Transcription
What's going on everyone? Welcome back to the School of Hard Knocks podcast. I'm James. I'm here with Jack and Josh. And we have an incredible guest for you all today from our hometown in our hometown of Austin, Texas. We are with Patrick Terry, the hamburger mogul, the founder of P Terry's. And for those of you watching right now, if you're not from Texas, you got to come out to Texas to try these hamburgers.
We were having the discussion in the cart. And I'm going to put it out there, full transparency, I got Pete Terries over In-N-Out. I got Perries over Waterburg. And I know these are some of the competitors, and I know that you're not, but I'm going to put it out there. [laughter] These are some truth. These are some damn good hamburgers. Seriously. And um you know, we're just super happy to be here with you today, my friend. So it means a lot and we're going to dive into really how you got into this business and you know you've built you've built Peter's into what's a name brand to a lot of households and whatnot. So thank you.
Congratulations on your.
I appreciate that. I appreciate that. I have one correction. I am the co-founder. My wife Kathy was very involved and we'll talk about that later. But you know I we share a bed together so I want to make that very clear that she was right there.
How long have you been married for?
Uh I think it's been 21 years. 21 years. We so we dated for a few before that. Okay.
And uh the interesting part of all that is that uh I talked incessantly about opening a hamburger stand uh for years.
At what age did you come up with that idea?
Oh my god. Well, I love the restaurant business and and the trick with the restaurant business is you you when you you have to every once in a while like take a break and forget how hard it is and then you get back in it because you forgot how hard it was. So I I' always had an inkling for the business and my favorite was the simple idea of burgers, fries, and milkshakes. I just I just am attracted to that as most people are attracted to eating that. I love that side of it. And so I talked about it forever. And then uh I got married late. I was 45 when I got married. And like eight months into our marriage, I just said, "Oh, by the way, you know how I always talk about it? Well, I just secured a lease on a 527 foot building at Lamar and Barton Springs."
So So you started B terries in your late 40s.
Yeah. Yeah. And and and and I decided there was a psychological thing. I knew I was I was kind of I I always think of myself as being an entrepreneur and and and I think that's also the ultimate compliment of a business guy is because it means you can do multiple things. So I'm not really sure if I deserve the the title, but that was my goal. And I knew when I started this that this was going to be it. This was the last harrah. I was sticking with it. I wasn't going to sell it in three years or move on to something else that this was going to be what I wanted to do until you know I dropped.
Was was there another company that had inspired you? Like you mentioned that you kind of always thought about that burger stand. Was there a particular brand or a restaurant that inspired you and maybe you took some inspiration from before?
Absolutely. You know, I don't think whether it's consciously or subconsciously anyone creates something all by themselves, right? I think you you have history behind you and and and great memories or or sometimes bad memories that affect you as you as you grow up. And so I grew up in West Texas in Abalene. My wife grew up in Midland and there is a West Texas thing that goes on. It really is. Uh, it's different than other parts of Texas. And and so I my my idol when growing up was a guy named M. Ein. He had all these restaurants in Abling and Abene just 100,000 people. It's not a particularly wealthy community at all, but this guy owned it. He had the he had the cafeteria, the steakhouse, the diner, the coffee shop. I mean, he had it all. And even in that environment, he still insisted on the quality. He baked his own hamburger buns. He had his own commissary where he ground his own meat. He baked his own pies and cakes. I mean, everything was from scratch. And and of course, he ran the town because nobody else was willing to do that, you know, and and his prices were always affordable. And so I I just never forgot that. And and and subconsciously so many of those things have kind of come back. And you know, now we have a commissary. You know, we do our own banana bread, our own cookies, our own veggie burgers, we do our own chicken. Hell, 99% of our customers don't know that we serve salsa. We make our own salsa. So, you know, nothing. We're not opening jars around here, you know, and and for a fast food restaurant, and that's really what we are. I mean, the the industry is has renamed it quick service because fast food got this negative, you know, thing. But that's what we are. You go through the line, you get it in and out as fast as you can. You grab your burger, you grab your fries. for the fast food to to do this in the fast food industry to have this commissary where you know the veggie burger the creini mushrooms are cooking in cream right now with the fresh parsley and the grated cheese that are going to go into it and we're going to wrap this thing up and sell it for under five bucks. I mean for anybody to do that it just is unheard of. And so, but it but MAC was my commitment to quality and and man, it yeah, it got me to this point. I think it really did.
How many Peter's locations are there today?
So, we just opened number 38. Uh, and thank you.
All here in Texas.
All in Texas. You know, it's an interesting thing. Uh, because that's the first question people ask. Are they all in Texas? And the truth is um the biggest mistake you can make in running a business I think is bringing your ego with you. So we leave our ego at at home. Uh, yeah, my name's on the cup. It's on the bag. I get it. But the truth of the matter is there's no reason for me to go outside of Texas. There just isn't. I can there there are 185 Waterburgers in the Houston area. I have four burger stands in the Houston area. Why would I go to Denver?
I mean, really, there's a market.
Yeah. I I I you know, I've got plenty of locations in Houston to open up. Heck, I don't even want to go to Dallas right now. Why Why would I? Right.
Let me challenge you on that, though, cuz you know how much people love your product here.
Don't you think that expansion nationally though? Like, do you think that more people would be like bought into it at the national level? I'm curious if like cuz I feel like a lot of people like when they expand like they're worried about the quality.
Diminishing and maybe that that's a big part of it. But I I'd be interested.
No, you're both you're both right. Um, that's exactly right. Yes, we're leaving it on the table that that you know we have got a presence because Austin has become such a hub for activities and you know ACL draws hundreds of thousands of people. Southby draws and they all leave and they all have had a perry or hopefully most of them thank goodness and they're talking about it in their other towns but I have a commissary to look after and I have quality that concerns me and the the one killer in in this in our business and in most businesses is losing your culture and and so that's the killer because the minute you lose your culture which is why when you see companies expand and you walk in and you don't have the the event that you used to have. you you know it's not this you the the biggest nightmare I can have is oh it's not like it used to be oh my god you know kill me right and so that's based on culture and so to to go into Denver I'd have to send you know two or three people to live there and never leave because they have to pro provide that culture that you know that everyone else needs to have and so you start to spread yourself really thin and and yeah, I can't do that. I can't do that.
