Mark Haney: Super excited about today's show.
Mark Haney: One reason is because we're gonna talk
Mark Haney: about something that might be considered by
Mark Haney: some people as a little bit controversial.
Mark Haney: I don't think it's all that controversial,
Mark Haney: but I think it might be to some.
Mark Haney: Today I have Eric Freeman in the house.
Mark Haney: He is the CEO of Jim Boy's North America.
Mark Haney: Welcome to the show.
Erik Freeman: Hey Mark, how you doing.
Mark Haney: Glad you are here Now, Jim Boy's North
Mark Haney: America.
Mark Haney: I mean, how big are you guys now?
Mark Haney: Hey guys, you're still a taco stand.
Erik Freeman: That's where my grandfather started.
Erik Freeman: I love it it was at a 1954, just one
Erik Freeman: trailer.
Erik Freeman: We have 40 locations now, mostly in the
Erik Freeman: Sacramento Northern California area, but we
Erik Freeman: also have some in Nevada and Texas.
Mark Haney: Well you guys, I'm gonna go out on a limb
Mark Haney: and say you guys do have the best tacos in
Mark Haney: North America.
Mark Haney: I was gonna say the secret sauce, but
Mark Haney: there's like little cheese or something
Mark Haney: that you put on the tacos.
Mark Haney: It makes it taste just a little bit of a
Mark Haney: bite to it Tastes good.
Erik Freeman: We like to say that we're the original
Erik Freeman: American taco and it's Parmesan cheese.
Erik Freeman: That's on the outside.
Mark Haney: That's, I think, with whatever buddy craves.
Mark Haney: And if you are a new listener, so this show
Mark Haney: is all about winning and you know Eric and
Mark Haney: his family have built a winning business, a
Mark Haney: highly successful I'll call it a fast food
Mark Haney: business, but it's really a great
Mark Haney: restaurant and it's started right here in
Mark Haney: the Sacramento area.
Mark Haney: But again, this show is about winning and
Mark Haney: we are building the backyard advantage the
Mark Haney: most connected community in the world for
Mark Haney: local entrepreneurs and it's centered
Mark Haney: around this culture of love, helping one
Mark Haney: another.
Mark Haney: So if that is something that you want to be
Mark Haney: a part of, for sure, come, get involved,
Mark Haney: feel free to subscribe, to share, to
Mark Haney: comment, but really, if you're one of these
Mark Haney: people that gets it, you understand the
Mark Haney: power of entrepreneurship.
Mark Haney: Come start to chime in and be a part of
Mark Haney: this.
Mark Haney: And, as I mentioned today, I mean winning
Mark Haney: is not really controversial, I think, but
Mark Haney: sometimes the handcuffs that the government
Mark Haney: applies to us and the regulations they can
Mark Haney: be a little bit controversial because
Mark Haney: obviously some people think that we should
Mark Haney: be regulated and I think many of us get on
Mark Haney: certain regulations we want to push back a
Mark Haney: little bit.
Mark Haney: Today we're going to be talking about
Mark Haney: minimum wage, where you know there's a
Mark Haney: there's a new wage increase that is being
Mark Haney: mandated, called AB 1228.
Mark Haney: Is that something that's affecting you?
Erik Freeman: It's honestly, Mark, it's going to affect
Erik Freeman: everybody and every industry.
Erik Freeman: So if there was a time to come and come
Erik Freeman: together as restaurant owners, as
Erik Freeman: entrepreneurs, it would be now.
Mark Haney: Okay, so tell us about this AB 1228.
Mark Haney: It's a minimum wage increase.
Mark Haney: Maybe just give us a little bit of the
Mark Haney: backdrop of what it is and why some people
Mark Haney: want it and then why it really is not good
Mark Haney: for their.
Mark Haney: You know, it's not really not good for
Mark Haney: America, Really not good for America.
Erik Freeman: Sure.
Erik Freeman: So for the last several years California
Erik Freeman: has been working on increasing minimum
Erik Freeman: wages.
Erik Freeman: We've had to do pretty significant
Erik Freeman: increases.
Erik Freeman: They've had a staggered approach this was
Erik Freeman: about three or four years ago to get to $15
Erik Freeman: minimum wage.
Mark Haney: What is it now?
Mark Haney: $15.
Erik Freeman: It's $1550 now.
Erik Freeman: Now the staggered approach was that they
Erik Freeman: were accelerating the wage increases every
Erik Freeman: year for larger employers in the restaurant
Erik Freeman: segment versus smaller employers, in order
Erik Freeman: to get everybody up to that level where
Erik Freeman: everybody's at $1550 now and actually just
Erik Freeman: coming up in January it's going to be $16
Erik Freeman: an hour.
Erik Freeman: The struggle has been that every, first of
Erik Freeman: all, restaurant owners don't like to
Erik Freeman: increase prices.
Erik Freeman: It's always something that gives them a lot
Erik Freeman: of heartburn.
Erik Freeman: They care about their customers.
Erik Freeman: They don't like losing customers.
Erik Freeman: I can say for gym boys you know, when we
Erik Freeman: look at the data, every time we do a price
Erik Freeman: increase, you know and over the last
Erik Freeman: several years we've had to do pretty
Erik Freeman: significant increases three, four, 5%, and
Erik Freeman: sometimes some restaurants have had to do
Erik Freeman: it twice a year you lose customers.
Erik Freeman: We've lost about three to four percent.
Erik Freeman: You know.
Erik Freeman: Every year that we do an increase, we lose
Erik Freeman: about three to four percent of customers.
Erik Freeman: So it's a legitimate worry.
Erik Freeman: It's a legitimate concern that restaurant
Erik Freeman: owners have Coming up.
Erik Freeman: This bill that we're talking about is a
Erik Freeman: minimum wage increase to $20 an hour.
Mark Haney: Jump from $1550 to $20?.
Erik Freeman: Well, starting January 1st of 2024, is
Erik Freeman: going to be $16 an hour, and then three
Erik Freeman: months later, in April, or four months
Erik Freeman: later in April, it's going to be $20 an
Erik Freeman: hour.
Erik Freeman: Now, this is for locations, this is for
Erik Freeman: brands that have stores nationwide of over
Erik Freeman: 60 locations, and it's focused on limited
Erik Freeman: service.
Erik Freeman: With that being said, though, don't think
Erik Freeman: that it won't affect you, you know, or
Erik Freeman: anyone, and every industry is going to be
Erik Freeman: touched by this.
Mark Haney: So is this geared toward restaurants or is
Mark Haney: it geared toward all retail with locations
Mark Haney: over 60?
Erik Freeman: So it's limited service, so it's really
Erik Freeman: geared towards fast food.
Erik Freeman: We actually don't have more than 60
Erik Freeman: locations, so we don't fall into that.
Erik Freeman: So, starting in April, just a little bit
Erik Freeman: more background on the detail here.
Erik Freeman: Starting April, it's going to increase to
Erik Freeman: $20 an hour.
Erik Freeman: It also comes with a like a council that's
Erik Freeman: been formed, and so there's going to be two
Erik Freeman: representatives who are worker.
Erik Freeman: They're they're restaurant workers.
Erik Freeman: They represent the restaurant workers.
Erik Freeman: There will be two people who are restaurant
Erik Freeman: owners.
Erik Freeman: There's going to be two people who
Erik Freeman: represent the the industry in general.
Erik Freeman: There's going to be two people who are
Erik Freeman: restaurant worker advocates, and then
Erik Freeman: there's going to be one person that is
Erik Freeman: unaffiliated with the industry at all.
Erik Freeman: The idea is for this council to come
Erik Freeman: together to discuss next steps.
Erik Freeman: They will, as of January 1st of 2025,
Erik Freeman: they'll have the authority and the ability
Erik Freeman: to unilaterally raise minimum wages after
Erik Freeman: that.
Mark Haney: So these seven people we're talking about
Mark Haney: seven people, is that what it is?
Mark Haney: And and they will control minimum wage for
Mark Haney: the fast food industry.
Erik Freeman: For California.
Erik Freeman: Yes, this is just a California rule.
Erik Freeman: This is just specific to California.
