Kent Taylor and his Texas Roadhouse Dream is made reality by, outworking everyone, putting people before profits, and proving that “crazy” ideas, like cutting ties off in the office and treating employees like family, can build a billion-dollar brand. His story is a playbook for entrepreneurs who believe culture drives lasting success.
This is the story of Kent Taylor and his Texas Roadhouse Dream! Kent's journey shows how “crazy” ideas can build billion-dollar companies when fueled by grit and heart. Born in 1955, Taylor wasn’t the most gifted athlete or student, but he quickly learned that outworking others was his secret weapon. As a teenager, he logged over 1,500 miles one summer to improve as a runner, teaching himself to push through pain and reshape his destiny. That relentless drive carried into his career, where rejection became a steppingstone, after more than 130 “no’s,” he finally found the investors who believed in his vision.
What made Taylor different wasn’t just persistence. It was his unapologetic focus on people. He believed that if he took care of his “Roadies” (employees), they would take care of guests. Texas Roadhouse avoided corporate polish: no ties in the office, no flashy advertising, no MBA culture. Instead, Kent doubled down on hand-cut steaks, made-from-scratch sides, and a team atmosphere where everyone felt like family. He even kept scissors handy in the office to cut off visiting executives’ ties, an outward symbol of his no-nonsense culture.
Taylor’s leadership philosophy often clashed with business orthodoxy. He resisted raising menu prices even as costs rose, kept decision-making decentralized, and invested heavily in staff happiness when most chains were cutting corners. The results? A restaurant empire with a “stair-step” growth in profits, driven by loyalty from both employees and customers.
Beyond business, Taylor was known for generosity and humility. During the COVID-19 pandemic, he gave up his salary to support employees and help the company stay afloat. His story, captured in Made from Scratch: The Legendary Success Story of Texas Roadhouse, is part playbook, part love letter to doing business differently.
For entrepreneurs, Kent Taylor’s life delivers timeless lessons: outwork your competition, listen to your people, stick to your principles even when the world says you’re crazy, and never lose sight of why you started. Texas Roadhouse wasn’t just about steaks—it was about building a culture where people came first, and profits followed. Taylor proved that sometimes, the craziest ideas make the most sense.
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Isn't it? A little bit crazy for a publicly traded restaurant chain with 70,000 people to mostly hire folks who don't quite fit into other places or may have messed up a few times. Isn't it lunacy for a huge restaurant chain to do almost no national advertising? Is it certifiable to keep prices low even as food and labor costs continue to rise?
Or to avoid hiring anyone with an MBA or a PhD or to keep the menu basically the same since it opened decades before? Does it fly in the face of conventional sanity to not allow coats and ties in the home office to the point of keeping scissors handy, to cut neck ties off visitors, or have a founder, chairman and CEO who dresses like he's part of the landscaping crew?
Probably Texas Roadhouse has always been first and [00:01:00] foremost about its people and guest satisfaction. They know that if they take care of their roadies, they'll take care of their guests. It's blasphemy to put people over profits to ignore the percentages and focus on making employees happy. Such beliefs would probably earn you a D or an F, which are exactly the grades Kent earn in graduate business school
This MBA dropouts company's net income graph for the next three decades looks like a stair master. Welcome to Texas Roadhouse, where Crazy Works.
These selections were from the preface of the book, made from Scratch, the legendary success story of Texas Roadhouse, and this is an autobiography that was written by their legendary founder, Kent Taylor, who was an overnight success 20 years in the making. That is, If this book's not in your library, I would highly suggest picking up [00:02:00] a copy. It is loaded with valuable insights about business and about life, and what I like is at the end of each chapter, there's a lessons learned page that is worth the price of a mission alone if you ask me.
Now, Kent, he was a firm believer in learning from his mistakes and his successes along with sharing what he learned and learning from others at the same time. This is demonstrated by his actions many times throughout the book.
Just as a quick tip, at the start of each chapter, I would highly recommend actually skipping to the lessons learned page and read that first, it gives you a little warmup of what to expect.
Then once you arrive at that lesson in the chapter, it already feels familiar. And then when you finish the chapter, if you reread it, you're basically seeing that lesson three times. And that really helps with enforcement. I really wish a lot more books would do this. I think it's really [00:03:00] brilliant if you ask me.
Now, if you're in the restaurant industry and you want to advance your career or possibly start your own business, I believe this is an absolute must read book.
It is a roadmap for those of us working in the restaurant industry. However, if you're not in that particular industry, there is more than an equal amount of learning opportunity in this book. It is loaded with a lot of valuable lessons that we can use in any aspect of our businesses. Plus the book has a lot of crazy Kent He loved his employees and his friends and his family, and it's really heartwarming to see a founder and an executive put his team first in all situations.
And I'm a really big fan, to say the least. Look, if you ask me who would you rather spend the day with? Steve Jobs, Elon Musk, bill Gates, Michael Jordan, or Kent Taylor. For [00:04:00] me, that is easy. Kent Taylor. And you might be asking yourself why? Who's Kent Taylor? Maybe you're just learning about Kent Taylor today.
Well, let me tell you, I would spend the day with Kent because I believe that he would listen to me as a human, as I would be generally cared about and provided with a lot of high quality lessons that Kent had learned over the course of his career. At the same time, I also believe that he would listen to my ideas and suggestions and insights, and it would be a mutually beneficial day between the both of us.
There would be a lot of practical and wise lessons learned. I actually feel like I should be applying for a job at Texas Roadhouse after reading this book. So how about we jump in and take a look at Kent's relentless journey throughout his life.
Now it says in the book that Kent was born in 1955. But the book starts out with Kent on the football field as a freshman in high [00:05:00] school. And at that time he's not very tall. He is only five foot two inches. It says, however, right out of the gate, we get to really see that he has this strong drive in a determination and the coach is gonna look at his performance on the field and he's basically gonna tell the other kids to work as hard as that punk over there, basically, meaning that Kent was working his ass off.
In the kids that were bigger and more athletic, they were basically slacking. So the coach really wanted them to look after Kent and his effort and take after his effort.
but however, even with this hard work that he was putting forth, he's still gonna ride the pine for most of the season.
After his sophomore year, the coach is gonna tell him the following, Taylor don't even think about coming back next year. If I let you get into the game, they're gonna kill you.
I mean, you could die. Why don't you go try the track team where a skinny little kid, like you can maybe do [00:06:00] something. those, my friend, are very harsh words, Especially for a young teenager like that, but sometimes we really need to hear that harsh truth.
There is certainly value in business when we surround ourselves in our organization with those folks and trusted advisors that are willing to tell us no, or they're willing to offer different points of view. We really need that check and balance to keep us straightforward and honest here. Now, Kent's football coach, he had done a little bit of prep work to help him out and he had talked to the track coach in advance, and once he goes to see the track coach, he's gonna have him run a few laps and he's gonna give him some further harsh words saying the following.
I hate to say this, Kent, but you apparently have no natural speed or talent, so your only option is long distance. That's just brutal. I tell you, that's twice now. So what does he do? He signs up for the cross country team and Kent says the following, I finished my [00:07:00] first race near the back of the pack, getting lapped by the better runners, and I got laughed at in the process by the kids in the stands and right here in an early age, Kent.
He's getting bounced around from various teams. He has a lack of athletic ability.
but he's not gonna just give up. He's got that really special drive. It reminds me a lot of Michael Jordan when he got cut from his high school basketball team, he would say that that really lit a fire in him and it drove him to work even harder, and he became obsessed with the game, waking up early to shoot hoops in the backyard or going down to the gym to shoot hoops.
He grew physically and he added muscle and body weight, we all know what happens to the Jordan story after that. Now, in much the same way, Kent, he has this exact same fire that Jordan had, and he says the following, I wanted more than anything to prove to the other guys, my coach and the [00:08:00] grandstand golfers, that they were wrong.
So before his junior year, he's gonna be running six to eight miles a day. This really allowed him to progress into what would become an average runner. In addition, it says that he grew about eight inches in the book and this would allow him to finish in the middle of the pack, if you will. This got the naysayers off his back.
