Jon Taffer on Bars, Restaurants and Hotels on Lockdown (Podcast)

which you probably know today as Red Zone. He is the star and creator of Bar Rescue, a nightclub hall of fame in Duct just somebody who has been incredibly insightful in understanding how to make bars and restaurants work better, not only for the owners and for the employees, but for the customers as well. He really understands the industry in a way that nobody else does. And he is very concerns that we are going to have a lot of problems keeping some of these restaurants and bars open

once we finally come out of the pandemic. We have done a tremendous amount of economic damage and it is going to leave a mark. He has some ideas how to get out from behind that. So, with no further ado, my conversation with John Taffer, this is Masters in Business with Barry Ridholts on Bloomberg Radio. My special guest this week is John Taffer. He created the NFL Sunday Ticket before going on to star and create Bar Rescue. He was one of six inductees until the Nightclub Hall of Fame.

He has created several apps for managing a bar or a nightclub, including bar HQ. His latest show, Marriage Rescue, is out. He is the author of Raise the Bar, an action based method for maximum customer reactions. John Taffer, Welcome to Bloomberg. Nice to be here, Barry. So you're the perfect guy to speak about restaurants and bars and how people are going to be able to come out of this quarantine. But before we get to that, let's

talk a little bit about your background. How does a kid who grew up in Great Neck end up on the West Coast in the hospitality industry. You know, it's funny. When I went to high school back in those days, a lot of us went west. You know, we just went to California, That's what we did. So I had taken music lessons when I was in high school. I was a drummer. I was very serious about it. Took lessons for nine years and went to California actually to pursue a music career. And in my pursuit of the

music career, I started managing a nightclub. One day, the Troubadour, the very famous Troubadoor in Hollowood, California, which had opened in fifty seven, Lenny Bruce was arrested on a Troubadoor stage Barry for saying something I won't repeat. That's the kind of history that that place had. So I got a job at the at the Troubadour and started managing it, and one thing to another, and I've been in a bar, in hospitality management business ever since, but ever run bars, restaurants,

resort hotels. I've really worked in every facet of the hospitality industry. So how does one transition from running a bar to running a consulting business to television? You know, in the mid eighties, tax code changed, barry, and it got to the point that hotels could no longer right off certain deductions. So restaurants and bars and hotels had previously been more amenities. They weren't run as profit center as they were run really a service, uh mechanisms to

support guest room sales in the hotel. Well when those tax codes changed. My company was very successful. This is back in the mid eighties, and I created a company to teach the hotel industry how to make money in food and beverage, which, believe it or not, they weren't good at then. And these were all the hotel franchises around the country. I won't mention brands, but household brands. Twelve hundred hotels in one company, eight hundred and another.

So we went in in. In those days, hotel restaurants Barry weren't exactly the greatest hotel bars you wouldn't even go to. So we we're the company that built all the outside entrances in and tried to create a position them for the local market. We're also the company when

we got it hired by all the hotel companies. I'm the guy who flew around America closing almost every top four restaurant on every hotel and moving them from those things into into food and beverage operations that would be successful. We did that for many years, did hundreds of hotels, got very very good at it, Arry, and we opened my first restaurant, which I owned myself. I opened in a St. Louis let's go back to the top floor restaurant.

You're saying there's not a lot of pedestrian traffic when you put the restaurant at the top of the hotel, well, it becomes what I call the dreaded special occasion syndrome. You'll go there on your anniversary, Barry, you might go there on your wife's birthday, but you're not going there more often than that. And when hotels would drop restaurants on the top four as, they inherently became that special occasion syndrome which knocked off all frequency and UH destroyed

their potential day to day. So none of them were ever really successful, with very few exceptions. So how does one transition from being a consultant to name brand hotel chains to something like bar Rescue? You know, well, bar

Rescue was interesting, Bear and all my hotel work. Over the years, I became a public speaker and I spoke at all sorts of hospitality and industry events are all of the country, thirty forty speeches a year to UH many companies, and many of those speeches were to brand conferences for companies like Marriott Holiday in back then Hilton And when I would go give a keynote speech at a brand conference. One day, somebody came up to me at one of those speeches and said, John, you should

be on television. So Gordon Ramsey was on TV at the time, this is about ten years ago, eleven years ago. He had his show Kitchen Nightmares. So I sat out and I put together my own concept, Barry. It was a cross between Kitchen Nightmares and Mission Impossible, and I wanted to pick experts. Remember Mission Impossible, they picked the experts out of the file at the beginning of every episode and there could be different experts for different episodes. Well,

that was the model I wanted to use. So I created bar Risk. You wrote it up on a piece of paper and it was originally called On the Rocks, and you like the story. So I take that's a fantastic name. On the Rocks. That's even better than Rescue. That's what I thought. But so I go to Paramount, And years earlier I had done a project for Paramount, the Bubba Gump Shrimp Company, and I had worked on a restaurant concept, so I knew the president of Paramount.

