Rick Spell is a Private Equity Investor and the Owner of Spell Restaurant Group. In 2004, Rick and his daughter Christy purchased Brookhaven Pub & Grill in Memphis, Tennessee. Since then, they have established both casual and fine dining restaurants in nine locations in Florida, Tennessee, and Mississippi. In addition to this, Rick is a CPA with over 30 years of experience in investment banking. He is also currently a member of The University of Memphis Board of Visitors and an active supporter of the university’s athletics department.
Here’s a Glimpse of What You’ll Hear:
- How and why Rick Spell transitioned from a financial career to restaurant ownership
- Rick’s experience partnering with his daughter to start Spell Restaurant Group
- Spell Restaurant Group’s strategies for managing restaurants and empowering employees
- Rick discusses how he branched out in the restaurant industry
- Overcoming the challenges of owning a restaurant during a natural disaster
- How Rick developed his own restaurant concept, why he had to shut it down, and what he learned from the experience
- Rick explains how a background in accounting made him and his daughter better business owners
- The impact of the pandemic and how Rick’s businesses weathered it
In this episode…
After a 30-year career in finance, many wouldn’t consider starting from scratch in a trade they don’t know much about. But for Rick Spell, a background in investment banking was the key to his success as a restaurateur.
Rick says he didn’t get into the restaurant business despite his background in investing and accounting, but because of it. His approach to restaurant ownership is rare, informed by his keen eye for numbers — and that’s exactly why his restaurants have performed so well. Now, he’s here to share his tips for running profitable, long-lasting, and wildly successful restaurants.
In this episode of the SpotOn Series, Chad Franzen interviews Rick Spell, Private Equity Investor and the Owner at Spell Restaurant Group. Rick shares his tips for buying and managing restaurants and explains how he oversees hundreds of employees across nine locations. Plus, he discusses how his businesses have continued to succeed through difficult challenges like a hurricane and a pandemic. Stay tuned.
Resources mentioned in this episode:
- Spell Restaurant Group
- Rick Spell on LinkedIn
- Brookhaven Pub & Grill
- George’s at Alys Beach
- La Crema
- Saltwater Grill
- Andrew Michael Italian Kitchen
- Chad Franzen on LinkedIn
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Chad Franzen 0:20
Chad Franzen here co host for this show where we feature top restaurant tours, investors and business leaders. This is part of our SpotOn Series. SpotOn has the best in class payment platform for retail and they have a flagship solution called SpotOn Restaurant where they combine marketing software and payments all in one. They’ve served everyone from larger chains like Dairy Queen and Subway to small mom and pop restaurants. To learn more, go to spoton.com This episode is presented by Rise25 We help b2b businesses to get ROI clients referrals and strategic partnerships through done for you podcast. If you have a b2b business and want to build a great relationship with clients, referral partners and thought leaders in your space. There’s no better way to do it than through podcasts and content marketing. To learn more go to rise25media.com or firstname.lastname@example.org. Rick Spell is a CPA with a 30 year investment banking career. He’s also a buyer of companies. He and his daughter Christy have established both casual and fine dining restaurants at nine locations in South Walton and Panama City Beach, Florida, Memphis, Tennessee and Jackson, Mississippi. Rick is also a member of the University of Memphis Board of Visitors, former president of the fundraising board for the University of Memphis athletic department and as a lifetime Ambassador Club member representing the highest level of financial contributions to the athletic department. Rick, thanks so much for joining me today. How are you?
Rick Spell 1:41
It’s my pleasure. We’re getting along way through the COVID environment we’ve been in so everything is up the Pareto?
Chad Franzen 1:49
Yeah, I hope so too. I’ll we’ll get we’ll get more into that as we go along. So you, you have been a CPA and an investment banker for decades. And in 2004, I believe you purchased Brookhaven Pub and Grill in Memphis, what made you decide to do that after kind of a, you know, more of a financial driven career.
