Torchy's Tacos: Mike Rypka

Long before founding Torchy’s Tacos, Mike Rypka was a troubled teenager trying to outrun his own self-destruction. Growing up around addiction and falling into heavy drug use himself, Mike’s future looked bleak—until he got clean and found refuge in kitchens. Cooking gave him structure, purpose, and eventually, a career. After years working in restaurants and corporate kitchens, Mike decided to take a risk on something smaller: a food truck on a street corner in Austin. In 2006, he launched Torchy’s with nothing but a dream, a fiery logo, and a menu full of bold flavors. That humble truck became the start of something much bigger. Today, Torchy’s is a national chain with more than 130 locations and annual sales topping $300 million. And through all of it, Mike has remained sober—more than three decades and counting. This episode was produced by Carla Esteves and edited by Kevin Leahy, with research by Katherine Sypher and music by Ramtin Arablouei. Our audio engineers were Patrick Murray and Gilly Moon. You can follow HIBT on X https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. Sign up for Guy’s newsletter at guyraz.com http://guyraz.com and on Substack https://guyraz.substack.com/. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

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• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

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• 3:45Guy Raz?

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• 4:27Guy Raz?

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• 5:13Speaker 01

  We were on a little spot on Fifth Street, and the landlord there, he never gave us a contract for what he wanted for rent. Like, we'd kept coming to him and asking him, like, "Hey, we need to figure something out. We don't want to stay here for free. We gotta pay you something, like, help us out." And he gave us some crazy, like, $10,000 or $15,000 bill that we had no clue that was even coming. And he's like, "Well, you got two days to pay it, or you're out of here."

• 5:42Guy Raz?

  Wow.

• 5:43Speaker 01

  We didn't have the $10,000 or $15,000 to pay him, and he literally just cut off our electricity in the middle of lunch.

• 5:50Guy Raz?

  He just came and what, what do you mean, he cut, he like, pulled the plug?

• 5:54Speaker 01

  No, he came with one of his guys and used bolt cutters and literally cut off the power.

• 6:08Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:20Guy Raz?

  I'm Guy Raz, and on the show today, how Mike Rypka went from dropping out of high school and dodging drug dealers to building one of the biggest, baddest taco chains in America, Torchies.

• 6:44Guy Raz?

  If you met Mike Rypka when he was a teenager, you'd conclude pretty quickly that he was going nowhere. Mike, as you will hear, was a total mess. And yet, he would go on to build one of the fastest-growing taco chains in America with over 130 locations and a business that now does over $300 million in sales a year. So you might call this a redemption story. Now, I know that can sound a little cliched and predictable, but the truth is, to get from where he was to where he is didn't happen because of miracles. It happened because Mike Rypka made a decision. He decided he didn't want to be a screw-up. He didn't want to be a victim.

• 7:29Guy Raz?

  And the path from rock bottom to where he is now didn't happen overnight. Mike would spend decades grinding it out in kitchens across the US. And in those kitchens, he didn't just learn how to cook for lots of people. He learned how to manage inventory and staff and customers. But by the time Mike hit his early 30s, he was out of work, broke, and trying to figure out how to make money. The answer came in a secondhand barbecue trailer that he bought and turned into a single taco truck in Austin. One truck, one man, and years of early mornings and late nights turned into a massive success story called Torch's Tacos.

• 8:14Guy Raz?

  And it happened in spite of, or maybe because of, Mike's serious struggles as a teenager. Struggles that landed him in a military academy and then eventually in rehab. Mike Rypka spent most of his childhood in northern Virginia. By the time he was eight, his parents had split and his dad had moved out of the country. His mom worked long hours as a journalist, plus weekend shifts in retail to make ends meet. From a young age, Mike was around grownups who smoked and drank heavily, and it wasn't long until he started experimenting himself.

• 8:47Speaker 01

  I just, I, I wanted to feel better, you know? And I didn't really have an outlet or someone to go to to help me feel better. And so I saw people drinking and, and, and doing other things and smiles on their face and I want some of that, you know? I can remember even at the age of five, being at a party and there was a keg off to the side and I grabbed some friends and we went and ran over and stuck our head under the keg and drank from it. I used to sneak drinks from my parents, glasses of wine and beer when they'd go wash the dishes. I didn't love the taste of alcohol. I think most people don't, especially when you're young.

• 9:31Speaker 01

  But I think the thing I loved was that, that feeling of when the buzz was coming on. And that was sort of just this feeling of calmness. Hey, everything's gonna be okay. And when you're a kid and you're in a lot of pain, like anything that's gonna help soothe that, you're gonna go after more.

• 9:52Guy Raz?

  You were, I mean, it's, it's sort of this strange kind of dichotomy because on the one hand, you were a very good athlete. You played, I think you played baseball and you played football. You were a pitcher, you were a starter on the football team. So you were going to practice and playing.

• 10:07Speaker 01

  Yep.

• 10:08Guy Raz?

  You were also like using drugs like, like crack cocaine. I mean, at one point, I read about- A drug dealer who had basically pulled a gun on you because you owed him money.

• 10:21Speaker 01

  Yes.

• 10:22Guy Raz?

  And, and you had to find a way to pay him. You found some old savings bonds that were saved up for you. And you grabbed those and like threw them at him to basically save your life.

• 10:34Speaker 01

  Yeah, I, I still don't know today how I was able to cash them being under 18, but somehow I did. And I would go to this bank and I think I went through $40,000 worth of savings bonds and, you know, probably six months and crack and drugs and everything else.

• 10:54Guy Raz?

  I guess the tipping point for your mom was she found out that you hadn't, you hadn't gone to school for like 45 straight days and, and basically made you get drug tested and you came back just, just on fire, like all light lit up, a positive for like several different drugs.

• 11:12Speaker 01

  Yeah.

• 11:13Guy Raz?

  And put you into your first treatment facility.

• 11:17Speaker 01

  Yeah, I was in 10th grade. I was 15. Um, I think I had LSD, PCP, crack cocaine, marijuana and alcohol in my system. So my mom obviously freaked out and then they obviously knew I needed more help. And that's how I ended up in Louisiana. So I went to a place called Opportunities down there.

• 11:39Guy Raz?

  You would stay there for a few months, I think.

• 11:42Speaker 01

  I was there for about nine months.

• 11:43Guy Raz?

  Oh, wow.

• 11:44Speaker 01

  Yeah, yeah.

• 11:45Guy Raz?

  Um, and so this is your sophomore into your junior year. And miraculously, um, you kicked it. You, you, you were able to come out of there totally sober.

• 12:00Speaker 01

  Yeah, I struggled some in the beginning. Um, I'd run away from there twice and I'd used quite a few times when I was in there. And something just changed and, um, you know, I found some help and decided to actually start listening to what they were saying. And really kind of realized like, oh crap, I really do have a problem with this stuff. Like I can't control it and, um,

• 12:35Speaker 01

  My mother was coming down in the next two weeks with the sheriff to basically go take me to jail because she wasn't going to allow me to go back on the streets. And I had a bunch of charges that were still holding over my head.

• 12:49Guy Raz?

  These were charges for illegal drug possession?

• 12:52Speaker 01

  Yeah, drugs and car theft and things like that. And so, I don't know, I, something changed and I started showing up and doing all the stuff that they were telling me to and not because I felt I had to because I wanted to. And within that two weeks, they said, hey, let's, let's give this guy a second chance. I think he really wants it now. And so I got to stay at the treatment center instead of go to jail.

• 13:23Guy Raz?

  You get back to, to the DC area, to Virginia and finish out high school. You did manage to, and during, I guess, the time when you came back, you started working in restaurants, first as a dishwasher and then you got a chance to be a line cook. How, I mean, were you already by the time you were a senior in high school, thinking about a career in food or was it just a job to do?

• 13:50Speaker 01

  A little bit of both. I loved working in restaurants. What I loved about it was I didn't have to think.

• 13:58Guy Raz?

  Yeah.

• 13:59Speaker 01

  And anyone who struggles with alcohol and drugs, like thinking is kind of your worst enemy.

• 14:05Guy Raz?

  Your mind doesn't wander, right? Because you've got a purpose. You know, you've got to either wash the dishes or if you're a line cook, you've got to, you know, do the prep or you've got to do, work on your station, right? It's like, almost like this automatic kind of, it's like being in a factory.

• 14:21Speaker 01

  Yeah, yeah. You don't, you don't have time to think and you're just, you know, on to the next thing, on to the next thing. And there's a rush from it, you know, there's, there's nothing better when you're a chef or a cook of like going through a really hard Saturday or Sunday and getting your butt kicked and like actually succeeding on the other side of it.

• 14:40Guy Raz?

  So how did you, I mean, your senior year of high school or, you know, how did you start to? Get jobs cooking. I mean, you weren't trained. You got, I think you eventually got a job at a golf club in Springfield, Virginia, where you were like cooking for, as an 18-year-old. How did that, who showed you what to do?

