the brand in the direction that they want to go.
And as far as the tenured based customer, we knew
this several years ago that we were going to have
to evolve in a a different customer, a younger based customer.
(40:18):
And I think we I think they're trying to do that.
It just hasn't attached. And the one might question did
we start too late to try to did we Did
we not be aggressive enough over the last several years
to do that. So it's going to be a challenge.
Speaker 2 (40:42):
Yeah, and maybe they need to find, uh, maybe they
can find, you know, the guy or girl that runs
like the slim gym or the radio shack Twitter accounts,
somebody that has absolutely helped some of these brands blow
up on social media.
Speaker 1 (40:59):
Maybe maybe that's.
Speaker 2 (41:00):
Part of the answer in terms of attracting you know,
gen Z through TikTok and Twitter and LinkedIn, I'm sorry,
Instagram stuff like that.
Speaker 1 (41:10):
You know.
Speaker 3 (41:11):
Yeah, it's interesting Michael that I have a twenty three
year old daughter that's aid you know, she's getting her masters,
And I talked to her a lot, and she used
to work at Cracker Broll and so even while she
was working there, if I really want to know the
truth that was going on in the restaurant, I would
ask her and she didn't know. She was telling me
(41:32):
things that I did not want to hear. So I
had to pretend like, I really want to hear did
you really get the truth? And what you just said
is exactly right. It is so it's not her obvious
choice place to go when she's thinking about going out
to dinner. It's not her place obvious choice place to
go when she's thinks about going in for breakfast. And
when I asked her why some of the things that
(41:54):
we talked about, those are actually they're validated that those
are the reasons why. It's just not know my radar, dad.
It's not a place that I feel welcomes me. It's
not a place that I feel that I I want
to be it. It doesn't it doesn't draw me in,
and and I think that that's going to be a
challenge for them to figure out. I I love the
(42:17):
brand still, I still have stock in the brand. Wish
them nothing but the best, but it's been disappointing and
and and and and heartbreaking to see the struggles that
they've gone through over the last couple of years.
Speaker 2 (42:31):
Yeah, I think, I think, uh yeah, I'm hopeful that
the new management team can can turn things around because
it is a great brand. I know a lot of
people have very strong feelings towards the brandy, you know,
so so yeah, you know, hopefully things things turn around there.
You know, as a financial guy, I always like the
(42:51):
fact that that they never closed the store and that
uh and that their maintenance CAPPACX was so much lower
than their everybody else because you know, it was part
of the vibe, part of the being an old country store.
Speaker 1 (43:04):
Right.
Speaker 2 (43:04):
So there's there's definitely some really you know, interesting attractive
aspects to the story. So so yeah, I'll be I'll
be waiting, I'll be watching closely, for sure, I'll be.
Speaker 1 (43:16):
I'll be there. I'm here watching pretty closely, paying close attention.
Speaker 3 (43:19):
So absolutely absolutely I wish to nothing but the best
going for same.
Speaker 2 (43:25):
All right, thanks again, Ray, that was awesome man, Thank you.
What's what's the best way for members of the audience
to get in touch with you?
Speaker 3 (43:34):
Well, absolutely you are. I am available. I will give
you my business number. I'm at six one eight three
oh four three two two. I love this business. If
I could help any brands, my email account is reces
(43:54):
R E C E E s l LC at gmail.
Please reach out to me and you could also reach
out to me on LinkedIn. I appreciate you, Michael.
Speaker 2 (44:07):
I appreciate you too, and I also appreciate the audience
for listening in. If you liked the episode, please leave
us a review. Check back in a couple of weeks
for a discussion with Charlie Morrison, CEO of Salad and
Go
Welcome to Chopping it Up.
Speaker 2 (00:18):
I'm your host Mike Halon, the senior restaurant and food
service analyst at Bloomberg Intelligence. Today we're joined by Ray Johnson, Founder,
president and CEO of Rec's Restaurant Consulting Company. Thanks for
doing us Ray.
Speaker 3 (00:30):
Thank you. Mikeel I'm so glad to be here.
Speaker 2 (00:33):
Good stuff, man, I'm glad I've got to meet you
at the Prosper conference. Shout out to David Job and
the team over there last August. You were one of
the highlights of my trip.
Speaker 3 (00:47):
Well, thank you, I tell you David and Luke I'm
going to shout him out also, just two great, great
people in this industry and have a feign desire for
this great industry of ours. Yeah. I love meeting you
and the team and some of the people we got
to meet there and Millie Island was awesome. Looking forward
to next year.
Speaker 1 (01:08):
Yeah for sure. All right, let's let's jump in here.
