Torchy's Tacos: Mike Rypka

29:52He's like, dude, I got the name. Like we got to meet, let's go get coffee. And he had remembered something that happened in the nineties where he probably had a little too much to drink one night and was at a late night taco place that was here in Austin called Rosie's El Pastor. They were famous for their El Pastor tacos. And he sort of had this vision of this old Airstream trailer with neon torches with flames coming out of the Y. And he hadn't remembered that memory until literally that night or that morning when he came and he said, I've got the name. And when he said it, we both looked at each other and like, that's it.

30:36That's the name. That should be Torchies. Torchy's just felt like very right, very inspired and like, no, this is it. Like torch fired meats or, but it could be a guy. It could be like the cook's name's Torchy. Yeah. Yeah, exactly. So, and it wasn't, um, and that was the other thing. Like I never wanted a place that like had my name on it. Um, cause I, I always felt like the place needed to be bigger than me. Mike's taco is just eh. No, Mike's taco doesn't do much for me. That's not going to do it. I'm curious. So, all right, he has this trailer and he suggests that you do, and you guys have agreed to do a taco truck.

31:18So how does it work? Are you going to be partners? I mean, did you need a whole lot of money? I can't imagine you needed that much money to start this thing, but I imagine he was a co-owner with you. Yeah, he was a co-owner. So I ended up taking a loan on my house and using that to help kind of get the trailer painted and get our logo on there and buy some of the equipment. And then he used some of his money to kind of help set up our first spot and do some of the landscaping and things like that. And where did you – I mean where did you – you set up on a corner in Austin and what just like – how does that work?

32:04Do you have to get a permit from the city? Like can you just set it up anywhere? Yes, you definitely need a permit. They did have mobile vending permits back then. And we needed to have a commissary kitchen. So we figured that out. And I got a buddy who I knew owned a restaurant to help us use their kitchen to start. and, um, so yeah, we opened on South first, um, just South of downtown in this undeveloped lot. There was a guy that was selling snow cones there before that went out of business, um, who I had asked originally, and he didn't want to share the spot with me. And then I came back a month later and the poor guy was packing his stuff up and he gave me the landlord's number and I called him and, And, you know, came to find out that whole spot was in a floodplain, so you can't build on it.

33:01And so having a food truck there is actually like the perfect use for it. So, all right, let's just talk about food trucks for a moment because 2006, food trucks were not yet cool, right? It was like it was construction sites. They were, you know, trucks that would go to feed construction workers or maybe you'd like to go to a carnival, like one of these carnivals and there'd be like a food truck. But it wasn't – this was not something that a trained chef from Johnson & Wales would be doing at that time. Yeah, yeah. I remember my friends going, what the hell are you doing opening a food truck, dude?

33:38Like, how is that even going to work? And, you know, I don't know what – I just – and I guess I think when, you know, folks that are entrepreneurs or that have passion about a business, like, you just won't hear no. and I can remember people sort of challenging me and I just like, look, this is what I can afford and this is what I'm going to do and I'm going to figure it out. And the owner of the land where you were set up, basically, I think he was letting you kind of squat there for free, if I'm not mistaken, but then he was like, okay, now you got to pay. Yeah, yeah, yeah. So we talk about South first because that was really kind of where we found our home.

34:26So before that, we were on a little spot on Fifth Street. And the landlord there, he never gave us a contract for what he wanted for rent. Like, we'd kept coming to him and asking him, like, hey, we need to figure something out. We don't want to stay here for free. We got to pay you something, like, help us out. And he gave us some crazy, like,$10 ,000 or$15 ,000 bill that we had no clue that was even coming. and he's like well you got two days to pay it or you're out of here and so wow we didn't have the 10 or 15 grand to pay him and he literally just cut off our electricity in the middle of lunch he just came and what do you mean he could he like pulled the plug now he came with one of his guys and used bolt cutters and literally cut off the power he cut the power line in the middle of lunch Yes, he cut the power.

35:18Wait, what did you do? Did you run out and go, what the hell are you doing, man? I did not want to get in a fight with him. And so I had to kind of like close up shop that day. And we ended up for a week literally cooking out of Bill's driveway. We took the trailer and we hooked up the power to the trailer at his house, which was totally illegal at the time. But, you know, we were trying to stay in business and, you know, keep some cash coming. When we come back in just a moment, how partners, publicity and$15 ,000 worth of pumpkins help Torchy's grow into one of the most popular taco chains in America.

36:00Stay with us. I'm Guy Raz and you're listening to How I Built This.