• 15:07Speaker 01

  So I had a mentor. His name was Brian. He was the executive chef there. He kind of took me under his wing. But I don't know, I just, I fell in love with it. And, you know, I almost got fired because my knife skills were just horrible. And I was kind of just anxious in the kitchen. So I was always dropping stuff and kind of not getting it together. And he finally had one last stern talk with me and I turned it around. And he started really working with me and showing me things. And I can remember him giving me a lot of advice around just, hey, if you want to do a career in this, like, you know, your first five, 10 years, like, don't stay anywhere more than two years. Like, learn as much as you

• 15:52Speaker 01

  can. Like, get your butt out there, working everywhere you can. And, you know, learn, learn, learn. And so it was really, really helpful.

• 16:03Guy Raz?

  All right. So here you are, just starting out in life. You're sober. You've got it together. And you're getting, obviously, some experience in the kitchen. But then I guess that you actually started attending some college classes, right? Like, what were you thinking that you would do at that point?

• 16:19Speaker 01

  So I, I almost went to, well, I did. I went to a community college to start to become a counselor. And I thought, maybe I'll be a substance abuse counselor, because I like, I love helping people. But two months into my semester, I literally woke up in the middle of the night and I was like, I had this thought of like, what the hell are you doing? Like, you need to be a chef. You need to be in restaurants. Don't worry about it. You're gonna be fine. And- So I trusted that and I woke, I woke up that morning and ran downstairs and I was all excited and told my mother and I said, I'm dropping out of school. And she said, the

• 17:00Speaker 01

  hell you're not. And so she made me finish my semester, but we went and toured a bunch of culinary schools that next couple of months. And I ended up at Johnson and Wales down in Miami.

• 17:14Guy Raz?

  This is 1994, I think around 94, you started Johnson and Wales. It was a two year program, right? In culinary arts. And so you get your degree at Johnson and Wales. And then I think right after you, you went and got a bachelor's degree in hospitality management. So were you thinking, I mean, do you remember at that, around that time, what you thought you might want to do? Did you think, I want to run restaurants? Or I want to run kitchens? I want to cook? All of that? Did you have a sense of what you thought you wanted to do?

• 17:48Speaker 01

  Not horribly. I didn't know sort of exactly what direction I was going to take. But I knew I wanted to be in kitchens. I loved cooking. I loved being a chef. And I also knew that like, at some point, I'd love to start my own thing. And, and I knew even at that age, like, I never wanted to do something that was like, super fine dining. I wanted to do something that was more kind of for the masses, affordable, you know, sort of street food type, something. So I, I had that early on inkling that, you know, at some point, if I could, I'd, I'd love to start my own place.

• 18:34Guy Raz?

  All right. So you graduate from Florida International. And I think one of the first jobs you get is at actually at a five star restaurant.

• 18:43Guy Raz?

  Mark's Place in Fort Lauderdale and five star. This is tricky because there's Michelin and this, this, and there's five diamonds. And what does five star mean? If somebody gave five stars, but it was a fine dining restaurant, basically. And you were not the head chef. You were, you were in charge of saute and sauces and making appetizers. So, and this is like the mid 90s when kitchens were not gentle places. I mean, today, everything's, everything's on Tik Tok and Instagram. So chefs have to be on there on guard. But what was the kitchen like there?

• 19:18Speaker 01

  It was rough. It was actually while I was still in school when I worked at Mark's Place. It was before I graduated. Super rough. I can remember dodging many asate pans flying at my head.

• 19:33Speaker 01

  And hot spatulas of pasta water getting thrown at you too. Yeah, it was, it was rough. Lots of yelling, lots of screaming. There was a lot of, you know, getting your ass handed to you, if you will, in the kitchen. And just super intense, but it was a great learning experience. Like our menu changed every single day. And we were using ingredients from all over Latin America and the world.

• 20:04Speaker 01

  And I can just, you know, remember like, holy cow. Like, I didn't know you could do this stuff with truffles or salsify root or real hearts of palm or just different things we did. So it was pretty, pretty impressive menu we had there.

• 20:20Guy Raz?

  Yeah. Well, you, you would end up staying in South Florida for a couple of years after you graduated, doing different jobs. But eventually, I think in 99, you go back to your sort of hometown area. You get a job at the World Bank. And, and what, what, what did you do? I mean, you're what 24, 25 years old.

• 20:42Speaker 01

  Twenty two at the time.

• 20:43Guy Raz?

  Twenty two. Wow. What was your job?

• 20:46Speaker 01

  So I started as an assistant manager and my mom's now ex boyfriend at the time helped me get the job. He got me an introduction to someone at Marriott who ran all the food service there. So I got hired.

• 21:02Speaker 01

  And I showed up every day in a suit and a tie and kind of learning the, learning the ropes. And we fed three to 4,000 people a day from 7:00 AM to 3:00 PM. So that's a lot of bodies moving through in that timeframe. It was a huge cafe set up kind of like a food court. There was about 12 or 13 stations and each station represented a different area of the world. I mean, anything you can think of, we had it on our menu. And two months into me being there, the chef left and they came to little old me at 22 and said, "Hey, do you want to be the executive chef here?"

• 21:47Speaker 01

  And I choked a little bit and I said, "Hell yeah, I'll do it." And it was not easy in the beginning. I mean, I literally would get laughed at when I'd walk in the kitchen just because, you know, they're like, "Who's this young kid? What the hell does he know?"

• 22:04Guy Raz?

  Right, because you were in charge of like 75 people and I read that like they would call you boss, but sort of like as a disparagement, like to, not out of respect, but to be like, you know, because you were a kid.

• 22:18Speaker 01

  Yeah.

• 22:18Guy Raz?

  And there were, there were these adults working in the kitchen, but you were essentially their boss and they, they really didn't, they didn't respect you.

• 22:24Speaker 01

  No, no, not in those first three, four months for sure. I can remember them, you know, setting up things to like, for stuff to fall and, you know, making messes and just.

• 22:39Guy Raz?

  They'd sabotage you.

• 22:40Speaker 01

  Yeah, they'd sabotage me. So, and so I learned, I was like, okay, this is, this is hard. I need to figure this out. And so the one advice I got was like, really work beside your folks. And so I'd go in, I'd be there earlier than everyone and I'd leave later than everyone. So I, I had that going for me. And I would come in and I would set people's stations up for them so that when they got to work, like their cutting board was there, their knives were there, their aprons were there, their towels were there. And over time, this built this real sort of confidence of like, hey, Mike's really

• 23:21Speaker 01

  got our back and he actually does what he says he's gonna do. And if I'm in the weeds, like, he jumps in and really helps us. And so I started to really gain their respect. And then we really focused on how do we have fun in the kitchen and start laughing and having a good time.

• 23:41Guy Raz?

  You would last there about a year before you decided to move to Los Angeles in 2000.

• 23:45Speaker 01

  Yep, yep.

• 23:47Guy Raz?

  So you, you're in LA for, I think, for about a year, doing some work cooking at MTV and then Disney for some time. And then you get a job in Houston in 2001 for a really, I'm assuming it was a really well-paying job. You go out to work for a very successful energy company called Enron. 2001, you moved to Houston to become the head chef for Enron.

• 24:13Speaker 01

  Yes.

• 24:14Guy Raz?

  And, and again, am I right? It was like a well-paying, great opportunity?

• 24:19Speaker 01

  Great job. So they, yeah, I mean, Enron was the cat's meow back then.

• 24:24Guy Raz?

  Rolling in dough.

• 24:25Speaker 01

  Rolling in dough. The stock price was through the roof. Jobs getting created left and right. And I got hired to open this new, like, state-of-the-art cafe that was gonna have a full bake shop, homemade pasta, sushi station, cook-to-order food in front of everybody. And so they were kind of using my expertise and skills from what I had already gained in all the different places I'd worked to be able to kind of create this very innovative, fun menu to life in Houston, Texas for their folks. And so I got there, I started hiring

• 25:06Speaker 01

  people. And then, I guess it was about a month and a half, two months after that, that's when all the news broke about Enron.

• 25:15Guy Raz?

  You're talking, obviously, about the Enron scandal in 2001 where they're basically cooking the books, right? They were lying about, completely lying about their business. And it was, it was a scam. And it all unraveled. And I think in a few months, it had gone from being one of the most valuable companies in the country to a totally bankrupt company.

• 25:35Speaker 01

  Yeah. That was a super challenging time. You know, I'd only been in Houston like four months at that point. I'd moved everything and... Moved to Texas and, you know, I'm watching this company just crumble by the day, basically. Like, they had their stock ticker on the escalator to the elevators. And every day, the price would just drop and drop and drop. And news cameras start showing up and like, it was, it was a madhouse.

• 26:09Guy Raz?