Mark Haney: But seven people get to run the show, and
Mark Haney: well, I mean, that's odd.
Erik Freeman: It's.
Erik Freeman: It has been and now this has been in the
Erik Freeman: works for a while.
Erik Freeman: It got slammed down about a year ago, but
Erik Freeman: it's really just been a push and pull
Erik Freeman: method for a tug of war really for about a
Erik Freeman: year.
Erik Freeman: This one came through and I think a lot of
Erik Freeman: restaurant owners were caught off guard
Erik Freeman: didn't necessarily, and you know it's been,
Erik Freeman: it's been busy, so not everybody were able
Erik Freeman: to get on board and speak their mind and be
Erik Freeman: able to stop this.
Erik Freeman: So it's in play now.
Mark Haney: Okay.
Mark Haney: So what's happening?
Mark Haney: There's no changing it.
Mark Haney: There's not really a.
Mark Haney: It's not in the process of being reversed,
Mark Haney: it's it's here Now, what are we going to do
Mark Haney: about it?
Erik Freeman: Correct, that's really what the
Erik Freeman: conversation is now.
Erik Freeman: Could people get together?
Erik Freeman: Sure, at this point, I think it's going to
Erik Freeman: be more productive to talk about how do you
Erik Freeman: address this, how do you get past this, how
Erik Freeman: do we come together and and and come up
Erik Freeman: with ways to to tackle this In January 2025,
Erik Freeman: from that point forward, the count, the
Erik Freeman: council, has the ability to raise prices
Erik Freeman: unilaterally.
Erik Freeman: They can pick which counties they'd like to
Erik Freeman: raise the minimum wage.
Erik Freeman: They cannot exceed 3.5%, so there is some
Erik Freeman: what of a ceiling there.
Erik Freeman: But I want to make sure that this is clear
Erik Freeman: A $20 minimum wage from where we are right
Erik Freeman: now is a 25% increase to labor costs, and
Erik Freeman: that's minimum.
Erik Freeman: So, even though they're going to limit this,
Erik Freeman: you know, in 2025, it doesn't really matter
Erik Freeman: that much because it's already gone up 25%.
Mark Haney: Right, you're talking about, yeah, 3%, 3.5%
Mark Haney: per year on the $20 an hour.
Mark Haney: Yeah, okay, so this is interesting.
Mark Haney: So I think my audience knows is we?
Mark Haney: We don't really do a political show here
Mark Haney: and I don't sit here and get on one side of
Mark Haney: regulation or the other, because a lot of
Mark Haney: different viewpoints and it's a lot easier
Mark Haney: to kind of answer the question what are you
Mark Haney: going to do about it?
Mark Haney: Right, what are you going to do with what
Mark Haney: you got?
Mark Haney: Now the government put it's another
Mark Haney: restriction on us or a regulation on us.
Mark Haney: It's already a lot of regulation we all
Mark Haney: have to, you know, work to our advantage or
Mark Haney: keep it from hurting us or whatever.
Mark Haney: But maybe we'll talk about the other side
Mark Haney: for a second before we talk about, like,
Mark Haney: how are we supposed to deal with it?
Mark Haney: Why would a lot of people think it's a good
Mark Haney: idea to raise let's put our hat on of the
Mark Haney: of the people that are advocates, have been
Mark Haney: advocates for this, because obviously
Mark Haney: they've had enough persuasion or persuasive
Mark Haney: powers to to get this across the finish
Mark Haney: line and make it and put it into law.
Mark Haney: Why, what's their argument that got us to
Mark Haney: want to raise it so fast?
Mark Haney: What's the other side?
Erik Freeman: Yeah, I'd say mostly it has to do with a
Erik Freeman: living wage.
Erik Freeman: So, you know, when it comes to families,
Erik Freeman: when it comes to, you know of hardworking
Erik Freeman: families that are solely working in the
Erik Freeman: restaurant industry or solely looking for a
Erik Freeman: restaurant and they have a family of two,
Erik Freeman: or themselves or a family, afford to feed.
Erik Freeman: The amount of wages that they're earning
Erik Freeman: don't meet the the expenses that they have
Erik Freeman: in their household, and so the idea of the
Erik Freeman: wage increase is to is to is to guarantee a
Erik Freeman: minimum amount that everybody makes so that
Erik Freeman: they can afford the living wages.
Mark Haney: Yeah, okay.
Mark Haney: So I mean there's so many ways to take this
Mark Haney: conversation, but I just want to make sure
Mark Haney: we have both sides of the, of the whatever
Mark Haney: we'll call it, the argument, if you will,
Mark Haney: or the opinions of both sides, because you
Mark Haney: know, if you're, if you're working at a
Mark Haney: fast food location, you may view this as a
Mark Haney: good thing.
Mark Haney: I don't know, or you may not, but what ends
Mark Haney: up happening for somebody who owns a
Mark Haney: business, or probably for for any of us,
Mark Haney: whether you're in fast food or not, if this
Mark Haney: group of people is getting paid 20 bucks an
Mark Haney: hour and this group of people is getting
Mark Haney: paid it's called 1550 an hour, or maybe
Mark Haney: even 20 bucks an hour over here it's going
Mark Haney: to cause everybody to kind of have to
Mark Haney: ratchet up their wages to stay market
Mark Haney: competitive.
Mark Haney: Everybody's going to have to raise their
Mark Haney: wages a little bit, or maybe the full 25%,
Mark Haney: just to kind of keep with market wages,
Mark Haney: right.
Mark Haney: So everybody's wages are going to go up a
Mark Haney: little bit or some.
Mark Haney: And is that a good thing or a bad thing?
Mark Haney: I mean, it just it's a, it's an artificial
Mark Haney: effect on the market and we're all going to
Mark Haney: have to make adjustments.
Erik Freeman: I think that's the biggest fear.
Erik Freeman: Is you know at some point and I can say
Erik Freeman: even for for our business at some point,
Erik Freeman: the perception of what you have to charge
Erik Freeman: for your food in order to make these, you
Erik Freeman: know, these, these inflationary pressures
Erik Freeman: or or some of these increases in wages at
Erik Freeman: some point?
Erik Freeman: The question is is a customer willing to
Erik Freeman: pay that?
Erik Freeman: So for us, in order to, let's say, tackle
Erik Freeman: this right and every year we've had to
Erik Freeman: raise our ground beef taco right to to
Erik Freeman: every year to get to a how much is a ground
Erik Freeman: beef?
Erik Freeman: taco these days, it's currently 295 for one
Erik Freeman: taco for one taco.
Mark Haney: And already feeling the inflation, I mean
Mark Haney: I'm not saying that's an unfair price,
Mark Haney: that's a.
Mark Haney: That's an affordable meal.
Mark Haney: You know, you get a couple of tacos and a
Mark Haney: drink and maybe something else.
Mark Haney: It's like 10 bucks.
Mark Haney: It's still an affordable meal.
Erik Freeman: And, and the biggest fear I think for
Erik Freeman: restaurant owners is at what point does a
Erik Freeman: customer say I'm unwilling to pay this for
Erik Freeman: this food?
Erik Freeman: You know, whatever it it might be, if it's
Erik Freeman: a gym boys taco, if it, if it turns into
Erik Freeman: being $4 for one ground beef taco, Okay,
Erik Freeman: yeah, we're certainly now addressing the
Erik Freeman: minimum wage, and that's what we need in
Erik Freeman: order to do minimum wage, and I'm
Erik Freeman: exaggerating a little bit, but you can see
Erik Freeman: where this could go.
Erik Freeman: Certainly, over the next two, three years,
Erik Freeman: prices will have to continue to increase,
Erik Freeman: and so the the fear and concern is is
Erik Freeman: someone willing to pay, you know, $4 for a
Erik Freeman: ground beef taco?
Mark Haney: Well, it's an interesting time to do it
Mark Haney: when we've printed all this money, right,
Mark Haney: inflationary type of decision to print a
Mark Haney: bunch of money we we have, you know, our
Mark Haney: debt and interest rates have gone up, so
Mark Haney: our interest payments on the national debt
Mark Haney: and all that are going up.