So I take my rite up On the Rocks to my friend that Paramount he reads it and I won't repeat his language, Barry, but he said to me, John, you will never blanking beyond television. You're too old, you're not good looking at enough. It will never happen. So I drive out of the Paramount gates a little little disappointed, and I say, you know what, I'm gonna do this myself. So I, when I shot my own sizzle reel, which is sort of a three minute version of the show,

sent that sizzle reel to four different production companies in Hollywood. Unbelievably, I got four offers from four and one of them was at the television convention in France. They called me from Frances said, no side with anyone, so we come back. So now I have a deals on the table. So I look at the four production companies and I didn't follow anyone's advice. Everybody told me to take the money, picked companies that gave me the largest offer. I didn't.

I chose the company I thought would make the best show, and it was a few few less dollars for me. So we put together the pilot. The show sold in two months, was on TV less than a year from the day that I went to the Paramount lot and was told I'll never be on television. The show premiered, and of course I got a beautiful phone call from my buddy who told me I'll never be on TV.

But the show went through three different names. It started with on the Rocks, and when they tested on the Roxbury, they found that it came up with a marriage connotation and marriages on a rock, so so that brand didn't work. Then we became bar Rehab for a little while, and then we landed on bar Rescue and if show premier and of course we're in our tenth year. I'll be shooting my two hundredth episode in a few months. Have been quiet down and it's an act of a run.

You know. There's an amazing book by William Goldman, who wrote screenplays like Butch Cassidy and The Princess Bride and his it's called Adventures in Screenwriting, and he has entire chapters about all the amazing movies from Raiders of the Lost Arc to Star Wars to Princess Bride that everybody passed on and said, this is a disaster, this will

never be successful. You're another case study, I am, and there's something to be said in this There isn't any one person in the world who can tell you you can or cannot do something, and there shouldn't be a group of people in the world that tell you can or cannot do something. You know this when when they walked out, when I walked off to Paramount, a lot very because of that meeting, it became important to me.

It was an idea on the way in, but when he said no, it became a vendetta on the way out. And I thank him for that meeting. That's quite fascinating. Let's talk a little bit about the early part of your career. You worked at the infamous Troubadour in West Hollywood in the late seventies. That place had a wild reputation. What was that era like when you were there. Well, I think wild is a good word. This was a

very different time in our society, was pre aids. Sort of sexual revolution was still going on in those days. There was no gang activity, no threat of violence, so it's a very different time. I hate to sound like a hippie and say love and peace, but it was sort of a little bit of love and peace. Back then. People didn't fear each other. They were quicker to get intimate with each other and music was exploding. Then, all different types of music were exploding on the scene. Then

the Troubadour was sort of the center of it. And so let me give a short list of some of the bands that either premiered or played there. Jackson Brown, The Birds, The Eagles, Elton John, Joni Mitchell, Van Morris and Bonnie Ray Red, Hot Chili Peppers, Linda Ronstat, James Taylor, On and on. The list goes. What was it like when you were there watching that talent go through that stage? Well,

it was an incredible thing. Doug Weston, who founded and ran the Troubadour, would get these real tapes back in those days and he would listen to these tapes. There were no videos. He would listen to these tapes and picked the bands that he would book at the Troubador. All of those bands you mentioned played there when they weren't famous. That's the amazing thing of it. Doug's ear, you know, reacted to them and he saw potential. So they came and played in the Troubador. So I wasn't

watching stars per se bad I didn't know it. They were going to be superstars in some cases, megastars. So to me, it wasn't as much about the star as it was the music. And when Elton would play or these people would play and they get off the stage, you were overwhelmed by the performance into music and you would say to yourself, this person is going to be a star. And in the Troubador you got to see many of them were in your chops and become stars. So the music and the performance side seems to be

running on all cylinders. But the actual management of the restaurant and the bar was kind of a disaster. Employee theft was rife, the books never balanced. You take over in what do you do to change how the places managed? Well, a number of things. First of all, there were no rules in the Troubator, and everybody who worked there was a musician. I mean, that's just the way it evolved. So if if you were a musician and you needed

a job, you worked at the Troubator. People would take a side of beef, throw in the back of their car and take it home Barry. I mean, people would take full bottles of liquor home, do it no controls whatsoever, and a half of beef that they took home the other half of it day ate while they were working

that day, so there were no controls. The club had no money, and there was a floor safe in the kitchen, and at the end of the night we put the few hundred dollars we made in the for safe, and in the morning I had to come in as the manager empty the floor safe and used that money to buy liquor that morning. Because we were on C O. D. We had no accounts anywhere, and in those days the owner used to engage in recreational activities and he would go in there at four in the morning and take

the money out of the safe. So I would come in at eight thirty in the morning hoping that money was there so I could pay for wicket too, every and it wasn't there. So it was a real battle running the Troubador. It turned into a system whereabout I took the money home with me every night and then came back in the morning with it so I could

buy liquor and such. But here's a funny story. When I took over the Troubadour, we had about two inches of water in the kitchen a flood, and we did the tributor did not have the money to fix it. Was struggling at the time, so we put together the Troubadours twenty fifth anniversary events for a month. Everybody came back, very Linda Ronstad, Elton, John Jackson Brown, even bands like The Knack, they all came back. We made a fortune that month. We're able to fix the floor and the

