Fred Langley is the owner and CEO of Restaurant Systems Pro, a complete operating system for restaurants including organization, hands-on training, apps and software, and more. Fred has been in the service industry since he was 12 years old and opened his first restaurant at age 27. Fred holds an associates degree in Business Administration from Santa Rosa Junior College.
Here’s a Glimpse of What You’ll Hear:
- Fred Langley’s rise from bussing tables to restaurant systems
- What is Restaurant Systems Pro?
- Fred talks about how operating systems improve bottom-line profits
- How Restaurant Systems Pro reinvented itself during the height of the pandemic
- Fred shares his most important lessons as a restaurateur and OS mentor
In this episode…
In this episode of the SpotOn Series, Chad Franzen speaks with Restaurant Systems Pro Owner and CEO Fred Langley about how complete operating systems can help restaurants improve profits. Fred started as a client with Restaurant Systems Pro and moved up the ranks to where he is now. He uses his decades of experience as a chef and restaurateur to help build sustainable systems for operating profitable restaurants.
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Welcome to The Top Business Leaders Show. Powered by Rise25 Media, we featured top founders, executives and business leaders from all over the world
Chad Franzen 0:20
Chad Franzen here co-host for this show where we feature top restaurateurs, 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 brought to you 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 great relationships with clients, referral partners and thought leaders in your space, there’s no better way to do it than through punch than through podcasts and content marketing. To learn more, go to Rise25Media.com or email us at email@example.com Fred Langley is Chief Executive Officer at Restaurant Systems Pro and all in one solution for the restaurant operator, Restaurant Systems Pro offers checklists, training systems, operations, manuals, budgeting manager, logs, smartphone apps, and much much more. Fred, thanks so much for joining me today. How are you?
Fred Langley 1:25
Thanks for Thanks for having me on Chad. Good to be here.
Chad Franzen 1:29
Yeah, thank you. Hey, so can you tell me what your history is with Restaurant Systems Pro, I know you’ve been the CEO for well over a decade.
Fred Langley 1:37
Yes. So I actually left, less than a decade. So in 2004, our company was founded. And that time was a restaurateur in Northern California. And, you know, Chef, owner of a restaurant operating my sales were good, I wanted them to be a little bit better. I was doing over over a couple million a year in my, you know, like a 3000 square foot restaurant. So pretty good sales. For there, I wanted my bottom line to get better. And of course, as sort of a egotistical chef, I don’t know if you’ve ever heard of a chef with an ego, but they go hand in hand. So my I’m like, Oh, I’m operating just fine. Only thing I need to do to increase my bottom line is to increase sales. And in the restaurant business. There’s so many opportunities in our operations to increase our bottom line. And sometimes restaurateurs do what I did. And they think, hey, the only way I’m going to grow, my bottom line is they increase sales, when actually if you really dig into operations, sometimes you can lose money faster. But if you’re not operating there correctly, the correct way, by increasing sales, we really caution against, you know, getting certain things in order in a certain direction. So I signed, I went to this marketing seminar, to grow my sales, because that’s what I thought the solution that I was needed, and I got to the marketing seminar. And there was like, Hey, there’s this email program. And if you buy the email program, I’ll tell you what it is. And the here’s a PR program. And if you buy it, I’ll tell you what it is. And I already paid to be there. So I was like, what is happening here, this is not cool. And but it was just a sales pitch after sales pitch on these different programs. Well, on the last day in the last hour, the not fun person went on stage. And that’s my ex partner, David Scott Peters. He goes on stage, and he’s talking and he’s the founder of our company. Starts talking, budgeting, inventory, recipe costing cards, not the sexy butts and seats stuff. But you know, the hard work that goes into running a restaurant, and I really connected with him, he actually delivered something that I could take home and make a difference. I signed up immediately. And within a month of me signing up, he called me up, he’s like, Hey, man, you’re really you’re really taken, you know, kicking butt on this stuff. And in that time, we’re just a coaching a coaching program, no software, nothing. And so he said, You are doing well plus, you know, I’m from the chain world, you are a chef actually operating restaurants in the independent restaurant world. I really think that, that our skill set could could come together nicely. And especially kitchen questions, you can answer those and take care, take care of that. So so he I just I traded my membership at that point to take a few calls. And then I’m taking calls like crazy. And I helping a lot of people and doing coaching over the phone using GoToMeeting and stuff back and back. And at that time, and just phone calls with coaching restaurants, I really honed my skills because I really realized that if I was going to coach restaurants, I could not be a hypocrite. And I had to be doing every single thing that I asked somebody to do. And so there are certain systems that I felt I didn’t need that when they implemented I was like, Man, I didn’t need those two just because the your own ego gets in the way. Sometimes and so you know, where are you thinking I need help. I found that I did. And it kept me kept me on track.
