Mitch Roberts, SM '92

And I really was attracted to the concept of an operating company, a continuum, something where you were dealing with either continual product development or people development or business development. Something that didn't just start in. And uh, so I came to Sloan specifically cause I wanted to be in technology. I thought, wouldn't it be wonderful to be involved with computers or software?

And keep in mind when I entered in 1990 it was really pre-internet, it was pre.com we didn't have email as students at Sloan. So the idea was simply move into technology because technology was an exciting future. And we got here and I say we because my wife and I were classmates together. Uh , we were one of three married couples where both spouses were in the class. That's great. Uh, it was great actually. She made me a much better student than I had been in prior times.

We got here and had a wonderful first year and realized our ambition by both landing jobs in California in tech companies. And she went to work for apple and I went to work for Intel and had terrific summers and lived in the bay area in Cupertino and each weekend traveled someplace three or four hours away from Cupertino and had a wonderful experience in California. At the end of the summer we had that classic end of summer dinner with the boss and spouses pitch and his name was [inaudible] .

He said, Mitch, we'd love you to join us. Please come back. Uh , but don't rush. Call us in October or November and we'll arrange for your start in June. And what year was this? This was a , this would have been the fall of 91 cause I graduated the spring of 92. So I said thank you. And we came back to Boston for our second year at Sloan and it was a perfect Boston fall.

It was sunny, it was crisp, the colors were beautiful and we looked at each other and we said, you know, we're never going to be Californians. We could go, there will be a year or two or three, but we're coming back to these coasts. So why mess around, let's just find a job here and start our life together here. We celebrated our first anniversary as first years at Sloan . This was very early in the relationship. Did you regret that decision in February now ? No .

I grew up in New England, so I must skier and have always loved the winter. And my wife grew up in upstate New York where the winters are serious. A , so she wasn't afraid of snow either and we really thought of New England as our home. So , uh , when it came time to find that job, I went through all the standard interviews that everyone at the time went through the McKinsey interviews and a couple of investment banks in New York. And none of it really seemed very exciting.

And a friend of the family who happened to work at a local restaurant company called Obom pan called and said the chairman's looking for an assistant. So I went through this interview process with [inaudible] Pan and they made me an offer to be the assistant to the chairman. I went to see a visiting scholar here that I'd taken a class from, a gentleman named Morris Segal , who taught a class called retail strategy or strategies and retelling was retail strategy.

And he had been before , uh, being a scholar at Sloan . He had been chairman of Zero Corp, he had been chairman of American Express and basically his course was bringing in his buddies from American Express or American Airlines, a bunch of different boards that he sat on to speak to the class. It was, it was exciting. So I went to see a professor, Siegel and I said, I've got this job offer. The money's fine. It's assistant to the chairman. I don't know what it is.

He said, it's a good job, Mitch, just don't do it for more than two years. So I said, great. I said, this sounds like good advice. And we had a condominium that we owned and a mortgage and um , job was important. So I took the job and I went to work and all of a sudden I was in the restaurant business. Are they based? Where are they based here? At the time they were based in Boston. Uh , it had been a company that had gone public a year prior to my arriving.

Uh, so they were in the throws of being very exciting and aggressively growing. And I knew them because every morning before class at Sloan, there was an o bone pan in Kendall square that I'd go and I'd get my corn muffin and a cup of coffee. Is that the same one that's there now at the same location on the corner ? One same location, although it might be closed now we're about to close because they're renovating the building. Right? Yeah. Oh right .

You know , something that we don't know it's going, it's just going away. Wow. That's amazing . Cause that it has had generations of [inaudible] go through there . Right, right. Yeah. So I figured if I like the muffins and I liked the coffee, that's what else do I need to know? So I ended up spending a total of seven and a half years at Obama band and uh, I did work for the chairman for about two years. Uh, that job was fascinating.

It was anything that hit his desk that he didn't really want to do, he simply handed to me. So sometimes that meant junk. I mean, carrying my briefcase type of stuff. And sometimes it meant go to Harvard Square and negotiate with the homeless coalition, cause they wanna sell Christmas wreaths on the Patio of the urban panel at Harvard Square. And we need someone to go and make a deal with them. And that was a legendary one as well. Right? Hey, that was only closed five years ago.

It was legendary. Yes. And the chess tables out front and one of the early ones, number seven, number seven. Right . And what did the Kendall Square was in that range as well. A little later, but yes. Yeah . Nonetheless, I'm in the restaurant business all of a sudden. And uh, I quickly evolved into a real estate component because the chairman was the real estate guy, so I was his right hand guy, therefore I was a real estate guy.

