David Doty - Episode #31

David Doty: From Wall Street to Main Street – Building a People-First Food & Restaurant Conglomerate

In this enlightening episode of the Maker Manager Money podcast, Kyle Knowles sits down with David Doty, an entrepreneur who left Wall Street to revolutionize the food industry in Utah. Starting with his early days washing dishes at 16, Doty’s journey through finance and law school, to his strategic pivot towards acquiring and nurturing local food businesses, is nothing short of inspirational. David’s approach isn’t just about business growth but fostering community and culture within the food and beverage industry. His story is a testament to passion, innovation, and entrepreneurship’s power to create lasting impact.

David is CEO and Founder of Kensington Asset Management, which owns the following:

What Listeners Will Learn:
🎯 From Dishes to Riches: Doty’s transition from a dishwasher to a food industry visionary shows the power of following one’s passion.
🎯 Strategic Growth: Learn about Doty’s approach to sustainable business growth, including owning real estate and nurturing a community-focused culture.
🎯 Inspiring Entrepreneurship: Doty’s journey encourages listeners to pursue their entrepreneurial dreams, highlighting the importance of adaptability, hard work, and vision.

🍽️ #FoodIndustry
🚀 #Entrepreneurship
📈 #BusinessGrowthStrategies
🏠 #RealEstateInvestment
💼 #Leadership


David Doty on LinkedIn

Kensington Asset Management


David Doty’s entrepreneurial journey is a story of resilience, adaptability, and passion. Growing up in a blue-collar town in Pittsburgh, Doty’s first job was at Denny’s, igniting his love for the food business. Despite a successful stint on Wall Street, where he worked as an equity trader at JP Morgan and a project manager at Goldman Sachs, Doty felt out of place among his Ivy League colleagues and yearned for something more fulfilling. This led him to pivot to law and business, earning a JD and MBA from BYU on a full scholarship and a CFA charter.

Doty’s passion for small businesses and the food industry drove him to purchase his first food-related business during business school, marking the beginning of his venture, Kensington Asset Management (KAM). His strategy focused on sustainable growth, owning real estate, and creating a lasting culture in the food and beverage industry. This included acquiring, operating, and growing high-quality, hospitality-focused food concepts in Utah, such as Lehi Bakery and Magelby’s Restaurant.

Doty’s approach wasn’t just about rapid expansion but about making a difference in the community and building a legacy. His journey showcases the importance of following one’s passion and the value of hard work, perseverance, and a commitment to making a positive impact.

Kyle Knowles (00:00:00):
Hello there. Welcome to the Maker Manager Money podcast, a podcast about entrepreneurs, solopreneurs, founders, business owners, and business partnerships from startups to stay ups, to inspire entrepreneurs to keep going and future entrepreneurs. To just start, today’s guest is David Doty, a remarkable entrepreneur and visionary in the food industry and the founder and CEO of Kensington Asset Management. KAM, is that right? KAM. That’s great. Okay. With an impressive journey that started in finance, David worked as an equity trader at JP Morgan and a project manager at Goldman Sachs before pivoting to law and business, earning his JD and MBA from BYU on a full scholarship along with a CFA charter. Shifting from Wall Street to Main Street. David’s passion for small businesses led him to purchase his first food related business during business school. This marked the beginning of KAM, his venture to revolutionize Utah’s food scene by acquiring, operating and growing high quality, hospitality focused food concepts. David’s strategy isn’t just about rapid expansion. He’s focused on sustainable growth owning real estate and creating a lasting culture in the food and beverage industry. His portfolio includes beloved establishments like Lehi Bakery and Magee’s Restaurant. David resides in Lehi, Utah with his wife Danielle and their five children. Welcome to the show,

David Doty (00:01:39):
David. Hey, thanks for having me. That intro seemed exhausting.

Kyle Knowles (00:01:43):
Well, you’ve done a lot of things and I’ve been snooping around LinkedIn reading a bunch of your posts on LinkedIn, so we just have, there’s so much to talk about. I don’t know where to begin exactly, but what I think we should start is just how you grew up and how you ended up on Wall Street.

David Doty (00:02:05):
I grew up in Pittsburgh, Pennsylvania, and so very blue collar, blue collar town, so it probably makes sense to say on my 16th birthday, my mom said to me, alright, get out of the house time to get your first job. And I had no idea what to do. I had mowed some lawns and done things, but I went down the road and the first place I saw was a Denny’s. And so I walked in, turned in an application, got a call back the next day, and I started washing dishes at 16 years old. I think it was from there that I just started to get more comfortable in the food business. It wasn’t too long. I washed dishes and I loved that comradery in that dish room with some other kids my age. And then they said, why don’t you come up and be a host?

And that lasted another few months. And then before you knew it, I was serving tables and the only thing I didn’t do in that restaurant was just work on the line there with the cooks. But I came to just love working with my peers, everyday people and the vast variety of people that work in a restaurant from 16-year-old kids to 65-year-old servers and everything in between. I just love that dynamic and the people that come in and out of the restaurant. So I did that through high school and just came to love the food business and I guess I thought for a while when I went to college that that was going to be the end of my food journey. Just turned out not to be that way. So went to colleges right down the road at the University of Pittsburgh, studied math and finance and was good at it, good enough to be the first person from our school to go to be a trader on Wall Street, but always just felt like a complete fish out of water. My mom had a very poor upbringing and mine was just lower middle class upbringing. Just always felt a little strange going into 2 77 Park Avenue or 3 83 Madison Avenue in New York City, just being with a different, I don’t know, class of people. So as I’ve come back to Main Street, I’ve just felt so much more comfortable and in my element, you

Kyle Knowles (00:04:15):
Did something remarkable and that is you started running track in high school, which to me is remarkable because you hadn’t really done track before and somehow was it your junior year you started running track?

David Doty (00:04:30):
This girl comes up to me actually my first day of senior year and says, you run pretty good. I was on the basketball team and I was always just running laps on everybody. She said, you should come out for cross country. And I said, I don’t even know what that is, but she said, just show up today at three o’clock at the track or whatever. I showed up in my Tracy McGrady basketball shoes and they said, we’re going to do a time trial. And I was second in the entire high school on my first day running in basketball shoes. I think all of the high school kids, I work with hundreds of them now and they’re just trying to find their place and I don’t think I was too different when I was in high school trying to figure out where you fit in, right? It’s a very high school thing. Who am I? Where do I fit in? And I had finally found like, oh my gosh, maybe I can run. Maybe this is something I’m good at. I scored three points on the JV team, my junior or my sophomore year. And so basketball was just not my thing as much as I wanted to be like Kobe Bryant, but running was something I could do and eventually parlayed that into walking onto a division one cross country and track team after a year of less than a year of running.

Kyle Knowles (00:05:38):
That’s amazing. And what were some of your achievements when you were doing that?

David Doty (00:05:43):
I mean by today’s standards, especially around here in Utah, these kids are unbelievably fast. So my times weren’t anything comparable. What these kids are doing today, they seem to get faster and faster. I mean, I have a record at our high school for the mile. It wasn’t very fast, it was in the four forties, but I think what my coaches saw in me was a lot of potential, and I think that’s what a lot of people have seen in me is either going to colleges, this kid has some potential, there’s something a little different. He’s willing to commit 110% to getting the job done. So even though he is running for a year, this kid is going to come in and do it. Or when I was an intern at JP Morgan in college during my junior year, I didn’t have the accolades of going to the Ivy League schools or have taken all these classes on financial engineering or things like that, but they knew I was going to come in and outwork every single person out there. So over the years running, I was able to get some really great times for me. Nothing Olympic standard or anything, but it was for me just trying to be the best version of myself and being 110% all in. And I think that reflects in what we do now at our company.

