8-27-25 - 7am - Cracker Barrel Apology

Episode Transcript

Speaker 1 (00:00):
Good morning, Mikel.

Speaker 2 (00:01):
I'm dragon.

Speaker 3 (00:02):
What is in store for us today.

Speaker 1 (00:06):
Or where have you been?

Speaker 4 (00:07):
Cracker barrel. Cracker barrel is in the store for us today.
But I'm trying to do this in a larger concept
of corporate America and how corporate. I've told you before
about my professor in undergrad who believed that organisms organizations

(00:31):
can become so large that they become unwieldy, and then
what happens is they start to engage in group think
because there's no opportunity for rational analytical thinking. The Michael

(00:51):
Brown minute that I did I think yesterday, well it
was either yesterday or Monday, had to do with Next Star,
which is Nextstar Media, which is a giant media organization
much like iHeart that owns KADIVR and the CW channels

(01:13):
thirty one and two in Denver. They have bought out Tegna,
which owns Channel nine. And I point out because Caldera
had written a pretty good piece in the Gazette about
if you're excited because you're a conservative, and you think
that because Channel thirty one seems to be more center

(01:37):
or right of center in their reporting and editorializing, and
you think that's going to carry over onto Channel nine,
and that might result in Channel nine becoming more center
or even center. Right, you're foolish, but Caldera is right

(01:57):
about that. It doesn't mean that any particular anchor or
news director or anybody else at Channel nine is going
to lose their job, although they might. But here's what
will happen. Because in order to do that acquisition, and
I don't know the particulars about the financing of that acquisition,

(02:18):
I doubt that Nexstar had the capital laying around to
buy however much it costs to buy whatever stations they bought.
They didn't buy just Channel nine. They bought some other
stations all over the country. So they are which is
really a problem in America right now. And I think
Cracker Barrel is an example of this. They tried to
although not in this particular aspect. They're a problem of

(02:42):
pretty much hedge funds. They try to grow by acquisition
rather than taking their core concept like Cracker Barrel has
and growing that, refining that, making sure that they understand
their customers, understanding their clients able to come into a
Crocker Barrel or the people that consume nine News, or

(03:04):
the people that consume six thirty khow or ninety three
seven freedom that can that consume conservative talk radio, that
consume broadcast radio. That what happens is the hedge funds
move in. They end up with a boatload of debt.
So what do they do? Will they take the acquisitions

(03:26):
and they start just slices, slashing and dicing and cutting
and eliminating and doing everything, and they destroy the very
product that they purchase, hoping to grow and expand.

Speaker 1 (03:40):
I mean, it's insane.

Speaker 4 (03:43):
I'm not anti capitalists, I'm not anti hedge fund but
hedge funds are run by people who are trying to
make a quick buck. They think that by growing by
acquisition that they oh, we'll just get we'll get all
of their customers to come over with us, or we'll
just get you know, we'll get We'll grab all these

(04:03):
additional radio stations, all these indital TV stations, or all
these additional restaurant outlets or whatever it might be. We'll
grab all of those. And then suddenly you realize, oh, crap,
we've got, in the case of next Star, six point
four or six point five billion dollars in debt. Corporate
Americas is and don't get me wrong. Debt is not

(04:26):
a bad thing. Oftentimes, you go into debt in order
to make money because you need that capital to start
generating the revenues. And as long as you know that
you can service the debt and still make a profit
off the off the use of that debt, don't. I
don't have a problem with that whatsoever. But you have
to manage your debt. And so when you go on

(04:46):
an acquisition spree and you spend all of this money,
and hedge funds are notorious for this spending all of
this money, then suddenly they realize, oh crap, we've overextended
ourselves and now we've got to start, you know, slicing
in dicing, and they start doing that. And what happens
when you start slicing and dicing, You start destroying the product,
You start destroying the brand. I've well, let me just

(05:10):
say put it this way. I see it everywhere, and
this is the problem with corporate America. And then you
add on to that what's been going on since the
Obama administration with respect to diversity, equity, and inclusion. So
now you take debt and the servicing of the debt,
and now you decide that and notice I haven't talked

(05:30):
to him. I haven't said one thing about the consumer. Now,
I'm not one that buys into the theory that the
consumer is always right, but I do believe that you ought.

