BOOK REVIEW – SHUT UP AND LISTEN

We are not in the business of reviewing books, but we are always interested in best practices of very successful restaurant/hospitality operators. That is why we periodically report on commentary by CEOs such as Gene Lee of Darden and Danny Meyer of USHG. We therefore spent an interesting five hours on a flight to LA reading Fertitta’s “Shut Up and Listen”.

You don’t build a multi-billion dollar hospitality empire over 40 years without doing a lot of things right and we feel like we have had a ringside seat since Fertitta brought Landrys’s public with twenty units in the eighties. His “easy read”, of course flattering, provides an informative description of how he navigated the macro economic cycles, as well as his management principles.  This is especially interesting since his hospitality empire is about to become publicly held once again by way of a merger with SPAC, Fast Acquisition Corp. (FST).  In preview, we admire his style, and have to be impressed with his accomplishments but our relationship with him and FST is arms length. We haven’t spoken to Tilman Fertitta in decades, and we get no royalties on book sales.

No two management styles are exactly the same, nor should they be. It comes through loud and clear that Fertitta knows what he wants and when he wants it, and we have heard numerous comments through the years that Fertitta is demanding. However, nobody  has ever described to us that his requirements have been unreasonable, and that is consistent with his self evaluation. We get the impression that he pushes nobody harder than he pushes himself. We believe it is also telling that there aren’t a lot of ex-Fertitta executives out there. Seems like he must be more than careful about whom he brings aboard and most likely rewards them pretty well thereafter.

We won’t describe here all the details, but the chapters include: Hospitality Matters, Take the Word “No” Out of Your Vocabulary, Cater to the Masses, Working Capital is Everything, The Pitfalls of Property Leases, KNOW YOUR NUMBERS, Leverage Your Strengths, Partner with Complementary Strengths, Don’t Ever Lose the Hunger, LISTEN first, Change Change Change” and the Conclusion: Don’t Choose to Quit, Keep Punching.

Aside from the above, we found especially interesting Fertitta’s macro moves, leveraging his business in the bad times, staying liquid and buying distress properties that would almost certainly recover over time. This was brilliantly employed in the crash of 08-09, and Fertitta became a multi billionaire, allowing, among other things, him to personally buy the NBA’s Houston Rockets for $1.2 billion.

The one thing that Fertitta could not foresee, however, was a worldwide pandemic that mostly shut down his basketball arena, his casinos and his 450 dinner houses. This is not good when you are carrying $4.5 billion of debt, and that is when Fertitta’s Conclusion, written pre-pandemic in 2019, “Don’t Choose to Quit, Keep Punching” kicked in.

With the pending merger of the Fertitta hospitality empire into FST, just as the new COVID variant becomes of concern, check out the book, and stay tuned.

Roger Lipton