Rob Ertmann, CEO of Mo' Bettahs

Guest: Rob Ertmann, CEO, Mo' Bettahs Hawaiian Style Food

Host: Chris Hatch

Listen on Spotify

Summary

Chris Hatch welcomes back Rob Ertmann, CEO of Mo' Bettahs, the Utah-born Hawaiian-style food brand founded by brothers Kimo and Kalani Mack. Rob joined at 22 locations and has grown it to 60, with 15 more planned this year. He explains how the Savory Fund helped the founders scale from six to 56 units, how he built the back office in-house before the sale to new majority partners, and what changes with a new owner group. He walks through the ideal site: about 2,500 square feet, an end cap with a drive-thru when possible, near daily needs, with clear access, in value-seeking communities he calls "the champion of the underserved." He also covers buying 130,000 pounds of chicken a week, training managers, the annual Hawaii trip for top performers, his 80-pound health journey and marathon running, focusing on fundamentals over menu complexity, and the lesson he learned when Noah's Bagels was converted to Einstein's.

Key Takeaways

• Being one of the few Hawaiian-style brands means educating new markets rather than fighting competitors on differentiation.

• Keeping the founders involved, through culture nights at every opening and a check on authenticity, protects the brand as it grows.

• Savory's model takes brands from about five to 10 units to roughly 50, providing the legal, payroll, IT, construction and real estate expertise founders can't afford early on.

• The ideal site is about 2,500 square feet, ideally an end-cap drive-thru (30 to 40% of sales when present), near daily needs like high schools, grocers or gyms.

• Don't fixate on traffic counts. Some roads are too busy for people to stop. Visibility and easy access matter more.

• Target communities with roughly $70,000 to $90,000 household incomes that want value and variety beyond pizza, burgers and tacos.

• Skip career assistant managers. Promote hungry shift leads through a focused manager-in-training program.

• Focus on fundamentals. Menu innovation adds complexity more than revenue, and 80% of plates include teriyaki chicken, so make it great.

• Never underestimate the power of a brand. Converting Noah's Bagels to Einstein's in the Northwest cut sales in half.

• Fund growth from a healthy P&L instead of relying on investor cash that can dry up.

Transcript

[01:00] Chris Hatch: Welcome back to the Dirt Dog Pod. Today we have a wonderful guest: Rob Ertmann, CEO of Mo' Bettahs.

[01:11] Rob Ertmann: Thanks for having me. Glad to be here.

[01:13] Chris Hatch: Time two.

[01:14] Rob Ertmann: There you go. Everything's better the second time.

[01:17] Chris Hatch: Yes, exactly. Well, hey, listen: when I put out that I was going to be sitting down with you today, a lot of our followers asked about your concept, because it is unique. You do now have a competitor or two in the space, but you're still in a niche where you don't have a whole lot of competitors, right? Compare that to a sandwich chain, where it's a lot harder to find the next Jimmy John's. So how is it operating in that space? Do you prefer that?

[01:52] Rob Ertmann: We love that. The fun thing about what we get to do is, you're right, there aren't a lot of competitors. We look at that as a challenge, because a lot of our job isn't trying to figure out our point of differentiation from a competitor. If you're in tacos or pizza or burgers, you've got to tell everybody why you're different from the next guy. We actually get the fun of educating people on what Hawaiian-style food is in the first place. Fortunately, here in Utah, people kind of know. We've been around long enough; we've been doing this for over 16 years. People in Utah generally know what we do and what we serve. But as we get out into Texas and Oklahoma and some of the outer markets, if you will, from our home base here in Utah, we get to teach people what it's all about. And we love doing that, because it means we get to give out a lot of food and share it with folks. I find that to be a lot of fun.

There are some competitors in the space, but generally speaking, most of them do something a little different. Maybe they have a big, wide menu, because with Hawaiian-style food you can have a pretty broad menu, and they offer variety. Or maybe they go with the Waikiki, tourist view of Hawaii: "When you think of going on vacation, this is what we're going to present." For us, we get to say, "No, our founders grew up in Hawaii. They are Hawaiian. This is what they grew up making in their backyard." And we're going to keep ours pretty simple, because we want to make the best mac salad and teriyaki chicken you've ever had, not just have it be one more thing on the menu. So I think our flavor is also what gives us our competitive flair, but a lot of it is just educating people on what we do in the first place.

[03:27] Chris Hatch: And I think one of the fun things about your brand is that you're still at a size where the owners are there, right?

[03:34] Rob Ertmann: I was with them today.

[03:36] Chris Hatch: So they're at the office on a typical Tuesday?

[03:40] Rob Ertmann: Yeah, they come in and meet with us. For the most part, they come in to make sure we're not getting too far off the path. There's an idea and a concept here, and there are things that are authentic to their Hawaiian upbringing and things that are not. So we may have ideas and fun things we want to do, and I always use them as a sounding board: "Hey, is this actually something you would eat in Hawaii? Is it something you would have made growing up? Or are we getting a little too creative here?" So yes, they come in often, and we get to bounce ideas off them. And more than anything, the most fun part about them coming in... I tell our teams this, because every new store we open starts with a culture night where the founders meet the teams. I remind everybody that there aren't many brands, and I've worked for a few, where I get to meet the founders and pick their brains. So for our teams, having them come around, introduce themselves and talk to them, and not just introduce themselves but get to know them, is a pretty special thing we still get to have with Kimo and Kalani around.

