EP 212 | Building A Multi-Million Dollar Restaurant Business With Jeff Mastro & Oliver Badgio

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Episode Transcript

S1 (00:05):
Hey, everybody, it's Brandon Dawson. Welcome back to another episode
of Building Billions. I have some remarkable guests here today
with me. Uh, and and it's a name that if
anybody's ever eaten at the best steak houses in the world,
they'll recognize. And I think that, uh, this is going
to be a true testament of what it's like to
to build a business, start, build scale, exit, start over,

(00:29):
maybe exit again. Who knows? Uh, today I have with
me Jeff Mastro, and I'm going to have him introduced
who he is, what he's done, and what he's doing.
And Oliver, uh, both of them. So, Jeff, why don't
you kick this off? Yeah.

S2 (00:42):
Hi. How are you? Um, yeah. So, Jeff mastro. So, uh. Yeah, we, uh,
back in 1999, we started the Masters of Steakhouse and
Masters Ocean Club restaurants. Um, we did that for a
few years, and it was terrific. And then, uh, we
exited that in May of oh seven, and then, uh,

(01:02):
we decided, uh, you know, we were still young enough
and wanted to continue on. And we thought there was, uh,
there was a, uh, opportunity and more of the kind
of somewhat modern, more modern steakhouse segment because that wasn't
really existing at that point. So that's what we're doing now.
We have, uh, nine steakhouses now, um, our steak 44,

(01:27):
ocean 44, and steak 48, and we have nine units
in six states right now. And and our first one
we did after we sold Mastro's is a Dominick Steakhouse
named after my grandfather. Um, but, uh, yeah. And we're, uh,
we're just having a good time now, and, uh, yeah. And, uh,
we we're just going to do it until it's not

(01:50):
fun anymore.

S1 (01:50):
Yeah, yeah. Good. And, Oliver, what's your role in all this?

S3 (01:53):
Uh, I am, uh, chief brand officer, uh, for for
Jeff and, uh, and his family. We've been together 32 years. Wow. Um, so, uh,
it's been, uh, an exciting, uh, exciting adventure, a great journey,
and it just keeps getting better and better.

S1 (02:09):
So, you know, I remember, uh, coming here eating at mastro's, and.
And we loved up in Kirkland, uh, probably 12 years ago. Sure. And,
and we really fell in love with the brand and
the environment. Uh, and then here at city, is it city? Uh,
city hall? City hall. Yeah. And so we'd go between
the two and, uh, and then I think, uh, I

(02:32):
think one opened in Palm Desert where I had a place.

S2 (02:35):
Yeah. That was after we sold. Yeah.

S1 (02:37):
After you sold. Yeah. And and so what's it like
building a brand that quite honestly, whenever anybody in New York,
anyone people go to Mastro's, they want to go to Mastro's.
You started something with your brand position and with the
quality of what you delivered that extended beyond transacting and exiting,

(02:58):
but transformed into a whole nother line of businesses. And
a lot of people talk about how tough it is
in the restaurant business. How is it that you guys
have figured out whatever that magic sauce is, to build
a high valued and high quality deliverable in the food
industry or in the restaurant industry?

S2 (03:15):
Well, we talk about that all the time. Yeah. So
and we don't have all the answers. So, uh, you know,
there's me and my brother right now and we're so
passionate with what we do, and it's all about the guest.
And when you're only focused on the guests and not
all your cost and your economics and all that, um,

(03:35):
that that I think that makes all the difference. We
just want the guests to come in and have the
best experience possible. And if they don't, they're not going
to pay for it. I mean, it's that's what it is.
It's it's just all about the guest. And if your
guest focused as far as service and food and everything, it's, uh,
it it really makes for a winning, winning situation.

S1 (03:56):
So we have a saying which is price is only
an issue in the absence of value.

S3 (04:00):
That's exactly right.

S1 (04:01):
And so it's your belief that you can pretty much
charge whatever you want, as long as that experience is
remarkable for the person that's coming in to to eat
at the restaurant, or even I like to go there
just to get drinks. By the way, it's like a
great place just to be. It's a community place, right? Well,
you know.

S3 (04:18):
It has a great feel and that's really what it's about. You're,
you're you're the the food has to be, you know,
the best quality and spectacular luxury personal service and then
the environment and all the other things that go along
with it. And then the culture, uh, that, that we
work so hard to, to continue to, to propagate within
the company culture of consideration and, and just making everything

(04:41):
the best it can. And what happens is when you
put all those things together, you end up with the
totality of the experience, and that's what you're buying. That's
what you're experiencing. That's what you that's what's craveable. I think, uh, is,
is that experience that you get. And when you can
create that, then, you know, that's a that's a special thing.
And people want that. And, and you know, the, the,
the value is uh, is built in and is there.

(05:04):
When you do that and when it isn't, when something
goes wrong and when there are missteps, well, then you just,
you know, if you came for perfect and you didn't
get it, then we got to reset and do it.
And we have.