There was no longer people in the stands laughing at him. So we can see that through his hard work, he's certainly making progress, but he's not quite satisfied and he keeps going. He is pushing hard and we can learn. A really great lesson from Kent right here. He says, the following between my junior and senior year, I learned what would be my greatest lesson in running something that would eventually help me in the early days of Texas Roadhouse.
That lady's dig. Letterman jackets. Actually, just kidding. The lesson was, if you outwork the other guys, you will eventually get to where you want to go [00:09:00] and be somewhat luckier than others think you ought to be. Just a couple of observations here. One, I love the humor that Kent includes in the book.
It's really refreshing to see someone not be all wrapped around themselves. I've read that selection probably 10 times now, reviewing for the podcast, and it makes me laugh every time. The second observation here is I have to say spot on. If you just plain outwork the other guys, you'll definitely get to where you want to go, and then that luck part, well, I think that just comes from freaking outworking everyone else.
how many times have we seen this on the podcast already? This philosophy, it's embedded in almost everyone that you and I study. Elon Musk pops to mind right away. If we go back to episode seven, we saw how he was working 16, 18, 20 hours a day at SpaceX in those early days. Setting the example for his team, grinding super hard.
[00:10:00] Also, Sam Zemurray, the banana man. No one outworked that guy. Hell, he even outworked entire governments and Kent. Right here. He has this exact same drive and this lesson is gonna be a great teacher for him, for the rest of his life. It's an excellent one for you. And I also outwork everyone, my friend.
Now between his junior and his senior years, we're gonna see him working even harder. He's gonna log more than 1500 miles of running in one summer. That's just crazy. That's a lot of miles. I just wanted to read how Kent would describe this transformation. I had been building up the muscles in my heart, and by cross country season, was able to pump blood farther with less exertion, increasing my lung capacity to bring more oxygen to my leg muscles.
Most importantly, I was expanding my brain's ability to tolerate pain and push myself beyond what I had felt [00:11:00] possible. I was reshaping myself and my destiny. I really think those last two sentences are magic for you and I, and I just wanna read them again.
Most importantly, I was expanding my brain's ability to tolerate pain and push myself beyond what I had felt possible. I was reshaping myself and my destiny.
These are the results of what happened. When we really dig into painful situations in life and we push ourselves, we reshape our brain and our ability to accept that pain into push beyond that pain. imagine for a second, if Kent would've just sat on the sidelines all summer, this is gonna ultimately lead him to just being average
and Kent, he's not looking for average later in life. When his brain knows this pain, it can say, wait, I've been down this road before and it's okay. I can work a hundred [00:12:00] hours a week at Bennigan's. I can get rejected more than 130 times to find an investor for Texas Roadhouse. I made it out alive last time.
Let's go baby. Bring it on. Kent is exactly right. He was reshaping his destiny through those 1500 miles, as he starts his senior season, he's gonna be faster and faster with each race. What do you think his strategy was? It was to accelerate up the hills, he says, pushing for max pain.
this really allowed him to overcome runners who were faster than him on the flats. In this strategy, it's gonna see him beating out the previous year's state champ, who was also a friend and a mentor, and his name was Steve Bullock. Now Steve's gonna have a pivotal role for Kent here in the near future,
as willsoon see. Kent's gonna go on to have a stellar senior year. His high school would win the state championship in which he was a strong part [00:13:00] of.
Even though it says that he had the flu on race day, it kind of flashes me back to Michael Jordan in the playoffs when he had the flu and came out on the floor and dominated everyone. I imagine Kent doing the same thing here on the track and field team.
So at this point his future is looking really bright and Kent, he is gonna turn his sights on trying to find a college where he can run and maybe cash in on some of those scholarship bucks. so in the spring of 1972, Kent would go with his friend Steve. He was the one that I had mentioned just a little bit ago. Uh, they would go visit the University of North Carolina to take a little visit of the campus Steve had already been accepted on a full scholarship ride, but he does get an introduction with Kent to the coach.
That's where he is helping his buddy out here. And this was a really big deal for Kent. He's going to make his case to the track coach telling him how many miles he is run, how well he is improved, what my [00:14:00] times are, here's all the positions I finished, here's how well I've done on all the races.
I mean, he's basically putting everything out there in front of the coach,
The coach is gonna respond and basically say, Hey, you know, we don't have any more scholarship money left for you at this time. But Kent he insists on leaving his number with a coach just in case something comes up. Kent says that this really pushed him outside of his comfort zone. But the big question here, would this pay off?
Well, lo and behold, over the summer, he's gonna get a call from that track coach who says that one of the high jumpers had backed out and that he was in on a half scholarship. We can see right here that Kent's tenacity really paid off for him in a big way. If he would've just been timid and not put himself out there, this opportunity maybe would've never came forth.
So I think that's a great lesson just to always be pushing and make people aware of your abilities and what you can do for [00:15:00] them.
Now once Kent arrives at college, he is gonna kind of take the path of a lot of the students there and he is gonna fall into partying. And he says that he barely made it out of college with passing grades. He says that for his freshman and sophomore years, his running was generally up and down.
He was kind of an average runner and it seems like maybe he was more in love with the ice cold bud versus running around on the track.
But prior to his junior year, he has kind of a revitalization, if you will, in the summer before his junior year, Kent had taken a job as a cab counselor in the Great Smoky Mountains, and it's here that he rediscovers his love of running. He says The following, running in the mountains was refreshing Zen or something. Cosmic.
The summer love affair with the Smoky Mountains is something that stays with me to this day. I got myself in the best shape of my life. This hard work, it really pays off big time. In his junior year, he's [00:16:00] gonna crush just about everything.
He would finish second in the A CC championships, and then he would also qualify for the NCAA championships, he was only one of four people on his team that would qualify for that championship. Then as he's going into his senior year, he says he wasn't quite as good, but he would finish and he would get out with his degree and a bunch of lessons learned, such as how to hook multiple kegs together, market yourself to college co-eds, and how to deal with the barriers in life.
Again, I love the sense of humor here,
So what would he do now? I think that is a really great question. Let's see what he says. I took that well deserved four year diploma and with a full sack of gumption and moxie.
I marched back to my old job working for Dottie Mann at the Captain's Quarters restaurant in Louisville. This time as a server. Kent had started working at this restaurant in high school as a buser, and this is really his first taste of the [00:17:00] restaurant business.
let's stay on the book here just for a minute. We're gonna get a first peak at Kent's purpose in life right here, I think this is magical and it's critical towards where he is gonna be going in the future.
A little older and wiser. I became fascinated by how the kitchen processed orders, who on the team excelled and who sucked, and what specials garnered the most interest. I really did like waiting tables, rushing around upselling items, and finding ways to entertain the various types of guests.
The tips I counted at the end of each shift were a trophy of sorts, providing that I had done some kick ass work on the show. We always talk about that concept that in life chance is the cards that you're dealt. Then choice is how you play them. I believe right here, this is Kent playing his cards.
He's a getting them all arranged, if you will. And it's gonna take him a little bit of time to get them all in [00:18:00] order. But we're seeing that first hint of Kent's purpose right here. I always think that's special. I think it's magical and he's gonna use it to propel him for the rest of his career. in the meantime, Kent's next move is gonna be to start taking MBA classes at the University of Kentucky.
He's also gonna find himself running with the track team and then doing a bartending gig for his uncle. It really seems like during this period of time, he had a mix of a lot of different activities going on. And at the same time, he had one semester of eligibility, left to run in track. So he would head back to the University of North Carolina and he would participate on the track team.
With about six weeks left in the season, he's gonna be injured. That basically ended his college running days. Now Kent, he really knows how to have fun. And with this injury, he's gonna say the following, I had three choices. [00:19:00] One Stewardly attend my PE grad courses. Two, move back to Lexington, get a job and prepare for my MBA summer school or three blow off classes party, go to the beach, do some camping in the North Carolina mountains.