Troubador survived. So what you're describing in first taking over the bar and restaurant is effectively the basics. What sort of basics of business do People who go to bars have no idea is happening behind the scenes. Well, you know, when I took over at the Troubador, it was fascinating to me because I had never run any place before, so I didn't know how it should be. But I

learned very quickly how it shouldn't be. I mean, everybody giving away drinks to their friends, overpouring like crazy, making themselves drinks, giving away food, taking food home, no standards. If there's your buddy, cut the steak thick. If he's not your buddy, you cut it thin. I mean, there was no standards, no rules. It was a complete flee for all. And I learned at a young age When I worked at the Troubador, I was in a legendary facility when it came to music, But I was in

the worst run bar America. There was no question about it. Nobody could survive with the set of rules or lack of them as the Troubador had. So I walked away from the trouba or experience, with a very powerful knowledge that great places can be poorly run, great places can close. And I learned how type the margins are in the bar business, which is twelve percent if if it works, twelve eights of home run, so there's not a lot of room for error or employee borrowing of either food

or drink or cash. How quickly when you walk into a bar, can you identify if this is something that could be rehabilitated and made at least break even if not profitable, or hey, this place is never gonna make it well. I walk in within about two or three minutes, I can scope the operation. I can determine what operational potential has literally in minutes, things like smell of music, pace, energy that set up behind the bar, how did the

tabletops look? Are salt and pepper shaker sticky? Are they clean? I mean, it's eight or ten things that you can use is pretty good measurements to determine ability. But to me, the business isn't what's failing. It's the owner that's failing. And I've always look at taken a look at this Barry, and that the only way I could fix the failing business is to fix the failing owner. And every failing business has a failing owner. So I start there. I

start on the owner. If I can't make the owner want to clean, if I can't make the owner embraced, change, if I can't make the owner uh change his life, day to day's processes, his procedures, that I cannot change the business. I could build him to taj Mahal and he'd still fail there. So that's why bar rescue gets so intense. Because I can build a bar with my eyes closed, Barry. I can put into computer systems the recipes.

That's easy, that's logistics. The challenge is creating an owner who knows how to be successful and has the desire to be successful. That's always the biggest fight and bar rescue. You know, it's funny. You remind me of something that one of the dog trainers at one of the dog show is once said to me, because I don't train dogs, I trained dog owners. The dog knows what to do. It's teaching the owner, and you're you're basically saying the

exact same time. I am. You know, great employees know what to do, Give him an environment, let him do it. Train them, of course, But so many cases it all comes down to the owners, and it gets very conflicting, and it gets intense, as I know you know about. And here's why. Because of accountability. I forced them to tell me that they're failing because of them. I won't let them say they're failing because of the bar. The

bar is them. I won't let them say they're failing because of the competition or the recession, or the whatever the case is. They always push an excuse. And my second book, which was a New York Times bestseller, Don't b as Yourself Cut The Excuses that are holding you back, identifies to me the single denominator of failure in business is an excuse. In almost every case. Make it. It is fascinating to think about it. What is an excuse?

Barry and excuses a reconciliation of a mistake, you did something you shouldn't have, you didn't do something you should have, or you're screwed up somehow, and now you create an excuse which makes you feel good about the failure. It's lets you explain the failure to other people. So you go to sleep that night and when you look in the mirror and you don't blame that shortcoming on yourself, You blame it on the excuse. So in the morning, when you wake up and you say to yourself, why

am I failing, Well, it's that excuse. It's not me. So you have no reason to change. But if I can get you to wake up in the morning and look in the mirror and say I'm failing because of me, you won't like that, barry that self accountability, then you'll start to change. So the ugly part of our rescue is when I'm forcing them to say that to themselves, I am failing because of me. They need to say that now they own failure. And once your own failure,

I believe you have a chance of owning success. If you never own your failure, how the heck do you get to success. So finishing up this point back, I believe that when I go in and train people and I do this in my public speeches and my keynotes. I give keynotes all the time these days of doing v notes. We have a special camera to stage set up and we do V notes speeches and we do very, very many of them. And every speech I give I always started with the same premise. I don't want to

change what you do. I want to change the way you think. You see, if I say don't do this, do that, don't do that, do this. When I leave, you'll go back and do it over again. Seventy chance you will. But if I can change the way you think, Barry, then I can't help but change what you do. So

I'm very aggressive in that focus. Whether it's bar Rescue, whether it's of my educational or keynote programs, I am very focused on forcing people to assess, uh what they do, not how they do it, and by changing how you think, I can't help but change actions. So that's become my signature, and as I give my speech is all around the country, I'm very focused on shaking up the way people think so that they can begin to think differently. I love that.