S1 (05:12):
A great story relative to your, your, your customer. We
didn't do. It wasn't us. We didn't do it. It
wasn't us. Um, Natalie and I went in there to
have dinner. This has to be a year over a
year ago, and I had just bought her a brand
new purse. She had wanted basically her whole life. And
it was a Kelly. Uh. I can't.

S3 (05:34):
Remember the maze.

S1 (05:35):
Or maze. Yeah, you know better than I do. And, uh.
And she was concerned about it. It was on the table,
so she set it down on her. On the floor.
By her, by her chair leg, you know. So it
was out of the way, and we weren't probably ten
minutes into sitting there. And she had never she had
just unwrapped this bag and, and the, the bartender or

(05:56):
or the, the one of our server assistant. Yeah. Move
the candle. And when he moved the candle, he dropped
basically dropped it and all that wax went all over
Hermes and all down inside of it. And my wife
was just looking at it. She didn't even know what
to say. And her eyes were huge. We had a
business dinner there, so she wasn't like, you know, she

(06:18):
she was just like, she doesn't freak out anyway. But
she was just like, I could tell. And I'm like
looking at her like, what happened? And all of a
sudden she picks her bag up and it's just got
wax all over it. I'm like, oh shit, this is
going to be a this is not going to end
well for for me, her or the poor bus guy. And, uh,
your waiter came over, took the information, got it all.

(06:39):
You called me Oliver immediately, like the next day. And
you're like, look, we're going to swing by. We're going
to pick the bag up. Don't worry about it. You'll
either get a brand new one or I'm like, dude,
do you know how much this thing cost and how
long I had to wait for it? Yeah. And you're like, no,
I understand, but we have a direct relationship in France.
Blah blah blah. Boo boo boo. Anyway, several months later,
I got the bag back. It was brand new. It was.

(07:01):
It was whatever they did to it. It was as
brand new or as brand new. Maybe they swapped it
out and you guys didn't flinch at all. You're like,
sorry about this. We did it. And I wanted to
make sure that, you know, you guys like the the,
the the guy that probably felt the worst in the
whole situation was the poor wait staff.

S4 (07:19):
He's, he's.

S2 (07:19):
He's doing very well at Morton's now.

S5 (07:21):
Yeah.

S1 (07:24):
There you go. I love that sense of humor, but
but uh, but talk about like, because you guys didn't flinch.

S3 (07:31):
No, it was never a question of what to do.
It was whatever it was going to take to make
it exactly perfect. And, uh, and that was it. And
as you know, universe doesn't make any mistakes. And, and,
you know, you and I had the good fortune of
meeting just briefly before that. So it was easy for
me to give you a quick call. And we just,
you know, went right into, right into action to, to

(07:53):
fix it. And, you know, this, uh, this, this business
is so much about building genuine relationships. And you never
know when those relationships are going to come to come
to bear. And we happen to have a relationship with
Hermes and their their person that runs North America and, uh,
and just, uh, and it worked out perfect. And they,

(08:14):
they took the bag and shipped it. Uh couriered it
because they don't ship them, um, back to, uh, to Paris,
to the manufacturer, to bench guys that made it. And
they did everything they did and made it, uh, made
it exactly perfect.

S1 (08:27):
You know, sometimes business owners would look at those situations
and most of them would freak out and, and, and,
and understand, uh, they'd be overwhelmed with whatever it takes
to get things fixed. They'd be mad at everybody involved.
They'd even, to some extent, blame the customer for saying,
why would you bring that bag to arrest? Like, like
like like people defer and deflect when when they're overwhelmed.

S3 (08:51):
That's your reason. Choice, right?

S1 (08:52):
That's your reason of choice. Now. Now there is the
flip side to that is, which is when something really
wrong goes bad. You can use that. To an advantage
if you if you flip it the other way if
you convert it. So we talk a lot in business
about converting problems to opportunities for promotion. So here now
we built a relationship off of that because I built

(09:13):
high trust I think I, I probably eat there 2
or 3 times a week. I take a lot of
customers there. This is.

S3 (09:18):
Amazing.

S1 (09:19):
I haven't audited my bills.

S3 (09:21):
Don't do that.

S1 (09:22):
For 2023, but my guess is it's 100,000 or more
that we spend. They're easy and your your wife.

S2 (09:30):
Show up with all their stuff in a Ziploc bag now.

S5 (09:32):
Yeah yeah yeah. So she's no.

S1 (09:34):
No she's because she's like hey, you know if anywhere
you're going to go where, you know, they're going to
take care of you.

S3 (09:39):
Absolutely.

S1 (09:40):
And and so that relationship was converted into now we're
doing a podcast because we built a relationship. Uh, I
feel like I want to take more people there. The experience,
the restaurant's awesome. But also the story is amazing. It's
a great representation of customer support. Yeah. And the customer
journey working with you guys, which I believe is why

(10:00):
you were able to build such a high value businesses.

