and receive welcome to acquiring minds I will it's good to be here thanks Andrew we were connected by my cousin Brandon who said to me will I have a good friend who's got a remarkable story that kind of centers around buying a business he was like going through a real rough patch in his life and now is flourishing as the owner operator of a local business kind of a local institution type business and it was really buying that business that kind of turned things around for Andrew you should talk so we did so last week I heard this remarkable story and thank you Andrew for coming on acquiring minds to share it with the audience thanks will uh I appreciate those words yeah it's an interesting story for sure um I'm glad you thought it was a fit for your show happy to be here this will be good great well yeah we're gonna we're gonna get right into it and um and we're gonna learn about the restaurant business it was a restaurant uh that you acquired and um that's a that's a common business type that people see for sale but don't often act on because it's a notoriously hard business and so we're gonna get into that as well so start us off with Andrew with a little bit of background on you go ahead yeah so I grew up in Minnesota actually in a a smaller Resort town in like West Central Minnesota uh my father and my uncle ran a large restaurant in a smaller town sort of at the the heart of things and I grew up with a bunch of Brothers a bunch of cousins all guys we were raised in the business so I'm 40 years old I say I have 30 years in the industry uh I think that's pretty accurate because when you're we have a family in the restaurant business you guys you know you live it and it's it's kind of a constant thing so I loved it I loved growing up in it I think it made a huge impact on my DNA basically from a young kid and once I graduated high school went off to college I said well I won't be working in restaurants anymore that was fun and little do I know 20 years later I'm still in the business in two different iterations and couldn't get away from it so um yeah that's where I grew up went to college at St John's University also in Minnesota and did a couple things outside of college they moved to San Francisco worked for Americorps for one year in the city of San Francisco trying to teach didn't do that very well and then took a stint at Corporate America with Wells Fargo and it just happened to be in the time of the recession so I got to witness that from behind a banker's desk and realize that that's not a fit for me and from within the belly of the Beast right Wells was one of the kind of the the banks that was causing all the Mayhem absolutely yeah pretty much at the center of the whole Scandal and uh I just really didn't like the way I felt when I was working and I you know at the time probably didn't see it but should have taken it as a sign that you're doing the wrong thing you know internally it's against the grain you know once an entrepreneur or or a knowing family business like I do that was the right fit and I was trying to do something else same with the teaching um so I got out of that started working for a restaurant came up with an idea said hey I want to run a restaurant this is what feels right and natural but it was the midst of the recession talked to my dad he said why don't you start looking for businesses that might be for sale um so I spent a couple years looking all over Minneapolis looking at all the different commercial real estate that was for sale or for lease and then I got turned on to some of the business websites that sell businesses that are existing and kind of looked at a Jimmy John's or two and thought you know but I have a concept I have an idea drawing from my upbringing that I could Implement into this market so I looked at restaurants that were up and running and had equipment in them that were for sale and that kind of brings me to my first opportunity in the Minneapolis area and and the idea was that you would buy an existing restaurant but change the concept so you'd inherit hopefully a customer base but also equipment and obviously the lease in the location but that you would really transform it into your concept absolutely and that is kind of a funny thing I always I didn't really what I was buying was basically an existing client base also some of the ffne the furniture fixtures and equipment um but yeah you know if you're if you buy a family comfort food restaurant and change it into a hot dog stand it's really hard to compare those numbers at the end of the day so exactly buying that business was kind of a weird I mean I was only 28 years old and I'd never done it before so I was trying to get my head around the angle but in hindsight you know our concept was similar enough to what existed that uh it was kind of a seamless transition and we kind of captured the neighborhood uh audience in the same way that they had been going but they enjoyed what we were doing you know very very much so anyway and so so tell us about your now restaurant business and and your partnership with your brother I believe as well correct sure yeah so I um had this concept um maybe 2009 this idea and pursued it you know looking at all the real estate about 2010 about a month before the deal was done my brother was moving home from Chicago because his deal out there was finishing up and he said let me join you in this Venture and so you know I witnessed uh growing up my dad and my uncle having disagreements in the business as any owners and operators of a business would have but family members and brothers as well makes that a tough combination and you know maybe hindsight vision is 2020 and I maybe should have seen that as a bad idea but I saw it as a good idea we were very close we went to college together um I used to follow him around to his buddy's house when I was a kid so this is of course going to work and it didn't you know it did work for about 10 years we were very very successful at that first restaurant we had a great product an awesome staff great location and you know it was kind of like cheers for people who know Minneapolis this was in Minneapolis or St Paul this it was in Minneapolis in the neighborhood of Northeast actually kind of a hipster community um and so you guys had it for 10 years and the concept was what it was basically named after my grandmother who started Us in the family business so I was technically a third generation so I kind of thought I'd tip my cap back to the story of how we all arrived in the business and where we were so um I named it after her and then I served a higher level of comfort food towards the end of the recession that we grew up eating is hot beef sandwiches and you know brisket hashes biscuits and gravy all the all the warm fuzzy feeling food that people have been ordering for a hundred years in this country you know I thought if it was in style in the 60s and the 80s and