Chad Franzen 4:57
So you mentioned that you were a chef owner of a restaurant before this. Can you tell me a little bit about kind of your evolution within the restaurant industry up to that point?
Fred Langley 5:06
Yeah. So 12 years old, I started as a dishwasher. I worked in a restaurant that my, my mom was she was serving tables Friday and Saturday nights. And she managed to lodges catch the restaurant out in the Sonoma County, Northern California, Sonoma County coastline. And I was a six foot tall, 12 year old so I was able to get in there and my mom was working there. So they let me go into work. And it just went from there. I just just fell in love with it. I found out that if I wasn’t bussing tables for the girls that tipped me out that if I was doing better on Prep, I could have less time in the dish pit. And so you know, I got my knife skills up and really worked hard to learn. And I had fun. You know, when I was when I was 14 and 15, I had a job doing doing construction during the day and would go to the restaurant. In the construction, I would look at my my watch after an hour and a half of the day thinking six hours have gone by, you know, and then I’d go in the restaurant and the shift would just go like that. And it’s just a blast. And I just was in love with it. When I was 15, a classically trained European chef came to work there and he just took me under his wing and started teaching me techniques, cleaning fish, making stocks, knife skills, you know, cooking online, you know, a flavor combinations. He just really became an apprenticeship for me. By the time I was 18, I went worked at one of the top restaurants in Sonoma County, John Ashton Company and just worked my way up a chef I did things like I’d go and work with the farmers where tomatoes came from, I go and work with the Goat farmer and see how the cheese was made and, and then go and work at the bakery and learn my pastry skills. And I worked in the docks in San Francisco with our fishmongers. So I was always taking my education to my own hands. And growing through all of this in my career. By the time I was 27, I’ve worked worked my way up and I was wondering, Hey, which way am I going and I decided that I wanted to be my own boss and open my first restaurant at 27 in 2003.
Chad Franzen 7:03
So what kind of a restaurant was that?
Fred Langley 7:05
Firm the table fine dining, you know, chef driven restaurant and you know all the microclimates, which makes it good for growing grapes in Sonoma County is also great for agriculture. And so it’s just really a, a great place to be a chef, some of the best restaurants in the world are in Napa Sonoma. And so you know, we were I was just really just a good playground as a chef to come up. Through 2008, I actually threw all this in open multiple restaurants, more casual pizzeria and became a multi unit operator. And as I’m going through that, so that’s kind of how I got into a really quick how I got into becoming a chef and working my way through that working for different places, taking my education to my own hand I, in 2005, our clients that were learning from us and our coaching partner were like, Hey, we need to do this stuff faster. And so I started hitting a plane almost every week, visiting restaurants and consulting and putting in physically putting in place it in the systems in other restaurants across the country. So I had to really practice what I preach, because I’m leaving my restaurants to get on a plane to go and coach others. And with that, our software journey started in 2007, we launched a budgeting software for restaurants, and we launched them onto the desktop. Remember desktop, put your disk in the computer, and you download software. And there you go. So then we did a menu engineering software, the plot of the graphs and helped with recipes, costing and profit margin, you know, how do we design them and all that stuff. And then we did a breakeven point calculator, which today is integrated all into our software, we started, we started our software journey online for online browser based software, we started programming in 2009, threw it all out in 2010, started over and launched in 2011.
Chad Franzen 8:55
What kinds of if you could think of maybe like a story, or what kinds of lessons did you learn as a, as a chef owner? That kind of have helped you in this endeavor?
Fred Langley 9:06
Yeah, so one of the biggest things as a chef owner, that I had to learn, especially as I was growing, I’m going to consult in other restaurants and help other restaurants I had to, you know, practicing what I preach meant letting go, right. And so as a driven chef, I was very controlling and very like, hey, I need to do this and I need to do it. I need to know, in fact, we got away from doing you know, basics like inventory because I became too busy to do them and it wasn’t delegating properly. And everybody needed me for an answer and how do I operate and as good as I am and as good as I was you can never truly do everything and you have to be able to train people and need to have systems for them to follow. You have to have training that is not just showing them how to do it but follow up and checking for understanding and, you know, practice repetition and accountability to all those things. And so, I kind of got you know, as I was consulting, I had to really force myself into that. And we and as soon as I let go, our numbers got better and better and profitability went up as I was able to as a young chef thinking that I can control everything to realize that I gained control by giving up control. And that’s one of the one of the biggest lessons in my career that I’ve taken.