S2 (10:03):
That conversion concept is is I've never heard of put
that way, but we do we do that a lot.
I mean we joke sometimes it's it's great we destroyed
that purse, you know, or it's great. We we we
hit somebody on the back of the head with one
of our trays or, you know, or we, uh, you know,
or they brought in a cake and and we gave

(10:26):
it to the wrong table. So everything happens. But the conversion,
some of our best guests. I mean, we had some
issue in Houston years ago on Mother's Day, and we
converted a lot of guests into just just loving us
more than anything. We have some of our best guests
are out of these horrible situations because we go the

(10:46):
extra mile. We will do and we don't. And I've
always had this. Me and my brother said, don't make excuses.
Just do it. Just fix it. Don't make any. We
we did it. Let's move on. Let's fix it. Let's
make it right. That's it. Don't make any excuses. So.

S3 (11:00):
But that's an important piece of this puzzle. And I
think maybe, uh, more important than than than Jeff makes
it sound. The environment that. Jeff and his family and
his brother Mike have created over the years. That, and
I've been fortunate to be around for for over three decades.
There's no question it was easy for me to pick
up the phone and call you in the morning. I

(11:21):
didn't even we didn't have to talk about it because
I knew 100% without a doubt. Do whatever it takes.
Make it as good as you make it, the best
or better, and that's it. And that's, uh, that's a
special thing, because that becomes a mindset that the company
takes on, becomes a mindset that everyone you know, takes on.
It becomes a part of your DNA, a part of
the culture of the company, when there's never a doubt

(11:43):
that it's going to be the absolute best, meaning that
all of the the deliveries that come to a business
on on any given day, a restaurant, then every chef
in the company knows, without a doubt, they have Jeff's
implicit support that if something comes in and it's not
exactly perfect, it could be a tomato, could be a shrimp,

(12:03):
could be anything. Don't use it. Give it back and
just say, we don't have that tonight. He'd rather not
sell it. Then sell it a hair less than perfect.

S1 (12:13):
And so talk a little bit because when you think
about the complexity of a business, I mean especially the
restaurant business, you have high transactions. You have a lot
of logistics everywhere from setting the reservation, showing up on time,
parking the car, showing the people at the table, making
sure everything is in order. Everything's delivered properly, everything comes
out right, making sure the experience is remarkable. There's probably

(12:37):
more logistics in a single transaction in the restaurant, especially
a high valued one like you guys, than there is
in most businesses. And most people talk about the complexity
of business, the operations of business. How were you guys
able to streamline each granular piece of the process to
make sure and ensure your people are empowered and the

(12:59):
deliverables consistent every single time? Because that has been my
experience going to your restaurants.

S2 (13:05):
We have we have a first of all, when we
open a store, we have a great training program and
we spend a lot of time and money. I mean,
when we open a new store, you know, it. We
have we almost have two months of training, which costs
a lot of money to bring them in. And then
we do all these practice dinners and and it's all
in the restaurant. It's all about the systems you have

(13:26):
in place and your standard operating procedures. And we've learned
a lot. I mean, we learned a lot with Mastro's,
and we're even better now with what we have with
our our new steakhouses. But it's getting those procedures in place.
And then it's it's making sure the the employees understand
and believe in them and empowering them to, to do,

(13:51):
do what we want them to do and, and them
knowing they can do these things and they're not going to,
you know, like that essay, he he, he, you know,
he didn't he dropped that candle, but he we don't
we want him to just take responsibility for it. Two
mistakes happen. That was a bad mistake. But we we
all move on and and just, uh, you know, it's

(14:12):
all about empowering our, our management and the staff to
do the right thing and comfortable to come to us
on how to fix any problem rather than because the
problem you get in restaurant business and a lot of businesses,
the staff might do something wrong and they don't want
to get in trouble, so they hide it so they
don't tell anybody. That makes it worse. Yeah. Then you

(14:32):
just hear about it down the road because and and
we lost the opportunity to fix it in real time.
So it's a that's a big part of what we
do and them trusting us that, hey we understand mistakes
are going to happen. Let's just do our best to
fix it.

S3 (14:47):
I mean, the person's perfect example, say the server, the
manager that night, the gentleman that went through a line
of people to get the job, to get to me
like that because nobody's flinched.

S1 (14:57):
It was, it was it had to be less than
a minute and a half. It was resolved with a
phone number with a text message saying, hey, we understand
this happened. We're going to be all over it. I
was just it just let us sit back and somebody
hides that.

S3 (15:09):
You can't. You can. We would have never had that
opportunity for instant recovery, you know, and and that's, uh,
that's that's a.

S1 (15:16):
Good lesson for all business owners. That's why this show
is building billions. It's hard enough to build a $1
million business or a 3 million, in fact, all businesses
under 100 million, 98% of all businesses under 100 million
are stuck at 3 million or less. 97% go out
of business every ten years. So it's very difficult to
build a successful business. And it sounds to me like

(15:36):
the operations are exceptionally important and tight to build a
food business, right, a restaurant business, but the culture. From
what I'm hearing is as important or more important than
the SOPs, because if they don't follow them, that's right.
If they don't have transparency where they feel like they
can communicate problems, then you can't fix them, which means

(15:59):
it prolongs it and compounds it.