Speaker 2 (01:12):
Man. Why don't you you know, you have a great
career background. You worked at some fantastic brands over the years,
So if you could tell the audience a little bit
about your you know, career past.
Speaker 3 (01:23):
All right, Michael so Reda Didger's version of my great
career in this great industry. I love this industry, Michael.
I started out way back in the day at a
franchisee of the McDonald's so QSR. And quickly I went
to a fast casual steakhouse similar to a Bonanza U
(01:46):
ponder Rosa, a concept called Wrestler Steakhouse that was owned
by Marriott host Uh And right away I thought I
was pretty good. I was pretty young, and I wanted
to be with the very very best. And I heard
about the concept that was just doing tremendous volume called
TGI Fridays, and they were the king of the casual
(02:09):
theme restaurant. And I would go in and just study them,
and I go, if I'm that good, I want to
go work for that brand. And I finally got a
chance to go work for them, work for them twelve years,
learned so much. My mentor was the founder, Dan Scoggins.
He really taught me some very tough lessons that was
(02:31):
very very good. And I left there in nineteen ninety
six as director of operations. As I call it, the
area of the Midwest capital of the world, vacation capital
of the world. I should say Oklahoma, Arkansas, Missouri, and Oklahoma.
So then I stepped out of the restaurant business Michael
(02:53):
for the first time and only time, to get into
the patrollingum C story business. And I had a great
friend of mine, David Dornell, who was a president of
Bank of America it was Nation's bank at the time,
and we bought together at them, being our senior lenner
me being an entrepreneur, we bought twenty five C stores
(03:17):
in a gasoline and marketing distribution company called Saint Louis
for Trollingman Marketing, and I was the CEO president CEO.
And it was the greatest lesson I've ever learned about
leading people because all I knew Michael before get into
this business that the sign on the street and the
price on the sign is what you paid for gasoline, right,
(03:40):
and so, but it taught me a lesson that people
who work for you have great skills and it really
takes great leadership to engage them. Step back, be a
servant leader, take to time to learn, get to know
your people, and you don't give up power by being
a leader. And it just helped me a lot. I
(04:02):
would literally go in and ask many many questions as
opposed to given directions, and so I did that for
five years as CEO president, and I missed the restaurant
business and I started my own concept called Village Cafes
out of Saint Louis, and I literally created the concept.
(04:24):
I was the CFO, CEO, the operations guy, and the
whole nine yards, and I like to describe it as
a poor man's version of Prener Bread. We were in
office buildings and about two thousand square feet. It was
an awesome, awesome brand created. And that was in two
thousand to two thousand and eight, and then Crackerbrol came
(04:46):
calling and I kept saying no to them, and eventually
they wore me down and I sold my restaurant and
went to work for Crackerbrow And my goal was just
to work there for a couple of years back and
get back into the entrepreneur world. And the problem was
that kept getting promoted having success, and I became divisional
(05:10):
vice president and I left there in May of twenty
twenty two, and it was after fourteen and a half years.
It was an awesome, awesome ride, and I started my
consulting company, Recei's leadership restaurant consulting, and it's been an awesome,
awesome entrepreneur ride. There's a lot of people in our
(05:31):
industry that needed my help. While I was working for
bands like Cracker Broil and was an officer of the company,
and I would tell them, I go, I can't do that.
It's a conflict of ventance. So I saw the need
out there and it's been awesome to get out and
help people run restaurants right now.
Speaker 1 (05:49):
That's great.
Speaker 2 (05:51):
At TGI Fridays. Did you have any overlap with Alan Stillman?
Speaker 3 (05:56):
Absolutely, he was. I didn't know Alan, but I knew
of Allen. He was Dan's partner, right founder partner, Yeah, yeah, yeah.
Speaker 2 (06:05):
I think he started the brand with a he said,
a five hundred dollars loan from his mom.
Speaker 3 (06:10):
Yeah. You know. The story, Michael, is that they started
the brand in New York and it wanted it was
a brand that was started. The tells of the story
goes as they wanted to have a place for pilots
and flight attendants to be able to go as they're
(06:32):
laying over in these different cities, to go and just
have a great time. It was an awesome some of
the stories Dan till was just awesome. Yeah, a great brand.
Speaker 2 (06:43):
Yeah it's cool, and yeah, I bet you a lot
of gen z Ers didn't didn't realize it started as
a singles bar, you know.
Speaker 3 (06:50):
That's that's right, that's right, and when you go into
I don't think they have him now, but I remember
one of our templars was a three tier phone booth
that people would say, what's a phone boot? But you
would go in and you would have one level that
you go up. On the next level you can use
another phone on the next level. It was an awesome,
awesome stuff. So yeah, I enjoyed it.