Chad Franzen 10:18
Yeah, can you give me kind of like a broad view of restaurant systems Pro, I know, when I, when I mentioned all the things you guys do in your introduction, but maybe, you know, like, like, for somebody who’s just new, or just finding out about it might be interested, can you give me kind of a broad view.
Fred Langley 10:33
So the chains, a lot of big chains will have an operating system that they use, right, a system that has everything in its place, that has, that has their their, you know, place to do inventory place for recipe cost cards and places that they have, and, and the chain through this, because if you have 5000, restaurants, if you’re to develop a $3 million software, where you take $3 million, and you divide it by 5000 5000, restaurants, and it doesn’t cost that much to put out and get done. But if I’m, if I’m an independent restaurant, and I have, you know, one to 20, restaurants, I can’t possibly do that. And so we became that resource, and we provide all the systems and processes to change us to be extremely profitable, and to scale. And we bring them to a lot of independence, we have a lot of small chains that are using us potential franchisees that are using us, we’re an all in one system for that. And we help you identify the systems, give you the training and give you everything that you need to be successful. And it’s kind of like, you know, it could be you could also look at it as a tool, or a plan for weight loss or getting in shape. That all those plans are really good. But if you don’t use them, you know, you’re not going to really achieve the results. So we’re a tool for you to achieve, we don’t replace what you do. A lot of times people think what we do, because they can’t conceive, you know, lowering their costs or whether or not because they’re working, you know, restaurant people are the hardest working people around. But they’re also really stubborn and changing their ways. So sometimes they can’t conceive, and they think what we do is help them buy cheaper products, or change our pricing or can do all those things. And it’s so far from what we do. We have we help you increase quality, increase hospitality, while driving down costs. And we do that through more control. Like, for example, people think like, oh, checklists and systems and processes I don’t want to go corporate with is having lemons ready for service. So if somebody orders iced tea, and I go back, and there’s no lemons ready, and I’m running around trying to cut lemons on the fly, and they’re sitting there waiting, is that making me less of who I want to be or more of who I want to be to the guests, right? And so organization and all that and employees are happier, and they stay longer. When they have organization systems process the following it ranges from a manager log to inventory and all the way up to your accounting and budgeting systems.
Chad Franzen 12:48
Yeah, you guys, you also you talked about helping control food costs in that way? What about costs associated with paying staff?
Fred Langley 12:55
Yeah, so we have labor control, so the full prime cost. So in the restaurant business, we track prime costs, which is your total cost of goods sold total labor, we at rest, most restaurants are operating in the 75 range, which is where you end up with that either breakeven or you know that three to 5% profit, right, if they’re in the 65 to 70, they’re getting three to 5% profit, which is what the average restaurant profit is, we get restaurants to 55 Prime costs, by controlling labor, we not only control labor, but we also offer the scheduling systems where an app for your employees where they can swap schedules and manage it all in one one place as well. So not only do we have the financial controls and budgeting, but you know, we offer the the systems for the employees to request time and swap shifts and put in their their their availability and all that stuff to our labor schedules. A lot of times, you know, how we end up taking systems and you use systems, we have a big we start with a big picture, right? We have these big picture financial goals for a restaurant. But then we have to take these big picture financial goals and delegate them down to people’s level of responsibility. So you may see a lot of times a new manager, the first thing they do is they’ll write media whose schedule right there’s not a whole lot of employees, lot less moving parts, and it’s a great, you know, Spot the start. So instead of going, Hey, we need to hit a 1% You know, host budget, the personnel are like, Well, how do I know one person is what am I gonna do in sales? You know, how do I even hit 1%? How do I know the schedule I read? Well, we just we take it we say oh, hey, success for you is scheduling 85 hours total hours, go write a schedule and stay within that system tells you if you’re over under and you’re able to you know, make these hard things a little bit easier, which makes them easier to delegate and to to pass on. And that’s how we save restaurateurs time and money at the same time.
Chad Franzen 14:46
You also helped with training.
