00:00:20,060 –> 00:00:33,080
Yeah, and our main source here is a great piece from the Austin Business Journal. It gives us a real inside look. It shows how the co-owners, Jennifer McNevin and Greg Koury, are managing despite some, uh, pretty big obstacles. The industry is tough.

00:00:33,080 –> 00:00:42,660
Right. So our mission today is, you know, to unpack how some beloved places actually manage to stick around. What are those unique business practices the Journal highlighted? What jumps out?

00:00:42,660 –> 00:00:44,600
Well, adaptability is key, right from the start.

00:00:44,600 –> 00:00:44,720
Yeah.

00:00:44,720 –> 00:00:54,339
That, and a really, um, unconventional way they handle their employees. It’s not just about dealing with outside stuff, but using their internal strengths in, well, surprising ways.

00:00:54,340 –> 00:01:14,460
Okay, let’s get into it then. Closing the downtown Congress Avenue location in 2020, that must have been tough. Almost four decades, opened in ’84, the spot for business lunches. What really pushed them to that point? The article mentions Greg Koury felt sadness, but also relief. That’s interesting.

00:01:14,460 –> 00:01:15,720
You can see why. Yeah.

00:01:15,720 –> 00:01:16,120
Okay, Mary.

00:01:16,120 –> 00:01:30,120
A mix of feelings. There were some very practical reasons pushing them out. Greg Koury was offered only a five-year lease extension, max, expiring end of 2022. And given all the market uncertainty back then, that just felt way too short.

00:01:30,120 –> 00:01:32,660
Five years isn’t long when you’re talking about a restaurant investment.

00:01:32,660 –> 00:01:42,740
Exactly. Plus, big redevelopment plans were already in the works for that property, a 10-story condo building right there. And the building itself, the downtown spot, it needed a lot of maintenance, a lot.

00:01:42,740 –> 00:01:42,820
Yeah.

00:01:42,820 –> 00:01:45,620
Spending that kinda money just wasn’t gonna make sense for a short lease anyway.

00:01:45,620 –> 00:01:47,640
Okay, so redevelopment, maintenance costs.

00:01:47,640 –> 00:01:48,060
Yeah.

00:01:48,060 –> 00:01:48,570
What else?

00:01:48,570 –> 00:01:59,500
And then the rent, the sheer cost. Manuel’s was paying $42 a square foot, which sounds like a lot, but nearby places, like in the 2nd Street District, they were already getting around $65.

00:01:59,500 –> 00:02:02,870
Wow, so the financial pressure was just immense.

00:02:02,870 –> 00:02:06,720
Immense. The writing was kind of on the wall, financially speaking.

00:02:06,720 –> 00:02:21,640
Greg Koury also said downtown felt not hospitable anymore. He mentioned the, uh, overwhelmingly negative homeless situation, said it affected their core lunch crowd, the people who’d walk for blocks from their offices. How big a factor was that?

00:02:21,640 –> 00:02:36,520
It seems like it was a major factor, that shift in the downtown environment, the foot traffic. It made it harder to serve their regular customers, the ones looking for that specific business lunch experience. And remember, the pandemic closure in March 2020, that was meant to be temporary.

00:02:36,520 –> 00:02:38,970
Right. They initially planned to reopen downtown.

00:02:38,970 –> 00:02:50,240
I think they even kept paying rent into 2022, but they never actually reopened downtown. That initial closure plus all these other issues piling up, it just sort of sealed the deal for the Congress Avenue location.

00:02:50,240 –> 00:03:17,000
It’s quite a contrast when you think about how Greg Koury started, saving waiter tips, a $10,000 loan backed by a friend. Compared to downtown Austin now, you’ve got these huge high-end places moving in, BOA Steakhouse, Sushi Roku from LA, Kimbal Musk’s places, Mexta got Michelin recognition, the Dead Rabbit’s selling what, $16 hot chocolate. What does that landscape mean for an independent place like Manuel’s was? How do you even fit in?

00:03:17,000 –> 00:03:44,000
It shows a massive shift, doesn’t it? Downtown Austin became this, uh, playground for big money, for national and international brands. For a local spot with deep roots and a different way of doing things, it’s not just about competing on food anymore. It’s a totally different economic game. The cost, the clientele they’re attracting, the investment needed, it’s all changed. It really signals a move away from that homegrown scene Manuel’s was part of towards something more, well, corporate and high-end.

