Texas Roadhouse announced Thursday evening the passing of founder and chief executive officer Kent Taylor.
“We are deeply saddened by the loss of Kent Taylor. He founded Texas Roadhouse and dedicated himself to building it into a legendary experience for ‘Roadies’ and restaurant guests alike. During the pandemic, he gave up his entire compensation package to help support his frontline workers,” Greg Moore, the company’s lead director, said in a statement. “This selfless act was no surprise to anyone who knew Kent and his strong belief in servant leadership. He was without a doubt, a people-first leader. His entrepreneurial spirit will live on in the company he built, the projects he supported and the lives he touched.”
Taylor took his own life, his family and the company said Friday. Taylor, who was battling with post-COVID-19 symptoms, including “severe tinnitus,” was 65.
Taylor founded Texas Roadhouse in 1993. He worked at casual-dining icon Bennigan’s from 1983–1989 before heading over to KFC. At both venues, Taylor earned a reputation as a rule breaker with an entrepreneurial itch. He would experiment with recipes and stray from the blueprint—traits that followed him throughout his career. At KFC, Taylor famously sold bottled water and crafted a chicken sandwich before they were mainstream.
He often said he left before trouble caught up to him. Taylor’s first solo venture, Buckhead Hickory Grill (now Buckhead Mountain Grill), arrived in 1991 and is still in operation. He sold his interest three years later, a year after launching Texas Roadhouse with a $300,000 investment from three Kentucky doctors.
Texas Roadhouse had its early adventures. Taylor tried to recruit investors by any means, everyone from NBA legend Larry Bird—who Taylor chased through an airport in Louisville, Kentucky—to Garth Brooks and Ross Perot. Taylor brought ribs and beer to the offices of the country music megastar. With Perot, he knocked on the front door of the politician’s Bermuda vacation home. Taylor laid the proposal on Perot’s front door and never heard back.
But this fighter mentality was a Taylor staple.
Three of the first five Texas Roadhouse locations failed as the concept spread across the map. There was a Cincinnati, Ohio, store. One in Sarasota and Clearwater, Florida—those to balance the original Clarksville, Indiana, location. Taylor bought a PO box in Dallas and put a Texas address on all his comment cards, to try to give his steakhouse some Texas cred.
The turning point came in 1996 when Taylor teamed with George Lask to build a prototype. The unit, which opened in Texas Roadhouse’s home base of Louisville, still looks much like the stores today. Minus a bar remodel and some recent updates to enhance to-go offerings, it’s a near mirror image.
And as much as Taylor was an innovator—he would also create Bubba’s 33 and a fast casual, Jaggers, over the years—he was known industry-wide for his core-centric and unshakable approach. The brand shied away from delivery and continued to fully staff restaurants despite rising labor costs in recent years. Hand-cut steaks, line dancing, free peanuts and rolls, and a commitment to quality always endured. Menu changes were far and far between. Texas Roadhouse’s No. 1 selling item, its 6-ounce sirloin, has been its top-ticket draw every single year.
Additionally, a partnership model defined Texas Roadhouse’s operational standards.
Texas Roadhouse’s leaders put up $25,000 (the first forked up $30,000 because Taylor was low on startup cash) and get 10 percent of the store’s profits.
As Travis Doster, the company’s senior director of communications, once said, “Every other concept shows you how to run a restaurant. Texas Roadhouse shows you how to own one.”
Taylor was adamant this path—which Outback Steakhouse took in its early days—fostered a like-minded entrepreneurial drive from operators, who would figure out how to navigate challenges, given they had a stake in it. This was especially true during COVID-19.
To Moore’s point, however, arguably Taylor’s most profound moment of 2020 came in late March when Taylor elected to forgo his base salary and incentive bonus in an effort to aid front-line workers. The executive team would follow in April, with COO Doug Thompson, CMO Chris Jacobsen, and CFO Tonya Robinson deciding to forgo their base salary and incentive bonus pay as well.
Texas Roadhouse reported net income of $19.5 million in Q4. This was down from $42.7 million and 61 cents, respectively, in the year-ago period. Revenue declined 12 percent to $637.9 million from $752.2 million.
Same-store sales declined 8.9 percent at company stores and 11.2 percent at franchises—among the best in the category during the COVID crisis.
Texas Roadhouse, in the 2019 American Customer Satisfaction Index, ranked atop the casual-dining list, along with Olive Garden, as America’s favorite casual chain.
Texas Roadhouse began the pandemic with very little off-premises sales. In the week ending March 3, Texas Roadhouse units averaged weekly sales of $118,512. Of that, only $9,115 came outside from off-premises. By March 24, those numbers were $29,432 and $25,938, respectively. And then the shift arrived. Within just a week, Texas Roadhouse jolted to-go sales to $41,892, a number that would rise into the high $50,000, low $60,000 range in late April.
Moving to recent times, stores with limited capacity averaged more than $108,000 for the first seven weeks of fiscal 2021. And for restaurants with open dining rooms, to-go averaged just over $25,000 per week, or roughly 23 percent of sales, during that stretch.
Restaurants with 75 percent and above were averaging slightly under $23,000 per week (20 percent of total sales).
Texas Roadhouse has grown to 503 corporate restaurants and 69 franchises (there’s another 28 internationally). There are also 31 Bubba’s 33 and three Jaggers.
The company announced Friday that Jerry Morgan, who assumed the president role in December, would also take on CEO duties, effective immediately.
Morgan is a 23-year veteran of Texas Roadhouse. He began his career with the brand in 1997 as managing partner of its first Texas restaurant. He earned Texas Roadhouse’s Managing Partner of the Year distinction in 2001 and was promoted to Market Partner later that year. Morgan was promoted to Regional Marker Partner in 2015. He previously worked at Bennigan’s and Burger King.
“While you never expect the loss of such a visionary as Kent, our succession plan, which Kent led, gives us great confidence. Jerry’s operational background and 20-plus years of Texas Roadhouse experience will be key in helping the Company and Roadies move forward after such a tragic loss,” Moore said.