The Realtor Who Bought the Burrito

Most restaurant CEOs come up through the kitchen. Kelly Gray came up through commercial real estate — she was the leasing agent on the very first Hot Head Burritos location, long before she bought into the brand and took over as president and CEO.

In this episode, Joanna sits down with Kelly to talk about what a real estate brain sees that most operators miss: why the "perfect site" software will never replace gut feeling, how third-party delivery is quietly reshaping store design, and why she'd rather build a smaller footprint with dual-purpose equipment than waste a single square inch. Kelly also gets candid about the stuff nobody wants to slow down for — reading your P&L line by line, treating franchise partnerships like marriages (operating agreement and all), and why "train your replacement" is the least scary advice she gives.

Plus: scaling Hot Head toward 100+ units without breaking what made it work, the portfolio mindset she pushes on every franchisee, and what it's actually like leading as a woman in two industries that weren't built for you.

Hot Head Burritos turns 20 next year — and Kelly has some thoughts on how it got here.

For access to retail insights and perspectives that build better businesses, subscribe to The Gist to stay in the know.

Transcript

SPEAKER_01 0:01

Hi, everybody, and welcome back to another episode of Brands and Banter. Today I am so excited to sit down with President and CEO of Hot Head Burritos, Kelly Gray. Kelly, welcome.

SPEAKER_00 0:12

Hi, Joanna.

SPEAKER_01 0:13

Thanks so much for having me. I'm so excited. It's gonna be fun. So I really want to kick it off. You have such a fascinating origin story of you know how you got here today, especially your route to Hothead Burritos. So let's jump in. You were uh the realtor on the very first Hot Head Burritos location, weren't you?

SPEAKER_00 0:32

Yeah, so the very first Hothead started uh uh in one of the locations I represented as an agent, and my um business partner, Ray Wiley, who has just recently passed away. So this is my first interview as uh president and CEO. Um but Ray operated a subway in that location, and he said um he told the landlord he wanted to try this new brand called Hothead Burritos, and the landlord said he was gonna give him a one-year lease, and if it worked, he were new for five. And I said to the landlord, now you know people who only want a one-year lease are not serious. Why are we doing this? And he said, Kelly, we're gonna do this. Um, and that was in 2007, and 2017 I bought into the brand. And so it worked.

SPEAKER_01 1:14

Yeah, I guess that one year lease really worked out then. That's um that's so like such a fun and fascinating entry point too into the brand, just to be on the other side of it, um, and just to like hear how it kind of came about and and moved into the location there in 2007. So that's that's awesome. Um so a lot of restaurant founders, owners come up through kitchens. Um, what you came up through the commercial real estate um industry. What did that background make you see differently, maybe from day one or different perspectives it maybe gave to you?

SPEAKER_00 1:50

So I never worked in a restaurant as a kid because I thought, oh my gosh, that's too hard to work. I don't want to do that. But I was always um, you know, always worked, always in business, um, was in the financial securities business for a while, so understood financials, you know, well, then got into commercial real estate and just um really gravitated toward towards restaurants because I thought it was just so exciting and so changing. I love to watch brands grow. So it really gave me a um great perspective on that side of the world and also from you know doing deals with really all of our comp all of my personal competitors now and bigger big brands, McDonald's, Burger Kings, you know, Starbucks, everybody, I understood how they did deals, how their leases were structured, what kind of concessions a landlord would give or would not give. And so at least gave me um bargaining power. And I also had worked with both tenants and landlords. So again, seeing both sides of it and really seeing the financials uh of the deal on each side and what would make the most sense, and how do you really get a a win-win as cliche as that sounds for both parties? Because that's really what makes um a good relationship with your landlord or with your tenant is you know, everybody winning, everybody making money, because that's what we're all here to do.

SPEAKER_01 3:08

Yeah, yeah, that's fair. And I think it's definitely a unique perspective for people now like that maybe are sitting in the president and CEO role. So I think that experience I'm sure is like invaluable to you just to have the other side of the coin, and you clearly have a lot of restaurant knowledge too. So understanding, you know, maybe what other brands might be doing and considering, I I can only imagine helps a lot. Yeah, um yeah, you've said your real estate background made you better at negotiating leases, but also more honest about whether a brand has enough capital to succeed. How does that show up in practice?