Fred Langley 14:48
Yeah, so we have full training systems. So we have a learning management system within our software, where you have quizzes and you know check for understanding you can insert videos, you can attach QR codes, your recipes showed exactly a here’s a video on how exactly how we want to do it. You can, you know, sometimes you can, if you want to, you can put them on your Google Drive, but they load slower but so if you hide them on YouTube, YouTube will optimize and make those videos play faster. And so we’ll take you to a hidden YouTube video. But you know, right away, that’s how to make our special recipe, exactly how you want it as the owner delegate that authority. What kind of influence or advice do you guys give on menus. So we don’t do menu design, but we actually lay out all the suggestions. We have eye movement studies that we use, we know where the most profitable parts are, have a three panel menu to panel menu, one panel menu, and we’ll lay it out, you know, I see so many times people make a mistake, they don’t know how I move it works and where it is. And they’ll put their dollar 50 sides in the most profitable point on their menu, right. And so with recipe costing cards, and all that information, or menu engineering software helps us quickly identify our most profitable profit profitable items and place them in the most profitable areas and depending on concept will suggest pictures or boxing or however the concept is.
Chad Franzen 16:07
I never even thought about that is the first time I’ve ever talked to anybody about that. How much of a financial difference could something like that make?
Fred Langley 16:16
Oh, it’s massive. In fact, we can save people up to five points immediately without even raising prices. Just by directing the customers to it. There’s that, you know, if you look, is this thing to go out as a video evidence? Okay. It is yes. It is going to be as a video. Yeah. So you have four quadrants, right? We help you identify, right? So you have four quadrants here. And we have we have this access here. Right? This is this is this is quantity sold or velocity, right. And then this is profit. Right? So if we plot we have a star up here, which means a lot sold, and a lot of profit. Right? Right down here we have a dog, which is not profitable, and we don’t sell many, then we have these things called a, this is a plowhorse. We call it right, I sell I sell a lot of them, I guess love them. But they’re not as profitable. Maybe it’s a side salad. Everybody orders a side salad with it. So it will live here. That’s okay. But then we have a puzzle over here, where the puzzle is these high profit items that aren’t selling as much. And if we could just take these these items that are puzzles, and move them up the chart to a star, meaning we’re selling more of a more profitable items, that is magical. And menu design can help help do that.
Chad Franzen 17:35
Okay, well that’s, that’s very interesting and good to know, you guys also help with ordering systems.
Fred Langley 17:40
How boring systems where we connect, you know, you can place an order in our system, it’ll automatically notify your salesman, it’ll, it’ll track it, we know the up to date pricing as the invoices come in to update your pricing, it’s connected to your recipe costing cards, in a in a database. So your inventory is always up to date, your recipe costing cards are always up to date. So you know your ideal and theoretical food costs, which is we have budget, but then we have Hey, what’s potentially possible and where are the leaks in the in the dollars. And then you also can track it by item meaning, hey, I know I bought 40 pounds of chicken breasts this week, right and use 40 pounds because of inventory. And I compare that to my POS system, which a lot of we connect with a lot of POS systems. So let’s say hey, ideally, you shouldn’t have used 30 pounds of chicken breasts. But now I know I actually use 40 pounds. And so I can identify and go concentrate at work that other 10 pounds of chicken go to be over portioning to get wasted and get not counted inventory. And you start solving all these problems in your in your numbers by no by knowing anything measured improves for sure.
Chad Franzen 18:44
How has COVID affected or changed anything the restaurant systems proved?
Fred Langley 18:49
Massively massively, it majorly impacted our company, a large portion of our revenue was was consulting, right? So going out getting on a plane for consultants to go out help restaurants. Well guess what happened immediately, right? We lose all of that we can’t possibly be charging. We didn’t have we did not, you know charge even though we had, we don’t put we don’t put contracts in place, right. And so meaning that happens, we’re not going to charge you. When we do consulting, we don’t make you sign a contract. Because we’re so good at what we do. We don’t need a contract to make you pay us. You’re going to be so happy to write that check to us. That’s our that’s our plan. And that’s how we do it. Same thing with our software, we’d actually don’t require a contract with my software consultant tells me you’re dumb for not doing that. Hey, restaurant tours are not very trusting people. And if you’d say hey, you have to work with me. You have to pay me for a year before you can get out no we have to deliver it’s our job to make sure that we’re making a difference for you. So we don’t require this thing. So So with all this, you know without those contracts in place, you know, that’s where it hit us, but that’s where we also got to put our money where our mouth is on. Hey, what kind of integrity do we have in so we set out to help people we we worked with Restaurants as far as even from that just the software user to the consulting client, what do we have to do to make sure you survive this and so I was not sleeping, reading the laws that were coming out. And we were helping people with their PPP loans, we were creating graphic design and QR codes for people and not charging them for it. Because they needed they needed that they needed to be able to have, you know, all the all that stuff. We, we were, we had people that will we did it first for our clients, we we don’t do online ordering here, but we were setting it up for clients. Because all of a sudden, you can’t have people in India have online ordering. And so even as we got through our clients, we went out and people that were not our clients, we were setting up online ordering for them, you know, just imagine you have this this person not really technology, technologically savvy, they don’t have online ordering. And now it’s the only way that they can do business. And so we’re going and helping people set that stuff up for free and really just serving the industry. Well, we were being educated on what the employee retention tax credit was when the PPP was, we actually do their employee retention tax credit for restaurants today, we’ve gotten over $11 million back for restaurants, we don’t charge we do charge, but we’re charging 5% When with a max of 5k when most CPAs just hurt 20% flat, there’s one client I got I got $200,000 for a CPA would have charged them 40 grand, and I charged them $5,000 Because they know they need that money for their business. Right. And so we’ve just helped so many people with that alone. And guess what, you don’t have to pay me that $5,000 until you get your $200,000 Check. Awesome, right? So it’s just our job to serve the community when the when the law was updated last December, that’s when we knew we could start going out and getting the employee retention tax credit for restaurants as well.