the 2000s it'll probably work here too and it did just a small small little restaurant how many seats did you say about 60 a 60. yeah and and so that's considered pretty small by restaurant standards it is you know I learned a lesson working in a restaurant during the recession and then talking to another owner when you have a big restaurant and there's not a lot of people in it it feels very unwelcoming it's not a fun place to be and when you're in a small restaurant that's full of people and you have to wait to get a seat there's an excitement in that air in the environment and I prefer that um and so we based the concept on have a little place that a lot of people want to go to and then have it be full all the time and we should make some money and and make money you did so it was a successful concept like a lot of your ideas and your thesis if you will around this around this startup restaurant startup panned out they did actually we we had the you know when you're doing a business deal usually the seller of the business hires a broker um and they there was a broker involved didn't do much on our side but we got to look at the numbers tax returns P L's from the previous owners and thought you know if we could provide a similar or better product than they were serving in the way that we know how these numbers should work out and when in fact we could probably beat these numbers and I think by the end of the second year we had almost doubled the business wow awesome that's that's great especially considering that you changed you changed everything up like you worry about turning off existing customers but it sounded like it sounds like you doubled existing customers if we did yeah um and just so the audience is clear this is not the store this is not the main story this is a previous story of of of acquiring a small restaurant so I um because the way I introduce things I think people might be a little confused okay so you're 10 years of success with this your co-part your partner with your brother is your co-owner uh were what 2018-19 now uh yeah late 2019 um I had and then what I had just gotten married in September um and I'd been you know my brother had had a family and I wanted the partnership to feel different than it had felt for the 10 years we had ran the place I mean we got along well enough to operate the business but it was a little dysfunctional and some would maybe use the word toxic and that's not to throw anyone under the bus it always takes two to tango we all bring what we bring to the table um but I had decided that I wanted to kind of call him on how the partnership was going and change it turns out he wasn't very receptive to that and said you know I think the partnership should be over uh maybe I'll buy you out and I I was pretty shocked by that you know like I said I'd just been married three months before and didn't see my life changing like that and about a week later covid hit and all conversations about selling out were off you know survival mode changed the entire way that we ran businesses and by this point that's kind of like saying Hey I want a divorce but will you sleep over at my house so I didn't really get to work at the restaurant during those times my brother said I'll run it and get us through this and when we're at the end of it we'll do a deal and it took two years took two years and that was a long time to wait with a lot of uncertainty but meanwhile covet so covet is unfolding yeah and in your personal life things are also happening in your marriage and then on top of it of course George Floyd occurs in your in your city correct how is all that so tell there's more going on tell us that stuff I was married to a journalist um who you know 24 new 24 7 News cycle is difficult to be involved in and stressful and our city under the pandemic I think it was I don't know a misquote history here April May it's all a blur to me but George Floyd was killed in the streets in a in a neighborhood not far from ours and the city just you know went up in Flames it was there was so much tension and so much stress and yeah my home life got rocky you know and we you know I guess I told you this in our previous conversation it it hit home so close that George Floyd's girlfriend who testified in his trial was Irregular at a restaurant on a weekly basis wow so we were in the thick of it and you know I not to get into too many dirty details but it was it was hard to keep the nose above water in all those areas with all that change uh and my wife and I that my ex-wife and my the stress kind of boiled over and um she took off and uh I decided to go back out and I relapsed on alcohol I'd been sober for over four years and had stints over the last 10 where I'd been in recovery and trying to work on myself and you know the world was the world was falling apart and I felt desperate and I went out and medicated myself the way that people like me do and that's that's not a fun thing to admit to the world but it happened and it's real and um we tried to make it work a few months later and uh it didn't and then at that point I was really really low said I don't want to be married anymore and so I lost my business I lost my partnership I lost my sense of purpose The pandemic's Happening tension everywhere and now I don't have a partner at home so I was pretty desperate and I ended up um ended up having a little bit of a mental break and uh it went away for a little while to a treatment center for about 28 days and I got out and my wife had left she had taken everything out of the house that was hers and basically said in a text message I don't want to be married anymore let's not talk about it let's just be done with it so uh yeah that was that was tough those words starting unbelievably brittle yeah yeah and then you know um just fearing how that was gonna go in the process I had just this lightning bolt moment I guess like the lightning bolt that told me the first time that I should start a restaurant it just came out of nowhere and it felt right um I had the idea that I should just sell my house it was three blocks away from the restaurant in the same neighborhood and I couldn't go there I didn't want to show my face so I said I'll just sell my house I'll eventually get my business sold to my brother and I'm gonna move somewhere that I can start over and you know I think I was 39 years old 38. uh sold my house sold most of my personal belongings rented a U-Haul threw my dog in the truck drove out to a little town in Colorado that I'd never been to before I didn't know a person out here not one single person and didn't have any job prospects rented an apartment and said we'll just figure it out wow and it was that was that an invigorating moment or was it a sad moment or or a desperate moment or all of the above oh all of the above for sure I mean so Bittersweet I knew I was moving away from my family we all lived in a few block radius