So, I I I'm curious. So, you're at 38 locations now. For you, what was that process like? How long did you have the first location and just the first first location? Right.
And when did you decide, hey, I want to open up that second location? And what was that process like?
So, the first location we were open for almost three years before we opened the second one.
And where was it by the way? It was a Yeah, it was a Lamar and Barton Springs here down down from Zilker Park. That little 527 foot building. Yeah. And by the way, let me just say um.
Across the street the day we opened was McDonald's, Jack in the Box, Wendy's, Taco Cabana, Taco Bell, and Schlotskies.
Not a single one of those are still there today. They're all gone. They're all gone.
I want everybody watching this to realize this because we know that intersection very, very well. Like I think McDonald's was the last one. McDonald's was the last one across from the teras and that one's gone.
That's it. And it's a 500 square foot building.
With two drive-throughs in a patio, right?
Why did all those places go? Do you know or.
Oh, I do know. Uh, I Yeah, I mean, we beat him. [laughter]
I love it.
I was going to say kicked their ass, but I'm trying to be nice. No, we really did. And it's it's almost wasn't a fair fight because every one of those I I mentioned to you are all are all large franchisebased companies, right? They follow a set of rules. I had no rules. This was like, you know, fighting in the jungle. And and so, you know, my wife and I lived at the first location for the first couple of years. I can tell you um 7 in the morning I would walk in, grab the money from the the safe, make the deposit from the night the day before and if I got home at midnight it was a good day and I did that forever. Two things happened. One is I saw uh well three things happened. The first is I saw the competition every day and I would see the 18-wheeler pull up for the Jack in the Box guy and the doors would open and the frost would come out and everything would be unloaded and it's all frozen and it's you know there's a there's rules here, right? They're following reg the the way they do their business. My building was so small that I had to find a produce guy that would deliver six days a week because I couldn't take a Friday delivery of produce for Saturday and Sunday. I didn't have the room. So everything I had was coming in almost daily. So everything was fresh, everything. So right there I I have this this edge. So I learned about the competition. And the second thing I did is I learned about the customer because I'm there every day. So now I start to see customers. I know all the all the kids that are coming through at Austin High, you know, sneaking off campus. I see the kids from Westlake coming over. I know everybody. And that's really valuable because it helped pick my second location because I saw who was coming over on the weekends, but they weren't coming over on the weekdays. And they were over on the other side of uh further down on Lamar in older neighborhoods, Terry Town, Old Enfield, stuff like that. And so I knew if we opened a second store, I'd get those people more often than once a week, which is what happened. The third thing is I got to know our employees. And and knowing what your employees are going through on a daily basis is about the most important thing you can do. And so, um, we were just tuned in. And you know, the franchise guy across the street, he's got 15 stores, you know, or whatever he's got. These are numbers and I'm giving out cookies. I'm giving out lemonade. I'm giving out t-shirts. I'm giving out I'm doing whatever it takes. And that guy that managed across the street, he's just following the rules. You You don't do any of that. So yeah, we just kind of took them out.
When when you look at like McDonald's when they were early on when they were kind of franchising out and doing that rapid expansion, there was it was a mess. I mean, one store was selling cheeseburgers, the next store was selling quesadillas, the next one selling burritos. It was just a mess. You went into an area where there was some of the biggest change in the country all around you. Do you think a big portion of that comes down to your menu? And like how did you ultimately come up with like your menu? Because there's not a thousand things on the menu like there is like at Sonic.
How did how did that how did that kind of come about?
No, it's a great question. And first of part of it is, you know, this was my idea. I wanted to open a burger stand. My wife was great. She came along, she was indisposable. I mean, the the things that that she helped out in and created, you know, it's the reason we're we're open today. But this was my vision. It it it something I always wanted to do. I hate big menus. I I mean, if you took me into Cheesecake Factory, I just I'd probably have a stroke. And and [laughter] and I don't and I don't have anything against Cheesecake Factory. I just.
That menu is hard to navigate.
I just can't I just I don't like anything that much. I mean that there's nothing on the that's worth it to me. And so I love the simplicity. The other thing it does is it keeps our cost down. We have no waste.
I I mean if they cook a burger on the grill too long, that patty needs to be disposed of. But we don't we don't waste anything. And I think we don't I think it also slows places down that the menu's too big, especially in my business where you have a drive-thru. People don't want to wait, you know, they want to keep it going. So, if you know, I I just want to sell hamburgers. Kathy is the one that said, "We got to sell veggie burger and we got to sell chicken burger." And I'm like, "Oh, okay. Okay." Turned out to be a good idea. Um, but yes. AC across the different locations you have in Texas. Do you switch up the menu at all or is it still everyone has the same.
I'll tell you that the other thing is all the prices are the same. So my prices don't vary from one neighborhood to another and there are some neighborhoods that could afford to pay more. I just don't think that's okay. I I think we're all we can all cover it.
How does how do you do that though? Because if you look at like you know a Five Guys or McDonald's, what used to be, you know, a $3 burger is now a $12 burger. And I feel like Peter's is like it's incredibly reasonable.
Right?
Is a big portion of how you're able to do that is because you own the supply chain.
Well, the truth is they got greedy and they thought I don't know if it was because of COVID. I don't know what happened, but the last four, five years things have just gotten really weird. And and I think there was this sense of how much can the consumer how much pain can they take? How much can we keep going up on their prices? And that's exactly what happened. I mean that happened with McDonald's and hell it happened with Doritos. All of a sudden a bag of Doritos was $7. Guess what? People stopped buying it. And so um we never got we never ever look at something and go how much could we get for this? I could, you know, I described that veggie burger. We go to great lengths for that. The labor on that is intense. But there's also just accepting a fair profit and and and going with that. I don't say, "Oh my gosh, you know, our oatmeal, chocolate chip cookies made with all butter um and real chocolate chips and oatmeal and it's, you know, we make it fresh every every dollar. I I want the customer to have that experience. And and there is this it's really easy to just say, "Oh, we we'll go up another nickel or a quarter or a dime." The other thing is is the playbook is the old playbook really needs to go and and that is we used to have better margins. Our cost of goods were, you know, acceptable. In my, you know, my view, I wanted it to be in the high 20s as a percentage of of my cost. Those days are gone. Beef is crazy. They're I the cattle herd is the lowest it's been in 50 years. I mean, I can go on and on. And so, what we do is we accept less profit. we we take it as the the world has changed and if we are going to continue at the su success that we've had then we're just going to pull back a little bit and say well yeah that was great we used to make that we're not going to make that anymore so we'll hopefully make it up on volume by the way the secret to all of this is the customer has to love you if you want to live in in a business forever um the customer has to love you. Liking you is not enough. You can like me all day long, but if a new guy across across the street opens up with a new shiny object, well, I like him, but let me go check that out. You love me. You may not go over there. I'm trying to get you to love me. That's the whole point. Excuse me. That's the whole point. It reminds me about I recently did an interview with Arthur Blank, the uh the founder of Home Depot, and he talks about how, you know, the the greatest thing that he can see is his customers putting on that, you know, Home Depot apron. Not literally, but in the sense where like if they were to go to a Lowe's or something like that, then they would feel, you know, bad about themselves cuz you want those raving fans. When you talk about getting the customer to love you.