SPEAKER_00 3:43

Yeah, really um, you know, a lot of a lot of growth in the restaurant business is franchise driven. So, you know, on my when I was real wearing my realtor hat, especially as I was just really getting into restaurant ownership with um Hot Hat Burritos and previous brand I'd started with my partner's Rapid Fire Pizza, um, I really started to understand how much money it took to do this. And you know, you either you have to have both cash and you know financing available to get it off, you know, to get it, you know, launched. And a lot of the franchisees, you know, may have the minimums that a franchise or would require, but you really have to have a a good bit of working capital to keep it going. Um, and and I think the biggest thing is you know, not um trying to um cheat your marketing budget because that is one of the most important things, you know, as an operator um now and as a realtor, I saw it, the number of people who would, you know, do these great big grand openings and then stop marketing. But just because you're living it every day doesn't mean that your customers remember that you're there. I mean, Hothead started in the Dayton, Ohio area again in 2007, next year will be our 20-year anniversary, and people will still say, Hothead burritos, what is that? I've never heard of it. I are you living under a rock because we do we do advertise a lot, but people, you know, just uh either don't pay attention or or maybe you're just not hanging them in the advertising lane that they're listening to.

SPEAKER_01 5:16

Yeah, and I think it's just it's what it comes down to is there's so much um being thrown at people on an everyday basis that it's finding out like you know what messaging and what um is really gonna stick for them. And I think sometimes people get overwhelmed and it's like, okay, how can you meet them, you know, really meet your consumer where they're at and understanding like what kind of message they need to hear in order to have it resonate. Um so I I can imagine too. Um that's so exciting though that you're coming up on 20 years. You were saying 2007, and I'm like, oh yeah, like 10 years old. I'm like, wait, it is 2026. I'm amazing. It's just so crazy. Yeah, it is. 20 years is uh is huge. That's very exciting. I hope you have some some fun plans for for 2020. We do.

SPEAKER_00 6:03

We're gonna do a whole like little retro logo sometimes when our you know members of our team who've been with us for a long time, because we have people who have been with us oh you know, almost from the beginning, or really from the beginning, and they'll wear like one of their retro t-shirts. We're like, oh my god, that's so cool. Where'd you get that at? And you know, because you know, we brands evolve, but um, you know, I I've noticed that, you know. I actually stopped into a McDonald's and I noticed them wearing these retro t-shirts, and I'm like, oh, retro is cool again.

SPEAKER_01 6:29

Yeah, retro is definitely cool again. I couldn't agree more. I love that. That's a fun idea. I'll have to be on the lookout for all of the things 20 years hot had burritos next year. Um, what's a conversation maybe due to your background um in real estate that you find yourself having with franchisees that you think maybe typical brand presidents aren't having?

SPEAKER_00 6:50

I think because of my real estate experience and then my restaurant experience, I'm really having a um two conversations with my franchisees in that lane is one regarding how much the rent is, um, and two the location. Um, you know, I I get a lot of franchisees, and I'm sure every brand does, they're just so excited, they want to get a store open, and they will take a substandard location. Um, which, you know, it's such a huge investment that, you know, I always tell people, don't worry about a dollar or two a square foot, you know, don't go off the beating path to get that discount. But on the flip side, you know, real new real estate is so expensive right now. I get a lot of um great sites that come across my desk and they want $40 or $50 a square foot to rent. I'm like, we can't afford that. I mean, if you're at Chick-fil-A, they can afford that, but we we can't afford that. So um just kind of keeping in perspective what is financially um reasonable to pay in rent and really being patient to get that right location and and a lot of times it's turning over rocks to get that.

SPEAKER_01 8:04

Yeah, that makes sense. Um, so when you're looking or evaluating a new market, what does that evaluation process look like? I know obviously cost per square foot, I'm sure, is a huge um factor in that, but maybe what are some other brands like potentially I hate to say like getting wrong, or what like knowledge have you been able to bring in finding um that new location and that evaluation process?