And over the course of a couple of years, I started to learn about what it took to put together a deal for a restaurant. The real magic though was the fact that there were co-chairman of the company guy named Lou Kane , who I worked directly for in his partner Ron shake. And Ron has gone on to a lot of fame and fortune and was chairman and CEO of Panera bread for many, many years. And several years ago he sold that to a private investment firm and now he's onto other things.

But the magic was that I would go and make a real estate deal. Lou would say, great, let's do it. And Ron would say, no, we're not doing that deal. It's too expensive and not knowing any better. I would just go back to the landlord and say, sorry, I thought I made a deal with you, but I didn't. My chairman rejected it and the deal would get better. Right? So good cop, bad cop. And it was a eye opening experience for me. I was like, wait, there's Roman deals. Like I think I made a good deal.

And then there's more Rome and it was maybe the most valuable post Sloan education I received this notion that a deal is really not necessarily a deal until it's signed in , in my, in my view opened. Um, and that what people say they're willing to do is not necessarily what will actually make them happy in the end. That's a constant all the way to the end. It's knowing to leave the last nickel on the table, but to get all the way there a , I don't think you ever want to leave somebody in pain.

They have to make a profit on their end as well. But it doesn't mean they have to make a lot of profit on you. And so that was a terrific experience.

this whole fast casual sector hadn't really [inaudible]

And Pinera came in and saw our bigger niche and something that went beyond urban areas, which is really what Oman Pan specialized in.

Uh, and so we ended up becoming the franchisees for essentially the northern half of New England, three out of the six states of New England and started by building one store and growing their first store was in Framingham, Massachusetts. Still they're off route nine , uh , right on. Yes, route, route 30 there , uh , next to the target. Now , um , used to be a filings leech mirror center, excuse me.

Finally and spacement leach mere , uh, in fact, when we signed our deal there, it was finally his basement at one end. And Leech were on the other besides a t stop. Right. Do you remember legionnaires ? I arrived in 2002 . Oh , leach mears was a general goods kind of, I don't even know how to describe it. It was a predecessor to best buy slash target. Goodbye buy a little of everything, but not much of any [inaudible] general store, basically specialized in electronics.

We signed our lease there in Framingham, Leach Mirror , declared bankruptcy. We started construction on our store filings, basement declared bankruptcy. So here we are about to open in a new, in a mall where the two anchors both were either in bankruptcy or gone. Right . That's got to be scary. It was terrifying. So we had nothing else to do but open. So we opened. And just to give you a sense, the average Pinera today does about 55 to 57,000 a week.

Our first week in business in Framingham we did 9,000. Wow. The average back then was about 21,000. So we did nine and we looked at each other, my partner David and I and said, okay, we can always get a job. Yes. That was our general view. We're employable. Uh , and all of the investors, most of whom shared our last names would just have to take a loss and we'd all move on their friends and family. Right . But each week had gotten a little better.

And uh , after about four months we were like, yeah, this is good. This is sustainable, this is going to work. And then target bought that center and tore it around. Tore down around us, literally built a retaining wall around our store and tore everything else down, put construction fence everywhere. And customers kept coming in and they would say, guys, we wish you luck. We hope you make it. And this went on for about two years while they rebuilt the entire center. What year was this?

Must have been right around , uh, 2000, 2001 somewhere in that timeframe. And then we built a second store cause the first store worked and then we just kept going. So was, was there any threat of other people buying Pinera franchises that would make , so our exclusive , um, pretty standard franchise type of language. We bought a territory. So we were the developer of a , of an area and we had the rights to build the brand. So long as we kept pace.

So we had a agreement, builds a certain number of units in a certain timeframe. So as long as we kept pace, we were good. Right . And that's what we did. And our goal, by the way, was very simple. We were both in corporate jobs. We both had families. He's a little older than I am. So his family, it was a little older. I think we had just had maybe our, our second child would have been our second child and we figured if we built a dozen stores, it would be enough to support the two families.

That was really the goal. 1213 stores takes care of the two families, educate the kids lifestyles. Okay. That was it. That was really all we wanted. There was no build a brand, build an organization, create something really much beyond that. But once we got going and we got past the early stages, which were without question, the most difficult time. Yeah. I feel like I have endless stories about those most difficult times.

