Why Cracker Barrel Paid $36 Million For Maple Street Biscuit Company

March 13, 2020 |  

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When Scott Moore’s job as a VP at Winn-Dixie was eliminated in 2012, he decided to start a restaurant with his friend Gus Evans in Jacksonville, Florida. They called it The Maple Street Biscuit Company and offered what they refer to as “comfort food with a modern twist.”

To read a transcript of this episode, click here.

When Scott Moore’s job as a VP at Winn-Dixie was eliminated in 2012, he decided to start a restaurant with his friend Gus Evans in Jacksonville, Florida. They called it The Maple Street Biscuit Company and offered what they refer to as “comfort food with a modern twist.”

Moore invested a chunk of his life savings in the first restaurant, and it was a success. A second store worked well too. Then a third. Emboldened by their early results, Moore wrote a business plan for a massive expansion, which called for building 25 locations across the southeastern United States in just 18 months. To fund the growth, he put his house up as collateral on a bank loan and personally signed a guarantee that, had Moore failed, would have left him penniless.

As it turns out, the gamble paid off when the restaurant chain Cracker Barrel acquired Maple Street in November 2019 for $36 million in an all-cash transaction.

Cracker Barrel didn’t just buy a biscuit company. They already had one of those. It was called Holler & Dash but when executives at Cracker Barrel saw the Strength of the Maple Street brand, they knew they could be better together.

Big companies buy smaller ones when they realize that it would cost too much, or take too long to compete or they see an opportunity for growth. With Cracker’s Barrel’s resources, Holler & Dash could have invested more money at the biscuit business, but they realized what Maple Street had created was more than just hawking biscuits and building an equal brand would take longer than if they just bought the company.

Maple Street had created a durable competitive advantage because of its brand, which was defined by Moore’s careful choice of words. One way to build the value of your brand — and your business — is to own the vocabulary used to describe it:

  • Own your product names: Maple Street started with creative names for the biscuits they served. Instead of a generic fried chicken biscuit you could get from any old fast-food chain, they offered “The Squawking Goat.” Instead of generic-sounding vegetarian biscuit, Maple Street offers “The Iron Goat” (think spinach and goat cheese on a biscuit).
  • Own your employee titles: the people in charge of bringing the Maple Street brand to life are the employees, but Moore was careful not to call them that. He refers to employees as “family members” and customers as “guests.” In a nod to the vision Moore had for making his stores a community hub, he refers to store managers as “community leaders.”
  • Own the words describing the way you do things: at Maple Street, Moore talks about “gracious service,” which is about treating customers with grace. Restaurant businesses have back-office people who order food and pay invoices, but instead of referring to headquarters in a generic way, Moore calls it “The Family Support Team.”

Maple Street had an entire dictionary of words they used, which collectively rolled up into a brand and ultimately a culture which is what Cracker Barrel found hard to compete against.

There is a lot more in today’s episode including:

  • The one interview question Scott Moore uses to determine the fit of a potential hire
  • Why some employees broke down in tears when Moore shared the news of Cracker Barrel’s acquisition
  • The role of theater at a Maple Street location
  • A surprising way to discover the value of your business
  • The secrets behind Maple Street’s outlandish profitability
  • How Moore got customers to clear their own dirty dishes
  • Moore’s favourite book about managing people

Cracker Barrel bought the Maple Street brand because it would have taken too long and too much money to re-create what Moore had started. We call that having Monopoly Control, and it is one the things acquirers look for in a company to buy. Find out how you’re doing on all eight factors acquirers evaluate by getting your value builder score.

Our guest

Scott Moore is the CEO and Founder of Maple Street Biscuit Company. He has led the charge on building Maple Street Biscuit Company to become a market leader with a team that is focused on the company’s mission: help others, serve people, and be a part of the community. The company was founded in 2012 in Jacksonville, FL and has grown to 33 stores (and counting) across the Southeast.

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Transcript

John Warrillow:

Have you ever stopped to wonder why a big company would acquire your business? I mean, with all the resources in the world, why wouldn’t they just compete with you? Well, the answer comes down to how well you branded and differentiated your business. Because at the end of the day, the acquirer’s going to make a very simple calculation. They’re going to ask themselves, is it easier and cheaper for us to simply compete with your business? Or have you built such differentiated value propositions, such a well-branded company that competing with you would take longer or cost more money than simply buying you? And that’s a lesson that my friend Scott Moore learned. Scott started the Maple Street Biscuit Company and sold it to Cracker Barrel for a cool $36 million.

John Warrillow:

Now, why would Cracker Barrel want to buy the Maple Street Biscuit Company? Cracker Barrel, by the way, is if you’ve ever gone down the interstate in the United States, you’ve probably seen those restaurants. And what’s interesting is Cracker Barrel owned a biscuit company that sold for intents and purposes, a similar product. It was called Holler and Dash. They’re both biscuit companies. Why would Cracker Barrel this NASDAQ traded hundreds and hundreds of stores be interested in little Maple Street? Well, they realized that what Maple Street had done was built a culture and a brand defined by a vocabulary that they used internally and externally that would be so hard to compete with that it made it worth it to them to acquire Maple Street rather than simply compete with them. Here to tell you, Scott Moore’s story is Scott himself.

John Warrillow:

Scott Moore, welcome to Built To Sell Radio.

Scott Moore:

Great to be with you John.

John Warrillow:

So I feel kind of out of the loop. So I’m in Toronto where we have terrible winters and we don’t have biscuits but you started this company and if I lived in Florida, I would definitely know and have enjoyed your product. Tell me about Maple Street. What were you guys offered? But you are?

Scott Moore:

Yes, it’s a comfort food with a modern twist. When we designed this, we wanted to have a concept that was a destination, not just an option. And so for where I live there’s lots of different diners you can go to and I go to those. But they basically have the same menu. I’ll get the sausage and cheese omelet, like potatoes, cup of coffee and I’m good to go. But we wanted a menu that was built in such a way that if you liked what we had, you had to come to us to get it. And so there was this modern twist that would make us a destination. That said, we wanted it to be approachable food. So we want people to say this, John. That I’ve had it but I’ve never had it that way before. I call it food with an opinion. And if enough people like our opinion, we have a compelling concept. So the Squawking Goat is one of our favorite ones that people ask-

John Warrillow:

Which one? Say it slowly again?

Scott Moore:

Squawking Goat.

John Warrillow:

Squawking Goat?

Scott Moore:

Squawking Goat.

John Warrillow:

Okay, what is that?

Scott Moore:

Do you like goat cheese, John?

John Warrillow:

I do, yeah.

Scott Moore:

Then this will be a favorite. And this is what’s crazy too. Is that chef Amanda Freitag, who’s on Chopped Food Network’s show, came into our store and tried it and actually called and they put us on TV about Squawking Goat. But it’s our fresh made biscuit. We use a winter wheat artisan flour. We have some frozen butter that we shred and drop in there. So we fold that in, into layers. We bake those fresh all day long. And you can it, there’s a maple table right at the front of the open kitchen, seeing the biscuits being made. On top of that, we take an all natural chicken breast. We have our own breading which has a good crunch and a little bit of spice to it. And then we take a goat-

John Warrillow:

You’re making me hungry, dude.