in Minneapolis and got together for everyone's birthday I knew that I was going to be extracting myself from the situation um but it's what I had to do to be okay for me you know I couldn't do it for anybody else and so yeah you know but coming out here driving across um the Nebraska Plains and the Foothills come into view it was exciting and one of my older brothers came with me too he said you're not going to move out there by yourself I'm going to drive out there with you and help you get adjusted which was so cool and uh yeah so I landed here and said okay well I'm semi-retired not permanently I got a little bit of time but not all the time so I better figure something out and give us just a sense of your financial picture at the time you have a little bit of uh of home equity that you got from selling the house right yeah I actually signed my first house up I bought in 2012 I signed up for a 15-year mortgage because I'd been in the banking industry and said you know if we if I'm making a higher income and that little bit of you know this is when interest rates were 2.79 on a 15 year so why not it's not that much more money and I ended up paying down most of my house in the course of about nine years which was cool yeah so I had a lot of equity and then the values of the homes in my neighborhood and I think our restaurant had a lot to do with it I didn't say that our customers say that the realtor said that house prices went way up so I was I had a really good first experience of home buying and I owned the house outright so I got to keep the proceeds you know as things kind of divvied up so that was nice and then I knew I was I was always responsible with my savings at brokerage accounts and things like that so I knew I had a cushion and then I knew that there would be some day down the road a payout from the restaurant uh maybe not what I had expected or what I had hoped it to be but enough to be reasonably comfortable but if you're a guy like me even that doesn't make you comfortable so I was in panic mode for quite a while the trying to figure out the next thing when you were in the business in the restaurant in Minneapolis with your brother and things were going well pre-covered pre all of it kind of unraveling were you earning well was your salary your annual oh yeah okay absolutely yeah we were you know six figures plus um very comfortable you know I did whatever I wanted to do and I was a single guy for most of that time and the income was so consistent and I think that if you run a certain kind of business and can have consistency from month to month with your customers and that income comes in you know it it was a really comfortable place to be yeah and um for both of us and then I think it made it ultimately scary because that that sense of security goes away in an instant and then you say how am I ever going to find a job working for somebody else that's going to replace the kind of income you can have as a small business owner even if you're a 50 partner uh I I didn't see how that was going to work so it got a little scary and did your brother ultimately sell the restaurant he actually currently still runs it oh yeah okay yep okay but you're still expecting maybe at some point but well I guess it probably he's probably not going to sell it at least not imminently if he survived covid he's probably and George Floyd The Fallout from George Floyd he's probably gonna probably intends to keep it open now oh yeah I you know I'm not sure about the day-to-day operations or um you know what he's really up to there I know it's open still running I think the same staff's in place so it should be just the same as it always was he's just doing it on his own now and but through that um kind of separation of the partnership not a not a legal dissolution but a de facto separation in the partnership you guys became kind of fell out of touch you're not really in touch with him anymore so this was a rough yeah rough separation yeah it was and it's tough because we were we were two middle Brothers out of four and like I said I looked up to him and we worked a lot together we both put Blood Sweat and Tears into our business and you know built it with our backs and our people and um yet to not be able to have discussions regularly or ever really is a tough thing it's kind of like a death in the family and I have hopes that someday it will be better and that we'll find resolution but it just wasn't it just wasn't the best way it could have gone so time will heal we'll say okay well so you arrive in a town in Colorado sight unseen uh with one of your other brothers there um in the passenger seat supporting you and then what unfolds in the next number of months yeah so I really um I really dug into like the recovery Community out here in this town because I knew that that's a built-in network of people who meet regularly and I knew it would feel like I have at least friends or some family so I so I spent a lot of time you know in certain meetings in the recovery space and getting to know people and I met a few people in this smaller town that were very well connected and kind of got taken under their wing and introduce to different people and I you know I was pretty outgoing I was hurting pretty bad but I knew you know if you don't know anybody have to talk and have conversations and and be open and try things you weren't comfortable doing show up to meetups by yourself uh it's a little bit of a scary thing uh but one day I was um I went out to breakfast with one of my friends and um it was this cute little restaurant in town that had apparently been there forever and um I walked in and I just got this feeling kind of washed over me and it just felt like what I used to do it just felt very right and I sat down and with my friend and his baby and we were eating some food and a woman walked by and I said excuse me are you the owner of this place and she said I am and I said this is a great little spot it's so cute and your food is really good you know um what are you doing working here right now and she laughed and she said well it's a Saturday and I'm in the restaurant business I always work and I said well you you wouldn't always have to work you could retire and just sell the place to me and I kind of saw her back on her heels like well who are you and I just said she said what do you know about the restaurant business or something to that effect and I said um well I grew up in it and I ran a place in Minneapolis similar seating capacity and you know I bet you do about x amount of sales on a Sunday that's busy or x amount of customer account and I saw her kind of little little look at her eye and she said you could give me your phone number and I did give her my phone number and one of those things and I empty my pockets at the end of the day and anything that's papers in the trash and um there's no reason that you know she should have taken that real seriously but fast forward so that was probably November of 20. 