Vp And General Counsel, Chicago, Executive discussed on Beyond 8 Figures
Born than I did another offering two thousand one we got in trouble we over expanded, and then the nine eleven hit and so forth. And so I didn't other Campbell raise in two thousand one and then we grew on banked in internal cash flow all the way along to we had our sale transaction tonight. I left a few million bucks. Company paid off her debts and, and reporters, and so forth. And in two in two thousand eight we sold, and then I was probably wanting my biggest mistakes, I've made my life. I was very aggressive reading my own press proteins at cetera. I went inside seven big expensive restaurants with twenty million dollar developed price tag on those to open the next eighteen months. Well, along behold, the crash, I left the company with three million dollars on the balance sheet, no debt, and so long beholding head to in two thousand nine door letter capital raised to get ourselves. You know, stabilize now, that whole bits and ended up giving back basically I became my largest, you know, best internet than that deal. And I gave back basically everything I had left. At the markets and put it back into the company. So my original goal taking some chips on the table had failed because I was now my chips were back on the table. So that's last capillaries. We've done, and we'll never have to refine the point now where we, we can grow pay for all growth with her own capital to Barnard. I'm again, and we pay prints phone interest, pair debts down and appear partners. So it's a good feeling today, but take me twenty five years to get there. So quick question as far as the, the exit goes. And just the general structure is concerned do you do you only lease your properties, or do you do you have a separate entity that buys a real estate, and then leases to Cameron Mitchell? And that sort of what, what's your MO around that, what's that question, a lot in our business, you know, we're not doing out parcels mall where we can buy a personal ground. Put a restaurant there were, you know in Manhattan, we got two million square foot office building on top of us. I couldn't buy that real estate wildest dreams. And so we're in big developments around the country, for the most part. And so all of our deals are least deals or in that, you know, that we wouldn't buy a real estate, just in our type of business are type of restaurants, for deals, present them. So pretty few and far between I'm much more interested in a great location, integrate least y'all trope. It's going to be there for forty years that I can never. On my own. Boston is perfect example, that where just appropriately multigenerational site unit for forty years. I could never bought that property, but I'm more than happy leases for four years. And so, to that end as far as valuations, concerned how, how do you get to ninety two million dollar number on on that exit? Is that what is that based off of that was for that particular those particular restaurants was about? They did about ninety million volume. They had eight point nine million of, of, of EBA, and so it's ten point three. It's a multiple. I got that deal for me. In. And at that point, you were fifty fifty then with the original partner group because it sounds like there was a lot of roll up of the LLC's, and it gets a little convoluted. I would think with all those different restaurants in the concepts. And so on. Sue being dollars in debt. I gave I'll just to break down at waterfall for me that and I you know, we'd have to two million fees to get the deal done of ninety thirty million that, that sixty and then I had left three in cash on the on the balance sheet, Nick company, it's fifty seven, and then I had I gave me the management team got ten percent of the purchase price, extent, forty or so. And in we had to pay off, we are trailing bills and so forth. We don't purchase and so forth. Long story. Short. They win distributing forty million dollars to our partners on that deal, the ratio what they on the on the, you know, ten percents. They got four million dollars on one percents, or hurt though. So. Argos or so going back to the very beginning. Because you say you have five thousand associates right now and outside of your partners or slash investors, who was a critical higher or someone who maybe has been with you the whole time we're really influenced you or had your back while you were beginning. Well, we pride ourselves in much restaurants. Every very, very low turnover. I mean, our average executive teams here leadership team member. We have ten fifteen and Billy coming twenty years. So Dave Miller present chief operating officer started the GM third restaurant and the twenty three years now Stacy content who was really, I call her. She was associate number or two. I was a one she's just retiring this year. So after twenty six years, and when she uses day one, and then my side and so there's just a lot of people, but. You know, there's a lot of good people to come along the way to join the ranks, we've got tremendous stories. I save someone I'll have to look to their writer Luxuria left and was organization, and you'll see some of the doubled tripled quadrupled or salaries since they started up ladder eighty five percent of our people we promote within. So we don't really outside. I very often. I was going to ask when you have different concepts, and they're in different locations, all across the country. How did you