Scott Moore:

Yes, John, that’s the idea. We take a fresh goat cheese medallion and we take some special breading on it and we put it on the grill. That kind of melts the goat cheese but then also gets some crisp on that breading that we put on top of it. Then on top of the chicken. And then we have a house made pepper jelly that we take and we pour all over that. And then it’s all on the biscuit. So you’re going to need a knife and fork to eat it. It’s got a little sweet, a little bit of heat and it’s almost like a sweet and sour chicken biscuit. So people have had biscuits and fried chicken. But they’ve not had it with goat cheese and pepper jelly. And so you come to there, it’s approachable. You know that food. You’ve had it but you never had it that way before. And then again, if enough people like our food with an opinion, then they have to come to us to get it.

John Warrillow:

How do you come up with names for your dishes? What’s the process look like?

Scott Moore:

Yeah, it’s internally. And so everything about Maple Street has been a community story. So we’re a mission driven company. Help people, serve others, be a part of the community. We don’t call our locations restaurants. We call them community stores and they’re all called by community. They’re in there and they’re run by community leader. But with that, when we were evolving this, for five months we did food throwdowns at my house on Thursday nights. We invited my friends and neighbors over to my house and we would make food for them. And they have a little spreadsheet where they would rate and rank the food. And so when it came time to even name Maple Street as a company, I sent out to all those 40 people a bunch of different names. I gave them 30 some choices on names. And we have some maple syrup in our biscuits and so some of the names had maple in there. I sent it out to them and said, “Hey, if we’re going to name the company, which of these resonates?” Overwhelmingly, Maple Street Biscuit Company came back as the name for the company. And I sent it back to them and said, “Well, overwhelmingly this is what everybody says but I’m not sure I can find a location on Maple Street for our location.”

Scott Moore:

Because we were only talking about one store at that time. “Is that okay?” They all said, “No, people get it. Maple Street, you’re a company to communicate with.” So the community has helped us name the company and even helped us name the food as we went along. And so the Squawking Goat ended up, but it was originally was what’s called The Squawk On The Street. Which was a biscuit with that fried chicken and the pepper jelly on it. And then there was the Loaded Goat, which had the biscuit with the fried chicken and the goat cheese. Eventually a guest came in and said, “Hey, can I get pepper jelly with my Loaded Goat?” We said sure. And so we tried it, put it together, it was like perfect. And then came the Squawking Goat.

John Warrillow:

What is your background? Because when did you start Maple Street? It was 2012?

Scott Moore:

November, 2012, yeah. I did spend 30 years in the retail grocery business. And I was in operations and then human resources. And it came with when we opened up the first location, they should have failed. Small businesses fail at a fairly fast pace.

John Warrillow:

Sure.

Scott Moore:

And restaurants fail even at a faster pace. And restaurants that are opened by a couple of guys that have no restaurant experience and no culinary background should fail at a much higher rate. What I can say now is, like Steve Jobs said in his very last public speech, it was college commencement before he passed away. He said he could look over the years and connect the dots. That the experiences he had prepared him to go do what they did at Apple. And I could say the same thing. I didn’t have restaurant background but experiences that God took me through for those 30 years in the grocery business prepared me for the day when I had to go do something on my own. I always worked for these companies who were not the market leaders. They were in turnaround situations and struggling. In fact, that’s right. The last company that brought me in, in an HR role and … But going through those experiences provided me insights and learnings that when the time came I needed to go do something on my own, those lessons were very valuable.

John Warrillow:

How did you finance the growth? What was the way you kind of funded the business?

Scott Moore:

So I started out with the first store, I paid for it myself. And that was a crazy thing. And since it was a second gen site, it was a former Moe’s restaurant, and they had just left everything that was in there. So I told my partner, I said, “We’re going to spend 35 thousand and we’re going to remodel it in eight weeks. And we’re going to open it and you’ll never know it was a Moe’s.” The team now says that was my first of many unreasonable goals that I’ve set for them. But they always go do them and make them happen. And so that was the first set of funding that we did. The second store, I put up the dollars for it as well. Then on the third store, I took an investor in with us, which funded stores three and four and five, to get us there. At that stage, I realized that we had an opportunity, I think, to go serve in a lot more communities. And so I reached out to a guy who worked with me in the grocery business and said, “I need to put this five year plan together. I think we’ve earned the right to think in an expansive way.” I said, “Do you know anybody that can help me with it?” And he said, “Yeah, me.”

Scott Moore:

And I said, “You’re a CFO in another company.” And he goes, “No, I can go help you.” And he had been watching our story all along. So he came and helped me put the five year plan together and what that looked like. And as we took a look at that five year plan, we put two models for us to manage our growth and to fund it. One was, we did what we call these joint venture partnerships is that for individuals would bring capital to the table, basically 150 thousand dollars. They would have a joint venture with us and we would split the profits, 51% for the company, 49% for them. And so they could have this investment in a joint venture with us. And so we’d own those units together. Those had good economics and so we had a couple of different individuals who did multiple sites like that, through this process. Then we started looking at, how do we fund the growth and expand the company’s store’s footprint completely? And so for the first time, we went to a bank and worked through our plan and that really funded the rapid growth for us, at that point.

Scott Moore:

And so there’s really just four different stages. Myself, bringing in an individual investor, doing the joint venture partnerships, then we proved the concept and the model to the point where we had credibility, we could go to the bank and then fund our growth until of course, we were acquired by Cracker Barrel.

John Warrillow:

And the growth or the bank, was that secured against the business? Did you have to personally guarantee the bank debt?

Scott Moore:

I did have to personally guarantee it. And I was the only one that had to personally guarantee it. But a bank wasn’t going to do it unless I did. And that is part of the risk that comes in being an entrepreneur and growing your business. So everything was on the line for us.

John Warrillow:

Wow. What gave you the confidence to sign up for that kind of bank debt?

Scott Moore:

Yeah. So people sometimes ask me, were you afraid? And I don’t want this to sound arrogant because I don’t always have everything figured out, John. But I was so focused on what we were trying to do, I just didn’t have time to sit down and worry about it, to be honest with you. But to answer the question as, we had did the first two stores as a proof of concept. And we did 10 months in the first store. I can tell you, the way I did my analysis on how we could make this work was, I have spent months going to restaurants who are open the same hours we are. We’re basically open seven in the morning until two in the afternoon. And so I sat there in these restaurants and I would count how many people came in every hour. And then I would look at what they ordered and I would calculate based on the menu I had, how much they spent. And after a couple of months, I had a pretty good idea what an average restaurant, open those hours, would do per hour. And I took those numbers and I created three P&Ls. One is, if we’re just average, we just do what everybody as an average does, what would that look like based on our expected expenses for rent and insurance and all the things that would go into P&L.