Mark Haney: So all of that is driving a bunch of other
Mark Haney: inflation, right, De-coupling from China
Mark Haney: and on and on and on.
Mark Haney: There's a lot of inflationary sort of
Mark Haney: pressure out there and everybody realizes
Mark Haney: that.
Mark Haney: You know, price at the pump, that we have
Mark Haney: inflation, right, we do.
Mark Haney: We've.
Mark Haney: There's a lot more money chasing, you know,
Mark Haney: chasing the goods, and it's causing stuff
Mark Haney: to go up in price.
Mark Haney: And so now the most affordable meal that we
Mark Haney: might want to buy, right, it's cheaper to
Mark Haney: go buy have dinner at gym boys than to go
Mark Haney: go to the grocery store and buy some
Mark Haney: groceries and make it.
Mark Haney: And now you're taking the most affordable
Mark Haney: meal in the world and you're causing that
Mark Haney: to go up too.
Mark Haney: It's like is that good?
Mark Haney: Is it good timing?
Mark Haney: I mean, my goodness.
Erik Freeman: Well, and in addition to this and I think
Erik Freeman: this is maybe one thing that's good to
Erik Freeman: address as well is that, even though this
Erik Freeman: is targeted towards brands that have 60
Erik Freeman: locations or more, that doesn't mean that
Erik Freeman: it's going to radically change.
Erik Freeman: It won't radically change the industry.
Erik Freeman: It will because everyone is going to demand
Erik Freeman: that $20 minimum wage.
Erik Freeman: There's only so many jobs that are going to
Erik Freeman: be available for the bigger brands, so to
Erik Freeman: speak, so all the customers or, excuse me,
Erik Freeman: all the laborers and employees are going to
Erik Freeman: want that same way.
Mark Haney: They want a $4.50 increase or a pro-rata
Mark Haney: percentage increase.
Erik Freeman: Who this ends up actually hurting the most
Erik Freeman: are the small businesses, not the large
Erik Freeman: businesses, even though that's what the
Erik Freeman: bill is targeting.
Erik Freeman: It's targeting larger guys, but who it
Erik Freeman: hurts the most are the smaller guys,
Erik Freeman: because their margins are as thin as it is.
Erik Freeman: They don't have the same luxury buying
Erik Freeman: capacity.
Erik Freeman: They don't have the same buying power or
Erik Freeman: leveraging that bigger brands are able to
Erik Freeman: do.
Erik Freeman: So, while it might hurt the bigger brands,
Erik Freeman: ultimately it's going to really hurt the
Erik Freeman: smaller guys.
Mark Haney: Yeah, and I think ultimately it hurts the
Mark Haney: consumer because it's one.
Mark Haney: You know, I can barely make my rent payment,
Mark Haney: I can barely make my house payment and now
Mark Haney: I got to put food on the.
Mark Haney: I mean, food is a main thing.
Mark Haney: So an affordable meal is a fast food meal.
Mark Haney: And today, you know, when I was a kid, you
Mark Haney: know, go get fast food.
Mark Haney: Maybe that was a luxury or whatever.
Mark Haney: That was like a maybe a more expensive meal
Mark Haney: than my mom making macaroni and tomatoes
Mark Haney: and the crap that we ate around our house.
Mark Haney: But now that's a cheap way.
Mark Haney: You know that's a cheap way to go out to
Mark Haney: dinner or to have a meal is to have a, you
Mark Haney: know, some fast food.
Mark Haney: Yeah, I mean, it's on the cheaper side.
Erik Freeman: Yeah, and now and now that's not the case.
Erik Freeman: Now it is with, like I said, with this
Erik Freeman: labor increase.
Erik Freeman: We are looking at a 25% increase and again
Erik Freeman: just to put that in perspective, that's
Erik Freeman: never occurred before.
Erik Freeman: There's never been a $4 an hour increase in
Erik Freeman: a single year.
Erik Freeman: I think in the hit, certainly in
Erik Freeman: California's history, I believe nationwide
Erik Freeman: it is.
Erik Freeman: It is unprecedented.
Erik Freeman: And yeah, to come out and you know, now of
Erik Freeman: all time, it will certainly put a strain on
Erik Freeman: things.
Erik Freeman: The big question I think a lot of
Erik Freeman: restaurant owners are going to have is how
Erik Freeman: much of this can they pass along to the
Erik Freeman: consumer?
Erik Freeman: Usually, restaurant owners they pass the,
Erik Freeman: they pass these, these costs on to the
Erik Freeman: consumer, but not all of them.
Erik Freeman: They always have to absorb a little bit of
Erik Freeman: it and the question is how much of this can
Erik Freeman: they really absorb this time?
Mark Haney: Interesting.
Mark Haney: Okay.
Mark Haney: So now the other question is how can I
Mark Haney: tweak my business to deal with this Right?
Mark Haney: So can I turn my business into a luxury
Mark Haney: product, luxury brand?
Mark Haney: Can I automate and go lean and mean and
Mark Haney: have this automated type, automated type
Mark Haney: thing?
Mark Haney: How are we going to?
Mark Haney: What kind of changes are the smart guys
Mark Haney: going to make?
Erik Freeman: Yeah, so so a couple things there, and I'll
Erik Freeman: start with this is this is a brand new bill.
Erik Freeman: This is brand new.
Erik Freeman: I mean, this is an active, ongoing
Erik Freeman: conversation.
Erik Freeman: I've had a lot of conversations with
Erik Freeman: different restaurant owners.
Erik Freeman: We are all actively talking about what we
Erik Freeman: can do about this.
Mark Haney: So we are still in the in the stages of
Mark Haney: brainstorming, really trying to pick
Mark Haney: yourself up off the floor.
Mark Haney: Are you kidding me?
Mark Haney: Oh, my god.
Erik Freeman: But I will say, and that's why I feel that
Erik Freeman: the biggest advice to all restaurant owners
Erik Freeman: and to all business owners is to talk about
Erik Freeman: this.
Erik Freeman: Get together now, start collaborating now.
Erik Freeman: It wouldn't hurt to start brainstorming
Erik Freeman: with everybody that you can about what's
Erik Freeman: coming and to start sharing this, because
Erik Freeman: even if you do share, it's still going to
Erik Freeman: be an effect on everyone.
Mark Haney: Well, interesting, because, okay, so I want
Mark Haney: to challenge this in a way that is
Mark Haney: productive, I suppose, in terms of getting.
Mark Haney: I'm all about collaboration and so and I
Mark Haney: think, working together for solutions and
Mark Haney: that kind of thing.
Mark Haney: But you, in order to win, we need to be
Mark Haney: differentiated, right?
Mark Haney: So you, if you're the one that comes up
Mark Haney: with the creative idea on how to battle
Mark Haney: this, you want, might want, to be first to
Mark Haney: market with it, and something like that.
Mark Haney: Is there any kind of thought like that, in
Mark Haney: terms of like, what are we going to do?
Mark Haney: Oh, no, let's share our ideas and all go do
Mark Haney: the same thing.
Mark Haney: So there's that one challenge that I have.
Mark Haney: My, my brain goes how do I turn this into
Mark Haney: an advantage?
Mark Haney: You know, as I mentioned, luxury brand, if
Mark Haney: I can repackage my offering to appear to be
Mark Haney: better or to be better, can I get more
Mark Haney: margin and so on to make up for the you
Mark Haney: know what the government's doing to me?
Mark Haney: Or can I automate, or something like that?
Mark Haney: And then I also wonder is there any risk of
Mark Haney: being accused of colluding?
Mark Haney: Because we're talking about price pricing,
Mark Haney: right, and we know you can't get together
Mark Haney: and all decide to.
Mark Haney: You know, price fix tacos at, you know, at
Mark Haney: a higher price.
Mark Haney: And hey, I'll raise my tacos a dollar if
Mark Haney: you do too right.
Mark Haney: We can't do that kind of stuff, so makes me
Mark Haney: kind of wonder about how to collaborate
Mark Haney: effectively.
Erik Freeman: Yeah, yeah, sure, so well, and I can.
Erik Freeman: For me, it's easy for me to say listen.