SPEAKER_00 8:27

Yeah, so as we're looking uh at a new market, there's a lot of factors that we're looking at. One is there is there available real estate to you know, are our competitors there already? And if not, if I choose a location, can they outposition me? Um, you know, but the other thing, you know, that when we look at something is obviously everyone's looking for population and traffic count. So we definitely look at those things. But one of one factor that I think is really um I've really learned over the years, especially being on the restaurant side, not the real estate side, is when I'm looking at demographics for like daytime population. If I have a heavy daytime population of uh where there's hospitals or universities, um, a lot of times those people cannot leave their location to go out for lunch. So I discount those when I'm looking at them just because you know, yes, in a hospital, some of the some doctors' offices can leave, but most of your staff can't. Now, in today's day and age with third-party delivery and catering, I really have to think that's how I have to really focus my marketing dollars in somewhere like that. Um, you know, but I also um we look at the cost of advertising when we're going into a market. So, you know, for example, being based in Ohio, you know, Columbus, which is one of the areas everybody wants to be in, well, the advertising expenses are so high because of the Ohio State University, and they use so much of the marketing um space out there that it costs us a lot to do it. So we really have to be conscientious of can I get enough stores in there quickly in order to be able to get enough of the market share and afford to have marketing, and um and and we like big small towns too because they tend not to have as many new competitors coming in, and and you know, people are excited when you're there, and we like to be involved in the community doing fundraisers for the schools and and those kind of things. So being a partner I think really really helps.

SPEAKER_01 10:38

Yeah, no, I think um I like the way you put that big small towns where you know there's enough people there to really um buy into the brand, um, and obviously a great loyal um consumer base there. But I I love the idea of really getting involved with your community, those school fundraisers. I think that's so impactful too, and it it just continues to tie back the the loyalty into the brand. So that's awesome. Yeah.

SPEAKER_00 11:03

Sometimes with those big small towns, you can't necessarily do more than one store, but if you if you positioned yourself right as a franchisee, I always want my franchisees to do more than one store, and then you can kind of pick and choose, and so they're not geographically too far away from their home base either. That that's important, and I and I always talk to my um my potential franchisees about okay, here if we do store number one here, where are we gonna do store number two at store number three? Yeah, no, that's fair.

SPEAKER_01 11:30

That's such an interesting point you brought up too. A thread I'd like to pull on the uh third-party delivery apps is I never like realized the complexity now that you probably have to consider when you used to say you discount by a doctor's office or a hospital, but now you're like, oh, actually that might unlock something new that I'm sure is a whole extra layer of things to consider. So that's so interesting. I I didn't think about it like that.

SPEAKER_00 11:54

Yeah, it was uh we were very lucky before COVID started. We were already um signed up with the third party services, so we didn't have to get in line, we were already there, so that's interesting. And we also it's changed in the way we're designing our stores because so many people are utilizing third party, they're not you know, we have a 90% off-premises um right now, so I don't need as big a store, but I need to think about where am I putting all those third-party delivery pickup or you know, for my stores that have drive-throughs or pickup windows, where am I going to store all that product, you know, waiting for the customer to come in?

SPEAKER_01 12:32

Yeah, absolutely. Um, that actually kind of folds perfectly into our next section here about designing for efficiency, um, whether it's a corporate store or franchisee standards. Um, so you've described your job as a franchiser um as designing the most efficient operations possible for your franchisees. What does that actually look like day to day and how did you get there?

SPEAKER_00 12:54

Um I honestly, there's just there's so much involved with that. And luckily, you know, I have a great team. Like I said, I never worked in a restaurant as a kid, but you know, the the the few times that I do go in and I um look at the way our restaurants are laid out, I always have questions like, why are we doing it like this? Why isn't it more efficient? But um again, my team is so great, and you know, sometimes I'll give ideas and they're like, Nope, Kelly, we can't do that because it takes three more steps for the employee to do this, you know, to get to that point or go around this piece of equipment or whatever, and you just really have to think through all of those things. Again, I want a small, as small as real estate space as I can, which keeps the cost down for my franchisees, but I also want um a workspace that's comfortable for the employees because that will affect employee happiness and turnover. Um, in fact, we're right in the middle of remodeling um the very first store in that in that shopping center that I was the leasing agent on, because uh when we built it, it was all just too we gave tons of room for the dining room, but it made the kitchen area really small, and the employees are just cramped in there. They can like barely two people pass each other. So we're in the middle of opening that up, and our employees are just thrilled as we're doing it because they're like, Oh, it's gonna be so much better to work here, and of course the customers are interested in seeing it happen, but I'm still gonna probably end up with 40 seats, and that's still way more than I need. Um, but um it really is changing the way we're we're looking at things. And in fact, I I was over there today looking at the store. I'm like, okay, well, um, we're gonna we have a big, tall can rack. Well, we're gonna take that out, put a smaller uh can rack in with a tabletop workstation so that way I have more prep space workspace because we always need more. You just never have enough table space. We're trying to be really efficient in the way we're building things so that way, you know, we're not, you know, we're not wasting, you know, any square inch in the space.