Kyle Knowles (00:06:55):
And so what do you do attribute, because you had a lot of academic success as well, so academic and sports success, what do you attribute your drive? Where did that come from?

David Doty (00:07:07):
So I have always just really appreciated and valued the people that give a hundred percent to what they do. I think I saw that to bring up what you mentioned earlier, my mom, my mom didn’t have two nickels rubbed together growing up. They actually called her poor patty. She was so poor. She had a dirt floor in her house. But when she got an opportunity when she’s 18 years old to start to be a sonographer to scan pregnant women with their babies, she got that chance and she ran with it as much as she could even, so she got pregnant while she was in school, and back then you could not be in school if you’re pregnant because of all the radiation or whatnot that they had. She found a way she would wear four sweatshirts to cover it up so she could say, and she wasn’t going to let anything stop her, but she went with only high school education that she was selected by her peers from all across the country to be the chair of the entire sonographer governing body.

The entire United States picked over doctors with accolades, multi-page cvs. Here’s this poor patty from Pittsburgh with just a simple high school diploma and a girl that worked her guts out and was elected as the head of the national body. And so I saw that in her and my favorite athlete growing up was Kobe Bryant. That mamba mentality do whatever it takes everything you can do to give yourself an edge to be better. I’ve just always, I’ve always valued that. And so when it came to running, it didn’t take me long to say, oh, if I’m good at this, I’m going to go all in. So I’m going to run in the morning before school. I’m going to run at night. I don’t care if it’s five degrees outside in Pittsburgh, I’m running. I don’t care if there’s a blizzard, I’m doing it. And so we’ve just been everything financing college.

I petitioned the dean of the business school to take MBA level classes so that I could be competitive with the kids that were coming in from the other Ivy League schools. So I’ve seen that example from my mom and it’s other people I value that just said, if I’m going to do this, I’m going to do it the best I can in the first class way to say I’m not going to leave anything on the table. Everything’s getting laid out. And as I get older, it’s still with me. I just get a lot tired, a lot faster.

Kyle Knowles (00:09:44):
So it sounds like your mom and the mamba mentality.

David Doty (00:09:49):
Yes. Yeah. I mean, we’re shaped by some of these people that come into our lives or that inspire us and we take some of their, it’s not just always financial resources or direct time spent, but it’s the example that a lot of people give to you and that they can replicate. So I’ve just always come back to this notion of 110%. I loved it. My BYU graduation from law school and MBA, Ryan Smith came in, Qualtrics founder, and he gave this phenomenal commencement speech and he just talked about 110% and being all in and what that’s meant for him in Qualtrics. And I was like, he was speaking to thousands of people, but I felt like he was speaking directly to me because his example of grinding through the hard times and his story of how he had to just figure it out. A lot of times, and that’s especially true of us in business now and everybody thinks we have the answer all the time, but anybody that’s in it for too long knows that half the time we’re just floating around trying to figure out and see what sticks and see what works. But it’s really easy to quit. Sometimes it could be really easy to quit, but it’s when you persevere and get through the hard running days, the hard days in college, sleeping 10 hours in a week to get a project done, or doing six days a week at one in the morning learning how to run a bakery, it is easy to quit. But I’ve just always been inspired by these people that said, I don’t quit.

Kyle Knowles (00:11:30):
I love it. So you finish up at University of Pennsylvania, Pittsburgh, sorry, university of

David Doty (00:11:37):
Pittsburgh. I’m not that smart. Okay.

Kyle Knowles (00:11:39):
And then I guess you get recruited to Wall Street and you start working for JP Morgan first.

David Doty (00:11:46):
Yes. Those were crazy days. So my internship was in 2006. So when you see those movies like The Big Short, that was real, and I still look back on it and I dunno, what’s that word? Surreal, how this class of 150 kids from all over the country we’re treated like we’re rock stars, we’re like 21-year-old idiots and they’re taking us out all these fancy clubs and doing all this whining and dining us and trying to recruit us to accept full-time offers to come back. And then it was so crazy. 2007 comes around, we all come in, those of us who decided to come back, we all come back and that’s when the market started to get shaky. So I had all these colleagues, classmates that wanted to go into derivatives, the CMOs, the CMBS, financial engineering and all these jobs just started to disappear. They just said, we’re sorry that desk is shutting down, that you were recruited to come back to and we don’t have a place for you.

Thankfully for me, I just came in with this very simple job that I wanted. I just wanted to trade stocks. It was probably the joke job of the class, but it was definitely turned out to be the safest. And I did not know that that was going to even be a concern at all. But yeah, so I started trading stocks, consumer stocks in 2007 at JP Morgan. Had some great mentors there and traders that I worked with, and that was a ride to be a Wall Street trader between 2007 and 2011. That was a ride

Kyle Knowles (00:13:29):
For sure. But why did you feel like you didn’t fit in?

David Doty (00:13:39):
I think I might still have it saved in a folder at home. I mean, this goes back to the same way as high school. You’re always kind of comparing yourself, where do I fit in? What’s my spot on the team? Am I valuable? Am I not? Where do I fit? They give you class ranks and everything. And so I get this 150 person class coming in at JP Morgan and it’s 98% Ivy League, Stanford, university of Chicago, duke, Caltech, the list goes on. And then I am literally the only non-target school hire. You say, why am I here?

How did I get here? I know I’m going to fight like hell to really to make my way here and be successful. And I can tell you no one worked more hours than me. I was in there at 3:00 AM and worked until eight every night. I mean, I killed myself to say, I deserve to be here and I’m going to show ’em I can be here. But yeah, I think it was just the school because one of the first questions everyone asked you, oh, what school are you from? How’d that guy get here? Right. So again, I just had this interview and I just was very authentic with the hiring people. Sure, everyone comes in very prepared, has all the right answers, and I just gave me authentic version. I think that might’ve been refreshing or something a little different. They said, well take a chance.

Kyle Knowles (00:15:09):
That’s what you feel like the difference maker was?

David Doty (00:15:11):
I think so, and I look for that in my interviews too now, among interviewing people. It’s like some people come in, they have all the right answers, they can tell you exactly what you want to hear, but some people would say, Hey, I’m not going to be perfect. I struggle with this, but you’re going to get my all. And I have good emotional intelligence and I can connect with people. And I feel so much more comfort around those hires and it’s led, I think to having some really low turnover rates at our businesses is just find true, authentic people that can connect with me as a manager and not feel like they have to overcompensate or seem too stiff. It’s like we’re in the hospitality business. You have to be able to connect with people, talk to them when the little kid comes in. You have to be able to get down on one knee and talk to a little kid sometimes and make their day special. And I’m going to get that out in my authentic person more than I am, than with somebody that just has all the right answers and tell me what to do by the book.

Kyle Knowles (00:16:12):
So comparing resumes was one reason you didn’t feel like you fit in. Did a lot of these new hires, did they come from money?

David Doty (00:16:23):
I would imagine so. We never got into it too much, but let’s just say my clothes came from Marshalls and theirs did not.

Kyle Knowles (00:16:34):
So I worked

David Doty (00:16:36):
Four jobs my senior year in college while I was taking 26 credits, and my mom said, David, if you want to live on campus at school, you got to pay your own way. So I was working for the university. I worked for a beard distributor with a drive-through, they called it the Brew through Fridays and Saturday nights I worked for a financial advisor. I’m forgetting offhand my other job. But yeah, I mean everything I had that senior year, I had to grind out myself. When I moved to New York, I took a loan from my mom and paid her back to buy my first mattress and my first futon and all that stuff. So I don’t know, it doesn’t really matter where people came from at the end of the day, we’re all sitting there in the same spots. And actually half of those kids with those pedigrees didn’t have a job after a month or two of a training program. So it didn’t matter. But in my mind, I still had this chip on my shoulder. I had something to prove.