Erik Freeman: I think the questions are, you know, among
Erik Freeman: everyone it's just trying to get an
Erik Freeman: understanding of the need, the percentage
Erik Freeman: increase.
Erik Freeman: I don't think there's any way that all
Erik Freeman: restaurants can get together for you know,
Erik Freeman: and start colluding.
Erik Freeman: I think collaboration is hey, you know, for
Erik Freeman: us our challenge is do we increase prices
Erik Freeman: once or three times in smaller increments?
Erik Freeman: Those are strategies that I don't think
Erik Freeman: have any bearing on what it will do to the
Erik Freeman: market, but it's certainly something to
Erik Freeman: share for for different owners of saying,
Erik Freeman: hey, how do we effectively tackle this?
Erik Freeman: Because for us our price increase need is
Erik Freeman: going to be different than someone else's
Erik Freeman: price increase need, right.
Erik Freeman: So for someone else, for them just to be
Erik Freeman: able to handle this, they might have to be
Erik Freeman: able to raise it 15% on their menu prices
Erik Freeman: versus another brand that only needs to go
Erik Freeman: up five or six, you know, depending on the
Erik Freeman: size of it.
Erik Freeman: But I certainly think, talking about how
Erik Freeman: that affects them, and I don't think, I
Erik Freeman: certainly think that smaller restaurants
Erik Freeman: don't have the tools that that other brands
Erik Freeman: have to understand how much they may need
Erik Freeman: to increase prices.
Erik Freeman: I mean for them, they may be taking a stab
Erik Freeman: at the dark and saying, oh, you know, I
Erik Freeman: think I need to increase, you know $2 or $3.
Erik Freeman: Well, that might you know.
Erik Freeman: If it's on a really good item, that might
Erik Freeman: be a 20% increase.
Erik Freeman: You know, you may want to try different
Erik Freeman: tactics that have a more smooth and
Erik Freeman: transitional effect, so it doesn't impact
Erik Freeman: everybody the same way.
Erik Freeman: So those are tools, those are, those are
Erik Freeman: strategies.
Erik Freeman: I think that don't affect the price,
Erik Freeman: colluding or anything like that.
Erik Freeman: It's just strategies that people can share.
Mark Haney: I wonder if there's any, and I'm not saying
Mark Haney: this is a good long term strategy, because
Mark Haney: the market ultimately I'm a market guy.
Mark Haney: Right, I want the market to play out when
Mark Haney: everything gets priced at and so on, and
Mark Haney: the market will price out what you know.
Mark Haney: This new regulation will happen and now the
Mark Haney: market will price out what you got to pay
Mark Haney: an employee to make a taco.
Mark Haney: But is there any short term gain for the
Mark Haney: people under 60 employee or, excuse me, 60
Mark Haney: restaurants in that you could postpone your
Mark Haney: wage hikes for some period of time and
Mark Haney: potentially still inch up your margins at
Mark Haney: the same rate as everybody else and maybe
Mark Haney: gain the system for a little bit of time?
Mark Haney: Ultimately, you're going to be underpaying.
Mark Haney: You know you won't be paying market for
Mark Haney: some period of time until you start having
Mark Haney: culture issues in your with your staff.
Mark Haney: But is there any short term good that you
Mark Haney: can kind of eke out of it to take that
Mark Haney: excess earnings, if you will it's hard to
Mark Haney: say excess earnings, those earnings and and
Mark Haney: kind of invest it into something?
Mark Haney: I'm just wondering is there a way to sort
Mark Haney: of play it that way and justify it,
Mark Haney: especially to company your size?
Erik Freeman: Certainly there's there's short term and
Erik Freeman: long term, and within short term there's
Erik Freeman: there's a whole decision tree of things to
Erik Freeman: talk about, which I'll cover in one moment.
Erik Freeman: The long term, I think, is that it
Erik Freeman: ultimately will go automation, but the the
Erik Freeman: the current issue is that when it comes to
Erik Freeman: automation, it's not a one for one, number
Erik Freeman: one.
Erik Freeman: If you have a robot, let's say, that is
Erik Freeman: doing a particular function, it's not going
Erik Freeman: to replace one person.
Erik Freeman: So if you have a robot, it might replace
Erik Freeman: half of a person.
Erik Freeman: So it it's.
Erik Freeman: It's still something that you have to weigh
Erik Freeman: out in terms of how much do you have to
Erik Freeman: invest in getting this piece of equipment
Erik Freeman: or this thing developed versus how much it
Erik Freeman: really replaces in your store and the, of
Erik Freeman: course, the challenge is that in the
Erik Freeman: restaurant industry there's a lot of
Erik Freeman: customization, you know.
Erik Freeman: So for us, for example, to flip the taco,
Erik Freeman: you know, is a pretty difficult task for a
Erik Freeman: robot to perform or automated to perform,
Erik Freeman: and it will take a lot of money to develop
Erik Freeman: and it's really only for our benefit,
Erik Freeman: whereas someone else are going to need an
Erik Freeman: entirely different system set up for them.
Erik Freeman: I know it's going to get there, but will it
Erik Freeman: get there economically For us in the next
Erik Freeman: two years?
Erik Freeman: Probably not.
Erik Freeman: It's something that restaurant owners need
Erik Freeman: to keep their eye on.
Erik Freeman: Ultimately, that's where it's going to go.
Erik Freeman: On the short term to what you were talking
Erik Freeman: about, there's another school of thought,
Erik Freeman: which is okay as a restaurant owner, and
Erik Freeman: this and I think, the real, the name of the
Erik Freeman: game.
Erik Freeman: This is certainly what the CEO of
Erik Freeman: McDonald's is talking about.
Erik Freeman: It's about market share and that is code
Erik Freeman: for taking up customers from other
Erik Freeman: restaurants.
Erik Freeman: That's code for businesses potentially
Erik Freeman: going out of business.
Erik Freeman: But that is what the battle is gonna be for.
Erik Freeman: It's gonna be for market share.
Erik Freeman: So one school of thought might be if I hold
Erik Freeman: off right, if I hold off on doing price
Erik Freeman: increases, do I have an opportunity to
Erik Freeman: undercut or to be more competitive with my
Erik Freeman: prices for against these larger chains?
Erik Freeman: And yeah, that, of course, is a possibility.
Erik Freeman: There's no doubt about it.
Erik Freeman: On the other side of that, it could be well
Erik Freeman: if everybody else is raising their prices.
Erik Freeman: This might be your only chance to take some
Erik Freeman: of those profits ahead of time that you can
Erik Freeman: reinvest into marketing later, I will say
Erik Freeman: is I think the consensus that I'm getting
Erik Freeman: at so far everyone's gonna have to do price
Erik Freeman: increases.
Erik Freeman: But I think what I would advise is coming
Erik Freeman: up with a way that you can treat your
Erik Freeman: existing customers like gold.
Erik Freeman: And for us that's gonna be.
Erik Freeman: Loyalty.
Erik Freeman: For us that's gonna be.
Erik Freeman: We have an app that we're doing.
Erik Freeman: For example, in December we're doing a 12
Erik Freeman: days of Christmas promotion, but it's app
Erik Freeman: focused and I think the idea for people, if
Erik Freeman: you don't have an app, you need to come up
Erik Freeman: with something that treats your customers
Erik Freeman: like gold and that might be a specific
Erik Freeman: loyalty or a specific program that keeps
Erik Freeman: them coming back, because market share
Erik Freeman: means them and other businesses are gonna
Erik Freeman: be competing for that particular customer.
Erik Freeman: So coming up with something that's unique,
Erik Freeman: that can hold that customer or get them to
Erik Freeman: come more often, I think is gonna be the
Erik Freeman: name of the game going forward.
Mark Haney: Yeah, interesting.
Mark Haney: So still so many ways of taking this
Mark Haney: conversation.
Mark Haney: I'm thinking about what you mentioned
Mark Haney: around automation.
Mark Haney: I wanna take it down that path for a second
Mark Haney: and cause you understand this better than I
Mark Haney: do.