What goes into that? Is it just making sure that they're experiencing the store? Is it just the quality of the food? What are some things that you do to ensure that hey your customer leaves for that type of experience?
No, absolutely. Well, the first thing we do is we take care of the customer. But by doing that, we've actually taken care of the employee first. So, uh, we treat our employees differently and and early on I couldn't pay in in some instances I couldn't pay as well as some of my competitors. So, it was very easy to to lose an employee. We were just starting out. But what we could do, the simple things, the things that that nobody else does, and I don't know why, the first thing we do is if you work for me and you need a loan, I'll give you an an interest free loan for as long as you need the money. Uh, so if you've wrecked your car or you've had an argument with your roommate, now you need a deposit for an apartment or you have a sick one, a sick loved one somewhere. So here's the 500 bucks. Here's the 700 bucks. Pay me back when you can. 25 bucks a paycheck, $10 a paycheck, $100, I don't care. Uh, I'm not making any money from the bank anyway. I mean, what the hell? What's the difference? I'd rather give it to my employee, let them take care of themselves and and also uh retain somebody because nobody else does it. So then we have a we've always done this. Um, you get a birthday cake on your birthday and when you fill out your application, one of the questions is, "What's your favorite birthday cake or what's your favorite cake?" And you check off chocolate or cheesecake or trices or whatever. And we deliver your birthday cake to you at at the store and we sing happy birthday to you. Seems like a little thing. We got 1,800 employees. Not so easy. But to the employee, you know, where where we take a break out of out of the day and sing happy birthday and the car and the phones come out and people snap the pictures, it means a lot.
So there is this we're going to take care of the employee first and then they're going to take care of the customer. That's the idea. It's got to be a two-way street. We're running a business here. This is not a charity. It's got to be a two-way street. Second thing is we're going to we're going to give back to the community and and we are going to be a part of this community. The community has allowed us to grow. The commu the community has given us a a viable business. How do we not give back to the community? Guys, we're going to be right back to the episode with Patrick from Perry's. I want to point out something that he has said in this episode. The number one most important thing is taking care of your customer. And here's why that matters. The cheapest customer to acquire is an existing customer that already knows and loves your brand. And that's why I want to talk about one of the most powerful tools for entrepreneurs at every level in business today. Go High Level. Go High Level is a business CRM. It's a software that you can use for your business that automates your entire follow-up process. [music] Not just with new customers, but for existing customers that you've already had in the past. You can set up actual sequences to [music] talk to your previous customers. So that way you notify them of anything new coming to your business, any special offers that are coming. You're able to send them announcements, [music] emails, DMs, messages thanks to go high level. We use it in all of our businesses at the school of hard knockocks. Be the most successful business owners that I know use go high level in their company. So if you guys want access to go high level, click the link in the description of this video to start your free trial using go high level today and watch your business [music] change forever. With that being said, let's get back to the interview.
And so that's where the days of giving started. and we do it four times a year and we're approaching $3 million in giving stuff back, giving money back to and little charities. It also ties you in with the community. You run into the most amazing people in this town. I'll give you a quick example. There's a woman who just saw the need for giving diapers, disposable diapers to parents who could not afford to buy just the simplest thing in the whole world. goes to Walmart, buys diapers, and starts a little thing. Ask a few friends for donations, the whole thing. Well, we did this years ago. This is like 15 years ago. So, we give her a check for $10,000. That's a lot of diapers. She's never gotten a check for $10,000, right? And so, now we're we're a part of this, right? Um, so it's a multitude of things, but you know what? You have to come from you have to come from a a sense of of doing right.
And you can't fake it. I can't fake this for 20 years. I mean at some point it's like okay, there's a con going on, right? You're really not that guy or this really isn't that business. It has to come it has to come from a different place.
Yeah. You know our our first job that we both ever worked was actually we worked at Chick-fil-A.
Oh yeah.
So that was our first job ever. We were team members at Chick-fil-A.
They they are a great company.
They Yeah, they they are a great company. And you know, you said something there that you know the greatest expense that any business owner will have is employee churn. Yeah.
Right. So the idea of taking care of the employees and then then taking care of the customers is important. And I know that that's one of the things that they really emphasize a lot in their business. Was there ever a time in one of your restaurants over the 20 years or so where, you know, you waited maybe unannounced or so and you kind of you kind of had to air it out in there because there was just, you know, something something going on between the staff or or whatnot and you were just like, "Guys, what the hell is going on?"
Oh, I've lost my.
Yeah. [laughter] Tell us the story, man. There's a time.
Well, there's a joke in the office the the time Patrick jumped the counter. I mean [laughter] there there that is that is a well-known story. I can tell you where I was and I tell you how I did it and I can tell you everyone's eyes when I did it that this old man cleared the counter and went right to somebody and went that is not how you do it. You know that's not how you do it and you knew that he was I mean oh my god.
The second time was uh and I had to give myself kind of a break because I really lost it. Um, and I was asking an employee a question and she rolled her eyes and it just triggered me because I'm too old. I've been doing this too long. Uh, you don't get to roll your eyes at me. [laughter] You I can turn around. You can flip me off. You can do whatever you want when I'm not looking, but you can't do it. So, yeah, it has happened. I it um but I can tell you in all honesty, those are really those are really the only two times and it happened. But but.