SPEAKER_01 14:55

Yeah, that's um such a perfect segue too, because I was gonna talk about um I know that when we first chatted, you were talking about how can something have two different functions, you know, whether that's a can rack with a worktop or a freezer with some type of oven on top. Um, that mindset I think that really like feels like it's like ingrained in your team. Did you build that or do you feel like they've always just had that mindset because they, you know, maybe grew up working in restaurants?

SPEAKER_00 15:23

Um, I I think we've all just really had that mindset on like again, efficient operations, how can we use the most space um uh, you know, to to serve two different functions and again make it efficient for the employees as they're as they're working through it. And you know, there's just there's so much innovation that's coming on. Um, you know, we definitely want to move forward or move towards more um automated systems that takes the repetition out um out of it for the day-to-day for our employees because nobody wants to just sit there and do the same thing. And if I can, you know, have the robots you know, scooping rice or whatever that is at the point where it comes um affordable for the masses, I mean we will definitely embrace that. Obviously, we never get away from having employees, you know, you know, but the good thing about machines is well you know, they tend to show up. Occasionally they break down, but they're there every day. So that's that also helps because the labor market is just so tough, and everybody in the in the industry just knows it's such a challenge.

SPEAKER_01 16:30

Yeah, that's so interesting. Like there's there's such a um, you know, there are a lot of big feelings about automation in the restaurant industry, I feel like. And I think at the end of the day, if you ask pretty much any restaurant operator, do you feel like you're 100% fully staffed every single day? They're gonna say no. And so it's like, you know, um including some of that automation and and taking some of the strain off of your really great employees, too, that are showing up and doing an amazing job to make their job easier. Like, who doesn't want that, you know? So it's it's trying to flip that script for people because a lot of people, um, you know, they with when anything is new, there's there's feelings. So I I get that for sure.

SPEAKER_00 17:15

Absolutely.

SPEAKER_01 17:17

Um, so you're currently looking at sort of a weird configuration space in Louisville and rethinking that whole setup. Um, walk us through maybe how you found that problem and then how you kind of um go through and make adjustments.

SPEAKER_00 17:31

And so we have a uh a franchisee who's gonna open their first door uh in Louisville, uh hopefully yet before the end of the year. And um the space is is an odd configuration. So, you know, we're looking at like, well, how do we configure it? So again, um, you know, learning from our past experiences, making sure that the staff has enough room to work, um, that we have enough space for the customers to sit who do want to come in and sit with us, and just you know, making it visually appeasing, you know, to the customers and to the employees, and again, just efficient. So sometimes that's um, you know, um you know the way we top the dish tank or a prep sink or s or or things like that, or again, going back to like let me get a uh a freezer that has a tabletop on top of it so that way I can you know I can put my toaster oven on top of it, or I could do those different things that allows that piece to serve two purposes and um kind of reduce that um to increase the counter space versus reducing it by all my equipment and you know nowhere for it to go.

SPEAKER_01 18:39

Yeah, that's awesome. I think that efficiency is like your your word of the day. I love it, like just driving efficiency in your design. Um it's super cool to hear how you guys go about making sure that your stores are as efficient as they can be. Um, another thing that I think that when we when we chatted, you really drove home was the idea of paying attention to your financials and really blocking time for it. Um it seems like that's one of the most important things that you believe an operator can do. What does that feel um, why does that feel maybe like radical to say out loud in this industry?

SPEAKER_00 19:14

I think it's because everyone's like, well, of course we look at our financials, but do you really look at your financials? And um, you know, when I go to different conferences and seminars, I'm always trying to learn more and learn, you know, you know, as they say, learn from someone smarter than you. There's always someone smarter than you, and like pick the brain and understand. And uh one of the sessions I was listening to um this year at a conference, they were talking about just reviewing the PLs and like not just reviewing it, but like going down deep into it. And um, gosh, one of the ladies was saying uh I mean they were getting uh credit card chargebacks that were um and I think she was actually a hospitality brand, a hotel, was it was sixty to a hundred thousand dollars a year. Hello, that is a lot of money. And if you just look at, you know, and it was lumped into her credit card fees, so it wasn't like sticking out, so it's like not only just looking at your broad categories, but really drilling down into the details of of the why, you know, why are we paying $10 a week for this, you know, $50 a week for that, or $100 a month, whatever it is. Look at every single thing. And do you do you need it? How do I um you know, how do I reduce my costs as much as possible? And and on our side as a franchise or we do that for our franchisees, even though they may not think that or believe that, but we do. We're always as again, everyone's coming to us. I have this great system, it'll automate this, it'll automate that, and oh, and it's only $50 a month, $200 a month, and and that's just stacking up and stacking up on my franchisees, and um, you know, we just have to really be cognizant of that and and really look at is this the best product for my franchisees? And um, and sometimes you know, we may think it is, and and you know, we as a franchise or may pick up part of the cost of that because we just believe in it that much, or we're we believe in it enough to give it a try because we think it's gonna help the bottom line.