Hmm. What to do. What to do. And for Kent, it's gonna be option three. At least he was being open and honest with us here. For me, I do find it uplifting that Kent is really an open book about his life. After this little sabbatical, he is gonna return to grad school. But remember he's got a lot of things going on in his life at this point, and he's basically also doing full-time bartending work. I think he was just having more fun bartending and he was having a lot of fun and Lexington as well. As a result, his grades are really gonna suffer and he eventually drops outta the MBA program with D's and F's that very last semester past this point in the [00:20:00] book, everything going forward, it's gonna be full-time work for Kent,
I think you could also say that this is when his real education begins, can he's not a passive guy
and we're gonna see him dig in super deep in everything that he does. It really reminds me of what you and I spoke about on episode four with Jake Gould, who made his fortune in the stock market and in the railroads, and perhaps was one of the top 10 richest men of all time. His belief that hands-on practical experience outweighed that of academics.
The real world discipline
and education were far more valuable than any traditional education you might get through formal schooling. Now, that doesn't mean that we should stop educating ourself. Gould. He was an avid reader and he was super smart. Kent Taylor. He's in the same vein, in
that he valued real world application [00:21:00] and he really shaped his leadership through practical books and lots of them and more on that. Shortly we'll talk about Kent in reading. He loves to read
One of Kent's first gigs after he had finished his MBA program was as a door-to-door salesman.
But after three months, he found himself back to bartending at TGI Fridays. He's slinging drinks there and he's having a good time. He is doing really well until he is hit with a reality call from his father. He would visit home one day and Kent's father is gonna sit him down and tell him the following
so the friends you've graduated with are getting good corporate jobs, they're building their futures, and here you are bartending.
Ouch. . Kenneth certainly stung right here. Reminds me of the harsh words he heard from his football and his track coaches at an early age. He really kind of has a choice. I guess we see some entrepreneurs that just go completely against their parents and then others really take 'em to [00:22:00] heart.
Kent's gonna say the following. . Good thing there were no cell phones. Then as such, parental scolding couldn't last past the front door. I didn't even have a landline, so dad could only tell me off if I went home for a free meal and I didn't go for a while.
Still his words stuck. And eventually I went to see my uncle Bill. before we talk about his uncle Bill, just a few thoughts right here throughout the book. Kent mentions his dad many times over and over And how much he admired him and how proud he was of him. His father, Powell Taylor had worked at GE for more than 35 years, and even though he didn't own his own business, he acted like he did, particularly in terms of work ethic, drive and organizational skills, where he was one of the general managers and he was highly respected across the company.
I think that's just a valuable insight right there, that if you're working for a company, you can still act [00:23:00] as if you're the owner and this is gonna move you up the ranks very quickly. Plus, it's such a solid example for those of us who have children, remember more is caught than taught. Our children are always watching our actions and we can see firsthand that this was really impactful for Kent starting young, building a foundation by cutting grass and busing tables and washing dishes during high school.
And then it just goes from here. He has that deep drive,That's always gonna propel him forward to do excellent work and do great things. , Let's take a look and see what happens next. Uh, with his Uncle Bill that we just mentioned. Now, bill, he was a serial entrepreneur. He ran dry cleaners, liquor stores, he had lounges, he had apartment buildings, and he had this after hours club.
He is gonna allow to let Kent take over the club. Uh, this club was called Circus Disco and Kent, [00:24:00] he's gonna jump in with both feet and impress his uncle very quickly. Who is gonna tap Kent to open a second location that would be located in Florence, Kentucky, and it's gonna be called Circus Disco Two.
It says in the book that this became an immediate success Kent reflects on his time saying the following. I was managing a business at the age of 24, meeting and dating a few ladies and beginning to figure things out. I think that is excellent. I think he's starting to arrange his cards right here,
For me, this is always one of my favorite parts when someone has discovered their passion. They're on their path towards greatness. As the reader, you and I know that he's gonna be successful, but this young version of Kent in this particular case, while he obviously doesn't know it yet, you and I, we get to see all of these struggles that yield so many valuable lessons in the bright ones. They really learn [00:25:00] from them and they feed them back into their plans. It's, we're about to see here now the circus disco, it's gonna do well, but after about six months it starts to drop off.
The primary reason was that it was about a 30 minute drive from where most customers were located, which was in the city of Cincinnati. he would undertake many different types of promos to try to get people to come back into the club. And eventually that just didn't quite work out.
So Kent, he's gonna convince his uncle to let him convert the club into a rock and roll bar,
His uncle would agree and he would put Kent in charge of the design. Kent's gonna say that this was a crash course. He learned things about like people flow, such as having cruise routes through the bar in case some guy had got turned down by a lady. He could make an escape route and not have to walk past her again.
So he was learning about people flow here. And then he was also talking about putting your booths at different levels so that guests from different tables don't stare at each other all [00:26:00] night long. He really says that adjusting the booth heights just by a couple inches really had a big impact on the experience.
That's quite interesting. I've never quite thought about that before. And I know some of the popular restaurants that I like to go to utilize that concept. So that is very interesting. And then he also says, you know, that the lighting would be low so that everyone looked hot. they're gonna bring in a lot of different types of bands.
They're gonna host fashion shows with free champagne for the women, and then they let the men come in after 10:00 PM So they would kind of get everyone jazzed up and excited. They had country night, they would have ladies night, they would have bull riding, basically. Anything that you can dream up to bring crowds in.
I really see this as trial and error, trying to figure out what works and what doesn't work. And these are really beneficial lessons for Kent. Later on with Texas Roadhouse, when he fires that business up, he already has a general idea of what would work and what wouldn't work. [00:27:00] So this is just trial and error for his future.
one thing that I really admire about Kent is that he was not afraid to try anything. And he was okay at failing. That was perfectly fine. Kent didn't dwell on the past. He tried something and if it worked, he kept doing it. If it didn't work, fine, stop doing it.
Learn your lesson and move forward. Don't dwell on the past, my friend. Just keep moving forward.
Now something important's gonna happen here. he's gonna run into a gentleman by the name of Jeff. Ruby. He was also a club owner and they spark up this like-minded friendship. They would trade ideas and they would generally encourage each other to keep going and to keep working hard.
Then one day he's gonna get a call from Jeff who asked him if he would like to open a club if he would design the club, if he would be willing to put in all of the sweat equity and run the club, he would make him a 20% partner and Kent, He is overjoyed and says the following, that ownership [00:28:00] and a chance to use my design skills were too much to pass up.
I thank Bill for believing in me. Turned in my notice and took the leap. I was finally going to become an entrepreneur, Kent right here he is gonna work his ass off managing the construction of the new location that they were gonna call Mabel Murphy's. This really gave him additional experience in some of the finer details, such as picking out plates, silverware, glassware, laying out menu options, fine tuning the restaurant layout and the decor.
And Kent says the following. That was awesome. An awesome it is gonna be for him. They're gonna start out super strong and Kent, he is just on top of the world, but he's gonna be in for a big shock here you see the landlord, he was an Italian guy with a less than stellar reputation. He was also a frequent customer and he had seen how hip and popular the joint had become [00:29:00] he's always asking these questions and Kent, he felt a little bit strange because he was asking questions like, what was the daily take?
What food items are doing well, what food items aren't doing well, just things that normal customers wouldn't quite ask. you know when you get that feeling like something's just a bit off. I really think this is what Kent felt here and his gut is gonna be correct he's gonna soon learn from Jeff.
Remember Jeff was the guy that he was working for, well Jeff had a partner and his partner's name was Don and the joint, Mabel Murphy's was actually in Don's name. So Don has all of the legal rights to this business. And Don, he had a silent partner and he guesses who that partner might be. Yep, that little Italian guy.
WTFI tell ya. Talk about being blindsided. Kent [00:30:00] gets notified that they had made a new arrangement and they're gonna take over 100% of the ownership from now on. This is Don and the little Italian guy. They wanted Kent to stay and run the place, not for a 20% equity or even a 10% equity, but merely just a 10% bonus.
This is gonna turn into a super valuable lesson for Ken at this early age. And it's also one for you and I, it's just so valuable. This lesson right here is to get the legal stuff done. Ken's gonna say the following, we hadn't consulted a lawyer before jumping into this venture and like a couple of clueless chumps, Jeff and I had no rights to anything.
It was like some cautionary tale I'd learned about in business school when I had gone to class, except this was happening to me. Another lesson learned, get the legal stuff figured out before you go into business with anyone and spend the money to hire yourself. A lawyer who [00:31:00] knows what he or she is doing.