That's the thing of a, you know, of a great founder and somebody that really really cares about their business and their product that like those little things matter so much. Like I remember we interviewed Steve Madden.
Um, you know, he has giant shoe company shoe company, right? When we did the interview with him, he like stopped a woman on this on the street and asked her, "Hey, where did you get those shoes? I want to know where you got those shoes." prod a massive company.
I've said before that that the minute I get out of the the car walking into a one of those burger stands.
That I don't bend over and pick up a piece of trash is the day I can't run the company.
It just goes with the territory. I I I want to talk about though because like you you obviously were the founder and then CEO and running the company for a long time, right? Um when was that decision for you to like bring somebody else in to be like a C to be the CEO of the company?
So, we had decided, Kathy and I go through these, we have lots of conversations and and at one point we decided that we were not going to grow outside of Central Texas and then we decided [clears throat] we were going to grow out of Central Texas and there is a term and it's it's escaped me where, you know, the guy running the company doesn't feel like he has the doesn't have the confidence that he needs to go to the next level and I had never gone to I'd only done what I had done and and I was worried about going to another city like San Antonio or Houston was a bigger hill to climb that I could handle and I'm very protective. We call we call our business the mothership and we protect the mothership at all cost.
Um and I got to tell you at all cost.
Yeah, brand equity is everything.
It is it I can't do a thing if the mothership's not protected. I can't. All these great things I've been telling you about, they all go away. And so, um, when you are, um, uh, when you're focused on on protecting the mothership, then you you go, okay, maybe I'm not the guy. And so, we had a series of interviews, hired hired a guy, good guy, [clears throat] great guy. And and what I found was that as important as it was to have somebody with that experience and knowledge, it was more important to have the guy who understood the culture and what you were trying to achieve because it was his culture and what he was trying to achieve. And I found it was very hard to duplicate that that to ask somebody to mimic me because so much of what I I do at this level at this point in my 20 years of running it is instinctive. I can't explain to you why I just did what I did, but I did. And I've got a lot of guys around me that are really good and very smart and capable. And every once in a while, you know, I'll crack the code on something and they go, "Oh, he hadn't lost it. Okay, we need him. We still could use him." So, it was it was more of a the ship just starting to drift. Um, and I instinctively I mean, I I just knew this was this was um not the direction it needed to go.
Yeah.
You you've been married 21 years.
Yeah.
And you guys started the company together.
Yeah. Talk to us about how you've been able to balance building the business out to where you've got nearly 40 locations and then also having a healthy and happy marriage where you guys are still sleeping in the same bed.
Real quick, one thing I want to touch on there as well is when we first started the conversation, you said that right after you got married as well, you kind of just presented to your wife that I just put a lease down.
Oh, yeah. Surprise.
You didn't even What was that conversation like as well?
Thank god my memor is crap. Um, it was um well, I I will tell you Kathy has always been 100% supportive of this and and I mean you talk about a yman I mean she's right in there with me part of that West Texas thing I'm talking about where you you grow up in West Texas where you need your neighbor you're used to helping out um there's not cra there's nothing in West Texas is it's it really is it's windy it's sand it's it's it's it's there's no water there are no trees. West Texas is tough. I mean, I love it. I had a wonderful life there, but environmentally it's just tough. And so, you need your neighbor. You you you uh there's not a lot of money. You you just you help out. And and Kathy did just that. And so, when we had um when we were going through all of this, um if she had not been 100% from the beginning, we the marriage couldn't have lasted. There's no way. It was so stressful. It was so strenuous. And I've actually I had a you know I hit a certain age in my life and you know we've hit this 20-y year milestone where you start thinking about the past. Um and I really don't know how we survived the first two years.
Why?
Uh, it was that hard. It was it was day in and day out. Uh, I tell this story that, um, Fleming Steakhouse um had a location over by the convention center downtown in Austin. And our one treats a week, our one treat was Friday night, one hour at Flemings, splitting a steak and having a glass of wine and maybe a scotch. And I went back to work. Our one treat was that hour. And I got through the week thinking about Friday night I get to have a steak. I mean, that was the excitement of the week. And so, can you imagine? You have this wife that you've been married to for a year that didn't sign on for this and all of a sudden she's thrown into this. Um, but she was there and, you know, set up the accounting system, set up hell, she designed the second kitchen. 32nd Lamar is Kathy's design for the kitchen. So, so the answer to your question is had we not been on the same page, it would never have lasted. It would not have worked. And so picking your partner um pretty darn important. And and uh and so yeah, it it has been uh there's been a lot going on. It it was and and don't forget I said about I didn't know what I was doing when we opened. I I really didn't know what I was doing. I had never opened a burger stand. I had had a couple of pizza restaurants in my past. I had an idea. I could see exactly where everything was going to go and, you know, having an idea of something and visualizing it and then watching it happen.
Yeah. Because let's talk about that actually. It's like most people when they talk about taking that risk, the people talk about take the risk early on, you know, when you're in your 20s or early 30s, like you started this business in your mid to late 40s.
Right?
Why? Like why? Like what finally changed for you was like like I'm going to go all in on this. like now is the right time to start. I understand that there never really is a perfect time, but why then?
Well, I've been on my own. I started I I graduated from University of Texas and and I got a job in advertising in Dallas and went to work for a good agency.
What did you study at UT?
Uh, I was studying advertising.
Rudy.
Yeah. Yeah.
Stan Richards. Yeah.
Same here. Yeah. There you go. There you go.
Um, and uh anything to avoid those accounting classes.
Exactly. [laughter] Well, I was sitting in those.
Oh, God. And my thing is I didn't want to take calculus in college or the communication school. You you were good at that. I was, [laughter] you know, I was right there with you. [clears throat] I was right there with you. So, uh, you have a nice you had a nicer school than I did back then. It was smaller, but it was all right. It was really cool.
Um, and so I I went to work at an ad agency and uh, Tracy Lock BBDO. I had I I got my my MBA there. I worked on Ben Hogan Golf and Fredo Lelay and and Philips Petroleum and and kind of, you know, did that for three years and learned a lot.
And from that moment on, I've since I'm 25, I've been out on my own.