SPEAKER_01 21:15

Yeah, yeah, absolutely. Um you told me that you look at food and labor costs weekly and then kind of track over a 12-week average. Walk us through that discipline. Uh, what are you looking for and what does maybe like a bad week tell you?

SPEAKER_00 21:30

Yeah, um, well, I I tell you, bad weeks scare me, um uh especially um, you know, when I have a franchisee who's not necessarily looking at those bad weeks, but bad weeks turn into bad months and bad quarters and bad years. So, you know, yes, we're always gonna have something, you know, happen, you know, uh where you have maybe you have some kind of a um uh uh environmental thing. You have a snowstorm, rainstorm, you have, you know, all the Canadian wildfires that come. Through you know, whatever happens and it affects your business. And so you've either over-ordered, overstaffed, you know, whatever the case may be. So, yes, that is going to happen on a weekly basis at some times. But when you don't have a reason why that happened, or it starts happening on a regular basis and you don't make adjustments, that's where that one bad week can turn into a bad month and snowball from there. So it's really paying attention to that. Um, we look at labor hours, not just labor dollars, um, you know, the food cost, and just you know, and we send those we um have a great IT team, and we've created some reports that we send out to our franchisees. So even if they're not looking, all they have to do is look at the weekly email we send, and they can just get a quick snapshot um, you know, on it. And with our POS system, you know, we personally use it for all of our employees to clock in and clock out because that way I get a fairly accurate representation of my labor costs there. And um, you know, I wish all my franchisees used it too for theirs. They don't, um, but it we could help them more if if they did, and and that's what I tell them on a regular basis.

SPEAKER_01 23:11

Yeah, yeah, I love that. Giving them trying to give them the tools, um, you know, getting people to adopt those, I get can be can be tricky. You mentioned accountants and attorneys as some of the most important um people an operator can spend money on. What does good advice actually look like and how do you know when you're not getting it?

SPEAKER_00 23:29

Well, a lot of times you don't know you're a lot of times you don't realize you're not getting good advice until it's too late. Um and I think that really is kind of uh especially on the attorney side of it. And I always, always, always counsel my uh franchisees to have an attorney look at their lease. And you know, even though I look at it with experience, not as an attorney, but you know, with the experience, um, you know, sometimes they don't look for a professional who is a you know an attorney who specializes in real estate, and it's different. It's different than you know, the guy who's doing divorce or the person who's doing even real estate title. They think that that's still the same correlation, it's really not. And understanding, you know, every word in that lease is legally binding. So, how how do I make sure I'm protected? I'm protected if the landlord wants to raise my expenses in there because they want to charge a bigger bigger management fee. I try to protect them from that, but that's where a good attorney can help them through that. And then, you know, on the accounting side, just understanding your tax deductions, um, you know, doing you know, tax planning, you know, whether you're gonna do accelerated depreciations, um, you know, what you can include as a business expense, what you what you can't. And and again, I maybe I'll just uh um roll into that as people are looking to like buy stores because there's a lot of people who buy and sell their stores in different brands, is really digging into the financials then too, because you want to understand is there stuff that was left out, like what was left out, you know, or the things that were padding in, you know, uh an owner's um cell phone or an owner's vehicle where your store manager wouldn't necessarily you wouldn't necessarily pay for that, but just understanding what those real expenses are and having a professional that really specializes in our field who can look at that and analyze. And again, knowing what's missing as important is as important as knowing what's there.

SPEAKER_01 25:31

Yeah, that's great advice. The knowing what's missing is that's probably jarring to people.

SPEAKER_00 25:38

It is because of what's not there, but it but it needs there's some things that really need to be there, and if they're not, that's where you that's where you get in trouble later.