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39:01Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2006, and Torchy's Tacos is just a single food truck parked off South 1st Street in Austin, Texas. Meanwhile, founder Mike Ripka has gone from managing huge kitchens at the World Bank and Dell to toiling away in a trailer, pretty much doing everything himself. Yeah, so seven days a week, 5 a.m. to midnight every day. I'd start. I'd open everything up. I'd get the prep going. I'd get the gas grills going. I'd welcome the employees, the one or two employees I had at that point. You know, pretty much every day you had to go shop. And so because it just wasn't enough space and we weren't doing a lot of volume either.

39:50And I didn't have some big runway budget of like, you know, hey, here's half a million dollars in the bank for your first six months of operating costs. Like I basically took a loan on my house and maxed out my credit cards and got the doors open. And so like every dollar that came in the register mattered. I imagine you were going to be making a lot less money than you made a Dell. Yeah, I mean, no money, at least in the beginning. I didn't get a paycheck, I think, for the first two years I was in business. And your menu was pretty limited, right? I mean, you did just a few things initially. It wasn't like – I don't even think it was just tacos, right?

40:33It was like fajitas? What were you making? Yeah, so we started with kind of a build-your-own-breakfast taco. Like chorizo and egg. Yeah, chorizo, egg, bacon. So breakfast tacos are real big in Austin, so I wanted to have that. And then, you know, we started with kind of the basics. We had a barbacoa, a green chili pork, and then we had a chicken and steak fajita, and then you could make a burrito or get a fajita plate. And our first taco of the month was called the Trailer Park, which is our number one selling taco today. All these years later, fried chicken, green chilies, lettuce, pico. There's some shredded jack and cheddar cheese, and it comes with a creamy poblano ranch.

41:21And if you want it trashy, you can take off the lettuce and put queso on there. And so when you launched it in the first couple of weeks or months, from what I've seen, I've looked at a map of this place. I mean maybe it's a little different now, but 2006, there was nothing around there. Like who went there? Did you have customers? Were there just hours that would go by with nobody coming up and ordering any food? Yeah, it was very tough. You know, again, so there's a stigma of like, at that point, like Roach Coach, right? Like, is it even safe to eat in a trailer? You know what I mean? Like, is it safe in there?

42:05Is it inspected by the food, you know, whatever? Is it safe? Right. Yeah. Now, the one thing I had going for me was we were on the right side of South First. so all the morning traffic going to downtown was passing right by our trailer and so we were perfect for breakfast tacos the question was how do you get them to turn in there in the first place and so I learned real quick like how to do grassroots marketing so I had a red Vespa and I would make chips and salsa because it was cheap and print out a ton of menus and I would go hit every Tom, Dick and Harry, dentist office, office, office, you know, tire shop, lube place, salon, wherever they'd let me in and I'd go hand out samples of chips and salsa and give them my menu.

43:05And we started delivering very early on. And when you say we, it was you and who else? So it was me and I had a cook named Juan and I had a delivery driver. We took the orders by phone. There was no DoorDash or Uber Eats at this point. And we'd go deliver them on the Vespa. So I had a setup on the back. You know, we'd put all the food in there and go hand deliver it to folks. You know, today, if you were to start this, right, you'd have like a branding agency that would say, OK, you want to call this like chef driven menu, right? Like you weren't just some dude who was just making tacos like you really came from the culinary world.

43:51Did you advertise that in any way? Did people know that or were you just I mean, how did you differentiate in the minds of consumers? There's a lot of taco options. Even in Austin in 2006, there were a ton of taco options. So why would, like what made your, how did you convey that your place was different? You know, I don't know that there was some big communication plan around it. It was really about just getting my food in people's mouths. So we did lots of events. We did lots of giveaways. I would go donate food to a school, show up at their carnival at the school and serve tacos and give some of the proceeds back to the school.

44:36So we just really got involved and inundated with the community was really how we got the word out and how we got people to know who and what we are. So I guess by the end of that summer, you started to get some traction. what was your lifestyle like i mean here you are you're in your early 30s you had you would just come off pretty steady uh jobs where i'm assuming you had pretty steady hours and decent life balance now it's you and juan and i'm imagining you're working at least 50 60 more hours a week Oh, 100 hours a week, literally. 5 a.m. to midnight, seven days a week. Wow. Yeah. How did you cope with that?

45:24Did you like it? Did it get you down? Did it, I don't know. It was stressful, but I had my eye on the prize, right? What was the prize? Well, the prize was to really get this business off the ground so it could sustain itself. It wasn't about - Because you were not profitable yet. No, not even close. And the hard thing for us was just the sales. And early on at that South first spot, my partner Bill comes to me with this bright idea and lets me know that we've got an 18-wheeler truck of pumpkins coming. I told him he was nuts, but it was around Halloween time. and unbeknownst to me, he puts, you know, I think it was around$15 ,000 worth of pumpkins on our business Amex card.

