Jason Morgan Discusses Ruggles Green Growth in Houston Business Journal
November 11th, 2016
Houston, Texas – Hargett Hunter Managing Partner Jason Morgan was featured in an article written by Jack Witthaus in the November 11th, 2016 edition of Houston Business Journal.
The article, “How the new CEO of Ruggles Green plans to grow the company in Houston and Dallas”, is available here and below.
By Jack Witthaus
A majority stake in Houston-based Ruggles Green was bought Oct. 11 for an undisclosed amount by Raleigh, North Carolina-based private investment firm Hargett Hunter Capital Partners LLC. In the process, Jason Morgan was named CEO of the fast-casual concept, which serves healthy, organic food and wine. Morgan grew up in Alabama, where his father worked in a tire plant factory and his mother served in elementary school administration. He was a bright student in a high school where less than 10 percent of his class attended college. He graduated from Vanderbilt University and used his connections to enter the professional world as an accountant at Arthur Andersen in 1995 in Memphis. Later, a client, who operated a Mississippi casino, offered him a new gig as a financial analysis manager. After a couple of entrepreneurial endeavors, he received a call from a restaurant chain in his home state of Alabama.
You were the CFO at Zoe’s Kitchen. How’d you get involved with them?
I spent the majority of my career in hotels and casinos. In 2006, I went the entrepreneur route with a slot machine manufacturing company, but it didn’t pan out. Then, I jumped to a mail-order diabetic supply business, but that didn’t work out either. I was sitting at that job thinking, “What have I done to my career?” But a recruiter called and said there was this little company in Birmingham, Alabama, called Zoe’s Kitchen, looking for a CFO. They wanted me to interview but thought I’d be the dark horse because I didn’t have much restaurant experience.
How’d the interview go?
I ended up with the job in 2008. I got the job in part because I was willing to move to Birmingham — it’s a tough place to recruit. But my wife grew up there, and I grew up two hours south of there, so it was an easy move. The company was about 20 units and $18 million in sales. The office was small with about eight people. For the first time ever in my career, I was the oldest person in the office. I was 39 years old, but the next oldest person was about 14 years younger. It was a very youthful team.
What was the job like?
My entire career I’d been taught to say “we.” But at Zoe’s, there was a lot of me doing the work. It was hands-on work with a lot of systems implementations that year. I did much more granular than you’d expect a CFO to do all the way up until the IPO in 2014.
How’d you take the company public and what did you learn from that experience?
Noodles & Co. and Chuy’s paved the way for emerging restaurant companies to go public. Zoe’s was growing at a pace that we could be considered to go public. In 2013, the private equity and management team decided we were ready. We started the process in September and by April 2014, we were ringing a bell on the New York Stock Exchange. We were small, but we had a sophisticated foundation with large
company procedures to scale the growth. It was a wonderful experience, but I don’t know if I’d want to do it again. It was 6 or 7 days a week with 10 to 12-hour days.
Why did you resign from the company in June 2015?
I wanted to run a business, and I felt like it was time to take my Zoe’s experience and leverage that into something new for me. My job changed drastically after the company went public. It went from entrepreneurial to compliance-based. It wasn’t as much fun. Instead of doing the work, I was managing people who were smart, talented and successful — they didn’t need to be managed. There were some days I’d walk in, and I was a little bored. I longed for the early days of Zoe’s of starting something new and growing it.
How’d you end up at North Carolina-based Hargett Hunter Capital Partners LLC?
After leaving Zoe’s, I pursued buying a 15-unit fast casual in Dallas, but the check size wasn’t big enough for the private equity firms. I wanted $18 million to invest, and they needed to write checks for bigger than $25 million. During that process, I met my current partner Jeff Brock (founder and managing partner of Hargett Hunter). He predicted that the deal wouldn’t work out and asked me to call him when that happened. I laughed because I had just met the guy. But he was right. The deal didn’t work out, and I called him. Jeff has spent his entire career in business development and deal making. I had a seven-and-a-half year history of growing one of the most successful fast-casual concepts in the past decade. He needed an operator, and I needed deals. When we joined forces, we rounded each other out. Jeff had recently left a small private equity firm before founding Hargett Hunter, and he had live deals. I was intrigued. One of those deals that we closed in July was with (Phoenix-based) Original Chopshop Co. Then we turned our attention to Ruggles Green.
Why Ruggles Green?
Jeff had met the founders. Jeff is a great network guy, and he’s extremely likeable. He grew up in a small town in North Carolina. We have different skill sets, but our values and DNA are almost identical. He continued to give the Ruggles founders advice for no fee after meeting with them. When I joined, we went back to them and pitched growing the company.
How’s Ruggles Green doing?
That concept is great. When we were building Zoe’s stores in Houston, the broker suggested we check out Ruggles Green. This was about six years ago. I thought, wow, this is exactly where all of our customers are. It was packed with a patio and lines. That’s when we decided to launch a Zoe’s concept near a Ruggles Green. Little did I know I’d be running the business. It’s five units, the sales and margins are great. We think we can grow the business.
You’re running Ruggles Green out of Dallas. How often are you in Houston?
I’m in Houston a little bit. Small restaurant concepts typically don’t make enough money to support an overhead structure. When you have founders who are more creative and not so much financially-oriented, they hit a point in store openings where they need to add overhead, but they don’t want to take away money building new stores. For those guys, most decide not to add overhead. Then they build too many stores, but they can’t run them because they don’t have overhead. It’s a horrible Catch 22 situation for small entrepreneurs.
What are you doing to assist the expansion?
We built a shared services team in Dallas to support both (Ruggles and Chopshop). We hired an operator in each of the cities to manage the stores, but the back office functions, accounting, IT, HR and marketing, will be done from Dallas. It works. Both brands are at the point where they need those back office things. The ultimate goal is to take both of those brands, grow them in each city and then take them to Dallas.
What’s your biggest takeaway from Zoe’s that you’re using to develop these two brands?
The first is that the restaurant business is a people business. We will be people-focused. If you have happy team members, guests will be happy. The second is that you have to put systems and foundations in place early. Some restaurant operators would scoff at that. That’s what we did at Zoe’s. If you can professionalize how the data is flowing in your business, then you can take that data and drive strategy. You’ll see us put platforms in place with both of these businesses that is analytical and process-based.
How do most people approach early restaurant growth?
Usually through a qualitative and creative side. That’s not who I am. I can take a brand and grow it. The goal is to add two more stores in 2017 in Houston, and then we’ll go to Dallas in 2018.
Where in Houston?
We’re close to signing a lease at Vintage Marketplace. We don’t have a second one yet, but we have real estate brokers looking for one.
This interview has been edited for length and clarity.
CEO of Ruggles Green
Birthplace: Opelika, Alabama
Alma mater: Vanderbilt University
Hobbies: Golf and Vanderbilt football season ticket holder with tickets on the 45-yard line.
Owner: North Carolina-based Hargett Hunter Capital Partners LLC
Acquired: October 2016
Projected: Two more Ruggles Green eateries in Houston in 2017 with one at Vintage Marketplace in northwest Houston.