[04:40] Chris Hatch: That's great. Brothers, right? Kimo and Kalani?

[04:41] Rob Ertmann: Yeah. Both brothers.

[04:44] Chris Hatch: Wonderful. So tell us about the company. It just sold.

[04:49] Rob Ertmann: It did.

[04:50] Chris Hatch: And what kind of unit count are you at today?

[04:53] Rob Ertmann: We just ended the year at 60 locations. I joined three and a half years ago at 22 locations, so it was kind of crazy to hit the end of the year and realize we'd already gotten to 60.

[05:04] Chris Hatch: Just over one a month.

[05:06] Rob Ertmann: Pretty much, yeah. And we're going to do more than that this year. Our goal this year is to go for 15. So, not that I'll necessarily be sitting here at the same time next year, but expect us to be at 75 by the end of this coming year. Well, this year; we're already in it. I can't believe it's 2025.

[05:21] Chris Hatch: No kidding. So you were owned by the Savory Fund. Were you owned by the Savory Fund when you started with the company?

[05:28] Rob Ertmann: Yeah. The Savory Fund got involved with Kimo and Kalani back in 2017. So when I joined in 2021, the Savory Fund was still there and very active and busy with the business.

[05:40] Chris Hatch: And the Savory Fund model is that they buy a portion of the company, not the whole thing, and the whole idea is that they're there to help propel growth.

[05:48] Rob Ertmann: Typically, they like to find brands between five and 10 units. They do typically take a majority stake in the business, and in our case they did. But Kimo and Kalani are still owners in the business. Savory's goal is to grow a brand to around 50-ish units. We got to 56 before the actual transaction occurred. At that point, it's out of their sweet spot. They're great at coming in, giving the brand a foundation and helping it scale. It's really hard to grow from, in our case, six to 56 units if you're a founder who's never done it before. So they add that expertise, and then at that point they're like, "Okay, it's big enough. Time to get a return on that investment. Let's find a new majority ownership group," which is what happened. Savory is still a minority owner in the business, and Kimo and Kalani are still owners; they just don't own as large a piece as they did before. Then Savory can go focus on the next up-and-coming brand they want to support, while we go do our thing and keep growing with this new partner.

[06:51] Chris Hatch: So you had 20-something stores, and you were scaling it. What were some of those hard parts you were just alluding to?

[06:58] Rob Ertmann: Well, if I'm Kimo and Kalani in the early days, these were two guys from Hawaii who knew how to make great food and had never worked in the restaurant business outside of high school, when they worked for a brand called Zippy's. By the time they got to six units, they were overwhelmed by legal, payroll, real estate, construction, IT, you name it. So Savory came in and said, "Hey, we've got a great team of people who are experts in this business. We've got that part for you. You keep the heart and soul of the brand and keep it on the rails. We'll get all the infrastructure in place for you to operate professionally, if you will, and grow and scale."

When I came in, what really shifted... like I said, I joined at 22 units. Most of the day-to-day functions were being run by Savory, other than day-to-day operations: the operations team, our district managers and general managers running the stores. All those other functions I mentioned, Savory did. When I came in, it was the transition to say, "Okay, the next group of partners we bring into the business isn't going to have that expertise." I came on as president and was later promoted to CEO, and I built that whole team in-house. Now, instead of Savory doing payroll and IT and construction and development, we have our own team and our own office down in Lehi that does all the back-office side. So as we transitioned from Savory being the majority owner to being a minority owner, they no longer needed to be involved in the day-to-day. They can lend some strategic advice, but we do all of the functions in-house. At six units, you don't have the money to have the expertise required to scale from six to 56 units.

[08:44] Chris Hatch: So a small brand goes to Savory, and one of the immediate things they pick up would be things like accounting systems?

[08:52] Rob Ertmann: People, training systems, food safety systems, a formalized payroll system, even the expertise to go out and pick real estate. Think about these local brands with such a following that, not that the real estate doesn't matter, but if your food is good enough and you're local, sometimes you can make it on a D real estate site. As you start to scale and get bigger, you can't make those same decisions. You've got to have more data and analytics behind the real estate. That's where Savory also brings in the expertise to say, "Hey, we've done this once or twice now. Once we understand what your brand is, we can help you pick better sites and help you scale at this level as well." So, on many fronts.

[09:34] Chris Hatch: That's interesting. I think Brad Giles is a tremendous site location person.

[09:38] Rob Ertmann: Absolutely.

[09:39] Chris Hatch: The amount of knowledge he has. What a tremendous resource he must be for you in running a brand.

[09:45] Rob Ertmann: Him and Andrew, sure. And even Steve Black on the legal side. There are so many experts there. Again, at six units, you couldn't have the horsepower of the folks I just named, and many others who work at Savory. You couldn't afford them at six units. You just couldn't.

[10:00] Chris Hatch: Okay. So Savory comes in and helps you get to your growth objective, and now you have a new private equity partner. Who's that?

