The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 9 months ago

Legends with John Rothschild of Recipe Unlimited

ABOUT THIS EPISODE

From East Side Marios, Fionn MacCool's and Bier Markt to Swiss Chalet, and The Keg, millions of Canadians have celebrated their special moments in John Rothschild’s world. 

Graduating as one of the youngest MBA students in 1983, John Rothschild didn’t take the obvious entrepreneurial path. He built his career as an accountant, and then an investment banker who soon discovered how much he enjoyed working with small owner-operator businesses. From there, it was a small step to becoming an owner-operator himself, as the founder of Prime Restaurants. 

In this episode, long-time friend and ally of entrepreneurship, John Rothschild shares his love for business, food and celebrating good times.

You were listening to the Entrepreneur podcast from Western's Morrissett Institute for Entrepreneurship, towered by Ivy. In this series, join me Eric Morse as we uncover the stories of our entrepreneurial legends. These Western founders have revolutionized industries, built recognizable brands, and added richness to lives across Canada and beyond. Discover their origins, their greatest moments, their deepest challenges, and what makes each of them tick. Welcome to the Legend Series. From East Side Mario's, Fion Maccoul's and Beer Market to Swiss Chalet and the Keg, millions of Canadians have celebrated their special moments in John Rothschild's world. Graduating as one of the youngest MBA students in nineteen eighty three, John Rothschild didn't take the obvious entrepreneurial path. He built his career as an accountant and then as an investment banker, who soon discovered how much he enjoyed working with small, owner operated businesses. From there, it was a small step to becoming an owner operator himself, as the founder of Prime Restaurants. In this episode, longtime friend and ally of entrepreneurship. John Rothchild shares his love for business, food and celebrating good times. John, it's a delight to be with you this afternoon. Really, thank you for joining us for the Legends podcast. And I know you don't like that Moniker, but I think it's one that that fits you well. But my first question is really about you know, in your youth, did you ever think that you would be an entrepreneur? You know what, Eric, That's a that's a great question because the answer is I always thought I wanted to run something, but I really didn't know the route to get there. So yeah, I thought I wanted to run something. Um, I guess the idea of becoming entrepreneur. I didn't know it had a label, So so maybe to run something. And I, yeah, I understand,...

I understand that. Um. But you went off to business school and in some ways took a traditional pathway I think for for IVY students. In any case, you went with a private investing firm. You know, how how did that go? And when did you decide it was time for something else? My path was not an obvious path. Perhaps, uh graduated, as you said with my m b A, probably the best move I ever made in terms of of schooling. For sure was the launching to the NBA. I came out as one of the youngest uh MBAs to graduate. Felt that I had this very high level degree and m b A for strategy and seeing all of the ways of putting a company together, but I didn't have a grassroots foundation. And then I went and joined Price Waterhouse and did my chart accounting degree with them. I see it. I set up my own accounting firm afterwards. I guess I had a bit of an entrepreneurial orientation even then, and then was approached by a client who convinced me that I should go into the investment banking business. Didn't need much convincing. It was there in the investment in the investment business that I saw I had the end. Let me put it this way, I had the yen to get involved in smaller businesses. I liked working with owner operators. I liked the hands on approach. And then I guess I had a bit of an epiphany that I wanted to be instead of being with owner operators, I wanted to be an owner operator. And I took my shot at it through one of the investments that the investment company I had mentioned. Okay, so couth was a little different...

...than I thought. So accounting first, um, and then you went to the investment banking route. Why why this, you know, jumping off with with the food with a restaurant business. What was it that you know kind of excited you about that. It's a bit of a tough question to answer, and that you think you you you ask it from the perspective that I made an overt choice of business. It's not the case. It it was a business that through the investment company, we had invested in. It was one that I had recommended we invest in. It looked very promising. I found that the investment the people that I had invested in, had let me down, and I felt kind of betrayed, to put it bluntly. And it was then that I got the combination of betrayal, I can do a better job, that I disappointed my called my handlers of the investment company, and it's time for me to no longer be a coach, but to be a player. So it was the coming together of all of those things. It didn't necessarily need to be a restaurant business. It could have been almost any business. I feel very fortunate it was. The restaurant business is an exciting business. If you like people, it's a great business. And I like people, and I liked being involved in a fast moving, dynamic business that I thought I could grow. So it's great. So that's interesting, John. So you know, you hear so much talk about passion, but your passion wasn't necessarily for the restaurant. It was for business in it in itself, and can I make a go of this? And you saw the challenge in it, I suppose, Yeah, that's true. It was more of an intellectual or perhaps an opportunity to apply all of the fundamentals that I had learned both at IVY and my years at Price Waterhouse and my years at the investment firm. And so it was kind of putting it all together and putting it into action, seeing whether I could actually walk the walk as well...

...as talk the talk. Once it got into the restaurant business, it was more than It was so much more than just a fundamental or an academic exercise. I love the people that I met. They were so different and so interesting, and yeah, I quickly fell in love with the restaurant business and the people and the pace and where can you make a decision in the morning, implemented in the afternoon, and no quickly what the results are like the restaurant business, So it was it's hard to be involved in a business that's combines business fundamentals and and passionate food, I mean feeding. It's it's hard to stay neutral and it's very easy to get get passionate and involved. Yeah, so became passionate about the particular industry. What are these this looked like? When you started John east Side Mario's? Was it you bigger than that? How many restaurants were there? The business was really quite small and failing, and it was before east Side Mario's really had started to shine. It consisted of a couple of concepts that were not towing their weight and and needed to be changed. So I had a ton of cleaning up work to be done. Once the cleanup was done, I found that we had this east Side Mario's concept and it was fabulous. And I found that I had some people who really wanted to grow the concept but were held back for various reasons, some of which referred to the concepts that I talked about just a moment ago and Once the cleanup was done, these passionate restaurant tour leaders were able...

...to expand east Side Marris and get the fundamentals. One of the things you find in the restaurant business is that they didn't have base cases. They had feel they thought something would be okay, but they didn't know factually what would be okay. And perhaps when you're running one or two smaller restaurants or enterprises, feel is sufficient. But if you really want to roll things out, you have to establish your best base case. You have to establish standards. And that's pretty much what we did. We established base case, so we formalized a whole process. And perhaps that's one of the things UH, the training, the IVY training, taught me to do. Thanks John. So you went on to have a number of brands in Prime Restaurant Group, it became the group after a while. Were those brands built organically by your team or did you acquire other chains or yeah, all all of the brands we developed internally. East Side Marios certainly was an internal brand. Cases the pubs Finn mccool's. It was the primary name of our pubs, and then UH, one of our last concepts that was really a fantastic concept was a Belgian uh concept. The beer markets is my favorite, by the way. Yeah, I'm not supposed to say who my favorite. I'm sure each each concept became like like a child to me. But yeah, I love the Beer Markets and the expansion of that brand. It was wonderful to bring something new to to the marketplace, and the beer market with its Belgian beer orientation and food Flemish food was very, very different and novel at the time. Yeah, it's a really amazing job growing all of that. And I wasn't aware the it was all organic. That's uh, that's that's really neat. John.

We went on afterwards to acquire brands and in effect be acquired, and so that we became a collection of some very significant and super brands in Canada. Take me through some of that. Because you built this great organization and you had an investor come along with with some other brands and say, hey, what you know, why don't we work together? What was that decision like? For Yeah, it seemed to me that we had grown significantly. Not see, we did, we'd grown significantly in size, but we were kind of I coined the phrase we were a tweener company. We were too big to take advantages of some of the um quickness that smaller businesses could achieve, and we weren't large enough to achieve some of the significant scale that that was necessary in a in a large company. So it seemed to me that was important to get the larger. We had identified a couple of opportunities at the best and the strangest circumstance to come along and wonderful circumstances was meeting the people from Fairfax Financial. They had determined that they wanted to get into the restaurant business. They had had an investment in Quebec which wasn't working out as well as they had hoped, and they, by then Prime Restaurants was a public company. Fairfax helped us to take the company private, which was nice. And then once private, we looked around and identified that Kara was the was a wonderful company. It was in similar trouble if you wish to what Prime was in its early days. Uh And there was an opportunity where Fairfax...

...was able to acquire a majority interest in in Kara and merged Prime in with the deal, and so we became one company called Kara, and then turned Kara around quite quickly and then went on a buying screen. So we'll try to back up just a little bit for me. The I mean, it's amazing story. And basically you were running the restaurant business for Kara or the merged entity, which is really a who's who of restaurants across the country. I mean, they're they're you know, deep Canadian brands. But now you've got you know, Fairfax, You've got Kara. What was that like now suddenly to be you know, had these other partners in the business with you after after being kind of your own guy for so long. Yeah, when you make the determination that you don't want to be caught in between, you don't want to be a tweener, you are prepared then to give up certain things to get certain things. So the days of of running Prime came to an end, days of getting involved and doing Kara became the way to go. And that's it just was a fundamental change and fundamental change that I was prepared for. Um. Also, Eric, I was a lot older as as we did this, and so thank you. So perhaps it was also a bit of career change and acknowledgement that entrepreneurism has a lifespan, at least in my case, since it was not going to be a family business. Therefore it has a best before date. So yes, I got involved in the management and operations of Kara, and then after a couple of years at...

...the company being put together and safely merged and operating properly, I retired from management. Stayed on the board for a number of years to help guide it from a board perspective, and it was a pretty not pretty It was an extraordinarily satisfying career. I love. I do not regret one bit any of the career paths. There may have been one, two, three, maybe even four days from a granular perspective that I had, but in general, in planning a career, and I shouldn't use the word planning because in many ways it was somewhat self evolving and things that you're not in control of, and some sometimes it's they're good, they're good things. They said meeting the Fairfax people, they are the finest and the best people I've ever come up us. So that was very fortunate. Yeah. Great, when you find a partner that you fit with like that, you know, we're interesting and you talk a little bit about some of the tough days, granular days. We really come through a very tough time. We're not we're not through it yet. For the restaurant hospitality industry with the pandemic, um, you also were able to navigate some tough times and financial crisis and some other you know, downturns in the economy. I don't know if you have a perspective on the pandemic, but but maybe just you know, some of the things that you had to do during the down cycles that you have gone through that you you might, um, you know, ideas you might give to the entrepreneurs as they try and fight through this time. Being to the abyss and looking deep down into the into that abyss is frightening. Yeah, it's frightening. Um. The one that certainly I lived through was the oh seven, O eight and oh nine if you wish, years of a procession real estate blowing...

...up, and I thought all of my life's works could come to an end. Ye. So yeah, that's uh. And there is a saying about when the going gets tough, the tough get going. Didn't really look forward to putting into practice, but we did. Uh. One thing that we learned some of the restaurant operations that were marginal and that we're keeping going in good times. We decided we had to take a hard decision and let them go or shut them down. It was just taking up too much management time to to run operations that were never going to be profitable, if you want to call them the walking dead. We had to do that. Clearly, I learned how important good management is, or good people are. My partner and I we had a choice of reducing the salaries of our people and seeing it through, or frankly, keeping their salaries the way they were and reducing our salaries, the senior management, myself, my partner down to zero. And that's what we chose to do. We didn't tell anybody that we're doing it, and that way we were able to maintain all of our staff, all of our key people. And so when we came out of the recession, we had all of our key people in place and we had closed down all of the anchors that were weighing down our business. Was our absolute best year to date them in performance. So we came roaring back. The same thing will happen now. The same thing is happening now. We're in the throes of the comeback once, at least in Ontario, we get to have full occupancy in our restaurants and people feel a lot safer in going to restaurants,...

...and I think they should feel safe even today, the business will come roaring back. And I know and Kara, or as we're now called Recipe has done everything to maintain and encourage all of the key people to be there. People are the secret and that's and that's what Recipe has done. It's very similar to what I saw in two thousand and eight through nine. To you, I don't think we had the same programs back then that we did today going through in terms of helping you keep some of the key people in and you know you made the hard decisions to do that, um Eric, there was nothing heroic that we did. It was just the right You know, when you're doing the right thing, it is the right thing. So it was just a matter of doing the right thing, and doing the right thing is timeless, doesn't matter whether it's the financial crisis the eight period, or the pandemic crisis of now or any crisis is crises that may yet be ahead. Yeah, the two things I take from that, John, One is, you know, people are critical. Good people are are critical to your success. And making sure that they're set and prepared to take advantage of the good times when you come through them is key, and you did that well. The The other piece that I think a lot of growth companies you know, probably don't do quick enough is those marginal pieces of the business that are really much more of a drain even when they're breaking, even because of the amount of mental time that the leadership has to put into them. And in good times, you know, we we sometimes do that longer than we should, and when things turned down, it becomes much more obvious that it's a drain. And so, you know, making those things quickly for the health of the overall business and and preparing yourself to grow is I think a hard thing for most entrepreneurs. And yeah, sometimes you have to cut off an arm to save the body. No same person ever wants to cut off...

...an arm until you must. You know. One of the I don't know is always brought a smile to my face and a bit of a chuckle is when you went into Undercover Boss, that show that was on for a couple of years back then. I loved your disguise and everything about the whole thing. Having known you for several years at that point, what just what was that experience? Like John, a little out of your norm? Yeah, Eric, the evolution of getting on the show was funny because I didn't believe I was a crank call when I was, but once once I got past that, it was probably one of the best experiences I could I've ever had in my life. And were the show or the opportunities still available to people, I would encourage them to do it. I got to meet the grassroots people in my army music. You know, you preach from as they called the Ivory Tower, what you should be doing, what the right thing is to do, but you really don't have the feel, the touch, the the the getting down to the customer interface, the person that comes, the dining, the person that's in and dining at your restaurant. So as a result, I got to meet some of the most wonderful people in our organization, from a blind dishwasher believe I'm a wonderful man, to a fabulous chef, to a woman who was running our pizza production area. I got to meet people that I would not normally meet. And one of the things that I saw was universal from everybody. These were people of different jobs, different restaurants throughout the country, but universally they said, and they said, it's so succinctly, so better than we could have even words Smith Smith did. They said, Hey, if I wouldn't eat it myself, I'm not serving...

...it. I mean, and it said to me, somehow, some way, these guys are getting the message. So I loved meeting all the young people, and my life is blessed for meeting all of them. And as you know, the part of the show is not only do you give of yourself in terms of participating and being in the restaurants and working the job. And I must say in many, no, in all instances, incompetently because all of the kids were so much better. They were great. But yeah, you get to see your company at its grassroots. I think in part of the reward system that is part of the show, you also get to make a difference in each one of those individual people's lives. And uh, it's a it's the most gratifying experience. It is then meeting these young people, hearing them, hearing their words and their dedication to the company, and and helping perhaps to even make a difference in their lives. What an opportunity. Yeah, well, well well done. Yours ended well, not all of them did, if we remember. Yeah, well I I don't. I don't know about the others. I just know that the the young people that I met my life path wouldn't normally cross theirs, and I feel so so blessed that it did. Yeah, that's very cool, John. When you look back, you know, what's maybe something you wish you had learned at university that would have helped you in your entrepreneurial career that that went missing. I I don't know how to answer that question. I can only say that I wasn't looking for the holy grail at the business school. There is none what I was looking for, and I didn't learn this until I reflect...

...backwards. Is a toolbox. Give me a kit that I can apply to almost any or many situations. Give me a way of analyzing. Help me to understand a complex problem and reduce it to its simplistic, action oriented ways. So Ivy gave me that toolbox. If you can take complex issues and reduce them down to one, two or three, very important, gotta have and and make it action orient. I mean talking about something is useless unless it's accompanied by by action. That's what IVY gave me. I don't know enough about the formalities of entrepreneurism the way it's taught today, but I know that if I were to start a course at IVY, that's what I would want to make sure that the two A box of analytical's action, assigning tasks, getting them done was done. And of course in that there's a sophistication understanding numbers and balance sheets and all of the technical things that are part of the course makeup. That's also part of the toolbox. I hope that answers your question. I'm not sure, but that's yeah. No, I think that's great. Thanks John. I that tool kit you get coming out of iv through the case study method and some great faculty and good peers. Right, let's not underestimate the value there is does help you with a great tool Eric, let me let me respond a moment to that I'm coming up to. I think I'm two years short of fifty years since I graduated. I have stayed in touch with my MBA guys. The last Thursday of every month we get together for a drink. Well, you used to do that at...

...the international beer market. Where do you go? Now, Well, well, we've been I'm going to say we've been beneficiaries perhaps of the pandemic in that we no longer go to a pub, but we do it on zoom and as a result, we've been able to include guys who are all over the world, guys feeling in England and Scotland and all over the United States, in Israel. Uh, it's just wonderful to see these guys and stay in touch. That's what Ivy did for me. I kept in touch with my MBA class. Unfortunately many of the professors in my day are no longer around, but through involvement directly with you and and ten gently with you and other things, have stayed in touch Ivy. I cannot tell you how important it has been in the development of my my career. Thanks John, It's it's amazing you're you're still that level of communication with your classmates and your peers. That's been plastic. Yeah. Um, hey, you've been back and you you actually do you know, teaching in our program in a number of different ways, but one of the ones is through E I R. And you've given back a lot of your time to the next generation of entrepreneurs coming through. What is it that brings you back to help with that you enjoy the teaching, is that the students combination, it's all of the above. First of all, since I was such a beneficiary benefited from my MBA education, I mentioned earlier how I feel it's important to pay it forward or pay it back in some way be involved with ib Then you, Eric and your props allow me to interact with the students. Uh, there's no talking about don't do this, don't do that. It's you're completely trusting and open. And the minds, the young minds are just so dynamic. The people.

The level of student at IVY is just remarkable. They need to be honed or more experienced, but there's drive and it's really a two way street. The field that I could give something to these young minds is stupefying to me. And frankly, getting and understanding the way they think helps me to stay in touch with today's realities. Yeah, they are amazing. I leave every class feeling like I've learned something for sure. Um, but I'm sure John, you're you know. What they don't have is experience and your wisdom over the years. Is something that they learned from is they interact with you over time and you know it may not even be something that's explicit, but I but I know that that's happening as well. Well. I tell them often use the phrase that maybe in something I say, there will be a diamond that will come out of my mouth. Okay, that could It may not strike them as a diamond, then it may reverberate some sometime in the future. There's some lumps of a lot of lumps of coal that come out of my mind and my mouth too. But the idea that something could influence tomorrow's leaders, yeah, is awesome. It's mind boggling. So thank you for letting me exposing me to those brilliant minds. Thank you. John. Is there if you were, you know, just thinking back on your career, one piece of advice that you would want to pass on to aspiring entrepreneurs or those that are just getting going and their entrepreneurial journey, any anything that you'd want to pass along to them. This is a funny question, and that I could say do this and do that, it's not really the case. Um. And then you' at words about when things aren't working out. You...

...call it a pivot. My best advice is hanging when things get tough, you have to get tough and get get with it. There is a solution and many people will walk away from a situation when it gets tough. Hang in there. If you believe with what I believe in what you're doing. Your passions need to be well invested or need you need your passions when you're in tough times. And I'm not preaching tough times, but I can tell you in any situation, you would be silly not to be prepared for a tough time happening. And it can be unpredictable. But hang in, believe in your people, believe in your team, believe in your conferres, and believe in your company, and hang in during tough times. John, I, you know it's it's it's interesting. I would say this legend category that we've created for these podcasts, that that's a recurring theme. Um. And you know, to reach that level means that you've had a long enough career that you've you've seen the abysses as you mentioned, and you know, to to reach legend status it means you've come out the other side. And I think that that grit, that determination, that that willingness to really put your nose into it and figure it out rather than hoping somebody else will seems to be a key differentiator. You know, a small sample, but that's it's certainly makes sense to me as we look back at these Yeah, Eric, it does. And and frankly, my best opportunities have come from surprising places. Had I not hung in and seen something through, another opportunity which led to something else just wouldn't have happened. I've often heard an entrepreneur being described...

...as being similar to a spoiled brat, and if you think about it, they both don't take no for an answer, all right, although although perhaps an entrepreneur is more positively oriented. Now, let's hope that spoiled brat. But there's some similarities of of hanging in there that are universally true. And if you do, the rewards that can come are can be can be breathtaking in many in many cases, and that was the case for me, John. You know, I want to I want to say that I've valued your friendship over the years, and I think that's uh, that's what it's been, and I look forward to many more years of that friendship going forward, and uh, you know your wisdom has helped to shape what we do here in entrepreneurship, at the Ivy Business School and now at Western University, and I want to thank you from that, and I think everybody listening today hopefully we'll take take away a little bit of that wisdom and apply it in their own career and be the better for it. So thanks so much. I really really appreciate it. Thank you, Eric. It's entirely mutual. I truly value our friendship and we are linked in our desire to have the next generation be even better than than our generation has been, and so pay it forward. The entrepreneur podcast is sponsored by Quantum Shift two thousand and atole, I'm Connie Clarici and closing the Gap Healthcare Group. To ensure you never miss an episode, subscribe to the show on your favorite podcast player, or visit Entrepreneurship dot u w O dot C, a slash podcast. Thank you so much for listening. Until next time,.

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