Speaker 1 (05:42):
To listen to the consumer.

Speaker 4 (05:44):
And when the consumer says that you're focused so much
on acquisition, or you're focused so much on DEI or
your smoke focus on so much like this, the chicken
fried steak that's used to get at cracker barrel may
not be as good as it used to be because
you're cuttings. So then rather rather than by a find

(06:04):
a vendor or a supplier that can provide you with
a high quality chicken fried steak, now you're going for
a really cheap cut a cheap supplier. And now and
now you're doing DEI hires. And so the people who
are preparing that food are not that great. Damn the consumer,
Damn the customer. They the hedge funds don't care. They

(06:29):
just simply don't care. They're trying to survive quarter by
quarter by quarter. I've invested in some companies that I
might participate in, you know, as an employee, and I
watched I watched the financials, and I know what they do,
and sometimes it's utter insanity, absolutely insanity. And I know

(06:49):
you work for companies like that too. They're all that,
they're everywhere. Corporate America has lost sight of what are
we doing? What are we doing well? You're trying to
offer a product that people will consume, that will return
a return on your investment so that you can make
a profit to not just pay the salaries of the

(07:11):
c sweep, but pay the salaries of all of your employees,
return a reasonable rate of return to your shareholders, and
everybody goes home happy. They don't do that anymore. Cracker
Barrel is a great example of that.

Speaker 3 (07:25):
When I go on a road trip, I love a
sit down meal at the rest stop.

Speaker 1 (07:29):
Yeah, like a chat.

Speaker 3 (07:31):
With a local server. I love a theme restaurant, which
means I really love a Cracker Barrel.

Speaker 4 (07:37):
It's a chain. But when you now, again, I'm not
a fan of Cracker Barrel. As I say i've been
in Cracker Barrel, I'm guessing less than I know less
than a dozen times and probably less than half a
dozen times in my entire life. But I get the
product that they're trying to sell, which is what he's
talking about.

Speaker 3 (07:55):
Recently, Cracker Barrel has found itself in a cultural crossfire,
a remark old ruckus and last night the company announced
we were wrong.

Speaker 5 (08:04):
We have a major update to that Cracker Barrel logo saga.

Speaker 3 (08:07):
The company is returning to its old logo.

Speaker 4 (08:10):
And let me emphasize it's everyone's focused on the logo.
The logo just happens to be. Remember the limb ball
theorem we've talked about this week. This is the limb
ball theorem applied to Cracker Barrel. The logo just happens
to be the focal point. The problem is you ignored
your customers. You ignored your client You ignored your consumers

(08:34):
of your product and thought, oh, we'll be really hip
and cool and do something else. And that's not what
your customers want. Now that what you're providing. I find
this so ironic. You so desperately want to become the
CEO of a company, so you become the CEO of
Cracker Barrel. Well, your objective should be who are our clients,

(08:59):
our customers? How can we expand that base? How can
we bring new customers in without alienating our old customers.
It's not an easy thing to figure out, but she
wasn't interested in that. All she was interested in, Oh,
We're going to completely rebrand, transform this because I'm a millennial.

(09:19):
I'm you know, I'm a thirty year old or whatever
she is, and I've got all these great new ideas. Well, sweetheart,
there's nothing new under the sun. And what you're doing
is you're destroying a long standing brand that's been around
since the nineteen sixties, that still has a base of customers.
And in fact, baby boomers probably grew up going into
a cracker barrel. My family didn't because well, you know,

(09:42):
we just we weren't in an area where the cracker
barrels existed. And she ignored all of that. And it's
a tipping point. You know, I talk a lot about
tipping points. The change in the logo proceeded was preceded
by all of those things I told you about in

(10:03):
the last hour, everything that they were doing, and they
actually had an active as shareholder who was calling out,
filing documents with the Securities and Exchange Commission about how
dysfunction of the board was, how was all group think,
how they were making horrible mistakes, how they were going
to completely destroy the brand. He was a soothsayer, but

(10:25):
because they like many companies. In fact, I would say,
you may find this in your social settings where somebody
makes a statement and maybe you don't entirely agree with it,
but you don't want to, you know, you don't want
to start a debate over dinner, so you just ignore it,

(10:49):
and pretty soon you're actually kind of capitulating and agreeing
to everything that's said. And now you've got group think
going on. That happens. Human beings, for whatever reason drives
me batty, tend to just fall into group.

