Bankrupt Restaurant to $1.5 Billion Business in 7 Years
My parents have been operating a successful steak restaurant in southern Arizona called The Steak Out for nearly 40 years. It’s a pretty famous honky-tonk…but it’s in the middle of nowhere. So, for my first business, I thought ‘what if we brought the Steak Out to where the people are, or at least to where they are going?’ I spent the better part of a year searching for the perfect spot for a new restaurant and landed on Dove Mountain (also in Arizona). It was a small suburb just north of Tucson, but growing quickly, with plans to build over 100,000 new homes in the next three years. A new mall had just opened, the Ritz Carlton just opened, and the PGA Accenture Match Play had named the town as their feature destination. We picked a development area that was going to be a center hub with a huge grocery store, gym, a Starbucks, and over 300,000 square feet of retail, plus a few hundred offices that were being built in the next year. It was perfect.
I sank every last penny I had into the idea, borrowed as much as possible, and even got my parents to invest. All in all, we invested nearly $1.5 million and borrowed another $1 million to open it. We were all in!
Mind you, this was also late 2007, and the restaurant opened right into the second worst time ever to open a restaurant (2020 being the worst)…
Looking back, the writing was on the wall from nearly day one. In the midst of the great recession, the landlord who sold us on the building stopped all development the minute we moved in — no other retail space, no offices, and those 100,000 additional houses that were forecasted all stopped as well. To my credit (and because of the additional support from my parents), I managed to keep the doors open for five years. I did everything possible: tried every idea, gimmick, or crazy thing that came to my mind to draw up some business. It worked only to hold off the inevitable for a bit longer, but nothing ever truly got us over the hump. In the end, I was working seven days a week, pulling doubles, and living off of nothing but tips. The landlord who promised us the sky refused to budge on the rent during our troubles, and my parents were tapped out. It was over.
The day I closed the restaurant, I had $30 in the bank.
I felt like I had let everyone down (my parents, my employees, our loyal customers, etc.). I told myself I had two choices: to either let this define me as a failure, or let this define me as someone who gets knocked down and gets right back up again. I chose the latter.
One of the aforementioned ideas or gimmicks that I had tried was delivering some of our healthy meals directly to people’s homes. While it wasn’t successful enough at the time to keep the restaurant open, I knew there was something there. This idea ultimately led to the creation of Freshly.
Just last year alone, seven years after I closed my restaurant and had only that $30 in my bank account, Freshly delivered over 50 million healthy meals in 48 states, and we currently have nearly 2,500 employees. On October 30, 2020, it was announced that Freshly was sold to Nestle for $1.5 billion.
I was able to pay off all of my debt, pay back my parents (and then some), and most importantly, I proved to myself that keeping a positive mindset was the most powerful thing in the world, and what got me through it all. And trust me — at the time, there wasn’t a lot to be positive about.
For all of you going through similar hard times (and I know there are a lot of you out there): I can’t say that I fully understand your exact situation, as every story is unique, but I am a huge believer in positive thinking overall. I know first-hand that it’s difficult to be positive when it seems like the whole world is against you, but I promise you that the positivity is what gets you through to the other side. Regardless of the situation that you are currently in, there is no doubt that 2020 will define all of us…but remember it is up to each of us to choose what that definition will be.