46:22And, you know, his thought was like, hey, let's do a pumpkin patch and help drive some business to the trailer. And so we opened this pumpkin patch and I can remember just, you know. On the premises? Right next to the trailer, yeah. And the idea of the pumpkin patch was to presumably attract people to the taco truck. Yeah. Sell some pumpkins and get them to try some tacos while they're there. And so we opened this pumpkin patch and we're doing fine. We're selling some pumpkins. But, you know, here it is. It's about October 15th. And like I still have like I don't know if you know how many pumpkins come in an 18-wheeler, but it's 44 pallets of pumpkins.

47:06Like it's a lot of pumpkins. thousands of pumpkins thousands of pumpkins yeah and i'm like counting the days like once halloween hits and so one day it was like a tuesday or wednesday this uh news van shows up and like hey we'd love to interview you and do a story and we're like what are you talking about he's like you guys are one of the only people that have pumpkins left in austin and we want to do a story about it. There was a pumpkin shortage this year. I was like, really? I was so busy. I wasn't paying attention to the pumpkin shortage out there. I was just trying to make tacos and make a living.

47:45And so he does this interview and like within two weeks, we end up selling all the pumpkins that we had bought and got some new customers, not tons, but definitely got more exposure to who we were, I can remember just thinking like, holy cow, that was a bet that like really could have gone wrong if that didn't happen. Yeah. So I'm curious about overall sort of financial situation. I mean, you know, on the one hand, you're grinding, you're trying to get to sustainability. But what about, and it was just the two of you who were financing or funding this thing, you and Bill. I mean, were there – do you remember any specific moments where you weren't sure you were going to make payroll?

48:37I mean, damn near every week it felt like. You know, there were definitely weeks where I was like, holy cow, it's Wednesday and I need like$3 ,000 to make payroll and we've got$1 ,000 in there. Like, how's this even going to happen? And we'd get these little breaks, right? I'd get a call and I'd have a catering for like a Thursday night to go cater fajitas for a riverboat. Or, you know, there may not quite be enough in the bank, but I knew it was going to be a great sunny weekend. And I'd cut the checks hoping they didn't bounce. And, you know, we'd get enough sales over the weekend to cover the float and not get in trouble.

49:23But it was real, real dicey at that point. How did you manage the stress of doing all of these things all the time, every day, without a single day off? It was a lot. Lots of coffee, lots of Red Bull in terms of keeping awake. You know, I think the thing that I leaned on the most is, you know, I had this recovery background that, like, really kind of helped me. I'd been through rough times in my life, right? Like, I'd seen what darkness looked like. and I knew that if I did the right things for the right reasons, whether the business succeeded or not, like, I was going to be okay. And that would give me enough strength and enough grit to, like, do it one more day, put one more foot in front of the other, and just have some faith to, like, just keep doing what you're doing, Mike.

50:18Like it's almost like staying so busy that you couldn't stop and let your mind wander was like just sort of an extension of your ongoing recovery. Yeah, yeah. It was about doing, you know, I like to say my job is to chop wood and carry water and eventually the house gets built, right? Like if I don't chop the wood and don't carry the water, the house isn't going to get built. So, all right. So you are, you know, on South First Street and 2007, you get some locals in Austin who want to make an investment and suggest or I guess help you get a second truck. And this is just for the beginning of the process of a group of local people who want to invest in the business.

51:13I guess, Bill, your original partner decides to step away. He gets bought out. And there's a couple that invest a little bit of money, Farrell and Rebecca Kubina or Kubina, locals in Austin. And when they came to invest, what did they – did you have a plan? How did that come about? So at this point, we were finally having some success. So before that happened, we got a big write-up in Austin Chronicle. And that really helped change things. So we were definitely on our way to, like, we were having lines, 20, 30 people long every Friday, Saturday, and Sunday. Lunches were starting to pick up during the week.

52:00Dinners were getting better. And so we knew we like had something and we figured that like we probably couldn't get enough money to open a restaurant yet. But maybe we could at least open a second trailer and kind of extend the brand a little bit. And so did you did you know these people who who were interested? Like were they friends? Bill knew them. He had done business with them. So Farrell was a builder. So he built a lot of houses in Austin, and they had a relationship because they would work together. Bill would do the landscape, and Farrell would do the house building. So they had worked together quite a bit.

52:43And we knew that we were going to have to raise money to help open the second trailer because we were all tapped at that point. And so we brought Farrell on and showed him the finances and what we were doing. Had him come try the food. And he was just blown away. He's like, man, I've never had tacos like this. Like, holy crap. And his wife, Rebecca, thought he was nuts. But they were sort of serial entrepreneurs, right? And so they kind of knew the game. So having someone on the team that like knew about business that could, you know, help navigate some of the things that I was still learning on the fly was really helpful to have them kind of on the fly.