  I guess the writing was on the wall and you knew that your job was, was also winding down.

• 26:14Speaker 01

  Yeah.

• 26:14Guy Raz?

  You, by the end of that year, you end up outside of Austin, working for Dell.

• 26:18Speaker 01

  Yep.

• 26:19Guy Raz?

  Running their food catering program. And now you're in Austin and you're working at Dell. And, and tell me about Dell. I mean, it, it seems like it was a pretty stable place to be.

• 26:30Speaker 01

  Yeah, for sure. I mean, you know, you gotta remember, um, late nineties, early two thousands, Dell was, you know.

• 26:36Guy Raz?

  Oh, it was hot.

• 26:37Speaker 01

  Rocking and rolling. Um, I ran all the food service over both campuses and there was about, um, 12 different cafes in different buildings. And we also had a huge catering department that did tons of catering. So it was a big, big job and a lot of responsibility. I mean, I was in charge of about, you know, 10 to 15 million dollars a year in food business. So, um, a lot, especially at, you know, 25 years old.

• 27:10Guy Raz?

  Wow.

• 27:11Speaker 01

  Um, and then after I'd been there about two, two and a half years, they really started making a lot of changes and taking a lot of the liberties away. And they really wanted things to be a lot more sort of the same across the board. And that's where sort of the, the taste of like, hey, why did I get in this business in the first place? It's because I love food, I love being creative. And so that's when I started getting back to thinking about maybe different restaurant concepts or something that I could do that could be really fun and, um, kind of create something different out there.

• 27:53Guy Raz?

  Yeah, I mean, it's it's usually those moments, right, where you start to get itchy feet. Was that our gift, right? That where you start to get frustrated, that that actually, it's like a sign from from God or the gods or whatever you believe in, which is maybe it's time to make a change. And you did. I mean, you were at Dell for almost three years, but then you, I guess, out of frustration, left and helped start a new restaurant called Lucy's Bow Yard. You were brought on to kind of help, but that closes. And this is now takes us to about 2006. You're now like 30, 31, and trying to figure out the next step. And I guess you have a you had a friend in Austin, a guy named Bill Roberts, who who

• 28:38Guy Raz?

  had a like a trailer that like a barbecue trailer that he he had owned. And he said, hey, do you want to take this off my hands and like open up a taco truck or something? It was what's the story about that?

• 28:52Speaker 01

  So he had this old barbecue trailer. He'd gotten it from his grandfather, and he couldn't. He was trying to sell it.

• 29:01Guy Raz?

  It was just a what was it? A smoker or a?

• 29:03Speaker 01

  No, it was like a food trailer. You know, kind of what you see at like, you know, carnivals or now what you see out there, you know, out.

• 29:12Guy Raz?

  You can go inside. There's a door. There's a little kitchen in there.

• 29:15Speaker 01

  Yeah, there's a kitchen, the whole nine yards. And so, you know, he couldn't sell it. And at that point, there wasn't really a food truck slash food trailer culture that you see nowadays in different cities, and definitely not in Austin. And I had, you know, had gone to some banks before that for trying to do a breakfast concept. And they all pretty much laughed at me, you know, wrote big business plans. And yeah, I didn't have any money. I didn't know people with money. And that's really kind of almost how you have to start a restaurant. You know, banks not going to just take a bet on you

• 29:55Speaker 01

  and give you 600 grand to go open a brick and mortar restaurant. And so he had this trailer. And he's like, hey, what do you think about opening a taco stand? I thought he was nuts at first because, you know, there's tacos every on every corner, just about in Austin. And so I sort of did this taco tour all around Texas and around the border towns and. What I realized was like, man, there's some great tacos, but they're all kind of the same. They're all these sort of street style tacos, all great, but they're very similar. And I was like, well, I don't want to go replicate that, right?

• 30:35Speaker 01

  Like, these are history old recipes that these folks have been doing that have been handed down by grandma and cousins and aunts and everyone else. Like, let's not try and compete with them. Let's go do our own thing. Like, take this, you know, vessel called the tortilla and let's go have fun with it.

• 30:55Guy Raz?

  Right, because like in LA where I grew up, like, you know, a taco, a traditional taco would be, you know, be like al pastor or maybe like a little bit of, you know, carne asada with some onions and cilantro. And that's it.

• 31:09Speaker 01

  Yep, yep.

• 31:10Guy Raz?

  Like, that is it, right? Or, you know, pork tacos with bits of pineapple and some pickled onions.

• 31:18Speaker 01

  Yeah, yeah.

• 31:19Guy Raz?

  And that's it.

• 31:20Speaker 01

  And there's nothing wrong with that. Like, that's awesome. Like, and I, I think, you know, that's, that was like the opposite of what I wanted to do. Like, I wanted to take tacos and, and put fried chicken in them and fried shrimp and blackened salmon and brisket and, you know, all these different flavors that like, let's go have some fun.

• 31:45Speaker 01

  And that's sort of the idea behind tortillas and where it was born is just these gourmet street tacos.

• 31:53Guy Raz?

  All right, let's talk, so, so 2006, you decide, all right, I'm gonna do a taco truck.

• 31:58Speaker 01

  Yep.

• 31:58Guy Raz?

  And first of all, you call it tortillas. What's, what's tortillas? What does that mean?

• 32:02Speaker 01

  So, that actually came from Bill. We were struggling with the name and he woke up one morning, called me super excited. He's like, dude, I got the name. Like, we gotta meet, let's go get coffee. And he had remembered something that happened in the 90s where he probably had a little too much to drink one night and was at a late night taco place that was here in Austin called Rosie's El Pastor. They were famous for their El Pastor tacos. And he sort of had this vision of this old airstream trailer with neon tortillas with flames coming out of the Y. And he hadn't remembered that.

• 32:48Speaker 01

  Memory until literally that night or that morning when he came and he said, I've got the name. And when he said it, we both looked at each other and like, that's it. That's the name. That should be Torch's. Torch's just felt like very right, very inspired. And like, no, this is it.

• 33:05Guy Raz?

  Like fire, like torch fired meats or, but it could be a guy, it could be like the cook's name's Torchy.

• 33:11Speaker 01

  Yeah, yeah, exactly. So, and it wasn't, um, and that was the other thing, like I never wanted a place that like, had my name on it. Um, cause I, I always felt like the place needed to be bigger than, than me. Um, and

• 33:27Guy Raz?

  Mike's Taco is just eh.

• 33:29Speaker 01

  Nah, Mike's Taco's ain't gonna hit.

• 33:31Guy Raz?

  Doesn't do much for me. Yeah.

• 33:32Speaker 01

  Yeah.

• 33:34Guy Raz?

  Um, I'm curious. So, all right, he has this trailer and he suggests that you do, and you guys have agreed to do a taco truck. So, how does it work? Are you going to be partners? I mean, did you, did you need a whole lot of money to start? I can't imagine you need that much money to start this thing, but I imagine he would, he was a co-owner with you.

• 33:50Speaker 01

  Yeah, he was a co-owner. So, um, I ended up taking a loan on my house, um, and using that to help kind of get the trailer painted and get our logo on there, um, and buy some of the equipment. Um, and then he used some of his money to kind of help set up our first spot, um, and you know, do some of the landscaping and things like that.

• 34:18Guy Raz?

  And where did you, I mean, where did you, you set up on a corner in Austin and what just like, how does that work? Do you have to get a permit from the city? Like, can you just set it up anywhere?

• 34:30Speaker 01

  Yeah. So you definitely need a permit. They did have mobile vending permits back then. Um, and we needed to have a commissary kitchen. So we figured that out. Um, and I got a buddy who I knew owned a restaurant to help us use their kitchen to start. And, um, so yeah, we opened on South First, um, just south of downtown in this undeveloped lot. There was a guy that was selling snow cones there before that went out of business, um, who I had asked originally and he didn't want to, uh, share the spot with me. And then I came back a month later and the poor guy was packing his stuff up and.

• 35:14Speaker 01

  He gave me the landlord's number and I called him and, um, you know, came to find out that whole spot was in a floodplain, so you can't build on it. And so having a food truck there is actually like the perfect use for it.

• 35:26Guy Raz?

  So, all right, let's just talk about food trucks for a moment because 2006, food trucks were not yet cool, right? It was like, it was like, it was construction sites. They were, you know, trucks that would go to feed construction workers, or maybe you'd like to go to a carnival, like one of these carnivals, there'd be like a food truck, but it wasn't, this was not something that a trained chef from Johnson and Wales would be doing at that time.

• 35:53Speaker 01

  Yeah, yeah. My, my, I remember my friends going, what the hell are you doing opening a food truck? Do you like, how is that even gonna work? Um, and, you know, I, I, I don't know what I just, and I guess I think when, you know, folks that are entrepreneurs or that have passion about a business, like, you just won't hear no. Um, and I can remember people sort of challenging me and I just like, look, this is what I can afford and this is what I'm gonna do and I'm gonna figure it out.