00:03:44,000 –> 00:03:54,640
So downtown became unsustainable, but they still have the North Austin location. Let’s shift there, the one on Jollyville Road in Great Hills Market opened back in ’98. But it hasn’t been smooth sailing there either, right?

00:03:54,640 –> 00:04:10,800
No, not at all. Even escaping downtown didn’t mean escaping challenges. COVID hit the North Austin location hard too. Sales are recovering, thankfully. They’re hoping for about $3.8 million by year end, which is up from 2023, so progress.

00:04:10,800 –> 00:04:13,540
Okay. Recovering from the pandemic. What else?

00:04:13,540 –> 00:04:23,820
A really unexpected hit came from the demolition of the Regal Arbor 8 cinema nearby. That movie theater apparently drove a lot of traffic. People would do dinner and a movie, you know?

00:04:23,820 –> 00:04:27,460
Ah, that symbiotic relationship. Lose one, the other feels it.

00:04:27,460 –> 00:04:45,580
Exactly. That full evenings out dynamic, its demolition cost Manuel’s business big time. Plus, all the dust and disruption from the construction meant extra cleaning, hassle. And get this, a lot of customers just assumed Manuel’s was going away too, because the cinema was being torn down. They actually had to put up a banner saying, “Hey, we’re still here.”

00:04:45,580 –> 00:05:01,400
Wow, talk about an external factor you have zero control over. Crazy, but it’s not all bad news up there, is it? You mentioned something about their lease on Jollyville Road, expires end of 2025. There’s something unique, a ground lease. What is that exactly, and why is it such a big deal for them now?

00:05:01,400 –> 00:05:11,280
Okay, so a ground lease basically means Manuel’s owns the actual building, the structure itself, but they lease the land underneath it from the property owner.

00:05:11,280 –> 00:05:13,980
Ah, okay. Own the building, rent the dirt.

00:05:13,980 –> 00:05:28,960
Pretty much, and that’s crucial right now. See, in the past, the owner wanted to redevelop that land. They even offered to buy Manuel’s out, but McNevin and Koury said no. But now the real estate market is, as the article puts it, more dicey. Developers are hitting pause.

00:05:28,960 –> 00:05:30,480
So the tables have turned a bit.

00:05:30,480 –> 00:05:48,039
Significantly. Suddenly, a longtime stalwart like Manuel’s, a reliable tenant who owns the building on your land, that looked pretty good to a property owner when new development seems risky. It gives Manuel’s much more leverage in renegotiating that lease than if they were just renting the whole thing. They’re an established asset there.

00:05:48,040 –> 00:05:55,400
Okay, that makes sense. Real leverage. So they handled downtown, weathered the pandemic, the demolition. Now they have this lease advantage.

00:05:55,400 –> 00:05:55,700
Right.

00:05:55,700 –> 00:06:02,840
And despite all that, Jennifer McNevin and Greg Koury are determined not to let 40 years just wash away.

00:06:02,840 –> 00:06:03,420
Hmm.

00:06:03,420 –> 00:06:07,100
They’re looking to monetize the brand itself. That’s fascinating. How are they planning to do that?

00:06:07,100 –> 00:06:17,560
They’re looking at two main paths right now, taking the Manuel’s name beyond just the restaurant. The first and maybe more immediate focus is consumer packaged goods.CPG.

00:06:17,560 –> 00:06:19,100
Like, sauces and stuff in grocery stores.

00:06:19,100 –> 00:06:19,840
Exactly.

00:06:19,840 –> 00:06:20,180
Okay.

00:06:20,180 –> 00:06:38,630
They wanna get Manuel’s sauces, maybe their flan, onto shelves. Nothing’s set in stone yet, but that’s the plan. And Austin’s actually a good place for that. There’s a strong CPG scene. Lots of local brands have made that jump, like, uh, Toccadilly. They got their sauces and chips into hundreds of grocery stores. So there’s a precedent.

00:06:38,630 –> 00:06:41,840
Makes sense. Build on the name recognition. What’s the other avenue?

00:06:41,840 –> 00:06:47,740
The other potential path they’re exploring is franchising, spreading the Manuel’s concept that way.

00:06:47,740 –> 00:07:07,330
CPG and franchising, smart moves. But there’s another aspect to their long-term vision that sounds really unique, almost inspiring. It involves their employees. The article says there’s no single ownership plan for the future, but they see the brand’s future with their longtime staff. How does that actually work? Is it just a nice idea or a real business model?

