In 1996, Lynn and Norton Hughes opened a buffet barbecue restaurant in Latta, South Carolina, forty years after Norton’s father, Shuler, had created his personal brand of sauce. Combining Norton and Lynn’s family recipes, the Hughes’ restaurant became a popular destination, with folks sometimes driving more than 100 miles to sample the feast. Lynn and Norton named the restaurant for Norton’s dad and their adopted son, also named Shuler. They hoped that young Shuler would one day take over the business and carry on the family’s legacy.
Marcus Meets the Nortons
The Profit Season 2 Episode 15
When Marcus entered the bustling restaurant, he saw that it was packed with customers. Norton told Marcus that they often have a line around the building with patrons waiting to enjoy the southern barbecue. The restaurant was open three days per week – Thursday, Friday, and Saturday – and seated only 200 customers. With table turnover, Schuler’s typically seated 500 per night. Norton sometimes had to turn customers away.
Marcus tasted the food and thought the ribs were “ridiculous.” Lunch cost $8.95, dinner was $12.70, and an all-you-can-eat option was $13.95. Shuler’s had made $1 million in the previous year, with an average profit near $140,000. That was pretty impressive. But then Marcus learned about Shuler’s food costs – they were around 42%, when they should be closer to 32%. Marcus knew that percentage had to come down. There was also $86,000 to pay off on the 30-acre mortgage.
Marcus visited the kitchen where Lynn was making her famous biscuits. He learned that the biscuits were one of the most popular items on the buffet and that they had to be refilled several times a night. But only Lynn could make the biscuits, according to a couple of kitchen workers, and she spent four hours a day baking them. Marcus saw potential in the biscuits and thought he’d be able to sell them nationally.
Norton and Lynn worked very hard to keep the restaurant running, and they wanted to take some of the burden off by hiring a manager. Lynn’s sister, Jenny, and her brother-in-law, Ewell, were visiting from New Orleans. Lynn thought Ewell could possibly be a good fit for the job. She said he was an expert in marketing. Marcus wanted to talk to Ewell to see what he thought about the restaurant’s needs.
But the only thing Ewell was focused on was growing the business. Marcus didn’t think Shuler’s needed to grow – they had to figure out how to make the existing business work better with new processes. Ewell wanted Shuler’s to be a national chain, but Marcus knew that wouldn’t work because all barbecue is regional. Marcus wanted to help build the infrastructure in the current location and make Shuler’s a destination.
Marcus Summarizes Shuler’s Needs
After touring Shuler’s, eating the food, meeting the staff, and learning about the business, Marcus presented his plan to Lynn, Norton, and Ewell. The restaurant would need to:
- Offer customers payment options. There was currently only one cash register and it didn’t accept credit cards. Norton was worried about fees, but Marcus said they were losing business by having to turn away customers who didn’t have cash.
- Decrease food costs and consider raising prices. Norton was either paying too much, not charging enough, or there was waste involved.
- Turn Shuler’s into a destination. Marcus said that Shuler’s was more than just a restaurant; it was an experience. He wanted to build a general store and construct a deck for additional seating.
- Turn Lynn’s biscuits into a national brand. Marcus wanted the distribution rights to the biscuits so he could sell them in grocery chains across the country.
In exchange for making those improvements, Marcus wanted 40% of the business and 100% control, and he would add $500,000 working capital to execute his plan, as well as pay off the $86,000 debt. Although Lynn, Norton, and Ewell had previously talked about giving Marcus a 35% stake, they eventually agreed to take Marcus’s original offer.
After the deal was made, Marcus again talked to Ewell to find out how he was going to fit in. That’s when he learned that Ewell wanted a $200,000 salary and to focus on marketing and PR. Marcus knew that PR wasn’t what the restaurant needed at that time and that Norton probably wasn’t aware of Ewell’s salary demands.
The Team Goes to Work
It was time to get through the to-do list. First up was deciding on the correct pricing based on food consumption versus the food cost. By weighing the average plate of food, they were able to determine the optimal price for the all-you-can-eat deal should increase from $13.95 to $15. That would bring in an additional $1575 per week in sales. After Ewell mentioned hiring consultants to determine pricing, Marcus had a talk with Norton about Ewell’s role. Marcus was concerned about Ewell’s salary demands and that he really wasn’t interested in helping out with the day-to-day. Norton told Marcus that Lynn really wanted her sister to move back home, so he was eager to make his wife happy and find a way to work Ewell in.
Next, Marcus took Lynn to meet a commercial baker friend. They wanted to adjust the biscuit recipe for mass-production. Lynn was uneasy with some of the ingredient changes, but she trusted that Marcus knew what he was doing. She tasted the result of the changed recipe and said it only needed a bit more sugar.
They tackled food costs next. Marcus was able to negotiate a better deal with a local meal supplier than the deal Norton had with a larger manufacturer. Then it was time to figure out how to improve the flow of customers and lessen wait times. By adding another register and allowing customers to access both sides of the buffet, it would help keep the customers moving. But they also wanted to increase seating, so plans were made to build out the deck and add 100 seats there. That would increase Shuler’s nightly customers from 500 to 700.
Marcus still had the Ewell problem, so he confronted him again to find out how he would be involved. Once again, Ewell talked about outreach and expansion without mentioning how he would help inside the restaurant. Marcus let him know that what his sister- and brother-in-law needed was a manager. Ewell told Marcus he was all in.
But some weeks later, Ewell was a no-show to a meeting, and Lynn’s sister wouldn’t answer her calls. Marcus told Lynn and Norton that this was a hard reality to accept but that it was better to know now before they moved to South Carolina.
With the deck completed, it was time for Marcus to add what he thought would be better than any billboard: a huge American flag. The American flag symbolizes hard work, good food, and a great country, and Marcus thought it perfectly captured what Shuler’s was all about. He also had something to share with Lynn and her mother – packaging for Lynn’s Little Biscuits, which would be distributed to groceries nationwide. He planned to sell it a 100% markup. Both Lynn and her mom loved the packaging.
Marcus wanted to surprise Lynn and Norton, so he took them – along with Shuler – to New York City where he showed Lynn that her mom’s watermelon cupcakes were featured in the reopening of Crumbs Bakery (Marcus’ investment). Crumbs had a flagship Manhattan store and other locations throughout the country.
As the episode ended, the general store had opened – including an expanded bakeshop – and the customers were moving more quickly through the restaurant. It certainly seemed like a success story for Shuler’s BBQ.
Shuler’s BBQ After The Profit
Except for a few setbacks, including a smokehouse fire in 2018 and some recent re-occurring power losses, the business has been steady for Shuler’s and they’ve racked up positive reviews on Tripadvisor, Yelp, and Google. But the packaged biscuits didn’t take off – there is no indication that they’re being sold anywhere other than in Sweet Lorraine’s Bakery inside the General Store. And if Lynn’s mom’s cupcakes were to be featured in Crumbs locations, they’re not anymore, since the chain closed down again.
Marcus seemed to be banking on this deal because of the grocery distribution plan. Without that, it seems unlikely there’s money to be made in a restaurant with only one location. Also, when Marcus tried the giant flag idea in a different business in North Carolina, he was hit with fines for violating code. Some ideas either don’t translate well or need to be better researched.
But good luck to Lynn and Norton Hughes. Hopefully, their restaurant will continue to be successful, and that they’ll have a nice prize to hand down to their son.
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