Mark Haney: How much automation is coming, whether it
Mark Haney: be at a McDonald's or a major chain like
Mark Haney: that, a national chain or even
Mark Haney: international, where you go to other
Mark Haney: countries and they're somewhat more
Mark Haney: automated than what we are in some places
Mark Haney: and what's coming already, and how much
Mark Haney: that reduces the number of employees that
Mark Haney: we need to have.
Mark Haney: So you think about a company or, excuse me,
Mark Haney: a location that has maybe very few
Mark Haney: employees working at a time.
Mark Haney: Let's say you've got two employees.
Mark Haney: How many people working at a gym boys at an
Mark Haney: off peak hour?
Erik Freeman: Probably four, four or five.
Mark Haney: Okay.
Mark Haney: So you're even now at an off peak hour,
Mark Haney: you've got four employees.
Mark Haney: I'm sure there's some fast food places that
Mark Haney: have two people working, right.
Mark Haney: So you have two people working and my mind
Mark Haney: cause I'm a security guy right, I sell
Mark Haney: security cameras and you know, I've been in
Mark Haney: that business for a long time and I keep
Mark Haney: thinking I used to own a bunch of video
Mark Haney: stores and I keep thinking that you start
Mark Haney: getting down to a location with one to two
Mark Haney: people and now you're driving an automation,
Mark Haney: now I've got one person working alone.
Mark Haney: One person with automation it's not a safe
Mark Haney: place.
Mark Haney: They're already working.
Mark Haney: Retail can feel a little bit unsafe at
Mark Haney: times it's depending on what area you're in
Mark Haney: and now you're one person working alone in
Mark Haney: a fast food place and like, ah, that
Mark Haney: doesn't feel good, Well, and the culture
Mark Haney: right.
Mark Haney: I mean, I think you have to yeah we're so
Mark Haney: fun.
Erik Freeman: It's exactly right.
Erik Freeman: I mean, I guess the employee in the month
Erik Freeman: is the same employee.
Erik Freeman: But other than that, I mean, what do you do?
Erik Freeman: And on top of that it is important to
Erik Freeman: consider, there needs to be a technician of
Erik Freeman: some sort, someone who is going to be
Erik Freeman: maintaining the equipment, the maintaining
Erik Freeman: the automation, making sure that there's no
Erik Freeman: glitches or issues.
Erik Freeman: And if there is an issue right, it's not
Erik Freeman: something that can be fixed by, most likely,
Erik Freeman: the employee that's there.
Erik Freeman: It has to be someone who has the skill and
Erik Freeman: technical abilities to solve it.
Erik Freeman: So there is a lot of moving parts, a lot
Erik Freeman: more moving parts than I think everybody
Erik Freeman: thinks.
Erik Freeman: Certainly, in the five year or six year
Erik Freeman: version of this it's gonna be a lot more, I
Erik Freeman: think, easier for people to bear, but for
Erik Freeman: right now it is costly, it's gonna be hard
Erik Freeman: on the culture, it'll be hard on employees
Erik Freeman: and it won't be a one-to-one.
Erik Freeman: So that, I think, is the biggest challenge.
Mark Haney: Yeah, what other do you think?
Mark Haney: Advice, I guess so, to your fellow.
Mark Haney: Who's your guys' biggest competition?
Mark Haney: Just kinda curious.
Mark Haney: I'm picturing the one the gym boys by my
Mark Haney: house and it actually feels good.
Mark Haney: Gym boys is right next to Beechia, which is
Mark Haney: next to Mod Pizza, which is next to some
Mark Haney: chicken wing place and I think there's a
Mark Haney: Japanese restaurant.
Mark Haney: You know a lot of fast foodie-type places
Mark Haney: right there, starbucks, not too far away.
Mark Haney: All that's going through my mind is these
Mark Haney: restaurants wanna be kinda around other
Mark Haney: restaurants and stuff like that.
Mark Haney: They don't really view them as competitors.
Mark Haney: It's more like look, that's, we're gonna
Mark Haney: eat somewhere in that little shopping
Mark Haney: center.
Mark Haney: But is there like a direct competitor to
Mark Haney: you guys that you guys feel right now?
Erik Freeman: You know, I think it's hard to say.
Erik Freeman: I think, at the end of the day, the direct
Erik Freeman: competitors would be the Chipotle's of the
Erik Freeman: world.
Mark Haney: Okay.
Erik Freeman: You know, and yes, taco Bell would be a
Erik Freeman: competitor, not that it's in our space, but
Erik Freeman: the-.
Mark Haney: Taco Bell just tastes different, I mean,
Mark Haney: and so does Chipotle.
Mark Haney: It tastes different than gym boys.
Mark Haney: It's got a way different taste and feel.
Erik Freeman: I think the way that we brand ourselves is
Erik Freeman: that we are we're fast casual.
Erik Freeman: So anything in the fast casual space which
Erik Freeman: is the Beech Hut deli is where would be the
Erik Freeman: Chipotle's or five guys, for instance,
Erik Freeman: those?
Erik Freeman: it's, I think, less about the cuisine, as
Erik Freeman: much the demand for quality that the
Erik Freeman: concept provides.
Erik Freeman: So it doesn't have to be a direct Hispanic.
Erik Freeman: You know concept Right.
Erik Freeman: It can be a, like I said, a sandwich shop,
Erik Freeman: or it can be a pizza place.
Erik Freeman: Those are competitors because we're all
Erik Freeman: competing for that segment, the lunch
Erik Freeman: segment or the dinner segment.
Erik Freeman: So it's great to be a complimentary, but
Erik Freeman: sometimes also they can take more from that
Erik Freeman: segment than-.
Mark Haney: Do you now in terms of pricing because this
Mark Haney: is kind of a pricing question do you, when
Mark Haney: you look at the landscape, do you for gym
Mark Haney: boys, do you see yourself able to charge
Mark Haney: premium pricing Because it sounds
Mark Haney: affordable?
Mark Haney: I mean $299?
Mark Haney: Shock me that because I guess I guess,
Mark Haney: don't look, I never looked at the price to.
Mark Haney: I'm just like I'm the guy that doesn't know
Mark Haney: whether I paid $10 or $15 or whatever, I
Mark Haney: don't know.
Mark Haney: That sounds bad.
Mark Haney: I know it to the audience, but I just don't
Mark Haney: look at that stuff that close.
Mark Haney: My wife does, I guess.
Mark Haney: But when you're pricing, cause it all adds
Mark Haney: up, cause you're selling tons of tacos and
Mark Haney: tons of french fries and tons of stuff, you
Mark Haney: try to price yourself against those other
Mark Haney: people to make sure you're in the same
Mark Haney: realm 100% absolutely.
Mark Haney: Okay.
Erik Freeman: We compare ourselves with Del Taco.
Erik Freeman: We'll look at what they what they're
Erik Freeman: pricing.
Erik Freeman: We'll look at Chipotle what they're pricing.
Erik Freeman: We'll look at Q Doba, which isn't really
Erik Freeman: around here, but we still look at what
Erik Freeman: their pricing is.
Erik Freeman: We look at Pollo Loco as well, what their
Erik Freeman: pricing is.
Erik Freeman: We do a competitive analysis.
Erik Freeman: I would advise any owner to be doing this,
Erik Freeman: if they're not already to just take
Erik Freeman: snapshots every month to see whether the
Erik Freeman: prices of their competitors have changed or
Erik Freeman: not and by how much.
Erik Freeman: And that helps figure out a little bit
Erik Freeman: about what you could do and what the market
Erik Freeman: can bear for you.
Mark Haney: Are there premium or, excuse me so it goes
Mark Haney: through my mind about there's ways to cut
Mark Haney: portion sizes and there's a way you could
Mark Haney: revamp the taco so that you get less of a
Mark Haney: taco or something like that, or a little
Mark Haney: few less fries or whatever.
Mark Haney: You take away some of the amenities or some
Mark Haney: of the value, I guess, out of the equation
Mark Haney: and maybe not raise the prices much.
Mark Haney: You think you guys are gonna see some of
Mark Haney: that kind of stuff too.
Erik Freeman: So I love that you bring that up, because
Erik Freeman: we looked into that ourselves about two
Erik Freeman: years ago and it's kind of they call it
Erik Freeman: it's called America on a Diet.
