Why Portillo’s is as good as gold

One billion dollars for a business that started off with a Villa Park trailer hotdog stand back in 1963! That ain’t too bad. My hat’s off to Dick Portillo for reminding us that, despite so many efforts to kill it, the American Dream is still alive and hard work can still pay off.

These days, Portillo’s boasts 38 locations in four states with each store grossing $8 million in annual sales.

portillos

But before we continue, please note that the happy new owners are actually the Boston-based Berkshire Partners and not Warren Buffett’s Omaha-based Berkshire Hathaway as was erroneously reported in a number of newspapers.

Other than a penchant for investing in interesting businesses, the two companies are not related.

This is what, Josh Lutzker, Berkshire Partners Managing Director had to say about their purchase;

“Portillo’s is a highly differentiated restaurant with a passionate customer base. In addition to great food, the Portillo’s name stands for quality and service. We are looking forward to working with Dick and his management team to uphold their culture of excellence.”

And he’s dead on, because what separates Portillo’s from every other fast food chain (and almost every other chain in general) is their astounding customer service.

The list of local businesses I actually look forward to visiting is very short; Geneva Running Outfitters, Graham Cracker Comics, Dick Pond’s, Elburn Market, Halsa, and Portillo’s. The rest I simply endure.

Enterprises like McDonald’s will apply their vast research resources into getting as much money out of you as they can (larger straws) and getting you out of their establishment as fast as they can (hard seats), but everything about Portillo’s is customer-centric.

It starts in the parking lot where peak hour attendants will take your order or direct you to the nearest parking place. Once inside the restaurant, there’s just one line so you don’t have to worry about perennially picking the slowest queue as is frequently my fate.

The order takers are pleasant, competent and they don’t immediately go into meltdown mode if you make a special request. The food is reasonably priced, it’s reasonably good, it comes reasonably quickly, the atmosphere is welcoming, and the staff keeps the place pretty clean.

If you phone ahead, your order is actually ready and accurately filled when you arrive to pick it up.

The amazing truth is, I’ve never left a Portillo’s restaurant while grumbling to myself, “Well, that sucked!” It’s clear that Dick Portillo understood it’s all about the customer from the beginning and he’s never deviated from that simple recipe for success.

And while this kind of customer-based business ethos always starts at the top, it’s generally pointless if you don’t make some effort to value your employees because they tend to treat your clientele exactly as the company treats them.

Having been there, I know working in a fast food restaurant will never be a perfect endeavor, but Portillo’s generally pays their frontline staff a bit above the minimum wage. Their managers make around 25 percent more than they would at a place like McDonald’s. And when you pay better than the competition, you attract better people.

The bottom line? If you peruse the most popular employer review sites, most employees enjoyed their time at Portillo’s.

When hearing of the Berkshire Partners purchase, I was terrified they’d immediately embark upon the too typical kind of corporate slash and burn cost cutting campaign that has doomed so many of these transactions.

But the investors clearly see the merit in keeping Dick Portillo and his management team intact and on the job. That’s were the real value is.

Considering the crowds that regularly descend on the Batavia Portillo’s, what I don’t understand is why other companies haven’t picked up on their eminently simple formula. Offer a good product, treat your employees well, always put the customer first, and you will succeed.

A billion dollars certainly ain’t nothing to sneeze at.

2 thoughts on “Why Portillo’s is as good as gold

  1. I personaly like Culver’s they also have a formulae which works. Pleasant staff quick service and excellent food. I wish I had a franchise.

  2. Cary, I don’t eat at fast food places very often so I’ve never managed to try Culver’s. I’ll have to give them a shot.

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