2020. yeah 2020. excuse me I'm trying to think well and let me let me pause you there real quick Andrew first of all um what possessed you to ask that question and I actually don't mean like what gave you the you know the cheat the cheekiness to do that why but why were you even talking about buying a business where did you get this notion that you might buy a business was this something that you were contemplating and and on you know related to that question what were you thinking you would do for money to support yourself or as a job or what once you kind of got established out there no idea I mean I worked at a golf course for the first summer I was out here just to go somewhere and play some free golf which was nice but um so what gave the question was what gave me the the uh yeah well I remember when I was a kid uh you know watching my dad my uncle kind of operate this highly successful center of town business I I liked what they did and I grew up you know playing golf and I lived on a lake and it wasn't an entitled upbringing it was just a nice upbringing so I knew whatever was going on with running a business was raising a family of four boys in the 80s and 90s uh with pretty good opportunity and so I looked up to my dad and what he did and and used him as sort of a model of of what could be and and here said something to me when I was maybe a young teenager he said you know you can you can always buy an income if you go to work for somebody else you get paid what they want to pay you and if you work for yourself depending on how you do it there's really no cap and you know he had other investments in hotels and apartment buildings so I saw him doing the multiple Revenue stream and a lot of real estate investing that had um you know they were cash producing assets and we thought you know it seems to be the way to do it so that little statement you know you can always buy it feels like kind of a Millionaire Next Door Rich Dad Poor Dad 100 guy 100 real real low-key in terms of how he presents himself but has done quite well I I would say um I'd love to be where he's at at 72. um so that's so this idea you can buy an income that that that that uh little one little phrase of a piece of advice kind of and to be honest with you uh when everything was falling apart in the spring of again what was it 2020 I guess um yeah 2020. I just walked forever I just went out with my dog and walked I like walked to keep my sanity and to keep me on the rails as best I could I've been talking hundreds of miles in a few short months and I was listening to podcasts because I needed to have a conversation in my ear and for some reason I kept gravitating towards business based podcasts like Bigger Pockets money uh Bigger Pockets real estate just lots and lots of stories about people buying businesses and what that looks like and you know appliance repair companies and plumbing companies and you named what's your show is doing I was listening to and I thought you know the only way that I'm gonna get back is to to probably do it that way um you know and so I guess that was just to buy a small business to buy that income stream and if I have if you have capital or you you have good credit and the combination of that and capital um that's a possibility you know you're gonna buy a business with a percentage of what the value is as a down payment and take out a loan um that gives you access you know yeah I remember hearing that like 90 of business owners um don't have an exit strategy and I fell into that category my brother and I had no idea what to do with the restaurant if the partnership didn't work out we didn't think that far ahead and I think that you know for the audience listening there are websites that sell businesses and there are a lot of baby boomers who own businesses and they're 70 72 75 and they don't know how to retire and so for me I saw this business owner who might be similar to that age or has done it for a long time and for some reason it just clicked one day to say I mean it was the only time I'd ever eaten there too I wasn't like a daily regular I just I just said hey maybe you should sell it to me so then uh over the next 10 months or so I was part of the whole crypto rise and fall I thought that was going to be my my ticket to riches and it looked pretty good there for a while but as the stories always go up and back down and Shoulda Coulda Woulda so I think come spring and summer uh it was starting to get real heavy you know I'd been out here for a year year and a half now I tried to do a couple other I guess jobs work at a restaurant serving tables I looked into becoming a roof salesman because there's a lot of hail out here in Colorado that's the yeah big big job big thing in Colorado yeah it is and you know it seemed like every time I had this idea or I felt desperate and I needed to force the situation go out and find something something in my life happened that prevented me from proceeding with that career choice or that job option and I can't really explain it without sounding woo-woo or esoterical or kind of weird but um I think it was all happening for a reason like something was grabbing me and saying don't go that way that's not that's not what you're supposed to do so um I guess I could share the story I told you previously I was sitting on the roof of my apartment with one of my friends and she commented on me you know searching for jobs and feeling miserable trying to put a resume out there to the world you know not knowing what I'm qualified for with high income expectations um is starting to look desperate and you know she just said to me why don't you just tonight put out to the universe or whatever's out there what you want I said okay I'll note this night as a manifest as a statement a declaration of what I'm looking for to get out of life and I was specific and I said I want to start a business or own a business again I want to work for myself I want to have the income that I used to have or more and I won't think she said great now go rip up your resume and delete your profile online because you don't need to find a job and I said okay I think it's I think you're right so the next morning I'm uh having some quiet Thoughts by this by the pool at my apartment and wondering how I'm going to fill the hours of the day and my phone rings and it's a strange number that I didn't know and I picked it up which I don't always do and it happened to be the current owner of the restaurant that I had offered to make a purchase on you know passive and jokey but serious kind of way she said hi it's me from the restaurant do you remember the conversation we had is it yes they do and the phone almost dropped out of my hands on the way down because it was way down there too she said I think um I think I'd be interested in having a conversation with you and I I said I can't