Speaker 1 (07:11):
Yeah, that's great. Alan's a legend.
Speaker 2 (07:13):
I got to I was lucky enough to meet him
a few years back and I met I met his
son Michael as well, who's running the family business.
Speaker 1 (07:20):
Now.
Speaker 2 (07:20):
They own the Smith and Wilenski's in New York and
a whole bunch of and a great new brand, well
not really new anymore, but quality branded restaurant in Manhattan.
So next time you're in Manhattan, check out Quality. Absolutely
my favorites.
Speaker 3 (07:35):
Yeah, well I'll give a plug. It's the one when
I sit back and look over my career, it's the
one brand that taught me the most and the most
disciplined brand that I have ever worked for even to
this day.
Speaker 1 (07:49):
Cool, very cool, all right.
Speaker 2 (07:52):
So for the audience, the reason why I approached Ray
is because he shared this amazingly inspirational story at prosper So, yeah,
are you willing to share that story with us here
for the pod?
Speaker 3 (08:08):
Absolutely, Michael. So. I shared this story because it's really
meant for the leaders and people in general who maybe struggle,
maybe sometime wants to give up. Maybe sometimes things are
not happening for them as quickly as they would like
for them to happen. Maybe they feel they should have
(08:29):
gotten promoted and got in a position that they didn't get,
and they might give up or get discouraged with the industry.
But the reader's digest version of the story was, I
was this guy with a TGI Friday, unbalanced in my
home life, in my work life, I just want to grow,
I want to be successful. And so I'm this young
(08:52):
African American leader working in an area where my staff
was probably about ninety nine percent sent not African Americans,
and so I had to lead this great group of
people every single day, every single day. And so I
would go into work. I would give it my all.
(09:14):
And over the years I got to a level that
I was ready to be promoted. And my boss was
telling me you're the next guy up. You're the next
guy up, and so that just fed me more. I
got more inspired. I put in the extra work. I
went beyond the call of duty. I had this thing
that says, excellence is doing more than most people think
(09:37):
is required. That was my logo, that was my statement.
So I would give the extra effort. And so I
wanted to be this district manager, and so I wanted
to be the obvious choice. So when it came time,
based on my evaluations, based on my results, time to
be the guy that's going to get promoted. Yet I
(10:00):
had this leader who pulled me aside and he said, hey, listen,
we're going to make a decision. And the decision is
we're not going to promote you. And I was devastated,
and I think I stared at him, Michael, for about
ten seconds before I said a word. And he said,
before you do this, I want to tell you something
(10:21):
off the record, and I go, okay, I'm listening. And
he said to me, you are a great leader, but
I'm going to protect you, and I'm not going to
give you this position that you've earn. I'm going to
wait for something more suitable. And he said, because the
(10:42):
position you would have to have, the position that I
would promote you to, you'd be leading about seventy eight
to eighty five percent Caucasian employees and leaders. And I
don't think I'm set you up for success. If I
would put you in that position, you would be in
an area where no one in the area would look
(11:04):
like you, and it would be tough. And I didn't
know how to respond to that, Michael. I had never
had it to hit me in the face like that.
But after being sitting there for a couple of minutes,
I asked, two, could I be excuse and I'm going
to leave now. I'm going to go home. I got
(11:24):
in my car. I was devastated. I drove all the
way home. Michael, I don't know why I drove all
the way home, but I drove all the way home,
got in my driveway, turned around, never got out of
my car, went back to the restaurant. I'm having a
conversation with myself and my boss was at the restaurant,
(11:46):
and I said, I need to talk to you, and
I said, I appreciate you telling me the truth. At
least you was honest with me. I said, but I
don't agree with it. I absolutely. I need to make
sure you know I don't agree with it. That's number one.
(12:06):
Number two. I need to let you know that you
have lit something inside of me fire and desire that
the next time the position comes open of anything that
I'm qualified for, it's going to be such an obvious
choice promotion for you that you cannot choose me. And
(12:29):
the third thing I said to him at the time,
and I remember saying this to him, and I said,
I am a leader that lead people, and I don't
even look in the mirror and see color. I look
and I treat people for who they are in the
behaviors that they exist. I said, I just do not
(12:52):
think of it that way, and you need to know
that by me. So I'm not saying that to you
to go back and have you to change your mind.
