Like Outback, which was the first company to introduce a true managing partner equity program, Metro Diner is deploying an adjusted version of the strategy to carve its expansion. This is similar to the platform Texas Roadhouse uses, where partners pay $25,000 up front and get 10 percent of the store profits. Metro Diner provides a base salary compensation of $75,000 per year; managing partners invest $7,500 in their diners and receive a 5 percent interest that can scale up to 10 percent. The participation interest of diner cash flow is in addition to the base salary. Metro Diner also allows significant ability to realize the value of the partner’s participation interest after five years.
“We believe it allows our managing partners to participate at the very highest levels of compensation in the industry,” says Connerty, who is co-chairman of Metro Diner along with Sullivan. “... That’s a huge rite of passage with us. You have to come up with your own money and you’ve got to have skin in the game.”
Additionally, there’s not just a managing partner who owns part of the restaurant, but also a local investor partner who owns another 30 percent. As mentioned before, all of these partners across the country are “guys or gals that we did Outback, Carrabba’s, and [Bonefish Grills] with,” Connerty says.
“You know what it does, you don’t have to go out and establish trust because we worked together for 20-plus years. So we know each other. And we have a pretty unlimited network of people,” he adds.
When the trio founded ConSul, the idea was to target brands ready to blossom from this collective experience. It also had to be run by a family or founder, have overwhelming consumer acceptance, and rock-star economics.
Metro Diner fits that bill to a tee.