Rick Spell 2:08
So actually, it’s because of my financial career. What I buy is I tried to buy assets that I believe are undervalued. But that first package purchased in 2004. I was sitting at a restaurant eating we left it, it was a bar restaurant, located a Pub and Grill and somebody said, you know, Marcus is selling this. And he had been a, he had been an officer in the army and 10 years out of being out, they call him back for the Iraq War. He had a six month old child, his wife didn’t even know him was in the service, he had to leave. And so he needed to unload a restaurant, I had a brother who was a bartender. And so I really purchased it really family oriented. Little did I know that that would be a significant purchase, and would be where I started putting a lot of my funds. So we really learned the business from that first model. And the model works for me being a finance guy, and not being a restaurateur. You know, I have to have good local management. So we sat down with the manager of the restaurant and said, Look, if you don’t like me, if you don’t want to stay, let me know. And I’m not buying. And so that’s how we got our start. Once I
Chad Franzen 3:25
went here, and just basically on the manager who was already there?
Rick Spell 3:29
Absolutely we do. We need good managers to run restaurants. And the good news about having multiple restaurants is you start developing, you know, a good bench to move people around, for example, I just moved in assistant manager in Jackson, down to Florida, because it’s a much better opportunity for her. And then we just moved an assistant manager here in Memphis, to the General Manager of Brookhaven pub. And so we have a lot of on the job, you know, interviews going on, so to speak, or, you know, as so we’re always watching these key points. And that’s a great pride that we take in the business of growing, and we’ve been very successful.
Chad Franzen 4:14
So you had no prior experience in the restaurant industry.
Rick Spell 4:18
I worked at Mug & Cone when I was 16, for nine months on the grill,
Chad Franzen 4:27
was that was there anything from that experience that carried over?
Rick Spell 4:32
You know, I’d have to say, the enjoyment of working in a restaurant. I mean, when you’re a new employee and don’t know what you’re doing, and you have older people that teach you not to be dumb. That’s a real learning experience. So in the restaurant business now, you know, I’m really we have over 500 employees. I really view it that we we have the ability to help people’s lives be and people that are here In college people that are working their first job, people that are or have been in this job for 20, 25 years. So we take our family responsibility and how we treat our employees very seriously.
Chad Franzen 5:12
I mentioned in the in your intro that you are partnering with your daughter, what made you decide to do that?
Rick Spell 5:19
Well, you don’t want to get into family politics, but I’ll give you the short version. You see, I was I bought this and was going to partner with my brother, the bartender, the general manager that I mentioned, his only problem was, Rick, I’m comfortable. But I’m not comfortable with your brother, it looks like you’re going to train him to replacement. And so I said, if if he was not involved, would you be interested? And he said, Yes, I would. And as luck would have it, he knew my daughter. So my daughter was a corporate accountant. And, and she came on board. So she kept her full time job. And she came on board and did the financial work. You know, after hours, she and I both have always had two jobs. And so she did that for I would say about four years. And that was she was young enough then that there was a lot of father daughter fighting, as you get kids that are older, you realize there is an age where they think they know more than you. And she’s actually come out on the other side. And she’s a big part of our success. Because administratively POS systems how to make things more efficient, neither one of us actually have a great backup house or front of addicts experience. So I really believe it’s one of our secrets, the way we approach this business is, is we look at a restaurant as a customer. And so my wife and I do this day, every time we’re in one of our restaurants, and we try to eat at least once, maybe twice a day in our restaurants, we’re always watching. And for example, the hostess stand is is always a person that is maybe not really experienced in the business. She’s younger, she can be intimidated, and she has to tell people that are older, you’re going to have to wait 20 minutes. Or maybe she’s not doing a good enough job being there and greeting people so so we watch it as customers and and we give advice as customers to the real pros in the business which is demanding.