I just need to make make sure you understand how
I felt. So go. He didn't say a word. I
go back. I have to have this conversation with my
wife that all the unbalanced hours that I've been working
(13:14):
all these years, I mean, in these months, I have
to go back and say, Hey, the reason I wasn't
there for a kids and this and that, and I
told you that I was going to be the next
guy up. It didn't happen, and I need to tell
you that that's the bad news. The good news is
I'm more inspired and energized to be the obvious choice next.
(13:39):
Six months later, Michael I was promoted to a district
manager and a year after that, I was promoted to
director of operations for a TGI Fridays. And it was
just a lesson of perseverance. It was a lesson of
don't let people tell you who they are who you are.
It's a lesson of it. It's about treating people with
(14:02):
dignating respect and everybody for the values of who they are.
And it helped me for the rest of my restaurant career.
Speaker 1 (14:10):
It's a testament to who you are. Man, I'm sorry
you had to go through it, but.
Speaker 2 (14:15):
Man, it's so moving and I love how that you
use that to even motivate yourself more.
Speaker 1 (14:21):
Man.
Speaker 3 (14:22):
Fantastic, Yes, and Mike as a plug, I use I
don't use that story, but I use that event to
speak to the college students, especially with eighth SPCU students.
I have programs where I help walk them through a
runway from a freshman in college through how you can
(14:43):
get into our great industry. For example, you might be
a shift leader a freshman year in college. The second year,
you might be a shift leader again. The third year
you're going to get some more training and some mentorship leadership,
and by the time you're ready to grad, way, you
have a runway or a path that you can understand
if you want to be in this industry. You have
(15:05):
some experience how you continue to continue to grow in
this industry. So it's been awesome for me.
Speaker 1 (15:10):
That's fantastic, all right.
Speaker 2 (15:12):
We I can talk to you all day about, you know,
the history of the restaurant business.
Speaker 1 (15:17):
I love it, but I'd.
Speaker 2 (15:19):
Like to talk a little bit about what's going on
now and kind of catch the point on some of
the hot topics. You know, Yes, I guess how how
should some of these restaurant chains solve for the solve
their problems for the long term, right like consumers have
options right now, It's not easy out there, Michael.
Speaker 3 (15:39):
I think you're absolutely right. I think the muscle that
the restaurant industry had pre tempt. Pandemic was a good
muscle to use. It was the muscle we all knew
no one had experienced, thank god, the pandemic before right
and and during the pandemic, there was a lot of
things that happened that people nobody knew how to manage
(16:03):
against it, you know, off premise, third party delivery, restaurants,
dining rooms being closed. And then post pandemic, thinking that
we could go back to that type of management or
that type of the guest experience, it wasn't there anymore.
We didn't have the employees there, and it didn't come back.
People had transitioned out of the restaurant industry that had
(16:27):
gone over to e commerce, the Amazon's in the Walmarts
of the world. And so now you're paying someone twenty
five dollars an hour, doesn't mean that you're going to
get twenty five dollars to productivity. Twenty five dollars is
just to get the person. And so once that that happened,
is that the muscle that's needed now in the industry
(16:48):
is the muscle of her attention of employees and to
create these great experience for our employees to create great
experience for the guests because the guests learned something doing
the pandemic. From my point of view that I'm forced
to make meals that are in ways that I could
get pretty close to the restaurant industry, and I was
(17:12):
forced to do that. So now when I come out
and I don't have the hospitality value and I don't
have it's a higher price, it's less selection, it's a
service is not there. So now I get to pick
and choose where my one hundred dollars are spent and
I get to evaluate that that's the value that it's
(17:34):
just spent one hundred dollars. Was it worth your experience?
Was it worth off premise where I had to pay
thirty percent more to get a hamburger, where it wasn't
really transportable, It wasn't the quality I expected. And I
think our guests are so smart that they started after spending,
(17:56):
they start evaluating was that value for what I spent
on my family of for worth going back again? Or
I used to go there three times a month, it's
not worth it anymore. Now that is one and a
half time, or it's one time for a month. And
I think the restaurant muscles now, is that how do
(18:18):
you leverage the cycle of what's creating a great guess
experience that is different from post pandemic, that's different than
pre pandemic. And I think that that's been a challenge
for restaurants.
Speaker 2 (18:32):
Yeah, and last time we spoke, you mentioned too how
you felt that the marketing and operations for a lot
of the restaurant chains are going in opposite directions versus
pulling in the same direction.
Speaker 3 (18:44):
Yeah. I think that everyone is trying to figure it out,
and I think marketing is running in a lane and
they have trends and they have things they want to do,
and it probably will drive traffic. The collaboration in the
alignment has got to be can we sustain traffic? Are
we driving these our great guests into the door? And
(19:07):
can we sustain them? Can we give them a great experience?