Scott Moore:

Then I did a second P&L that said, hey if this thing really took off, would it even be worth it? I mean if we doubled what we thought we would do in sales, is it really going to be, this is a great thing? So is there potential for a wow here? But then I did a third P&L which was half of what the average was. And as I built that model I said, “That’s the P&L we’re going to go manage ourself against.” If we’re going to build a model that if we only do half of what we think we’ll do, we still at least won’t lose money. And we could work through the lease, be done and move on. We were open about a month and it was a Saturday and it was lined up all day long. But you got no time and so it was finally around 1:30, you got a little bit of a break. And I walked outside and I called the gentleman who is our accountant and I said, “Hey, I know you’re planning to do my taxes at the end of the year for they business but I need reports today. This is drinking out of a fire hose. I’ve got to figure out what’s going on.

Scott Moore:

It was at that moment I knew that there was probably something more. I didn’t know what that meant but the analysis that I had done gave me enough assurance that we could pull the trigger. And even if we’re half of average, at least not lose money. But we ended up really being that wow P&L and earning the right to go do more.

John Warrillow:

And why not stop there? I mean again, forgive me for saying this but I’ll say it. 30-year career in the grocery business. A lot of guys that age would be like, “Perfect. I’ve done my time. Maybe I want a little lifestyle business. Maybe I’m ready for a little golf.” But you’re betting the house. Why not just keep it a lifestyle business?

Scott Moore:

Yeah. So the reason that my grocery career ended is they got bought out by a private equity group. And they brought in their own executive team, which they should do. They bring in the people that they know and they trust. Our SVP of HR had called me in and she had the conversation with me that the role I was doing was going away. But she did say, there’s another role we’re creating and you could post for that, raise your hand for that and if you get it, you can keep your compensation and which as an officer of a Fortune 100 company is fairly significant. But the difference is, that role would only have five people reporting to it. And I currently had had 175 people on my team throughout the distributed organization. I went home and I thought about it. Prayed about it for a week. And I came back and told her, “Thank you but I want the last half of my life to have more impact than the first half.” I didn’t even know what that meant at the time, John. I just, I wasn’t ready to coast into glory. It was never been my goal as how do we get there. The goal is how can we go change people’s lives.

Scott Moore:

That’s why Maple Street’s a mission company. Help people, serve others, be a part of the community. That’s what we do. There’s people on our team, a hundred people on our team. We have one who is a community leader for us and we found her in South Florida. And she’d actually eaten in a Maple Street three years earlier and wrote a Yelp review. It was a great Yelp review. We found her there, she applied for a job as community leader. And we got to know her and she got to know us and we thought we could go do something. She didn’t have any restaurant experience. She’d been working in a salon, was let go from that job. She had to ask her grandparents to take her daughter and take care of her because she couldn’t afford to do it. She was living out of her car and she has a screenshot of her checking account where she had four dollars and fifty three cents to her name. We brought her on. We taught her how to run a community store. It was a long process but she now has her own community store. She has her daughter living with her. We’ve been able to help her get her credit turned around, to have her own home.

Scott Moore:

And now she’s going to help other people. There are hundreds of people on the Maple Street team where we get to be part of their story. So when I say that it’s our mission to go help people, the first store was a gentleman I was going to church with and I was just going to set him up. I said, “I’ll work with you for six months. I’ll teach you how to run it. And then I’ll go figure out what I’m going to do. I’ve got time, I’ll go figure it out.” And it was just going to be helping somebody in their life. And every one of these stories with a community store has been about how do we get to be a part of somebody’s lives in serving those communities? So for me it was, I’d like the last half of my life to have more impact than the first half.

John Warrillow:

Love it. Amazing. I want to get into the lexicon a little bit because I know branding and the words that you use, like community leader, as opposed to store manager, was a big part of your business. Some people kind of throw away words these days. I mean the Twitterfication of vocabulary, my kids now when they text, I can’t understand it. It’s like three letters for every two syllable word. I don’t get it. But you think words are important. Tell me why.

Scott Moore:

Words mean something. And I think if supported by your actions, they have impact in people’s lives. And so, we use terms … So we have four principles which guide us. One mission, four principles. One of those principles, comfort food with a modern twist, we’ve had made consistently. Another one is, gracious service. Any retail shop you go to will serve you. Any restaurant will serve you, John. But gracious service is something more. Any restaurant will take your order. They’ll make your food. They’ll get you a to-go box. But gracious service is something more. So we talk about grace and how we show grace to each other as team members. And how we show grace to our guests. We talk about gracious eyes. And if our actions that we show grace to other people, if our actions match up to that, people start to connect those dots. So yeah, we don’t have store managers. And I’m not saying that’s bad for people who call their leaders store managers. It’s just my experiences again, taught me some things I wanted to do, some things I didn’t want to do. To me, what does a store manager do? They manage stuff. We don’t have store directors because what does a director do? They direct stuff.

Scott Moore:

Those words mean things. Community leader is somebody who gets our heart and our mission. Is going to execute our model. And they’re going to go do it in a way to earn the right to do more good. And I tell it to the team this way. Good business people earn the right to go do more good. Bad business people lose the right to go do more good. And if our mission’s that important. If we want to go change people’s lives, then we ought to be the best business people there is, that are out there. And we should execute our model relentlessly because we want to go change lives. And so for us, those words communicate that’s more than I’m just managing something. It’s I’m living out a mission. And so there’s at this point, a whole Maple Street dictionary of words that help us communicate what we’re trying to do.

John Warrillow:

What else would be in the dictionary?

Scott Moore:

The word ambassador. So we don’t have cashiers. When you come into a Maple Street, now it is an unusual way. I tell people, if you’re going to build a restaurant, John, you would not build it the way we built it. Which goes to the way a restaurant should … Two guys with no restaurant experience. Most restaurants that are going to scale are building it so you can go anywhere and not have a bad experience. They want to be able to be across thousands of units that you go in and you get what you said but it’s not a bad experience. Maple Street’s built in an unusual way. And if we do it right, it can be a real wow experience. And that’s why Yelp has, every year ranks the top 100 restaurants to eat at in the United States, based on guest reviews. In 2017, 18 and 19, we’ve been in those top 100. Really quite a thing. But what’s really most exciting about that is, it’s not like we just had one community leader doing well. Every year it’s been a different community store with a different community leader. So it was Jack Speak in St. Augustine and then downtown Greenville. And those community leaders, by how they served their guests, earned the right to be recognized.

Scott Moore:

That was for us, quite an accolade. So we have ambassadors that talk about … Because we can’t have a real wow experience but it’s going to be an uncomfortable experience if we don’t explain it to you. And so the ambassadors are supposed to explain to you, you come in and you hear the word Squawking Goat, or Five and Dime, Hashbrown Cake, our three layer cake and what do those mean? And we have this community question that we ask. Every month it changes. They have to explain to you why we’re doing it. So their ambassadors, their job is to introduce the Maple Street way to the world, this weird way we do community. And in that, they are the purveyors of theater and romance. They’re calling out things back to this open kitchen and you’re seeing all that happen in the kitchen. Then we talk about romancing the food, that we talk about it because we love it. And we talk about it like we love it and that’s how we describe it when we’re talking to our guests. And it’s romancing the food.

John Warrillow:

Love it, love it. How big did you get the business before you decided it was time to sell?