wait let's go have coffee we did um and so she said you know what what kind of questions do you have just just throw them out there and let's talk about you know what you know about the business and um you know she said why don't you why don't you come and work for me for a month at one of our other stores so I can you know see how you are and you can see how we are and see how if this is a fit I said sure I'll come down and be a bus boy I'll be a host I'll be a server and I'll cook in the kitchen and um I did that it now this is probably in Late July of this this year or last year 2022. and I lasted four shifts and she said all right just get out of the kitchen don't waste your time doing shift work for me go get a loan let's get this deal done how fast do you want to do it because how how can you impress her so quickly in four shifts it's just like she just wanted to make sure that you knew the business and it was very clear that you were competent and and were an old hand in the restaurant game but I could finish her sentences I you know I know how to Expo food out of a window I know how to cook on the line um I'm a pretty good server I've been a host and a person as the face of the business or one of the faces of a business for a deck like I just I know how to do it it's it's second nature to me it's who I am and I think you know as a person who's like that herself um she saw that in me right away and I think a lot of people in business or restaurants even talk a big game and they don't have the skill to back it up and so I showed her through however I showed her that I was the real deal and knew what I was talking about and so she cut my month down to less than a week or two and off to the list I went to see if I was lendable well well and let's hear a little bit more about the business center whatever you can share I know I know you can't um you can only share so much but you mentioned multiple stores so tell us about that and just tell us give us a kind of a story the story of the business it's it's kind of a cute place that everybody in town knows been there for decades sort of thing flesh it all out for us yeah so I would call that an Institutional restaurant um with a captive Community supporting it and um there are multiple locations again the the partners of mine so I I bought my location outright I'm a sole owner operator but it's under a licensing deal so there's a there's a handful of locations scattered around the area some of them are independently owned a couple few of them are and a couple few of them are owned by the founders of the company the people who created it so we're all Partners under a name and under a licensing deal but a few of us are allowed to operate our own stores tweak a few things but there's a lot of proprietary stuff going on again many decades in business so people know what to expect and I I'm no dummy just the worst thing you could ever do is come into a restaurant and start changing things that people expect it means the fastest way to going out of business yeah and it happens all the time so I I told the owners I said are you looking for the most money possible are you looking for a quick exit or are you looking for a seamless transition they said seamless transition I think I can provide that for you and they said great that's what we're looking for okay and just a little bit more on the the mechanics of the relationship to this woman the founder and her husband so you said so there's a number of stores summer owned outright like you own yours but then you have a licensing agreement in place where you're licensing the name and there are kind of understandings the menu the proprietary stuff that you said um but this is which starts to feel kind of like you know a franchise might but this is no franchise this is a woman who has kind of just found local operator entrepreneur types to kind of strike these informal well not informal but but not overly architected agreements with um somebody that she likes trusts a young go-getter who has restaurant industry experience there is kind of a Mothership and you need to stay true to kind of the rules that you've agreed to with her but it's not this like hyper-controlled situation like a traditional franchise it feels like something that might grow into if this woman were maybe younger and not at retirement age might grow into a proper franchised concept but at this point it's it's more of like a like a a prototype of a franchise yeah I think that's true and you know licensing versus franchising I think there's some overlap and I'm not a MBA grad with knowing all the terminology and the intricacies but I think the idea of Licensing is you know a selected partner gets access to an asset and uh then can use that asset in the way they see fit under terms of the agreement and so that's sort of how it is um and it also kind of feels like a big family but we're not really getting into each other's business or telling each other how to do things there's sort of a template or sort of a way to do it and uh within that there's a little bit of leeway and then I you know I pay a licensing fee there's a percentage on my gross sales on a monthly basis that goes to uh the former owners of my location and so it's a good deal for them it allows them to work less it gives me an opportunity and um yeah it's kind of an everybody win I think I think that proposal I made that morning at the restaurant um I think it was mutually beneficial and again I can't explain that timing all I can tell the audience that might be listening is you never know what you might get if you ask or you have a intuitive thought or feeling act on it it's telling you one thing it's never wrong and for me it took nearly a year to come to fruition by planting that seed so I know that it wasn't on my timeline certain things had to happen and on on both the seller and the buyer's side to make this a deal that was going to happen and I tell you will it worked so quickly the broker said I've never done a 30-day close this is crazy like we made it happen it was like seamless the whole thing just worked out um I bought the business actually for a pretty good percentage discount on the appraised value um so I got a good deal on on the business which again most people selling a business want the most money possible for their little baby and that just wasn't the case here I think it was a a right fit type thing that yeah yeah oh I know it makes a lot of sense I think a lot of a lot of sellers uh look for that and it's a theme that comes up again and again with the buyers and guests on acquiring minds um can you give us a sense of any of the financials business size of the restaurant I know you can't get into specifics but um this any kind of ballparks yeah ballparks um and again I've only been involved for a little over a quarter now you know four months or so and but I can I can look at how it has performed in the