SPEAKER_01 25:47

Yeah. So you are scaling. Um Hothead Burritos is on the road to a hundred plus units. Um so what does disciplined growth actually look like at this stage, and what does it feel like maybe to say no to a deal that you might think looks good on paper?

SPEAKER_00 26:04

I think you know, as we have grown, what we have really come to understand, and and as our brand has gotten uh larger and more sophisticated for us, it's distribution. So um, you know, if someone you know called me up and said, Kelly, I want to do a store in Denver, Colorado today, I would say, well, if you're not gonna plan to do three to five, I can't do it because my distribution is going to be painful. Um, and we've kind of learned that, you know, even though I have six stores in Florida, sometimes I have a little bit of an issue, you know, getting things there because it's all just based on volume and timing and and those kind of things. So so we underst we understand that now, and that's why we're really focused on um, I'll say kind of connecting the dots between where we are now and you know, um, and filling in, you know, filling those areas in in between. So we're uh we really pay attention to that now, and um, you know, you know, making sure that our the our franchisees who come in that they're capitalized enough that yes, they can do that store. And like I said, I I really want them to look at you know hot head as they should anything like a portfolio. So if you go in and you just do one, your exposure is is is big, not just for our brand, for any in any brand, but if you go in with the thought that I'm gonna do three, five, seven, okay, then as I like to say, if there's road construction in front of your store for six months or a year, and you have two or three others, well, hopefully that you know their volume can lift and hold the one that's that's gonna be down for a little while. Those aren't things that are within our control. Now, adjusting and scaling labor and food, you know, when those things happen is very important, and just getting creative on how else going out into the community, delivering catering, whatever you need to do to keep those sales up, but really paying attention to what's going on.

SPEAKER_01 27:55

Yeah, I love your analogy about connecting the dots from where you guys are to where you can grow, because I think that's something that, you know, even as a consumer, people will be like, oh, like I wish I had X restaurant chain around me, and you know, understanding the big picture of like you know, why it's like strategic maybe for some of these um restaurant groups to scale in the certain markets that they are, like you did open my eyes to that too, because I was like, wow, that's such a good point. Like, if you have this one location that's on the opposite side of the country, it's extremely hard on your distribution. So um that's really, really interesting. Um, you said that one of the big lessons you got from your rapid fire days was to streamline the menu and not try to be everything to everybody. How'd that philosophy play out at Hothead?

SPEAKER_00 28:42

You know, that you know that the rapid fire, you know, that quick serve pizza um space is just is very competitive and and you just really, really have to have high volumes in order to um to move into product that it doesn't that you don't waste it. And so we we really learned a lot now. And you know, in the position I'm at, I'm really trying to hold my team back in some ways where they're like they have all these ideas and there's all this new product that's coming at us. Um but we we just really have to look at can we execute it? You know, is it worth it? Are we gonna move it? Um, is the customer going to buy it? Like we've looked at a couple different um different types of ways we could serve chicken or different desserts, but the but the cook time was so long as a consumer. I'm not gonna wait two or three minutes. I mean, you know, because one the employee has to stop, they have to go, you know, uh, you know, make that product how it needs to be made, and stops the line, makes the other customers frustrated because it slows them down. And so we just really have to be able to execute quickly. There are things always that'll take a little bit, but uh I I just really tried to focus on you know eliminating those extra SKUs, trying to consolidate, trying to um, you know, make it easy for our franchisees, our customers, and our employees. That's that's the most important thing. And you know, for my franchisees, uh again, whatever product I I bring in, I have to move it. They have to move it, otherwise, you know, they're gonna throw it away. And that's not good business.

SPEAKER_01 30:16

Yeah. No to the food waste. No food waste. No food waste. Um, if a fast casual brand came to you today at 15 locations asking how to scale without breaking what made them good, what would be the first thing you'd tell them?