53:28the team and to be able to help finance the second trailer. So and we took some of that money to kind of help. Just I hadn't had a paycheck yet. Right. And so I took a little bit of that cash and just kind of like kept my house from getting foreclosed on and got caught up a little bit on some bills. All right. So there now you now have some investors. And so all of those people were now partners. It was the Farrell and Rebecca, and then a guy named Bob Gentry bought out Bill, the original partner. There was another guy involved named Jay. And with their help, not only were you able to open up a second truck, but by 2008, you were able to get a brick-and-mortar location.

54:21And let's just pause for a moment because this is an important turning point, right? You have two years of grinding away in taco trucks, and now you've got a brick and mortar location. It doesn't mean the grind is going to end. No. For sure it won't. But at this point, now having some investors involved, are you guys starting to articulate a vision of what you think this could be? Like was it too early to talk about multiple locations, or were you already talking about that possibility? A little yes and a little no. Our first goal was we definitely, at first we kind of argued about like, hey, do we just open a bunch of trailers because they're cheap and we move them?

55:02And I was very much against that because I was like, hey, look, this is a great way to start, but it's not a good way to sustain. It's very weather dependent. It's a lot of heavy lifting every day of like shipping food back and forth. And so I was really like, hey, we got to get a brick and mortar. I know it's expensive, but that's the way to do this. And it was a little bit of defense because our trailer location, we couldn't get more than a year lease. And every time the lease came up, our landlord wanted to double the rent. You know, he saw the lines and was like, I can make more money off these guys.

55:45And Farrell, being in real estate and construction, you know, had a real good eye for that. So we kind of put him in charge of like, hey, go find us the next spot that's somewhere close to here, but not too close, but that like we could still capture our customers. And so that's how we found our South first spot. Okay, so now you've got the brick and mortar and then two, you opened up two in 2008. Tell me a little bit about the look and the vibe. Like this is just on the cusp of Austin and forgive me because I hate to use this language, but like becoming more corporate, right? Like South by Southwest, still very indie.

56:27Like now you go – and it's still fun. Austin is still amazing, but it was still a little bit of a kind of a sleepy cultural town, right? With Austin City Limits and South by Southwest was still very kind of indie. Yeah. So so the vibe, I think. Right. Like the whole I think like the whole motto of Austin was keep Austin weird. Right. And so how did your like look and feel fit into that? We definitely had that vibe, especially early on. So a lot of used restaurant equipment, paint, a little bit of decor, not a whole lot in terms of like a super well thought out, like this is how the design's going to look.

57:11We did incorporate some of our colors from our logo. Your logo had a little devil. It was like a devil with a toilet plunger in its mouth? Oh, no, with a pitchfork. A pitchfork. Okay, all right, I got you. Am I the first one to say that? Yeah, I haven't heard that one before. Tyler Plunker. Okay, it's a pitchfork. All right. I got you. All right, sorry. No, you're good. Torchy, he's sort of my alter ego. When Bill and I first started Torchy's, we were, even though we were just opening a taco truck, we definitely still wanted to have a good brand. And we did a lot of talking about great brands and what makes them special.

57:53And a lot of the good brands out there, like Nike has the swoosh. Like if you just saw the swoosh, you know that's Nike. Starbucks has the siren and so on and so forth. And so we were like, well, what is that for Torchy's? And we talked about pitchforks and this and that. And I had the same kind of moment that Bill had when he came to me with the name. I woke up in the morning super excited. And I just had this idea of like, it needs to be a little baby devil. A baby devil in a diaper. Yes. And that was the premise of Torchy's was we were a place to really come let your hair down, be who you are, be original, take all the stress of life and just come enjoy some damn good food.

58:46Like the little angel on my shoulder says, hey, you should probably eat the kale salad. It's healthy. You need to go work out. And Torchy, on the other hand, is like, fuck that. Drink a margarita, have some queso and have a damn good taco. And that was sort of what Torchy is about. And as you sort of – once you had the brick and mortar locations, was the menu – I'm assuming it was expanded. I mean, you had how are you coming up with different like, you know, for example, I don't know, a taco with like just the things that you would add to the taco. Like, you know, you've got a taco with carnitas, teriyaki sauce, bacon, corn relish, cotija cheese.

59:29I mean, a lot of different cultures and flavors blended into that thing. How would you come up with those ideas? Very early on, me and Bill agreed, like, hey, we wouldn't do anything unless it came from an inspired place, which might sound a little hokey. But sometimes that meant that, like, it might take you a while to, like, come up with something because it didn't feel very authentic. And what I mean by that was. It would be anything from, hey, I'm in the grocery store and I see an ingredient like a miso paste. and it sparks an idea of like, ooh, I've had that with sea bass and what if I did this and then how would I format that in a taco?