Scott Moore:

It was about a year ago. We’re at 30 community stores at the time. And we realized if we’re going to go do this, we need the right partner to help us to do it. We had grown really fast, very quickly. And we did that strategically, as that there are other people who kind of want to play in this space. And so we put in the plan that we were going to go from basically eight community stores to 25 community stores in an 18 month period across the Southeast of the United States. But we weren’t telling anybody. We didn’t do any press releases. We knew we didn’t put a sign up in the stores that we were building out. Because what we wanted to do, is to get out and be the market leader. Somebody was going to own the brand identity and the first to get to critical mass of course, is typically the one that does. And we wanted to do it. And so we executed that plan. Went from our eight to our 25 in 18 months. And what we wanted, anybody else who was going to be interested in playing that space to look around and say, “Hey, what just happened? They were just a handful of stores and now all of a sudden, they’ve got 25 across the Southeast.”

Scott Moore:

And that’s kind of what happened. In that process, we did a lot of things right, we did a lot of things wrong. And our analysis after we did it is that we can go serve in a lot more communities but we’re going to need help to go do this. So we started going through that conversation. We talked to Piper, Jeffrey and partnered with them to help us to start the conversations. And then we started looking ourself, what’s the best plan to move forward? We have had 25 plus entities reach out to us over the years, who wanted to invest in Maple Street, buy Maple Street, partner with them. Restaurant groups, private equity firms, investment banks. I talked to all of them and we’ve had them come to the office and spend time and tour our stores. I do it because it’s always a learning thing. I didn’t know this industry and so, every chance I can get to learn a lot to always getting insight, gaining insight. But we always said no because they didn’t get who we were, we thought to the level they should. And then, as we’re going to market, Hyper’s trying to help us figure that out. I came up with this idea that Cracker Barrel had these Holler and Dash biscuit houses that they had started four years ago.

Scott Moore:

But they hadn’t really moved on them in the last year. There had been no announcements of new stores up. I wondered, maybe they’re been a pause on that. Maybe they be interested in divesting those stores? And a good go to market strategy I told Piper would be, “Hey, if we have the chance to acquire those units and could convert those, we can increase the size of the company by 25%. We’d immediately have a growth story. Find the right partner to help us fund it. That’s a great story to go tell. And so I reached out to Cracker Barrel and had a conversation with them. And they said no, they’re not interested in divesting themselves. But they said, hey … I explained to them we were going to market and what our strategy was and they said, “Hey, but we’d like to talk to you.” And we spent 10 months really getting to know each other. And we went through a very detailed process of, did they get us? And they do a very detailed, thorough review of who we were, from the brand to the financials, the store economics, the opportunities and we both came to them and said, “This is the right partnership.”

John Warrillow:

At what point did the conversation into the nine month quoting process go from you buying their stores, to the opposite. Them looking at potentially acquiring you guys?

Scott Moore:

Yeah, that was within two weeks of the first call. When I called and said, “Hey, are you interested in talking about divesting some of those stores?” It was within the first two weeks that they reached back to us and said, “Hey, we’d like to talk to you.”

John Warrillow:

And Scott, give me a sense of what’s going on for you personally at the time. Are you still on the hook with the bank for the debt that you’ve taken on from eight to 25 stores?

Scott Moore:

Yes.

John Warrillow:

What would have happened if the business had failed? How big a financial impact would that have been for you personally?

Scott Moore:

I would have lost everything. Not only was it a personal guarantee on the loan, it was a personal guarantee on … So when you first went out, those first sites, landlords don’t know who you are. And they’re not near as interested in signing the lease. And so to get some of those locations required that I had to put my name to the line.

John Warrillow:

Gosh.

Scott Moore:

But again, remember I had done the analysis on what it … the three PNLs. And I understand what those looked like. The model was built and it could flex to whatever those tables were, in trying not to lose money. So our fourth principle for us, is being a sustainable business. And I confuse people with that sometimes, John. Because being sustainable is from an environment perspective certainly. But when I first started out with this, that was my fourth principle because they said this, “Sustainable for us means at least this, don’t lose money. Because businesses that lose money don’t hang around very long. They are not sustainable.” And if our mission’s to go help people, again, we have to be great business people. So I had built it on, then we went through the proof of concept as well, those first two stores. And so I had a pretty good feeling of what it meant to not lose money and how to make that work in new stores. I will tell you, I did get challenged when we went to Chattanooga, Tennessee. It’s seven hours away from Jacksonville, where we started. The shareholders I had at the time certainly challenged me about why are you going seven hours away? There’s a lot of places between here and there.

Scott Moore:

But we had to answer this question. Were we just a regional hit? They’ll be certain places, cities you go to. And when you go there, you have to go to that restaurant. It’s been, in Atlanta, Georgia, it’s The Varsity. They’re just hot dogs and fries but you go there, it’s The Varsity. And we were quite a Jacksonville story and I had to know, are we just a Jacksonville story, or can we go somewhere else? So we went to Chattanooga, Tennessee. I’d lived there for seven years. I knew a gentleman there who was looking for an opportunity. He was working at the Volkswagen plant and didn’t have restaurant experience but our model is designed that we go teach them. And so we went there. And so we started, we opened that community store and we started very slow. I mean some of the slowest pace we’ve ever had. And I’m like, okay. And so I would walk across … around the block there’s a Panera that was a block away. And I’d grab Zeke and I’d say, “Let’s go to Panera’s.” And I just wanted to know if there were people there. If people around there, maybe we can win them over?

Scott Moore:

So we’d walk over, there’d be people. I’m like, “We just have to stick with our model and execute it. Because we’ve seen it happen before.” We got 100 days in. I went in and added the sales for the original store, for the first 100 days, San Marco. And added the sales in City Center, Chattanooga, for the first 100 days they’d been open. And they were within 1000 dollars total sales for the first 100 days.

John Warrillow:

That’s unbelievable.

Scott Moore:

Yeah. And it just told me the brand was building the same way. People didn’t know who we were but it was building the same way. And that has become one of our best performing stores now.

John Warrillow:

Wow. What made you guys so much more profitable than a typical restaurant? To in your own admission, most restaurants go bust in a few years. So what was the secret sauce that made you guys so much more profitable?

Scott Moore:

Yeah, I always have this phrase John would say, “Make it easy to do right, hard to do wrong.” When we built the model, I wanted to build it so that it was easy to execute against it. And I live by the 80/20 rule that typically 20% of what you do gets you 80% of what you want to achieve. So we weren’t trying to be everything to everybody. We’re open seven to two. That’s your 20% of your hours for breakfast, brunch lunch that you’re going to get your business. We make that as a very attractive schedule for somebody in this industry. I mean if we get out 90 minutes after we close, so at 3:30, they’re going home. And then it has a community leader still have half the day left to go enjoy the day. But make it easy to do right, hard to do wrong. For me, we had no expertise in doing the waiter/waitress model. So we did the fast casual, where you order at the counter. And then you also pick up your food. When we call out the answer to the community question, you come and you pick up your food. But I also thought if we’re a community store, we could go one step further and asked our guests to help us clean up after we’re done.

