Torchy’s Tacos CEO Highlights the Importance of Developing People
Speaking at an ACG Austin lunch, Mike Rypka shared his views on finding success in the restaurant business
Restaurants are not an easy business. There is a lot of churn and longevity is hard to find.
“Starting a restaurant is a very risky thing. Most restaurants fail within the first two years. Very few make it after five years,” said Mike Rypka founder and CEO of Torchy’s Tacos, speaking at an ACG Austin/San Antonio lunch event on Dec. 11. “Margins are thin. You really got to know what you’re doing in terms of running and operating a restaurant.”
Torchy’s, the iconic Texas-headquartered taco chain, started out as a food trailer in 2006. Rypka said one of the keys to the company’s success is developing people. “Restaurants are a huge people business. Everybody comes to the table with their luggage and their attitudes and their inspiration or lack thereof every day, so how do you develop people? We spend a lot of time talking about that,” Rypka said.
He added that he holds quarterly calls to look at the whole organization and talk about who’s got talent, who has interest in talent, who is developing themselves or doing training and finding ways to elevate people. “We’re always looking for that next leader,” he noted.
Rypka added that he wants to provide opportunities for growth to everyone across the organization from dish washers to line cooks to cashiers.
Rypka himself started in the business as a line cook at a Popeyes in Virginia at age 13. “We have people that were cooks who are now running 12 stores. There are people that run our purchasing department that used to be cashiers. We’ve got all these great stories out there and these people that we’ve developed and that’s pretty amazing,” he said.
Event Recap
WHAT: ACG Austin/San Antonio Lunch featuring Mike Rypka, founder and CEO of Torchy’s Tacos
WHERE: Westwood Country Club, Austin
WHEN: Dec. 11, 2024
THE TAKEAWAY: Although running and maintaining a successful restaurant business is hard work, developing people from the ground up is a big factor in longevity.
Private equity firm General Atlantic invested an undisclosed stake in Torchy’s in 2017 and added to it in 2020, bringing its hold size to $400 million. At the time of the first investment, Torchy’s used some of the proceeds to give $200,000 checks to 50 employees at the company. “We changed lives that day. For people making $50,000 – $75,000 per year, that’s a big check. So that was an amazing day and a lot of tears. And it was just a ‘thank you.’ It wasn’t like ‘hey, I need you to work for two more years,’” the CEO said.
Differentiation is also important in the restaurant business, Rypka said. It was his love of street food and a desire to start a unique taco shop that led him to launch the business.
Living in Texas, he admitted that there are taco shops everywhere. He travelled all over the state between Austin, Houston and various Mexico border towns trying tacos, and while many were good, they were all simple with meat, onions and cilantro and maybe some cheese. “I was like, how do I take this and add my own flair to it and do something different that’s maybe a little more approachable for the masses?” Torchy’s menu includes tacos with a variety of unique ingredients and eclectic names, like The Swinger, The Hogfather and Trailer Park.
After starting up in Austin and expanding within Texas, the chain now has locations in 17 states, having recently opened new outposts in Nashville, Atlanta and Rockville, Maryland. When thinking about expansion, Rypka takes a multitude of factors into consideration, including the density and demographics of the population, the availability of parking, how you’d get in and out of the restaurant and visibility from the road. “We’re in the fast-casual space. It’s not a dine-in place where people would spend two hours, so you want to be able to park easily and get in and out. People want Torchy’s fast and quick.”
Anastasia Donde is Middle Market Growth’s senior editor.
Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.