I've I've just I've done consulting gigs. I've done, you know, I bought some real estate. I did some rental stuff. I But I've been on my own. And so, and it was always going to be that way. I was always going to be on my own. I I just that's just my deal. And and so you know it it it it I was willing to do the burger thing earlier. I missed the lease on that location that I was telling you about. I missed it by five year. I missed it by a week and it cost me five years.
So that location sat there for 5 years with with a lease on it and the minute it was available I jumped. So I I would have done it sooner. Um, but you know there's a thing and you guys have done this and you know uh as well as I do. You take a leap of faith when you you know you you sign a contract or you sign a lease or you sign a you know or you start buying things or you go in debt. This is the leap of faith that it's going to work. And a lot of it is just the confidence that you have in yourself.
And so by then I I knew ex I just could I could see it. I could visualize it. Mhm.
Out of the 38 locations you have, how many are are franchised?
None.
Why?
Oh god. I'd kill them and they'd kill me. We We are We are so um man, we're just anal. We just.
People would argue like from the outside in like you know, you look at I'll just make the example McDonald's for example.
You know, you're probably able to expand at a much faster pace if you if you do it that way. Is it?
Oh, absolutely.
So, I'm just kind of curious like what was it just for you? Is it just maintaining the the quality of the control or what is it for you?
Um, well, at some point in your life, in your career, uh, money secondary, you it just you you look around, you go, okay, I got a nice house, I drive a nice car, my kids will never starve. Um, what am I going to get out of that? Right? So, you know, we we've had opportunities to sell the business. Uh, we've had, you know, VCs knock on our door and, you know, private equity. Um, and.
Did you ever entertain those conversations?
I had a really serious conversation 10 years ago. I was I had been doing it for 10 years and I was exhausted and I had an um I had a a number one guy with me and and we weren't particularly getting along at the time and I and by then Kathy we had had two kids and Kathy wasn't spending near as much time as she should not have been you know at the business and so it was a lot of it was on was on me and I was just burned out and I was and I just had I ass kick cuz I did a lot of stuff on my own. You know, I back then we had our office forever had four people in it and if you wanted it was smaller than the st studio and if you wanted to make a call you went out in the parking lot cuz somebody's standing right next to you and so I mean we were just lean and we were kicking you know and I was just exhausted and so [laughter] so.
I'm sorry it's all right. It was just funny. He's [laughter] going to get caught step outside.
It's It's funny cuz it's relatable.
Yeah. [gasps]
Yeah. Nobody Yeah. Stay stay So that's something I've talked about enough is stay lean comes with a cost. Okay. [laughter] Cuz it's like damn, everything comes back to me.
Well, that's why you're here. [laughter]
That's true.
You know that new project everyone's talking about. We're like, who the going to do it?
Yeah.
Me. Of course you are. [laughter] Yeah. Yeah. I've got a guy in my office. We call him Monty. So,
You know, I [laughter] get it.
Continue there. Sorry about that.
So, yeah. Yeah. I'll have this bright idea and Monty will look at me and go, "Oh, you mean I'm going to do that?"
Yeah.
Um, so anyway, um, God, what were we talking about? I [laughter] can't even remember. You threw me. It was a story about.
10 years ago you and your partner.
Yeah. So, so we entertained. Um, so I hired uh an outside guy.
And we did a a deck and and did the whole thing and uh we got a we got a a very good offer from a very reputable company.
It was real. It was enough money for me to go live on an island. It was um and the minute I got the offer, well um Kathy called me. She was on a flight and I said, "We got this offer." And she got off the plane. She said, "You you can't sell it." And I said, "I I I agree. I agree. I agree. We I You're right." And I had gone through the whole bit because, hey, I'm not different than most people. You You show me a big check and I start thinking, "Okay, boat, car, maybe a plane. I mean, I I get it, right? I I I I I'm there." And and then you look and you go, "Okay, well, then what do I do?
Then what do I do? And where am I going to go? where I'm gonna fly to where and where, you know, I got a house, you know. So, so what I found was what I needed was someone to tell me what I had accomplished because I'd been doing it for 10 years non-stop. I don't go to conferences. I don't network. I don't know anybody in this restaurant town. I I know three or four guys, but I don't I don't really know.
Do you just kind of keep your head down, do your thing, still do it? And and so.
Do you not enjoy that aspect either of all the smoozing and.
God [laughter] I know what you're saying I don't blame you and and I don't you know and I I get it. I get it but it's just never been my deal. And part of being and and I don't recommend it but you know part of my journey has been I'm just going to do it on my own. I I'm going to figure it out on my own. I may may make mistake. I'll listen to you over there because oh you're clearly smarter than me. I mean somebody's whispering in my ear. But what I needed after that 10 years was somebody to say, "Wow, this is what your business is worth because you've done this." And until that happened, I had no idea. I didn't know what my restaurant was supposed to be. I didn't know what my profit was supposed to be. Hell, I was taking when I needed money to pay a mortgage or whatever, I'd go over to Sharon, who, God bless her, is still working. Sharon, can you just cut me a check for a couple of grand? I got to go pay some bills. I mean, that that was my salary. Finally, the accountant goes, "You know, this is not going to be okay with the IRS. You're going to have to have a salary, and you're gonna have to it has to be commenceable to what you're earning, what the business is earning, because I just didn't take anything out. It was all about putting it back in." The biggest compliment I've gotten in 20 years, a guy is giving me a ride. I get my car fixed and he's giving me a ride home. And I said, "If you pull into this Pet Terry's, I'll buy you a coffee." Because it was early morning. And he figures out, Patrick Terry, Peter's a long time ago. And he goes, "Are you Peter?" And I said, "Yeah." And he goes, "Oh my god, a bunch of guys were just talking about you the other day." And uh that's like 13 years ago. And I said, "What were they saying?" He said, "Well, they said that you work like you work your ass off and your office is crap." And I said, "That's it. My office is crap and I work my ass off. And if if you want to put down on my.
tombstone because I don't need that ego. I don't need, you know, our office is right over here and you're in this in this development. That's where our office and commissary were for years. We just moved a few years ago.
>> We were in the front.
>> That's cool. Yeah.
>> So So we we just Not that this is crap. Didn't mean that.
>> No, no. But but the point is that the point is that you you have to pick what's important to you. And and so um I would rather be remembered as the guy who had 50 burger stands that were all running great that you had a great experience than to have 150 and be average. I just I don't want to be remembered for that.