• 36:28Guy Raz?

  And the owner of the land where you were set up, uh, basically, I, I, I think he was letting you kind of squat there for free, if I'm not mistaken, but then he was like, okay, now you gotta pay.

• 36:41Speaker 01

  Yeah, yeah. So we, we talk about South first because that was really kind of where we found our home. So before that, we were on a little spot on Fifth Street and the landlord there, he never gave us a contract for what he wanted for rent. Like, we'd kept coming to him and asking him like, hey, we need to figure something out. We don't want to stay here for free. We gotta pay you something, like, help us out. And he gave us some crazy, like, ten or fifteen thousand dollar bill that we had no clue that was even coming. And he's like, well, you got two days to pay it or you're out of here. And so

• 37:17Guy Raz?

  Wow.

• 37:18Speaker 01

  We didn't have the ten or fifteen grand to pay him. And he literally just cut off our electricity in the middle of lunch.

• 37:26Guy Raz?

  He just came and what do you mean he cut? He like pulled the plug?

• 37:29Speaker 01

  No, he came with one of his guys and used bolt cutters and literally cut off the power.

• 37:36Guy Raz?

  He cut the power line in the middle of lunch?

• 37:39Speaker 01

  Yes, he cut the-

• 37:39Guy Raz?

  Wait, what did you do? Did you run out and go, "What the hell are you doing, man?"

• 37:43Speaker 01

  Yeah, I did not want to get in a fight with him.

• 37:48Speaker 01

  And so I had to kind of like close up shop that day. And we ended up for a week, literally cooking out of Bill's driveway. We took the trailer and we hooked up the power to the trailer at his house, which was totally illegal at the time, but you know, we were trying to stay in business and, and you know, keep some cash coming.

• 38:10Guy Raz?

  When we come back in just a moment, how partners, publicity, and $15,000 worth of pumpkins helped Torchy's grow into one of the most popular taco chains in America. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 38:33Guy Raz?

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• 39:15Guy Raz?

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• 40:00Guy Raz?

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• 40:45Guy Raz?

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• 41:29Guy Raz?

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• 42:09Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2006, and Torchy's Tacos is just a single food truck parked off South First Street in Austin, Texas. Meanwhile, founder Mike Rypka has gone from managing huge kitchens at the World Bank and Dell to toiling away in a trailer, pretty much doing everything himself.

• 42:31Speaker 01

  Yeah, so seven days a week, 5:00 AM to midnight, every day. I'd start, I'd open everything up, I'd get the prep going, I'd get the gas grills going. I'd welcome the employees, the one or two employees I had at that point. You know, pretty much every day you had to go shop. And so, because it just wasn't enough space. And we weren't doing a lot of volume either. And I didn't have some big runway budget of like, you know, hey, here's half a million dollars in the bank for your first six months of operating costs. Like, I basically took a loan on my house and maxed out my credit cards and got the doors

• 43:13Speaker 01

  open. And so, like, every dollar that came into register mattered.

• 43:18Guy Raz?

  I imagine you were not, you were going to be making a lot less money than you made at Dell.

• 43:22Speaker 01

  Yeah, I mean, no money. At least in the beginning, I didn't get a paycheck, I think, for the first two years I was in business.

• 43:31Guy Raz?

  And what, and your menu was pretty limited, right? I mean, you did just a few things initially. It wasn't, it wasn't like, I don't even think it was just tacos, right? It was like fajitas? What were you making?

• 43:44Speaker 01

  Yeah, so we, we started with a kind of a build-your-own-breakfast taco.

• 43:49Guy Raz?

  Like chorizo and egg?

• 43:50Speaker 01

  Yeah, chorizo, egg, bacon. So breakfast tacos are real big in Austin, so I wanted to have that.

• 43:59Speaker 01

  And then, you know, we started with kind of the basics. We had a barbacoa, a green chili pork, and then we had a chicken and steak fajita, and then you could make a burrito or get a fajita plate. And our first taco of the month was called the Trailer Park, which is our number one selling taco today. Um, all these years later, fried chicken, green chilies, lettuce, pico, there's some shredded jack and cheddar cheese, and it comes with a creamy poblano ranch. And if you want it trashy, you can take off the lettuce and put queso on there.

• 44:33Guy Raz?

  And, and so when you, I mean, when you launched it, right, in the first couple of weeks or months, I, from what I've seen, I've looked at a map of this place, I mean, maybe it's a little different now, but 2006, it doesn't, it was, there was nothing around there. Like, who went there? What, did you have customers? Were there, were there just hours that would go by with nobody coming up and ordering any food?

• 44:59Speaker 01

  Yeah, it was, it was very tough, you know, again, so there's this stigma of like, at that point, like roach coach, right? Like, is it even safe to eat in a trailer? You know what I mean? Like, is it safe in there?

• 45:13Guy Raz?

  Is it inspected by the, by the food, you know, whatever? Is it, is, is it safe? Right?

• 45:18Speaker 01

  Yeah. Now, the one thing I had going for me was we were on the right side of South First. So all the morning traffic going to downtown was passing right by our trailer. And so we were perfect for breakfast tacos. The question was, how do you get them to turn in there in the first place? And so I learned real quick, like, how to do grassroots marketing. So I had a red Vespa, and I would make chips and salsa because it was cheap. And print out a ton of menus and I would go hit every Tom, Dick and Harry dentist

• 46:00Speaker 01

  office, office, office, um, you know, tire shop, lube place, salon, wherever they'd let me in and I'd go hand out samples of chips and salsa, give them my menu. Um, and we started delivering very early on.

• 46:17Guy Raz?

  And when you say we, was you and who else?

• 46:20Speaker 01

  So it's me and I had a cook named Juan and I had a delivery driver. We took the orders by phone. Um, there was no DoorDash or Uber Eats at this point and, uh, we'd go deliver them on the Vespa. So I had a setup on the back, you know, we'd put all the food in there and go hand deliver it to folks.

• 46:40Guy Raz?

  You know, today, if you were to start this, right, uh, you'd have like a branding agency that would say, okay, you want to call this like chef driven menu, right? Like you weren't just some dude who was just making tacos. Like you really came from the culinary world. Did you advertise that in any way? Did people know that? Or were you just, I mean, how did you differentiate in the minds of consumers? There's a lot of taco options, even in Austin in 2006, there were a ton of taco options. So why, why would, like, what made your, how, how did you convey that your place was different?

• 47:18Speaker 01

  You know, I don't know that there was some big communication plan around it. It was really about just getting my food in people's mouths. So we did lots of events. We did lots of giveaways. I would go donate food to a school, show up at their carnival at the school and, and serve tacos and give some of the proceeds back to the school. Um, so we just really got involved and inundated with the community was really how we got the word out and how we got people to, to know who and what we are.

• 47:56Guy Raz?

  So I guess by the end of that summer, you started to get some traction. What was your lifestyle like? I mean, here you are, you're in your early 30s. You had, you had just come off pretty steady jobs where I'm assuming you had pretty steady hours and decent life balance. Now it's you and Juan.

• 48:17Speaker 01

  Yeah.

• 48:18Guy Raz?

  And I'm imagining you're working at least 50, 60 more hours a week?

• 48:24Speaker 01

  Oh, 100 hours a week, literally. 5:00 AM to midnight, seven days a week.

• 48:29Guy Raz?

  Wow.

• 48:29Speaker 01

  Yeah.

• 48:30Guy Raz?

  How did, how did you cope with that? Did you, did you like it? Did it get you down? Did it, I don't know?

• 48:37Speaker 01

  It was stressful, but I had my eye on the prize, right? Like I-

• 48:41Guy Raz?

  What was the prize?

• 48:43Speaker 01

  Well, the prize was to really get this business off of ground so it could sustain itself. It wasn't about-

• 48:50Guy Raz?

  Because you were not profitable yet.

• 48:52Speaker 01

  No, not even close. And the hard thing for us was just the sales. And early on at that South First Spot, my partner Bill comes to me with this bright idea and lets me know that we've got an 18-wheeler truck of pumpkins coming.

• 49:14Speaker 01

  I told him he was nuts, but it was around Halloween time and unbeknownst to me, he puts, you know, I think it was around $15,000 worth of pumpkins on our business Amex card. And, you know, his thought was like, hey, let's do a pumpkin patch and help drive some business to the trailer. And so we opened this pumpkin patch and I can remember just, you know-

• 49:44Guy Raz?

  On the premises, like what around?

• 49:45Speaker 01

  Right next to the trailer. Yep.

• 49:47Guy Raz?

  And, and the idea of the pumpkin patch was to presumably to attract people to the taco truck?

• 49:52Speaker 01

  Yep. Sell some pumpkins and get them to try some tacos while they're there. And so we opened this pumpkin patch.