That's quite fascinating. You had a role in the creation of NFL's Sunday Ticket. Tell us how that came about. Oh, that's a heck of a story. Of years ago, I had one sports bar Operator of the Year in America, and I also had a consulting practice, and we consulted to not only people in the industry, but products looking to break into the industry. And I got a phone call one day from a company called com Sat. And

com Sat is based in Maryland. They have a huge field of uplink dishes and they manage most of the satellites in space, including government satellites. So they're a satellite management company and they manage the signals coming up the signals coming down. So at the time, this is the mid nineties, they managed things like pay per view cinema for hotels went through their satellites, and most entertainment channels did.

They came to me and said, John, we would like your company to do a feasibility study on out of market sports programming concept, being that you sitting in New York, Barry could watch a Dallas Cowboy game. You could get that signal on your home TV. So they asked my company to assess it. What could we charge for it? Would Bars want to buy it? What would be the fee structure, what support do they need to be able to sell it to their customers and promoted, etcetera. So

they retained us to do this feasibility study. So we did. We did the feasibility study. We identified huge market potential for this type of product, and they paid us dearly for that work. And then they came back to us a couple of weeks later and said, John, we really like this. Tell us what the product would look like. So then we did a second phase of work where we started design what Sunday Ticket would look like. And while we were doing that work, Barry something happened technologically

called compression. And compression changed the satellite industry where now I could receive multiple signals on multiple transponders off one dish. Prior to that, you might remember Barry to watch seven football games at once. The bar how to have a half acre field behind it with those big analog dishes. It became sort of cost prohibitive. Since compression was created in that second document, we then created the premise of Sunday Ticket. You could watch seven or eight games at

the same time off one satellite system. The technology worked, and then we started putting together the ad slicks to promo manuals, a marketing book or promotion book for the bar. We put it all together and then we delivered that to comp SAT. Compsat then came back a third time and said, this is great, Now give us a marketing universe. John,

Who the heck can we sell this too? So we put together another document filled with the Fridays and Damon's Ribs and Applebee's and all of those brands and their corporate offices and all their contacts and essence a target market book and gave them that, and they paid us very well for each one of these. Comp Sat then took my three pieces of work brought it to the NFL to license the signal. The NFL had the three Pafford documents and said, you know, this is really good,

let's do it ourselves. So they put me on the board of NFL Enterprises, and Sunday Ticket came to be. Wow, that's quite astonishing, and I imagine that that was as wildly successful as it sounds. The way you make it to this day, you still have an option of doing that, don't you. Well, you know, when Sunday Ticket launched, it

was originally only in commercial licenses. You couldn't get it at home for the first two years, so it became if you wanted to watch that Dallas game in New York, you had to go to a bar to do it. You couldn't watch it at home. Of course, years later Sunday Ticket evolved into a residential product too, and now there's NFL Read and different variations of it. But when we did it, which was about twenty six years ago, it's still the model by which all sports leagues do

their programming. Wow, twenty six years ago, that's a long time. So how does that then get par laid into bar rescue? Well it really didn't. So I'm back to my Paramount story. So I leave Paramount, they put together my sizzle Wheel, and I go to Paramount. Of course, I told you, and I'm told I'll never be on television, so I didn't accept that. I wrote it up, send it to four production companies, and the four production companies sent me four offers. I couldn't believe it. And these guys all

now background with the NFL. They they saw the past success obviously not really honestly, all they did was look at me on TV honestly, that's all they did. These are television stations. Sure they cared about my background a little bit, but you know, I learned on television that you know a lot of television chefs can cook at dinner, They can cook one place to TV, but they can't

run a kitchen. So there's a big difference, particularly in a hospitality space between TV hospitality people and operations hospitality people, huge difference, and I've learned that and Bar Rescue. So they did Nutch care as long as I could create a good TV show. They knew I had a background in it, so they knew I was a quote expert, but they didn't put much effort into learning my background in a hospitality business. They were more interested in what

I could do on camera. So we created a sizzle reel and the network picked it up. In four days the show launched. You'll get a kick out of this. First season was ten episodes, second season was ten third episode was season was forty episodes. Fifth season was fifty episodes in one year, and it takes a week to make one, so you can imagine, uh, the amount of work that year. But you know, Bar Rescue was successful. I think for one main reason and one reason alone.

