On any given day, the parking lot of the Texas Roadhouse in Humble, Texas, is packed. When I last visited, peanut shells were scattered across the floor. Servers wore black T-shirts and blue jeans while delivering dinner rolls and sizzling steaks to wooden tables. On occasion, they danced in a line. It felt undeniably Texan.
Except Texas Roadhouse isn’t even from here. It’s from Kentucky. And yet, the apparent longtime cosplay has done nothing to impede the restaurant chain’s exceptional growth and performance. Texas Roadhouse has become the Texas that most of America has now embraced.
Dr. Benjamin Johnson, a professor of history at Loyola University Chicago, told Chron this isn’t entirely surprising. Also the author of Texas: An American History, Johnson said Texas has become less of a defined place and more a state of being. “Texas is kind of a vibe moreso than a place,” Johnson said. “It’s not surprising to me that something outside of Texas is branding the restaurant that way.”
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View of a Texas Roadhouse restaurant exterior building located in Hesperia, Calif.
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Texas has long fought an image others perceive it to have: cowboys, cattle, oil, beef and plenty of “howdy” and “yee-haw.” The commerce surrounding that mythos, as marketed by Texas Roadhouse, has only served to propagate that image to the rest of the U.S. and the world.
“The iconography is a part of this,” Johnson said. “Most people from Illinois don’t know what their flag looks like. Most people know what the Texas flag looks like.”
The rise of Texas Roadhouse
Kent Taylor tapped into that brand when he founded Texas Roadhouse. According to lore and legend, Taylor was inspired to create an affordable, Texas-style steakhouse after seeing so many skew more expensive with little personality. He brought the idea to potential investors and was allegedly rejected more than 80 times. At last, he drew up his idea for the restaurant on a cocktail napkin and opened the first Roadhouse in 1993 in Clarksville, Ky.
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Texas Roadhouse didn’t take off at first, finding its footing and momentum in the 2000s. John Gordon, founding principal of Pacific Management Consulting Group and restaurant industry expert, told Chron Taylor was a pioneer in the space and built his empire from tried-and-true thinking versus novelty and gimmicks.
For one, Texas Roadhouse kept the focus on the food.
Texas Roadhouse weaves USDA choice and USDA prime beef products in its menu. The goal is to create value in its overall menu, setting up customers to take advantage of combo deals and sides.
Lori Van Buren/Albany Times Union via Getty Images
“This is an old restaurant strategy: Don’t put so much money into marketing,” Gordon said. “Put those funds back into the quality of the meat. That has worked.”
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Second, Texas Roadhouse is generous with entrée weights and value. You can get a 16-ounce ribeye steak for $28. That’s half the price when compared to more premium steakhouses. And if a cut of protein is small, it’s often paired with another meat and sides as an affordable combo.
Taylor was also careful with expanding and positioning his restaurants. According to Gordon, Texas Roadhouse shied away from high-rent areas, like Los Angeles and New York City. Instead, the restaurants found locations in the “middle of the country,” often in places where competition was scarce.
“Roadhouse came into its own very strongly since about 2000,” Gordon said. “They were able to get into these markets before [large restaurant operator] Darden acquired Longhorn and then they began to ramp up sales and development. It was a timing thing.”
Nothing else quite like Texas Roadhouse
The strangest thing about Texas Roadhouse isn’t that it successfully co-opted Texas iconography and culture, or the perception of those things. It’s that no one else in Texas or elsewhere thought to do it before Taylor did.
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In Texas, it’s likely that independent steakhouse operators didn’t think to break out nationally and just stayed where they were. Others, like Logan’s Roadhouse and Outback Steakhouse, are playing catch-up after years stuck in the private equity cost-cutting muck.
Saltgrass, which first opened in Houston along the Katy Freeway, is probably the closest counterpart to Texas Roadhouse. It’s a dedicated steakhouse, it has more than 80 locations under its belt, and its aesthetics outwardly convey a sense of Texas. But despite its size, it never seemed to crack the barrier into becoming a widely recognized national chain.
Customers enter the Saltgrass Steak House near the Meyerland Plaza Wednesday, Sept. 9, 2009, in Houston.
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Gordon’s theory rests squarely at the feet of American billionaire Tilman Fertitta and his hospitality company Landry’s, Inc. In 2002, Fertitta purchased Saltgrass and its 24 locations for $75 million. While Gordon praised Fertitta’s business sense and common-sense acumen, he said he believes the billionaire’s decisions ultimately hobbled the brand at the start.
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“Because Landry’s … were interested in other things, they didn’t put the capital spending into building as many restaurants,” Gordon said. “And they had to come up with enormous amounts of money to come up with hotels and casinos.”
Terry Turney, the COO of Saltgrass Steakhouse, told Chron he disputes that accounting. For one, he says the two chains cater to different customers: Roadhouse locations are confined to the suburbs, while Saltgrass has restaurants inside city limits. According to Turney, Roadhouse has a much lower check average as a result.
Turney also pointed out that Saltgrass has over 95 locations across 16 states, not just Texas.
“Texas Roadhouse is a publicly traded company and has no choice but to open new units to maintain and grow their stock price, whereas Saltgrass Steak House is owned by a private individual that has a longer term outlook,” Turney said.
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Meanwhile, Taylor and his successor, Jerry Morgan, never lifted their foot off the gas when it came to funneling money back into the restaurants. What’s ultimately happened is that Texas’ rejection of the responsibility of curating its image has led other out-of-towners to run with it instead. Texas Roadhouse is just continuing the tradition laid down by folks like, for example, television producer David Jacobs, who wrote the mega-popular primetime soap opera Dallas from Los Angeles.
“I think a restaurant like this taps into that in a way that brands their food and the experience of going, (so) when that’s constantly done, it’s a kind of Texan that gets reinforced,” Johnson said.