Kyle Knowles (00:17:34):
And where does that chip come from? Does it come from, has it always been there since you were little?

David Doty (00:17:47):
I think so You’re sitting here looking at me. I came in five foot nine. I was a fat kid in middle school and in middle school, 3.0 grades. I mean, I was your average kid to a T. And then in high school, I talked this with my wife sometimes about our own kids. I said, I don’t know what happened in high school. I think as soon as they started ranking us on our grades, something competitive just clicked. When I was little, I played, I did karate and I swam and I was pretty good and I qualified for the Junior Olympics in swimming, and then it just stopped. But something clicked in high school and they started ranking us and I thought, oh, now we’re quantifying this.

I need to, that’s for some reason how I got my value. And then in college, I guess the same way grades mattered, being on that contract team mattered. My times mattered, and it’s just always trying to improve and be better, very quantitative. So on my side, I think sometimes I fail to look at the qualitative stuff as much as I should because I’ve just always prioritized the numbers. I think that’s being a sports fan too. I guess growing up, loving sports, collecting the cars, looking at the stats, the players numbers just always seemed to stick out and matter the most. And I guess that’s probably what attracted me to statistics and economics and finance is the number side of it, and that drives me a lot. Does that help you as you run your business, I assume? Oh, absolutely. So I still track every single day, the sales, every day, and I compare it versus last year.

And I take a lot of pride in that. I take pride in our retention numbers. I take pride in our cost of goods sold numbers. I take tons of pride in our reviews and how those are coming in, how we quantify those. And so there is a huge element of numbers in there. On the qualitative side, I think I see a lot of that come through the words in the reviews, but the numbers still matter too, right? What’s our average over the last week, over the last month at our different restaurants? How are we doing there? But I love the stories that come along when you get the reviews. That’s actually the meat that matters to me is those stories that come out because you get 105 star reviews in a row, but they say nothing on, and that was great, but it’s when someone takes that time and I can tell the manager broke out of the norm, just another customer coming in or somebody breaks out of that cycle and looks at a customer as an individual and does such an inspiring job for them that they write something really quality and deep about that experience.

Because in hospitality, that’s the stuff that makes me feel like we’re making a difference in people’s lives is those stories. And sometimes I’m very grateful we get those deep, thoughtful reviews that come in that show that we still do that despite volumes being record highs every month, higher volume, higher volume, higher sales that we can still stop and make someone feel special.

Kyle Knowles (00:21:10):
I love that. How long did you work in Wall Street and what was the tipping point to go? I’m going to go do a JD and an MBA combo.

David Doty (00:21:24):
I don’t know if you ever feel this way. There’s certain periods of your life or there’s certain, I don’t know, Taylor Swift Eras tour. I don’t know. We have different patches. So I worked on Wall Street five, six years, did a year at a private equity firm, and I just woke up on my birthday one year, I think it was 29, and I said, my window to go back to school. It’s just shrinking. And of course I can go back to school when I’m 50. I’m sure I can, but it just might not make as much sense now or then as it does now. So I studied three weeks for my gmat, took that, and my wife and I took some used excuse to go out and visit some schools on the east coast, but I felt like going back to school is the right thing.

So six months after that, I enrolled at BYU and felt like that was the place to go. I had all these acceptances that had come in after my final round applications and I’m like, I don’t know where to go. And then I’m sitting in this room and this little kid turns around, gets a piece of paper and a pen out and just starts drawing BYU on the paper. As I’m staring at him, I’m like, oh, that’s where I’m supposed to go. So that’s why I went back to school and how I got into law school is a different story. I just applied for my MBA, we met the dean of admissions at a wedding reception and she’s like, I like you. I think we’re, if you want to come to law school, you have good enough grades in a GMAT score that I can slide you in without taking the lsat. So I did.

Kyle Knowles (00:23:04):
That’s awesome. So you basically did both at the same time? I

David Doty (00:23:07):
Did both.

Kyle Knowles (00:23:09):
So it wasn’t like you did MBA and then jd you did in three years you did both.

David Doty (00:23:14):
It actually took four. They do let you reduce some of the credit requirements, but it’s still a four year deal for most people that do both.

Kyle Knowles (00:23:22):
And just because she asked you or were you interested in law or what did you think? Oh, well, I’m going to school anyway, may as well.

David Doty (00:23:29):
So I’m on Wall Street, right? And it’s the height of this Dodd-Frank legislation and all these every day. I worked as a trader for the financial stocks from oh nine to 11, and it’s all about regulation, capital requirements, statutes and finance and law are so highly intertwined. So I was considering it anyway. I was considering it just because I figured if I’m going to do this for the next 30, 35 years, it’s probably better to get a little bit of a deeper background If it costs me a year, it costs me a year of work, but I think I’ll be able to get more out of it. So I was looking at it, I was like, I don’t know where I have time to study for the lsat, my law school class, these kids have a 3.95 GPA, they’re all brilliant, and they take years to study for this lsat. And I’m like, man, I don’t know if I have time. It was truly, I think Heaven sent that I ran into the dean of admissions at a wedding reception and that there was only this rule that existed for one year from the American Bar Association that allowed them to waive an LSAT requirement if you had a good enough GPA and GMAT score. So thank you. Dean Mumford.

Kyle Knowles (00:24:45):
Shout out to Dean Mumford.

David Doty (00:24:47):

Kyle Knowles (00:24:49):
Alright, so you did an MBA and you did a jd and you’ve been on Wall Street doing finance. You didn’t go back to Wall Street?

David Doty (00:25:02):

Why? BYU has some great alum. So one day, the CFO of Haynes, Michael Jordan Haynes underwear, socks, the CFO comes back and I run into him and he’s like, David, I have the perfect job for you. Come out to North Carolina, which I love the Carolinas growing up on the East coast. I love the Carolinas. We would vacation there, come out to North Carolina. You can help run our risk management for the company. So our commodity risk management, our balance sheet, and work in our treasury department. And I thought if the CFO of a Fortune 500 company is telling me to come out and work somewhere, I’m thinking I’m going to do it. So I went out there and four months later he retired, but I worked there for a couple of years and set up how should the company think about buying cotton for all of its products globally?

How should we think about debt ratios and what kind of capital structure we have? And so, I mean, this is a job that I was made for that job. The problem was I’m sitting in a corporate office in Winston-Salem, North Carolina, buying cotton futures, and I just didn’t feel like it was dynamic enough, and it was cool. I get to go in and present to the CEO every month and talk to the CFO constantly. That’s a pretty cool job for a kid coming out of business school. But at the end of the day, I have that entrepreneurial itch that I’m sure all the other 27 people that have been on this podcast have had. And it wasn’t going away. We had had at that point, our first small business. It was a frozen yogurt store. It was the easiest small business to have, and we were owning it remotely. And I was like, we just got to go back. We have to go back. I have to do this small business thing. I just can’t sit at a corporate desk all day. I must have undiagnosed A DHD or something, but I need to get back and work in small business again.

Kyle Knowles (00:27:08):
Let’s talk about the frozen yogurt.

David Doty (00:27:11):

Kyle Knowles (00:27:12):
Was it a franchise that you owned or you opened your own frozen yogurt

David Doty (00:27:16):
Place? Yeah, so because my family had moved a couple times here in the state of Utah, instead of selling every house as we had moved, I just had held onto them and I was, at this point, we had two or three rentals. I was looking for another one, and I’m on the MLS looking for another property, and I see this building put on there for a certain price, and I’m like, there’s no way that building is selling for that. I called the broker and he says, yeah, you’re right. He said, I’m a real estate agent, so I’m posting this business for sale in the MLS, hoping to get an extra lead that might help someone buy this business. And I said, well, I’m not super interested, but send me the numbers anyway, I’d never looked at a small business to buy before. And I looked through and I said, I think I could do this.