You know what I think is really funny about what you said about like the you work your ass off and the office is crap is I feel like in the day and age of especially like the social media you see like the new VC funded company they got the massive office with the big glass doors and it's like but they have no product that they've sold right >> there's no revenue being generated raising money they keep raising money I'm like where's all the money going you know I'd rather have a dirty office where I'm actually going to war every day then hey look great from the outside but I'm not you know creating anything.
>> Yeah. No, it it it's it's a facade, right? I mean, it's just kind of we're it's kind of like pretend. So, I I and I'm not putting people down to get their NBA, but I've got I've got my Ivy League MBA and now I'm going to go start a little thing and I'm going to do this and this is all going to look good and we'll have a secretary up front.
>> It's called playing business.
>> It is.
>> They're playing business.
>> They're playing business. They're not They're not actually doing business. They're playing business. and and um you know I I look back and the the two things that have gotten me into this chair. By the way, you you've had some hellacious guests. Congratulations. I feel kind of silly. I'm sorry. I should be just sitting on the floor. I don't think I should deserve this chair.
>> No, no, no. But I but but the two things that have gotten me here is the first thing is I know my capabilities. I know exactly what I can do and what I can't do. And what I can't do, I go find somebody that can. And I'm not the least bit proud about it. I'm nope, I can't do that. You can. I need you. The second thing is I'm the first guy to admit I made a mistake. Nobody has to point and tell me I made a mistake. I'll admit it before. Because if you're not honest with yourself, if you're not honest about the decisions you make, whether they're good or not, how can you be honest about how your business is doing or how you treat people or where you're going to go? And how do the people that work for me look at me if oh god, he can't Jesus, he's pretending like that's okay. I mean, I don't know how they come to work, right? I don't know. And so what I do is I give them license to say, "Oh, I screwed up." Oh, yeah. Yeah. Okay. Well, remember I screwed up before you, so you and I got something in common. So when you give them when you give the people around you and I forget because, you know, for most of the the people that I encounter that work for me, you know, I'm Patrick. I'm not Pet Terry and I'm not the guy that they saw on Instagram. I'm I'm just the guy that's was running that milkshake machine, you know, not that long ago. I forget that there are people that work for me that look at me differently that haven't been around as you know as long as some of these people. The proudest thing we ever we've ever accomplished, excuse [clears throat] me, is called the Maggie rule. So Maggie started with us the second day we opened right 20 and a half years ago. Maggie still works for us.
>> Awesome.
>> She's working the grill right now at William Cannon. Wow.
>> And the and the Maggie rule is that you never do anything to disrespect Maggie. So, I give you a perfect example. Uh, when I wasn't running the company, um, the last the last guy took the office um, rented a bus and took the office uh, on a wine tour around Fredericksburg. They spent the day drinking wine and having lunch. They got home, they posted their pictures, they had a great day. Maggie pulled a double that day. Pulling a double on the grill is like digging ditches. It's really hard. So, here's this 50-year-old woman been working for me 20 years, gets home, takes her shoes off, sits on the couch, opens up her phone, and sees her office drinking wine on a workday. You don't disrespect Maggie. And so, and I get I'm sorry to get emotional, but you have to understand when you know what your people are going through, when you know how hard they work in the stands, and the guys in the office got it made, AC, chairs, you know, the whole bit. We are a very democratic lowercase D company. We are all towing the line. We're all, you know, um, if if I've got five people in that office that can work in a burger stand right now, if something is happening in a burger stand and they need help, I expect one of those five to get off their ass and run to that burger stand and help out.
>> It's just part of it. It's just part of it. So, when you look at your people in that regard, um, and with that respect, then your company becomes different. It just does. It goes to the testament of like how much you care about, you know, not only your customers and the brand, but also your employees as well.
Yeah.
>> I think what's been really cool recently on on like, you know, we're a media company on social media and so like what's came as of recent is a trend of, you know, many leaders and CEOs of different companies have, you know, kind of expressing, you know, how they feel about their product and things like that. And so as a media company, I can't be uh, you know, I have to ask, you know, to see the video of yourself get millions of views [laughter] online trying your product,
>> right?
>> Um what was that like? Like like and and, you know, for us maybe speaking to just like how do you kind of see like the power of social media and and what that's maybe done for for your brand and and how just tell us the story real quick of like maybe how your team approached you with that. Um, because I mean for those that don't know like obviously there's a trend of you know CEOs of of different you know fast food companies and things like that trying their product and of course there was a bunch of controversy with the McDonald's CEO with that one. Uh, and so, um, you know, Patrick, you did that video and it it was it was an awesome video. It genuinely was. Uh, and uh, I just
>> yeah, I just want to hear you tell that story.