Chad Franzen 7:27
You know, this, this question may not be totally appropriate for you, since you based a lot of your purchase decision on the staff that was already in place. But, you know, a lot of restaurant tours really struggle when they first start, but over the over the early days of your ownership of Brookhaven Pub and Grill like,
Rick Spell 7:44
you know, it’s, you know the story. Rick, why would you invest in restaurants, you’re gonna have your head. And and if I could segue a little forward when I bought the first two restaurants I bought in Florida. You know, the I was at a company, I was a manager at a company. And I was preparing for leaving, because I knew I didn’t have the capability to retire. I had to do something within that that’s become via the business. You know, the question is always, or is there something wrong with you? What were you thinking? But the truth is only a restaurant can if it makes money, and we try not to buy restaurants that don’t make. And we have started one that we just closed as your Grits and Grind. It’s actually very enjoyable. You’re working around a bunch of great people. Yeah, there’s a few knuckleheads in the business. But generally, I’ve found that you you have a chance to help people in their lives. And we have responsibility to to make our employees have a great place to work. And we take that very seriously. So I don’t really have any stories other than a few about the early days, but because we are very financially oriented. So we in essence, were run learning from our manager, as he was learning from us on financially, what was the best way to run the business? I will say this though, I did get a call it one o’clock on a Friday. And it was from someone that knew me. And he said, we and we have music at Brookhaven we charge a cover charge to get in after nine or 10 o’clock and he said, Rick, you know, you don’t know me really well. But Brookhaven Pub is my favorite place. My brother and I were up there. We just went in there. And you you have a bartender that is drinking or doing drugs and they got into a fight with this and then they chase us around the block. And you know, you got to do something about this. Well, he woke me up. And that’s a great story. So I had to go up and and, you know, see what was going on because we’re not going to treat people that way. But of course, you know, that’s probably not your story. So we have cameras at doors and you can see The true stories, and you can see what really happens. So you do have experiences like that we’ve had a couple of employees that, you know, did things in their life away from the restaurant that, you know, were very disappointing. But generally, we’ve been really, really fortunate.
Chad Franzen 10:17
Those kinds of things, probably not things you really had to deal with as a CPA,
Rick Spell 10:21
you know, you know, I was a CPA for four years, I was an investment banker for 30 years. That is the big difference in the restaurant business, there are things like that, that happen, that you have to deal with. And, and that’d be less than candidate, if I didn’t tell you that, you know, you have something happen once a year, twice a year, five times a year with employees, sometimes you can help them. Sometimes you can’t. I think one of the things that we deal a lot with now is his online reviews, and I review every bad online review. And weekly, I have the the good online reviews summarized for so that you can show the managers, and we’re fortunate to have great managers. So when you’re showing them bad reviews, it, it just is very depressing. But again, back to my point of, you know, you you have to look at a review, as as a customer in is some of you see, you know, they have another agenda, but most of it, you tell when you just let them down, and they want some like way to speak to you. So you know that that is something that that, you know, all restaurants have to deal with? How do you manage your reviews? How do you? How do you make it a positive learning experience? And then again, you know, I’d be less than candid if I didn’t tell you there’s a lot of people in restaurants that, you know, want to say, well, you know, that that that customer didn’t understand what doesn’t matter they need to get and understand we’ve got to be better at helping them understand. So it’s it’s a it’s a fun business, not every day is the same. And you work around a bunch of great people. I just can’t overemphasize how lucky I am not only my management staff, but is so many of our workers that really try to serve people will.
Chad Franzen 12:14
Was there ever see, like I mentioned you own that for several years before you decided to expand? Was there a major turning point where you thought, you know, this is going well, we’re ready to branch out and move further into this industry.
Rick Spell 12:28
So I’d like to give you two stories there. You mentioned Brookhaven Pub, which was my first one in 2004. And, and it was a old house that was converted and had a patio on it, which we immediately covered. And we started having the Football Coach of the University of Memphis there. And as our team got better, I felt a little embarrassed that my patio went better. So we did a million dollar remodel and they, you know, one of the best patios in Memphis, we’re always stated that way. And we since then did another remodel. And then just a couple of months ago, we did I put another patio on the front, because in the back is music and you know, it’s a little more of a drinking environment. So we kind of had a softer crowd in the front. So we’ve always continued to remodel our restaurants. Now Now let me answer your question. What made me go from one restaurant to more so as it was time for me to leave my investment banking job because my, my, the people that I work with and had had grown and in train lane as much as I did. And so in essence, I, I knew it was time to exit or what I like to say as I fired myself, I’m originally from California, my intention was to go live on the coast in Los Angeles, Santa Monica. And I couldn’t find a business to purchase. And so we we said at that time, we weren’t looking at restaurants and somebody said, Well, look, you can buy restaurants at these yield levels. And we weren’t afraid of restaurants. So we agreed to buy a breakfast chain out in Los Angeles area. And at the same time, we had somebody calls from Florida. And that was offering to sell to restaurants. And so we agreed to buy both up. And the one in California. They were not experienced, which is common on selling restaurants. And we then found that they were making some single sided entries, which meant they their math was not correct. Maybe that’s the advantage we have. We’re able to see that. So from that those first two and in Florida and one of those is called George’s At Alys Beach, A L Y S. It’s a very famous area down there. This area has just started booming, and I bought it in 2015 And that’s one of the most popular restaurants in southeast of the United States because so many people from the South East go to this area for baby And I people all the time, just tell me hey, this is this is We love coming here, every every vacation, they go down there and eat there at least one time a night. So we got lucky in some respects, we bought from people that wanted to retire that were just burned out on the business, they had worked too hard. And, and so we had to and then we had another gentleman come to us, this was Saltwater Grill in Panama City Beach, he was 150 pounds overweight, he had just had two knee replacements. He was on a scooter, he was 76 years old, and he and his scooter wouldn’t go into his restaurant he was forced to sell. And so that was our next purchase. So what was going on is people were going, Hey, we’ve got a dumb guy that will give you some liquidity and buy your restaurant. And I was the dumb guy. So that’s how that’s how it evolved.