It's real. I never met these people before. I get a sixty second briefing before the show starts. Barry, that's it. I've never been in the bar before, so bar Rescue last because people know real, they know fake, and I don't know anything about these people at the bar. When I find out, the audience finds out at the same time.

So I've worked very, very hard to keep the show authentic, sometimes at odds with the network to do so, because you know, in the television business they want to know what they're getting before they read a check, and Bar Rescue, you're not gonna know what you're getting till after your right the check. It just doesn't work that way in my show. You have to trust me. So it took some time. Now, of course, we had the level of trust with the network. We never had network executives on show.

The network really has very little to do with what we produced. We do it all ourselves, deliver the show to the network, and we operate very autonomously of the network, which enhances the reality of the show. Let's talk a little bit about what's going on with Shelter in Place and working from home in lockdowns. The bar and restaurant

industry has been pretty decimated by this. I spoke to Pat la Freda, a meat purveyor in New York City, who said about half of his restaurants are just shut totally, and of those that are open that are doing curbside service take out to go, they're running about a third of what they traditionally run. What is the world of

bars and restaurants gonna look like coming out of this quarantine? Well, I think decimator is the right word, Barry, And obviously I'm heartbroken to for this, and many restaurants are running a closer to uh off ten percent of what they

did and many of course haven't opened yet. And making a couple of points, I'm very concerned about the difference between sustaining and opening, and all we've gotten government stimulus hours We're all spending our money sustaining ourselves when we have no revenue potential, and I'm terrified we're not going to make it and have the resources to open properly when we do have potential. That's what's horrifying me about

the industry. And every week more go down that don't reopen again because what we're doing, we're causing them to bleed to death slowly. Now. I'm not saying every restaurant, but I think in many cases I wouldn't open now. I would stay closed. I would retain my resources for a real opening. I would open in a few weeks when people are more comfortable, open with a bang, with a little marketing. I wouldn't just open quietly with everyone else.

And I'm just very are concerned. And in our government stimulus package, Bear, they gave us money for payroll, rent and utilities, but there's no inventory allocation. Now when these restaurants really open to a capacity down the road three four whatever months from now. Keep in mind they've been running into deficits, so they don't have resources. Now they have to fill their refrigerator, really feel it because everything is bad. They even have to change their beer kegs

because those are bad barry. So now they need the resources to create a completely new inventory to open properly. They don't have those resources, which means they don't order from the food distributor, the manufactory doesn't make it, and the farmer doesn't grow it. So if we don't get American Americans restaurants to refill their refrigerators. We're going to have an impact right down the whole supply chain that. Yeah, they really need a new line of credit so they

could ramp up. Correct, we need some type of an inventory credit so that we can spend dollars on product. Then it should be structured the saying that the money spent on product, it's not repayable. If it's not, it is. But we must get these refrigerators full against the restaurants can get to real capacity levels as far as having the products to sell so that The other thing that terrifies me, Barry is the separation between bars and restaurants.

The industry doesn't separate them. We talk about them in one glide, and they're not bars. For example, if you look at the regulations around restaurant openings, you're not allowed to walk up to the bar. You're not allowed to sit at the bar. There's no standing room allowed. You have to be sitting at the table. So by effect, the regulations to open a restaurant has closed the bar. Now you can order a drink at your table, but the bar itself is closed for walk up or sit

down customers. Now that to me, I get it. But the bar in fact is being clustered. Are the restaurant is open, It's no, the bar is at zero. We must remember that. So all of the as far as across the country, particularly ones that don't have food, people can't walk up to their bars, can't sit at their bars, they can't have standing rooms barry. That's almost every small neighborhood bar in America. So the bar industry is far more challenged than the restaurant industry is, and I'm very

concerned we're gonna lose about them. Wow, that's a giant number. My understanding of profitability at restaurants is that the bar plays an enormous part in that. If we reopen restaurants and the bar portion of a restaurant remains closed, does that mean we're dooming these restaurants to uh not be profitable for the foreseeable future. Well, yes, that that's in many cases. The numbers that you're talking about is product cost.

Food costs in a restaurant can run, beverage costs can run, so you're making considerably more dollars per revenue dollar off of liquor. You also can sell liquor without the burden of the kitchen staff, so your labor costs connected to liquor and to rinks is a little lower as well. So yes, when you take the beverage sales out of a casual dining operation, let's say where it's beverage sales, now it's a food sales, lower profit item, and it's only at potential. There's no way it can make money.