It’s a mile from my house. It’s profitable. It has existing team in place, and it’s not like a fine dining steakhouse. We’re talking a frozen yogurt store where I’m walking in and I’m seeing a bunch of 16-year-old kids running it. I think I can figure it out. So at that time, I was a student and we had some savings, but most of our money was tied up in real estate projects. I didn’t know how I was going to buy it. So I get this question all the time from students or from people that are working in corporate worlds. How do you buy a business? I tell ’em, I’ve done it every way. But the way we did it this time was I called up my mom and I said, mom, is this business I want to buy? And she’s like, well, how much is it? I said, well, it’s $300,000. She said, okay, I have IRA money that we can use. So she went and self-directed her IRA. She sold her stock in Amazon and Apple and all that stuff back in 2015. If you pull up the charts right now,

You’ll see my mom has given up a lot. And she helped me buy that first business on September 15th, 2015, and took a chance on her son, who’s never owned a small business, said that was her. She only had a slightly more than that. That was her entire life savings. And my mom went and liquidated the stock in those companies to invest in the stock of me. Several years later, we operated the business, paid her back in full, and have since just obviously grown it to the point now where that business was doing $400,000 a year in revenue. This year we’ll be doing almost 15. And it’s all thanks to a mom that believed in her son and said, this is my greater work is to invest in you than to invest in anywhere else. So that lady is just didn’t give up her parenting at age 18 or 20 or whatever. She views it as a lifelong commitment, and I just couldn’t be more grateful.

Kyle Knowles (00:30:10):
That’s amazing. Are you an only child?

David Doty (00:30:12):
I’m one of five.

Kyle Knowles (00:30:13):
One of five. But

David Doty (00:30:14):
Definitely her favorite.

Kyle Knowles (00:30:17):
You must be. Must be if she took a chance on you like

David Doty (00:30:21):
That. Yeah. So she has this thing where she says she has her top three at all times, said, am I always in the top three? She said, 95% of the time you are. So yeah, so I’m doing pretty good.

Kyle Knowles (00:30:31):
So you’re at Hanes and you decide with your wife, and did you have children at this point too?

David Doty (00:30:37):
Yeah, we had

Kyle Knowles (00:30:38):
Three to uproot everyone from the Carolinas come back to Utah.

David Doty (00:30:41):
We had just had our fourth kid. And so I’m sitting there, and again, I’m just feeling this edge like, oh my gosh, I got to get back out there. I look up, I’m looking at small business listings and I don’t know if you’ve looked at ’em before. It’s not like the MLS for real estate. You can look out there on the MLS and probably see 98, 90 9% of all listings out there, right? Small business is not the same way. It’s this hodgepodge of classified some brokers. And to be perfectly honest, how I feel now is there’s a lot of listing. People are willing to sell, but they don’t know what to do. They don’t know where to put it. They don’t know who to call. They’re basically unlisted listings. I get a call, this guy Sean calls me. So a doctor sold me that frozen yogurt store.

The guy had a second one that this other guy bought, and I’d always stayed in contact with him. We had same vendors. We shared an employee actually. So I always stayed in contact with Sean. He calls me one day, I’m sitting in North Carolina in July. He says, David, I got to sell my store. And I’m like, okay, what’s going on? He said, I have been collecting the sales tax from these customers for the last two years. I’ve never paid at the state. Well, they got one of it. I have all of these back due taxes to pay penalties, interest, blah, blah, blah. He’s like, I just need to sell and I need to sell quick my eyes just like this is my chance. I knew how well that store had performed. And so six weeks later, we bought it from him and he even financed part of it for us.

So when I say I bought businesses a lot of different ways, I’ve used SBA seller financing an IRA to do that. I’ve done cash, we’ve done it all. But those un marketed or unlisted listings, those are the ones where you find all the meat. So if I had just not stayed in contact with him, then it probably wouldn’t have come up. But it was really this blessing of having him in my network and talking to him that I became his first call, and that’s how we were able to buy that and sell it for five times as much as a couple years later. He basically gave it away. He gave it away for less than what we made on it in the first year.

Kyle Knowles (00:33:03):
Was that the turning point to come back to Utah was the second store. That

David Doty (00:33:06):
Was it, the one we had out here. Everyone knows the saying when the cat’s away, the mice will play. The store was failing. I felt this anxiety, and there were several months where I was actually funding some of the expenses from the store with my corporate paycheck. So I have this anxiety come back because again, this is in my bones, this I don’t fail. This is not going to fail. This is not going to happen. And so when I had the sister store come up for sale that I knew performed super well and we were going to get a steal of a deal on, I said, that’s enough. But it’s also that same summer when the Lehi Bakery came for sale. We lived in Lehi for a season while I was in school, and I would take my boys there to get donuts every Wednesday morning.

We’d go, we’d get some donuts, we’d sit down in the parking lot, we’d eat ’em and watch the guys doing CrossFit in the little gym behind us. We’d be eating our donuts and they’re like throwing around the cowbell. So I actually have a picture that’s one of my favorite pictures I have of my little boys is for one of those mornings, so it was during that summer of 2018 where we bought these two businesses that changed our lives, the one that we were to buy and then eventually sell for a big profit that we got such a deal on. And then kind of the other side of the coin, that one is the Lehi Bakery, which has now just, we’ve owned it now for slightly over five years. That is just our long-term beloved brand that we’re going to take. And we’re not looking to flip it. We’re not looking to sell it in a couple years. We’re looking to have this thing for the next 30 years to make it into a long tenured beloved bakery name.

Kyle Knowles (00:34:48):
Would you buy Square Donuts when you went to the Lehi Bakery?

David Doty (00:34:51):
Oh yes. We’d buy ’em all. But

Kyle Knowles (00:34:53):
That’s the one they’re famous for, correct?

David Doty (00:34:55):
That’s what they’re famous for. I mean, yeah. So you have this, at that point, when we bought it, 49-year-old bakery in this hole in the wall place, I don’t know if you’d been to the old, I’ve been the old one. Yes. And every day sells out by 10 o’clock every day. If you weren’t there early, there were things that they had that just, if you weren’t there at seven o’clock, you weren’t guaranteed that it was going to be there later on in the day. So as we were looking at that business, I never even, I can’t even make a Betty Crocker cupcake at this point. I have no bakery skills at all. Literally, my skillset at this point is I can pour pre-made frozen yogurt mix in the back of a tailor machine. That’s my skillset. So we’re looking at this, have no experience, but what I do know is from my life is I can figure out things, right?

Never really run before, but I could figure it out. Never. I don’t have this great finance knowledge, but I can figure it out. And so we buy it in December of 2018. I still don’t know why that bank gave me that loan, but they did. And I just proceeded at that point to every day. At that point, it was five days a week, Tuesday through Saturday, 1:00 AM five days a week, 10, 12 hours a day every day to learn this thing because all my eggs were in that basket. Everything was in that basket. But the blessing of buying an existing business, I’m not sure how many people you’ve talked to about entrepreneurship through acquisition, but one of the blessings is that you’re walking into, I knew on day one, December 5th, 2018, going to be customers flooding through that door. And that was great. And thankfully, we also had a seller that was understanding of my position, stayed with me for six months. Brent Tuckett stayed with me for six months to make sure that the handoff of the recipes and the processes that they had, the time went well. Did

Kyle Knowles (00:36:51):
You use the funds from the sell of the other business to buy Lehi Bakery, or did you buy them both at the same time?