Chad Franzen 15:51
So did the worthy it was the incumbent staff as big a factor in those places, as it was in your first
Rick Spell 15:58
purchase. George’s At Alys Beach had a couple of great owners, George and Ann Hardly that were, we call them the King and Queen of 38, which is a very famous street down between. Yes, and Panama City Beach. When when when the deal was cut, and they were just be they were ready to retire. I made the mistake of going to the meeting with them as they disclose it to their employees. And these two people were so loved that immediately you had employees in tears. And now I have to say, Hey, I’m the new owner. How about me? And that wasn’t the right time for that. And so you you learn a lot about each one of the deals is differently Saltwater Grill. When I went to that I, I the previous owner wasn’t with me. And we did our disclosure on April one. Hey, employees, I’m Rick Spell bind your restaurant? Don’t worry, we’re going to try not to change anything. Help us learn about you where we, you know, your job is protected. And they were like, Whoa, it’s April 1, we just want to make sure this in an April Fool’s joke, and you’re not buying it. And so we just have been really lucky with great staff.
Chad Franzen 17:12
You. You added restaurants in both 2015 and 2016. What were some of the challenges associated, you know, when you first started managing restaurants, different types of restaurants in different locations, and then what was most enjoyable about it as well.
Rick Spell 17:29
You might have come back to the enjoyable part. The George’s At Alys Beach was such an iconic restaurants so well known in the southeast. And, and you know, we knew that the staff didn’t know us was resistant. And frankly, we were trying to be absentee owners. We were coming down there once a month. But our manager was not as strong as we needed. And so right as we were making a decision on that the chef at that restaurant, was involved with an employee. And so we in essence, bought a restaurant that we couldn’t screw up in within two months, we had to replace the chef and the manager. And that was scary. And we brought somebody from Memphis that we knew in the restaurant business that happened to want to move down in that area. And he did a fabulous job. In fact, he was operations manager for a while he’s back now running that restaurant, Patrick Miller. And we we had a sous chef that, that we let run through the our we call it 100 days of hell in the summer, everybody’s on a vacation down in Florida. And she did a fabulous job. And she’s still with us as a chef. So that was probably the scariest thing we had, although I will tell you this, the hurricane Michael and I think that was 2017, which absolutely decimated the east side of Panama City Beach were so many of the workers live. That was unique. All of our restaurants were without power. And after a day or two, we said look all our foods going bad. And there’s what we call the Dark Zone over there. You couldn’t get any communication there. So we just cooked a bunch of food and wait about four volunteers go to a fire station. And we said, you know, we said look, we have food and man they they rushed all over us. And they said and we said, Well, where else can we go? He says my buddy John is the next fire department. So we worked our way, rewarding miles through this dark zone, which is very hard to describe unless you’ve ever been around a hurricane, there’s no communication. It’s nothing but first responders. They’re working their guts out, and we show up and Vina and we had a young kid, about five or six years old. I think it was the second or third day we went into the dark area and we gave him a chocolate chip cookie and he looked at it And he was like, you know, we were like, what? What’s the matter? You know, you want to eat your cookies, like, I haven’t had anything to eat for two days. And you know, that’s what happens in hurricane displacement. That’s what Florida faces. So we spent all summer long watching these tropical storms to see what they’re gonna do to us. And that is a big, it’s a big factor down here in Florida,
Chad Franzen 20:25
in 2017, so you added those restaurants in 2015 2016. And then in 2017, you developed your own concept. Can you tell me a little bit about that? And that process
Rick Spell 20:36