Speaker 1 (11:06):
So what happened?

Speaker 4 (11:09):
What really happened here? Well, once they reached that tipping point,
they lost more than one hundred million dollars in value.
They saw it's formally crowded parking lots dropped to half
full at peak hours all over the country. Well, finally,
some cooler head stepped in and forced the woke lunatic

(11:31):
CEO to toss in the towel. Last night, well sort of,
sort of, they released another carefully scripted statement on X Speed,
saying it would scrap the logo design, that that would
have done away with the you know, with the old
timer sitting by the you know, the cracker barrel and
they wrote this. We thank our guests for sharing your

(11:52):
voices and love for Cracker Barrel. We said we would listen,
and we have. Our new logo is going away and
our old timer will remain at Cracker Barrel. It's always
been and always will be. And here's where I find
this hilarious. At Cracker Barrel, it always been, always will
be about serving up delicious food, warm welcomes, and the

(12:12):
kind of country hospitality that feels like family. As a
proud American institution, our seventy thousand hard working employees look
forward to welcoming you to our tables soon. Well that's
not really enough. It's a start down what will be
along road to recovery from this fiasco. But they really

(12:33):
ought to do a complete maya kulpa. They ought to say,
you know, we really f this up, and the CEO
quite frankly, the board's never going to do this, but
the board ought to fire the CEO. Do you lose
one hundred billion dollars in share value? And again, I'm
telling you, I've seen this in other publicly traded companies
where the CEO comes in and makes all these changes,

(12:58):
share price drops Suddenly you're just overburdened with a huge
amount of debt, and the CEO just lives on forever.
And I think to myself, is the board just made
up of yes people? Are there no independent board members?
Or they are they independent board members in name only?
Like what's going on here? But they won't. I I

(13:21):
bet my kingdom she she lives on because she did
the Maya Club. See the old white guy sitting by
the barrel, Well, if you're a lefty or if you're woke,
that guy came to symbolize white supremacy to all the

(13:43):
woke idiots didn't now run the corporation. Those brainwashed netwiks
were scared that the old far death on the sign
out front was somehow preventing the lgbt Q plus at
sign hashtag dollars sign percentage. I'm looking at my computer here,
volume up, volume down, whatever lights up like them, whatever,

(14:05):
night time, do not disturb all of that plus plus
plus would not pull off the freeway to drop in
for what has now become pre packaged chicken fried steak
that had been shipped in from oh maybe Uruguay or
probably South Korea, as opposed to being locally produced or

(14:26):
at least from you know, somewhere in the United States. Now,
remember that shorter statement came just two days after the
company had issued a much longer initial statement filled with
Remember we talked about this on money, all the corporate
bull crap. This said absolutely nothing of substance, but somehow

(14:48):
put up a pretense that the CEO and her team
of Marxist nutjobs where I'm like, you know, listening and
all that sort of crap. Our promise to you. Our
promise to you is we're going to completely change everything
we've done. It was just a bunch of gobbledee goot

(15:09):
corporate mumbo jumbo bull crap. But that's corporate America today. Oh,
I know, you've gotten emails from you know, your corporate headquarters.
You've gotten emails. If you're a small company, you've gotten
corporate email. You know, maybe you work for a company
it's got you know, five offices around the country. You've

(15:33):
gotten the emails from some you know, muckety muck at
corporate headquarters in Minneapolis or Denver or wherever. And and
you read it, and you and you're just like, this
is total bs, this is totally bull crap. And you
also recognize that and I would venture to say that
this cracker barrel, the new CEO, never really traveled around

(15:58):
the country and sat and talked to the employees. What
are we doing right? What are we doing wrong? You
think about just to compare and contrast in an out burger,
you know the story about the in and out Burger.
They want to move their corporate headquarters out of California
into what was it Kentucky or Tennessee. I forget which one,

(16:20):
But her primary concern was that they still reach out
to all of their outlets and still talk to the
employees and still talk to the customers. Well, I think
some people think they're too good for that.