David Doty (00:36:59):
We bought them around the same time. So I mean, at that time I was working a corporate job. We had a little bit of savings. We didn’t have much. I had to borrow against everything we had. I borrowed against paid off cars. I borrowed money from a friend against our frozen yogurt machines at our first store. I borrowed money from everywhere. In some ways I can’t get trouble. I think it almost was a borderline against the rules, but we got it done. So we pulled every resource we had, so all the eggs were in that basket, and there was no option to fail mean. But thankfully, because of the strength and the reputation and why we bought the bakery in the first place, we were able to not just make the payments. We paid off the bakery in three years. We just hammered that dead away. We just didn’t want that as a risk going forward.

Kyle Knowles (00:37:53):
You were all in

David Doty (00:37:55):
A hundred percent,

Kyle Knowles (00:37:55):
Literally all in, I mean,

David Doty (00:37:58):
Here I have all these classmates from law school, from my MBA, I mean still friends from Wall Street that are working there. I’m working at 1:00 AM and probably the Crusties Bakery in the United States. I remember my first day walking in, there’s buckets on the ground. I’m like, why are there buckets here? They’re catching the rain or the melting snow as it comes through the ceiling. I’m like, what did I just buy? But I had this opportunity, and I’m sure some other dads can relate to it, right? As much as it was a dirty job and people kind of looked on these dirty jobs, I think in some ways, I think that’s why Mike Rose been so successful in what he’s done. But we’ve just been, I was able to go in and say, working at this bakery is actually going to make our family monetarily three or four times as much money as it used to working these fancy jobs at Haynes.

Or we made twice as much money that first year that bakery than I did working on Wall Street. And I felt even not just because of the money, it’s not because of the money, but I felt so much more pride in it. I did it with my own hands, right? My little boy would come in and work the cash register. My wife would come in and make some bread on the hard heavy days the night before Thanksgiving, we were all in there for 12 hours making, but flake rolls and everything. So there was just so much more pride that came from that for me than pushing the buttons on the keyboard. So as much as we’ve enjoyed financial success personally, and been able to give a lot of that back to our employees, man, it is just been so much more rewarding to drive this ship. And if you’ve seen our new building now down there on Main Street, we just finished completion of a three and a half million dollars state-of-the-Art Bakery down there. We just take a lot of pride in that, that we’re able to change the lives for our employees, for the customer experience, and deliver more in ways that the bakery has never had been able to before.

Kyle Knowles (00:40:06):
When did the new building open then?

David Doty (00:40:09):
The new, I can tell you, it was the day I was at the Michigan, Ohio State football game. Was that three weeks ago? Three and a half weeks ago, I had bought tickets to the Michigan, Ohio State football game, take my son Calvin to, and because some piece of equipment got delayed, it was supposed to open on Tuesday, it got pushed to Saturday. I missed the grand opening of it. But yeah, so I think it was November 24th or something like that, somewhere around there. But we opened it recently and it’s just no super big grand opening. The mare came, we cut a little piece of ribbon, but we just continued shouldering on. There was no need to make a super big deal out of it.

Kyle Knowles (00:40:49):
And that was how many years after you bought

David Doty (00:40:52):
It? Just under five years.

Kyle Knowles (00:40:55):
Amazing. So

David Doty (00:40:55):
Step, everybody gets excited about doing step number 10, 11, 12, 30, 40, 50. The fact is, in my mind, it’s very linear. You do step one. Step one was come in, I had no recipe book. Everything Brent did was touch, feel, didn’t work for me without that experience, right? He did it for 50 years. He could touch and feel his way around. That’s too stiff. Add more water. I said, Brent, I need to measure things out. So we built a recipe book and then we took our operations to another level. There’s a company here in Lehi called Jolt, I don’t know if you’ve seen that name around. Guy comes in one day, he’s like, David, what’s some of the problems you’re having? And I said, boom, boom, boom, boom, boom, all these operations. He’s like, I can solve 95% of that for you. So he implemented these systems with these checklists, right?

And it’s helped our operations run so smoothly. He’s like, Chick-fil-A all across the country uses Jolt to help make their operations happen better. So we did that. It’s a company that comes in and helps you, or they have a software. It’s a software, it’s a checklist software. And so instead of how I had done up to that point paper checklist, write your initials next to the fact that you cleaned this or did that didn’t happen with the regularity. I don’t care who signed their names next to it, it didn’t always happen. Whereas they come in and they’re like, we have this on an iPad. If you say you want your mixing bowl clean, you can have them take a picture of it to show that it’s done. More accountability. It names stamps, it timestamps it, pictures counting, whatever it is. And so we still use that to this day across all of our businesses, all these things to help our operations run smooth, because I can’t spin all these 50 plates at the same time unless I got some really good foundations for everything.

So everything is, anytime something breaks in our business, we build another jolt item to make sure it doesn’t happen again. You do that every day across every business, 365 days a year. You just get some super smooth operations. And that’s what we need. That’s why we’ve been able to handle the volume of the bakery tripling in five years, is because we’ve been able to have this safety in operations. So yeah, it would be super exciting if the first thing I did at the bakery was build this brand new building, but it’s been recipes, it’s been operations, it’s been the financial, it’s take down the debt we paid off, paid off the business and the real estate. Then you make the plans and you do that. And so now it’s to expanding. Now it’s to a second and third store next year. But now we have the foundation to build from.

So I’m just like everybody else, I really can’t wait till we get to store number 50, but you got to get your second store. How do you make sure that quality consistency stays the same between the first and the second store? I don’t want people saying to me, February of next year, David, that Saratoga store’s a real disappointment. The product’s totally different over there. That’s just not going to fly with me because the quality and the standard, it has to be exact same. So now again, we’re implementing more software solutions into their training videos of what is the exact standard of how you make this donut with how you clean this, with how you maintain that. How do you clean this frying oil? How do you make this donut look consistent every day, every time? How do you do that? And so I’m learning, we’ve never had a second store where we’ve made products like this. So how do we do it? How do we have that? Consistency is new for me. It’s not new for people in this industry, but it’s new for me.

Kyle Knowles (00:44:39):
And did you always have the vision that you were going to expand or were you heads down, we’re going to make this store work, and then it was very successful, and then you could look up and go, okay, now let’s do a new building.

David Doty (00:44:51):
We knew we needed to improve the building. I made a promise to the employees on day one where I said, this building will not be here forever. We had no heater, air conditioning, people were getting injured in there all the time. I mean, it was, and we were busting at the seams. So that building being approved was step one. But we would have customers come in all the time and asking, would you please open a store here? I’ve had people asking to franchise that bakery since the first months we owned it. And the first guy that came in, he’s from Dallas, he’s like, I really want to open a Lehi Bakery down in Dallas. I said, dude, there’s nothing for you to franchise here. I don’t even have a recipe book. And he didn’t really understand that. So there has to be the structure in place that can support the weight.

And there was nothing there. But eight months ago, I had someone who manages over a billion dollars, not more than five miles from where we’re sitting today. He came and he said, David, come to my office. He said, I want to take you nationwide, like crumble. And for some reason it just wasn’t a first off. That’s saying something because that’s been the most rapid and amazing expansion I’ve ever seen. But it wasn’t a personality fit in terms of being the right partner. But we just have a different outlook on how we want to grow and expand. And it’s not the same. Crumble is more of a franchise model, and they lease their spaces where I’m just more of in the camp of a Chick-fil-A, where I wouldn’t say, let’s keep them corporate owned so we can control the quality as best we can. We want to own our real estate. We like the financial benefits of it. As long as the long-term benefits of owning your own real estate, it is really hard to compete with someone that doesn’t pay royalties and doesn’t have a rent payment. And so going to store number two and number three has become one because I saw that people were asking for it, but then if we’ve built the structure, we can do it. We can duplicate it if we have the structure in place.