I was devastated at this point he could have packed it in. It really reminds me of Sam Walton, who lost his first Ben Franklin store there in Newport, Arkansas, when the landlord saw how well he was doing and decided not to renew his lease and gave the store to his son . at that time I believed that he was the top Ben Franklin store in all of the United States.
After this, Sam, made a lifelong rule for himself, and he says, always control your real estate whenever possible. Sam also could have packed it in here, but he was deeply driven to succeed. And he knows that he had done it once and he can do it again.
He's really learned the lessons about discount retailing. So he picks up from his losses. He moves to Bettonville, Arkansas, rebuilds his business into what we know today as Walmart. Now, [00:32:00] another thing that I really like about this book. Is there's an appendix and it's called Books I dig. And number seven on the list, Sam Walton Made in America.
Kent, he was a really big reader and I can only imagine how much he related to Sam when he was reading about the loss of that first Ben Franklin store. Bottom line here my friend. Get the legal stuff figured out. It'll pay for itself in the long run.
Alright,
let's keep going in the book here. Uh, let's see. So after this Kent, he's gonna spend time working at a lot of different various clubs and he would also be living with his girlfriend Laura at the time. One day she's gonna tell him that she is pregnant. This really changes Kent's perspective and the way that he approaches things because he is currently working more than a hundred hours a week.
That certainly is not gonna fly for any sort of home knife. So Kent, he hits the street looking for a restaurant manager [00:33:00] gig, and it wouldn't take him too long to land a job as a trainee at a place called Bennigan's. In Louisville, uh, Bennigan's was this, um, Irish theme restaurant.
I think they would grow to something like 300 locations. Then during the 2008 financial crisis, they would get hit really hard. It would end up shutting down like 90% of the stores that were in their network, I believe it was. But at this time, it's still 1983. And Kent, he's safe from all of that. in typical Kent fashion, he is gonna kick ass as a trainee.
he works and learns all positions from the dishwasher to the server. And he's even gonna work to improve the bar menu, that would help sales. One sentence that really stood out for me here in the book. During this time, I wanted these full-time dishwashers to know I was there to learn from them, and I put in the effort to do it well.
, I tell you what, if everyone just took that approach in life, Kent really made it a priority in [00:34:00] life to learn from others, regardless of what title he held. He didn't care. He treated you like a friend and he wanted to learn from you. then he put the effort into do it well. And that sentence right there, it's so simple, yet it's very deep.
Let our actions speak for ourselves.
Put in that effort to do it well. As for Kent, he soon gonna find himself in Dallas. Added a week of classroom instruction. And then not long after that, He would be assigned to his first management gig in Dallas as well as a bar manager. Three months later, he is gonna be promoted to a service manager overseeing the wait staff.
Then not too long after that, he would take a role as a kitchen manager in a different location, and that really rounded him out. He knew all of the different manager positions. So in 1985, he's gonna be promoted [00:35:00] to a full store manager of a Bennigan's that's located in Denver on Arapahoe Road. It says, funny enough, I used to frequent that location when I lived in Denver, but I miss being served by Kent and his staff by at least 15 years or so.
And it looks like possibly that location closed in 2010. However, as Kent arrives, he finds the store is at the back of the pack. They're doing something like $35,000 of sales per week. In so many episodes, we've talked about this concept of hiring top tier talent, the thoroughbreds that can really elevate your team and drive things forward.
How just a few people with negative attitudes can really impact your culture
I think right here we get a real life example from Kent in just a few pages in the book here. And this is really worth its weight in gold. Plus it demonstrates that you really can turn around a negative [00:36:00] culture. Let me walk you through the transformation that takes place here. So the culture at the Bennigans was very toxic and he needed to change it.
He saw that he isn't gonna go any further if he doesn't change this culture. So what he does is he spends time talking with each person. he says the following,by listening more than I talked, I learned a lot about each person took note of their wants and skills and got a pretty good sense of who was helping the cause and who was keeping us from reaching our potential.
A plan develop quickly to turn the store around. I would need to let a group of current folks go about 20 who were toxic and would have to hire 30 or 40 new people. Now next is recruiting for camp. And he's gonna say the following, this is awesome. So on my own dime, I would eat at other restaurants. When I spotted a talented host or server or got a well-cooked meal, I'd introduce [00:37:00] myself to the person responsible and give them my card.
Did I get in trouble? Hell yeah. more than a few times. I was asked to vacate the premises by the manager. Did I care? Not at all. And I love the fact that he does not care about getting in trouble right here. He's looking for top tier talent that can join his team.
Plus he would work with the home office to have a bonus system implemented so that if employees recruited their upbeat and positive friends, they would get a little bonus. And that really helped as well. Kent says that he was looking for the following high energy, fun people on the team. And those types of folks tend to hang out with other high energy, fun people.
I didn't care what age or gender or anything else they were. the more diverse our team became. The better. The only requirement was a positive attitude and high energy. So with this team staffed up, [00:38:00] the next step is to let go of those donkeys, the ones with the toxic attitudes, the ones that are holding the organization down, just listen to what Kent says right here.
Once we hired about 20 new people, I was able to move on to the second part of the plan, eliminating the slackers and troublemakers. Funny thing, as I let people go, none of their teammates complained. If anything, with each layoff, the morale in the kitchen and the dining room soared. Team members were happier, they cleaned more, they moved faster, and they took more pride in their work.
That just blows my mind. It's a simple, yet deep plan. Hire fun people with that upbeat energy. It is very contagious. I'm sure if you were a guest at that time, visiting Kent's restaurant, it would've been a fun and enjoyable experience for sure.
I think for you and I, it just [00:39:00] drives home what we've spoken about so many times in the past, over and over. Hire the top tier talent that you can afford in your business. My friend for Ken, he's gonna see the results. Sales are gonna go up to over $50,000 a week, and his store was now a leader in his region
Things that are looking really good for Kent right here. but he is soon gonna be shocked as his wife tells him that she would like to file for a divorce, as he had really become obsessed with working and he was hardly ever home. So once she leaves, he's gonna be playing the role of a single dad to his two daughters, and that's gonna prove to be extremely difficult for him.
So he decides to leave Bennigan's and he would head back to Louisville, or he had a lot more family support that could help him out.
Once he arrives back in Kentucky, he's gonna find a job with. KFC as like, um,regional manager where he is overseeing managers of multiple stores. [00:40:00] he says that he immediately starts putting his mark on the stores. One in particular, he had convinced the manager to let him start putting different food items on the menu. And that really gets him into trouble quickly. He was trying to see what worked and what didn't work, but as a result, he's gonna learn a really valuable lesson and be turned on to something that's gonna fuel his growth for the long term.
His vice president is gonna basically say, Kent, you're an independent thinker. You're a bit of a rogue here, and , you should probably think about, you know, going out and doing your own thing. And he's gonna take him a step further. He could have just ended right there, but he is gonna give him, a copy of the book, uh, seven Habits of Highly Effective People by Stephen Covey and Ken's reaction to the book I dug in.
That's brilliant. Three short words I dug in. I guess he could have tossed it in the backseat of his car and it would've sat there for years, possibly, but instead he takes it to heart and he really does. [00:41:00] He digs in. Where might that lead him? You might ask.
Well, for many years he had been chasing a gentleman by the name of John Y. Brown. , Mr. Brown was a friend of Kent's dad, and subsequently, he was also the owner of Kentucky Fried Chicken. Brown had bought KFC from Colonel Sanders for $2 million. he would go on to add over 3000 locations and then sell it just seven years later for $284 million.
Quite a nice return, I must say, there. in addition, brown was also the governor of Kentucky from 79 to 83.
Now, John, he had rejected Kent over and over and over and Kent, he never backed down. , John Brown says the following in the book, Kent's dad was a dear friend of mine growing up in Lexington. Kent chased after me for about five years pitching various restaurant ideas. He was a big dreamer, lots of energy, very [00:42:00] persistent.
He was very curious, always asking questions, but wore me out if I'm honest with you. I just love that tenacity and that persistence in which Kent attacks his targets. Once he has something in his mind, he doesn't give it up.