Speaker 2 (16:40):
I just turned on your should and heard you talking
about water crackers. I'm fifty five years old, and I've
never heard of such a thing. I thought you were
talking about Michael Phelps.

Speaker 1 (16:55):
That's funny. That's pretty bad, you know.

Speaker 4 (17:01):
I wonder how long it took him to sit there
and think, Okay, I love water crackers too, but I
got I gotta leave a talk back that just, you know,
skeers him about, you know, water crackers. Michael Phelps cuche tooche.
If you've not seen the original statement from Cracker Barrel

(17:23):
Dragon's putting it up at Michael says, go here dot com.
I'd like for you to read it, or at least
scan through it, because it's just it's so full of
corporate bull crap, which personifies, I think, corporate America today. Now,

(17:43):
I know that I'm generalizing a lot about corporate America,
but you know as well as I do, that companies
that are incredibly well run, profitable focus on their clients
and their customers. Understand what their product is, how to
maximize the value of that product, so that you know,

(18:06):
whether it's you know, advertising on radio, increase the value
in the returnal and investment of advertising on radio or
television or in a newspaper, whatever the product or service
it is that you're providing. You got to know what
your customer base is, what do they want? How do

(18:26):
you keep them coming back? Go back to New Coke
back in me, what was it the early eighties, that
was the Pepsi generation. So they decided that, you know,
all the new kids running Coca Cola, the young boomers
they're now the old boomers, decided that, oh, you know
what we'll do is we'll roll out something that tastes

(18:49):
more like pepsi, because the pepsi generation is kicking our ass.

Speaker 1 (18:53):
So let's do something. Let's roll it out and call
it new coke.

Speaker 4 (18:56):
And for a while, New Coke flew off the shelves
because customers who love Coca Cola thought, oh, this is
something new, it'll be even better. Let's go buy it.
So it just flew off the grocery store shelves and
they took it home. They put some ice in the glass,
they poured it and they took a taste of them No,
what the crap is this. It took about a month,

(19:18):
about thirty days, and then all of the retailers, you know,
the King Soopers, in the safeways, all the grocery stores
were like, you know, yelling at the distributors, Hey, we've
got all this inventory and it's taking up all the
shelf space, and nobody's buying it. Nobody's buying it because
when they got home and they tried it, it's kind

(19:40):
of like And the best example I you come up
with is camera bought some like occasionally I like diet
a and w root beer. There's diet mug root beer.
I don't think it tastes the same some people do.
Or it might be pib. If you like doctor Pepper,

(20:02):
somebody gives you a mister PIB. No, I mean, and
timer's kind of that way about diet coke. We walk
into a restaurant and you know, do you have diet coke? No,
we have diet pepsi. She almost ninety nine point nine
percent of the time goes straight to iced t. She
just will not do diet pepsi. I'm kind of ambidextrous.

(20:24):
I just you know, song doesn't have sugar in and
it's carbonation. I really just don't care. Having just said
I don't like mug root beer anyway, the sale New
Coke collapsed. But here's what I think they deserve credit
for undying credit. And maybe it's because those new boomers,

(20:45):
those young boomers at the time, had been raised by
the Greatest Generation what they do. They quickly shifted their
marketing focus back to the original brand, issued a sincere
gigantic public apology to the customer base, and sales ultimately recover,
and today Coca Cola, without the classic nonsense on it
is still the most popular drink in America. But it

(21:07):
turned out that you know, kind of unlike the idiots
that run Target or Anheuser Busch. That people that ran
Coca Cola at that time were pretty smart people, and
they decided in a smart substantive strategy of what admitting
their bad moment of judgment, which people will always when
you say yeah, I screwed that up, Yeah I screwed