• 50:00Speaker 01

  And we're doing fine. We're selling some pumpkins, but you know, here it is. It's about October 15th and like, I still have like, I don't know if you know how many pumpkins come in the 18 wheeler, but it's 44 pallets of pumpkins. Like it's a lot of pumpkins.

• 50:16Guy Raz?

  Thousands of pumpkins.

• 50:17Speaker 01

  Thousands of pumpkins.

• 50:19Guy Raz?

  Yeah.

• 50:19Speaker 01

  And I'm like counting the days, like, once Halloween hits. And so one day, it was like a Tuesday or Wednesday, this news van shows up and like, hey, we'd love to interview you and do a story. And we're like, what are you talking about? He's like, you guys are one of the only people that have pumpkins left in Austin and we want to do a story about it. There's a pumpkin shortage this year. I was like, really? I was so busy. I wasn't paying attention to the pumpkin shortage out there. Um, I was just trying to make tacos and make a living. And, uh, so he does this interview and like, within two weeks, we

• 50:59Speaker 01

  end up selling all the pumpkins that we had bought and got some new customers, um, not tons, but definitely got more exposure to who we were. I can remember just thinking like, holy cow, that was a bet that like, really could have gone wrong if that didn't happen.

• 51:16Guy Raz?

  Yeah. So I'm curious about overall sort of financial situation. I mean, you know, on the one hand, you're grinding, you're trying to get to sustainability, but what about, and it was just the two of you who were, who were financing or funding this thing, you and Bill. Um, I mean, were there, do you remember any specific moments where you weren't sure you were going to make payroll?

• 51:45Speaker 01

  I mean, damn near every week, it felt like, um, you know, there were definitely weeks where I was like, holy cow, it's Wednesday and.

• 51:55Speaker 01

  I need like 3,000 bucks to make payroll and we've got a thousand in there like, how's this even gonna happen? And we'd get these little breaks, right? I'd get a call and I'd have a catering for like a Thursday night to go cater fajitas for a riverboat. Or, you know, there may not quite be enough in the bank, but I knew it was gonna be a great sunny weekend and I'd cut the checks hoping they didn't bounce and, you know, we'd get enough sales over the weekend to cover the float and, and not get in trouble. But it was real, real dicey at that point.

• 52:34Guy Raz?

  How did you manage the stress of doing all of these things all the time, every day, without a single day off?

• 52:42Speaker 01

  It was a lot. Um, lots of coffee, lots of Red Bull in terms of keeping awake. You know, I think the thing that I leaned on the most is, you know, I had this recovery background that like really kinda helped me. I'd been through rough times in my life, right? Like I'd seen what darkness looked like. And I knew that if I did the right things for the right reasons, whether the business succeeded or not, like I was gonna be okay. And, um, that would give me enough strength and enough grit to like, do it one more day, put one more foot in front of the other and just have some faith to like, just, just keep doing what you're doing, Mike.

• 53:27Guy Raz?

  It's almost like staying so busy that you couldn't stop and let your mind wander was like, well, you, just sort of an extension of your ongoing recovery.

• 53:40Speaker 01

  Yeah, yeah. It was about, it was about doing, you know, um, I like to say, my job is to chop wood and carry water and eventually the house gets built, right? Like, if I don't chop the wood and don't carry the water, the house isn't gonna get built.

• 53:57Guy Raz?

  So, all right, so you are, you know, on South First Street and 2007, you get some locals in Austin who want to make an investment and suggest, or I guess, help you get a second truck. And this is just for the beginning of the process of a group of local people who want to invest in the business. I guess, Bill, your original partner decides to step away, he gets bought out, and there's a couple that invests a little bit of money, Farrell and Rebecca Kubina or Kubena, locals in Austin.

• 54:35Speaker 01

  Yep.

• 54:36Guy Raz?

  And when they came to invest, what did they, did you have a plan? How did that come about?

• 54:44Speaker 01

  So, at this point, we were finally having some success. So, before that happened, we got a big write-up in the Austin Chronicle, and that really helped change things. So, we were definitely on our way to like, we were having lines, 20, 30 people long every Friday, Saturday, and Sunday. Lunches were starting to pick up during the week, dinners were getting better. And so, we knew we like had something, and we figured that like, we probably couldn't get enough money to open a restaurant yet, but maybe we could at least open a second trailer and kind of extend the brand a little bit.

• 55:25Guy Raz?

  And so, did you, did you know these people who were interested? Like, were they friends?

• 55:30Speaker 01

  Bill knew them. He had done business with them. So, Farrell was a builder. So, he built a lot of houses in Austin. And they had a relationship because they would work together. Bill would do the landscape and Farrell would do the house building. So, they had worked together quite a bit. And we knew that we were going to have to raise money to help open the second trailer because we were all tapped at that point. And so, we brought Farrell on and showed him the finances and what we were doing, had him come try the food. And he was just blown away. He's like, man, I've never had tacos like this. Like,

• 56:14Speaker 01

  holy crap. And his wife Rebecca thought he was nuts. But they were sort of serial entrepreneurs, right? And so they kind of knew the game. So having someone on the team that like, knew about business that could, you know, help navigate some of the things that I was still learning on the fly was really helpful to have them kind of on the team and, and to be able to, you know, help finance the second trailer. So, um, and we took some of that money to kind of help. Just I hadn't had a paycheck yet, right? And so I took a little bit of that cash and just kind of like kept my house from getting foreclosed on and got caught up a little bit on some bills.

• 56:57Guy Raz?

  All right. So there now, you now have some investors. And so all of those people were now partners. It was, it was the Farrell and Rebecca and then a guy named Bob Gentry bought out Bill, your original partner. There was another guy involved named Jay. And with, with their help, not only were you able to open up a second truck, but, but by 2008, you were able to get a brick and mortar location. And let's just pause for a moment because this is a, an important turning point, right? You have two years of grinding away in taco trucks and now you've got a brick

• 57:39Guy Raz?

  and mortar location. Doesn't mean the grind is going to end. For sure it won't. But at this point now, having some investors involved, are you guys starting to articulate a vision of what you think this could be? Like, was it, was it too early to talk about multiple locations? Or were you already talking about that possibility?

• 57:59Speaker 01

  A little yes and a little no. Our first goal was, we definitely, at first, we kind of argued about like, hey, do we just open a bunch of trailers because they're cheap? And we move them. And I was very much against that because I was like, hey, look, this is a great way to start, but it's not a good way to sustain. It's very weather dependent. It's a lot of heavy lifting every day of like shipping food back and forth. And so I was really like, hey, we got to get a brick and mortar. I know it's expensive, but that's the way to do this. And it was a little bit of defense because our trailer location, we couldn't get more than

• 58:40Speaker 01

  a year lease. And every time the lease came up, our landlord wanted to double the rent. You know, he saw the lines and was like, I can make more money off these guys. And Farrell being in real estate and construction, you know, had a real good eye for that. So we kind of put him in charge of like, hey, go find us the next spot that's somewhere close to here that, but not too close, but that like, we could still capture our customers. And so that's how we found our South first spot.

• 59:13Guy Raz?

  Okay. So now you've got this, the brick and mortar and, and, and then in two, you opened up two in 2008. Tell me a little bit about the look and the vibe. Like this is, this is just on the cusp of Austin and forgive me because I, I hate to use this language, but like becoming more corporate, right? Like South by Southwest, still very indie. Like now you go, and it does still fun. Austin's still amazing, but it was still a little bit of a kind of a sleepy cultural town, right? With Austin city limits and South by Southwest was still very kind of indie.

• 59:48Speaker 01

  Yeah.

• 59:49Guy Raz?

  So, so the vibe, I think, right? Like the whole, I think, like the whole motto of Austin was keep Austin weird, right?

• 59:57Speaker 01

  Yeah.

• 59:57Guy Raz?

  And so how did your like look and feel fit into that?

• 1:00:02Speaker 01

  We definitely had that vibe, especially early on. So a lot of used restaurant equipment, paint, a little bit of decor, not a whole lot in terms of like a super well thought out. Like this is how the design's going to look. Um, we did incorporate some of our colors from our logo.

• 1:00:23Guy Raz?

  Your logo had a little devil. It was like a devil with a, with a toilet plunger in its mouth?

• 1:00:27Speaker 01

  No, with a pitchfork.

• 1:00:30Guy Raz?

  A pitchfork. Okay. All right. I got you. Am I the first one to say that?

• 1:00:33Speaker 01

  Yeah. I haven't heard that one before.

• 1:00:35Guy Raz?

  Toilet plunger. Okay. It's a pitchfork. All right. I got you. All right. Sorry.