Right here we're gonna find Kent. And yet another pitch to John Brown. This time he's gonna be selling him really hard on a Colorado theme steakhouse idea that he was calling Aspen in. In addition, he's gonna float an alternate concept of a blue collar cowboy steakhouse called Texas Roadhouse.
Now, after this meeting, John says, you know, I'll think about it. I'll let you know. Several days later, John calls Kent back And says, you know, I like that Aspen in idea. Let's move forward with that.
so the plan was to convert one of John's chicken places into this Aspen idea. he would also become a 20% partner, and he would take on a [00:43:00] salary of $40,000 a year.
John, would put $80,000 up to convert this location, but he suggests that they come up with a new name. Kent's daughter had suggested the name Buckhead Bar and Grill. So one day when Kent was on the phone with John, he just tosses that name out there. John likes it, it's accepted, and they roll forward with a Buckhead bar and grill.
Now what we see next is that Kent, he really learns from his past and he's gonna say the following, I like this. This is great. John and I had a solid agreement reviewed by his lawyer and mine, and he was a high integrity guy who my trusted, but given my earlier nightclub contract mistake, my own lawyer seemed like a good idea and I could not agree more.
To get this new location started, they're gonna move swiftly into action. All of the decor inside would be Colorado themed. With pictures of mountains, they'd have, wooden skis and snowshoes on the [00:44:00] wall. They had a big stuffed buffalo and then they had like a bar area and a separate dining area. As they opened up, they had generally fairly decent crowds that says, but Kent, he did admit that the food needed a lot of work.
Right here we see him again. He's working a hundred plus hours a week trying to make this place work.
And then he runs into a roadblock.
However, things are gonna get worse when they would receive a negative review in one of the local newspapers. and this is really gonna drive away what's left of a very thin line of customers. Anyways. Kent, he has to dig and scrounge here and he gets creative.
' cause he says that their payroll was down to less than $2. He couldn't even cash his own paycheck. And these are just really desperate times. So Kent's gonna go around and hit up all the hotels, handing out discount coupons. He would put an ad in the paper with that [00:45:00] same coupon, and he says that guests would show up, but they would never really come back if they didn't have that coupon.
at this point, this effort is basically just allowing them not to crash and burn while he figures out what the hell to do next.
He does have a radical idea and he is gonna go back to his partner, John, and he's gonna ask for $20,000.
with this money, they're gonna change the theme to a bar and pub that would have a lot of live entertainment. Then they would also slim down the menu and he says they would add ice cold beer. Now how would he get the word out? I guess you could say through a little trade, listen to this, one of their customers was a DJ on a popular radio station.
So he asked the DJ to go on the radio and talk about the place like he had just discovered it and how great it was and how good the food was and how good the bands were. At first, this is met with a lot of resistance, but Kent, in his style, [00:46:00] he keeps pressing and he finally gets an agreement for this.
Kent's gonna say the following, Andy DJ was talking about us on the afternoon drive time slot, like he had just discovered a cure for baldness. As a result, their sales would shoot up quite dramatically. He says that they were selling more beer than they were food, which always makes for a healthy profit margin.
Kent is finally able to cash his paychecks and in addition, he can pay back all those IOUs from his kids' piggy banks. Kent's tenacity right here is simply untouched by any, he absolutely gets after it. I believe it was through those high quality books that really helped him to focus and it gave him a different perspective and it empowered him with the confidence that he could be successful at the end of this chapter one against lessons learned during that time.
This is perhaps my most favorite one in the whole book. It says the following, there's a [00:47:00] lot to learn from the right leadership books. If you think you know it, think again. Ask those you trust what books have inspired them and dig in.
Always have at least one book going, and I couldn't agree more. As we always say on the show here, readers are leaders. My friend always be reading. Now with this new success for Kent you think that maybe he would just sit back and enjoy it for a bit. But no, instead
He goes right back to John and starts pitching Texas Roadhouse. And John is gonna agree to Kent being a 20% owner. but this time Kent wants 50% and he's actually gonna turn John down this time and tell him, no, I'm looking for something a little bit better than 20%.
Where might he look for other potential investors? Well, remember, the bar is now full of people. Kent says the following, I was back to pitching my Texas [00:48:00] Roadhouse idea to any patron in Buckhead or anywhere else around town whom I felt had a hidden cash of cash to invest.
Every week I set a goal for how many times I would get turned down and the list kept growing longer. Looking back, I shouldn't have been surprised by the rejection. I eventually turned my focus to doctors and dentists figuring they might not be as business savvy as the restaurateurs, but would still have deep pockets and listen to this.
Finally, after 130 rejections. Yes, 130. That is crazy. Kent. He finds a potential in a doctor group, and let me just read for you here what he says. I was on my game. Nolan Ryan couldn't have pitched any better. The doctors hung on every word, at least that's how I remember it, and asked some insightful questions, but they didn't need a ton of selling.
They immediately grasped the concept. God blessed the [00:49:00] learned. On the spot. The three agreed to fund the build for the first Texas Roadhouse to be located in Clarksville, Indiana. Each would put up a hundred thousand dollars with all four of us signing a bank loan to add another $250,000. And what they would agree on is a 70 30 split, 70 to the doctors and 30 to Kent.
In addition, Kent is gonna do something quite genius here. He's gonna work out a 1% royalty on all sales for all stores. And I just wonder how that worked out for him in the long run. I imagine early days when you think about one or two stores, that's not a big deal, but now that they have six, 700 stores, that is a really big deal and a super smart move by Kent.
So as they get started here, Kent, he agrees to no salary during the construction phase that started in the fall of 92. ' cause he's still working at the Buckhead Bar and Grill during the nighttime and he's managing [00:50:00] the build during the day.
Kent's gonna take another brilliant move here, In that he would find a managing partner, Brian Judd. He would convince Brian to put up $30,000 to become a 10% store owner. I really like that concept. I mean, basically you're empowering someone as an owner and when they're financially invested, they're gonna work their asses off so much harder.
And I think this is really a wise move in the restaurant business. It's a concept that Texas Roadhouse is gonna deploy for the long term, He would say that for $25,000, the managing partner would get 10% of the store's bottom line. And they've done this more than 600 times now,
which I think is generally very impressive. Now, if we flip back to that first store here, his first managing partner would go and work to hire a kitchen manager and a service manager. So that's a smart move because the managing partner is [00:51:00] also taking some of that workload off of Ken helping to get things ready.
As they open, Ken is gonna roll out this concept of a server only working three tables at a time. Keep in mind that the industry standard is four to six tables. So by doing this, Kent is saying, I want a deeper commitment to customer service. You get your drinks faster, you get your refills faster, you get your food faster, the servers have more time to spend with each individual guests making them feel at home.
Plus you get to turn your tables over faster as well so you can service more guests. At the end of the day. This first location is also gonna have a healthy supply of country music. They had all of their meat in cases in the front that were open to display for the public, and then the best part, I think is plenty of free bread to go around for everyone and things immediately start off with a bang.
They [00:52:00] do really, really well this is gonna lead them into an expansion quite quickly. the second store is gonna be located in Gainesville, Florida, and then shortly thereafter, they add Cincinnati, Ohio, Sarasota, Florida in Clearwater, Florida, and right here, Kent makes a bold emission.
Let me just read for you,
those stores opened to extremely poor sales. I broke my rule with Cincinnati and didn't do my homework, ending up with a lousy location. So those locations, the Sarasota and Clearwater stores, They did well during the winter months when the snowbirds were in town. But the other eight months of the year, Kent says that they were basically flat or they were dead.
So he has, at this point, two profitable stores that are now covering the three that were losing money In times, they were looking kind of super rough here. They were barely breaking even. and to top it off, his doctors, they stopped [00:53:00] investing and they were generally done.
They weren't happy with this failure here. So now he's really up shit creek. But we also know that Kent, he has been here before. Remember that pain from those 1500 miles earlier? He knows pain. Kent knows pain. He knows what to do here. And let's see what happens with a revived sense of purpose instead of wallowing in my recent failures, I pulled up my big boy britches and dug into all the business books I could find. They confirmed my many mistakes, bad real estate decisions, bad people decisions, inconsistent food quality and poor training. My doctors were history, bills were mounting. I was in survival mode once again, ever the optimist.