is all about Grits and Grind. Yeah. So I’ve always been a big lover of breakfast, and there’s a restaurant in Memphis called brother Junipers that I kept begging him to sell Jimmy I never could talk him out of it. So I had I had bought a building at La Cocina, which is now called LaCo In secret speech, I have four restaurants within a quarter of a mile of each other. That’s how big this vacation is. So I wanted to I had owned the restaurant and so they had been a finance guy was all about how much more revenue slash income can I you know, get out of this building. I don’t I’m the building also in the kitchen was very large. So I, you know, I have a chef, he was a sous chef and another restaurant he took over, I was able to promote it. And we had just a fabulous breakfast menu that it did incredibly well. The named Grits and Grind is based on the Memphis Grizzlies, a basketball team in Memphis, they had some just great defensive players. And they said, We’re all grit and grind. And I was like Grits and Grind. That’s got to be the name. And so that’s how that came about. Unfortunately, starting this week, that area down there slows to nothing. People aren’t on vacation when kids are in school, and there’s no pandemic. And and through the winter, there’s no business so I did just closed Grits and Grind but I, I took LaCo where as it’s called now, and expanded the hours and we serve a brunch menu, but there just weren’t a lot of people down on vacation get up at seven and eight in the morning eat breakfast, because they’ve been at the beach. They’ve been drinking all the previous night. So they want to roll into our Mexican restaurant later. So that’s why I had to shut it down. But it was a pure love. I really enjoyed it
Chad Franzen 22:20
was opening a bread breakfast restaurant different than the other ones, I was all kind of the same operator type of type of operations.
Rick Spell 22:27
It was different. In fact, the I have a love for breakfast and our product was great, but you only have a certain amount of hours to make money. So going through the slow season, it’s just difficult to cut your your overhead enough to make it work. I made another mistake on that too. As a non restaurant tour in any restaurant people on the phone it’s now you point your finger at me go that dummy. He didn’t know that we know that. The changeover from breakfasts and lunches is different. And particularly since all our customers are coming in late, we were closing 11 and the breakfast restaurant and closing at 1030. But they all wanted Russia last minute which made our lunch service bad. And then we set them up as separate operations so that the breakfast people were in a hurry to just, you know, not clean completely. And hey, it’s all you you take over. And so the transition was was a really difficult thing that I learned some lessons about that my managers and my restaurant experience people told me in advance that that was that was actually difficult doing that out of one kitchen would have been a better way to do it. I think if I put all management under one head person, that so I was trying to promote somebody, but having the same building run by two people. It ended up not the transition just ended up not being as good and I probably should have put that under one corporation or the bandwidth.
Chad Franzen 23:52
And then you also added another restaurant that same year that you started Grits and Grind.
Rick Spell 23:58
There was a restaurant called so there was two restaurants that we haven’t talked about. There was a restaurant called La Crema. It’s it’s in Rosemary beach. It’s incredibly popular up to three hour ways in the vacation season in the summer. It’s it’s small dishes, and they sell get a Spanish to get at Nacho wine, which is a very soft one that I really love. And I sent this got an email and I said love your restaurant. Love your guy, Nacho wine. If you ever want to sell your restaurant, let me know. Or if you would just sit down and talk about Spanish wines. I’d love to do that. And he emailed me a year later he said are you in town and I wasn’t my daughter was at that time. I said well, I’m not. He said, Well, I’d love to meet you. And if you want to buy my restaurant, I’d love to sell it to you and we ended up buying that restaurant. And we make more yearly and profit than what we paid for it. And it’s just it’s one of the most iconic and well loved restaurants down there. We don’t change the name on the restaurants, you know, we have George’s that have bought George Hartley. I have another one called Edward’s that I bought from Edward. And, and that was a that’s more of a fine dining restaurant in this year we, we’ve added lunch in, we are adding a little upstairs area to it and it’s sales have gone through the roof. We just been really lucky. We’ve done a lot with our restaurants.