It's barely sustaining itself. And when it runs out of the resources, the same itself. Very how does it reopen when the pandemic is over? So here's one of the questions that I keep hearing from economists. They are saying, it's not so much that we're forced into lockdown that's preventing us from going out and about to these places that a lot of people on their own are afraid to go to restaurants and afraid to go to bars

or concerts or shows or whatever. So two questions for you, First, how long is it going to take for people to get over their fears? And second, can restaurants and bars wait that long? Are we basically gonna be stuck in a slow circle the drain situation. I'm worried about the ladder, but if I can, I made this pretty simple all right, let's cut it up in thirds. I believe the third of the population, the younger third, the invincible third, they're

gonna go out right away. They're gonna go out there in the party. We've seen a bunch of them out the past weekend or two in states that are allowing it. The second third I called the reserve third. They want to watch and see for a couple of weeks what's happening. You know, there was there any spike in illnesses that the restaurants look safe? Are people wearing masks? Okay, if it looks good, it feels good. That second third will start to come out in a few weeks. The third

third I called a certain third. They're not going out to there's a vaccine and they can be absolutely certain. These are people who are a little older, demo, maybe pre existing conditions, but Barry, that's the sector of the audience that has the highest disposable income. It's going to impact the luxury sector, and nobody's talking about this far greater than the casual and other sectors in the restaurant the bar industry. They're the last ones to come out.

And that's why I worry about brands like Neeme and Marcus and luxury brands, and how they're going to be impacted during this whole thing because of the certain third, as I call it. So that's what's happening outside. But here's the interesting part. I have great confidence in the restaurant business. BART We've been dealing with invisible enemies since our inception. We call it bacteria, and bars and restaurants

deal with bacteria every day. We know how to clean our surfaces, we know how to wash our hands, we know what chemicals to use to clean those services. We know to separate raw product from cook product. We are really good at this. A good restaurant operator manages bacteria in his kitchen every single day and people don't get sick. Well, now we have a virus. It's a different invisible energy enemy. But the chemicals have to change a little because it's

viral rather than bacterial. But the processes don't change that much. We still have to wipe our surfaces all the time, we still have to wash hands all the time. Now we're adding masks and other ppe to the process. But make no mistake, unlike the retail business, or the car business, or the furniture business, restaurants know how to do this. We've been doing it our whole lives. Here's my fear. I am scared more about the customers than I am

the restaurants. So let me give you an example. We talked about that first third, that second third, and that third third. If that first third goes out, doesn't wear masks, doesn't employee social distancing, so that we are the news. That second third, all they see is images of people being irresponsible in restaurants. Nobody's wearing masks, they're hanging together, there's crowds in front. That second third is not going

to go. So I suggest that the actions of the customers these first few weeks, more than a restaurants, are going to determine whether this works or not. And think about it. About if you're driving by a restaurant and there's four people standing in front space and they're wearing masks, your immediate impression is, Okay, they got their stuff together. That must be a safe place to go. Drive to the next restaurant. Crowd in front, nobody wearing masks. Are

you going to go in that restaurant? If I'm twenty two, yes, if I'm fifty two, now, So My point is this, those customers that are saying I refuse to wear a mask because of vanity, are risking all of these businesses, not just the health of the person standing next to them. And it's a powerful point. The only reason why somebody would not wear a mask today is because of vanity, and that makes no sense. Vanity shouldn't come before safety. Vanity shouldn't come before the safety of the person next

to you. Vanity shouldn't come before destroying the local business. So I'm trying to communicate the people that if we don't behave in these ways, we're gonna lose more of these businesses. People are not going to come. So I put the burden equally on the customer as I do the restaurant. I know that will do what is supposed Will the customers do what they're supposed to, and if they don't, that restaurant is doomed. Today, we're living in

a culture of accountability, Barry. If you go out to dinner and have a bad dinners on yelp, in a matter of seconds, if we have infections in any of these restaurants, and we have crises to break out in any of these businesses, it will go public and it will destroy that business. So think about it, and restaurant operated does everything right by the book PPE procedures, processes, A bunch of customers come in, very irresponsible, people get sick, and now that restaurant is shut down. I have two

questions about how we come out of this. One is sort of short term and the other is long term. Let let me start with the shorter term one. So, if we're doing social distancing and some of these restaurants are are running at half capacity, can these guys break even with every other table and every other seat pulled out of the restaurant? Is that is that really be

a viable financial option? No, it's not at all. And you know, I've said to myself, if we can't do a hundred lunches in an hour, because I'm the thirty percent capacity, you know, now I have to do those lunches over three hours. Okay, So I can do early bird lunch specials, late bird lunch specials. I can spread the business, but now I'm doing the same revenue for three times the labor costs. Barry, that doesn't work either. So if I recover the revenues over more hours, that

doesn't solve the problem. I have to recover the revenue in the same hours to make my numbers work. That makes a lot of sense. And then the second question. I keep hearing people saying, this is going to change us forever. Everything is going to be different. Fast forward two years. We have a treatment, we have a vaccine. Does the restaurant industry return to normal or are we forever altered by this experience. I'm I'm of the belief

that we do return to normal. You know. I think we're social animals and we need social interaction and six be the part isn't gonna work for us long term. Once we have a vaccine and people feel safe, I believe we go back to normal activity and and I think that there might be some adjustments to society. I think kitchens will never quite be the same, and I'm all for that. I'm opening a restaurant in Atlanta in July called Taffer's Tavern. We've created the kitchen of the future.