S3 (16:01):
Absolutely. I mean, you can't be upset about if you
want to go 100 miles an hour, it can't be
upset about a few bugs on the windshield. That's going
to happen. And when everybody knows that, then, you know,
it's the the rest of the SOPs and the rest
of the standards and the rest of the procedures that
Jeff puts in place all come to bear, because you're
activating them. If you don't activate them, you don't get
everybody you know behind it. And you know, it's no

(16:24):
different than, uh, you know, obviously, a lot of changes in, uh,
in historic college football and NFL today, you know, with
with Bill Belichick and Nick Saban both retiring in the
last 12 hours. But think about those the the the
level of accountability that those guys put in place and
the film watching and the correcting the smallest details. But
everybody knowing it's fine. Correct it. That's interesting. You know, we.

S1 (16:45):
Had Fertitta on our stage at the ten conference two
years ago and and he was talking about how much
he loves that business. And so, you know, when you
it's hard enough to build a business that sustains when
you own it. But to build a legacy business that
flourishes after you no longer own. It really speaks to

(17:08):
the value of the foundation of the brand, because for
most businesses it's hard enough. But when a buyer comes in,
they usually screwed up has been my experience. That's interesting.
What is it like driving by these locations and seeing
your names on them?

S2 (17:23):
Yeah, it was, uh, in the beginning. It was very odd.
I actually I used to live way up in North Scottsdale,
so our, our first mastro's was one of Pinnacle Peak
and Pima. So I would after we sold, I'd drive
by it every day. Um, and it was odd for
a while now it's just, uh, it's a just another,
you know, steakhouse that we compete with. So it's, uh,
you know, it's it's been, you know, we sold back

(17:45):
in May of oh seven, so. Yeah, but the first
few years were odd and, uh, yeah, but it's still
a great brand. I mean, Oliver has a great story
about this, uh, you know, like, your second house thing. Well, it.

S3 (17:54):
Is, you know, it's it was a wonderful chapter in
all of our lives. And, you know, it's easy to
equate that to, um, when my wife and I had
our first house, you know, and I think we all
have a similar story where, you know, one morning, you
wake up and you say, hey, maybe we should we
we should do something different, you know, maybe something a
little more. Something that fits us. And more today and

(18:15):
more where we're going in our direction in life. And,
and you buy a new house or you build a
new house and you love it. But your first house,
you painted it, you hung pictures there, you had kids there.
And every time you drive by it, you want to
see it look perfect. You know, you want the you
want everything to be perfect, and you want it to
be evergreen and and and be there forever. And that's
that's how we feel, um, about mastro's and and that

(18:36):
brand and that chapter in our lives. We it's, uh,
it's wonderful to see what they've they've done with it.
They're brilliant guys. They've taken it to, you know, a
next level. And that's, uh, it's it's exciting.

S1 (18:46):
It's rewarding to see that both both my businesses I've
sold have gone through expansion on a global basis. So
sometimes I'm in another country and I see something I started.
So I know that feeling of like, this is really cool,
but now let's go to the present time because. Those
restaurants have always been consistent. They've been a fun place
to go to. But the stuff you guys have today

(19:08):
is like, cool. It's like modern. It feels amazing. It's
it's like you walk into those restaurants and you're like, man,
I'd love to have a house that has some component
of this in it just because it feels so good, right? The, the,
the way I have to imagine, even the intention like
where to put the bar, how to put, you know,
how to put stuff around the bar versus the dining room,

(19:30):
because there's people that want to experience the bar but
not be in the bar, and all the thoughts that
go into the environment and the creation and what you
see when you walk in every one of your restaurants,
when we experience them, were like, like, that's the only
place I take my clients now when they come to town,
they like, we want to go to the best restaurants.
We could pick any one of your brands. And the consistency,
even with the different name is and the environment. So

(19:54):
talk a little bit about that spark that all of
a sudden you were like, okay, I've sold, I'm done.
I don't need to work anymore. And then it's like,
fuck it, I'm going to go build another big ass monstrosity.

S2 (20:04):
Well that was yeah. It's not that's not exactly the thought.

S5 (20:07):
Yeah, but.

S2 (20:08):
No, I mean, uh, you know, my brother and I
were only in our late 30s when we sold, so
we wanted to, you know, we took a little time off,
we had a non-compete, and then then we. And then
we were in the middle of the Great Recession, and
we were still, you know, we were I was on
the board for a while of mastro's after we sold
and and we saw what their numbers were even during

(20:29):
the recession. We said, well, hell, I mean, you know,
they're still doing these relatively really big. I mean, because
everything dropped during, you know, 00809 and we looked at
our numbers. I mean, they're still doing pretty relatively good,
and it's probably only going to get better after we
get out of this mess. So that's why we decided
to build our Dominic Steakhouse. And you could.