[10:11] Rob Ertmann: It's [Blue Marlin] and [Tribe Capital], the two main ones there.

[10:16] Chris Hatch: And do they have experience in other food service businesses?

[10:20] Rob Ertmann: Yeah, they've got some other businesses. I'd say they have a pretty broad portfolio; I don't even know all the businesses they're in. But they definitely have food concepts they're invested in. I think Jersey Mike's is one. They've got another investment in a group called Mission BBQ, which is out on the other side of the country from us. So they have some expertise they can lend on the real estate side as we get bigger and broader across the country.

[10:48] Chris Hatch: What's it like moving from one partner like that to another? I'd imagine everybody has different objectives and different ways of handling things. Is it kind of resetting it all over again?

[11:00] Rob Ertmann: I think it's real. It's still fresh and new, and we're all still learning each other and understanding the priorities for the different groups and what they're thinking about. A lot of it right now is them learning our business and who we are. So a lot of my time is spent educating them and helping them understand, "Hey, here's what we've done. Here's what got us to this point of success." And then bouncing ideas around about what's going to get us to the next mountaintop. So I'm really just figuring that out and understanding the new relationships and the new reporting. It's unique for us, in the sense that we used to office essentially out of Savory's office, and then out of the same building Savory was in. Now our office is five minutes from Savory, and our new partners are headquartered in Dallas and Washington, D.C. So even those relationships, where we can't just drive down the street and meet up, are something new we're navigating. But it's fun, and for me it's exciting to work through, because it's boring to stand still and do the same thing every day.

[11:59] Chris Hatch: No kidding. Let's flip to the food for a minute, because the food's amazing. If you're at a store, what's your go-to order?

[12:07] Rob Ertmann: Honestly, it's always one of our plates, mini or regular: mac salad, rice, and then the proteins. But our katsu chicken... we introduced a spicy [Yobo] sauce and a spicy mayo at the beginning of last year. If you take both of those and drizzle them on the katsu chicken, it'll change your life. It's phenomenal.

[12:25] Chris Hatch: That's it.

[12:26] Rob Ertmann: Spicy, sweet, creamy, life-changing. It's phenomenal. And then of course you have the rice and the mac salad.

[12:33] Chris Hatch: Let's talk about an ideal Mo' Bettahs location from a real estate standpoint. What are you looking for? What's the size, the layout? How many seats? What's ideal?

[12:44] Rob Ertmann: Anything close to around 2,500 square feet is perfect for us. We can go down to 2,300 square feet, and we can go up to 3,200. We've got a reasonably broad range. We love a drive-thru if we can find it, but it's not a necessity. There was a period coming out of COVID when it felt like a necessity, but at this point a drive-thru is not a necessity. But we love end-cap drive-thrus.

[13:06] Chris Hatch: Do you know how much in sales you're doing with a drive-thru versus without?

[13:10] Rob Ertmann: We're still figuring that out. What I mean by that is, a lot of our initial locations, which are some of our busiest because they've been around so long, don't have drive-thrus. So now that we're flexing and saying it doesn't have to be a drive-thru, we're still figuring out what a drive-thru is worth versus what it's not. We think it's pretty good for us. When we do have a drive-thru, it's anywhere from 30 to 40% of our sales. But I've got some really busy stores here in Salt Lake without a drive-thru that beat the drive-thru AUV. So we're still figuring it out, but I'd call an end-cap drive-thru our preference.

What we really love is to be near daily needs. I say that because, again, we're still educating people on what Hawaiian-style food is. So we like to be near a high school, because people go there every day. We like to be near a grocery store, or near a gym, something that drives traffic and gets people to drive by and go, "Mo' Bettahs? What is that? I need to go check that out." So our preference is to find places like that. Now, here in Utah, I don't need the daily needs as much. I just need great traffic and a great population base. Murray is an example. We just opened a location in Murray, Utah. There's no grocery store or gym or high school right nearby, but it's a phenomenal location for us, because there are plenty of humans in that area who know Mo' Bettahs and are just happy we're closer to their house than we were before we opened that store.

[14:41] Chris Hatch: So take a market like Vegas, which you might know less well than Salt Lake. You're looking at a new intersection. The broker's hot on it. Your real estate rep is hot on it. What do you do? How do you figure out whether that spot has what it takes to be a home run?

[15:01] Rob Ertmann: First off, you've got to have some visibility. I'm sure everybody says that, but if I'm buried in the back of the center in a new market like that, it's just not going to work. We've got to have some visibility. There's got to be good ingress and egress, in case it's hard to get in. Vegas in particular is one of those markets where you sometimes have to drive through a parking lot and around a corner. You might see us from Blue Diamond, let's say, but if we're not careful, you have to drive all the way through the center to get to us. And people are going to be like, "Wait a minute, I just got lost trying to get through this parking lot." So: can you get to us easily? And then those daily needs I mentioned.

Outside of that, there are the harder judgment calls. I think people get too fixated on traffic counts. They're so excited about all this traffic, but sometimes those roads are so busy that people aren't stopping. They're thinking, "My goal is to get from point A to point B, and if you're in the middle, I don't have time to stop, because it's going to take me 10 minutes to get back onto this road." So it's using that gut feel: is this a road people get on and off of, or are they just trying to get through it? It's that kind of assessment.