1:00:17And what I've found is when I've allowed myself that space and time to do that, that like typically the stuff that wins, I nail on the first recipe. There's not a lot of like back and forth and testing and this and that. It's like you have that idea, that inspiration. You go in the kitchen and it all just kind of works and works out perfect. All right. Even with these two restaurants, from what I understand, Torchy's was still not profitable. And one of the challenges is when you guys are opening more locations in Austin, I think by the end of that year, you had four locations. And then 2010, you opened the first location in Dallas.

1:01:01And I think I read that you guys still could not get lines of credit. You couldn't get banks to give you lines of credit. And I mean, this is now the financial crisis, right? So, of course, it's going to be challenging. So I'm sure it was stressful that you were just kind of treading water, even now, five, six years into this business. Yeah, yeah. I mean, it was definitely a challenge. And I think just like the thing that kept giving us hope was we were opening these locations and we were doing really good business. And at that point, we were really starting to capture a lot of fans. And the reason we opened in Dallas is because we had people begging for us to come up there.

1:01:48And when we opened, they came out in droves. I mean, we had lines out the door for weeks and months when we opened our Dallas location. So we knew we had something. And part of growing a business isn't always that profitable, right? Like you're constantly investing kind of to the next phase, which, you know, typically if you do it right, you kind of want to be a little over-invested ahead of yourself so that you've got the team that can execute it so that you can do it at a high level enough to make it work. When you opened that location in Dallas and then subsequent locations, how did you explain what the culture was to the team?

1:02:36Like, hey, everybody, we're opening this Torchys. This is what Torchys is. And you guys have to personify that, embody that. What was your explanation? So we had a handbook at that point. You know, so some of that, some of our cultures and values were in that. We did about three weeks of training with those new employees. I was up there. All the partners were up there. We did lots of storytelling in terms of like where we started, the kind of things we'd been through. We get our folks super involved in lots of tasting classes. and one of our big mantras is if it's not damn good, don't serve it.

1:03:19And so to really ingrain that culture of like, hey, like, you know, it's okay to not have pico if your tomatoes aren't ripe. Like, just don't serve it, right? Like a customer will understand, hey, we got a bad batch of tomatoes today, so we don't have pico versus, hey, let's serve yellow tomatoes in our pico that, you know, is hard and tastes like crap, you know? So it's really about getting that buy-in from your folks, being consistent with your values in terms of making sure that people understand what's important every day. We have what we call our winning formula, which is damn good food, damn good hospitality, and damn good shifts.

1:04:08And damn good tacos is your trademarked motto, I should say. You trademarked a damn good tacos. Yeah. And it came from our customers that said, damn, these tacos are good. What the hell are you putting in these things? You know, and we decided to add damn good as really a guiding light of like, hey, this is the level it needs to be every day, every shift, every time when someone comes in here, it needs to be damn good. And when you focus on that and when you really drive that home with your folks, they're able to do that, you know. And you end up with a very passionate employee team member base that, like, cares about the food, that, like, holds each other accountable when something's not right.

1:04:58And they bring a tasting spoon to the manager and make sure, like, hey, does this Diablo sauce taste right? Are these beans good? and that kind of culture has to get cultivated and you need to do it every day kind of without fail. When we come back after a quick break, a critic torches the tacos, a rival chain shows up with copycat recipes, and Mike, he's out as CEO. But that's not the end of the story. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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1:08:11Hey, welcome back to How I Built This. So it's 2012 and Torchy's Tacos is up to 11 locations. Most are in Austin. Next came Dallas. And now they've just opened up in Houston. And a very prominent, respected food critic named Alison Cook, James Beard Award winning food critic, comes to the restaurant and basically just just like trashes the restaurant. She just says, you know, you guys have lost the magic. The ingredients aren't – it's the quality has gone down. I wish they would focus more on quality rather than just expand, expand, expand. And that's not a good review to receive. And you did something pretty creative.

1:08:57You actually responded to her article in the comments section of the article. Well, first off, before that, I called their office and said, hey, I'd love to talk to Allison. and I'm not trying to change the review, but I'd like to know, because one of her big complaints was a busser kept trying to take her menu. And I don't know why our busser was doing that that day. I think he just was on autopilot, like clean the tables, clean the menus, like whatever he was thinking. And so I wanted to be able to coach that team member and they would not let me talk to her. And that just really pissed me off.

1:09:35It's like, I'm not trying to change a review. I just want to, you know, make our restaurant as good as I can. I'd like to know who it is so I'd coach him. And, um, so I responded and basically called her out and said, Hey, look, you know, I'm going to be there in two days from 12 to two, bringing this article, and I'm going to be giving away this tacos as she dreamed us on. And you can vote for yourself, whether you agree with her or not. Because I just, I felt real passionate about our food and like, hey, you know, because it was obvious that like, this thing the busser was doing is what kind of killed her experience.