It's all robotic cooking. There's no human touching of food as it goes to the cooking life process. And if you look at the kitchen today and we'll send you pictures when it opens back, you can see what the kitchen looks like. But but we're changing the industry. You look at a kitchen today, it almost looks more like an operating room than it does a kitchen. You know, we can't have street clothes and kitchens anymore. We can't let people wear their ball cap from home in a

kitchen anymore. You know, we have to have gloves, we have to have uniforms in the kitchen. We have to have hats that we issue, not hats that they wear from home. It's a different style of operating now. They have to have masks, they have to have gloves, but we have to have less contact in the kitchen. So I think it's there's mind the way. It's going to change the way future kitchens are designed, and it's changing

kitchen equipment hugely. Companies like Middleby, who owns about sixty professional grade ovens and cook they're focused on all these robotics and everyone is focused on how to do this without people. What's interesting art is six months ago we all were doing this. We were all trying to create robotic kitchens without people in them because we had no labor pool back then. Remember just a few months ago we couldn't find any people. We had fifteen dollar minimum wages.

Many of the hires we had with New Americans, they didn't speak so well, so we had to simplify and reduce the labor burdens and kitchens. So it's interesting when I started that process two years ago, because we had so much labor in the market we didn't have labor in the marketplace. I wound up with a kitchen that's perfect for post COVID, but that wasn't what we built. We just tried to build the most sanitary kitchen that would be the most efficient kitchen in America, and we

wound up with a COVID nineteen kitchen. It interesting, that's absolutely fascinating. So I know I only have you for a couple of more minutes. Let's jump to our speed round where we're gonna find out a little bit about you, uh personally, And let's begin with the question that's on everybody's mind. What are you streaming these days? Give us your favorite Netflix, Disney plus Amazon Prime shows. What are

you watching or listening to? Well, I've been I've been watching Ozark, of course, which which I love, and I just finished the new season, so I'm a little bummed. I got no more Ozark for a while. There's another show on Netflix called Stranger, which is a British show that I've been watching, which is really great. It's a mystery show. Um. And then of course on Disney, I must confess I'm a classics guy. I've watched a little Star Wars, but I must confess I watched Beauty and

the Beast the other day. Yeah, nothing like a little cheerful escapism to forget the mess we're dealing with. A cartoon works pretty well in the middle of it. Really, it really does. Tell us. By the way, the cartoon I'm watching on Disney plus us is um after I went through the Mandalorian is a Star Wars series called Rebels, and it's surprisingly good plot lines for an animated series. Tell us about your early mentors who helped guide your

career and turn you into the television powerhouse you are. Well, you know, it's interesting. I didn't really have any television idols, uh per se. Gordon Ramsey of course was out before me, sort of created the genre. So watching Gordon, of course, uh, the way he works and has impacted me. But you know, I have strange mentors. I mean, Thomas Jefferson is a huge mentor to me. I know everything about his life. I have huge respect for Jefferson. He's a real mentor

to me. Believe it or not. Howard Hughes, I've read every book ever written on a man who's been a huge mentor to me. The fact that he stepped from one industry to another, uh was huge. It was hugely powerful to me. Uh. You know more locally, Uh, there are people. Uh. Youngman by the name of Stillman who created Friday's was a mentor to me. He redefined the whole dining segment. But I tend to be more motivated

by global figures more than smaller industry figures. And of course the greatest motivator of all to me was my grandfather, who taught me that the only way you can become a millionaire in life is to be the smartest guy in the room. And the other thing he taught me was John, if you don't have a big check book, you better have a big idea book. And those are the things he taught me when I was young. But he was probably my biggest mentor. Speaking of books, what

are you reading? What are some of your favorites. What's keeping you occupied these days? Well, you know, I've been uh looking at a number of books. It's interesting. I just read one of mine again the other day. Don't be yes yourself. But there's a book that I love that I've been telling friends to read that I read years ago. When I pulled it out again, it's called The Myth Revisited and it's a book about the entrepreneurial myth.