SPEAKER_00 30:30

Yeah, the first thing I I think I think the first thing I would ask them is, you know, okay, do you have an uh an operations manual that's duplicatable? Um and as funny as that sounds, a lot of people really don't. Like, oh, okay, we we we make our we make this sauce this way, okay, it might have a recipe or two, but do you really have operations? And then um, as I've learned just from experience and from you know, always seeking out um additional knowledge is does this work in a different area? You know, what works in um Florida is it necessarily going to work in Denver, Colorado, or somebody, you know, somewhere cold versus somewhere hot, or the different, you know, trends healthier trends, um, you know, where people in California were there tend to eat healthier than the people in the Midwest. It's like, is this going to matter? So understanding, you know, does your brand scale out of your geographical area? Um, and then, you know, what's it take to build it? How flexible, what's the cost of entry in there? Um, you know, I I like to tell my potential franchisees, you know, I'm not a McDonald's where you have to build a building and just go in, you know, that's what you have to do. We have flexibility. So does your layout and your brand have some flexibility that allows potential franchisees to get in, you know, at a lesser cost? And then again, if I'm a 15-store brand, am I going to fund it myself or am I going to franchise? That's two totally different, you know, games that you're playing there, and the amount of capital that you need if you're not bringing in franchisees, then that's a whole different game.

SPEAKER_01 32:04

Yeah, absolutely. Well, I I've loved this conversation. Um, I think I want to steer a little bit into, you know, leading as a female in the industry. So when you were coming up in commercial real estate and then in franchising, what did those rooms feel like? Was gender something that you thought about consciously, or did it um not really come up as something that was maybe a barrier to entry?

SPEAKER_00 32:30

Yeah, i in in the commercial real estate world, it it definitely is, it definitely is a barrier um being a woman. And I I just think and then in the franchising world too, um, you know, and and honestly, being a woman in most industries, I think is probably fairly difficult. I've had a few in my in my day. Uh, the most important thing I think is education. Like you just have to educate yourself, understand what's going on, always be learning. Um, because if you know what you're doing, it's kind of hard for them to, you know, to put you down and fight back if if you know you you're out there trying to learn and educate yourself, and and you know, if you know your financials and your P ⁇ Ls, well they can't tell you you don't. So but sometimes you just have to be tough and and stand your ground. And you know, again, as as women, I think that's something that that we're used to, and you know, and as women, it's like we juggle a lot. We have a lot of different things that we do in our lives, um, you know, at different times where you might be having children, not having children, and then as they get older, now you have these parents that you have to take care of, and just things are always moving. But you know, women are great multitaskers, so I I think you know, we can do anything.

SPEAKER_01 33:43

Yeah, I couldn't agree more. I think we can do anything. Um, and I agree. I agree with the sentiment on good multitaskers for sure. So I I I coin that as a a strength of mine. So um maybe uh talk to me a little bit. Like, do you think the industry's changed at all since you entered it, or do you think it's trying to change in any way?

SPEAKER_00 34:03

I think it is. I think there's a lot of um good things happening um in the industry. Um, you know, there's rural women in restaurant leadership, they're out there trying to, you know, cheerlead for us and and and help um bring women together and really um, you know, to really help women support women. Because sometimes we're not we're not the best at that. Probably because we're multitasking or we're just trying to make it ourselves and we can be we can be competitive just like the guys. And so um remembering that we're kind of all here together, and even though we may be competitors, you know, we could still share best practices, you know, without giving away trade secret trade secret, without giving away trade secrets.

SPEAKER_01 34:47

Yeah, absolutely. Um, and then what do you make sure to tell the women or what do you want to tell the women, I guess, coming up behind you now?

SPEAKER_00 34:57

Oh, that that that they really can do anything that they want to do, and that they um again need you need to educate yourself, you know, do the best that you can. You know, one of the things that we always um we tell people on our team is that you have to train your replacement. And it sounds scary, like, oh my god, I'll train my replacement, but but you can't move up if you don't have the person coming up behind you that makes it easy for you know your your boss or your investor or whatever to know that okay, they I can take them up because they have their team coming up behind them, um, and to to really understand that that and not be threatened by that.

SPEAKER_01 35:36

Yeah, I love that that um training your replacement because it does sound like intimidating in the moment, but it is just really about building the people that can then come and help support you. And I think if you can, you know, be the leader to build those people up and train them up the way that they need to learn um and grow in the industry, says a lot about your leadership style. So shouldn't be uh an intimidating thing, but rather positive for sure.