1:10:15It wasn't the food, it wasn't, you know, she was recalling her memory from eating at the trailer under an oak tree in the middle of spring when it's 72 degrees out. Like, that's hard to compare that memory with, you know, being in a brick and mortar in Houston, right? And so my point was, it's like we haven't done anything to change the food. The food's just as damn good as it was in that trailer, if not better. And come on down and I'll prove it to you. You said if you print out the article and bring it, we'll give you a free taco. Yeah, we'll give you a free taco. And then I want to hear your vote.

1:10:52And I think out of the 300 articles we got, only two people agreed with the article. So you can't please everybody. But that's a pretty impressive vote change there. So I'll take it. Well, in her defense, I read the original review, and I feel like it was a tough love review. She was saying, I love Torchy's. What's going on? And so I think in her defense, you could say that it also – it must have perked you up a little bit. And it must have made you think, well, what's going on at that restaurant? Yeah. Oh, yeah, for sure. Well, and that's why I called her because I wanted to know, like, hey, like, you know, give me some more details so I can, like, fix this, right?

1:11:36Yeah. Okay. So, you guys are still, but I think still not profitable, right? I mean, you're growing, but still it's getting tough. We're getting closer. We're starting to make some money at that point. We're, you know, I'm taking a paycheck. Farrell and Rebecca had started to take in a small pay. And this is six years in, I should say. So, it's been a grind. I mean, you were on a hamster wheel. Yes. For six years already. Big time, big time. And so, you know, so we're starting to, you know, take a little bit of money and just from a paycheck standpoint, but we were definitely weren't taking any kind of like dividends or anything like that out.

1:12:11Mike, I want to ask you a personal question here, which I often ask, not in every case, but we didn't mention that you had gotten married around 2008. And I think your marriage broke apart around 2011 or 12. All of this is going on. You're expanding, you're building the restaurants. And personally, you're going through this crisis. Yeah.

1:13:04half, two years. And I met her in 2008. And that same year, my mom passed away from ovaric cancer. So it was just really sort of, it was just a, you know, on one hand, I had this woman that was potentially going to be my wife and, you know, was thinking about marriage. And then, you know, know, my mom passed away. So it was just, it was a really kind of weird and confusing time. And then also, you know, I'm like, I've got this business that's new, that's like, you know, I'm starting to make a little bit of money, but you know, it's, it's, it's just a lot of everything going on at once. And, um, you know, yeah, it was tough.

1:13:55Um, we got married, And literally the same year we got married, we had our son. So it was like boom, boom, get married, have a kid. All while, you know, I'm also trying to like manage growing this business. And there was just a lot of challenges. And, you know, I think, you know, I definitely made some mistakes. You know, it was tough. You know, it was tough trying to manage all that together. So this is happening in the background. In the meantime, you guys are growing and expanding. And then in 2013, there's another taco chain, another taco restaurant called the Texas Taco Company. And you start to see pictures on Instagram and on social media of fans at their restaurant, and it looks like, from your perspective, they're making the same exact things.

1:14:58They're literally copying your playbook. I should mention that recipes are not copyright. It's not like a photograph or a book or a patented invention. Like, unfortunately, recipes just aren't protected in the same way. But you guys decided to sue them for, I guess, copyright or some kind of infringement, trademark infringement. Tell me why you decided to do that. Well, we knew they had stolen our recipe book. You guys had an internal taco Bible that you used in your kitchens, right? Yeah. Like a brand Bible for your tacos. Yeah, exactly. With all the recipes and everything in it. And it was a trade secret.

1:15:40Yeah. Yeah. And so we had it on video. Now, the problem is by the time we got to court, we had lost that video. But we had enough other proof around, you know, their their menu. I mean, every description was exactly the same. The only thing they changed were the names of the tacos. They were doing the same exact fried chicken taco. Same exact stuff, you know, across the board. Luckily, they weren't executing it at all. So that I think saved us. But definitely a moment of like, holy shit, we got this great brand. We're doing these great things. And they were franchising, right? They opened one store and immediately started franchising.

1:16:30And you guys were not franchising. We were not franchising. Opening all of your own locations and you continue to do that to this day. Yep. They were franchising and you felt like, oh, this is a potential threat. This is a huge threat. They've got our food. They've got our recipes. Like they could completely take over and we'd just be forgotten about in the wind. And this is our stuff. And so, yeah, we definitely went to the lawyers and the thing went on for about 18 months. But we were able to get them to close everything down. So thank goodness for that. All right. 2017, you guys announced that an investment firm, General Atlantic, makes a significant investment, which is – I mean, it's a big deal.