(21:30):
it up, people are I mean, you take away suddenly,
they're out of AMMO now and a hole will continue
to attack you. But when you say I screwed up,
that pretty much kills it. And that's what Coca Cola
and their board of directors did. So go to cracker

(21:52):
Barrel for a moment. So somebody inside the company and
position of power. I don't know who it was, I
don't care who it was. They knew about all these examples.
They knew about Target, they knew about bud Light, they
knew about I hope they knew about Culture Colt. I mean,
that's a classic that's a classic marketing thing that I'm

(22:13):
certain you study in business school. The problem is that
this smart person was able to convince you know, some
other you know, gen x Er and her team of
circus clowns to take a half measure approach to their
apology with no real substance see the low the new

(22:35):
Low logo is a problem, But it's not the central
problem that Cracker Barrel faces. It's that their product now,
the brand, the symbol is just that it's a brand.

Speaker 1 (22:51):
It's the symbol.

Speaker 4 (22:53):
Maybe you have to look at you know, where's your
chicken fried state coming from? Are you really hiring you know,
we live in the maritime accuracy. I hate to remind them,
are you really hiring the best people to work for you?
Or are you more focused on what their skin color is,
or what their sexual preference is, or what their height is?
Or do we need an equal number of skinny plus

(23:13):
equal number of fat people? Do we need people that
are cross eyed and they can look straight ahead? Do
we need people that are handicapped or not handicapped? I mean,
it's the whole DEI crap. In addition to let's you know,
let's change the product that we're actually putting on people's plates,
and suddenly you've got the disaster that we're witnessing right now.

(23:39):
That logo is just the external face, the substance that
symbolizes the entire viral mental illness that's threatening the entire
country survival. Right now, that's what's behind the sign. You
can put the old guide back on the sign. I
don't care. That's great, But you still have a bunch
of mentally damage DEI hires that are running around at

(24:02):
corporate headquarters doling out millions of dollars to the you know,
the DEI shakedown operation, throwing millions of more dollars at
drag Queen story hours that are targeting young kids. You're
doing everything you're and you're providing a substandard product based
on what people are accustomed to get. Now, you may

(24:23):
think if all you ever eat at is Ruth Chris
Steakhouse and you've never had a chicken fried steak in
your life, you may already think that it's a substandard product.
But for people that like chicken fried steaks, they know
the difference between a really good chicken fried staking a
bad chicken fried staking. You're serving bad chicken fried steaks

(24:43):
and you're taking an in entire, an entire culture of
the American South, the American middle class, and taking a
sledgehammer to it. So, if the board of directors of
the company really do want to fix the substance of
the problem, well they ought to say is look, we

(25:04):
messed up at Cracker Barrel. We really messed this up.
We made a bad hire to be our corporate CEO,
and she's been relieved of her duties along with most
of her senior management team, and they're going to be
replaced with people that understand our company's customer base, our brand,
and our product. And that hiring process is underway right

(25:25):
now as we speak, and we want to challenge you.
We want to encourage you to come back because we're
going to have the best damn chicken fried steaks you've
ever had. And if you want to buy nick Knax,
we're gonna have nick Knacks at the wazoo for you
to buy two. Oh, you want to sit while you
wait in the line, because it's going to be so
crowded because we get bringing people back. Yeah, we'll have
the big ass rocking chairs out front too. And by

(25:47):
the way, for those of you that are there are
still a little bit woke, I mean I wouldn't put
in those terms, but some people. The fact that we
remain committed to equal opportunity for all people here at
Cracker Barrel and we will never tolerate discrimination to get
anyone at any time. That's an unalterable core value of
Cracker Barrel. But at the same time, we are going

(26:08):
to hire the best, most qualified people for every single
one of our some what was it seventy thousand jobs
across the country, including at the most senior levels, so
that we can avoid this kind of dumb ass y
in the future.

Speaker 1 (26:24):
Maybe they ought to hire me to write their apology.