Kyle Knowles (00:47:02):
So you’ve said we are in the donut business, but more importantly, we are in the people business. Can you explain that?

David Doty (00:47:12):
Yeah. I think that’s hospitality across the board in if you work in a hotel, yes, you sell rooms by the night. That’s how the revenue comes in. But Marriott, or IHG or any of these places, the people come to them because of not just the quality of the rooms, but it’s the quality of the service they provide. So for us, there’s two sides of the people equation. There’s the employee side, and then there’s the customer side. I mean, one of the conversations we’re having right now inside us is we’re looking again with metrics and how to be better is if we’re expecting 60 people to come in or 60 groups to come through the front door in an hour at the bakery on a Friday morning, how many people should we have to serve them so we don’t have this interaction? What else? This is your total and move on.

How long should we expect our team to spend with a group to make them not feel rushed, to make them feel seen, to spend the time to explain the donut to them or to talk to them about the event they’re ordering a cake for doing all of that. So on that side of it, we are trying to make sure that people interaction with the customer side to make them feel special. I think that’s been what’s made the bakery successful, is having that tone. And there’s a little time when I broke my ankle and all I could do at that point was be on my little knee scooter and hand out donut holes. And people said, man, you’re going to be the grip, the best Walmart reader that exists when you retire.

And so that’s the tone I try to set, is that we see the customer. I never ever want to be the place that just shoves people through their cattle. So that’s the one side. When little kids come in, if they don’t get a donut hole and we don’t look them in the eye and give it to ’em, make them feel special, this is the coolest day. You get to come get a donut, and then they’re giving me an extra one for free. Those kids are our future customers. Make them feel special, make them feel like, yes, you came here and you won. The other side of it’s the employees. And this is probably my favorite part of the business in terms of the strategy or the important thing. We have the hardest jobs to hire for in this entire town, maybe even in the state.

We’re talking in a state here with unemployment, what below 3%. How do I get people to come in to work at that point, at a hundred year old building with no heater, air conditioning, to come in at one in the morning, fry donuts get covered in oil and flour. How do I get those people? Who are those people who wants that job? And so we found some pockets of people that like that, right? My favorite contingent at our Lehi Bakery is a stay-at-home mom. But she wants to get out of the house, come out, make a little amount money for her family before her kids wake up or before her husband leaves in the morning. They come in, they make donuts, they fry, they decorate, and then they go home. We found these little pockets of people that really work and work well. They’re so responsible, and I’ve been able to have amazing retention with them across the board.

I think in 2021 or 2020, I lost one person out of 40 at our bakery. They like working with each other. I think for me going forward is we’re always trying to find ways to find the best people, but we’ve added paid healthcare for our people. We’ve added 401k stuff. But then starting next month, we’re going to be doing something even more radical, which is not very common in our industries. We’re going to be making our bakery employee owned. Because if I’m thinking about what’s better than me being there on my knee scooter, handing out donut holes and making sure every customer feels seen is if I had 10 people at our bakery every day giving that same care to every product, every icing, every donut, making sure it looks perfect, every customer interaction. If we can have 10 owners in that building, I just can’t think of a better way to serve people with hospitality than if the owner does it in 10 different ways every time they’re there.

And as we expand, I think this is also going to be a helper for us. Finding and attracting the best talent in the industry. If you set yourself apart in how you compensate and treat your employees within your industry, you’re going to attract the best no matter what it is. Tech, financial services, we’re a little hometown bakery. You can do that and do that the best in your industry. You’re going to have the best people and everything I’ve seen, if you have the best people, you win every time. And so that’s my outlook for us, is find and attract the best. And with that kind of momentum, with owning our real estate with 54 years of brand recognition with quality lines, donuts, cookies, cakes, I just try to build this mode of safety and protection. And every day we’re just adding more financial strength, people adding, working on our recipes. Everything we do every day is to make us a stronger company. And that’s why sales are up 35% this year in a tough food environment.

Kyle Knowles (00:52:41):
And so what you’ve done is super unique in the food industry. It’s unheard of. If someone working at a bakery that’s not, I dunno, like a Smith’s or Kroger, right? That’s a two or three store bakery. It’s very rare that someone would have health insurance or 401k or these kinds of things, right?

David Doty (00:53:02):
Oh, I think 4 0 1 ks might be more common. That really doesn’t cost the employer that much, but the healthcare side, I had that one person that left in 2020 said, why are you leaving? She was really great. She was an amazing cake decorator. She said, David, I need healthcare. And my flag just went up and I said, I can’t be losing great people because I don’t want to have that expense. So we added it. The next year we a healthcare stipend for all of our people. Most of it covers their entire cost of their healthcare. And then what recently just came up last week, we lost one of the moms at our bakery. This actually came up last week, one of my favorite employees there. She said, David, I love the bakery, but the hours are killing me. So for a while, because the volume has risen so much, the answer was just start a little bit earlier, start a little bit earlier, start a little bit earlier.

And that’s just has caused a little bit of employee burnout. And so a couple days ago, I went into my general manager and my head baker there, and I said, we need to redesign this process to make it more sustainable for our employees every six months. I don’t want to burn through another amazing person. We fought so hard to find because they, as she said, turned into a zombie mom. I said, I can’t have that for her personally or for this business. So we’re in the process of saying, okay, what do we need to do to redesign our processes to make us a little bit more employee friendly? So just that anywhere else, anybody’s working process improvement. And it’s same thing for us. Even after five years, there are still major things that we can do to be better

Kyle Knowles (00:54:51):
Square donuts. And this year you were on track to sell a million, about

David Doty (00:54:58):
A million

Kyle Knowles (00:54:59):
Of it’s your number one seller, right? Yes. It accounts for a third of your revenues or something like that. The Square Donuts of Lehi, they’re famous for. Have you crossed that number yet? I have

David Doty (00:55:12):
To check. We’re getting really close. A school ordered 3000 today. That always helps.

Kyle Knowles (00:55:18):
So you might get close, you still have what, 11 days?

David Doty (00:55:20):
Yeah. It’s wild to me. Sometimes I just stand there and I just look from the back through that little black swinging door with a little window. And I said, where do all these people come from? And then I go out there and I talk to ’em, oh, I’m driving Every time I drive from Boise down to see our family down in Tucson or whatever. Every time we always get off the exit here in Lehi and come in. I’m like, it’s amazing sometimes where these people actually come from when you ask them. But I mean, that’s again, one of the blessings of buying a 50-year-old business is you’ve built these connections from everywhere. Hey, every time my grandkids come in from Michigan, we always bring them in every time. It’s become tradition for so many people. And that’s one thing I really love about this business is I used to work on Wall Street. People would pick it outside of our building, occupy Wall Street. No one gets mad at me now. No one gets mad at the donut guy. It’s a pretty good life, and most problems can be fixed with a couple more donuts. So it’s not a bad life.

Kyle Knowles (00:56:24):
People are happy to come in there. I mean, you have customers that are smiling as they come in there. Yes, right. They know they’re going to get something amazing.

