Walk me through how the deal with Sentinel worked. When I took over the holding company, the bank that held the loan on it was worried about bankruptcy. They wanted to give me another $5 million. I told them, “This company cannot sustain another $5 million debt.”

So I went out and got equity money. I think that’s the way to go now. If you’re under-capitalized, you’re not going to grow. There’s a lot of money out there in the equity market. They don’t know what to do with it. Everybody’s looking for a deal.

I presented the deal to Sentinel, and they put $8 million into it. The [holding] company was virtually bankrupt. The only asset [we] had was my knowledge and experiences with previous restaurant companies.

Let’s go back to those struggling California restaurants. What was going on there before you got involved? It was a management and people problem. See, I believe I’m not in the chicken business. I’m in the people business. I take care of my people, the ones who take care of the chicken business—cooking, cleaning, and serving. If you ignore those people, they’ll ignore your customer.

People don’t quit the job; they quit people. If people are not engaged, they are just passing their time until they find another job.

So you came in with a focus on people? People—and the system. Managers were given scorecards so they knew where they were. That was a big turn.

Were you taught that people-first philosophy or was it something you developed through your time with Church’s? I developed it. That was the period when I could finally put all of my experience to work because I was in a position where I could test my methods and myself. And it worked.

What did you find when you took over the Falcon Holdings units in the Midwest? After I looked at the previous style of management, I came up with a mission: “Inform, Influence, and Engage.”

Managers were disenchanted. Information was not being given to them. They did not have a scorecard. They didn’t even get the P&Ls for years and years. They didn’t know whether they were doing good or bad.

So what we did was set up a state-of-the-art information system. Every morning at four o’ clock, [managers] get their scorecard that tells them about the previous day and a continued running year-to-date scorecard.

We influence them by letting them know we’re chicken people and we understand the chicken business. We can break our machines apart and fix them in front of you. We influence them by showing them we have the knowledge.

And then we engage them. If somebody needs help, we provide it.

Many operators view providing health insurance as cost-prohibitive. How do you make it work? For us, it pays for itself. Employees are happy and that’s why our food costs are a couple of points better than most, that’s why labor is better than others by about a point or so. They don’t waste anything. They know they have to save our company money in order for our company to pay their health insurance.