1:17:16They're looking at your business and thinking, OK, we can really expand this. And now I imagine by 2017, you had 10 or 15 locations, I think, something like that. Oh, no. We were at 35 at that point. Oh, wow. OK. So you had a lot. And – but with this deal, I imagine there was plans now to really expand this, like to turn this into a national, maybe even an international business chain. Yeah. And I think, you know, the two things we thought about, one was, hey, look, we've been busting our butt. You know, we don't even know like what we're worth or not worth as a company. We didn't want to like step out, but it was also be nice to like take some chips off the table.

1:18:05Like we've, you know, restaurant, you never know. Right. Right. And we want to if we're going to grow, like we want the best shot to like do it right. And these guys have done this stuff before. And so we started talking to some people about, you know, hey, what does what's a good way to accomplish two of those goals to take some chips off the table? And but then also to continue to like expand and work in the business and, you know, not necessarily write it off. And what we came to is like, hey, if you find the right private equity partnership, that can work out really well. And so we went through a whole bidding process and really landed on General Atlantic.

1:18:47And they've been great to work with. And just down to earth, they get the business, they get investments. And they had a great track record. So you now – I mean now that there's outside investors, professional investors I should say involved with you and your original team, there's a different set of pressures, right? And there's a board and it's 2018. And I gather that that year the board essentially asks you to step aside. From what I understand, they felt like you were not the right person to help scale the business anymore. And they brought in a quote-unquote professional who had been the CEO of California Pizza Kitchen.

1:19:36He was an executive at Texas Roadhouse, a guy named G.J. Hart. Were you – I mean clearly you did. You stepped down and you took on a different role. But were you okay with that decision? Were you relieved? Did you feel like, oh, I really don't want to do this? Or were you like, I can't believe they don't trust me to do this? No, that actually, the way that went down was I was ready for a break. And I think the five of us were kind of at this point of where we've done what we've done. We've done an amazing job. But like, what if somebody professional came in that's done this before, that's grown a company, you know, two, three, 400 units that knows what that looks like?

1:20:23What could they bring to the table that could add value? And it was really a group decision. And there wasn't really in this new phase, like it was going to be hard for me or some of my other partners to, you know, one of us to sort of rise above everyone else. And we also knew that like, hey, even though I was sort of running things that like we were still very democratic in how we made decisions. You know, it wasn't like I was the boss of everyone. And so now you couldn't do that anymore. Yeah. And we were getting you were getting bigger. We were getting bigger. We needed someone to kind of be a decision maker on stuff.

1:21:00And so we all agreed with when they came in and they had actually asked, like, do one of you guys want to be the CEO? And we all kind of said no. And I was still in the business per se, but not I didn't want any more direct reports. I kind of wanted to take a step back and just take a breath. All right. So you step down, but you stay on as the like in a creative leadership capacity and and the brand starts to, you know, the company continues to grow. And he, Hart, is also leading the business during COVID, which is no question. Very challenging, but manages to kind of steer it through. I mean, I think by the time, you know, sort of by the time, you know, within a couple of years, 2020, it hits over 70 locations.

1:22:01So not a bad trajectory. But from what I've read, you weren't happy with how it was expanding. I mean, I'm just looking at this objectively. I think this CEO clearly did a good job. I mean, he got it from 45 restaurants to 96 restaurants and did that in the midst of COVID. So by any account, a success. But you were not happy with certain things. What were you not happy about? Well, I don't know that there was enough thought behind, hey, are these the exact right markets to go into and why? I think it was a little more to grow versus, hey, are we growing the right way in the right place? And, you know, and then I also just saw some of our branding changing and just, you know, getting a little too corporate for what I felt comfortable with.

1:23:07And, you know, just they weren't bad things per se, but they were just, you know, things that sometimes if you're not, you know, vocal enough about that, like, can start, you know, start to water a business down, if you will. Yeah. Hart eventually decided to retire in 2021. And you came back as CEO. Is that something that you wanted to do? You said, I think I got to come back in. I did. And bring us back to the core, the heart of what we are. Yeah, I definitely did. When you say went too corporate, I mean, what do you mean? Like, I mean, the quality was affected. The restaurants didn't feel like they were welcoming.

1:23:58What do you mean by that? Yeah, just some of the, we'd lost some of the edge to our culture. They revised the logo, which I didn't really love. You know, so we've kind of dialed that back, you know, back to more of our original logo and how it looks. the restaurants started to get away from our core you know what I mean like we're a cool local taco shop right like that doesn't look like 5 ,000 square feet that looks more like 3 ,000 square feet like cool funky graffiti on the walls not this big kind of massive dining room and everything else When you came back as CEO, you got rid of or you closed down a couple of restaurants, including two in Wichita, Kansas, and you laid off 65 employees at headquarters.