• 1:00:40Speaker 01

  No, you're good. Uh, Torchy, uh, he's, he's sort of my alter ego. When Bill and I first started Torchies, we were, even though we were just opening a taco truck, we definitely still wanted to have like a good brand. And we did a lot of talking about like great brands and. What makes them special and, and a lot of the good brands out there like Nike has the swoosh. Like if you just saw the swoosh, you know, that's Nike. Starbucks has the siren and so on and so forth. And so we were like, well, what, what is that for torchies? And we talked about pitchforks and this and that. And I had the same kind of moment that Bill had when he came to me with the name.

• 1:01:23Speaker 01

  I like woke up in the morning, super excited and I, I just had this idea of like, it needs to be a little baby devil.

• 1:01:33Guy Raz?

  A baby devil in a diaper.

• 1:01:35Speaker 01

  Yes, and, um, and, and that was, that was the premise of torchies was

• 1:01:43Speaker 01

  we were a place to really come let your hair down, be who you are, be original, take all the stress of life and just come enjoy some damn good food. Like the little angel on my shoulder says, hey, you should probably eat the kale salad. It's healthy. You need to go work out. And torchy on the other hand is like, fuck that, drink a margarita, have some queso and have a damn good taco. And, uh, and that was, that was sort of what torchy is about.

• 1:02:11Guy Raz?

  And, and as you sort of, once you had the brick and mortar locations, was the menu, I'm assuming it was, it was expanded. I mean, you had, how are you coming up with different like, you know, for example, I don't know, a taco with, um, like just the things that you would add to the taco, like, you know, you've got a taco with carnitas, teriyaki sauce, bacon, corn relish, cotija cheese. I mean, a lot of different cultures and flavors blended into that thing. How would you come up with those ideas?

• 1:02:44Speaker 01

  Very early on, me and Bill agreed that like, hey, we wouldn't do anything unless it came from an inspired place, which might sound a little hokey, but sometimes that meant that like, it might take you a while to like, come up with something because it didn't feel very authentic. And what I mean by that was, It would be anything from, hey, I'm in the grocery store and I see an ingredient like a miso paste and it sparks an idea of like, ooh, I've had that with sea bass and what if I did this and then, and then how would I format that in a taco?

• 1:03:25Speaker 01

  And what I've found is when I've allowed myself that space and time to do that, that like typically the stuff that wins, I nail on the first recipe. There's not a lot of like back and forth and testing and this and that. It's like you have that idea, that inspiration, you go in the kitchen and it all just kind of works and works out perfect.

• 1:03:50Guy Raz?

  All right. Even with these two restaurants, from what I understand, Torche's was still not profitable. And, and one of the challenges is that when you, you guys are opening more locations in Austin, I think by the end of that year, you had four locations. And then 2010, you opened the first location in Dallas. And I think I read that you guys couldn't, still could not get lines of credit. You couldn't get banks to give you lines of credit and a lot, I mean, this is now the financial crisis, right? So of course it's going to be challenging. So I'm sure it was stressful that, that you were just kind of treading water, even now five, six years into this business.

• 1:04:30Speaker 01

  Yeah, yeah. I mean, it was definitely a challenge and I think just like, the thing that kept giving us hope was we were opening these locations and we were doing really good business. And at that point, we were really starting to capture a lot of fans. And the reason we opened in Dallas is because we had people begging for us to come up there. And when we opened, they came out in droves. I mean, we had lines out the door for weeks and months when we opened our Dallas location. So we knew we had something and part of, part of growing a business isn't always that profitable, right?

• 1:05:15Speaker 01

  Like you're constantly investing kind of to the next phase, which, you know, typically if you do it right, you kind of want to be a little over invested ahead of yourself so that you've got the team that can execute it, so that you can do it at a high level enough to, to make it work.

• 1:05:35Guy Raz?

  When you opened that location in Dallas and then subsequent locations, how did you explain what the culture was to the team? Like, hey, everybody, we're opening this Torchy's. This is what Torchy's is and you guys have to personify that, embody that. What was your explanation?

• 1:05:54Speaker 01

  So we had a handbook at that point. You know, so some of that, some of our cultures and values were in that. We did about three weeks of training with those new employees. I was up there, all the partners were up there. We did lots of storytelling in terms of like where we started, the kind of things we'd been through. We get our folks super involved in lots of tasting classes. And one of our big mantras is if it's not damn good, don't serve it. And so to really engrain that culture of like, hey, like, you know, it's okay to not have pico if your tomatoes aren't ripe. Like, just don't serve it, right?

• 1:06:37Speaker 01

  Like, a customer will understand, hey, we got a bad batch of tomatoes today, so we don't have pico versus, hey, let's serve yellow tomatoes in our pico that, you know, is hard and tastes like crap, you know? So it's really about getting that buy-in from your folks, being consistent with your values in terms of, you know, making sure that, that, that people understand what's important every day. You know, we, we have what we call the, our winning formula, which is damn good food, damn good hospitality and damn good shifts.

• 1:07:16Guy Raz?

  And damn good tacos is your trademarked motto?

• 1:07:20Speaker 01

  Yes.

• 1:07:21Guy Raz?

  I should say, you trademarked damn good tacos.

• 1:07:23Speaker 01

  Yep, and it came from our customers that said, damn, these tacos are good. What the hell are you putting in these things, you know? And

• 1:07:32Speaker 01

  We decided to add damn good as really a guiding light of like, hey, this is the level it needs to be every day, every shift, every time when someone comes in here, it needs to be damn good. And when you focus on that and when you really drive that home with your folks, they're able to do that, you know, and you end up with a very passionate employee team member base that like cares about the food, that like holds each other accountable when something's not right. And they bring a tasting spoon to the manager and make sure like, hey, does this Diablo sauce taste right? Are these

• 1:08:13Speaker 01

  beans good? And that kind of culture has to get cultivated and you need to do it every day, kind of without fail.

• 1:08:25Guy Raz?

  When we come back after a quick break, a critic torches the tacos, a rival chain shows up with copycat recipes, and Mike, he's out as CEO. But that's not the end of the story. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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• 1:10:13Guy Raz?

  Hey, welcome back to How I Built This. So it's 2012 and Torchy's Tacos is up to 11 locations. Most are in Austin, next came Dallas, and now they've just opened up in Houston. And a very prominent, respected food critic named Allison Cook, James Beard Award-winning food critic, comes to the restaurant and basically just trashes the restaurant. She just says, you know, you guys have lost the magic. The ingredients aren't, it's the quality has gone down. I wish they would focus more on, you know, quality rather than just expand, expand, expand. And that's not a good review to receive.

• 1:10:56Speaker 01

  No.

• 1:10:58Guy Raz?

  And you did something pretty creative. You actually responded to her article in the comments section of the article.

• 1:11:04Speaker 01

  I, well, first off, before that, I called their office and said, hey, I'd love to talk to Allison. I'm not trying to change the review, but I'd like to know, because one of her big complaints was a buster kept trying to take her menu. And I don't know why our buster was doing that that day. I think he just was on autopilot, like clean the tables, clean the menus, like whatever he was thinking. And so I wanted to be able to coach that team member. And they would not let me talk to her. And that just really pissed me off. It's like, I'm not trying to change a review. I just want to, you know, make our restaurant as good as I can. I'd like to know who it is so I can coach them.

• 1:11:45Speaker 01

  And so I responded and basically called her out and said, hey, look, you know, I'm going to be there in two days from 12 to two, bring in this article and I'm going to be giving away this tacos as she reamed us on. And you can vote for yourself, whether you agree with with her or not. Because I just, I felt real passionate about our food and like, hey, you know, because it was obvious that like this thing the busser was doing is what kind of killed her experience. It wasn't the food. It wasn't, you know, she was recalling her memory from eating at the trailer under an oak tree in the middle of spring when it's 72 degrees out.

• 1:12:27Speaker 01

  Like, that's hard to compare that memory with, you know, being in a brick and mortar in Houston.

• 1:12:33Guy Raz?

  Right? Yeah.

• 1:12:33Speaker 01

  And so my point was, is like, we haven't done anything to change the food. The food's just as damn good as it was in that trailer, if not better. And come on down and I'll prove it to you.

• 1:12:45Guy Raz?

  You said, if you print, if you print out the article and bring it, we'll give you a free taco.

• 1:12:49Speaker 01

  Yeah, we'll give you a free taco. And so, and then you can, and then I want to hear your vote. And, uh, and I think out of the 300 articles we got, um, only two people agreed with the article. So you can't please everybody. But that's a pretty impressive vote change there. So

• 1:13:06Guy Raz?

  Yeah.

• 1:13:07Speaker 01

  I'll take it.

• 1:13:08Guy Raz?

  Well, I, in her, in her defense, I read the original review and I feel like she was, it was a tough love review. She was saying, I love Torche's. What's going on? And I, and so I think in her defense, you could say that it also, it must have perked you, your, it must have perked you up a little bit. And it must have made you think, well, what's going on at that restaurant?

• 1:13:30Speaker 01

  Yeah. Oh, yeah, for sure. Well, and that's why I called her because I wanted to know like, hey, like, you know, give me some more details so I can like fix this, right?