S1 (20:51):
Pick up property probably pretty cheap back then when you
started the.

S2 (20:54):
Process. Yeah, actually we almost did our Dominic Steakhouse at
this other location. Um, and the landlord was going to
it was going to be it was they were going
to build the whole location for us, and the rent
was going to be free for a couple of years
because nobody was doing anything. Although we're very happy we
didn't pick that location. Yeah, actually, they went completely out
of business, so we wouldn't it wouldn't have worked anyway.

(21:16):
They really didn't have any money.

S1 (21:17):
Location, location, location.

S5 (21:18):
Yeah. You know. Yeah.

S2 (21:19):
And all kidding aside, location, location. That's what a lot
of people make big mistakes. I say, oh, my God,
we're getting the rents great at this place. Yeah, well,
there's a reason. Yeah. So we we we joke about. Yeah.
We love paying high rent. Yeah. There's a reason to
pay high rent. Yeah.

S1 (21:33):
And what's it like having a restaurant named after you
said your grandfather?

S2 (21:36):
Yeah, my grandfather, Dominic Mastro. My my dad's. My dad's father, so. And, uh,
my middle son also is Dominic, and, uh. Yeah, it's great.
And and my grandfather, we were close, but he passed
away when I was about ten years old, and, um,
and is almost my age right now at at 57

(21:57):
years old, he passed away. And it's amazing. He was
always our mastro's. He was always our kind of our logo.
We had his picture on the front of the menu
at Mastro's. Uh, we really named it was when it
was Mastro's. It was really, um, you know, my dad's
idea of naming Mastro's after his father, our grandfather. So.
That's awesome. So it's a real. It's. What a great.

S1 (22:18):
Tribute.

S3 (22:19):
Yeah, yeah. And you know, that that consistency that you
mentioned where you walk in and each one of the
places what you feel that where the bars are. Hey,
I'd love to have a component of that in a
home someday or that nature. And in each one of
the brands, I think, you know, what you're feeling is,
is Mike and Jeff's infinite passion for the business and their, their,

(22:40):
their and true hospitality. But how involved, you know, everybody is,
how involved we all are in, in the, in the,
in the creation of the brand and the concept. And
they're a part of it. You're feeling their personalities, you're
feeling the love and passion that goes into it. And
I really do believe that that comes through, you know,
brick and mortar and the position of the bar and

(23:00):
the lighting and what the choices are, and they happen
in the feel when you sit down and you say
to yourself, you're a perfect example, you can have dinner
anywhere on the planet you want to go. And when
you choose one of our places, which is a great compliment,
by the way, and you sit down. You get that feeling?
You say to yourself, you know what? I'm in the
right place. Yeah. This is exactly where I want to be.

S1 (23:20):
It feels like I could be at my home.

S3 (23:22):
Yeah. And then when you can create that feeling that
this is exactly where I want to be, I'm in
the right spot. Well, then that's the totality experience. You win.

S1 (23:30):
What's talk about? The one thing. The single. Biggest, scariest
thing in the process of building all these businesses. One
day something had to have happened where you thought, is
this it?

S3 (23:48):
And it can't be the story and it.

S5 (23:50):
Can't be the yeah.

S1 (23:50):
It can't be the first.

S3 (23:51):
Story. What do you got, Jeff?

S2 (23:54):
Uh, well, I don't know. We, uh. I mean, there's
a lot of scary things, I mean, Covid. Yeah. I mean,
I thought at first I thought it was a joke,
so I was we were we were actually down in
the Beavis at the time having a great time. And uh,
and then we started, you know, hearing some things, um, and,

(24:15):
and then we heard a couple of little rumblings of things.
And because this is so I mean, we're in the
vbi's March, early March of, of 20 and and then
we heard something about they canceled some PGA tournament, but
then we heard they canceled the the rest of the
NBA season. I said, holy crap, they're not kidding around.
This is more serious than we thought. And then we
were trying to figure out how to get back into

(24:36):
the United States because we were they were shutting everything down.
So but that was the that's the scariest time during Covid.
We thought we didn't know, you know, what was going
to happen. You're talking about, you know, at the time
we had five restaurants. We were building two more, um,
you know, shutting down every one of our restaurants at
the same time we were I mean, I mean, when,

(24:57):
when sometimes we have, you know, the, you know, like,
the electric goes out, um, you know, at 2:00 on
a Thursday afternoon and we might not open for one night.
That scares the crap out of us having, uh, seven
of our restaurants closed, um, was just crazy, and we
didn't know what was going to happen. We didn't know

(25:18):
if we're going to be closed. I thought I thought
everything this was going to roll over in, like, a
week or two. Um, luckily, in Arizona and Texas, things
reopened after about 5 or 6 weeks. But a lot
of our other locations took a lot longer. But that
was the scariest time. And it's just the unknown. Um, and, um,
just but we came and I'm just I'm I'm still

(25:39):
shocked how how kind of most of the economy rebounded
so well after Covid. I mean, things are things have
been terrific since then and, uh, just hopefully it keeps
going that way.

S1 (25:52):
What was it like, uh, the process of actually selling
your business in 2007? How long did that process take you?

S2 (26:00):
It took from start to finish a couple of years.
We were never we were never for sale. We didn't.
That never happened. We were just plugging along, doing our thing.
And we had our restaurant, our Marshalls in Beverly Hills.
And that restaurant really put us on the map. Everybody,
everybody really heard of us because we ended up in
people magazine a lot, because a lot of celebrities came in.
So people would always come and talk to us and

(26:23):
someone we knew introduce us to somebody else. And, uh, and, and,
you know, we had dinner with them and they started
talking about maybe buying us. And we just said, no,
we're not, we're not for sale. And which we found
out that's a good way to negotiate. It's always.

S5 (26:38):
A great way to.

S1 (26:39):
Initiate. I mean, why sell if you don't have to? Yeah.
If somebody wants it bad enough, though, they'll keep coming
to you.

S5 (26:43):
Yeah. That's right.

S2 (26:44):
That's what happened. And it got to a point. And
and we always thought in the back of our head
we could you know, we could jump back in. So
and that's what we've done.

S1 (26:52):
So how much is easier is it because because I
have a lot of friends that had big exits, I
had a big exit and and people ask me like
this next iteration of building a business, how much easier
is it than the first? And people undervalue, you know,
the actual exit. A lot of times they're like, I'll
never sell, I never sell. But almost every one of
my friends that had an exit has accelerated the next

(27:17):
iteration of growth, because there's just no pressure on, like,
you know, you're not going to go broke. You know,
if as long as you're proper about how you do it, um,
then you have Elon throws everything at one thing.

S5 (27:27):
Right.

S1 (27:28):
But but how much easier was it for you the
second time around once you had an exit and, and
then before you got to that point. That whole process
of thinking you're going to sell negotiating a deal. Maybe
it's on, maybe it's off, maybe it's going to change somewhere.
How stressful was that for you?

S2 (27:49):
Uh, it wasn't stressful at all. The on and off.
The only hard part when you're selling. Because we didn't.
We didn't care if we sold or not. It was fine.
We weren't those people. We, like I said, we weren't
for sale even once we got close to closing on
the deal. It was fine. Worst case scenario, we just
wake up and do what we've been doing for years.
And so that was an enjoyable. Yeah, that was not

(28:09):
stressful at all.

S1 (28:09):
That's the best time to sell. Yeah.

S2 (28:11):
Yeah, exactly. So we just, uh, continued and move forward.
But as far as the second time around, I, I
would not say the second time around was easier at all,
just different. It was different.

S3 (28:22):
Uh, I don't know if it ever gets easier. I
think hopefully we just get a little better at it.

S2 (28:26):
Yeah, but it's still. It's just as stressful as opening
our first mastro's and opening our Dominick steakhouse. And. And
then when you got one, you got two. And, you know,
the stress of, you know, you want to succeed and
it doesn't matter. It doesn't matter how much money you have.
The bank you just opened, this new business. You want
to succeed. See, that's all you're looking at. And by
the way.

S3 (28:45):
That's what I thought you were going to say when
he said scary moment was the day. Opening day. Every
restaurant we have been planning and opening and practicing and
and bring people in and we have, I don't know,
a few hundred reservations and we have reservations booked for
a few weeks, but there's that time that like 3:00
in the afternoon when nobody's there yet and you're like,

(29:08):
all right, we're ready. Is anybody going to show up?

S5 (29:10):
Yeah.

S3 (29:11):
His dad tells a great story like that.

S1 (29:13):
And I and you probably have that feeling with every restaurant.

S5 (29:16):
Yeah. Yeah.

S1 (29:17):
Never goes away. Yeah. That's that that's that productive paranoia
that Jim Collins talks about. Good do great great by choice,
how the mighty fall and how the mighty fall. The
whole thesis there is when you lose that, that edge,
that productive paranoia because you just assume we're great, we're
just going to make it work. And everyone just assumes
the system.

S2 (29:35):
And I, unfortunately will never have that because that's a
freak about so many things. And I overly stressed myself
out so that because I do know that if you
get if you start taking things for granted, that's the
kiss of death that'll ruin you. And I'm I wish
I can get a little closer to that because I, uh,
you know, that's why I get so many migraines, I think. But, uh.

(29:55):
And anyway, I'm not worried about that. Yeah. I'm always,
you know, just every little thing. It's my personality. So it's, uh. Yeah. But, uh,
so every restaurant is like our first restaurant. That's how
you look at it. That's how I look out.

S3 (30:08):
There that Dennis has been saying for years. That fear
is an excellent motivator.

S5 (30:13):
Yeah, yeah.

S1 (30:14):
So this is like, if you're an entrepreneur and you're
listening to this show, um, you should really pay attention
to the nuances because here's here's what in fact, I'll
give you an example. We manage a couple billion dollars
of businesses over there, right there across all sorts of spectrum.
You got anywhere from a dentist to someone who owns
a restaurant to a chiropractor to to a concrete guy

(30:35):
to to to health business, you know, you got it all.
And and what we see is we start educating them
and then we start engineering their business, and then we
start consultative helping them. And you see these businesses start
to go like this. And then you see and you
see the earnings go like this. And all of a
sudden you see this and the business and are like,
it doesn't work, it doesn't work. I'm going to bail

(30:56):
or I'm going to get out or I got to
do something different. The reality is it went like this
because you can almost pinpoint the three decisions from, I
don't want to do it anymore. I'm going to hire
somebody else to do it, and then I'm going to
let them do it the way they want. It's almost
like a sequence. And because owners like wore themself out,
they're finally winning. They worn themselves out for years. They're
finally winning. And they're like, oh, I've arrived. And they're like,

(31:17):
oh shit, I gotta jump back in. I don't have
the energy. And so I just got to do something different.
And we see it's almost like clockwork. You see that
as they start to tick up. If you think about
your business and how many people you've brought in as
managers or general managers or people that you really rely on,
who all of a sudden go from, yeah, I got it,
I got it, I got it, I'm gonna pay attention.
The details like, yeah, it's going to be fine. And

(31:39):
then you realize that attitude caused the rest of the
culture to start to shift, and you have to make
a very quick decision as you're building your business and
paying attention every day. Because I get I, I'm getting
that you probably look at cash in every day would
be my guess. There's got to be one of you
is looking at a report every day.

S3 (31:57):
He looks at everything.

S1 (31:59):
Every day, every day. Because I look at it every day.

S2 (32:01):
Every morning when I wake.

S1 (32:02):
Up, that's how I stay going during the day. Because
if I see a trend over three days, I'm going
to hit the oh shit button and start putting protocols
in place, right? When you guys see that cultural shift,
because if somebody you've left in charge, that's deviating now,
you can see it. The numbers see it in the behavior,
probably in the engagement. What do you do in that moment?

S2 (32:24):
Well, yeah. The problem is. Yeah, you never move fast enough.
I mean, we always try. We always talk about it.
But whenever you see something happening, it's always. I wish
we would have made these changes a lot sooner, so. Yeah.
And and use the word trends. We're always looking for trends.
It's a it's one something happens once or twice. That's

(32:45):
that's might be okay. But it's the trends you're always
looking at. And then you gotta you got to react
and you got to move people around. And it's it's hard.
I mean it's a, you know, we're in the people business.
That's that's all we got. When you're multi operating restaurants
it's all about the people because you can't be there
every day. We got places all over the country. So

(33:06):
it's just you got to rely on your people and
you got to have the best people. And then you
got to stay close with them and know what they're
doing every day. And that's what we try to do
when we have systems in place and things I look
at every day to understand what my key people are
doing every day. So if we need to make some changes,
we will and hopefully sooner than later.

S1 (33:25):
And I got to imagine you guys treat. Those changes
the way that maybe a football coach, a an elite
coach or owner team would make about their players. I mean.

S2 (33:38):
That's a funny example. We just talked we were just
talking about this two days ago, the exact example, because
we had to do something along these lines. Um, that
was very troubling to me because we had to do it. And,
and it was best for the business, but it's just
a hard thing to do. So we were talking about
the exact example.

S3 (33:55):
That was an example I used.

S2 (33:57):
You gotta do what you gotta do for the business.

S3 (33:59):
So you're going from good to great every time.

S2 (34:02):
You're always trying to improve. That's all we're doing every day.
And sometimes you have employees that they're they're fine. But you,
you have somebody who's better. So but those are, those
are hard, hard decisions.

S1 (34:13):
Well it's the decisions that most business owners don't make.
And especially when they're small business, because they have friends
and family in the business and they're the ones that
usually are the are the ones that are taking advantage
of the situation. But that sends a message to everybody else.
If you're going to let the people you're closest to slide,
then the culture says, go.

S5 (34:31):
Ahead for sure.

S3 (34:32):
And I think it also sends a message to everybody
else of how much you care about them, because those
are difficult decisions. Whenever you're going to part with somebody
anyway that Jeff has to make, and he talks about
this all the time. But then there's the he's doing
it for all of our behalf, for everybody, for the
essay that that dropped the wax to everybody else. When
he makes a decision like that to a difficult decision

(34:54):
to make a change with somebody, it's for the benefit
of the other, you know, 1800 people that work on company.

S1 (35:02):
So keeping that big.

S3 (35:03):
Picture, the responsibility.

S1 (35:04):
And that is the responsibility, that's that's your job as
a leader, right. To prune the trees so the branches
don't break. That's right. So so the whole people equation
because to me it seems like it's probably the single
most I mean supply chain. You can you can make
sure your suppliers or the right suppliers and you can
make sure they deliver the way they're supposed to with
the quality they're supposed to and all those things. But

(35:26):
this is a people business. You've said it over and over.
The thing I tell every business owner is, guess what?