past and you know it's a million dollar plus uh Revenue restaurant which yeah I don't know what the expectations are there's a lot of restaurants out there much bigger lots of seats a huge bar that might do seven million dollars in a year so a million plus doesn't look you know attractive but if you run a Million Dollar Plus business the right way um it can be very profitable so it doesn't really matter the size I think it's more about percentages and how you operate and keeping keeping certain metrics in check to make it work and and what what do percentage what do margins look like in in the restaurant business and as you answer that explain to us why the restaurant industry is so notoriously difficult well for instance if you're serving breakfast and like currently this place in time eggs are out of control there's an egg shortage I don't know if it's across the country but it's definitely in my area with the avian flu um you know egg prices have tripled so how do you how do you weather that and keep your margins in check for food cost um you got to get creative or or the strategies to it um inflation minimum wage increases in popular parts of the country all of it cut into you know what I guess generally speaking restaurants would want to have somewhere between 25 and 30 food cost and maybe a 25 and 30 percent labor cost and 20 to 25 operational costs and so you're you're cutting down that number pretty good then you may have like then you may have licensing uh or or fight uh what franchise fees so you know you you hear people saying yeah I never made any money in my restaurant I lost money until I went out of the business I haven't had that experience I think we're pretty good at what we do in my family that good education a lot of experience so we run it well but I think you know five percent to 20 25 if you're a killer operator you know and if you're doing a million dollars let's just say that's pretty good money I think sure sure I mean again it's all relative everybody's at a different level but it's a livable livable for sure and and what kind of margins was the business doing can you share that before your ownership I don't think I can but what I can say is we're good at running it so you know there's a okay I said there's a range a low end range zero up to 20 25 percent we're pretty good at what we do okay but there great great gotcha uh really really neat so you're three months in Andrew three if you're your first quarter or you said you just finished out the first quarter you think I bought at the place September 16th was my first day yeah four or four and a half months okay something like that okay and just give us a sense of um well you you kind of already did with the story of kind of manifesting what you want but you had been just really casting about kind of applying for jobs but not having any success not really knowing what you wanted knowing that everything that you were applying for was not what you wanted uh just going through the demo the process this really demoralizing for everybody looking for a job I mean it's a terribly unhappy process for most people anyway let alone when you have the hurdles that you had um so you're really like still in a pretty low spot right before yeah before absolutely yeah like the lowest like the lowest I've I mean I've been in some Low Places and it was feeling like the walls were closing in because I was living off savings and I didn't wanna I I knew what my potential was I just didn't know how to find an Avenue to express that yeah and that's a very frustrating spot to be especially when you're starting over in a new community and it's again it's not a large community you know I thought moving out here they'll be endless opportunity and jobs falling out of the sky for a hundred thousand dollars a year it just wasn't the reality and so I was getting yeah like you say very demoralized so they're so so there was some reinvigoration moving there which may have given you a buzz for a little bit but after a while you've been there for a year you're approaching a year and a half and nothing's come of come of it and now you're almost kind of even sinking lower maybe or to where you were as you left Minneapolis sort of thing sure yeah that's very accurate you know but I felt like I I you want to call them synchronicities or um coincidences or luck or head scratching moments where I go I shouldn't meet I should have met that person but I did and wow look at what's happened since I've met that person or boy I was sure at the right place at the right time that one morning I chose to go to that restaurant um you know too many of those things happened over the course at the time I'd been moved out here that I knew you know from what I've been studying and what I've been focused on sort of tuning into that that there was there was stuff swirling in The Ether so to speak it was out there it was in motion it was on its way to finding me I was losing my patience uh with the timing but I knew it was I knew something was going to happen one one thing one day was going to click and it was just a matter of the right time well you got to give yourself some credit Andrew for for saying what very few people would have the the hutzpah uh or the the quick wittedness quick on your feetedness to to say to her I mean that was really what a fateful spontaneous decision to jokingly say that to her uh in your life unbelievable well will let me tell you this one I mean that's only the second time that exact scenario has happened in my family's history that's how my grandmother and grandfather bought the restaurant I was raised in they were dining there my grandmother made a flippant comment about wouldn't it be wonderful to run a place like this to her husband my grandfather and the owner walked by overheard him and said I'd be happy to sell it to you it changed my whole family's trajectory off the farm dirt poor to being you know living on the lake in a resort town in Minnesota running a beautiful restaurant it just so happens that's how I acquired my second restaurant and said the same thing in the same scenario it happened to me too so again that could be just coincidence but kind of weird yeah it's incredible I don't take the credit well you can you can give me the credit as you should but it's both things there's there's certainly some spooky or or compelling parallels there but also you you played a part in this a big part in this for for saying that to the woman at the right at that moment so what did the acquisition um deal structure look like I stopped you when you said you were going went to a community bank so tell us how you got the money yeah that's great um I was advised when I moved out here to to start banking with a Community Bank specifically one that uh one of my friends has a good relationship with and I put that off and put that off until there was a need to go do that and so I thought you know I