Chad Franzen 21:41
Yeah, you mentioned the fact that you only charged that customer $5,000 When you could have charged a much more your core values are listed pretty prominently on your website, educate empathy, integrity, fun and lead. Certainly that was a sign of empathy. Why are those core values important? And why did you want to share them
Fred Langley 22:02
So those are important towards they’re actually on our wall, I can see them right over there for my whole my whole company to see. But one day, we actually I came out and we were just kind of talking. In fact, if we look at it, I took a marker. I took my marker, and I wrote our wall over the top. And I didn’t cancel those out because they’re all what’s what we stand, but I went and I wrote over the top of them, SERVE… THEM… WELL, in a big black bar, right. And then is the restaurant community. And it’s just our job, we put that. Because we know that we put that principle in front of everything else that we’re going to make right decisions. So even if my employees make a terrible decision about something, as long as their heart was to serve them, well, we’re going to deal with it is it’s absolutely fine. So it’s the directive for everybody. It’s what we think about in every interaction is what can we do to sacrifice for the restaurant for restaurants, and serve them and put them first and we know if we do that, then everything else will take care of itself?
Chad Franzen 23:13
I have one last question for you. But first, how can people find out more about Restaurant Systems Pro?
Fred Langley 23:17
Yeah, Restaurant Systems Pro on Facebook, we have a YouTube channel that has a ton of following on it. Just search Restaurant Systems Pro on YouTube, you’ll find us there. There’s lots of lessons and tips and tricks. Our website is restaurantsystemspro.net. You can schedule demos and, you know, connect with our sales team to see how we can serve you better.
Chad Franzen 23:43
Last question for you in your career, you know, you have literally done and seen it all when it comes to the restaurant industry. How has it how has it changed and what it takes to succeed in it? How has all those things changed over your over the course of your career?
Fred Langley 24:00
Right. So you in fact, we used to have a standard for 65 Prime costs when we started. And what happened was is just because we started to see results and do 55 Prime costs with a lot of our clients. It’s it’s there. I think where where the big change needs to happen is really kind of getting rid of those limiting beliefs about what’s possible. You know, when you’re when your head down working so hard, and you don’t feel like you can work any harder. You don’t really want to look into a system that you have to put more work into, right. But we don’t want to stay where we’re at forever. We want to move beyond where we’re at. And if you look around, there’s lots of successful restaurant tours that are operating 2,5, 10, 20, 200, 1,000 restaurants. Now when he get higher like Applebee’s, you know not to insult Applebee’s, but people go to Applebee’s because they suck the same way every single time. Right so I know I’m insulting Applebee’s, but they have their own software. Because of what we’re doing, we want to be great. We want to help them be great. And when you can open up and you can not be that that person that thinks that they all have, have it all figured out. I don’t have I don’t know, at all, like you said, I have a lot of perspective, I’ve seen a lot. And guess what I’m still learning. You know, we just one of our members just was really successful in hiring people have a line of people out the door ready to hire. And I’m like, teach me so that I can teach others right. And because, you know, I’m able, I’m able to be in a position to do that. So we put out a training on how to have a line of employees out just because even though that’s not like what we do, we know restaurants need that and we go and find the need and fill the need. And when I don’t know the answer, we’re going to be honest, and we’re going to find it too. So just be open minded to learning always. I don’t care what you’re doing. You always have something to learn.
Chad Franzen 25:56
Okay. Hey, that’s, that’s great insight. And I really appreciate your time today. Fred, it’s been great talking to you. I can tell you’re very passionate about what you’re doing, and the industry and I really appreciate it.
Fred Langley 26:06
Thank you for having me on. It’s been an honor.
Chad Franzen 26:08
So long, everybody.
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