Is operations all bought in under direction? Marketing wants to go.
So I could have a great marketing campaign, but if
I can't execute it in the restaurant it takes too
many steps in the restaurant to execute it, then I'm
going to get bad service and I'm going to get
(19:28):
bad guess. Experience, and it's also going to turn the
employees because employees are not going to work in a
stressful environment. I got options now, right, And so my
biggest thing that I talk about to leaders now is
that the collaboration from the beginning, the the agreement, the
(19:49):
alignment from the beginning, and what's the why why, what's
the strategy? Is operations all in on the direction that
we're going. And the last part I'll say is that
I think operations spends a lot of time taking directions
of this is the way we're going for marketing. By
the time it gets to operations, it's pretty much baked
(20:12):
into the directions and strategy.
Speaker 2 (20:14):
Yeah, for sure, operations are I mean, they're so key,
and I feel like there's distill, like undervalued, right. But
when I see a new company, name a new CEO
and they bring in an operator, I get excited about that.
Speaker 3 (20:29):
Yeah, you know, I tell people it's the motor of
the car, Michael. I could live with my windows not
working and my radio or not playing, but I could
still drive a car. And I think operations is such
a vital, if not the most urgent part, because I
(20:51):
could have the greatest plan in the world but if
I can't execute it in the four walls of the restaurant,
it's not going to work. So I tell a lot
of clients that really, we have to make sure that
if we're going to put something into the building that
(21:13):
it is going to be executable, not only in terms
of driving sales, but can I really make it into
a great experience in the restaurant. And so it might
be that I have thirty items on my menu, but
maybe only ten of them are selling. I might te
mix at about seventy five to eighty percent. I might
(21:36):
be selling the other five at a three percent clip. So,
but I have to prepare as an operator to be
able to sell that for the one or two guests
that might come in and got And that's where I
think marketing and operators have to get together in a
line to say, Okay, this is great to have, is
it really providing value? Am I losing? Execute? Is an
(21:58):
ease of execution? And that's the conversation I think needs
to be had more now today. It's more urgent today
than it was in the past.
Speaker 2 (22:09):
Yeah, we saw on an example of this not working.
I guess it was a couple of years ago with
the Burger King Chick King fried chicken sandwich.
Speaker 1 (22:16):
It was a great sandwich.
Speaker 2 (22:18):
It was probably better than all the other Burger qsr
Chains made. But you know, trying to make a sandwich
that was very labor intensive in a restaurant that frankly
you know was understaffed or very lightly staffed became completely untenable.
And I think it was taken off the menu maybe
six months after it debuted.
Speaker 3 (22:40):
Yes, yes, And it's even more important now because productivity
levels have gone down wages have gone up. So I
don't get the same type of grill cook or the
same type of prep cook for twenty five dollars an hour.
But my expectations are this, so I can't have seven
(23:00):
steps to produce a menu of plate presentation that is
too complicated and volume wized to be able to execute
it in the kitchen. So this is where I think
from the beginning, when the strategy is being put together
as a brand, I think everybody should come together collaborative
(23:23):
and and talk about it and put the plan the
strategy together from the beginning. And I think that that's
the one piece that's different Michael, that in post pre
pandemic you could get away with it today, it's tough
to get away with it.
Speaker 2 (23:40):
Yeah, and you know impact of increased delivering and catering
is really pressured operations.
Speaker 1 (23:46):
Correct.
Speaker 3 (23:47):
Yes, I also the velocity of third party off premise
is coming at you in a way that that was
probably your week. It's muscle because you know it's the
demand has gone up. But you know the muscle that
you had in the facilities that you built wasn't built
(24:08):
for that type of volume. So now you're trying to
execute that, and you're trying to execute the dining room,
and you're trying to execute it maybe with less skill
employees or the training hasn't been there, and it gets
into a whirlwind and all of that comes in and
takes away of eroding the guest experience. Now, I got
a decision to make. I was in your brand, I
(24:32):
had dinner. You charge me more twenty to twenty five
percent more, and my experience was less. And as I'm
driving home, I get to evaluate that, you know what,
I can't create the experience at one hundred percent, but
I could do it at my home at about seventy
five percent and save myself a lot of money. So
(24:54):
I'm choosing not to go back in on that third visit.
And I think that's a big missed in an industry.
And I think that that's where we need to focus
an alignment. Ease of execution. What's really going to drive traffic?
Can I sustain it? Is it? Ease of execution for
my employees is creating churn in the restaurants?
Speaker 2 (25:18):
And I think you you know, and I know you've
said to me that you think a big, a big
onlock for that is really the retention of people.