sold my house I sold my business I don't have assets I was about 90 percent 90 percent of my net worth was Cash and inflation is ripping at this point and I'm going this is it's nice to have flexibility but boy this is a bad position to be in so um I didn't know how lendable I was going to be but I did have cash I could use a good portion as a down payment again I think the pricing and the structure of the deal was very fair in my favor which I'm very grateful to the previous owners too um but talking with the local bank it took a couple conversations about 10 Miss 10 minutes each time I just telling them what business I was buying um here's my net worth on paper what it looks like how it's broken down I have no liabilities um you don't have any kids nothing like that so like it was pretty straightforward and we're like we can take a chance at this guy so I think I put down I think I put down about 30 percent of the value of the business or the or the purchase price in cash and that was my personal cash and then because we needed to secure the loan um my father was very generous and said you can put a lien a second lien on a line of credit on our house that's paid for back in Minnesota and the terms of the loan from the Community Bank are five years so it's a really quick payoff for a pretty good chunk of money and I think that was really responsible lending on their part it gets me out of debt faster and when I can take that large debt payment to the bank you know a handful of years from now five years or less and apply that to my bottom line I'm going to get much more comfortable real quick sure and I'm excited about that so I'm focused on the debt reduction over the next few years with any additional income and and so this was not a traditional SBA loan SBA 7A business acquisition loan no and then the Community Bank that I that I'm working with said you know the SBA it just gets complicated and if you need to go that route you can but if we can get creative and you're very lendable uh person let's try to avoid that so I did and I think I got very favorable terms and I think it's structured in a very responsible way so they took care of me I believe you told me also that when you drop the name of the restaurant that you were acquiring they knew it and also so it wasn't just you that they found bankable it was also this neighborhood institution you know carried a lot of brand equity in their minds correct actually the bank I bank at is a half a block North of where I do business so they so they all you know go to lunch and dinner yeah exactly pretty much great um well what uh what what are you kind of what are the plans now Andrew is it basically to just you've already said you want to pay down that five-year debt um and continuing to operate the business I mean you're only three or three a couple months into this so you don't need to have big plans you're just probably getting your feet but um seems like things are going really well getting some breathing room now after a little while and that feels good um I did purchase a house in town as well um the same week I bought a business so apparently I pushed all my chips into the center of the table and uh decided to plant roots here I think is a good move um yeah I think the plan is just to operate the business my staff for the most part has been a core staff that's been there for quite a while multiple years in all departments so I have a good Core group of people that I can trust and help me run the place I think a friend of mine said when he came in for breakfast one morning he said uh this is the first time I've seen you over the last month or so running this place where it doesn't look like you're wearing your dad's suit and I said oh like he's saying you know I looked comfortable finally in my own skin there because like you know I was the new guy sure and I talked to a restaurant consultant that was offered from one of our vendors just a high level conversation and he said you know buying an Institutional Legacy restaurant is often much more difficult than starting one from scratch which I was surprised to hear he said oh these things they they fall apart all the time staff leaves new management comes in changes things Community doesn't Embrace new ownership I said well that's a good point I guess I didn't really think that was going to be the case here and it wasn't it didn't work that way in my case which was great maybe I'll you know take some credit for leadership or something or just having luck and good people to work with but I think I'm kind of whittling the stick you know into a spear right now I want it to be a really really high level high operating joint and just get a really good team around me I know the former owners uh brought me in as a partner to their organization with the idea that I would help grow the brand and you know the community that I'm in the whole area of this part of the country is growing so so fast people are flooding in from the south and the coasts and they're Landing in this little spot and um you know they want me to find a couple more locations if it's possible over the next five years and to your earlier point with the hopes that some large franchise company comes in and buys everybody out and when they do that they typically make it an offer you can't refuse and then the former owner said and then we all retired become artists in the mountains which would be my dream so so you know there could be a five-year play there could be a 10-year play I could just have the one um run it you know our hours are very reasonable have a nice work-life balance you know make enough money to live on and enjoy being in a new community without the stressors of my old life I don't know what direction that's going to be yet I don't know what path I'm going to be on and I'm not in a hurry to find out I think everything will happen when it's supposed to kind of just unfold speaking of um hours worked and stress that of course is is also one of the things that is notorious about the restaurant business how how hard are you working I mean how many hours are you working a day um more than I need to for sure I mean I have a staff of people who are so responsible and take such good care of the place um I could let them do what they've been doing for a long time I however like to be there um I like to hear nice things that people say about the business that I own and operate I can't take credit for all the history of make but I know how we're executing currently and people seem to be really enjoying it and that feels good you know I like being around people I like stirring up conversations and sharing my story and and getting to know the town so I'm kind of you know I always wanted to be Sam Malone from cheers I just grow up watching a show with them perfect yeah and so I actually have a frame picture of Woody and Sam back by the back bar the restaurant is sort of uh my inspiration