Chad Franzen 25:21
So people come into the restaurant put their name down, and they say it’s a three hour wait, and they don’t back out.
Rick Spell 25:28
Well, you know, it’s it’s kind of like being on a, I had that happen to me, I went to Atlantis in the Bahamas, and I’m a last minute guy. And I said, Okay, well what’s the eating arrangements and you know, you have to walk to restaurants that are a long way away. So everybody eats right there? Well, they only have five restaurants, they say, Look, if you don’t make reservations, you’re going to be eating at 530 or 930. Well, I don’t like to plan in advance. And, and so that’s what it is, when you’re in a vacation. You have so many people that are down there, the whole system is stressed. And, and so people love this restaurant so much that in essence, what these people are doing, they’re putting their names on about five different places. And then they go first, but La Crema is known for its chocolate desserts. So you have a lot of people that will wait for that dessert. And so the average wait there in the summer is probably about an hour and a half. If you’re there six or after you’re going to have a long wait. But yes, we have definitely quoted times of three hours. And we do it every month in the summer.
Chad Franzen 26:37
You and your daughter both have backgrounds and accounting, you’ve mentioned some ways that that’s probably paid off for you. What are some of the biggest ways you’d say that it’s helped both of you.
Rick Spell 26:47
So um, it’s just a total different way of looking at restaurants. There’s some restaurant tours here in Memphis. If anybody’s listening, I’ll help you find them. They are James Beard award winners. And there’s not a huge amount of those around. And they are exceptional restaurant tours and exceptional restaurant or tours that I like to go their restaurants. Andrew Michael are their names. It’s two guys, Andrew Ticer and Michael Hudman. And great guys, and they called me one time and they said, Rick, what are you doing? And I said, Well, why don’t you know is November I said, Why don’t we at the end of the year, let’s let’s get our financial statements for our operations. And I’ll tell you about each one of my restaurants actually a little bit of what we’re doing right now. And then you tell me about yours. And so by January 10, I have all my financials, and I sit down I go, Andy, here’s, here’s what I do in all my restaurants. And, you know, two months later, maybe three months later, he says, okay, Rick, I’m ready to talk to you. Well think about that. I have my information immediate, and I can make better management decisions. And my daughter oversees the the operation. And she now has financials to me three days after the month end. So that allows us to see what’s going on. For example, everyone knows in the last three months, the trend in food cost protein particularly is going up and my guess were warning me in advance. They said, Rick, we’ve done really good on our food costs, we are not going to do good for the next two or three months. By the way, we have not raised prices yet. We’re hoping this will even out Oh, we’ve been fortunate to have so many guests come in through the pandemic, we just don’t want to harm anybody. But yes, as a restaurant tour, our costs for labor are going up, our costs for food are going up. So I guess the point I would make we we are we just are more adept at what’s going on as far as the costs and ways improvement. And this is where I have to compliment my daughter. When we took over Babalu, which we took over that restaurant chain out of who bought it out of bankruptcy, we bet against quite a few of the people. They were using a lot of services to save costs, hey, you know use us we can save you costs course we get a little bit of that cost savings. And so we looked at their pricing, and all the contracts they signed with the different places ours were lower. And that’s my daughter that was was doing some of the global buying that we’re doing. So we just have been lucky. We’re able to save costs here, we’re able to pay our employees well. And we try to create an environment where they like each other and hopefully like us. So it’s just a combination of things. But for example, I’m going to still try to stay on what your question was one of the things that we do because our restaurants in Florida shut down. Some of them two of them do in the in the winter, but it’s slow there. We always plan for our capital improvements right now and we try not to let the restaurant just stay the same. We’re always trying, for example to George’s in the summer in the heat. Everybody wants to be outside You don’t want to be outside without an umbrella. If it’s 85 degrees, it gets hot in the sun. So we have a pad, a outdoor eating here, it’s called the lily pad. And we went ahead and covered half of that. You’re still outside. But if it’s raining, I didn’t lose that spot when I first heard that restaurant had about 130 seats, and half of them were outdoor and half of them were indoor. So if it rained, and by the way, in Florida, it rains almost every afternoon, half of my restaurant disappeared. So I built the I my porch. I covered that after the first year and this year, I started covering my outdoor sideboard. So we still give people an outdoor environment, but we keep the sun off of I’m right now I have you know, we all use the propane heaters. You know, we have started going back in and, and doing the permanent heaters, because restaurant people are great at serving guests. But I guarantee you every year this time of year when it gets cold, none of the restaurant tours, none of my managers have ever convinced me that they’re going to have their heaters out in advance. No, they were and have propane. Now. Normally, it’s two weeks after it’s cold. And you know, I walk in and I see people sharing. So those are just small things that we do. It haven’t been around so many restaurants COVID has,
Chad Franzen 31:21
it’s affected all of us in some way. It’s affected a lot of industries, especially the restaurant industry, how did it affect you guys?