I figured if I could find a couple of new investors, we could write the ship. Sooner or later, I would have to make the hard call to close those three underperforming restaurants. It was incredibly demoralizing. I had mementos on the wall of my office from [00:54:00] each of those three stores reminding me of the people affected by their failure.
The money lost and the lessons learned. With two restaurants still successful. I somehow kept the faith to top it off, during this time,
Kent would lose one of his good friends, Tom. he was just 38 years old when he passed away, and it was said in the book that he had a blood clot in his leg that had moved to his brain. And Kent was just devastated. And this was part of that fuel to reinvigorate himself and just keep charging hard and turn things around.
I think it's when we're at the lowest points in life. That we can reflect back and really appreciate the good things that we had. And at the same time, we can set a vision for the future. And for Kent, it is dig in deep time. Kent, he's a fighter and he's not gonna just roll over. Now to fix the food quality issues, he's gonna hire a legendary chef [00:55:00] by the name of Jim Boyles and he's gonna help him slim down the menu.
They're gonna focus on only the highest quality recipes that could be scaled across the locations. Kent says the following, stick to what you do best. In our case, it's steaks, ribs, and chicken. That reminds me a lot of Harry Schneider in, in an out burger who also developed a super simple menu, burgers, fries, drinks, and he kept it like that.
While so many others were adding salads and wraps, kids' menus, breakfast items, whatever you name it, Harry avoided all that crap. He just made the best damn burger that you could buy. Keep it simple, simple, simple. Always wins the day.
Kent's gonna go find some new investors that would be able to help him with his short term operations.
So he is really taking the bold steps here that he needs to shore up his menu and to keep his operations going. [00:56:00] Now in the book from January of 95 through 2020, what Kent does is he outlines the growth of the company
all along the way, year by year. I think what I would like to do here is just look at the key milestones along the way, because there's a lot of lessons learned, specifically how they treated their employees or their roadies as they called them.
And I'm quite impressed by how Kent supported all of those that he worked with. And then we'll look at some other lessons learned as well.
I.
At the start of 95 here they have five stores, as we already know, three are failing. And by the end of 97, they would reach 15 stores.
And how did they gain so many stores that Fast? Well, Kent,had been approached by several individuals who wanted to do franchising.
And Kent was open to that way of doing business and he felt that that would be a stream of revenue coming in for the company. [00:57:00] So in order to do this, Kent's gonna hire a Texas law firm. Oh, by the way, They were the same ones that did the franchising for his competitor Outback.
Let's just see what Kent says about that. There was a law firm in Dallas that had done franchising for Outback, and they put together the paperwork. I'm pretty sure they mostly used the same format they had used for our competitor just swapping out our name for theirs. But it worked and all of a sudden we were growing again.
So along with this growth, he's stabilized the food menu and things are really starting to look up here for Texas Roadhouse. but for Kent, he has this really big vision and things weren't quite moving as fast as he had wanted.
So he had to devise a plan because he needed more money. So where's the money gonna come from then? Well, Garth Brooks, of course, at least that was his plan. Let's read and see how this works out. I made some inquiries and found out that he had [00:58:00] offices. Really a country music singer with offices. I know, right?
With no appointment. Naturally. I barged in like I own the joint to find the place deserted. I peeked into offices, not a soul in sight. I waited for an hour in the waiting room until the receptionist finally appeared, maybe coming back from lunch break. Who looked at me like I had just stepped off the moon.
She said there was no one there for me to meet with, especially not Garth Brooks. I handed over my proposal and drove back home, but I didn't give up. After a few days, I called his offices, left a message, but still no response. I called again. Then again and again.
Finally I got a call back after a hectic evening in one of our stores. I found a message waiting on my cell phone, Mr. Kent Taylor. This is so and so from Mr. Brook's office. Holy crap. [00:59:00] I inhale deeply a smile forming. Then I heard, could you please stop calling?
We aren't interested. Click,
I just love Kent's tenacity and his outside the box thinking here. Always looking for friends in low places, I guess you could say. Now Kent, he's even gonna try to chase down Larry Bird in the airport. He doesn't have any success with that. And then while on vacation to Bermuda, he gets a tip from a server that tech billionaire, Ross Perot was on the island staying in his private home.
So what's Kent gonna do? He is gonna go try to track him down. he takes his proposal to Ross Perot's house, slipping past his security detail. He would knock on the front door and he didn't get an answer. So he leaves the proposal on the doorstep. And of course, he never heard back from Mr.
Perot. but the tenacity to chase his dreams, I think is certainly very infectious. And I can just imagine [01:00:00] hanging out with Ken, all the wild and crazy ideas we could brainstorm up and get after now past this.
Kent's gonna have to come up with a new approach. So what he's gonna do is he's gonna put together a $5 million private placement
with this structure, it would see Kent retain more than 50% of the company. In that 1% royalty that we spoke about earlier, all of the early investors, they would hold 35% and then 15% of the company would be put up for that private placement.
So this is gonna allow in breathing room, and it also allows them upward to trajectory as they're generally gonna open about 20 to 30 new stores a year on a fairly consistent basis past this. Another thing happens too, around 97, in which Kent says they adopted this zap attitude, and this is about creating a positive vibe with employees versus sucking the energy out of him.
He had worked at a lot of different [01:01:00] companies in the past where they just sucked the life out of him. You know, when you were watching the clock and you just want to get the hell out of there. He didn't wanna have any part of that. He vowed to never let that happen at Texas Roadhouse. So he institutes this positive VI culture and it really pays off big for them.
In addition, Kent adopts a bottom up approach. Let me just read for you here what he says about this.
To envision a bottom up organization, think of an upside down pyramid. In this type of company, the leader is at the bottom and learns from the frontline people at the top. The leader's job is to support, encourage, and finally celebrate his or her people's success. Sometimes even failures.
Success is so often built on attempts that don't always get results, but have powerful lessons that eventually lead to kick ass ideas. Too many companies, [01:02:00] small businesses and even governments, punish risk takers or punish the managers for allowing their people to go rogue. In those cultures, failures get hidden out of fear of scorn or even job loss.
then to put this action into words. Kent describes even further how he accomplishes this. as a leader, I've always believed you have to get your ass out of the office and go visit the people in the stores or wherever you have your business.
And when you see a great idea, you write the person who brought it up a note and you thank them. I send out many notes every month. I believe so much in actively seeking feedback from our stores, especially for those working directly with the customers that some Sunday nights after the weekend rush, I'll call stores at random asked to talk to half a dozen servers and asked if guests like or [01:03:00] dislike new menu items, what guests are complaining about, what they're raving about, and so on. When I visit a restaurant, my first stop is always with the servers. Then I make my way to the meat room, then the kitchen line, and finally to the managing partner.
By the time I get to the managing partner, I know if he or she is full of crap, because I've already talked to the other people.
That is so real for you and I how this works. We saw this with Sam Za Murray. Also on episode nine, Sam, the banana man. He started at the bottom as a fruit jobber, pedaling bananas that no one wanted, and he outworked everyone and he rose to the top. Yet all along the way.
He remained in the fields, in the train yards and in the warehouses and on the ships. he believed in his workers and would often go to them first to learn what was going on in the business. Harry Schneider Inn Out Burger is another great example of this, of leading on the front lines.
[01:04:00] The only reason he expanded his restaurant was so that he could allow employees to advance their careers. So each time he felt that he had a solid new manager for a store, he would set off and open a new one. Plus, he always encouraged employees to provide feedback on menu items and operations, and he mostly promoted from within as well.
That was another major thing that he did, if you haven't read that book In and Out, burger A behind the counter, look at the fast food chain that breaks all the rules by Stacy Perman. That is an excellent, excellent read and I hope to cover it for you in the near future here on an upcoming episode.
Then speaking of promoting from within, this was also Kent's core belief to promote from within as employees on the inside. They understood the company values and the culture, and they were best positioned to lead. He saw outsiders, those with MBAs who had their fancy charts and their graphs and their business [01:05:00] theories as someone to avoid because they didn't have any freaking clue how to run a successful restaurant or how to empower people or motivate staff.