Scott Moore:

So we think it was at community stores that we’re making food for our friends and our neighbors. And that’s why we use the best quality of pod products. That’s why we have ambassadors and not cashiers. That’s why you have an open kitchen. If you came to my house you’d be seeing it made. But when I go to people’s houses and I have dinner, I pick up my plates and I take them to the kitchen. So we put little signs on the table that said, “Hey, when you’re done, if you could just put your …” So then we have the porcelain plates and metal silverware and the coffee mugs. And ask them if they’d put it in the dirty dishpan. And I had a restaurateur come into our store and say, “You know you can’t do that.” He said, “If you did paper and plastic, yes you could do that. But not if you’re going to have the porcelain and metal silverware.” And I saw it’s a community stores, why couldn’t we? And our community’s been so great to help us to go do that. So if we had to add a person. And on the weekends we’d have to add multiple people out there, to be picking all those up, it would impact the store economics significantly.

Scott Moore:

And so we just asked our community to help and they did. And so we built the kitchen as a flex for the very first one, we built is so if the sales were so low, we could only have one person would do the whole thing. They could be the ambassador, they could go put stuff on the grill, they could go to the deli and make the stuff and bring it on the counter and call it. If we had to only have one, it’d be there. And it was going to be originally just Gus and I and three people. That’s all we were going to hire was three people. Yeah, we were open a few days and I realized we need a whole lot more.

John Warrillow:

We need a few more. How many people did you have when Cracker Barrel bought the business? How many employees did you have?

Scott Moore:

600 team members.

John Warrillow:

Sorry, not employees, team members.

Scott Moore:

Yeah, internally we actually call it family members. Externally we call them team members. We call them family members internally, it’s because I tell them, I want them to understand we’re in this life together. And that we’re doing life together and helping each other along. And the number one question that we ask of people is, tell me your story. It’s amazing when you ask that question and then you just get quiet and listen to people, how much they’ll tell you. Life can be really tough. In this industry, people many times live week to week. There’s challenges, struggles from in their life. And we have some promises that we make and one of these is, it’s a safe place. It’s the most inclusive place. You should, it’s a community store, everybody’s welcome. Safe place, nobody’s allowed to holler at anybody, that includes me. No cussing at anybody, that includes me. For these folks, life can be tough. I wish about the eight hours they come to Maple Street to be the place where they can get some rest. They’re going to come in and they’re going to work hard. But I don’t want to have to worry when they come here. And so when we talk about gracious service, that includes our team members, our family members, that we treat each other with grace.

Scott Moore:

We’ll hold each other to a high standard and accountable. As I said, we have a really good at what we were on the right but it is for us, an opportunity to be along with them in life.

John Warrillow:

It sounds amazing but the skeptic in me is also saying, “But what happens when you have an employee who drops the ball, whatever? I mean it can’t all be rainbows and unicorns.

Scott Moore:

No, that’s where people misunderstand grace sometimes, John. And now with our communities I’ve had this conversation. Grace has its limit. So for me, our number one filter is trust. And I tell people this, “If I can trust you but you’re not very teachable, we can do a few things. If I can trust you and you’re teachable, we can do a lot of things. If you’re teachable but I can’t trust you, we can’t do anything.” If somebody breaks trust, which can happen in different ways, which means not keeping my promises. I have a video that every new team member watches, where I make a promise that this will be a safe place. That nobody will be hollering at them. That nobody will be cussing at them. And I give them my email address. And it’s my job to protect the team. I’m the one person that can. And if people don’t keep our promise that this is going to be a safe place, then I’m the person that has to hold them accountable. And I’m a person who keeps his promises. And so, yeah, is it perfect every time, all the time? No. Are we committed to it? Absolutely. And that means grace has its limits. So people who can’t keep the trust lose the right to be on the team.

John Warrillow:

Let’s get into the Cracker Barrel negotiations. So you’re into this conversation. You’ve been flirting with one another back and forth a little bit. And the conversations turns to them looking at potentially acquiring you. Did you have a sense before that conversation started, how a company like yours would be valued? What you thought maybe a fair value might be for the business?

Scott Moore:

That’s where Piper was a value to us. They have a specific restaurant division. I was very cautious of going with an investment bank, a big investment bank like that. To me, for them it’s just a transaction, right? And so we interviewed several. And they actually convinced me, the restaurant division, that they got who we were. And so they understand what the comparables are out there, the strength of the brand, what value net brought to it and the good will. I mean so they did some analysis and gave us a range, it was a pretty big range.

John Warrillow:

What was the range based on?

Scott Moore:

Analysis of what other transactions that happened in the last few years in similar spaces we are in. And then based on what they thought the strength of the brand was, on top of that.

John Warrillow:

Mm hmm (affirmative). I guess what I’m getting at is, is it a multiple of EBIDTA or a multiple of sales? How do you …

Scott Moore:

Yeah, theirs was a multiple of EBIDTA. That’s what they do.

John Warrillow:

And so what would the range be that they would typically quote?

Scott Moore:

I don’t remember the number now, what it was. I remember the range that what we came to the deal with, Cracker Barrel was right in the middle of the dollar amount range. The 36 million was right in the middle of the range they gave us, that they thought we would be valued at. And John, I don’t remember. I’ll have to go look that up.

John Warrillow:

Okay, that’s fine. So it was really being driven by a multiple of the EBIDTA, or an earnings before interest, taxes, depreciation, and amortization. So the investment banker is out there. Are they looking for other potential suitors as well as Cracker Barrel? Or were they kind of locked into the Cracker Barrel conversation?

Scott Moore:

Yeah, the other entities they were talking to was part of the process. And there was a lot of interest in the Maple Street brand. We had a, I guess, a pretty good reputation in this race. I said we talked to multiple entities who would reach out to us individually along the way. And some of those were depending to be a part of the conversation as well. So different people were looking at us for different reasons. We have a few chartered stores, franchise stores that we have done. It’s not our go to market strategy. We did it because there are people who part Maple Street, community leaders, who had the potential to bring in more capital and wanted to do a chance to get more return. And we wanted to help them, as part of our mission. But some people looked at it and said, “Hey, we could go sell a lot of franchises.” So that’s why some were interested in that idea. Some of them certainly saw us as a growth story and a growth opportunity. There were some restaurant groups that thought it would be a good fit into their portfolio. So different people looking at us for different reasons.

John Warrillow:

What did Cracker Barrel see in you guys?

Scott Moore:

This is where Piper said, “You get the best prices when you get a strategic partner.” That somebody’s not looking to buy you as a risk asset. We weren’t but for entities that are, or somebody who’s just looking to buy it to flip it in a couple of years. Finding a strategic partner and that’s really what Cracker Barrel saw in us as a growth story. And they’re across the United States and they’ve really filled out with the Cracker Barrel flip [inaudible 00:40:35] in a significant way. And the question is okay, what’s our growth story? And they saw in Maple Street a similar environment. They liked what we had done. Of course they had their Holler and Dash stores to compare it to and one weight of debt our store performance. And that we had the potential to really be that growth story for them. And so that’s our responsibility, was to go find a way to serve in more communities. So they let you use the resources that they bring to the table.