Rick Spell 31:29
So I was fortunate to have other great careers and and so we were able to do some savings out through that I was able to buy these restaurants. And so when I started hearing about the pandemic, I was like, you know, whatever, you know, you know, I’m fine. And I was talking to my bankers, she said, and she acted worried. I’m like, I don’t know what you’re worried about. And then it was the next day, my you know, we were starting to shut down. And my daughter gave me a cash flow statement. And we realized that after, when we were closing all the restaurants and after laying off all of the people that were on our butt keeping managers on salary, we were negative, over $2 million cash flow quarterly. That’s 8 million a year. So and I just was kind of flipping in not realizing because I you know, you just don’t look at a restaurant 20% down in business that can happen. You don’t think about restaurants going to zero, it is impossible to see there’s just no way around it. And here’s the other thing. The owners of the properties, the landlords, I own some of my properties. Most I don’t. They’re in the same spot. And so it was very, very scary. Yes, you stay up at night. Yes. You wonder about surviving. And, and the government came in with plans very quickly. And, and they saved us now. Recognize that we’re hearing about this pandemic. But none of us knew anything. Even the scientists, nobody knew anything. So we didn’t know if we were going to be shut down for nine months, two years. And so it was it was interesting those first few months, I had two or three people at every restaurant down in our areas doing to go a couple of my didn’t open they just a couple of the finer Donnie just you couldn’t do enough business. And by the way, when you’re nothing but to go at my restaurants. You lose money. I have a friend here in Memphis, very well tuned at that time cookies barbecue, and they can live on to go and meet people, they have a drive thru. And they can make it work ours, forget about it. You’re, you’re at a big loss. But we were able to keep some people on. And my wife and I would go up to different restaurants every night. And we were able to be in the restaurant. So I hope nobody arrested me for this. We were the only people serve and we’d sit there and talk to the people and you know, commiserate and talk about what we’re going through and, and it was just a kind of a very family environment there for a while. And then fortunately, when you were able to reopen a lot of people were scared. We fortunately had tried to have outdoor dining at all of our restaurants. And so there are a lot of people to this day that still only would eat outside. So, but a lot of people rushed to Florida, and we got really lucky there. So if there’s any restaurant tours, listening, I’m certainly not trying to be cocky and that’s why I told you how negative cash flow was. It was a matter of survival. But being in Florida, people wanted to be outside and they could go to the beach and be you know, six feet apartment people So we were just we got really lucky on where we owned our restaurant, you’re in New York City, if you’re in Los Angeles, you know, I know there’s some places that have really, really struggled, but our weather allowed us to survive better than most. In Memphis, right now, we are still under a mass requirement, you enter a restaurant with a mass, you can take it off, when you sit down, Florida, I have my I’m just weak taking my employees out of masks. And everybody else is out of mass Previous to this, but when the Delta virus hit Florida before us, we could see how bad it was, it was much worse than the first one. So I don’t know, I know, I’m rambling. But it’s been traumatic. We survived. The government performed a function. And I know there’s a lot of people don’t like government, but it performed a function. And so you know, look, there’s a there’s a lot of political involved in COVID. I don’t, I don’t care about any of that. When somebody wants to talk Lucullus COVID. All I say is, I just want this behind this. Because let me tell you, it in fun. When you know that you have to lay people off. And when when the environment hit. I went to every all the employees knew they were getting laid off because we were closing. And I had my people at Brookhaven. And there you go back to the first one. And I sat down with them. And I’m about to announce what we’re going to do and, and then and I couldn’t talk I was in tears. Because I’m about I looked around this room of people with smiles on their face. They were great people. And I control their jobs, and I was about to not be able to pay it. Well, that was tough. And you know what their answer was? This was 10 o’clock meeting. They said, Rick, since you can’t pay us, do you mind if we drink for the next hour. And that hour became about five or six hours. And I finally had to stop it. But you know, there’s just a lot of great people, and a lot of them are in the restaurant business that will make something great out of something bad. And I I don’t I just can’t tell you how many employees we’ve had that have said, Hey, thanks for helping us through this when I’m still guilty about not being able to help people through as well as I’d like.