Always from within. He promoted, always from within. Time and time again. We see this, when we do this, my friend, it really fosters a deep sense of loyalty for your employees. Plus it gives them goals to strive for for their career development and advancements. And I believe it helps build that purpose-driven culture that really propels us and drives us forward for long-term success.
I just wanted to take a quick moment here and call out a few examples from the book.
First is that of Mike Schmidt. He had started as a busboy and rose up to become a regional market partner, overseeing more than a hundred stores. That is quite amazing. Gina Tobin, she ran the first prototype store in 96 and would [01:06:00] later become vice president of training.
Tanya Robinson began as a staff accountant, and she would rise up to become Chief financial Officer after 22 years with the company. Again, that is just very, very impressive that she's giving the opportunity to come in and learn and grow with the company and take on that executive leadership role.
There's so many more examples in the book, and I just really admire how much Kent poured into his employees. At the same time, he allowed them to pour their learnings back into him so that he could lead effectively. Now, Kent, he also celebrated his employees and their spouses. Each year they would have an annual conference that was generally held at a different resort destination.
I tell you, this just sounds like a super fun event. I wish I could certainly attend one of these. At this event, they would,they would name the managing partner of the year. They would also call out their [01:07:00] legend award,
then they would gather all of their roadies together and they would spend a day going out in the community and just
doing volunteer work and just providing a set of helping hands for the community. Then at nighttime, just legendary entertainment. I just compiled a real short list of the various acts that have performed over the years, and I just wanted to read that down here real quickly. This is awesome.
Willie Nelson Hootie in the Blowfish, the Doobie Brothers Counting Crows Earth, wind and Fire Collective Soul, five for Fighting KC and the Sunshine Band, Snoop Dogg Foreigner, Kenny Chesney and Toby Keith. And that's just to name a few. There were so many more. Another thing that I really admired by here is that Kent, he wasn't afraid to spend the money on his employees.
He was really the master of fun. In the book, it says that he even paid for several of those bands out of his own pocket so that he didn't strain their marketing budget [01:08:00] too heavily with this particular event.
I mean, I think these kind of events are just infectious. When you have a company that's really just willing to spend that kind of money on entertainment and taking care of you as a person. This just really breeds company loyalty and I can see why they have so many long-term employees plus this level of fun.
It just spills over into the culture, or I should probably just say that it is part of the culture. Fun is embedded in their culture and it's seen every night at the party that they throw at their Texas Roadhouse locations. Then to go even further to support employees, were not done yet here. Their director of care and concern, the Shaughnessy would set up what is known as Andy's outreach.
I think this program is incredible. I just wish more companies would do this. So under this program. Roadies could donate part of their [01:09:00] paycheck that would go to help frontline employees think like funerals, floods, surgeries, things like that.
Then in addition, they have one company store in Utah that was donating 95% of their profits into the fund. And then during the COVID times, Kent would personally write a check for $5 million as extra help for roadies who needed support during that time. That went into the fund as well. And then the results, these results are just impressive.
As of 2021, the fund has helped over 12,500 employees and has distributed something like $17 million hats off to Texas Roadhouse. This is incredible.
if you just stop and think about this for a second, a lot of their staff is younger, and when you're first starting out. You don't have a lot of money. I remember when I was starting out that one or two, $3,000, [01:10:00] that is a huge deal, and that could actually change someone's entire life trajectory right there.
So by helping employees with this emergency fund, they're doing the proper thing right here. They're taking care of their needs, and at the same time, how many employees feel an even deeper connection knowing that they have that level of security there, and hopefully it also is teaching them at the same time the value of saving for a rainy day when you might run into an emergency like this.
I think this alone is a true learning lesson for any company out there that doesn't have a program like this in place.
Now if we turn our focus to look at guest and food quality, there's several programs that were put into place that I find quite amazing that make Texas Roadhouse unique, and I just wanted to walk through a few of those.
One program is called Manager in the Window. So before each plate of food goes out, a manager ensures that [01:11:00] every guest receives legendary food. So they're making sure that everything's put together properly, everything has a good visual appeal, everything's cooked. How the guest ordered their food. It's not someone just new starting off on the job, sending food out into the environment.
It's a trained manager who knows exactly what to look for, ensuring that everything goes out perfectly. Another thing that I liked here is they establish what was known as alley rallies. So at the beginning of each shift, they share any specials, how the previous day sales were, any goals they might have, and then they just get people jacked up and energized and ready to face customers that are about ready to come in for legendary food and legendary service.
Another one that I really liked here is what they called Willie's Corner. So they took one booth at every location and they would feature memorabilia and pictures from the legend [01:12:00] Willie Nelson. not only was Willie a personal friend of Kent's, he was also a partner in many stores.
it's programs like this that allow them for continuous, steady, sustained growth over the years. Now, if we keep going here, we find ourselves in 2004, Kent's in a position where he really feels like he needs to take the company public. And in just this one or two chapters where he talks about going public, there's so, so many lessons alone in those chapters.
There's one that really stood out for me. This one hits home. This was the fact that Kent wanted super voting rights for his shares. so with this super voting right, he would get 10 votes for each of his shares. Basically, he doesn't wanna lose control of the company after the IPO.
I really believe that this came through his extensive reading and his wise counsel that he had around him
and that this really helped him a great deal. [01:13:00] Come to this important decision. Kent says the following, I called Don Tyson, CEO of Tyson Foods, and he said, you started the company, right, and you stayed true to your vision and your people, right? I said, yes, sir. He concluded with, well, damn it son. You should stay with it.
Into hell with them. Yes sir. my stand on super voting rights didn't go over too well with the bankers who threatened to bail, and how many do you think would bail? None of them. They were just trying to put pressure on him to erode control of his own company. Again, I think it's just another fantastic move for Kent to retain control right here.
They're gonna go on, have a successful IPO and would raise $183 million, and this was a really big success. Now a big question. Kent invested in the future, or is he gonna punch out and take the retirement path like so many might do? Let's see [01:14:00] what he says. I think we both know what he's gonna say before I read this.
At this point, I recognize that for most founders, the story would end here. They take their share and retire to a nice cabin in the Poconos or an island off Key West. I enjoyed the moment, no doubt, but the next week I was back in my office moving full seamahead. There would be more growth, more people, and more lessons to learn in terms of lessons he didn't let Wall Street push him around when it came to growth of his own company, and I really admire this.
So many companies are trying to meet the Wall Street expectations, or to not lose a quarter or a nickel or a dollar from their stock price. Kent, he took the road less traveled, and he does the right thing. He says the following, in 2007, we topped 1 billion in sales for the first time. I realized with our excessive growth from that point forward, we would [01:15:00] only grow at a pace that could be justified by our development of people and not by the availability of funds. We surely could use our cash flow and borrowed funds to grow up to 40 or 50 restaurants per year. But execution culture and not stretching people too far must rule the day.
Our training, along with our front and back of house assimilation should take a minimum of 12 to 14 months with 18 to 24 months, the best amount of time to set our people up for success and full participation in our unique culture. For my perspective, that is just plain wise leadership, and it's one of the reasons that I believe this book is really a master map on how to be successful in business.
I've worked at several companies myself that are only concerned about growing and they hire the bare minimum amount of people needed [01:16:00] and then they work the living shit out of 'em, and that always results in a poor culture and even worse, a poor customer experience.
At the same time here, I think Ken, he's really holding true to his roots. He knows what it takes to run a successful restaurant By having had worked on the front lines, He knew that he could easily damage the mission of legendary food, legendary service. By growing so fast, he let these four words, legendary food, legendary service, guide him in all of his directions, and he really did live true to his vision and his mission statement. He felt it and he lived it. Legendary food and legendary service, and this continues forward to this day. Now I want to take us up to 2020 in the pandemic.
So it's during the pandemic that Kent digs in really [01:17:00] deep to keep the company afloat and to protect his employees. And I just wanted to summarize some of the key events from 2020. These are the major bold decisions that he makes as the leader of the company. At the start of the pandemic, their store sales were averaging something like $105,000 a week.