John Warrillow:

And we should be clear, Cracker Barrel, for folks who may be outside the United States. This is the casual dining restaurant, as opposed to the cheese brand that’s owned by, I guess Kraft, right? Yeah, yeah, yeah. Got it. Okay, so they saw in you, they’d seen the biscuit business and they saw what you were doing and thought well wow, you guys are doing something pretty unique. This could be a sort of like rocket fuel underneath our business. How did conversations go from there? So did you actually receive letters of intent from some of the other buyers, the restaurant groups and so forth?

Scott Moore:

We did not, because we put … When this became serious conversation and we all agreed that they could be a really good strategic partner, we asked Piper, just table those for now. And it was really from us as business people. So we had at Maple Street, I’ll call it family support team, it’s our corporate headquarters. We have a very lean team. And so to add this additional diligence to us, was a significant thing. We had 33 community stores and we only had 13 people on the whole family support team. And that means accounting, people paying the bills and taking care of the vendors and payments. And we had 13 total people, salary, hourly, complete. So for us to add this diligence was significant. And then try to do it with multiple companies, would have just taken us off our game. And one of the lessons I learned through that growth process, John, was you always have to focus on the business. Whatever competing interests they are, that you have. You have to have a focus on running the business day to day. Those things can’t go away. This business itself doesn’t run it on autopilot. And so, in going through this, one of my objectives was, we have to keep running the business, growing the brand, executing our model, as well as going through this diligence.

Scott Moore:

So we only had a capacity to do one. I didn’t have time to deal with five different entities and go through there. And so when this became the viable option, we asked Piper, “Hold on those. We’ll go through this process. If we get to a point where we think hey, you know what? We need to consider others, we’ll come back and talk about that. And maybe we can use the diligence which we’ve done in going through this process.” But we never got to that point.

John Warrillow:

And in retrospect, do you think you left … is there a possibility you left money on the table by not doing the classic sort of playing the one off the other? And how do you kind of reconcile that in your mind?

Scott Moore:

Well so it’s possible. I don’t know that. What I can say is, Piper said, when we came to the final deal, they thought it was a very fair offer, based on the market that we’re in. And they thought that we had made a really good deal. What I know is, as much as the dollars are important, they were not the all important choice for us. I said I wanted the last half of my like to have more impact. I didn’t want to go anywhere. And I did offer, when the team and I said we’re going to go do this and the way we did it, everybody got to participate in some way. Even our community leaders all got part of the transaction. The executive team got part of the transaction. They were the ones who were going to make this happen, if it was going to happen. And I offered, say, “Hey, if private equity group comes up and says hey, we like it and it’s the right offer but they want their own leader, I’m willing to step aside. This is not about Scott.” That’s not what I wanted to do. Fortunately, Cracker Barrel looked at it and said, “This is a very founder driven company and that we believe is mission critical. And so, although we want to do this transaction, we’ll only do it if you come along, Scott.”

Scott Moore:

Which I was excited because that meant we could continue to create our mission and that I could go do this with a lot more community leaders and serving a lot more communities. And have resources I’ve never had before to go do it. We’ve always been this scrappy startup, looking for every nickel, dime and dollar to go do that next community store.

John Warrillow:

You’re having your customers bus their own tables. Unbelievable.

Scott Moore:

I know. It’s what we had to do to make it work then.

John Warrillow:

I love it.

Scott Moore:

We still think that way. We’re still, even though we have resources, those things that have made us successful to this point we won’t change. I want five years from now, for Cracker Barrel to look back and say, “This was the best decision we ever made.” And I want that to be earning us the right to go serve in more communities. And so we’ll keep doing it the way we’ve done it. So more important than what price we got at the end of the day, for me, was the right partner that was going to let us go live out our mission in more ways. That was a critical piece. And so I wanted everybody to get rewarded. But I want to have the right partner as well.

John Warrillow:

And how do you reconcile in your own mind, the trade offs of continuing to run as an entrepreneurial leader in a bigger company. You’ve worked in a big company for 30 years. You had this entrepreneurial experience. Does it ever feel like, oh my gosh, I’ve gone back, it’s Groundhog Day. I’ve gone back and I’m in a big company again. Do you ever feel that way?

Scott Moore:

Yeah, well we did joke around that for the first time in eight years, I have a boss.

John Warrillow:

And how does that feel?

Scott Moore:

It’s not all bad. So it’s interesting, my pastor had asked me a few years ago, do you struggle with pride? And he asked me that because Maple Street had done so well. And so many accolades came out there at ten. I had to think about his question and I came back to him after a few days and told him, “I don’t think … I mean we all struggle with pride in some fashion but I don’t think it’s …” but then I said, “I think what the big danger to me at this stage is, I really have nobody to tell me no, in my life.” Any decision in the world that I’m living in, store design or as a model, there’s nobody to tell me no.” And I think that can be a tough thing and maybe a dangerous thing for folks. And it’s good to have accountability. So it’s not all bad to have somebody who can have a conversation with you which can challenge your thoughts. And you have to listen to it and consider it. So I think that part’s good. With that said, this is one of the beauties of the way Cracker Barrel has partnered in its acquisition.

Scott Moore:

It’s a standalone brand. They like what we’ve done. Sandy, the CEO, is very committed to the mature brand, not putting their influence and fingerprint on this startup growth story brand. And so nobody at Maple Street refers to anybody at Cracker Barrel, except for me. And I report to the CEO, to Sandy. And she has been true to her word on that, for the four months we’ve been doing this together. I say this to the team repeatedly, I say, “If I knew five months ago what I know now, we’d still do the transaction.”

John Warrillow:

That’s the ultimate endorsement. Did you go into the negotiation with that as a stipulation? That you weren’t going to report to some regional executive vice president in charge of distribution, or something like that? Was it important to you that you report directly to the CEO?

Scott Moore:

I guess I always assumed that would be the way it was. And that was always Sandy’s posture about it as well. I guess if the conversation had came up that it’d be something different, I probably would have had some pause. But it just never came up.

John Warrillow:

Why do you think your pastor asked you if you struggle with pride?

Scott Moore:

First, he was one of those individuals in my life who could look at me and challenge me, which I wanted. He was actually younger than me but he had great credibility and he had invested in me in a way and hopefully I in him, that he had credibility and authority in my life. And he knew that I am not a perfect person and that I have struggles. But he also wanted the best for me and he wanted to be that person. And he had earned the right, to really make me think about what drives me and what are the qualities that could put me at risk in life? And pride’s one of those.

John Warrillow:

Meaning he thought you had too much of it, or not enough?

Scott Moore:

I don’t think he had an opinion based on what he’d seen in me either way. What he had was, a responsibility to challenge me. To think through what are the motivations in my life. And what were they playing out. And pride is something I think a lot of people struggle with. And specifically, people who had maybe been on the journey that I … He had seen me through that little journey. And so Maple Street has such a strong brand and is that people, when they find out that I’m the CEO of Maple Street, their first response typically is, “Man, I’ve been in there, I love that food.”

John Warrillow:

I love your stuff!