Chad Franzen 37:23
So we have a couple final questions for you. We’re big fans of publicly acknowledging people who have been influential for you. Has there been anybody or a few people within the restaurant industry that you you know, especially since you were coming into it kind of cold? In terms of your restaurant tour experience? Are there anybody? Is there anybody in the industry that you’ve really kind of leaned on and look to for advice?
Rick Spell 37:44
You know, I’d have to say no, because I’m so nonrestaurant, like that, I just had to learn by the seat of our pants. And you actually have done a good job chatter of maybe highlighting Brookhaven, which I learned from Oh, four, and then bought the other restaurants in 2015. And then just started buying them. By the way, I’m trying to buy more. So anybody in my areas or other areas that they want to sell a restaurant call me, I’m happy to talk to you. My wife’s not happy for me to talk to you, but I’m happy to talk to you. We did we I just have to say that, that I am blessed with the greatest staff of managers and chefs. And, and and I’ve learned from them now they’re learning from me because my strength is finance. And you know what, my daughter are pretty good at what we do. But we’re not good at serving guests at, you know, at cooking, we’re not good. And so I go into my restaurants and watch the rhythm of people in a restaurant. And by the way, a lot of customers do too, because they talk to me about and so I was I didn’t I guess I’m unfortunate that I didn’t have someone in the restaurant business that could guide me. But I’ll tell you what, I start naming people like Patrick Miller and Chris Joiner and Jimmy Berry and Andrew Kraebel. And, uh, you know, Camille, I’ve just got so many people that that I’ve worked with, that we all learn together and we all you know, we live or die together. And so my real heroes, the people that that I’m fortunate to work with,
Chad Franzen 39:25
how often did you say you check in on each place?
Rick Spell 39:28
Well, I live in Memphis, Tennessee, and I eat it one of my I generally try to eat it. One of it two restaurants a day. So I last night was my 90 to another restaurant and then Ali lunch and dinner at my restaurant. When I’m in Florida. I have five restaurants in that area. And and I eat it one or two a day. I virtually 90% of the time at my restaurant. And a lot of it is because I like the food, but it’s also because I can sit there in Watch how they’re treating guests. And I see them screw up sometimes. And I’m seeing being great. So anytime I’m in my restaurant, I’m, I’m looking, and I’m watching, and I’m seeing how clean the rest of the restroom is, and, and anything else and so and so I have one restaurant, Jackson, Mississippi, and that’s the one I don’t make it down enough to and I’m only there maybe once every two or three months.
Chad Franzen 40:23
Where can people find out more about your group of restaurants?
Rick Spell 40:27
So you’ll go there. The website spellrestaurantgroup.com spelled just like you’re trying to spell my name spell restaurant group.com. You can look on there. And you’ll see we have four restaurants in Rosemary beach and Alice Beach, one restaurant in Panama City Beach. Those are all within 15 miles, but four of them are within, you know, a quarter of a mile. And then we have three here in Memphis two Babalus and one Brookhaven in new Babalu.
Chad Franzen 40:57
Hey, Rick, I can’t thank you enough for your time. I really appreciate you joining me today. It was great talking to you,
Rick Spell 41:01
Chad, it was my pleasure. Thanks for putting this on. Call me if you’re selling.
Chad Franzen 41:06
Alright, thank you and So long, everybody.
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