00:07:07,330 –> 00:07:18,000
Oh, it’s very much a concrete model, and it’s where Manuel’s really, really stands out. It’s super rare in the restaurant world. You know the turnover in that industry, the thin margins.

00:07:18,000 –> 00:07:19,200
Yeah, it’s brutal.

00:07:19,200 –> 00:07:25,560
Right. So Manuel’s has 49 employees total. Six of them are managers. They’re salaried, and they get shares of the profits.

00:07:25,560 –> 00:07:27,180
Profit sharing for managers.

00:07:27,180 –> 00:07:55,620
Yes, actual profit sharing. Jennifer McNevin talks about their ownership attitude, says they genuinely look after the place when the owners aren’t there. And Greg Koury puts it bluntly, “This is their world. They vest their time, energy, money, their family into this.” He believes it makes good business sense to be open about costs, operations, and let employees participate fully. He says, “What you do matters, how you treat people matters, and there’s a reward if we all do it properly.”

00:07:55,620 –> 00:07:57,880
That’s quite a philosophy for the restaurant business.

00:07:57,880 –> 00:08:11,280
It really is. He sees it as smart operations, not just charity. These managers meet every couple of months, review how things are going, and they always get a check. The chef de cuisine, Hector Zaccatura, he’s been there since before his son, who’s now 25, was born.

00:08:11,280 –> 00:08:12,360
25 years.

00:08:12,360 –> 00:08:23,530
Yeah. He says the job’s enjoyable, gives him work/life balance, and he confirms the profit sharing pushes the team, makes it fair. It creates this direct link between their effort and their reward.

00:08:23,530 –> 00:08:35,080
That’s a powerful incentive, goes way beyond just an hourly wage. It builds investment. So, okay, the profit sharing is huge, but retaining people for 25-plus years-

00:08:35,080 –> 00:08:36,020
Mm-hmm

00:08:36,020 –> 00:08:41,500
… there has to be more to it than just money. It’s the culture, right? What’s the root of that loyalty? How do they build that?

00:08:41,500 –> 00:08:57,180
It absolutely goes deeper. It seems to stem right from Greg Koury’s own background and connection to food. His grandmother owned restaurants. He talks about walking through them with her as a kid, the kitchen, the bake shop, feeling totally comfortable, like it was second nature. It wasn’t just a job for him. It was in his blood.

00:08:57,180 –> 00:08:58,560
A lifelong passion, then.

00:08:58,560 –> 00:09:26,059
Totally. He grew up loving Mexican food in California, that homey taste. He calls it beans, cheese, tortillas. And the menu at Manuel’s reflects that, plus things from his travels, even family recipes from some of those longtime employees. They try to create this whole atmosphere, transport you somewhere else, like Cabo San Lucas, he says. It’s that personal connection to the food, the craft, and the people that seems to have built this, uh, familial environment.

00:09:26,060 –> 00:09:38,640
Yeah, you can see how that personal history shapes the business. It’s not just transactions, it’s relationships. Creating that kind of loyalty, keeping people for decades in an industry known for churn, that’s genuinely remarkable.

00:09:38,640 –> 00:09:51,360
And it pays off in tangible ways like Hector Zaccatura said, in enjoying the job, having that work/life balance. It’s this whole package, the respect, the balance, the financial stake that’s allowed Manuel’s to serve Austin for 40 years with such a dedicated team.

00:09:51,360 –> 00:10:10,620
Okay, so let’s recap this journey. We’ve seen Manuel’s face the painful downtown closure driven by market forces and costs, then navigating challenges in North Austin, like that cinema demolition. And now, finding this innovative path forward, expanding the brand, the CPG idea, and this really unique employee profit-sharing model.

00:10:10,620 –> 00:10:24,760
Yeah, the key takeaways really are about adaptability, that constant need to pivot, and understanding your market deeply, seeing those shifts coming. But maybe the biggest lesson is how investing in your people financially and culturally can build incredible resilience, an enduring legacy, really.

00:10:24,760 –> 00:10:49,580
It definitely leaves you thinking. In today’s economy, where Greg Koury said those humble beginnings feel long gone and big, flashy players dominate, what actually makes a business iconic and lasting? Is it just location or trends, or is there some other unique ingredient, something less tangible that lets certain places adapt, build loyalty, and thrive for decades while others just disappear? Something for you to mull over until our next deep dive.