Editors note, March 19, 2021: In light of the unexpected death of Texas Roadhouse founder Kent Taylor, Restaurant Business is re-running this story from last May to provide a glimpse into his contrarian strategies.
Toward the end of Texas Roadhouse’s conference call this week with Wall Street analysts, chain founder and CEO Kent Taylor offered a cryptic aside about the brand’s near-term future.
“I've got quite a few [of] which I call my people that think outside the box—I actually call them something else, but I won't say it,” Taylor said in response to a question about Roadhouse’s strategy for keeping its off-premise business at today’s unprecedented levels. “There are going to be trends and various things in the next couple of weeks to expand our possibilities for sales. So stay tuned.”
Startling utterances aren’t exactly a rarity for Taylor, a onetime TGI Fridays bartender who came up with the idea for Roadhouse while mixing drinks and drawing beers. Years later, when the chain was about to go public, he revisited that Fridays to taunt the bartender with a picture of what he could be doing if he had the right stuff.
Roadhouse prides itself on its Texas honky-tonk theming, right down to encouraging guests to toss peanut shells on the floor and the tendency of servers pre-COVID-19 to break into a line dance when the right country-western turn comes on the sound system. But nothing screams “cowboy” more than Taylor’s irreverent and unorthodox management style.
Roadhouse’s statement of first quarter earnings led off with what the company described as a personal letter from Taylor. Leading a financial report with a long download from the CEO on their chain’s COVID-19-related struggles is routine today for public restaurant companies. There was nothing routine about Taylor’s note.
“I still remember the early days of Texas Roadhouse back in the mid-1990s, when three of our first five stores failed,” Taylor wrote. ”Survival mode was where I lived for quite a few years. Well, damn if I didn’t find myself right back there again.” With the pandemic forcing restaurant dining rooms to close, “the ‘you-know-what’ had hit the fan.”
Taylor went on to praise Roadhouse’s staff for quickly transitioning to takeout-only operations. What he didn’t note was that he’d donated $5 million of his own money to a fund the company gathered to help hourlies survive the economic crisis triggered by the pandemic. That act was noted by Roadhouse CFO Tonya Robinson, whom Taylor joshed by purposely mispronouncing her name during the analysts’ calls.
Taylor can get away with being a rascal because he’s kept Roadhouse a persistent overachiever in the challenged casual-dining segment. Its contrarian attitude seems to be a point of personal pride. When dine-in service was virtually halted because of the coronavirus, Taylor did not waver from his refusal to add delivery service for his brand. And he’s not about to risk an erosion in food quality now by dispatching orders to patrons’ homes, even though delivery would presumably give Roadhouse a significant bump in sales.
“We are not looking at this point to hand our food over to someone else through third-party delivery,” he said.
So what sales innovations may be bouncing around under Taylor’s cowboy hat?
Might it be delivery—not for Roadhouse, but for its sister brand, the more bar-like Bubba’s 33? Asked if delivery was a possibility for that brand, given its menu of pizza and other items that presumably travel better than steak and ribs, Taylor responded, “Not at this point. “We're just trying to get them reopened, and so we're not really thinking about it at this point. But you never know,” he said.
The sales-boosting move likely won’t be the addition of lunch by Roadhouse, currently a dinner-only concept. An analyst noted that some of the chain’s 600 branches were offering to-go lunch.
“No, we're going to stay primarily dinner only,” Taylor said in his slight drawl. “I will tell you that the ones that have offered some lunch haven't been that exciting, to be honest with you, as you're not seeing the office buildings full or the shopping centers or malls full that normally drive that type of business. So, no, we will stay true to who we are. “
Roadhouse has been experimenting with drive-thru service, albeit in jury-rigged fashion. At some locations, two tents were set up in succession to serve as ordering and pickup stations. And Roadhouse has a small sandwich drive-thru concept called Jaggers that it’s discussed expanding.
Taylor gave no clue as to what ideas may be rolling through the plains of his mind. As he put it, “It's really hard to determine what the future is. So if we would have had this conversation a week from now, we would have given you a lot more information. But we didn't.”
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