>> So, it's actually a pretty good story. So, uh, we have two, um, media people, um, marketing people, and they're both named Devon, man and a woman, mid-20s. Um, and so they're into it, right? Social media, know everything. Excuse me. I don't know anything about it. I'm really, really that guy. and they walk into the office on a Wednesday and they say, "Um, this is a thing going on." And it started with the McDonald's guy and the Burger King guy had jumped in to mock the McDonald's guy, which Burger King's going to do. And um, so we want you to do it tomorrow. And I said, "Okay." And I kind of had heard about it, but not really. So I go home and excuse me, and I'm and no one's at home. They're everybody's out of town. And I'm scrolling and I'm watching all these people take a bite of their burger and and go, "Oh, this is delicious." And I think it's the dumbest thing I've ever seen. I I'm I'm shocked um how these guys Well, of course you're going to say your burger is great. What What the hell? What's wrong? What are you even posting it? So, I started to get pissed off and I sent I sent one of the Debons a text and I said, "You know, every Tom, Dick, and Harry is doing this. I think it's ridiculous. I'm not going to do it. And you got to understand, I'm handled at work every day. Everyone knows how to They're all handling me. They know how to They know what I'm what what to say and how to handle me. And and I got handled. And he and Devin said, "Um, let's do this. You just do it in the morning. If you don't like it, we don't have to post it." And I'm like, "Okay, okay. I'm being handled. That's fine. That's not a bad answer. Sorry. I'm having a little little tantrum." So, we hang up the phone and then the next guy I watch has a mouthful of food and he's trying to talk and he's crammed some of it on one side of his cheek and I'm like, "You posted this? This is unbel This is You're look like an idiot. This is the damnest thing." So, I immediately said, "Well, I'm not I'm not biting the burger. I I'll do the post, but I refuse to bite the burger. Eat into the hamburger." So then I'm sitting there on the couch by myself and I go, "Well, if you're not going to bite in the burger, why are you doing it?" Well, you could talk about the burger. And I go, "I know. I'll invite 10 of our customers to have lunch with." And it just like that. And And I knew the minute I said it, I'm like, "Oh, that's a really good idea. 10's a good number. I didn't I It's not five. That's not enough. 20. It's too many. 10's perfect." So, we get to the office and I'm sitting at the desk and I and I I've rehearsed it in my head a hundred times and they walk in. They they just went to one of the stands. They just ordered a double with cheese, fries, and a strawberry shake. They didn't No, there was no food preparation. None. I promise you. I opened up the wrapper. I'm one of these thing guys that I just like to be honest, right? That's why the kitchens are always open. That's why they're windows. I want you to see everything. I don't like tricks. And so I just opened the bag and the only thing I would let him do and I said, 'Well, I'm just going to do this how I eat every day at my desk and I put some fries down. I put some ketchup down. The only thing I let him do is he got to move the cup so that you could see the pizzeries. That's the only thing I let him touch. And we did it in one take. And I and I just said, "I'm not going to I'm not comfortable eating in front of you." And I'm thinking, I don't know why you want to watch me eat it. And um and they and he didn't one take and he walked out and I said, "Are you good?" And he goes, "Yeah." And I said, "Cuz I'm about to eat and when I eat this, we're not doing it again." He said, "No, no, it's good. It's good." 10 minutes later, the phone rings. Friend of mine in San Antonio, she says, "I want to have lunch with you." I said, "What are you talking about?" She said, "It's that thing has been posted." It was like 10 minutes later. and it 26.7 million views or some crazy 120,000 comments. Um, I have to tell you this stat cuz it's unbelievable to me. At one point in time, um, the term Pet Terry's locations was the number one search on Google.
>> Wow, that is awesome. [laughter] because nobody knew who the hell we were. You know, it went all over the world and people were like, "Pe Terry's where?" And they hit locations.
>> Yeah. The top comment on TikTok is uh man, I'm finding burger [laughter] burger places I've never heard of before.
>> Exactly. Exactly. Same trend. And And so it's just a really fun thing. And and and once it you So to answer your question,
>> uh I've never seen anything so powerful in my whole life. Guys, we're going to get right back to the episode with Patrick in just a second. But before we do that, I want to point out something that he just [music] said. He has never seen something so powerful like social media. Even people like Logan Paul will tell you that if you master this skill of content creation, [music] you will always be successful in business. However, one of the most common things that I see among all business owners and entrepreneurs [music] is that they know they need content. They know they need to be building a personal brand, but they just don't have the time and bandwidth. [music] And that's why I want to talk about Opus Clip today and their new tool, Agent Opus. Guys, with Agent Opus, you can publish a polished video, all created by AI. And all you have to do is give it a simple script, a unique voice, and your brand assets. And we gave [music] Agent Opus a simple prompt, which is James eating a hamburger. And look at what it created. What Agent Opus does is it [music] creates content so that way you can't tell whether the edits were done by AI or not. If you guys are ready to take your brand, your business, your content to the next level, go down [music] right now, click the link in the description of this video to sign up and use Agent Opus today and [music] watch your business and content go to the next level. With that being said, let's get back to the interview.
>> And I grew up, you know, with with when there were three TV networks and there was Johnny Carson and, you know, I grew up in that world and my dad actually ran a TV station and so I used to think that that was powerful. Nothing like this. Amazing. Absolutely amazing.
>> I want to talk about something else. Right. So, one of the things that I love about Peter's is the branding. It's seems like super modern as well, right? Especially some of the locations uh that come to mind.
>> It's modern, but it kind of has that like classic.
>> Yeah, classic. What went into the branding and was any of it maybe at all inspired from, you know, the background in advertising that you have?
>> Yeah, there was there was some inspiration from that, but it you guys are right to point it out. It's called GooGi Architecture. G O G I E.
>> Did you ever rebrand at all or have you ever rebranded or like has it been consistent ever since you lost?
>> It's always been Yeah, it's always gonna be awesome. That was the one stipulation. Um, and I went I the architect that we found uh Michael Shu who is um, you know, infamous in this town these days. Michael uh, and this was 20 years ago um, when he was as talented as he is today but just wasn't as wellknown. Um, my I got tired of telling when I would interview architects, I got tired of saying googy architecture and they never heard it. So, I stopped saying it and I so and what I love about it and it's it's really Southern California 50s and 60s and there's an innocence about it because of the time it comes from. So, it's straight lines, stone, lots of glass, natural lighting, plants, um, our source, right? And what I love about it is that I do see it as timeless. I see you walking into a P tererry's 20 years from now and feeling like this feels right >> and and and it's really become the key to our marketing and and you know people will see one being built and know what it is before the sign gets up. But it's a very important part of my what I'm trying to sell you when you walk in or even go through the drive-thru. You know, we have all the little signs, painted signs posted, you know, with all of our, you know, lemonade, you know, everything. I'm trying to give you an experience even through the drive-thru. And where I can, I want to add plants and and and landscaping. I want it to be a night. I want it to be nice, but I'm really trying to take you back to when we were a more innocent country. And and as terrible as it sounds, um, pre JFK assassination because when John Kennedy was assassinated, we there was an innocence that was lost in the country that that that could happen in in in our country. And before that, there was a little there was a lot lot of Leave it to Beaver and Wall-E and you know, there was a there was a it was simple Andy Griffin. I mean, I'm naming TV shows, but those TV shows reflected society. And so, I'm really trying to take you back to to a different time. And that's why we, you know, the employees, my hope is, you know, my employees are are are a part of that, right? I mean, I've had customers tell me that employees have come around the counter to hug them because they've had a bad day. I mean, so, so that's really, but the googie architecture and the look of it is as important as anything that we do.
>> You guys launch a new milkshake every single month.
>> We do.
>> Why do like what's the what's the strategy behind that? And how long has that kind of been a thing? Has that always been a thing since the inception or
>> It grew. It grew on its own.
>> Nutella.
>> Oh, I know it's coming. It's coming.
>> I'm the Nutella man. I love that Nutella.
>> I know. It's absolutely coming. It's It's one of our top sellers. Reese's is the top seller, but Nutella is right there behind it. No, it comes back every year. I promise.
>> I like the orange one. The orange the the creamsicle. Like that. That one is so good.
>> So interesting you said that because I've been catching so much crap on on social media to bring it back. That wasn't you, was it?
>> No. No. No. Team [laughter] So I look look I I love it.
>> Well, I'm telling you I'm telling you I've gotten so much heat the last couple of weeks that you will see it again. I promise you. what we did. We were just trying to have fun. Uh, you know, we were just I don't want to expand. I didn't want to expand the menu. I didn't want to add anything. We're just trying to make it fun. And so, it kind of gave a little our our folks some creativity to come up with something. So, we have a a you know, we have a a the commissary is run by guy named Frankie. In fact, if you buy our chicken bites, one of the sauces is Frankie sauce.
>> And that's Frankie because he created it. But Frankie is Frankie's the real deal. And in fact, I have a um when I finish here, I have a s'mores shake that I'm supposed to test that'll be on the menu soon. So, we we just have fun with it. We It got to be a real thing. And you know, it's like so much you don't realize the momentum that people are actually waiting to hear what the next one is or when it's going to be or when this is coming back. It just kind of grew organically. It's become a big deal for us though. I I wanted to ask you and this is for all the we call them young people people that aspire to one day be a restauranteer that want to open up their own restaurant in in in today's world you know you hear all the time that it is incredibly hard to get a loan from a bank for a restaurant
>> right
>> I want to just ask you for that young person that's watching that maybe hopes to open up a restaurant of their own one day what do you think is the best way to go about getting the money to start and open up a restaurant cuz we know that it can be capital intensive and in the beginning it may not be super profitable at first. Do you have any advice for them as somebody who's been in the game for a long time?
>> I think you know our original 500 ft uh building is really today's trailer and as you've seen living in Austin, you know, some of the best food in Austin is through trailers, right? I mean, Franklin Barbecue started as a trailer.
>> Uh Torches started as a trailer. Yeah. Um, so th that's a real beginning. Um, I I know I had a nice conversation the other day with Ben who runs Bessame Ice Cream. Incredible ice cream. I mean, like, oh my god. And he's out of a trailer. So, I I really think if you don't have the financing up front, if you don't have a friends and family that that that will pitch in, and frankly, you know, you've have you have to have pretty good experience to open something up. Um, you can't just do it on a whim because, you know, catastrophes written all over opening up a restaurant. Um, I think a trailer is a great way to go and I think you can do it at at um at a reasonable cost. you know, uh, we were still and I had money because I was in my 40s and I had done a bunch of stuff. So, but we still did SBA loans, you know, you could still apply through a bank to get an SBA loan. I don't know what that's like today, but I I would start in a trailer and I would start with a really simple menu and I would get, you know, I would be known for my one sandwich or my one taco or whatever it is. You got to build around that. But that's what I would do. And if you can it. I I promise you, and I've seen this because I've talked to um years ago, uh very successful pizza guy was working out of a trailer and one of his customers was a banker that went, you know, every week and one day he just said, "Hey, I want to loan you some money to get you in a brick and mortar."
>> So, I think the trailer is the way to go.
>> I love it.
>> Yeah.
>> One of the things you just said is that you kind of want to build it around like a singular item where you can kind of build off that. How do you go about getting that customer feedback of like, hey, what I'm building or this product that I have is actually good and people are going to want it.
>> Well, social media is going to come right back and and it could also bite you in the ass, but but it the most customers we ask for our feedback. You know, I I I I put in uh postcards and and paid put the stamp on it and I put it in the bag for months and months. Tell us how we're doing. You know, what's going on? We put our phone number to this day. The phone number's on the bag, you know. Um, and customers will tell you that the they will absolutely clue you in as to how you're doing. They're pretty tough. God,
>> I love it. Well, Patrick, we like to end these podcasts off with two questions for our guest. I'm going to start and then Jack will finish us up here. So, my one for you, Patrick, is that you know, you've built an incredible company. If me and you died tomorrow and you had one more message to leave with the younger generation, what would that be?
>> To succeed uh to really succeed, you got to show up every day. The you you can you can outwork a lot of problems. You have to have a decent idea, but man, if you show up every day, uh your odds and it's a game of odds, right? All the everything we've talked about today, it's all how do you increase your odds of success? How do you increase your odds for everything that you're trying to achieve in life? If you show up every day, your odds increase. And and I I can tell you of all my faults, that is not one of them. I show up every day.
>> I love that. And and Patrick, for you, you know, the company that you've built, the relationships you have, the legacy you're looking to leave. Uh for you, how do you want to be remembered? I want to be the guy that just was fair, you know, uh fair from a standpoint of he was fair with his with his staff, he was fair with his customers, you the word fair isn't really used very often. But the truth is it's the most simple way I can just say um, you know, he did he did it right. He was fair. It was it was always fair if if uh if I if I invested in him and this was my return. It was a fair return. If I was a customer and I got a burger and fries and it cost me eight bucks, it was a fair I I think I think it's underused, but I I love it for its simplicity. Let's just be fair. Um, yeah, let's start with that.
>> Love it.
>> Well, Patrick, this was an amazing conversation.
>> Thank you. I had a lot of fun. You guys have an energy. I I I mean that there's an energy I that that that that you that you feel in the room >> and and I I felt it. It was really fun to be here to do this. I appreciate that. Everybody watching right now, be sure to like and subscribe for amazing content and amazing guests, amazing business owners coming every week to the Hard Knocks podcast. Be sure if you haven't done so, like I said, you got to hit up Pete Terry's whenever you're in Texas. Look, I'm an advocate. I vouch for it. and everybody, you know, everybody that's that's in in here, even aside from the founder, can also vouch for that as well. Uh, but guys, we're going to put down all the links in the description for you guys to check out Patrick and his company along with we're going to put a link down in the description to join the School of Mentors, which is the number one community for entrepreneurs in the entire world, where we host live calls every single week with the eight, nine, and 10 figureure entrepreneurs that we interview on the School of Hard Knock. So, we can't wait to see you on the inside. With that being said, we'll see you in the next episode.