Mark Haney: They call it kind of shrink flange in a way
Mark Haney: right.
Erik Freeman: Where it's hidden.
Erik Freeman: You keep the price the same, but you will
Erik Freeman: change the portion size.
Erik Freeman: Well, we did look into it and I think
Erik Freeman: ultimately what we found, in order for it
Erik Freeman: to make a difference, we had to change our
Erik Freeman: portions by like 20% 15 to 20% on our
Erik Freeman: portions and I think when we really looked
Erik Freeman: at that, it just didn't sit right with what
Erik Freeman: the demand of the customer.
Erik Freeman: You're actually a perfect example.
Erik Freeman: You're not looking at the prices right.
Erik Freeman: You wouldn't notice necessarily a two,
Erik Freeman: three, four or 5% price increase, but I bet
Erik Freeman: you would notice the portion decrease.
Erik Freeman: Right and so even though you're paying.
Erik Freeman: If we were to cut-.
Mark Haney: I get a word of three chocos now, or two
Mark Haney: versus two, or whatever it is.
Erik Freeman: And, at the end of the day, I think that's
Erik Freeman: a decision that every restaurant owner, of
Erik Freeman: course, can look at.
Erik Freeman: But for us portions, we felt that was an
Erik Freeman: untouchable for our customer.
Mark Haney: Interesting.
Mark Haney: Yeah, these are really interesting strategy
Mark Haney: decisions.
Mark Haney: Okay, so what am I not talking about?
Mark Haney: I mean, I'm kind of coming up with all the
Mark Haney: questions here, but is there a certain
Mark Haney: aspect of this that I'm not addressing?
Erik Freeman: Well, I appreciate that.
Erik Freeman: I think, as I mentioned, the two immediate
Erik Freeman: questions that a restaurant owner needs to
Erik Freeman: look at is one how much and how often are
Erik Freeman: you gonna be increasing your prices from
Erik Freeman: here until April?
Erik Freeman: If that's the route you wanna go?
Erik Freeman: Market share all right, is that something?
Erik Freeman: How are you going to compete for market
Erik Freeman: share, because that's what everybody else
Erik Freeman: is gonna be doing in the immediate future,
Erik Freeman: and how are you going to be thinking about
Erik Freeman: your existing customers and really now
Erik Freeman: modeling your business to treat them like
Erik Freeman: gold, because they're gonna be the ones
Erik Freeman: that get you through this next step?
Erik Freeman: There's a lot of, I think, internal and
Erik Freeman: this is where I opened it up, where I'd
Erik Freeman: love to make myself available or anyone
Erik Freeman: available to talk this through because
Erik Freeman: there's a lot of internal conversations
Erik Freeman: that owners need to have about how they're
Erik Freeman: going to, how they're gonna tackle the wage
Erik Freeman: increase, the minimum wage increase.
Erik Freeman: There's different overtime conversations.
Erik Freeman: There's staffing conversations.
Erik Freeman: There's a lot of internal things that go on
Erik Freeman: in the restaurant that is specifically
Erik Freeman: tailored towards employees.
Erik Freeman: That's something I think is more beneficial
Erik Freeman: to have one-on-one conversations and direct
Erik Freeman: conversations with owners on, but and
Erik Freeman: that's a tackling this directly with how
Erik Freeman: you're gonna deal with the minimum wage
Erik Freeman: increase.
Erik Freeman: But on the other side I think that's where
Erik Freeman: it's very open to everybody else also
Erik Freeman: talking about hey, we have how many price
Erik Freeman: increases are you gonna do?
Erik Freeman: What's McDonald's doing?
Erik Freeman: What's in and out doing?
Erik Freeman: How many times are they gonna increase
Erik Freeman: their prices?
Erik Freeman: I can guarantee you it won't be just one.
Erik Freeman: They're not gonna do just one 10, 15, 20%
Erik Freeman: increase.
Erik Freeman: It will be two, maybe three that they're
Erik Freeman: gonna do between now and between April.
Erik Freeman: So keep your eye on that and keep a look on
Erik Freeman: it.
Erik Freeman: I think there's other.
Erik Freeman: There's certainly.
Erik Freeman: I think another competitive advantage here
Erik Freeman: that I can talk about is you're not
Erik Freeman: necessarily gonna be able to compete on
Erik Freeman: wages, and what I mean by that is a larger
Erik Freeman: brand might be spending.
Erik Freeman: They might be paying $24 an hour to get the
Erik Freeman: best type of employees.
Erik Freeman: What your competitive advantage is gonna be
Erik Freeman: is how you treat that employee as an owner.
Erik Freeman: How flexible are you with their schedule as
Erik Freeman: an owner?
Erik Freeman: How flexible are you with their personal
Erik Freeman: life?
Erik Freeman: How well do you know them?
Erik Freeman: What things does that employee care about
Erik Freeman: that you can help cater to or help make
Erik Freeman: easier on their life.
Erik Freeman: That, I think, is gonna be a really big
Erik Freeman: issue.
Erik Freeman: And something really important coming up
Erik Freeman: here is the employees that are looking for
Erik Freeman: not just the money, and sometimes instead
Erik Freeman: of the money, they might wanna see instead
Erik Freeman: more flexibility and more relational terms
Erik Freeman: with the owner.
Erik Freeman: I certainly know that during the COVID era,
Erik Freeman: that's how a lot of owners were able to get
Erik Freeman: through.
Erik Freeman: It is that they just had solid employees
Erik Freeman: who they had really good relationships with
Erik Freeman: and they were able to get through that and
Erik Freeman: I think going forward, that's gonna be
Erik Freeman: probably more important than anything,
Erik Freeman: especially for smaller businesses, for
Erik Freeman: smaller restaurant owners.
Erik Freeman: That relationship is gonna be gold.
Mark Haney: Is some of that already happening?
Mark Haney: I'm looking at Starbucks.
Mark Haney: They don't pay minimum wage, do they, or
Mark Haney: they?
Mark Haney: I mean?
Mark Haney: They're not close, I mean they kinda have
Mark Haney: abandoned some of that kind of stuff.
Mark Haney: They've got enough profitability and volume
Mark Haney: and all that scale to create different
Mark Haney: kinds of incentive packages and stuff
Mark Haney: beyond minimum wage.
Erik Freeman: Yeah, certainly their benefit package is
Erik Freeman: going to be stronger than what and that's
Erik Freeman: my point Typically, a benefit package that
Erik Freeman: a uh, a larger brand can offer is going to
Erik Freeman: be more than what you have as a restaurant
Erik Freeman: owner to offer.
Erik Freeman: But, believe me, that does come with
Erik Freeman: conditions.
Erik Freeman: They're there.
Erik Freeman: It's not going to be as personable as a
Erik Freeman: feel as knowing you know the as the owner,
Erik Freeman: knowing you by first name.
Erik Freeman: You know your owner by first name, the
Erik Freeman: owner knowing about what's going on in your
Erik Freeman: life and being able to accommodate, uh, uh,
Erik Freeman: certain things that come up, and so the the
Erik Freeman: more that an owner can really take that
Erik Freeman: care.
Erik Freeman: Uh, I do think that that's going to uh for
Erik Freeman: for a lot of employees.
Erik Freeman: If we're talking about the difference
Erik Freeman: between two or three or $4 an hour, I think
Erik Freeman: that's going to end up becoming more
Erik Freeman: important than just the $4 an hour.
Erik Freeman: Scheduling, staffing, the amount of hours
Erik Freeman: worked, those things are uh going to be a
Erik Freeman: little bit higher of a standard when you're
Erik Freeman: working at these bigger brands and they
Erik Freeman: have these benefit packages, but it does
Erik Freeman: come with a little bit of a cost.
Mark Haney: And the other thing I would say to anybody
Mark Haney: that might be listening out there that is
Mark Haney: either working in fast food, or maybe
Mark Haney: they're a parent and your child's in high
Mark Haney: school and thinking about getting a job in
Mark Haney: fast food is like what you can learn
Mark Haney: working for an independent company where
Mark Haney: you have access to an Eric Freeman or you
Mark Haney: know the owner of the business.