create the culture that? Kind of transition to all the different restaurants as you expand them in are there different cultures. It's all same company culture, and we, we measure their culture twice a year. We do recall socio being survey twice a year. And the culture to me is, it's the mortar to holds bricks together, it's most important and in the early days, like we really fast to no one, we didn't have enough people on board to open all these restaurants. So we opened a couple of restaurants early with a whole outside higher man's, which even and that was a disaster. You know, these folks, we thought we could train we're culture nickel learned. While weeks, we open the restaurant, as we find it has just simply not the case. So today, we won't open a restaurant, no matter where it is with about without say, we have eight people on the man's Petit, we would have six or seven of those people would be promoted within might hire one or two logo people, but Gerald. We, we stocked that Opie manage would see with our internal people in, in our opening allied teams role in general people and, and they, and we inculcate culture, mealy from they want Morientes, which I do personally for every new restaurant across the country, and in talking about our culture. We said that stage from the very moment they stood for the door, then so today like our last associated being survey of enough note is that, you know, seven out of our top ten restaurants are bottom restaurants, for might be eighty nine or tapper for might be ninety five you know, in fourteen culture, questions, we ask, but seven of the top ten we're all out of ten restaurants. So we got to the point where it doesn't matter. Whether in January cultures alive awhile threat organization. The point. We'll take it. And of course, he expansion, right? I mean having a one if you're a sole operator a sole proprietor with one location. I mean, that's you know, and, and I'm from Chicago. So very familiar with rich Melman and lettuce. And, you know, when you look at some concepts like Bob chins, you know, I mean, the forty million dollar restaurant crab house it, so it can it can happen where you have this one amazing facility, but. What? Oh, yeah. Few and far between once you start expanding. And then especially as you start moving into other locations. There's there are the operators where I get it you promote from within. But was there a key hire that helped you from from an operational standpoint, not in turn, because again, what it takes to open? A second restaurant, is very different in terms of a skill set of a GM versus someone who has actually worked in, in on a multinational type of corporation, where there are various locations, a spread out. Right. So what was there? Was there a key higher on that side of came from outside of the restaurant industry would just purely came everybody came from with them? Yeah. Like, for instance, our senior vice president operates, sous-chef is with our third restaurant, our, our senior VP historic player virtual, or I do or executive chef or third restaurant one board. And so. Everybody on our, our leadership team is home run. I mean, with the exception of our, our VP and general counsel, you know, we have attorneys and company per se. But he's been outside jury past twelve years now. He's inside. So even with on board. We've got this relationship with so no. It some you know word restaurant built by people for its people. And I, you know, I gave our team five million dollars out of the sale transaction in two or ninety eight I just gave her your team two and a half million dollars for fun for twenty five year verse rereading. I did with his two five hundred somewhere and, and, you know, it's just are people, you know, we, we have a say here, we want this to be lashed job, you ever have is, you know, people like for fears hundreds of CMO, marriages and understand where babies. This has been one of your favorite interviews, so far. We're, we're certainly open. I mean, if you're, if you're writing checks, just you get some extra cash, you want to kick around just from around that, that, that, that'll help keep our morale nights, we're okay with that promote your book. Yeah. We'll promote your book to write which we'll talk about here in a second, but yeah, exactly Ritchie. Where are you going to say, I was just going to kind of piggyback on your expansion? I'm curious when you look at the locations, I can understand New York, and you understand Chicago, Florida, all that. What do you look for in a city partially selfish, because I would love to see her to what, what do you look for in a city in what makes you expand to that city? Well that's a question we don't necessarily grow geographically speaking. No. Some restaurant companies found expansion plans and target to kinda grow outs from within outside keep the larger circle, you know. Five six years ago, we decided we wanna make ocean crime national brands so, you know, you can't be a national brand of you're near York. If you're not in California L, so we had concerted effort to find locations in the cities. But we we're listening to major cities. We just open in Chicago, you know, at the corner of Michigan Wacker. We spent five years. You're the apple stores across the street from us there, you know, I mean, it's we spent five years looking for we call trophy locations that are become generational sites that won't be available for another generation or two. And if you can do.