We also look at demographics. We call ourselves the champion of the underserved. We're not looking for high-six-figure household incomes. We love to be in communities where maybe the income is $70,000 to $90,000. They have enough disposable income that they want to eat out, but they're also looking for value. And I don't mean dollar-menu value. I mean they're going to come into Mo' Bettahs, spend maybe 15 bucks with a drink, and walk out feeling full. Or spend 20 bucks and walk out with leftovers for their next meal. We love communities where people have enough money to do that but are looking for that value at that price point.

[16:50] Chris Hatch: And it's a great value proposition for them, right? At 15 or 20 bucks... if they go to the barbecue place, it's going to be what, $22 to $30? So you're notching in there. It's a great segment.

[17:02] Rob Ertmann: Agreed. The other thing we look at on top of that is that we're a different take on food from the other places that are there. We actually just opened a location in Eagle Mountain, and we did our friends-and-ohana event, where our goal is just to serve as many people as we can. I remember we were shutting down for the night, because we have a time slot we do it in. At this point we'd served something like 2,000 people. And this poor guy comes walking through the parking lot, probably 15 minutes after we'd run out of food, while we're shutting down. We didn't have any food left; it's not like I was just being mean. And the poor guy goes, "Are you kidding me? You guys are closed? I was so excited. Look at my options. I'm going to have to go get a burger or a taco or a pizza. I was hoping for something different." So we look at that in a community: can we give variety to this community? That's where we think we'll have a home run in a lot of cases, as long as there isn't too much variety. Because there's the other side, where if there are 300 choices, maybe we won't be that point of differentiation. But we love communities like Eagle Mountain, where they don't have a ton of options that are different from pizza, burgers and tacos, where we can add that different meal for them a couple of times a week.

[18:17] Chris Hatch: You talked about adding spicy mayo to your menu last year. How hard is it, now that you're sitting in the 60s on store count, to implement a new product like that?

[18:28] Rob Ertmann: It just takes more diligence. I've got experience at several hundred units, 500 or more units. So I don't think it's hard to implement at 60, but you have to be more diligent. You can no longer say, "Oh, we'll just throw this into the 10 stores we have and see if it works." It's a process. We ideate. We see whether the recipe for the spicy mayo works. Okay, now let's put it into a restaurant. Can they actually make it, or is it too complex? Okay, we've figured out the ops. Now let's test it in two or three locations. Customers seem to like it, and then we expand from there. So it's just a process. Luckily, between me and others in the brand, we have enough experience doing that at scale that we can replicate it.

[19:08] Chris Hatch: You mentioned to me a few months ago, when we were talking, how much chicken you guys were buying. I think it was on a weekly basis, and I remember, still to this day, it was such a big number. I was blown away. How much chicken are you buying right now?

[19:24] Rob Ertmann: Like 130,000 pounds a week.

[19:26] Chris Hatch: Wild.

[19:27] Rob Ertmann: It's January, and it's slightly slower, so maybe 125,000 pounds right now.

[19:32] Chris Hatch: And when is peak in the year for you?

[19:36] Rob Ertmann: The run-up to Christmas is always very busy for us, and also the run-up to graduation season. January's quiet. I think everybody just spent all their money on Christmas, so they don't go out to eat quite as much. Then you get into February, and everybody's like, "Okay, I need to do this stuff again." And it ramps all the way up through June. May and June are very busy. Then there's usually a bit of a summer drop-off. Everybody's traveling, and they switch over to hamburgers. They want the McDonald's on the road on the way to whatever national park they're visiting. Then you come out of summer, and it ramps all the way through Christmas, and then it slows down. It's kind of a normal cycle.

[20:14] Chris Hatch: With that kind of chicken volume, are you going through a supplier, or direct to the farmers?

[20:20] Rob Ertmann: We're pretty much going through a supplier. We get most of our products through Sysco. We know the farms they're getting the chicken from, but at the end of the day, we're making it in-house. We're literally buying raw chicken thighs. It's not that unique an item as a base product. It's the teriyaki sauce and everything else we add that gives it the flavor. But we buy most of that through Sysco. Luckily, you can source most of the products we use pretty much anywhere in the U.S., which I think is to our advantage. It's all about how you put them together, and the recipes, once you get them in the restaurant.

[21:03] Chris Hatch: I'll never forget, as a teenager, my dad found himself invested in a small chain. He had three stores of a Japanese fast casual restaurant. And I'll never forget making the teriyaki sauce. You'd smell like ginger and garlic for five days.

[21:18] Rob Ertmann: Yeah. Luckily, our teriyaki sauce is made by our amazing partner, Aloha Shoyu, which is from Hawaii, and then it's finished in Vegas. But our head of ops, our chief operating officer, John [Conine], talks about the days when they used to make it in the store, boiling it and smelling like all of that, and what a sticky mess it can be to make a sauce like that.

[21:42] Chris Hatch: It was a bad day if you let that pot boil over. That's a multi-hour situation.