Mark Haney: I mean that's a different kind of learning
Mark Haney: experience because I mean, really we're
Mark Haney: doing it for the money.
Mark Haney: Of course we want to paycheck and all that
Mark Haney: kind of stuff, but really you think back to
Mark Haney: your first job, right, parent?
Mark Haney: Think back to your first job.
Mark Haney: What kind of experience did you have?
Mark Haney: Did you learn some stuff?
Mark Haney: Did you get some valuable lessons where
Mark Haney: these kind of the kind of lessons that last
Mark Haney: at a lifetime yeah, they did.
Mark Haney: It's like the first, your first girlfriend,
Mark Haney: your first job, those kinds of things.
Mark Haney: Like you remember those things for the rest
Mark Haney: of your life.
Mark Haney: You want to have your children or if you're
Mark Haney: a child or a young person, or a young
Mark Haney: person getting the first job, or an entry
Mark Haney: level job, maybe getting back in the
Mark Haney: workforce.
Mark Haney: You want that.
Mark Haney: It's going to be a memorable experience and
Mark Haney: so you want to be around people that think
Mark Haney: more entrepreneurially, think more
Mark Haney: creatively, think about how to win.
Mark Haney: We want to be in those kind of environments,
Mark Haney: and so there's a certain value that it's
Mark Haney: almost priceless in a way.
Mark Haney: You know you can go to some job where
Mark Haney: everybody doesn't care about the job and
Mark Haney: it's just kind of a job.
Mark Haney: Or you can go be around a small business
Mark Haney: where mom and pop are giving it everything
Mark Haney: they have and of course they they treat
Mark Haney: their employees like gold.
Mark Haney: They're like their employees, are like
Mark Haney: family, and what a much better experience
Mark Haney: in terms of getting your first or second
Mark Haney: job and being around somebody who thinks of
Mark Haney: you like family and you're actually
Mark Haney: learning life skills instead of you know
Mark Haney: how to be number three on the cashier, you
Mark Haney: know rack or cashier table.
Mark Haney: It's so much better to work for a small
Mark Haney: business than work for some giant fast food
Mark Haney: chain.
Mark Haney: I would think I have to imagine as a guy
Mark Haney: that used to own a bunch of video stores.
Mark Haney: We work for Blockbuster, we work for me.
Mark Haney: Of course you're going to get a lot better
Mark Haney: experience working for me.
Erik Freeman: I completely and 100% agree Restaurant
Erik Freeman: owners are.
Erik Freeman: They are, they're a breed all on themselves.
Erik Freeman: They go to work.
Erik Freeman: A lot of them, they especially the smaller
Erik Freeman: ones they go to work every day.
Erik Freeman: They are there, they are there in the
Erik Freeman: middle of the night, they're there in the
Erik Freeman: early parts of the morning there, and
Erik Freeman: that's just what you see.
Erik Freeman: Then there's the amount of work that they
Erik Freeman: do on the back end that nobody ever sees.
Erik Freeman: It is.
Erik Freeman: It is a backbreaking job, mentally,
Erik Freeman: physically, emotionally.
Erik Freeman: And you know, there's no doubt, if you can
Erik Freeman: see how a restaurant owner can persevere,
Erik Freeman: that should be an inspiration and something
Erik Freeman: that you can take with you for the rest of
Erik Freeman: your life.
Mark Haney: America, youth or your parents.
Mark Haney: We need that right.
Mark Haney: We, now more than ever, we need to learn
Mark Haney: work ethic and, you know, be inspired by
Mark Haney: people who put it all out on the line.
Mark Haney: Those are the kind of people we we should
Mark Haney: want our children to be around and want if
Mark Haney: it's us want, that's the people I mean.
Mark Haney: I invest in the startups.
Mark Haney: It's not the highest paying, you know gig
Mark Haney: in the world, but you know what it's
Mark Haney: inspiring and it makes me feel good about
Mark Haney: me to be working with this group of people
Mark Haney: with small business.
Mark Haney: So, um, all right.
Mark Haney: What else did I not cover?
Mark Haney: Because the other thing I was going to go
Mark Haney: to is I'm just picturing the ripple effect
Mark Haney: of this.
Mark Haney: You know I'm still scratching my head over
Mark Haney: how we're continuing to print money knowing
Mark Haney: that all it does is cause inflation.
Mark Haney: Now we do something like this.
Mark Haney: I have to imagine, you know, the gas
Mark Haney: station.
Mark Haney: You know on the on the opposing corner is
Mark Haney: going to be like wait.
Mark Haney: I could go over and work at the fast food
Mark Haney: place and make five bucks more an hour than
Mark Haney: I can being a cashier.
Mark Haney: You know what I got to feed my family.
Mark Haney: I'm going to be drawn to fast food.
Mark Haney: I'm going to be bouncing from Walmart or
Mark Haney: these other organizations that are paying
Mark Haney: minimum wage.
Mark Haney: I'm going to make 20 bucks an hour over at
Mark Haney: gym boys or wherever, um that other people
Mark Haney: are going to suffer.
Mark Haney: So there's this ripple effect, or these
Mark Haney: unintended consequences that are just going
Mark Haney: to show up on us.
Erik Freeman: You hit the nail on the head, mark.
Erik Freeman: That's, I think, the uh, when, when I say
Erik Freeman: don't uh, don't think that this won't
Erik Freeman: affect you, that's exactly what I mean.
Erik Freeman: There is every industry is going to have
Erik Freeman: this effect, and you use the convenience
Erik Freeman: store.
Erik Freeman: That's a perfect example.
Erik Freeman: Any retail outlet of any kind clothing, uh,
Erik Freeman: apparel or or jewelry or or anything out
Erik Freeman: there they're going to ask that same
Erik Freeman: question why is it that now I uh am, am
Erik Freeman: below this particular wage that uh, that
Erik Freeman: the restaurant industry gets?
Erik Freeman: And it will spur, believe me, conversations
Erik Freeman: and push back from employees with their
Erik Freeman: employers.
Erik Freeman: The employers are now going to be forced to
Erik Freeman: think about how much they have to pay and
Erik Freeman: it's most likely going to become that $20
Erik Freeman: minimum is going to be, I think, easily
Erik Freeman: become the minimum for everyone, just,
Erik Freeman: unintentionally, just that's the downstream
Erik Freeman: consequences of when you implemented in one
Erik Freeman: uh, in one facet of the of the industry.
Erik Freeman: It's going to it's going to ripple through
Erik Freeman: the remaining industries with exactly that
Erik Freeman: type of mentality.
Erik Freeman: Okay.
Mark Haney: So I'm going to switch subjects a little
Mark Haney: bit.
Mark Haney: I want to talk a little bit more about food,
Mark Haney: okay, oh, so that's great conversation.
Mark Haney: I don't think we went overly political,
Mark Haney: although you may have smelled some of our
Mark Haney: political beliefs.
Mark Haney: Look, we're not crying about it, we're
Mark Haney: trying to figure out what we're going to do
Mark Haney: about it.
Mark Haney: Right, we're, part of this makes you want
Mark Haney: to go.
Mark Haney: Are you kidding me?
Mark Haney: But then the other part is like okay, let's
Mark Haney: put that aside.
Mark Haney: Uh, that's not what this show is about.
Mark Haney: This show is about how to win.
Mark Haney: Um, let's talk about food for a second.
Mark Haney: Let's talk about your menu.
Mark Haney: Why is it?
Mark Haney: I mean it's good.
Mark Haney: What do people like the most?
Mark Haney: What's most popular?
Mark Haney: What do people love?
Mark Haney: What's like?
Mark Haney: Look, we can't keep this in stock type
Mark Haney: stuff.
Mark Haney: The ground beef taco Ground beef taco is as
Mark Haney: simple as the ground beef taco.
Erik Freeman: The ground beef taco is by far our most
Erik Freeman: popular item.
Mark Haney: I mean I'm not saying.
Mark Haney: I mean I'm saying this you share it versus
Mark Haney: me sharing it.
Mark Haney: I'm happy to share.
Erik Freeman: We, uh, our tortillas are, uh, they're
Erik Freeman: stone ground tortillas, so it does give
Erik Freeman: their.