I do recall at one moment , uh, one of the things I did at Intel that summer was I was responsible for helping install a new software system that had come from Lotus called Lotus notes. And Intel was a Beta user and I was the kid at Intel figure this thing out, how can we use it? Literally that was my summer job. So I was working in the , uh , development area of Intel , uh, the corporate development area, business development.

So I'm playing with this thing and part of it was reading a lot and I'm reading, I knew nothing about technology. I'm reading all these tech mags that I had no idea. And this company kept being talked about. Every magazine didn't seem to matter, called Microsoft, right? So I said, I got to know more about this. Microsoft company started investigate it and I had a sister who worked on Wall Street and I called her, I said, val, how do I buy stock in this Microsoft company?

And she said, well, don't buy stock. Do It on paper. Okay. And see how it goes for a couple of weeks. So I did. And um, it was looked like it was gonna be okay . I said, okay , I want to buy now. She was okay . Set up a Charles Schwab account, do this, do that, you'll be fine. So I had like 10,000 bucks, maybe. I'm unsure I had that much. And so on day one I bought Microsoft maybe $2,000. And I want to say it was at 110 a share, and the next day I went to 105 so I called her .

I said, what should I do? She said, you believe in? I said, yeah, it's in all these magazines. She said, you should buy more. So on day two, I bought $2,000 more at 105 on day three went to a hundred

Can't go wrong with that. Right. And there was this other company called Microsoft [inaudible] . So I put in $10,000 in tendon and it exploded. It was worth 20,000 you know, six months later, I thought, I'm such a winner. Yeah . Anyway, they went bankrupt and IBM will cancel the contract about two years later. And I still have the certificates as fancy certificates you got per stock. And I've done the math that I've had.

I invested in Microsoft at it's peak, it would've been worth something like 30 40 million.

And so I would do my day job and then come home and then I would do the books at night and he was doing whatever he did at night, you know, business-related. And , uh , we would use AOL instant messaging to talk to each other at night. Um, while the kids were, you know, in bed, a huge advance was great at 10 o'clock at night.

But literally we ran out of money, couldn't make payroll, and I had to write a check and I was able to write the check because of the proceeds from that Microsoft investment. That's great. So one of the fringe benefits of being at Sloan was having a good summer job, got exposed to new things that I hadn't been exposed to, which resulted in a good investment

But it's the concept that we've developed the best practice in the right things is our customer delivery , execute the hell out of this and conceals deliver as well. And [inaudible] has taken that approach and as they've, we've grown together 57 units who were signed on not a sophisticated group support today there are over 2000 up very sophisticated group and the franchise owners, there are only 28 of us in our queue . We're also very sophisticated people that you're getting.

So it's not a battle. It's actually a mutual agreements. And we sometimes come up with stuff that's better than what they're doing and they'd look at it and sometimes with great joy and sometimes reluctantly they'll incorporate it and then that becomes the new best practice and gets rolled out nationwide. So it's, it's terrific. We do veer off the menu occasionally, regionally. So as an example, we sell a lobster roll, right ?

We sell a lot of lobster rolls, by the way, and it's a terrific product. But if you're in a Panera in Atlanta, you're not getting a lobster, right? What'd you make it? Something local there. You'll get sweet tea braids , which we're not selling to you up here.

He is a bit of a beast in the, in the franchising thing. He's what the largest, he's Franchisor , I guess, restaurant, franchise or Franchisee own country. That's amazing. I was , was curious about the scaling. So you went from one to and you grow and you're comfortable with your 65 67. Is it, we're at 63 today and we're growing, but we took a different model than Greg. Um, so first of all, Greg is a very talented guy. Very smart, terrific , uh , thoughtful, done really well. Not by luck. Right?

He's really very aggressive, but he's somewhat , um, I would think of Greg in some way as a fund manager in restaurants. So he has raised capital from outside investors, substantial capital, and he operates essentially a fund investing in large franchise restaurants and operating them, not just simply arms-length . He's not passive by any means. He is an aggressive, excellent operator.

Um, we raised extremely little capital, so we own our company lock, stock and barrel, and it's a different approach. Uh, I have no complaints of what , what Greg has done. He has been an enormous success by any measurement shore . Uh, and so he has taken a different approach that required scale. If you had done what he did and only built 60 restaurants, your investors would be wondering what you're doing all day. Right . Um ,

We were perhaps a bit early , uh , in terms of bringing it to the northeast , um, where the sort of most Hispanic thing you can get is chipotle Poli . And , uh, my partner who grew up in La has forever complained about the lousy Mexican food in New England. And in fairness, I think he's right. We loved LPO , local because of the quality. And we saw a lot of things in it that we saw in Panera.