[21:48] Rob Ertmann: Well, even in our stores, we used to pour the cups. We'd get these gigantic five-gallon containers of sauce, and then we'd still pour all of our little sauce cups ourselves. Now our partner makes the sauce cups for us. But imagine walking into a restaurant at 8 a.m. on any given day, and every table is just full of these ramekins, and you've got team members out there pouring, pouring, pouring cups. The mess left over from that was incredible.

[22:16] Chris Hatch: Plenty of spills, right?

[22:17] Rob Ertmann: Plenty of spills. And again, it's sticky, and it's hard to clean up. Our restaurants are cleaner, and our team members are happier now that they're no longer filling all those cups every day.

[22:26] Chris Hatch: Let's talk about something else for a minute, because one of the other remarkable things about you is your health journey. There's a lot less Rob sitting here today than there would have been if we'd done this podcast, what, a year ago?

[22:42] Rob Ertmann: Probably a year and a half now. I've dropped a good 80-plus pounds, so that's been nice.

[22:47] Chris Hatch: Just a minor 80 pounds.

[22:49] Rob Ertmann: Minor 80 pounds. We had an interesting journey last year. I'd started to drop the weight before this, but the team and I got really into running. In fact, my team is trying to bait me right now into running the Ogden Marathon again. I was kind of like, "It's cold. I don't know if I want to train for that right now." And they reminded me that last year I was dumb enough to sign up for it three weeks before it happened. I think it's May 17th or something this year, and they're like, "What are you talking about? You've got plenty of time to train. Last year you gave yourself three weeks." But it's been a fun little journey, and it's been fun to see the team galvanize behind things like that. I certainly feel better and healthier, 80 pounds lighter.

[23:28] Chris Hatch: So if you're going to do it this year, you'll start a little further out than three weeks.

[23:31] Rob Ertmann: I will start a little further out. I had been running, because the team also did a Ragnar in June, so I was already running before that. But I was naively unprepared for marathon-level running when I signed up. This year I have a better sense of what I'm in for.

[23:48] Chris Hatch: Well, you can pretty much run out your front door and do that marathon.

[23:50] Rob Ertmann: Oh, yeah. It's great. There's a secret little bus you can take if you live up in the valley.

[23:55] Chris Hatch: Perfect.

[23:57] Rob Ertmann: It works out well, so they're probably going to sucker me into doing it again. Aside from that marathon, they suckered me into the Ragnar, which is a 200-mile relay, plus two halves and another full marathon last year. So they got me doing a lot of running. If I do one marathon this year, maybe that'll be the only one.

[24:15] Chris Hatch: So the way to get you to do something is to start a competition, and you just bite.

[24:21] Rob Ertmann: We're a competitive bunch, myself included. It's hard for me to let it go if the team's trying to sucker me into competing with them. Right now, I've done one more marathon than the rest of the guys I'm running with, so if I stop doing them, they'll catch me. I guess that's the other motivation.

[24:38] Chris Hatch: Good point. You've got to keep going. Now you're committed.

[24:41] Rob Ertmann: Exactly. That's right.

[24:43] Chris Hatch: Going back to that competitive nature, what kinds of metrics do you like to see at Mo' Bettahs? Do you look at daily metrics? Weekly?

[24:50] Rob Ertmann: Plenty. That's the beauty of Mo' Bettahs and the team we've built there. We have a value called [ho'okūkū], which is all about competition. Not competition where I'm going to step on your back to get ahead, but competition where it's me against myself, and I want to beat you because you're pushing me to be better. We've built a team that fosters that. So daily, we're looking at sales, food costs, labor and customer sentiment: are customers happy and enjoying the food? We look at all of these things regularly. In fact, one of the most powerful tools we have is a platform called Ovation, where customers leave feedback, and it allows our leadership teams to reach back out to those customers. Fortunately, a lot of it's positive. But when we do have a misstep, it's a chance to say, "Hey, we can be better than this. How are we going to make it right?" A, how do we get better for the future, and B, how do we make it right with that specific customer?

[25:45] Chris Hatch: Is that a customer survey that comes off credit card data?

[25:49] Rob Ertmann: A lot of it is linked to our loyalty program. When you come in and use your credit card, it's linked to your loyalty account. So when you use that card, it's, "Hey, Chris, you made a purchase. We have your information, and we're going to send you a survey. How was your visit? You just came in; what did you think today?" There's a QR code too, and some different ways to leave feedback. But that's probably the most common way, through that platform.

[26:17] Chris Hatch: You've mentioned Vegas a few times, and you were talking about Vegas as you came in. The Eighth Island.

[26:23] Rob Ertmann: The Ninth Island.

[26:25] Chris Hatch: The Ninth Island. How has the market been down there? Has it received you well?

[26:27] Rob Ertmann: The market's been great. It was one of those things where, for Kimo and Kalani in particular, they knew we had to do their heritage justice, because you've got a lot of Hawaiians and Polynesians down there. We don't need to educate the community of Las Vegas on what Hawaiian-style food is. The reception has been great, and it's been fun to see so many folks come in and say, "This reminds me of home. You're making it the right way." That validation... not to say we don't have opportunities to get better; we're always pushing ourselves. But it's been fun to go down to Vegas and get that validation, and to see Kimo and Kalani get a bit of that validation, too: "Hey, what you created in Utah and brought to Las Vegas resonates with the communities that really know what Hawaiian-style food is." We love that.