• 1:13:38Guy Raz?

  Yeah. Okay. So you guys are still, but I think still not profitable, right? I mean, you're growing, but still it's getting tough.

• 1:13:46Speaker 01

  We're starting to make some money at that point. We're, you know, I'm taking a paycheck. Farrell had, and Rebecca had started to take in a small pay.

• 1:13:55Guy Raz?

  And this is six years in, I should say.

• 1:13:57Speaker 01

  Yes.

• 1:13:57Guy Raz?

  So it's been a grind. I mean, you were on a hamster wheel.

• 1:14:00Speaker 01

  Yes.

• 1:14:00Guy Raz?

  For six years already.

• 1:14:01Speaker 01

  Big time, big time. And so, you know, so we're starting to, you know, take a little bit of money and just from a paycheck standpoint, but we, we were definitely weren't taking any kind of like dividends or anything like that out.

• 1:14:13Guy Raz?

  Mike, I want to ask you a personal question here, which I often ask, not in every case, but we didn't mention that you had gotten married around 2008, and I think your marriage broke apart around 2011 or 12. All of this is going on, you're expanding, you're building restaurants, and personally, you're going through this crisis.

• 1:14:37Speaker 01

  Yep.

• 1:14:38Guy Raz?

  We didn't mention that, that also, you know, your mom had passed away a couple of years before. Do you, I don't know, I mean, do you, again, marriage and partnership is complex, relationships are complex, but I imagine that you working 100 hours a week couldn't have helped.

• 1:14:56Speaker 01

  Yeah, I mean, I, you know, I, by the time I met her, I was working less. I wasn't, you know, that 100 hours was really that first kind of year and a half, two years. And I met her in 2008. And that same year, my mom passed away from ovarian cancer. So it was just really sort of, it was just a, you know, on one hand, I had this woman that was potentially going to be my wife and, you know, was thinking about marriage, and then, you know, my mom passed away. So it was just, it was a really kind of weird and confusing

• 1:15:39Speaker 01

  time. And then also, you know, I'm like, I've got this business that's new, that's like, you know, I'm starting to make a little bit of money, but, you know, it's, it's, it's just a lot of everything going on at once. And, you know, yeah, it was tough. We got married, literally, the same year we got married, we, we had our son. So it was like, boom, boom, get married, have a kid, all while, you know, I'm also trying to like, manage growing this business. And there was just a lot of, a lot of challenges. And, and,

• 1:16:19Speaker 01

  you know, I think, you know, I definitely made some mistakes, you know, it was, it was tough, you know, it was tough trying to manage all that together.

• 1:16:30Guy Raz?

  So this is happening in the background. In the meantime, you guys are growing and expanding. And then in 2013, there's another taco chain, another taco restaurant called The Texas Taco Company. And you start to see like pictures on Instagram and on social media of fans at their restaurant. And it looks like, from your perspective, they're making the same exact things. They're literally copying your playbook. I should mention that the recipes are not copyrighted. It's not like a photograph or a book or a patented invention.

• 1:17:11Guy Raz?

  Unfortunately, recipes just aren't protected in the same way. But you guys decided to sue them for, I guess, copyright or some kind of infringement, trademark infringement. Tell me why you decided to do that.

• 1:17:25Speaker 01

  Well, we knew they had stolen our recipe book, so they had.

• 1:17:31Guy Raz?

  You guys had an internal taco bible that you used in your kitchens, right?

• 1:17:35Speaker 01

  Yep, yeah.

• 1:17:36Guy Raz?

  Like a brand bible for your tacos.

• 1:17:38Speaker 01

  Yeah, exactly. With all the recipes and everything in it.

• 1:17:41Guy Raz?

  And it was a trade secret.

• 1:17:42Speaker 01

  Yeah, yeah. And so we had it on video. Now, the problem is by the time we got to court, we had lost that video. But we had enough other proof around, you know, their menu.

• 1:17:58Speaker 01

  I mean, every description was exactly the same. The only thing they changed were the names of the tacos.

• 1:18:05Guy Raz?

  They were doing the same exact fried chicken taco.

• 1:18:08Speaker 01

  Same exact stuff, you know, across the board. Luckily, they weren't executing it at all. So that, I think, saved us. But definitely a moment of like.

• 1:18:22Speaker 01

  Holy shit, we got this great brand, we're doing these great things and like, and they were franchising, right? Like, they opened one store and like immediately started franchising, so.

• 1:18:33Guy Raz?

  And you guys were not franchising?

• 1:18:34Speaker 01

  We were not franchising.

• 1:18:36Guy Raz?

  Opening all of your own locations and you continue to do that to this day?

• 1:18:40Speaker 01

  Yep.

• 1:18:40Guy Raz?

  They were franchising and you felt like, oh, this is a potential threat?

• 1:18:43Speaker 01

  This is a huge threat. They've got our food, they've got our recipes, like, they could completely take over and we'd just be forgotten about in the wind and this is our stuff. And so, yeah, we definitely went to the lawyers and the thing went on for about 18 months, but we were able to get them to, to close everything down. So, thank goodness for that.

• 1:19:07Guy Raz?

  All right, 2017, you guys announced that a, a investment firm, General Atlantic, makes a significant investment, which is, I mean, it's a big deal. They're, they're looking at your business and thinking, okay, we can really expand this. And now I imagine by 2017, you had 10 or 15 locations, I think, something like that.

• 1:19:29Speaker 01

  Oh no, we were, we were at 35 at that point.

• 1:19:31Guy Raz?

  Oh, wow. Okay, so you had a lot. And, but with this deal, I imagine there was plans now to really expand this, like to turn this into a national, maybe even an international business chain.

• 1:19:45Speaker 01

  Yep. Mm-hmm. Um, yeah, and I think, you know, the, the, you know, two things we thought about. One was, hey, look, we've been busting our butt.

• 1:19:55Speaker 01

  You know, we don't even know like what we're worth or, or not worth as a company.

• 1:20:02Speaker 01

  We didn't want to like step out, but it was also be nice to like take some chips off the table. Like we've, you know, restaurant, you never know, right? And we want to, if we're going to grow, like, we want the best shot to like do it right. And these guys have done this stuff before. And so we started talking to some people about, you know, hey, what does? What's a good way to accomplish two of those goals to take some chips off the table? And, um, but then also to continue to like expand and work in the business and, and, and, you know, not necessarily write it off. And, and what we came to is like, hey, if you, you find the right private equity partnership, that can, that can work out really well. And

• 1:20:45Speaker 01

  so we went through a whole bidding process and, and really landed on General Atlantic, and they've been great to work with. And just down to earth, they get the business, they get investments, and they had a great track record.

• 1:20:58Guy Raz?

  So you now, I mean, now that there's, there's outside investors, you know, professional investors, I should say, involved with your, you and your original team, uh, there's a different set of pressures, right? And there's a board and it's 2018. And I, I gather that, that year, the board essentially asks you, asks you to step aside. From what I understand, they felt like you were not the right person to help scale the business anymore. And they brought in a quote unquote professional who had been the CEO of California Pizza Kitchen. He was an executive at Texas Roadhouse, a guy named GJ Hart. Um, were you, I mean,

• 1:21:43Guy Raz?

  clearly you, you did, you stepped down and you took on a different role, but, uh, were you okay with that decision? Were you relieved? Did you feel like, oh, I really don't want to do this? Or were you like, I can't believe they don't trust me to do this?

• 1:21:57Speaker 01

  No, that actually, the way that went down was, um, I was ready for a break. Um, and I think the, the five of us were kind of at this point of where we've done what we've done. We've done an amazing job, but like, what if somebody professional came in that's done this before, that's grown a company, you know, two, three, 400 units, that knows what that looks like? What could they bring to the table that could add value? And it was really a group decision. And there wasn't really.

• 1:22:35Speaker 01

  In this new phase, like it was gonna be hard for me or some of my other partners to, you know, one of us to sort of rise above everyone else. And we also knew that like, hey, even though I was sort of running things that like, we were still very democratic in how we made decisions, you know, it wasn't like I was the boss of everyone. And so-

• 1:22:55Guy Raz?

  And now you couldn't do that anymore.

• 1:22:56Speaker 01

  Yeah.

• 1:22:57Guy Raz?

  You were getting, you were getting bigger.

• 1:22:58Speaker 01

  We were getting bigger. We needed someone to kind of be a decision maker on stuff. And so we all agreed with, um, when they came in, um, and they had actually asked like, is, do one of you guys wanna be the CEO? And we all kind of said no. And I was still in the business per se, but not, I didn't want any more direct reports. I kind of wanted to take a step back and just take a breath.

• 1:23:26Guy Raz?

  All right. So you stepped down, but you stay on as the, like in a creative leadership capacity and, um, and the brand starts to, you know, the, the, the company continues to grow. And, um, he, Hart is also leading the business during COVID, which is-

• 1:23:45Speaker 01

  Super challenging.