David Doty (00:56:33):
My favorite thing to do at the bakery is to give tours, whether it was the old building or the new one. Yesterday I had some, I think 10, 11-year-old girls from a local church group came by and we just took ’em around for an hour. And those girls, you just would’ve thought that they were at Disneyland. They just loved it. All my stories about each piece of equipment and stuff that for me at this point, it’s not as exciting anymore, but these girls love it. Or my real favorite group is when I get the three and 4-year-old kids from a preschool, they come in with their little chef hats on and their little aprons. I love that. That’s what makes it fun. I have such a dynamic life at this point. We’re hopping between the bakery to Magee’s. We have a little pizza store we run, and I definitely have my meetings. We’re talking about where to order from this product the best. And there’s the business side of it. There’s the people side. I have collect some money on our catering stuff. Stuff’s all out there. But when I see in my calendar pops up, I have a tour to do at the bakery with a bunch of kids.

My favorite thing on the whole calendar, I think that for me goes back to, I told you a big sports fan growing up, Jerry Rice was my favorite football player and I was in fifth grade, the school book fair. There was this book addresses for all of your favorite athletes, this glass book fairs like Roberto, I mean all the way. I mean, there must’ve been a thousand people in there. I probably sent out 200 letters with a sports card in there to 200 people. One person responded, Jerry Rice responded, his assistant probably assigned photo, and I always have that photo. I always remember it because again, it made me feel the day that came in the mail. I checked the mail every day for two months hoping somebody would write back, I don’t care. Give me Omar Viscal from the Indians, whoever it is. I just want one back to show that this book worked.

I got it back from Jerry Rice and I still have that picture and it’s signed. And I kept the letter and the sports card and all that stuff. And just that to me, stuck out is when you have your little fan group, even if they’re a bunch of three-year-old kids, they just literally just want a donut. Make ’em feel seen. That’s how you build fans for life. So I tell my people at the front counter every day, make a fan for life. Walk ’em to their car with their donuts, ask them what it’s for. It’s for their daughter’s wedding. It’s for they hit a goal in their kindergarten class and they’re excited to talk about it. But if you do that with one person every day, that’s how they built this 54-year-old bakery that’s still growing 30 plus percent a year is because we do those little things and see everybody individually.

Kyle Knowles (00:59:31):
I love that. So getting that photo from Jerry Rice, he will never not be your favorite football player ever the rest of your life

David Doty (00:59:42):
Now. Oh, absolutely.

Kyle Knowles (00:59:43):
Right. No one’s going to take his place

David Doty (00:59:45):
Because you have that. Yeah, and people told me once, they said at a restaurant, a lot of times they’re coming in to celebrate or to medicate like medicate. They’re having a hard time. We have a little cookie store we help with and there’s so many times a woman will pull up to get her drink and she’s just crying. And I’ve told my people it costs three or $4 to give that lady something for free and to help turn her day around. Just do it. It’s my money. It’s not yours. Just give it to her. And so if we can hit in those moments when it matters most to people you can really help. That’s in that inside out movie. That’s a core memory. That’s a core memory of whenever Cal and I ran on the field at the Michigan, Ohio State game a few weeks ago, I mean it’s getting that letter in the mail. It’s taking that time to take that kid on a tour. That kid came in a month ago crying with his mom, and I just saw him and I’m like, I don’t know. Just go ask. Hey, would he like a tour of the bakery? We took him around for 20 minutes. That kid left the happiest kid ever. We sent him home with a little cake too. You don’t think that kid’s going to bring his kid in 20 years and tell that story? That’s the stuff we do to try to make a difference.

Kyle Knowles (01:01:08):
I love these stories. So how did you become a Michigan fan?

David Doty (01:01:11):
I’m not. I just didn’t want to get beat up. So with the game this year, the stakes were so high because next year the playoff goes to 12 teams. This year it’s four. It’s the last year, it’s at four. So you had number two, verse number three, and I said, Cal, we’re going to go. So we went out to Michigan and it was quasi work trip. There’s a company I really respect out there called Zingerman’s. They have this little community of businesses where they have a roadhouse and a bake house and a deli, and they kind of cross pollinate. They make the bread at the bake house and it serves the restaurants and the deli and they, it’s really cool company. It was named by Inc. Is the coolest company in America a couple decades ago. And so I viewed it as this chance to go out to a cool football game with such high importance.

But then secondly, to go out and see Zingerman’s and just try the food. What was amazing when I was out there in Michigan, I took my nine-year-old cow. So we go to the deli, you have to wait two hours for your sandwich. I mean just got like a Ruben. It took them two hours, but it’s okay. It was worth it. It was more just even the of being like, man, look at this business thriving. Even after all these decades of being open, we go to the Roadhouse at night, which is like burgers and barbecue and stuff. I’m sitting there with Cal and we’re getting excited about the game tomorrow and I see the founder in there walking around to the tables delivering dessert. This guy has a hundred million dollars business. I’m sure it’s at least a hundred million coolest company in America. It’s a Friday night.

You would think that he would be anywhere else. He’s walking around pouring water in people’s glasses at their tables. I mean the hallmark of humility. He’s doing a $12 an hour job and he’s dealing with a smile and face. So I recognize him because I’ve seen pictures of him before and I just grabbed them. I actually had grab, I said, Cal, can you just make sure to ask him what his name is? And I told him, I said, what you’ve done here with Zingerman’s, I read about in a book called Small Giants. I said, what you did has helped inspire me to get started. We have a bakery, we have Magee’s, we have a pizzeria and some of them the way that we make the magee’s cake at Lehi Bakery just because we have such better ovens and capacity to do it. So I told ’em like, you’ve inspired me to do what I do.

And they do some things different than us in terms of their employees and their model. They have a partnership model where he has a managing partner at each store and that’s how he does it. But he gave me his personal business card and he said, anytime you ever need anything, just contact me. Just here’s my email. You just call whatever you need. And so I just have come to love these authentic people that he come across just so much today of wanting to appear to be the expert and exclusive and everything. Then there’s the people that walk around and pour your water for you. And I’m sure to everybody else in that restaurant, they didn’t know who he was, but he didn’t need that. He didn’t need to know. He didn’t need everyone to know that he has achieved so much. He was just happy to serve. Have you called him or emailed him or I emailed him, yeah. So part of next year, what I want to do is there’s within our industry’s people that are known to be the best for certain things. So what they do really well is how they work all their businesses, their various interests together.

And Chick-fil-A have really great real estate strategies. And so there’s some really interesting companies out of California, like one called Cali Barbecue. He treats his restaurant. It’s a media company. So much media put out about how they do it, what they do. I mean not just the videos of them smoking the ribs or anything like that. Just everything they do is to make their restaurant like a media company. So there’s all these different people that do different aspects of if you were to go up and down an income statement, say Chick-fil-A’s great here on the service side and marketing, these TV are great and real estate on this side. So part of what I want to do next year is go around and find some of these people and go out and visit their restaurant or their concepts for three to five days and just learn from them because I’m smart. I’ve been to a lot of school, I’m knee deep in all the stuff we do, but there are some people that are way smarter and way further down the line than me and I’m going to look to learn from them.

Kyle Knowles (01:06:01):
That sounds like an awesome 2024

David Doty (01:06:05):
Goal. I mean San Diego, I mean we’ll go across the country finding these places. So a little bit of a guy, FII Diners Drive-ins and Dives kind of thing, just not focused on the food. So much more on how do you run your business and do it really well. And you’re excellent at this. Just let me learn from

Kyle Knowles (01:06:24):
You. Are you going to do any content clips or blogs and stuff as you go?

David Doty (01:06:27):

Kyle Knowles (01:06:28):
Let us all in on what you’re learning.

David Doty (01:06:31):
So I hired a marketing person to help us this year and told her that we’d probably be doing some traveling to create some content, but also just to document it for us. If I could put it into some kind of written format as well to share it, that would be good too.

Kyle Knowles (01:06:52):
Awesome. I look forward to hearing more about that. So we’re running out of time here, David, I do have a lightning round of questions and just a couple more to end with, but what is your favorite candy bar?