[27:18] Chris Hatch: As you think about new markets, do you tend to gravitate toward markets with a higher Pacific Islander population?

[27:27] Rob Ertmann: No, not at all, actually. Again, we gravitate to markets where we feel the demographics and income levels are right. We really try to gravitate toward being the champion of the underserved. We're not looking at the sexy markets. I think it's fun to say you're in Chicago, or D.C. or New York, but I like to make money. Where are we going to make money? We make money in communities looking for some variety, but variety of food they know. Hawaiian-style food might be unique to a lot of folks, but if I go to Dallas, Texas, and tell them I'm serving chicken, steak, rice and macaroni salad, they're like, "Oh, that's what Hawaiian-style food is? I love that stuff. I cooked that in my backyard last night; I just didn't put teriyaki sauce on it." Those are the communities we're looking for.

[28:16] Chris Hatch: When you get to 60 units... I'm always sales-oriented, which I think comes from my training, starting out as a broker.

[28:24] Rob Ertmann: The world goes around with sales.

[28:26] Chris Hatch: No kidding. So I'm thinking about the way a typical store is structured. You have one manager for the store?

[28:33] Rob Ertmann: A general manager, we call them.

[28:34] Chris Hatch: Perfect. And then a couple of assistant managers?

[28:37] Rob Ertmann: No assistants. We have shift leads, fundamentally, who work in tandem with the general managers and run the shifts. We've had assistant managers before. But because I've been doing this for close to 30 years, I think too often you get an assistant manager who gets comfortable, and I end up calling them a blocker, which sounds weird to say. They're supposed to be your pipeline for your next group of general managers. We have the most success when we can promote from within. And when you find a lifelong assistant manager, unfortunately, and not to offend anybody, that doesn't do us any good. We need people who are hungry and looking for that next spot. So what we have is shift leads, and then we identify shift leads with a lot of potential who need extra training, and put them into our MIT program. They spend some time learning what a general manager does, how to lead a team, how to lead people, and then we move them up from the MIT program to a general manager spot. So we have assistants, in a sense, with these MITs, but they know their sole mission in life is to become a general manager. Their mission in life is not to be an assistant.

[29:43] Chris Hatch: So when you go into manager-in-training, is that virtual training?

[29:46] Rob Ertmann: No, it's in a restaurant. We have a learning management system with digital components...

[29:53] Chris Hatch: So it's like a crash course? You go to it for two weeks or something?

[29:56] Rob Ertmann: Four weeks. They do a lot of training in their original store, and most of that is how to make our food, how to serve customers, all those components. Then usually their general manager will teach them a little about ordering and scheduling.

[30:11] Chris Hatch: I can only hope you're yelling at them like Bobby Flay.

[30:15] Rob Ertmann: Oh, totally. That's the best way to get it, for sure. But then we actually pull them out of that store. Mandy, our general manager at the Sandy location, is just phenomenal.

[30:26] Chris Hatch: Mandy at Sandy.

[30:27] Rob Ertmann: Mandy at Sandy, yeah. Can't forget that. They'll go spend four weeks with Mandy. Mandy's not the only one; she's just the first who comes to mind. And she'll say, "Okay, great. You've learned all this stuff to date. Maybe you've been at Mo' Bettahs for a year, maybe two. Let me help you hone it into how to actually lead a restaurant." It helps to take them out of their home store, because in their home store, they're busy running shifts and serving customers. When they go to Sandy with Mandy, which does sound weird to say, she can focus on their leadership skills. They do run shifts, but the focus is them, not the restaurant. They get four weeks of development for themselves. Then, when they graduate from that program, Mandy and her counterparts help us understand whether they're ready to take a store or need something more. We assess that, and assuming they're ready and we have a store available, we put them in a store, and they get to work.

[31:29] Chris Hatch: Okay, so you have 60 GMs. How do you keep 60 GMs all in the canoe, so to speak, rowing in the same direction?

[31:38] Rob Ertmann: It comes down to leadership. Fortunately, we have an awesome team, from John [Conine], our head of ops and COO, to his two directors, who each have several district managers. So it is a bit of a telephone game, but it's really about making sure we're unified in the messaging, in what we're trying to accomplish, and aligned on vision. I can't be in every restaurant every day. John can't be in every restaurant every day. But the communication goes to the directors of ops and the district managers, and they lead those general managers in a way that keeps us all on the same page. We also have other mechanisms. At the end of this month, on the 29th, all of our general managers are coming to Utah for a meeting we try to do twice a year. We bring them together, talk about what we're trying to do as a brand and do a little coaching and training. They get to spend time with our founders and connect with them, and we celebrate and reward, and we'll be crowning the top GM and top DM for the system.

[32:35] Chris Hatch: There you go. What does the top GM get?