Scott Moore:

Yes. And he hears that all the time. I gave him a hard time because there’s been like eight or nine pastors or priests who have used the Maple Street as an illustration to talk about gracious service and is this illustration. And he never did. I said, “Man, I have to go to some other church.” But he had heard that for years, these accolades. And I think rightfully so, in challenging me is, people keep telling you really good things about yourself, sometimes you start to believe them. And we are not perfect. I am not perfect. We are not at all where we should be. There’s two things I talk to the team about all the time is, what can go wrong, how good can we be? What can go wrong is our responsibility to manage risk in any of its fashions. The question, how good can we be, I can tell you, we can be a lot better. We have not arrived. And so, he rightfully asked the questions to challenge me. But it really did make me think. Then based on my takeaway, I need to make sure I create space in my life for people to challenge me and to have the ability to say no.

John Warrillow:

I’ve got to ask. Did you get rid of the bank loan?

Scott Moore:

That was part of the deal.

John Warrillow:

Please tell me that’s gone. I’m worried for you, man.

Scott Moore:

That is one of the greatest blessings out of the whole deal. Not only that, my name’s no longer on the piece of paper and so is no longer at risk. But now we’re operating as a free business. So from this little scrappy startup that was every nickel, dime and dollar just to earn the right to go do some more, to be in a position where we have no debt is such a freeing thing. And that debt load was one of the challenges of course where you’re going. You’re investing in that. So you’re building a new community store. You take out the loan when you building it out and you start paying right away, while that store’s ramping up and starting to earn, cash flow positive. And you have to carry it along. And again, we went from the eight stores to 25 stores in 18 months, that’s a lot of ramping up.

John Warrillow:

What impact did getting rid of the loan have on your own personal psyche? Getting that feedback.

Scott Moore:

If I turn that off … I don’t know how to do that. I am … let’s see if I can quit that out there. On the personal?

John Warrillow:

Yeah, what impact has that had, or did that have on your decision making to sell? Was the desire to get out from underneath the personal debt in any way influential in your decision to sell?

Scott Moore:

No.

John Warrillow:

That floors me.

Scott Moore:

Wait, wait, yes. Did it keep me from sleeping at times? Absolutely. And the one comfort I had is, I didn’t ask anybody else to sign on the dotted line. Nobody else on the team, shareholders, executives, had ever signed for anything ever. So anything that I had was mine. Now that said, that means my wife was in the boat with me too. And give her credit for being willing to sign up and to trust me to go do this. And that she believed in me enough … Because the house is important to her. To her, a house is a home is a big deal. And so she deserves a lot of credit. But does that mean it was always easy for her to process? No. But she was able to, with her belief that I wouldn’t quit until we get it right, allow me to go sign up and do this and take that step. So this could have ended totally different, John. It could have been, you’re doing a podcast on the guy who lost everything and now trying to figure out his way … but God’s done the things I couldn’t have done for myself.

Scott Moore:

Certainly as I said, I had experiences that … I call it my Maple Street MBA, is that the last company I was working for, worked for 10 years, we went through I think five CEOs in 10 years. It was in turnaround all the time and we kept bringing in these consultants. We’d bring in Bain and Deloitte and people who are experts in their fields. They got their MBAs and so I got to work with all kinds of those in this turnaround process. And for me, it was my whole MBA. Just because I was in human resources, I ended up working with the operations team and the marketing team and the real estate team. And so I ended getting responsibilities for operations with HR. And that whole MBA process prepared me for the time. And I will say this, that the one thing I don’t know is how to stop. That’s why we keep moving forward. We had the one store, the second store and now the third store. Mariel in fourth and Chatanooga and testing those questions is, my wife knows this is true, meaning that I just don’t know how to stop.

John Warrillow:

And did you tell her, did you tell your wife the risk that she was signing up for when you went from whatever it was, eight to 25 stores? I mean was she aware of the ramifications of not getting it right?

Scott Moore:

She knew the house was on the line, yes.

John Warrillow:

Wow.

Scott Moore:

That we could, if it didn’t work, that we could lose everything that we had. So yeah. But that was a growing process for her too. I think if you talked to her eight years ago from today, it was … I apologize, I don’t know how to turn that off, John.

John Warrillow:

No, that’s okay.

Scott Moore:

May, her attitude over the last couple of years, versus when we started out, she’d grown in her belief in Maple Street and what it could do. She’d seen the lives that had changed. I think she saw how I grew in the role, which was really critical as well. And I mean there was a point when we did that fast growth process that I realized that this job could outgrow me. I might would have to go hire a CEO to run my company. I’ll tell you, that what is built a fire under me. I read a lot but I read more in the next six months than I’d read in a long time. Because to me, there’s thousands of counselors out there waiting to give you counsel and they’re in books. And so I read the stories of people who had been there and they’d done it and the experiences they went through and the things that they got wrong. And if I was going to be the CEO, I had to get myself ready. But she had grown in her belief that I could go do this. And I’d say that she trusted me to go get it right.

John Warrillow:

What’s on your bookshelf right now? What would you recommend other entrepreneurs read? Top three books?

Scott Moore:

Extreme Ownership. I teach a class called Managing Levels of Initial Freedom. So this book is out of print but you can buy it still on Amazon. By William Oncken called Managing Management Time. And he talks about how you go from being the manager to managing managers and what that looks like. He has in there five levels of initiative and freedoms. We’ve actually expanded them to seven levels of initiative and freedom. And in this course, I teach my team, you’re either moving up the levels or you’re moving down the levels. Nobody’s allowed to stay at level one, which is wait until told. And a lot of times, leaders think of people at least are at level two ask what to do, that they’ll come ask me what to do, they’re taking some initiative and they’re good people and I teach my team, no. If people are coming to ask you what to do, after they’ve been with you a while, they know what’s supposed to be done, that’s at least passive rebellion. They at least have to come and recommend and maybe talk about act and advise. I filter everything through those lessons of initiative and freedom. People that lean in get it.

John Warrillow:

What are the seven levels, just real quick go from the bottom, up to the top.

Scott Moore:

Sure. So level one is, wait until told. Level two is ask what to do. Level three is recommend and take resulting action. Level four is act and advise immediately. And then level five is act and advise routinely. So you get up to that level, you know what your boss wants you to do. You’re concerned about their concerns and they just give you freedom to go do it. So if not, you move down the scale. So if somebody’s at level one, wait till told, either move up to level two … And I tell people, nobody’s allowed to be at level three but at least this. If you’re at level one, wait until told, I’ll say, “Hey, if you have nothing to do, or you don’t know what to do, you come ask me what to do.” Now a minute ago said you can’t be there. But if you come ask me, my question to you John is, “What are you think you should do?” Which I took you to level three. And I’m going to make you give me an answer. I’m going to teach you how to think the way that we think about things. But if you don’t move up, if you stay at level one, wait until told, then you move down. And level zero is wait until forced.

Scott Moore:

This is what gets to, “Hey I came to you before, I told you you can’t wait until told, you at least come ask me what to do.” That’s so important. I’m writing this down on a little piece of paper. What in the business world they call the first write up, right? Or the second write up I guess because you had the second one there. And the next one is, wait until separated. Level negative one is wait until separated. We talked about it and you didn’t get concerned about our concerns and you didn’t take initial responsibility, then you can lose the right to be on the team. So people that move up or they move down the levels, I filter everything through that. I have a very simple leadership philosophy. Hire good people, teach them what right looks like, get out of their way, they’ll do amazing things. On our team, if you need to be managed, I’ll do it but it’ll be miserable for both of us. We should earn freedom. You get freedom … My team, my executive team, they go do good. I don’t know what they’re doing every day, every week. I don’t need to know that. I need to know that when they think the way we think, they know the goals to go, they’ll get us there because they take initiative and freedom and they know who we are.

John Warrillow:

How did you announce the acquisition of Maple Street to your team?

Scott Moore:

Well the executive team had been working out for 10 months, so they all knew it and they all participated in there. And so I did a Zoom with the community leaders. I did a Zoom video call that was my communication to them. Now I had talked to a few people ahead of time. Two that had been part of it and I wanted to talk to ahead of time, to get them up to speed. But then I had the Zoom video call where we could see everybody, make sure everybody was there. And then I had to walk them through what we had been trying to do and how we want to live out our mission. And then I had individual calls with every single community leader, after the Zoom video call. And we talked about what this meant to them individually. They all got to participate, as I said, in the transaction, in a significant way.

John Warrillow:

How significant? As a percentage of an annual compensation, what would it have been?

Scott Moore:

Some of them got 80% of their annual salary.

John Warrillow:

Wow.

Scott Moore:

And so folks in that world they’d start life changing amounts. That’s what we wanted to do.

John Warrillow:

what was their reaction when you told them?

Scott Moore:

Tears, some of them. There were some that had been on the Maple Street initially that it was a little bit of a shock. Because we had been doing this on our own for years. And they were pretty comfortable with we’ve been doing it on our own for years. They didn’t know everything that I knew about, if we’re going to serve more communities, what that would look like. They certainly had no awareness that I’ve put everything on the line. That’s not theirs to carry, that’s mine, from there. So for those it was a … had to take them through my change curve. Immediately, change, it’s scary and the unknown. I found we had to start communicating immediately, much more often and trying to get more detail. I think we still can do that better and we’re trying to find more and more vehicles which communicate to people and keep them connected. We had a significant change that happened afterwards. And that added stress to the whole change process. So we’d actually been open only six days a week. We were closed on Sundays. And the reason that was, when we first started out, that church or that pastor I said challenged me didn’t have a lead teaching pastor. I was an elder in the church. So I was making sure we stayed the course.

Scott Moore:

And when we opened the first store, I said the only thing I’ve got is Sundays I have to be there. So the best way to do is firewall it, just don’t open. The community came around in such a way we didn’t need to. We were doing the six days a week, it was fine. About a year ago though, our lead ambassador, chief people officer and I realized we needed a more sustainable leadership model. We only had two leaders in the store because that’s what we could pay for. The community leader and assistant community leader. With our growth, we really needed … I mean we were doubling the size of the company in when 12 months. And we were taking out these assistant community leaders. So now the community leader didn’t have anybody to back them up. And we needed more depth and breadth. So we came up with a four leadership model that gave us depth and breadth to support a large, a fast growth pattern. At the same time, you have to pay for it. We found that we decided a year ago, the best way to pay for it was to listen to our guests. And our guests were telling us, “Can’t you open on Sunday? Can’t you be there when I can get there?”

Scott Moore:

And so we had made that decision but we didn’t move on it because that takes significant resources, to hire, train and implement those leaders. And then implement it, you’re investing before hand. And so we were going to wait until that transaction happened. And so after the transaction, I announced we’re going to change our model, go to here. What I had to be clear with them is, this is not telling Scott what you need to go do. Scott and Tara figured this out a year ago, that’s what we’re going to need to do. And then Javier, our CFO, helped us put the numbers to what that looked like. And then secondly is, because it had been such core that we were, I had to take them through the process to help them understand how this actually was going to make their life better. Because initially they were like, “You just messed up my life.” And I actually bring to the community leaders by level of risk. Who would we might lose in this change process? What I’m excited to say is, we only lost one community leader out of that whole change process. And so this is probably the biggest change for them but also their also on just seeing that it is a huge personal benefit for them. One, they have more leaders they can depend on in their store.

Scott Moore:

And so they have depth and breadth and they can take the time that they need. Secondly, they’re paid a percentage of EBIDTA, that’s profit every period. And so because now we went to seven days, that EBIDTA number went up.

John Warrillow:

When bonuses go up, it’s like okay, now I get it.

Scott Moore:

Yes.

John Warrillow:

Should have led with the numbers, man.

Scott Moore:

Yeah. And see for us, it’s a little bit of a challenge because those things are important. We previously talked about, our community leaders get our mission so well. In fact, after the transaction’s done, [inaudible 01:09:57] had the market research team go across on multiple markets we were in and talk about the top district stakeholders, internally and externally. Even talking to guests about Maple Street. And what they came back with was amazing how everybody understood who Maple Street was. What makes them unique and what drives us from people, from community leaders down to our elite team members, to even guests, all understood all that. And the strength of the brand, they were shocked with and excited. At the same time, they wanted us to be reminded of this. Because your people are not just driven by monetary benefits … because you look at those change process, if you don’t keep that mission core of who you are, it’s going to devalue the brand. So yeah, it’s been interesting because money is important at the end of the day but these folks get the mission so much, that if I don’t start every conversation with these community leaders around our mission, they’re immediately like, “Where you going?”

Scott Moore:

And we’re here for a reason and it’s been a learning.

John Warrillow:

Fantastic. Well I appreciate you sharing the story with me. I’m just in awe and so grateful for you doing this. Last question. Did you buy your wife anything when the transaction went through for all of her … was there a trophy involved?

Scott Moore:

I bought her a new house.

John Warrillow:

There you go. There you go.

Scott Moore:

Yeah. We went and bought a new house.

John Warrillow:

Good for you.

Scott Moore:

And paid cash for it and I’m filling it up.

John Warrillow:

That’s awesome. Scott, I am so grateful for you doing this. I mean for people who have been in one of your community locations. I want to get-

Scott Moore:

Community stores.

John Warrillow:

Community stores. They know the experience. I’m looking forward to having my first experience now because you got me very hungry as a result of describing the work you guys do. So thank you for doing this. If people wanted to sort of learn more about you or the company, is there a website you want to point people to? Or what’s the best way for people to-

Scott Moore:

Yeah. They can certainly go to our website. It’s maplestreetbiscuits.com. And on there, so I said that we’re a part of people’s lives. So community leaders, we give them the opportunity to tell their story. So on our website, there’s a section where they tell their story. They type that up and they can put it online. I never look at it, I don’t review it. It’s not my story, it’s theirs. So whatever their story is, they put it on there. If you want to see the stories of people who are part of Maple Street and what they’re doing, go to the website and you’ll hear where they’ve told their stories.

John Warrillow:

That’s awesome. It’ll be so inspiring to read that. Scott Moore, thanks for joining us.

Scott Moore:

Glad to, John.

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