David Doty (01:07:04):

Kyle Knowles (01:07:05):
Favorite music artist?

David Doty (01:07:07):
Oh, come on. We Banjo three. I like bluegrass. That’s weird. You don’t get that too often out here in Utah. But I love bluegrass.

Kyle Knowles (01:07:20):
Interesting choice. I’m going to look ’em up. Favorite cereal?

David Doty (01:07:24):
Favorite cereal I don’t drink. Growing up it was Frosted Mini Wheats and I’d sneak some Oreos on the bottom just to, yeah, that’s what I would do.

Kyle Knowles (01:07:32):
I’ve never heard of that combination, but it sounds amazing. Yeah,

David Doty (01:07:35):
It hit ’em from mom. So ’em get soggy on the bottom and finished with that at the end. Yeah.

Kyle Knowles (01:07:40):
Nice. Mac or pc?

David Doty (01:07:43):
Oh, Mac,

Kyle Knowles (01:07:45):
Google or Microsoft.

David Doty (01:07:46):

Kyle Knowles (01:07:48):
Dogs or cats?

David Doty (01:07:50):

Kyle Knowles (01:07:52):
You hesitated. I

David Doty (01:07:53):
Had a cat growing up and we have dogs now and the dogs are winning me over.

Kyle Knowles (01:07:58):
Okay. Phantom or Les Mis.

David Doty (01:08:01):
Les Mis for sure.

Kyle Knowles (01:08:03):
So one of the questions I had because we didn’t get time to get further down the journey, you went in and were hands-on at Lehi Bakery. You eventually expanded and bought some other restaurants. You mentioned Magee’s. Were you hands-on at each of these as you bought them or was it mostly Lehi Bakery where you were up at 1:00 AM? The

David Doty (01:08:25):
Hard part at this point is at this point we have 300 plus employees and it is gotten bigger. I love doing the hands-on stuff. There’s no better way to learn how to run a business better than by getting in there and seeing it yourself. So I get calls from people, I’m going to buy this and just, it’s a franchise and I’ll just hire people to run it. You’re going to have a super inefficient business if you don’t know what to look for or how to hire it or what you’re training for, it’s just not going to run well. We bought in April this year. I was there busting tables today for the Wednesday buffet because that’s the only skill I have there. I don’t know how to make the steaks. I’ve never catered an event. So we bought it because of the strength of the name.

It was a good financial purpose. It had some benefits to the bakery of bringing this legacy cake that everybody loves. So there was lots of benefits to it, but I wish I had the time now with five kids and all these other businesses and the construction projects, which is my favorite thing to do besides the tours, I can’t give 30 hours a week to going to work on the line I have. It’s not because I am prideful about it. I don’t want to be like a line cook, it’s just that I don’t have the time for it. So as we expand going forward, I’ll try to do the best I can to understand on the ground operations, but unfortunately I just don’t have time to do it in the depth that I used to.

Kyle Knowles (01:10:03):
What’s the best piece of business advice you’ve ever been given

David Doty (01:10:06):
In business school? So I went back with seven years of experience to business school, whereas a lot of my classmates were two years at a job and they didn’t work on Wall Street. So in some ways I went back and there was a lot of stuff that was not as much for me, but there was one class, one class in law school, one class in MBA school that stay with me in MBA. I remember a class we’re talking about debt. I had my CFA charter, I can do income statements, balance sheets around corners, everybody else in that class, but I just remember this class, he framed it in a new way was we were talking about debt and he just kept talking about we were going through this case and it came down to this thing of the way we make decisions and we have debt on the balance or debt on the balance sheet and the payment to make is different than if you didn’t.

While we do take out and some leverage to buy company, I find so much more freedom when we don’t have debt on there. I’m able to be more with my employees, I’m able to give stuff away to make customer happier without worrying, oh my gosh, this is going to stress the financials. So we’re used to be so much more generous and make so much better long-term decisions without debt. So for us, getting rid of debt quickly and strengthening, strengthening that financial mode is always good. And then the law school side, it was the first day of law school at BYU.

And this doesn’t necessarily business advice per se, but the BYU law school is named after a guy named Jay Ruben Clark. And he was a in the first presidency of the LDS church and he gave this talk once about those in the last wagon. And the story he’s trying to tell is these pioneers were coming across the United States. They were the people in the last wagon. These usually were people that just did not have much means they were the slowest, they were sick, they were struggling. And he just remember those people in the last wagon. And in our industry, I feel like oftentimes we get some of those people, they don’t have all the resources. This is the job that they’ve just because the way life happened to them, this wasn’t just a stopping point for them on a way, on a career path. This has become their career.

And just like my mom who didn’t have much grown up looking at these people as valuable individuals regardless of what their job title is and what their other opportunities are in life. And so even though it was just a talk about these, don’t forget the people, the little people. Don’t forget those people in the last wagon. Those are the people that have made Lehi Bakery great. Those moms, those donut friars that are getting off of, I have a guy right now who just second day I met him, he said, oh, where are you going? I said, I had another job. I homeless right now. And I was just shocked.

And it’s been such a blessing to have him with us and we’ve been able to make a difference in his life currently. And he’s on his way back, my manager’s telling me they’re buying their first house. I mean these people that never had opportunities, the opportunities to give them to them and that loyalty that they’re able to give back to you. That’s why my girl Caitlin worked for, not because I asked her to. She worked 30 straight hours making donuts around Halloween, 14,000 donuts. And I think she feels seen. And so again, we’re in the people business, so we take care of them and they take care of the business. And I think a lot of stuff we learn in school or on Wall Street or any of the stuff that really overcomplicates at the end of the day, you treat your people well, they’re going to go above and beyond for you.

Kyle Knowles (01:14:37):
I just love hearing these stories of how you’re helping people. So I really want to thank you for being here tonight. I have one last question. What is a book that you recommend the most to people?

David Doty (01:14:51):
I mentioned Small Giants earlier. It’s a great book that talks about small businesses that really want to be great. Just not necessarily huge, but be great. That’s a great book. And then it’s a classic, it’s like an OG book. I’m sure you’ve read the E-Myth. I love that book. Just talking about you might love being a technician, but running a business is something a little bit different and how we do that. And then maybe a little bit more of a recent book, Dan Martel wrote a book called Buy Back Your Time. It’s a book just about as an entrepreneur, how you should be thinking about what you do to free up your time to do certain tasks that you like to do. And so not only in there, do you talk about his process of how he buys back his own time by hiring other people to do things that he doesn’t like to do. He also just talked about being an entrepreneur and why some of us are built the way we are in some ways an addiction to chaos. You made a comment earlier, I was like, I think that connected with me there. There’s this element of chaos that sometimes this entrepreneur just love the art of problem solving. And so it helped me understand more about me being an entrepreneur and maybe why I am wired the way I’m wired. So buy back your time’s. Another good one.

Kyle Knowles (01:16:18):
Thank you David. Thank you for taking time out of your busy schedule to be here. I’m so glad that Ian Bowles, episode number 18 connected us. What you are doing is so unique in the restaurant and food industry. I know that you will have incredible success since you are designing and building values-based businesses. I hope that the way that you’re treating employees as a business owner will inspire other business owners to implement similar incentives to create sustainable cultures and jobs. And I wish you massive success in the years to come.

David Doty (01:16:54):
Thank you. And I guess I would just close with thank you for having me and that Success Words is a cool one, but I think it’s for us, for me especially in the last year, it’s been turning to be more significant and impacting these employees’ lives and impacting the lives of the customers. That is, like Kenny Chesney said, that’s the good stuff.