for taking this path you know I want to run a place where people walk in the door and they recognize you call you by name you do the same and that's the kind of place this is so like why would I sit at home on my couch with my dog while there's action to be a part of for you know Limited hours during the day and if I'm there and it's going well it's financially um beneficial to me like I haven't been earning money or had a place to go so now I do I've been I've been working a lot I mean yeah I mean I I imagine you're kind of hungry for some structure to your day hungry to to go somewhere because you know being unemployed and aimless and kind of that's a terrible feeling after a while and just being hungry to have somewhere to go and feel productive and feel engaged um is it probably is scratching up an inch you've had for a while now I think that was the biggest part of feeling down when I did when things weren't working out is just like there's a ball game being played and I'm sitting on the bench and I don't know how to get in the game yeah and you know for any of your listeners who are saying oh I want to buy a business so I can sell it in a couple years and then I can retire at 42. I don't know I mean maybe that's for you but days get long and that might be nice for a month or two but you stretch that out and uh you know you're in your Prime working years and you opt out it's a tough spot to be I know it's not a goal for me anymore like I just want to have something that I enjoy doing that I can be a part of um and then I'm not looking for like really an early exit I can say that now begs under my eyes probably tell you well we could do another re-interview let's connect in a year I'm holding up uh Andrew just to close out here a couple more questions just on the transition so so this concept of buying an Institutional restaurant you know kind of counter-intuitively actually there's more risk rather than less part of it is according to this consultant I suspect part of it is that a lot of people try to change stuff and you were wise to not do that and know not to do that um but you know employees will leave was one of the things mentioned what did you have a day one speech did you kind of go in and gather everyone was there a handoff or was it more kind of quietly done where you just kind of started showing up and were introduced around kind of not in some big production but kind of more uh gradually uh yeah it's all a bit foggy but I'll try to remember I think I was secret shopping you know because I I think the Deal started getting in place in August like it's a reality and again I was living not far away from where this place was located so I would find myself just going out for a meal there and observing and looking and I would change this I see that person they're doing a great job wise the floor all messy etc etc and I was showing up as a person who didn't show up there and then I was there every other week and I think staff who is this guy who is this guy and they they put it together apparently before the whole thing was done I think I had a staff meeting like three weeks in okay I had to hire up a couple people and then I just brought everybody together and poured everyone a glass of champagne that was legal to drink and said this is sort of where I'm from and this is sort of what I did and this is what I'd like to do for this company in this business in this community for all of you guys like I want to be successful and All Ships will rise with the tide you know if you don't want to be a part of like what we're doing and row in the same direction uh totally fine but I'm here to make all of our Lives better if I can so you know and we lost a few people here and there over the last few months but that's the nature of the business all my core people have stuck around and I've brought on some new people that are fantastic and I show up there every day and I say despite all the illness going around the scratchy throats and the sniffly noses um I couldn't be happier with who's there so it's fantastic and does it feel like what you the business that you ran in back in Minneapolis I mean is it kind of um feel familiar or have there are there surprises and it's it's a different animal than that one because every restaurant has its own no it's it's better in almost every way the hours are better I have a kitchen that cooperates our kitchen was great back then but you know chefs sometimes have ways about them that are difficult and my people just anything I want to do they say oh let's do it we're excited about it which is awesome right I can delegate projects to staff in the front of the house instead of thinking you know if if I could do it then I should do it well it's the the old owners of my location said we don't want you to act like that like we want you to grow our brand grow your business we don't want you busting tables and I bust my fair share of tables too but I'm also looking at my team and saying I think that's the most important thing to having a work-life balance so great I don't know if I could last in the weeds in that answer but no that no that that was great well um is there anything else that we didn't touch on from from this story of of kind of Resurrection to hopefully not to use too heavy a word but um it you it sounds like um you know you couldn't have been much lower than you were and now you're you're in a wonderful place with this institutional restaurant business that that you acquired and it all started kind of on a whim and um you're off to the races again yeah we'll have to check in and see how things are nine 12 months hence but right now things you're sitting pretty yeah it feels really good I mean you know you used a heavy word Resurrection uh Redemption would be another similar word that I would that's what I was hoping for that's what I wanted you know nobody likes to leave town with their tail tucked between their legs and you know whoever is around might tell stories and might have opinions that feels bad to run away from that and then not know what's going to happen and have all this uncertainty and you know finally something that was totally right a deal that I probably you know shouldn't have got whatever whatever the circumstance it's worked out and I have a I can say you know big sigh of relief for being where I currently am because I know what it looks like on the other side so I wake up every day with the feeling of gratitude um willing to work put in the hours take care of my people um yeah grateful really great great well thank you very much Andrew for coming on and sharing your story I'm so glad Brandon connected us congratulations to you and and we certainly will Circle back around and hear how things are have gone a year from now excellent well this has been fun and I appreciate you having me on your show thank you so much I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business