And it's a short book. It's a quick read, and it really makes us think about ourselves, whether we truly are entrepreneurs, businesspeople, administrators. If counts us into categories of business through personality and helps us to understand ourselves. It's it's a fun book. It's called The Myth Revisited. It's written by Michael Gerber. I will definitely check that out. Tell us the sort of advice you would give to a recent college grad who was thinking about going into

either the hospitality business or the television industry. Well, you know, both industries are are somewhat of a metamorphosis, if you will, or a fork in the road. The hospitality industry is not going to go away. We need hotels, we need restaurants, We need bars. It's an important part of our society. But those who go into that business today are going to be the instruments of change. Great marketers are going to bubble to the top. Very great promoters are going

to create revenue. Great operators are gonna find new systems. So I personally see this as a time of rebirth. You know, it's almost like when it's a forest fire and those new sprouts pop out of the graud. Certainly one grow quicker than others. I really believe that. I believe there's going to be an exciting time as soon as that vaccine comes out in the industry. So I'm selling the people that want to go into this space, don't not don't hold yourself back. Think of the greatness.

Think of the amazingly powerful ideas and programs that are going to read, define and relaunch the industry. So I would not divert into a different way. I would remember for every person who's graduating this year that great marketers are going to market really well, great promoters, great operators be one of those. But if there's anything that this pandemic has taught us, it's mediocre is not going to work coming out of this We need energy to come out of this. We need ideas to come out of this.

We need those young minds, those young ideas that understand social media so well, grew up living these things. They're going to be the biggest contributors to this change, I believe. I love that suggestion. I think you're you're dead on And our final question, what do you know about the world of hospitality today? You wish you knew back in the late seventies when you were first started at the Troubadour. Well, you know, I think the world of hospitality today is

we didn't appreciate loyalty like we did today. You know, we didn't have loyalty programs and frequency cards and all of those things. We used to look at guests as transactions. We didn't look at them as relationships. It was only in the later years of the industry that we all started to understand the power of frequency and building guest relationships. And that's when all the software programs created, in the

tracking programs and the frequency programs. The one thing that I didn't know when I started in this business, and I learned my financials, I learned my operations, I never learned what really marketing was till much later years. Marketing is only three things, Barry, And in the hospitality industry, I didn't know when I was younger. I don't think they did. Marketing is new customer programs, frequency programs, and

spend programs. That's all we got there. I gotta get you to come the first time, I gotta get you to come more often, and I gotta get you to spend more while you're there. That's all we got. Most hospitality, the operators don't cut marketing into those three things. They just spend the money generically. And if ever, post pandemic, we need to isolate our dollars into new customer programs, frequency programs, and spend programs. Now is the time to do that. But I didn't know any of that. I

was just spend the money and trying to fill buildings. Today, Uh, these types of knowledge of frequencies and customer loyalty is what's made our industry so successful. And candle Bebarry, that's what's built the brands that we have today is those loyalty efforts. John, let me throw one more question at you, because you kind of tickled something in my memory. If you are a customer today, and you want to help keep your local restaurant in business even though we're under lockdown.

What could an individual do to help out that restaurant. Well, a number of things. One, gift cards are a great way to do it. There's a website anybody can go to. It's called shift fur cares dot com. S H I F T four the number cares dot com. If you go to that website, you can buy a gift card for any restaurant in your local town, and they pay them five percent more than the value of the gift card. So if you're gonna buy a gift card, go to shift four cares dot com getting the extra five I

think that's very very important. I think calling restaurants and trying to do some catering programs. If you're having any kind of family over, if you can order dinner for four's, I think that's very very important. I think bars should start selling deconstructed cocktails. You know some of us out to kill avatia rum and stuff at home. Sell me the cocktail without the booze. The government can't regulate that they are currently regulated. When there's booze in it, I'll

put the booze in at home. So we have to be innovative as restaurateurs to offer packages to people that they can buy. But I really think, look, the second public building ever built in American Barry, was a bar. The first public building built in America was a church. Those bars were called public houses. State boarders were built were discussed in those bars. Our Constitution was originally discussed in these bars all across the country. So bars are

in the fiber of America. Our first distiller was George Washington. So bars have a place in our society, that coveted third place. Barry, you go home, you got to work, and then there's that coveted third place. To some people, it might be a country club. To other people it's their local bar. But that third place is an important place to our society. It's where we all converge. It's the place of community. So they can't go away. And as people, we want to fight for this industry and

protect it. And I'm asking the government to step up and look at some inventory credits to help get us over this hump. Quite interesting. Thanks John for being so generous with your time. If you enjoy this conversation, well be sure and check out any of the previous three D plus prior ones we've had over the past six years. You can find those at iTunes, Spotify, Google podcast, Overcast, Stitcher,

wherever your final podcasts sold. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Give us a review on Apple iTunes. You can check out my weekly column on Bloomberg dot com Slash Opinion, Follow me on Twitter at Rid Halts. Sign up for my daily reads at ridhlts dot com. I would be remiss if I did not thank my crack staff who helps us put together this conversation every week. Tim Harrow is my audio engineer. Michael Boyle is my producer.

Michael bat Nick is my researcher. Batica val Bron is our project manager. I'm Barry Hults. You've been listening to Masters in Business on Bloomberg Radio.