SPEAKER_00 36:02

Yeah. And I think one more thing on you know, as far as women are concerned, is like again, you know, back to that to having children. Like I I we had one of our supervisors who oversaw four overstores. Some people call them district managers, we call them supervisors, and she was gonna quit because she was pregnant. And she said, I'm not gonna be able to do my job at the at this level, so I'm just gonna have to quit. We're like deny, you know, we're not gonna let you do that. You know, everybody on our management team had had children. You know, I was the only female, but it's like we'd all have children, we've been through this, we know what it's about. It's like it's there's gonna be some hiccups, there's gonna be some bumps, but it'll it'll work itself out. Like, you know, uh when I was in the financial business, my kids slept under my desk when they were sick at one point in time because I didn't have anybody else. Like we just you just get through it, and that's that's the way it is. So I I just think that by having being honest communications with your employers and just saying, hey, I've got this going on, and you know, granted as an employer I I need you there, but you know, for the if you're good, we're gonna work with you, you know. If you're just a slacker, then you know, that then you gotta then that's a whole different problem. But you know, just communication is really the key in everything.

SPEAKER_01 37:19

Oh yeah, definitely. I think that's you know, supporting the people that are so loyal and and good to your your business and your brand um is gonna be a great thing. So I love to hear that you really lifted her up because I'm sure it was a scary thing to have to admit, too, of like I'm not gonna be able to do this all. Like I can't juggle it. And the fact that she was able to kind of bring that forward and then get the support from you, I'm sure meant a lot to her. So that's awesome.

SPEAKER_00 37:44

Yeah, yes, yes.

SPEAKER_01 37:46

Um, well, you've been great. Tell me if there's anything that we didn't cover that you want to um chat about as kind of closing remarks here.

SPEAKER_00 37:55

Oh gosh, um, let me see. What is uh um what would I what would I share? Um I guess the one thing that I would share um that we probably haven't talked about is just talking about um partnerships. So um a lot of times if you're getting into the restaurant business and you become a franchisee, uh it's hard to have enough capital to do it all yourself. So um you get involved or or starting a brand or whatever you're doing, and so you get involved with partners. So partners are like marriages, I like to say, so you want to make really wise choices in what you're doing. Um, but even I think more as important, if not more important, is that um you need to have an operating agreement and you need to spell out in your operating agreement who does what, what what are the expectations? Because when the expectations are not clear-cut and spelled out, that's where things become problematic. And um, you know, feelings get hurt, lawsuits happen. So by just slowing down a minute and just spelling that all out, it's it's very important. And and honestly, I think it's important on even as a husband-wife team, if that's what you're doing, you know, what's one person doing, what's the other person? Is one person doing front office, one person's doing the back office? What's happening? Just so we have some expectations, and then you know, maybe in the husband-wife situation, maybe you gotta talk about that kid situation, like what happens with that, and who you know, are we gonna pay someone to come in and do back office or whatever, whatever it is? But communication is the key, and just really thinking through your partnerships and you know who's providing time, who's providing money, and just spelling that out, especially when it starts to become really profitable or or not, like how are those how is the profits gonna be handled? Is there a different distribution? Um, you know, is there preferred stock payback for some of your investors, whatever that might look like, but you just gotta spell it out, and that kind of goes back to having the professionals, having the uh right attorney, and just you know, even though it seems like, oh my gosh, I'm spending thousands of dollars for this document, it is so worth it. Like you do not want to that is not where you want to think about, like you need to spend the money there and just and really think about like the person spend time with the people you're gonna be working with, you know, partnering with. Do you like them? You know, can you spend time with them? Do you have the same beliefs and same work ethic?

SPEAKER_01 40:19

Yeah, no, that's so fair. You know, I think that that belief in work ethic piece is probably like you could drive that one into the ground because the second you start working closely with people that you know have a different um, you know, mentality around their work, I'm sure can create some road bumps.

SPEAKER_00 40:36

Yes, yes. How much vacation time do you need? It's like, you know, one person takes, you know, doesn't go away even a week a year, and the other person's like, oh, every couple months I'm going away for you know a week. Well, that's that's gonna be some resentment. So again, if you know it up front, hey, this is how I want to live my life, and we're gonna address that out right now, then there then then there's no real hard feelings on it because you've already talked about it.

SPEAKER_01 40:59

Yeah, I love that. Well, Kelly, thank you so much for joining us and just providing all your expertise. I can't wait for Hothead's 20-year um, you know, birthday next year. I think that's so exciting. I can't wait to see everything you guys do, and um, you know, maybe we can reconnect and and chat 20-year plans when you get there. Um, and I'm just so excited for you guys.

SPEAKER_00 41:20

Yeah, I would love that.

SPEAKER_01 41:21

Yes, thank you so much for having me. This has been wonderful. Yes, awesome. Thanks everybody for tuning in, and we'll see you next time on Brands and Banter.