[32:37] Rob Ertmann: They get to go to Hawaii. We do a trip every year with our founders and anybody who's been with the brand for more than five years as a general manager or support team member. They get to go to Hawaii, and the top GM and top DM come with us. If they have a spouse or significant other, they get to bring them on the trip as well. We spend five or six days in Hawaii. Yes, there's some beach time, but a lot of it is spent letting Kimo and Kalani take them around the island: "Hey, here's Waikiki and the fun tourist stuff. Now let us show you where we actually grew up. Let's talk about our values and our food. We sell this thing, musubi. You get that at 7-Eleven in Hawaii. Let's go to 7-Eleven and we'll show you." And there's a lot of food. We eat a lot. For my diet, I have to watch it, but we eat a lot.

[33:28] Chris Hatch: I was going to say, you're in the food service business, right? What is a musubi?

[33:34] Rob Ertmann: A musubi is essentially rice and a piece of... well, it doesn't have to be Spam, but in our case at Mo' Bettahs it's Spam musubi. You take rice and mix it with furikake, which is a seaweed and sesame seasoning. You add Spam that's been fried and tossed in teriyaki sauce. Then you wrap it in nori, which is basically seaweed. So it's kind of like Hawaiian sushi, sort of. But literally, what you find in the islands is that it's packaged up and sold in a hot case at 7-Eleven. In Hawaii, it's kind of like a peanut butter and jelly sandwich. You're going to the beach, you grab a few musubis, shove them in your purse or bag or whatever you're carrying, and feed them to everybody while you're sitting on the beach.

[34:19] Chris Hatch: So I've been pronouncing it "ma-SOO-bee" up to this point in my life.

[34:24] Rob Ertmann: Musubi. You definitely sound like a haole. If you're calling it masubi, you definitely sound like a haole. It's musubi.

[34:30] Chris Hatch: I may or may not be guilty of that.

[34:33] Rob Ertmann: But in Hawaii, you'll find it's not just Spam. There's teri chicken, there's katsu chicken, Portuguese sausage. They've got a whole lineup of musubi.

[34:41] Chris Hatch: Does it give you anxiety, bringing 60 general managers here, knowing you have 60 stores without their GMs in them?

[34:48] Rob Ertmann: No, it's a fun time. Look, if they've done their job right and trained their shift leads and their teams, those restaurants can run for a day and a half or two days without their general manager. And we schedule it in January, one of our slower times of the year, so we've got that going for us.

[35:05] Chris Hatch: That's always one of the interesting parts. A handful of the guests who come on the Dirt Dog Pod are living on the road, getting hundreds of stores open. Your version of the dirt dog life is slightly different. It's scaling, adding these new humans and systems, and entrusting people to take this vision to the customer. It's a whole different thing. I think it's daunting to think about, but maybe it's just as daunting as opening 200 locations.

[35:41] Rob Ertmann: I think it's fun. They both have their own unique challenges. Most of my team has Diamond Medallion status with Delta; we're on the road quite a bit. We're opening 15 locations, not 200. But at the same time, to your point, so much of it is trying to protect the core of what this brand is while we educate people on what it is. The work we're doing now sets the foundation, so that someday, I hope, we're opening hundreds in a year. And it's the work we're doing now that will allow us to do that without imploding on ourselves.

[36:16] Chris Hatch: Because of the nature of your food, do you sometimes run into exclusives with Asian food concepts, where a Chinese restaurant in a shopping center blocks you from coming in?

[36:26] Rob Ertmann: A little bit, I'd say. We've run into that from time to time with Panda Express or others who serve rice-and-protein concepts. It's usually rice and protein that's the exclusion. So there are a few, but it's so different from my coffee days. There's that big green behemoth out there that has an exclusive in a lot of centers. We have a lot more available real estate with what we're doing than I ever found in the coffee business when I wasn't wearing the green apron. So there's some of that, but not too much, luckily.

[36:56] Chris Hatch: If you had to hit one or two five-year goals, kind of reach goals for the brand, where would you like to see it over the next five years?

[37:05] Rob Ertmann: First off, I'd love to see us get to 150-plus units. I think that would be incredible. Our three-year goal is to get to 120, so for five years... maybe 150 is too low, as I say it out loud. Maybe it's 200. That's a big goal. I think maintaining our profitability is a big goal for me. Of course, everybody wants to be profitable. But I think it's too easy these days to get an investor and say, "Give me money, give me money, give me money." Then when the money dries up, you're like, "Wait a minute, we're not financially sound. How are we going to keep this thing going?" And people step back and talk about "pause to perfect" and re-engineering the P&L at that point. I'd rather keep a healthy P&L where we're funding and fueling our growth, so we can just keep that train rolling. So knowing we could be at 150-plus units while funding most of our growth, because we stayed disciplined in how we grow and how we drive profitability: that's a big objective of mine. And the other side of the next five years: I want to see a lot of the leaders I'm working with today running their own concepts. Or, who knows, maybe I'm somewhere else and I'm watching one of them run Mo' Bettahs. But I want to see a handful of our leaders doing what I get the pleasure of doing every day now. That would be pretty rewarding to me.

[38:24] Chris Hatch: It feels like for so many of the food operators I talk with daily, it's almost as if we've gone through a war over the last five years, just because of how difficult it's been to figure out profit, back to your point about maintaining margin. There are so many variables you're likely facing: rising labor costs, finding good labor talent, training that labor, and then this entire world of online ordering through the apps. And of course the apps are trying to get their piece of the market share, which squeezes your profit margin. What are you seeing out there, and what are you grappling with today? What's the biggest problem you see?