Speaker 3 (25:30):
I think it's Michael. It is the number one thing
that operators are struggling with. So the way I would
ask a question when I go into restaurants, if I
would ask two questions, I would get two answers. One
I would say, hey, tell me what you're doing to
grow sales and how you're growing your business, whether it's
(25:50):
right or wrong, Michael, I would get some answers right.
The second question is, hey, tell me what you're doing
that I can touch and feel for your employees and
to retain your employees. And I would get the stare.
I would get the repeated of the question, repeat of
(26:11):
the question, but it's it's it, or I would get
the stock answers. But when you go and talk to
employees and say do you feel you're a part of
this restaurant, and they go, no, I work for this restaurant.
And so I would make statements like why don't you
put up a sign to say what can we do
(26:31):
for our restaurant? The key words being we and are
it's not my restaurant, it's our restaurant, and what can
we do together to improve it? And I think that
that's a retention miss that's in the brands now that
we don't spend a lot of time and I think
we spent a lot of time of getting employees, Michael,
(26:53):
I don't think we spend a lot of time of
keeping and growing employees making it the obvious place to work.
If I'm going to work in a cure CURSR, feel
I'm going to work in a fast casual. I want
to be the obvious place to work. I want to
create an environment that people say, I want to work
in this business and I want to work for you.
(27:15):
And I think those behaviors and those tactics and actions
from leaders and operations are missed right now.
Speaker 2 (27:24):
I agree, you know, how much of a role can
you know menu reduction play in this too.
Speaker 3 (27:30):
I think that without eroding your brand and who you are,
if you are a brand, you have to carry the
type of items you need to carry. I don't think
you need to try to be everything to everybody. I
don't think our guests are asking us to be that.
I believe that ease of execution and menus and finding
(27:53):
out what is selling and what you need to have
to have your brand be sustainable and desirable is what
you need to do. Now, there's some things you're going
to carry that you're not going to sell one hundred
percent of, but you need to have some of those.
But I don't think that you need to carry everything
(28:13):
you maybe cared before, because it's going to create a
lot of extra work that right now, it's not ease
of execution.
Speaker 1 (28:23):
All right, good stuff.
Speaker 2 (28:25):
Obviously, costs have been a huge topic of discussion for
the last couple of years, so you know how our
chief operating officers driving costs out of the system.
Speaker 3 (28:35):
In twenty twenty four, I think cost is going to
be something that on an ongoing basis that operators and
leadership have got to look at and the balance between that,
if my costs are going up. I can't take it
all in venue price. I just can't. At some point
(28:58):
you're going to get to a price that you're not
your brand anymore. So if you're a fast catal, you
can't have an eighteen dollars plate that now is going
to throw you into another category. So I think a
lot of what needs what has happened falls back on
the brand and marketing and operational leadership. And so what
(29:22):
are the brands that creates the value that I could
serve fast that it's not going to be a high
priced menu item that I that doesn't affect my brand.
And I think that that's the challenge. And then how
do you store it? How do you keep it? How
do you make it productive? How do you eliminate waste?
(29:42):
And I think that all falls into the operational bucket
and it falls into a mastery of operations. I believe
if you believe, the kitchen is the motor of the
car and the front is about hospitality. So therefore, everything
I do in the kitchen, I'm going to make sure
that motor is purring. And I think that every day
(30:06):
that's got to be the focus from marketing and operation
to us lead the branch service.
Speaker 2 (30:12):
Yeah, that's the long term view, right I mean, just
shrinking your portion sizes and raising the prices is not
the long term answer right now.
Speaker 3 (30:22):
I think that at some point I've gone to restaurants recently, Michael,
where I walked away and I said, I just spent
ninety bucks in this restaurant. And one it was okay, Two,
I'm not really that full. Three the portion fives were
than where they needed to be. Plate pleasentation wasn't good.
(30:45):
Nobody cared about my service. It was the average service.
It took a long time, And I think all of
that plays into the bucket and you can tell when
restaurants are doing that, Michael, to your point, you can
tell when restaurants are spending more time weighing things out
than they care about it took thirty minutes to get
(31:06):
my food out, or it wasn't hot. And I just
think that that is the the you know, where restaurants
are not aligned at what's what's important to I.
Speaker 2 (31:15):
Guess, and we see it in the traffic numbers for
the last couple of years now it's glaring.
Speaker 3 (31:22):
Yes, And I think that the challenge is and what
I'm seeing today is the number one move. Brands are
using to compensate for a cost either than the labor
and in the supply bucket is pricing and you just
(31:44):
it can't be your only tool. So in other words,
how do you ask brands right now, how do you
increase productivity? What's the training and development development now that's
different from before? That could make my easier that I
can become more productive. And I think sometimes brand have
(32:05):
cut training to get costs back. I think sometimes training
is not as many days, or it's not as relentless
as it choose to be. I think a lot of
brands have looked at portions and say, hey, we could
get away by couldn't it ounce and a half and
keep the price at the same or raise the price.
And I think it's a bad, bad cycle to be
(32:27):
involved in for our guests.
Speaker 1 (32:29):
Yeah, and as a consumer, I definitely agree. I have
a big appetite ray, so you.
Speaker 2 (32:34):
Know, I definitely have left a few restaurants hungary recently.
All right, So, so once once you know a clienteers,
gets their operations nailed, gets the engine of the of
the car really running in tip top shape, how should
(32:56):
they approach growth?
Speaker 3 (32:59):
Well, I think that can I populate it. You know,
do I really feel good about the enterprise? Do I
really have it nail down? And so when I go
out to populate it, is it simple? Is it align?
(33:20):
And you know? Is there clarity about what we're trying
to do? And I think it's got to be more
than about the numbers or the number of units. Really
it's about how can I make it easier for my franchise.
Does the system work? Can can the process and system
help me with some tweaking of I might need to
(33:43):
check in Ray about this, but I don't need ready
to come in and do it. And once it gets
out there, is it broken? If everybody is failing at it,
there's something wrong with it. And I think that we
have to do inside out leadership before we go there.
We have to slow down to go fast. We have
(34:03):
to make sure that the foundation, as I call it,
the enterprise, is really really solid, because Michael is not
going to get better by being from going from one
unit to thirteen units. In other words, the thirteen unit
is not going to be better than the mothership. So
I have to really, on a scale of one to ten,
(34:23):
I have to have the mothership at eleven. So when
I go out and I'm doing more units. I really
have had systems and processes that populate its ease of execution.
It's simple, there's clarity, and there's alignment.
Speaker 2 (34:38):
Cool And is there an in that calculus about opening
that second third up to the thirteenth store? You know
how much did they think about maybe talent dilution in
the present stores?
Speaker 3 (34:53):
I think a couple of things. I think that that's
got to be the premise of what you thinking about.
So when I say populating, so I'm already populating in
my first store for my second and third store, and
I'm building inside that first store for my second and third,
and I'm constantly populating the second and third for my
(35:15):
fourth and fifth. Because the one thing I learned in
opening stores in California, Michael, people don't leave Indianapolis to
go to California open restaurants. And one of the learning
one of the lessons I learned is that when you're
opening brand new stores in California with brand new people
who have never heard of the brand before, you're learned
(35:37):
that population process quickly because you don't have the tenure
talent to go in and open a store that that
people might have twenty years of experience. It's all new.
So the lessons is to get learnings from the first
unit for the second and third, not only in people,
(36:00):
but in processes and systems. And I think that this
is where brands struggle a little bit. I think it's
more sometimes about the number of units as a as
opposed to process and systems and people. And that's got
to be uh, you know, thought about when you do that.
Speaker 1 (36:21):
For sure.
Speaker 2 (36:22):
All right, so, uh, you know, since I do cover
Cracker Barrel and you've had extensive experience at that, you know,
great brand, you know, if you're willing to share your thoughts,
I'd appreciate it right Like it's been a it was
a couple of tough years. They brought in new senior management.
You know where what do you think about where Cracker
(36:43):
Barrel is right now?
Speaker 3 (36:46):
Wow? Let me say I love this brand. It's an
iconic brand. It exceeded my expectations when I was working
through the years at Cracker Barrow. The one thing I
tell people about Crocker Brow. If you think about Cracker
(37:08):
Brel and who they are, who's their true competitor in
this space? There's not another concept. There's three day part
that you can get breakfast all day long, that it's
you know, comfort food and all of that. So with
that being said, it's been a tough couple of years
(37:31):
for them, and from the outside looking in and knowing
the brand, I think it's going to be tough for
them to get back to where they were. I believe that,
and I'm choosing my words carefully. I believe that there's
been a lot of people that have left the brand
(37:53):
that created the brand and created what was special about
the brand, and that's a lot to lose. And that's
a lot to lose. And I also think that it's
going to have to have the muscles to evolve from
where it was three, four or five years ago to
(38:15):
where it is today. And so it breaks my heart
to see the struggle. I know the stock prices had
struggled over the last couple of years, and you're speaking
to someone who owns a lot of stock and still
do so I hate it. I hate with what they're
going through. I can't, honestly, Mike, I can't say I
(38:40):
can see the light at the end of the tunnel.