Erik Freeman: I think the way that we, uh, we make our
Erik Freeman: food, specifically the taco, uh, you can
Erik Freeman: taste the difference the it is a stone
Erik Freeman: ground tortilla.
Erik Freeman: It's high grade quality cheese, both the
Erik Freeman: Parmesan and the cheese we put on the
Erik Freeman: inside.
Erik Freeman: The ground beef is pillow packed, um, and
Erik Freeman: it's in, uh, california, it's California
Erik Freeman: beef.
Erik Freeman: So we, we definitely take a lot of care
Erik Freeman: into the ingredients that we put into our
Erik Freeman: ground beef taco and I think that you can
Erik Freeman: taste the difference.
Erik Freeman: Um, we make the, the, uh, the ground beef.
Erik Freeman: It's fresh, never frozen, and it's been
Erik Freeman: that way since 1954.
Erik Freeman: We make it every day from scratch, uh, so
Erik Freeman: it is the real deal, uh, and so I think
Erik Freeman: that's, you know, there's always been a
Erik Freeman: demand for that.
Erik Freeman: You know we have a really good bean burrito
Erik Freeman: and those are simple ingredients as well
Erik Freeman: just the uh, just beans and and and cheese,
Erik Freeman: uh, and the way that we griddle it on the
Erik Freeman: uh, on the grill top but, that also is
Erik Freeman: because we make the beans fresh in, you
Erik Freeman: know, and so when you make the beans fresh
Erik Freeman: and you're and you're mashing these things,
Erik Freeman: you know fresh, it it does come across in
Erik Freeman: in the quality of the beans themselves, or
Erik Freeman: triple washed, uh, dried beans that we get
Erik Freeman: and cook from scratch.
Mark Haney: Well, I think the two things, even I'm
Mark Haney: going with my own personal taste here.
Mark Haney: So, um, you mentioned the grill, the way
Mark Haney: you griddle them Okay, I didn't know that
Mark Haney: that was the terminology and but I also the
Mark Haney: Parmesan cheese.
Mark Haney: So I am a fan of that.
Mark Haney: Uh, that griddle defect, if you will,
Mark Haney: versus just the crunchy, uh, or you know
Mark Haney: the, the flour tortilla that doesn't have
Mark Haney: any, um, you know, hasn't been cooked
Mark Haney: beyond the original.
Mark Haney: You know when you, I guess when they
Mark Haney: originally made it, you kind of griddle
Mark Haney: them and they taste, you know, hot off the
Mark Haney: stove type thing and those are great.
Mark Haney: But I think my son Marcus, he was in here a
Mark Haney: second before he got in here and he was
Mark Haney: talking about the Parmesan cheese and
Mark Haney: that's like something, those two things.
Mark Haney: I don't think anybody else really does that,
Mark Haney: do they?
Mark Haney: I mean, taco Bell doesn't do that stuff.
Erik Freeman: No, and that's why we term ourselves as the
Erik Freeman: original American.
Erik Freeman: It's not necessarily authentic.
Mark Haney: They don't do that stuff, it's not an
Mark Haney: authentic Hispanic taco.
Erik Freeman: We've never made that claim.
Erik Freeman: We are an American taco.
Erik Freeman: It's the original American taco my, my
Erik Freeman: grandfather is, you know he's full blooded
Erik Freeman: Norwegian.
Erik Freeman: You know he when, when he was first doing
Erik Freeman: tacos in 1954, no one knew what, what the
Erik Freeman: taco was.
Mark Haney: OK yeah, that was pretty.
Mark Haney: Taco Bell or Chipotle Certainly, obviously,
Mark Haney: certainly.
Erik Freeman: And he came up with a, with a side version
Erik Freeman: of it, of kind of just putting some
Erik Freeman: innovation on it and and it tastes, you
Erik Freeman: know it tastes better.
Erik Freeman: Yeah, the taste is different.
Erik Freeman: It's better than anything.
Erik Freeman: And yeah, we do grill them, you know.
Erik Freeman: Try them next time you have it.
Mark Haney: Is it less healthy?
Mark Haney: I mean, because there's people that are
Mark Haney: like on these health kicks and stuff like
Mark Haney: that, but it tastes so good you're not
Mark Haney: really that worried about it, but is it?
Erik Freeman: that's about 200 calories per per ground
Erik Freeman: beef taco.
Mark Haney: Which honestly isn't bad.
Erik Freeman: You know, you have your.
Erik Freeman: You know, I think for a lot of keto people
Erik Freeman: they would get a lot out of out of our food.
Mark Haney: OK, so that's a keto item.
Erik Freeman: The well, the the.
Erik Freeman: The corn tortilla doesn't necessarily have
Erik Freeman: a lot of a lot of carbs, a lot of net carbs.
Erik Freeman: So there's a lot that you can get.
Erik Freeman: I think, for anybody that has a lot of
Erik Freeman: fitness aspirations, there's there's
Erik Freeman: certainly a lot of items that that you can
Erik Freeman: get that provide a lot of protein, low
Erik Freeman: carbs, you know so.
Erik Freeman: But in general, I think the question that
Erik Freeman: you really want to have is it comes down to
Erik Freeman: the quality of food.
Erik Freeman: If you're going to have, you know, a gym
Erik Freeman: boy, or if you're going to have a taco of
Erik Freeman: any kind, you know, in general, is it
Erik Freeman: healthier than that?
Erik Freeman: That parfait?
Erik Freeman: Probably not, but what it does.
Erik Freeman: But but if you are going to have that, do
Erik Freeman: you want something that's quality?
Erik Freeman: You know it.
Erik Freeman: Do you want?
Erik Freeman: Do you want something that's going to taste
Erik Freeman: right and it's in, and maybe it doesn't hit
Erik Freeman: all of your fitness check boxes, but is it
Erik Freeman: still going to be something that your body,
Erik Freeman: except accepts versus rejects?
Erik Freeman: You know, and a lot of people talk about
Erik Freeman: natural places that have more mass produce
Erik Freeman: produced items and may not be quite as good
Erik Freeman: for your, for your body, and your body kind
Erik Freeman: of rejects it and you can feel that when
Erik Freeman: you have food that is majorly processed.
Mark Haney: OK, ok, only a minute left.
Mark Haney: So what?
Mark Haney: What did I besides Unless there's something
Mark Haney: else you want to talk about in terms of the
Mark Haney: minimum wage, I want to make sure you have
Mark Haney: a chance to present your organization in a
Mark Haney: way that you know, because we got kind of
Mark Haney: technical on wages and stuff like that.
Mark Haney: But I mean, jim Boyce is a it's a
Mark Haney: Sacramento success story and there's a
Mark Haney: reason.
Mark Haney: So maybe, just maybe, a little sales pitch
Mark Haney: on Jim Boyce, because there's a reason
Mark Haney: you've been successful.
Erik Freeman: Well, I would say that for me personally,
Erik Freeman: I've I've grown up on the ground Beef taco.
Erik Freeman: My wife, who I I met.
Erik Freeman: One of the first things that I learned
Erik Freeman: about her is that she liked the bean and
Erik Freeman: cheese burrito with onion.
Erik Freeman: You know, everybody in Sacramento has a Jim
Erik Freeman: Boyce story and when the first time that
Erik Freeman: they tried it because it is different when
Erik Freeman: we go to different places in the country
Erik Freeman: people remember Jim Boyce I would invite
Erik Freeman: anybody that think that a ground beef taco
Erik Freeman: that has parmesan on the outside might be a
Erik Freeman: little bit weird.
Erik Freeman: Just try it and give it a, give it a shot,
Erik Freeman: you know, and try it.
Erik Freeman: And maybe that'll be your first story that,
Erik Freeman: that that you can now share with a fellow
Erik Freeman: Jim Boyce fan.
Mark Haney: Eric Freeman.
Mark Haney: Jim Boyce, taco, third generation CEO,
Mark Haney: appreciate your leadership in the community
Mark Haney: and your leadership on this issue, so thank
Mark Haney: you.
Erik Freeman: Yeah, thank you very much, Mark, you bet.