Speaker 5 (26:26):
Hey Michael, when you're talking about chicken fried steak, it
brought me back to the old days of the Colorado
Diner downtown with their chicken fried steak, the family sized portions, gravy,
mass potatoes.

Speaker 1 (26:41):
Oh so good.

Speaker 4 (26:44):
I really do hate to admit this because it's a chain,
but you know you shouldn't. I mean, we're talking about
Cracker Barrel. It's a chain, and I can't speak to
Cracker barrels. I can't speak to the Denver diners. Oh
that that was at Spear and Kofact. Oh that was
a good chicken fried steak. The restaurant Salt Grass. Have
you ever been to Salt Grass Dragon?

Speaker 1 (27:05):
I have not.

Speaker 4 (27:06):
Well, there's one over at four seventy and Parker Road,
somewhat near where our kids live, so it's kind of
a place for us to meet, and there's several restaurants there,
but we went to a Salt Grass and I had
a chicken fried steak. It was amazingly good, amazingly good.

(27:27):
So what can we draw from all this experience about
Cracker Barrel. Well, we all remember that conservatives can win
the culture fights, but.

Speaker 1 (27:37):
And we've known that.

Speaker 4 (27:39):
I think for me, it's that corporations follow the narrative
in the media, and I think that's really bad for
you and I. As consumers of any product or service,
you have to be incredibly discerning about where you spend

(28:00):
your money because you need to understand what what does
that company really stand for? What do they really advocate.
Do they advocate DEI or do they advocate a meritocracy?
Because if you advocate a meritocracy, you're not going to

(28:21):
care and nor should you care anyway, when I go
into it, because we're talking about Cracker Barrel and choose
restaurants as an example, when I go in, I expect
good service, and depending on the level of quality of
food that I'm going to consume, I expect a commisserate,

(28:41):
commensurate level of quality with the price I expect to pay,
and I expect good service and that product at a
good price. And I don't care who's in the kitchen.
I don't care who's serving me. I don't care what
their political leanings are. I don't care what their sexual

(29:02):
preferences are. I don't care what their race is. I
don't care what their ethnicity is. I don't even care
what their political beliefs are. Just keep it to yourself
and provide the good service, the quality service, the quality
product at a reasonable price based on the quality that
you're expecting at that particular location. And fine, But if

(29:26):
you're a dei hier and you don't really care about
your job, you don't really care about service, you just
come down and throw the plates down. You just you know,
you just you don't watch, You don't pay any attention
to you know, does does somebody need their water glass filled?
Does somebody need, you know, an extra helping of salsa
or whatever it might? No, if you're not doing any
of those things, my guess is one, you're allows the employee,

(29:48):
and you shouldn't be you shouldn't be there.

Speaker 1 (29:51):
But Corporate America doesn't pay any attention to that anymore.

Speaker 4 (29:56):
I'm not saying we shouldn't be concerned about quarterly results,
but we get so focused on quarterly results that we
fail to recognize that if we would focus on you know,
there's a.

Speaker 1 (30:09):
Book I read it a long long time ago something.

Speaker 4 (30:13):
The title was something to the effect of do what
you love and the money will fall it.

Speaker 1 (30:18):
Well, that's generally true.

Speaker 4 (30:20):
If you go in determine now, you still have to
do all you got to take care of all the details,
the marketing, the hiring, the products, the delivery, everything. But
if you focus on meritocracy as opposed to these cultural
kind of stupid ideas that we're pursuing, you're doomed to fail.

(30:43):
And Cracker Barrel is an example of that. Whether Cracker
Barrel can survive this or not, I frankly just don't
care other than the fact that I hate to see.

Speaker 1 (30:51):
A DEI CEO remain in.

Speaker 4 (30:55):
Her job when if I run that board of directors,
and I've been on the boards of directors of of
publicly traded companies before, and I voted to fire CEOs before,
if I won the board of directors of Crocker Barrel,
the entire senior management team would be gone over a
period of time. Yeah, if not all at once, because

(31:16):
the board you have a fiduciary duty. Step up, take
care of your product.