1:24:56Yeah. Was that – did you feel like there were just too many people? They'd overhired or was it more of a quality thing? We were definitely over – we just had way too much headcount for what we needed. And I remember kind of looking at the business kind of going like, what are all these people doing? And just spending a lot of money that we didn't have really to be spending, even at that point, even being as big as we were. And it was time to get back and focus on what do we do? We serve damn good food, we give damn good hospitality, and we run damn good shifts, right? Like, what's the core part of our business that got us to the dance?

1:25:50So, really took a step back and really focused back in on, you know, our operations. And, like, now if we go open a new restaurant, I always make sure there's at least one internal hire that's a manager in that restaurant. versus just everyone being new from outside. You guys are in 16 states right now. Tell me about what the plan is. I mean, you know, I remember interviewing the founder of Five Guys many years ago on the show. And they've got thousands of locations around the world. And they're in Paris. And my children ate there when we were in Paris. I'm like, guys, we're in Paris. You're going to Five Guys?

1:26:30They're like, we ordered it. We ordered it in French. What is the plan? For Torchy's, like, are you looking at a future where you've got thousands of locations, not only in all 48, maybe 50 U.S. states, but abroad overseas? I mean, immediately, I think we'd like to be a national brand in most, if not all, 50 states. International, that's probably above my pay grade at this point. But definitely nationally, we definitely want to expand more up and down the east and west coast, for sure. You stepped down from your second stint as CEO in early 2025, and now you are – what's your role in the company?

1:27:15Chief Innovation Officer. So my whole thing that I'm focused on now is on a lot of innovation and kind of restaurant excellence, if you will. So really focusing in on new food, new items. The restaurant business has gotten very competitive. So I think to win these days, you've got to be bringing out new products, bringing out new stuff. And also just really looking back in at our operations and our kitchens and, hey, can we be more efficient? Can we be faster? What can we do to improve our operations and, you know, kind of really dialing that in as we kind of get ready for our next phase of growth?

1:28:06You know, Mike, I'm curious. I mean, as you reflect on just your story, you've become a very successful entrepreneur. Like that was not going to be your life story. No. Like your life story could have been strung out, in jail, dead. Yeah. Like any of those things. It's kind of amazing, actually. It is. It is. I think, and it's funny, you know, I've been asked that before, like, hey, do you really celebrate your success? And, you know, I think, you know, one of the advantages and disadvantages of, I think, being successful and being an entrepreneur is, you know, sometimes you don't take the time to sort of celebrate your wins.

1:28:52because you're just focused on sort of the next thing in front of you. But there are moments where, like, I got nominated an award at my culinary school for, like, a legacy achievement award. And I remember receiving that up in Providence and just broke down in tears because I just hadn't really given myself a chance to, like, Like, hey, man, look what you have done. Like, this is an incredible story. And, you know, look at all the opportunities you've created for people and what you've been able to do and what you've been able to overcome. Like, sometimes it's hard to take a step back and sort of reflect on that.

1:29:39When you think about what happened to you, where you started and where you are now, you're roughly the same age. You're just 50-ish. And I mean, you did not grow up with a lot of money. You've made a lot of money. You've built a growing business that is just going to get bigger. I'm sure if I see you in 10 years, Torchy is going to be much bigger. How much of this do you attribute to the work you put in, the grind, and how much do you think has to do with just luck and fate? You know, probably 75 % work and ethic and doing the right things for the right reasons and 25 % luck. I think anyone that says there isn't a little bit of luck that gets people to that level of success is lying to themselves.

1:30:32I think, you know, the pumpkin patch story I talked to you about, right, that could have put us out of business, right? But for some reason, there was a damn pumpkin shortage that year. That kind of got us to the next level that helped refill the coffers to make sure we had enough payroll to cover the next two months of business, right? Like, so there's little things, I think, like that that come up that help businesses along. But then I also think that you're not set up for that type of luck without all the hard work that goes into setting you up for that, if that makes sense. That's Mike Ripka, founder of Torchy's Tacos.

1:31:15By the way, remember how Mike says he has a hard time celebrating his wins in business? Well, he has a pretty different attitude about his sobriety. Yep, I still haven't had a drink in 33 years. I just celebrated this month.

1:31:53Our audio engineers were Patrick Murray and Gilly Moon. Our production staff also includes Casey Herman, J.C. Howard, Neva Grant, Alex Chung, Andrea Bruce, Sam Paulson, Elaine Coates, Noor Gill, and Kerry Thompson. I'm Guy Raz, and you've been listening to How I Built This.

1:32:24If you like How I Built This, you can listen early and ad-free right now by joining Wondery Plus in the Wondery app or on Apple Podcasts. Prime members can listen ad-free on Amazon Music. Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey.