The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 5 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 are listening to the entrepreneur podcast from Western Universities Morissett Institute for entrepreneurship, powered 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 mccoul's and beer market to Swiss la in the cake, millions of Canadians have celebrated their special moments in John Rothschild's world, graduating is one of the youngest MBA students in one thousand nine hundred and eighty three. John Rothschild didn't take the obvious entrepreneurial path. He built his career as an account 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 Monoor, but I think it's one that that fits too 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 earth? That's a that's a great question, because the answer is I always thought I wanted to run something, okay, but I really didn't know the route to get there. So, yeah, I thought I want to run something. I guess the idea of becoming entrepreneur. I didn't know it had a label, so I guess. So maybe to run something. And I yeah, I understand, I understand that. But you went off to business school and in some ways took a traditional pathway, I think, for Ivy Students. In any case, you went with a private investing firm. You know, how did that go and when did you decide it was time for something else? My Path was not an obvious path. Perhaps graduated, as you said, with my MBA, probably the best move I ever made in terms of schooling, for sure, was the launching to the NBA. I came out as one of the youngest MBA's to graduate. Felt that I had this very high level degree and MBA for strategy and seeing all of the ways of putting a company together, but I didn't have a grass root foundation.

And then I went and joined price water hose and did my chart a counting 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 and the investment business that I saw are 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 like the hands on approach and then I guess 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 so your path is a little different than I thought. Are we so? Accounting first and then you went to the investment banking route. Why? Why this? You know, jumping off with a with a 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 answer in 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 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 be trayed, to put it bluntly, and it was then that I got the combination of the trail I can do a better job, that I disappointed, call 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'm feel very fortunate. It was. The restaurant business 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 a self. 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 water hose 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 amazing. It's hard to be involved in a business that's combines business fundamentals and and passionate food, I mean feeding. 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 did the business look like when you started, John, with east side Mario's? Was a bigger than that? How many restaurants were there? Yeah, the business was really quite small and failing and it was before east side marries really had started to to shine. 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 marrows 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 marrows 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 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. Yeah, we're those brands built organically by your team? Or did you acquire other chains or yeah, all of the brands we...

...developed internally. Okay, east side Mario certainly was an internal brand case. He's the pub's Finn McCool's the primary name of our pubs. And then one of our last concepts, that was really a fantastic concept, was a Belgian concept, the the beer markets my favorite, by the way. Yeah, I'm not supposed to say who my favorite. No, I'm sure each concept became like a like a child to me, but yeah, 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 really amazing job growing all of that and I wasn't aware that it was all organic. That's that's that's really neat, John Give. 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 grade organization and you had an investor come along with with some other brands and say hey, what you know? Why we together? What was that decision like worth? Yeah, it seemed to me that we had grown significant, not seed. 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 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. The best and the strangest circumstance to come along, and wonderful circumstance 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, and there was an opportunity where Fairfax was able to acquire a majority interest in Kara and merge prime in with the deal. And so we became one company called Kara, and then turn Cara around quite quickly and then went on a buying scree. Wills makes back back up just a little bit for me. The I mean it, 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. And mean there they're, you know, deep Canadian brands. But now you've got, you know, fair facts, 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 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. Also are 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 of the company being put together and safely merged and operating properly, I retired from management and 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 have read, but but in general and planning a career, and 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 the good. They're good things, right, they said meeting the Fairfax people,...

...they are the finest and the best people I've ever come across. That was very fortunate. Yeah, great, when you find a partner that you fit with like that, you know we're interesting. You talked 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. You also were able to navigate some tough times and financial crisis and some other, you know, down terms 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 might 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 brightening. The one that certainly I lived through was the seven hundred and eighty and 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. So yeah, that's and there is a saying about when the going get stuff, the tough get going. Didn't really look forward to putting into practice, but we did. The one thing with that we learned some of the restaurant operations that were marginal and that we're keeping going in good times. We decide 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 we're never going to be profitable, if you want to call them the walking dead right. We had to do that. Clearly, I learned that 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 managing myself my partner, down to zero, and that's what we chose to do. We didn't tell anybody that we're doing with it, and that way we are 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. Two Thousand and ten was our absolute best year to date then 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 an Tara, we...

...get to have full occupancy in our restaurants and people feel a lot safer in going to restaurants and I think they could 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 it and that's what recipe has done. It's very similar to what I saw in two thousand and eight through nine, or. Kudos 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. 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 of the O 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 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, really 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 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 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 I 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. 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? Time a little out of your norm. Yeah, Eric, the evolution of getting on the show was funny because I didn't believe if I was a crank call when I 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 where the opportunity still available to people that would encourage them to do it. I got to meet the grass roots people in my own as a 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 come 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 or 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 sought for was universal from everybody. These were people different jobs, different restaurants throat the country, but universally, they said, and they said it's so succinctly, so better than we could have even word Smith Smith that. 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. Yeah, 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 known, in all instances, incompetently, because all of the kids were so much they were great. But yeah, you get to see your company had its grass roots. 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 and it's the most gratifying experience 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, it was. Well, well, well done. Yours ended well, not all of them did, if we remember. Yeah, well, yeah, I don't know about the others. I just know that the young people that I met, my Life Path wouldn't normally cross theirs, and I feel so, so blessed that it did. Yeah, it's very cool now. So when you look back, you don't what's maybe something you wish you had learned at university that would have helped ju in your entrepreneurial career, that that went missing. 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 tool box. Give me a kit that I can apply to almost any or many situation. 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 tool box. If you can take complex issues and reduce them down to one, two or three, very important God to have and and make it action or it I mean talking about something is useless unless you it's accompanied by by action. That's what IV 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 I be that's what I would want to make sure that the tool box of analyticals, action as signing 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 tool box. I hope that answer your question. I'm not sure, but that's yeah, I know. I think that's very thanks, Johnny. I that tool can 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. Can Yea Eric, let me at let me respond a moment to that. Sure, 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 while I get to gather for a drink. Well, you used to do that at the international deer market. Where do you go now. Well, we have. 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 Patil and in England and Scotland and all over the United States, in Israel. It's just wonderful to see these guys and stay in touch. That's what IV did for me. I kept in touch with my MBA class. Unfortunate many of the professors in my day are no longer around, but through involvement directly with you and and ten gentlely with you and other things, I've stayed in Touch Ivy. I cannot tell you how important it has been in the development of my my career. So thanks, John. It's amazing you're still the level of communication with your classmason,...

...your peers. That's fantastic. Yeah, 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 Eiar, 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 the students and 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 I be then you, Eric and your profs. allow me to interact with the students. There's no talking about don't do this, don't do that. It's you're completely trusting and open and the the minds, the young minds, are just so dynamic. The people they the level of student at IV is just remarkable. They need to be honed or more experienced, but there's drive and it's really a two way street. To feel 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 way. I leave every class feeling like I've learned something, for sure, 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 learn from is the interact with you over time and you know, 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 and may reverberate some sometime in the future. There's some lumps of a lot of lumps of coal that come up to my mind, my mouth too, but the idea that something could influence tomorrow's leaders, yeah, is is awesome. It's mindboggling. 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, if 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, 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. And then you've...

...got words about when things aren't working out. You call it a pivot. My best advice is hang in when things get tough. You have to get tough and get to 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 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 to 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. Johnny, you know it's it's interesting, I would say, this legend category that we've created for these podcasts, that that's a recurring theme and you know to reach that level means that you've had a long enough career that you've seen the abysses, as you mentioned, and you know to reach legend status it means you've come out the other side and I think that that grit, that determination, that the 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, small sample, but that 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 seeing something through, another opportunity which led to something else just wouldn't have happened. I've often heard of 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, spoiled Brat, but there's some similarities of hanging in there are universally true and if you do, the rewards that can come our can be can be breathtaking in many take in many cases, and that was the case for me. Go on, you know I want to. I want to say that I've valid your friendship over the years and I think that's that's what it's been and I look forward to many more years of that friendship going forward. And you know, your wisdom has helped to shape what we do here in Entrepreneurship at the V Business School and now at Western University, and one of thank you for that and...

I think everybody listening today, hopefully we'll take a 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 the even better than than our generation has been, and so pay it forward. The entrepreneur podcast is sponsored by quantum shift, two thousand and eight alum, 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 uwo dot C, a slash podcast. Thank you so much for listening. Until next time,.

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