Fresh protein, never frozen, marinated on sight flame, grilled on site , healthier, not fried, all of the sauces made by hand on site. So we said, wow, this is exactly what the market needs. The problem is the market didn't quite need it yet. It wasn't there. Yeah . And I think it will eventually or something like it will in fact work up here as the pallet sophistication continues to increase. [inaudible] consumers are slow to adapt , uh , particularly in the northeast. And so it will get here.

But we built three of them and operated them for about five years. Uh, and then finally just pulled the plug cause they bit of a distraction at the end. They weren't, they weren't going right , it wasn't working. And, and that's a realization that you have to reach at some point. You have to realize, you know what, we , we gave it a good try. Right, right. Time to cut it off.

In fact, one of the reasons I wanted to go to business school was I worked in this real estate development company and I didn't understand the economics of what they were doing. It didn't make sense to me and I like, I got to go and learn how that all works. And , uh, it turns out, by the way, after I took several finance classes that their economics didn't work. Uh, and so I in fact had understood it and it didn't make sense, right? But Paul Asquith , uh, was a tremendous teacher.

And I remember one line from his course, he had a phrase, the stupid banker theory , uh, and basically it was having a high multiple business and buying a low multiple business, but getting the high multiple applied to it. The banker looking at and saying, oh, well, high multiple bought low miles miles behind multiple now. And that concept has stuck with me , uh, when we think about our banking relationships and borrowing and what we want to talk about with banks. And so that's never left me.

You look for a stupid banker. Uh, in my experience, actually smart bankers have much more useful than stupid bankers. Yeah. A stupid bankers might be easier, but smart bankers are a better partner over the long term than the early ones get over the hurdle . And then you fake it til you make it right there . There is , I think he's still here, a Michael Cusumano and taught , uh, the strategy class that I took. Yeah. He was my thesis advisor. Eye-Opening .

Uh, so for a guy who had, had no background in thinking about how you think about businesses , uh, was one of the most profound courses. And just comparing strategy and thinking about how different companies had different strategies all in the same space. I remember writing my , uh, course paper comparing , um, uh, Marriott and Hilton and very different strategies about how they were growing.

And it was a wonderful learning experience and it's really been a political , because we think about it today and when we look at franchise models and what's the strategy for their growth and how are they differentiating themselves and what matters. And so absolutely apply that and think about that. And the last one that really sticks with me is I took a class and changed management from ed shine full semester course and lots of reading and lots of conversations and papers.

But the one thing I remember from it that still is applicable is when you try to change something, the way you get something accomplished, the way you make a change happen is you remove obstacles. You don't shove people through a change, you figure out what's stopping the change and you get those out of the way. And that is really a great way, a great model to think about in our business because we're essentially in the restaurant business. It's a fashion business.

It's not fashion by season, but it's fashion every few years it changes. So you have to basically ask your operators to constantly change what they're doing. So how do you do that? Because they've done it this way for the last three years. What do you mean you want me to do different thing? Well, change management. How do you remove the obstacles to the change? And that's directly from Ed Schein's course and it has stuck with me for 27 years.

I feel as if I need a civic involvement. I need to be part of the city. What do I do? Cause he was a very involved guy. He said, well what do you like? I said, well, I like art. I like theater. And he said, well, let me introduce you to some people. And he did and introduced me to some folks at the ICA and over at the Huntington. And I said, I liked the Huntington. I like what they do.

And then I started learning about their civic involvement in their outreach and incredible stuff they do with the public school systems, not just in Boston but in the whole area. And I said, yeah, I could get involved with that. And they to their credit, handled me very well. They made me an overseer and didn't ask very much and didn't, you know, need very much from me. And they developed me as any good organization would , uh, and I to the point where I became president of the trustees.

I'm in the company building and managing business. It happens to be restaurants. It could be a lot of different things. But my Sloan education really prepared me radically well for handling issues that come along that are unexpected, frankly, because you can't really plan for them. But come along with building a business and the Sloan community, which I'm still connected to very closely.

Uh , I was at the Red Sox game last night with three classmates from Sloan who are all in very different businesses than I am in. And we've stayed very close for a long, long time , uh, and their resources and their people that you can call and have conversations with because even though they're in different industries, what they are fundamentally is really smart. And so my experience is Sloan was sitting in a room, whether it was a classroom of 30 or you know, a full class.

I think we were about two 20 at the time of really, really smart people who challenged you and made you better. And that was my basic experience. It was, it was really wonderful and enriching.