S5 (35:33):
Eat it.

S1 (35:34):
Every business is a people business. It doesn't matter if
you're the best dentist, or the best hairstylist, or the
best concrete layer, the best framer, or the best house built. Ultimately,
we're all interdependent on people. And if you don't acknowledge
that finding, attracting, aligning, developing, and retaining great people needs
to be a talent. If you're serious about business, sure.

(35:55):
Do you agree with that?

S2 (35:57):
Absolutely. That's. Yeah. And every business. So that's that's all
it is. It's all about the people. So and it's
hard because we're all and we're always constantly looking for
the best people. Um, and we're also constantly we do
a lot of we, we don't open a store and
then never talk to our employees again about the training

(36:17):
they just received. We do on these ongoing training. We
do the what we call boot camps three times a
year at every store. We have our training team that
goes in. And because if you're not talking, if you're
not talking to your employees about about the systems and procedures,
then they think you don't care about them. And there's
that that slide that happens. So you got to constantly

(36:39):
talk about it or else I don't think if they
don't think ownership thinks is important, they're definitely not going
to think think it's important. So we're constantly doing things
to remind those, oh geez, we got to get back
on that.

S1 (36:49):
It's crazy because a lot of business owners, we I mean,
my partner Grant Cardone, is the number one world's greatest
sales trainer that there is. Right. And and yet so
many business owners will be like, well we don't we
our people don't want to train on that. And I
say to everybody that we manage like everyone in our

(37:09):
I don't care if you're the lawyer, you're training on
that same platform. I don't call it sales training. That's
what Grants Card Grant has positioned himself. I call it
human capital development training. Like everyone needs to learn to
communicate better. My lawyer, if I'm in the middle of
a deal and they don't learn to communicate, they're going
to blow my deal. So why would I only make

(37:29):
a sales person trained on how to be a more
effective communicator? When you when you wrap training into your business?
How significant and important is it embedded in your culture
that it is an absolute must from the top down?

S2 (37:45):
Oh yeah. Yeah, it's everything 100%. That's the only way
it works. If it doesn't start at the top, it'll
never work at the bottom. So and I.

S3 (37:52):
Think beyond the, the, the actual nuts and bolts of
the training is it's a real example, a living example
of the leadership that, hey, not only do we expect
this to happen, but we're going to help you make
it happen. And then when you're in that that people
business and you have all those people that are that
are contributing and doing something for it, well, now you

(38:13):
got a whole lot of people rowing in the same direction.
Then the, the, the, the, the sometimes liability of lots
of people becomes a real asset of lots of people. Because,
you know, when you create a company that has, you know,
top down leadership of caring about every single person in
their job, giving them the training to do it the
best they possibly can to deliver an amazing guest experience

(38:37):
that says something. And I think beyond just the nuts
and bolts, it says, hey, this, this is for real,
and I want to be a part of it. And
that that creates something really special.

S1 (38:46):
Yeah, well, look, guys, I mean, here's the deal. You
the what I love about this episode is I'm not
just some guy that wants to talk to to a
successful entrepreneur in what I would say would be a
difficult business to build. All businesses are difficult, but especially
the being on point every single day with people and

(39:10):
with systems and processes and vendors and suppliers and quality control.
I can't imagine a more difficult business. Right. But to
get to interview the ownership and the leadership, from my
own personal experience, I am a dedicated. Client customer who
loves the brand and and so to get to sit

(39:32):
with the creation of that is is certainly a pleasure
for me. And I want to thank you guys for
taking time out of your busy schedule. Um, I also
want to just congratulate you on your success. It is
it is a brand that you've built that anywhere I
go when someone says it doesn't matter if I'm out
of Arizona, if I'm in New York, or if I'm
in LA. Your brand, the representation of your brand, even

(39:55):
with your former restaurants, speaks volumes. So when people are like, hey,
I'm coming to Arizona, where's the. I just had my
buddy from Germany texted me, I'm coming to Arizona. Where
is the absolute best bougie place I can take my
most important client, I said ocean 44. So? So like
like hands down or steak 44. Like like it doesn't matter.

(40:16):
You're going to get the same experience or you go
up to Dominick's. It depends on where you're staying. You
can have that experience in multiple brands. So I want
to thank you guys. Thank you. And and thank you
for taking your time out of your busy schedule to come.
Of course. Meet with me.

S3 (40:29):
It's a compliment to be here. So thank.

S5 (40:31):
You for having us, and I.

S1 (40:31):
Look forward to doing all sorts of great things with
you guys in the community. Mandy has some great ideas
for us to collaborate, grow some stuff. I love it!
If you enjoyed this episode of Building Billions with Brand
and Dawson with iconic brand in the restaurant space, uh,
leave a like share this, leave a comment and I
appreciate you guys listening or watching another episode of Building

(40:52):
Buildings with Brandon.