• 1:23:46Guy Raz?

  No question, very challenging. Um, but manages to kind of steer it through. I mean, I think by the time, you know, sort of by the time it, you know, within a couple of years, 2020, it hits over 70 locations. Uh, so, so not a bad trajectory.

• 1:24:07Speaker 01

  Yep.

• 1:24:07Guy Raz?

  But from what I've read, you weren't happy with, with how it was expanding. I mean, I'm just looking at this objectively. I think this CEO clearly did a good job. I mean, he got it from 45 restaurants to 96 restaurants and, and did that in the midst of COVID. So by any account, a, a success.

• 1:24:28Speaker 01

  Yep.

• 1:24:29Guy Raz?

  But you were not happy with certain things. What, what were you not happy about?

• 1:24:34Speaker 01

  Well, I don't.

• 1:24:38Speaker 01

  I don't know that there was enough thought behind, hey, are these the exact right markets to go into and why? I think it was a little more grow

• 1:24:51Speaker 01

  to grow versus here we growing the right way in the right place. And, uh, you know, and then I also just saw some of our, our branding changing and just, you know, getting a little too corporate for what I felt comfortable with. And, you know, just, they weren't bad things per se, but they were just, you know, things that sometimes if you're not, um, you know, vocal enough about that like and start, you know, start to water a business down, if you will.

• 1:25:26Guy Raz?

  Yeah. Um, Hart eventually just decided to retire.

• 1:25:30Speaker 01

  Yeah.

• 1:25:31Guy Raz?

  Um, in 2021. And you came back.

• 1:25:35Speaker 01

  Yeah.

• 1:25:35Guy Raz?

  As CEO. Um, did you, is that something that you wanted to do? You said, I, I think I, I gotta come back in.

• 1:25:43Speaker 01

  I did.

• 1:25:43Guy Raz?

  And, and, and, and bring us back to the core, the heart of what we are.

• 1:25:47Speaker 01

  Yeah, yeah, I definitely did.

• 1:25:49Guy Raz?

  When you say went too corporate, I mean, what do you mean? Like, I mean, the quality was, was affected. The, the restaurants didn't feel like, like they were welcoming. What do you mean by that?

• 1:26:01Speaker 01

  Yeah, just some of the, the, we'd lost some of the edge to our culture. They revised the logo, um, which I didn't really love. Um, you know, so we've kind of dialed that back, you know, back to more of our original logo and how it looks. Um, the restaurants started to get away from our core. You know what I mean? Like, we're a cool, local taco shop, right? Like, that doesn't look like 5,000 square feet. That looks more like 3,000 square feet, like, cool, funky, graffiti on the walls, um, not this big, kind of massive dining room and everything else.

• 1:26:45Guy Raz?

  When you came back as CEO, you you got rid of or you closed down a couple of restaurants, including two in Wichita, Kansas, and you laid off 65 employees at headquarters.

• 1:26:58Speaker 01

  Yeah.

• 1:26:59Guy Raz?

  Was that, did you feel like there were just too many people, they had over hired? Or was it more of a quality thing?

• 1:27:06Speaker 01

  We were definitely over, we just had way too much headcount for what we needed, you know, and I remember kind of looking at the, you know, at the business kind of going like, what are all these people doing? Yeah. And just,

• 1:27:26Speaker 01

  and just spending a lot of money that like, we didn't have really to be spending, even at that point, even being as big as we were. And it just, it was time to like, get back and focus on what do we do? We we serve damn good food, we give damn good hospitality, and we run damn good shifts. Right? Like, what's the core part of our business that got us to the dance? So really took a step back and really focused back in on, you know, our operations. And like now, if we go open a new restaurant, I always make sure there's at least one internal hire that's a manager in that restaurant

• 1:28:09Speaker 01

  versus just everyone being new from outside.

• 1:28:13Guy Raz?

  You guys are in 16 states right now. Tell me about what the plan is. I mean, you know, I remember interviewing the founder of Five Guys many years ago on the show. And I've got thousands of locations around the world and they're in Paris. And my children ate there when we were in Paris. I'm like, guys, we're in Paris, you're going to Five Guys? They're like, we ordered it, we ordered it in French.

• 1:28:37Guy Raz?

  What is the plan for Torchies? Like, are you looking at a future where you've got thousands of locations, not only in all 48, maybe 50 US states, but but abroad overseas?

• 1:28:50Speaker 01

  I mean, immediately, I think we'd like to be a national brand in most, if not all, 50 states. International, that's probably above my pay grade at this point, but definitely, definitely nationally, we definitely want to expand more up and down the east and west coast, for sure.

• 1:29:07Guy Raz?

  You stepped down from your second stint as CEO in early 2025, and now you are, what's your role in the company?

• 1:29:17Speaker 01

  Chief Innovation Officer. So my whole thing that I'm focused on now is on a lot of innovation and kind of restaurant excellence, if you will. So really focusing in on new food, new items. The restaurant business has gotten very competitive. So I think to win these days, you've got to be bringing out new products, bringing out new stuff. And also, just really looking back in at our operations and our kitchens and hey, can we be more efficient? Can we be faster? What can we do to improve our operations?

• 1:30:01Speaker 01

  And, you know, kind of really dialing that in as we kind of get ready for our next phase of growth.

• 1:30:08Guy Raz?

  You know, Mike, I'm curious. I mean, as you, as you reflect on, on, on just your story, you've become a very successful entrepreneur. Like, that was not going to be your life story.

• 1:30:21Speaker 01

  No.

• 1:30:22Guy Raz?

  Like, like, your life story could have been strung out, in jail, dead.

• 1:30:27Speaker 01

  Yeah.

• 1:30:27Guy Raz?

  Like, any of those things.

• 1:30:29Speaker 01

  Yeah.

• 1:30:29Guy Raz?

  It's kind of amazing, actually.

• 1:30:32Speaker 01

  It is. It is. I think, and it's funny, you know, I've, I've been asked that before, like, hey, do you really celebrate your success? And, you know, I think, you know, one of the advantages and disadvantages of, I think, being successful and being an entrepreneur is, you know, sometimes you don't take the time to sort of celebrate your wins because you're just focused on sort of the next thing in front of you. But there are moments where, like, I got nominated an award at my culinary school for like a legacy achievement award. And I remember receiving that up in Providence

• 1:31:14Speaker 01

  and just broke down in tears because I just, I hadn't really given my cha- myself a chance to like, hey, man, look what you have done. Like, this is an incredible story and, and, you know, look at all the opportunities you've created for people and, and what you've been able to do and what you've been able to overcome. Like, sometimes it's hard to take a step back and sort of reflect on that.

• 1:31:41Guy Raz?

  When you think about, about the, the, what happened to you, where you started and where you are now, you're roughly the same age, you're just, you know, 50-ish.

• 1:31:52Speaker 01

  Yeah.

• 1:31:53Guy Raz?

  And, uh, I mean, you did not grow up with a lot of money. You've got, you've made a lot of money. You've built a growing business that is just gonna get bigger. I'm sure if I see you in 10 years, Torch is gonna be much bigger. How much of, of, of this do you attribute to the work you put in, the grind? And how much do you think has to do with just luck and fate?

• 1:32:15Speaker 01

  You know, probably 75% work and ethic and doing the right things for the right reasons and 25% luck. I think anyone that says there isn't a little bit of luck that gets people to that level of success is, is lying to themselves. I think, you know, the pumpkin patch story I talked to you about, right? That could have put us out of business, right? But for some reason, there was a damn pumpkin shortage that year. That kind of got us to the next level. That helped refill the coffers to make sure we had enough payroll to cover the next two months of business, right? Like, so there's little things, I

• 1:32:56Speaker 01

  think, like that that come up that help businesses along. But then I also think that you're not set up for that type of luck without all the hard work that goes into setting you up for that, if that makes sense.

• 1:33:14Guy Raz?

  That's Mike Rypka, founder of Torch's Tacos. By the way, remember how Mike says he has a hard time celebrating his wins in business? Well, he has a pretty different attitude about his sobriety.

• 1:33:26Speaker 01

  Yep, I still haven't had a drink in 33 years. I just celebrated this month.

• 1:33:32Guy Raz?

  Thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in big ideas about business and entrepreneurship, sign up for my newsletter at guyraz.com or on Substack. This episode was researched by Catherine Cypher and produced by Carla Esteves, with music composed by Ramtin Arablouei. It was edited by Kevin Leahy. Our audio engineers were Patrick Murray and Gilly Moon. Our production staff also includes Casey Herman, J.C. Howard, Neva Grant, Alex Chung, Andrea Bruce, Sam Paulson, Elaine Coats, Nora Gill, and Kerry Thompson. I'm Guy Raz, and you've been listening to How I Built This.