But I do wish them well. I have a lot
of friends still there. I just know what they're going
through and it's going to be a challenge for them.
Speaker 2 (38:54):
Yeah, well, hopefully they can succeed in bringing in a
younger customer base. I know that's been something that they've
been focused on and I guess that's also part of
the reason why they, you know, got into the fast
casual breakfast biscuit business with Maple Street Biscuit Company.
Speaker 3 (39:10):
Right. So yeah, yeah, I think that the frequency program
that they just launch, I think it's very good, but
that's not new, right, you know, everybody's doing frequency, so
you're joined the party there. I also think that Maple
(39:33):
Street is going to it's still new enough. A very
good friend of mine is the founder of Maple Street
that we talk a lot, and I think that that's
going to be a challenge for them because he's no
longer with the brand also, so I just think that
it's overall as a brand, it's it's going to be tough.
(39:54):
It's going to really take some tough muscles to move
the brand in the direction that they want to go.
And as far as the tenured based customer, we knew
this several years ago that we were going to have
to evolve in a a different customer, a younger based customer.
(40:18):
And I think we I think they're trying to do that.
It just hasn't attached. And the one might question did
we start too late to try to did we Did
we not be aggressive enough over the last several years
to do that. So it's going to be a challenge.
Speaker 2 (40:42):
Yeah, and maybe they need to find, uh, maybe they
can find, you know, the guy or girl that runs
like the slim gym or the radio shack Twitter accounts,
somebody that has absolutely helped some of these brands blow
up on social media.
Speaker 1 (40:59):
Maybe maybe that's.
Speaker 2 (41:00):
Part of the answer in terms of attracting you know,
gen Z through TikTok and Twitter and LinkedIn, I'm sorry,
Instagram stuff like that.
Speaker 1 (41:10):
You know.
Speaker 3 (41:11):
Yeah, it's interesting Michael that I have a twenty three
year old daughter that's aid you know, she's getting her masters,
And I talked to her a lot, and she used
to work at Cracker Broll and so even while she
was working there, if I really want to know the
truth that was going on in the restaurant, I would
ask her and she didn't know. She was telling me
(41:32):
things that I did not want to hear. So I
had to pretend like, I really want to hear did
you really get the truth? And what you just said
is exactly right. It is so it's not her obvious
choice place to go when she's thinking about going out
to dinner. It's not her place obvious choice place to
go when she's thinks about going in for breakfast. And
when I asked her why some of the things that
(41:54):
we talked about, those are actually they're validated that those
are the reasons why. It's just not know my radar, dad.
It's not a place that I feel welcomes me. It's
not a place that I feel that I I want
to be it. It doesn't it doesn't draw me in,
and and I think that that's going to be a
challenge for them to figure out. I I love the
(42:17):
brand still, I still have stock in the brand. Wish
them nothing but the best, but it's been disappointing and
and and and and heartbreaking to see the struggles that
they've gone through over the last couple of years.
Speaker 2 (42:31):
Yeah, I think, I think, uh yeah, I'm hopeful that
the new management team can can turn things around because
it is a great brand. I know a lot of
people have very strong feelings towards the brandy, you know,
so so yeah, you know, hopefully things things turn around there.
You know, as a financial guy, I always like the
(42:51):
fact that that they never closed the store and that
uh and that their maintenance CAPPACX was so much lower
than their everybody else because you know, it was part
of the vibe, part of the being an old country store.
Speaker 1 (43:04):
Right.
Speaker 2 (43:04):
So there's there's definitely some really you know, interesting attractive
aspects to the story. So so yeah, I'll be I'll
be waiting, I'll be watching closely, for sure, I'll be.
Speaker 1 (43:16):
I'll be there. I'm here watching pretty closely, paying close attention.
Speaker 3 (43:19):
So absolutely absolutely I wish to nothing but the best
going for same.
Speaker 2 (43:25):
All right, thanks again, Ray, that was awesome man, Thank you.
What's what's the best way for members of the audience
to get in touch with you?
Speaker 3 (43:34):
Well, absolutely you are. I am available. I will give
you my business number. I'm at six one eight three
oh four three two two. I love this business. If
I could help any brands, my email account is reces
(43:54):
R E C E E s l LC at gmail.
Please reach out to me and you could also reach
out to me on LinkedIn. I appreciate you, Michael.
Speaker 2 (44:07):
I appreciate you too, and I also appreciate the audience
for listening in. If you liked the episode, please leave
us a review. Check back in a couple of weeks
for a discussion with Charlie Morrison, CEO of Salad and
Go
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