[39:10] Rob Ertmann: Look, the apps are a real thing, because they want an oversized portion of your profits for hosting you on their app. It's kind of an unfortunate necessary evil, because we're all doing it. If you don't play the game, you're leaving a lot of revenue on the table. So you've got to be smart about how you structure your arrangements with those folks and how you ensure profitability in your business when you're using those apps.

But I think the biggest thing at this point is to focus on the fundamentals. Everybody tries to get so cute that they forget how to execute. Focus on how you're making your food, and how to make it in a way that's easier for your teams, so you're not spending an inordinate amount of labor to produce a product that might be cheaper on the product side but costs you more in labor. Remember that in a lot of cases, menu innovation isn't going to drive a ton of revenue, but it does drive complexity. So really double down on the product you're making. Right now, one of our biggest focuses is how to grill better. How do we make sure our teams grill food better? We grill chicken; 80% of every plate we sell has teriyaki chicken on it. So one of our big initiatives to kick off the year is: let's make sure we know how to make teriyaki chicken really freaking good. I'm not trying to tout ourselves, but too many times it's, "What's our next chicken? What's our next protein? What's this other thing we're trying to create?" And the reality is, if we can make the best teriyaki chicken on the market, people are going to come back for it. So let's focus on that. I think that helps from a cost perspective by eliminating complexity. But you've got to look for every nickel and dime you can on the P&L. Don't get complacent. Window washing: can your teams wash the windows, or do you need to hire somebody? It depends on the size of the building and your volume. It's not an easy answer, but you've got to look at all those things and ask how to eliminate spending that's just there because.

[41:06] Chris Hatch: You've had a storied career and been with a handful of different retailers. Tell us about one of the bigger mistakes you've made in business, and what you learned from it.

[41:17] Rob Ertmann: One of the biggest mistakes I saw was forgetting the power of the brand. I can't say I was necessarily the decision-maker, but I was the one who had to implement it. I was running the Noah's Bagels brand, and there was a belief that it didn't matter what the brand was. Einstein's, Noah's, whatever: it's all serving a bagel. So we converted the Pacific Northwest from Noah's Bagels to Einstein's. Oh, and along the way, we also bought another local bagel brand in Portland, Oregon, and converted all of those to Einstein's. What was literally said to me was, "You know what? They're not going to have any other option. They're going to have to buy Einstein Bagels." And the consumer said, "No. We like local." Noah's wasn't local to the Pacific Northwest, but it was local to the West Coast. And our sales were literally cut in half. It wasn't because our service dropped, and it wasn't because our quality dropped. It was the power of the brand.

So staying true to your brand ethos, and understanding its value... that was a tough lesson. A hard lesson. But it's one I think about when I talk about growing and scaling Mo' Bettahs. Our biggest challenge now is keeping the framework of what Mo' Bettahs is about today and remembering that it got us to this point. Let's not just assume we can now grow and do whatever we want. People like Mo' Bettahs because of what Mo' Bettahs is. Not that we can't evolve a little or iterate to some extent, but changing the core of who we are and assuming we can do whatever we want... changing from Noah's to Einstein's was a travesty, and I wouldn't repeat that mistake.

[42:59] Chris Hatch: Well, what a great message to end with: brand, and such a fun brand. So many of us here in Utah are so connected to the Polynesian community. I'm not sure if you're aware, but the youngest of my five children is adopted. He's from [Nuku'alofa], Tonga, and we feel privileged to have him in our household. I don't know what it is about Polynesian people. Maybe it's their never-take-life-too-seriously attitude, or whatever it is. I feel like there are so many lessons so many of us can learn from some of these great Polynesian people.

[43:30] Rob Ertmann: I think it's so connected to family and history and these core values that I learn something new every day, and it makes me happier and happier to be in literally the best job I've ever had, because there's so much more meaning to it than just the food. The food we serve is the vehicle to share aloha. It's not about being a restaurant; it's about sharing aloha. We just get to do it over food. And there are so many deeply connected meanings, not just across Hawaiian culture but all of Polynesia, that it's a pretty awesome group to be engaged with.

[44:01] Chris Hatch: I think you can feel that in your stores. Whether it's your leadership or the founders coming in, top down, you can feel it when you walk in the door, which is awesome.

[44:11] Rob Ertmann: I'm glad you can feel it, because that's the intent. That's cool to hear.

[44:15] Chris Hatch: Well, thanks for coming on the pod. And for everybody out there: go check out Mo' Bettahs. Get yourself the chicken katsu, right? With spicy mayo.

[44:22] Rob Ertmann: A drizzle of the spicy mayo, yeah.

[44:25] Chris Hatch: Oh, and the [Yobo] sauce.

[44:27] Rob Ertmann: The [Yobo] sauce. It's a spicy teriyaki sauce. The combo of the two: that's the key.

[44:34] Chris Hatch: There you go. You got the inside tip. That's the plate to get. So thanks for coming on today, Rob.

[44:39] Rob Ertmann: Thanks for having me, Chris. Appreciate it.