So that's the average across 600 stores. So before things started getting real bad, Kent goes out and he pulls down a $200 million line of credit, and that was a security blanket for the company he didn't really give a shit about what that looked like to Wall Street. He went and he secured the money that he needed to keep his operations afloat because no one really knew what was gonna happen or how long this was gonna last. Another thing here that I admire is he learns lessons quickly. So they had international stores at this point and they had reached out to the people on the ground there [01:18:00] and they were saying, you're gonna need things like mask, gloves and thermometers.
Long before anyone was ever forced to wear this. Kent goes out and he buys as much personal protective equipment as he could, and many are kind of laughing at him for doing this. But that decision would prove to be very wise as things really got heated up. And of course everyone knows we were forced to wear masks anyways, then he decides to move the party from the dining room to the parking lot.
So they put everything out in the parking lot. They're gonna offer killer or deals on various family packs. From his view, they were really helping to feed the communities. A lot of grocery stores are running low on supplies at this point. Kent is also constantly on the phone with all the managing partners out in the field.
He's trying to learn what they need, what is working and what is not working. And then he takes [01:19:00] all of those lessons that he is learned and he spreads 'em all around the company, such as some stores that were selling ready to grill steaks. So you just buy the steak, bring it home and cook it to perfection.
Some stores were doing farmer's markets, they were selling veggies and other fruits because local grocery stores were low on supplies. And they had them available and they were gonna sell 'em. So many stores started implementing farmer's markets as the pandemic is heating up Kent, he's gonna forego his salary. And then as we mentioned earlier, he puts $5 million of his own money into Andy's outreach.
Providing that extra level of support for employees that really needed assistance. So around this time when the pandemic is just getting started, we're about two weeks into the pandemic, they see their average store sales plummet to 29,000 a week. And that is just painful. so what are they gonna do?
They're gonna [01:20:00] double down and they're gonna pay their employees higher wages and bonuses if they showed up to work.
Kent's gonna allow the food cost to go up from about 30% to 40 or 50%
And he didn't really care because he knew that he needed to survive. And at the same time, he needed to feed customers that he was servicing. I really love what he says right here. If we could break even when adding our food costs, labor, rent, and other expenses, then who cared? If we didn't make a profit for a while?
If we could provide a service to people in need, keep the roadies employed and feed America, then we were staying true to our values. Amen. I find that incredibly inspiring. Just what a fantastic view and a blessing that you can use your business in that way and in that manner to help feed people and also provide paychecks to many companies out there say that they [01:21:00] care,
it's so rare to find one that just puts the actions front and center. They weren't bold and they weren't bragging about it. They were just taking actions in doing the right things. Now, towards the end of March, another bold action here, the roadies are gonna receive a stimulus check, and these aren't the government ones.
Kent had used part of that $200 million credit line to put cash directly into employees pockets, and they're gonna be so thankful they're the ones that are gonna go out on the social media . They're gonna tell everyone what Texas Roadhouse has been doing and that just blows everything up and makes it go crazy in the social media sphere.
They would just have lines of customers waiting to buy food from the parking lots. Sales are gonna shoot up a little bit here to $49,000 a week after four weeks. And then it says after six weeks they had reached $63,000 as an [01:22:00] average. And I think that's pretty impressive because before the pandemic, they were only doing about $8,000 a week in to go orders.
So they're up over $55,000 a week just in to-go orders. That is extremely impressive here. Now as we roll forward, we get into May and their dining rooms would start opening back up on a limited basis and eventually revenues would generally stabilize for the company. And this one chapter in the book, it's worth the entire cost of the book alone.
Kent just loved this company and everything that it was, , it's just so heartwarming and inspiring for you and to see a founder with this much passion in drive. I highly, highly recommend this book, my friend. I don't think you can be disappointed.
Normally at the end of the episode, you and I recap the top lessons learned for the show today. I'm gonna let the words of Kent Taylor [01:23:00] speak truth into us as they're spelled out in the appendix on leadership from this legendary founder
and in Kent's memory here, I'm just gonna read them so you can hear them.
When I think of great leadership, I think of good listening skills, passion, commitment, honesty, positivity, innovation, and effective communication. Other important terms include clear vision, humility, focus, and empathy. Still. Other terms include drive, persistence, courage, gratitude, standards, expectations, and accountability.
This may sound like a lot, but that's what it takes.
Relationships, rule of the day, relationships with our folks, suppliers, guests in our communities are why it's so cool I get to be in the restaurant business. Our roadies get to throw a party in our buildings every night, proud to serve our family of [01:24:00] guests with something yummy for your tummy and an ice cold beverage, and some delicious rolls.
One thing that stands out in the lives of most leaders is that they each had a job at an early age, and at some point had to overcome a struggle. Abraham Lincoln was born into a farming family and had a strained relationship with his father, Sam Walton, bill Gates, Steve Jobs, Jack Welsh, Sarah Blakely, herb Kelleher, and Phil Knight all worked early in life and each overcame early struggles.
I could train my mind to be more open to positivity and motivation by reading or listening to motivational books on tape Whether it was the work of Dr. Norm Vincent Peeley Zig Ziglar, Dr.
Wayne Dryer, or Tony Robbins. I digested as much as I could, accepting positivity and pushing out the negativity.
[01:25:00] Finding role models and mentors also seems to be a constant trait among those successful people.
I also found that as a few people evolve, get promoted, and gain more personal wealth, their focus and intensity can sometimes fall off. That's why it's critical to stay connected to your frontline folks and spot and confront those who lose focus before they screw up.
Let's go back to Texas Roadhouse. Circa 1993 to 19 95, 3 of our first five restaurants were failing. Money was tight, and change was necessary as disaster was imminent. Fear of failure was a more motivating factor than striving for success at that point.
A new 1996 was a critical year for our survival. that was the year a book called Nuts came out. It's about Herb Kelleher and Southwest Airlines, written by Kevin and Jackie Freberg. [01:26:00] It changed how I thought about business, how I was choosing people, training them, and how our culture at Texas Roadhouse needed to evolve.
My top learnings from this book, one, keep things simple, managing good times and bad. Two, hire for spirit spunk and enthusiasm. Then train for skill. Three, do whatever it takes. Four, develop a genuine interest in the knowledge of others. Ask to learn. Listen to learn, and watch to learn. Five own mistakes.
Share mistakes. Learn from mistakes, and move on. Six, focus on individuals and capabilities, not titles. Deal with people, not positions. Seven. Don't let rules, systems, and procedures be your guide. Eight. Create a [01:27:00] lean organization, one in which it is difficult to hide poor performance, and one that continually stamps out bureaucracy.
Nine, think like an owner about your job and your life Focus on results regardless of who's watching. And then number 10, Make your organizational and personal mission, vision and values clear and make sure to recognize others, celebrate and have fun along the way.
That is all my friend. Such wise wisdom right there,
sadly, Kent would end his life in 2021. He had been suffering from a very severe, debilitating tinnitus in the ears. That's like a ringing of the ear, but it was said that this was very, very severe, and he had got this, after having contracted, um, COVID, he had sought the best medical [01:28:00] treatment, but to no avail.
Things just continue to get worse and worse over time For him, even during his last days on Earth, he was working on this book, Kent Hand wrote this entire book and he sent it over to his team to draft up,
one of his last requests on the final read was to remove any negativity as Kent never dwelled in the past, and he didn't want the book to reflect that either. In one of his last memos to his employees Kent quotes TS Elliotby saying who will risk going too far can possibly find out how far one can go.
In the words of Travis Doster. Who wrote the afterward of this book and is the VP of Communications for Texas Roadhouse. He leaves us with the following sentences that are all so beautiful.
Kent not only pushed himself far, but pushed everyone around him to go
Further than even we thought [01:29:00] possible. I hope that after you hear made from scratch, you're inspired to go even further than you could have imagined.
That would've been Ken's dream for you.
And with that, we'll close my friend. If you have a chance to pick the book up, I highly recommend it.
Thanks for listening today, my friend. I hope you found some value in the episode today And can take a few things away that push you to go a little bit further than you thought you could go.
Until next time, make it a beautiful day in the neighborhood, my friend.