How Smokey John's Built a $3.8M Dallas BBQ Business and Got a $100K Offer

Rarely does a family business workout, but here in Dallas, these brothers have successfully taken over Smokey John's from their father.

Dad had a great huge personality. Yeah. Before there were celebrity chefs, he was kind of a celebrity barbecue guy.

They're scaling fast. Their revenue will shock you. So if you guys crush it this year, what do you think you'll do all in top line?

Goal is over four. Okay.

And does it feel doable? Or does it feel like, oh, no.

It's doable. Yeah.

So they're sitting on a massive opportunity. A major grocer chain has reached out NASA to develop a new product for dozens of their locations. What is this new project you guys are excited about?

Sweet potato pie. We need about a 100 k to be able to launch this full program for the sweet potato pie. We gotta buy equipment.

The big question is where will they get the cash to invest in the new product line? That's where I come in. If I can cut a check to speed up their product cycle, I'll invest on the spot.

Hey. How are you guys?

Hey. What's going on?

I'm Juan. Good to

meet Good to meet you. Nate Nate. Brent. Brent and Juan.

Yes, sir. Yes, sir. I hear this is the best barbecue in Texas. Is that right?

We are Smokey John's Barbecue, second generation owners. Our dad started in 1976 right here in North Dallas, just a little bit down the street from the airport.

Okay. Very good. And how long have you been in this location?

So we've been here since 1999. So we're, twenty six years. But the but the thing is the company will be 50 That's insane. In a few months.

So you guys now run this full time. When did you officially sort of step in and take over?

Oh, twenty thirteen. 2013. Yeah. Our dad was tired of our crazy ideas, and he was like, you know what? Man, y'all just take it and just run with it. In the

early years when he got going, what was he best known for in terms of food? Okay.

If you wanna share Well, no. His something that he needs know about.

His dad had a great Big personality. Yeah. Never met a stranger. Yeah. Everyone's friend. He was business partners with Dallas Cowboys of the seventies and eighties. So before there were celebrity chefs, he was kind of a celebrity barbecue guy.

He's a serial entrepreneur. He started a thousand businesses. And so he had roofing business. He had a mortgage banking business, insurance business. And what he would do is when he would close a deal with you, would smoke a turkey or a ham for you Oh, I love that. Just to say thank you gift. Just a little thank you gift. And what happened was he started getting more calls for turkeys and hams than for, like, roofing and

insurance business. Wow. And so at one point, he had over a 100 turkeys in his house that he was cooking customers. A friend of his came over and was like, John, what are you doing? You need a restaurant. He's like, okay, maybe I need a restaurant.

I always like to ask when I meet founders like this, like first year sales, but we're going way back. I don't expect you to have this memorized. Oh, have no idea.

It's literally 12/31/1998. We opened here.

The catalyst really for you guys is getting really involved in the business was the opening of the second location.

A 100%. Yeah. It was really for me, it was like life. I was at a stage in life where I realized I wanted to try something different. I'd been working for these big marketing companies and traveling all over the world. I had all these big ideas, and I'm like, I've got the secret sauce of how we're gonna blow this up. And what I didn't have is the budgets that I had when I was working for those other places. Yeah.

Had zero budget. What was the best

year revenue wise the first location had? Do you remember?

My dad had a club and bar that was also in restaurant. Okay. So he would have people like Al Green that would come in. BB King would play for ribs for free. Yeah. He was just... When he would finish the set, he'd come to the restaurant and play for ribs, you know? And so, like, at that time, it was really going well, and dad was doing about 500,000 a year out of that place, but you can $77.78. That's good money. That's good money.

People would never go work for their parents, much less take over the family business. Leave a comment below. Would you take one over?

So we do a significant significant amount of catering. So we've got some box lunches that are gonna be going out for tomorrow's event. And so the team is getting all that together right now.

Very cool. Is that... Is catering a big part of your business?

Yes. The catering is about 31% of our business. Oh, wow.

Wow. Was it always that big?

No. No. Okay. No. No. When we when we first started, catering was probably about, 18% of our business. The interesting thing is as we've grown the catering business, the restaurant business has increased as well. Absolutely.

So they they they actually They have each other.

They kind of kind of feed each other.

Yeah. So how many of these boxes will you deliver on a monthly basis right now?

Over a thousand. Over a thousand. Yeah. Over a thousand.

I mean, this... We've got 185 going out just tomorrow.

Yeah. So explain this part of the business to me. This is people walking into the shop. They're buying food real time. How big is this in terms of business?

Yeah. This is the lifeline. I mean, this is what happens. This... We're old school, cafeteria style. So you literally come in, look at the meat, pick it out, order what you want, and then you come down here and try some of our home cooked old fashioned sides.

How many people will come through on a daily basis on average? Or actually, maybe weekly. Yeah. On a weekly basis on average.

About twelve hundred twelve hundred to 1,400 meals

a week.

Oh, easily.

And that's through the door. That's through the door. Like DoorDash.

You still do third party and we have online business. Interesting.

Of total revenue you did last year, what percent was either Uber Eats, DoorDash, or people walking through here?

With us, with the fare, the restaurant, and catering, they're all 31, 32, 33. So you're diversified? Yeah. We're we're very diversified.

You mentioned this fare thing. That seems like it's a massive chunk of your revenue. What is the fare?

Yeah. So it is the largest fair

The state fair of Texas.

State fair of Texas is

the largest fair in the country.

Absolutely.

And it's one of the biggest well attended fairs in the world. It's about 2,000,000 people over twenty four days. Mhmm. And it's it's it's a big deal.

Is it mainly barbecue typically?

Oh, no. No. If anything. All crazy foods that we create. Crazy stuff just

for just for the fair.

We created fried jello. That was the first people to ever do that.

Just so the audience has context, your best state fair in terms of revenue was about how much revenue?

Best one is over 1,000,000.

Over 1,000,000. Which fair was that? Do you remember what year?

Two years ago.

What do you guys aim for this year in terms of profit margin? Do you aim for 10%, 20%, five eighteen to 20 is what we're teaching for.

That's our goal.

That's doable guys.

We need to work, you know, we've got to keep cranking it out and get all of our... And we've got some new things going. We've get everything to keep it rolling, but it's it's definitely doable.

This is

where we cook everything. So we'll cook the brisket overnight, and the brisket actually smokes on this for sixteen hours.

We have a guy that comes in in the morning who wraps them, and then we throw ribs and chicken, and we cook everything on this. We have some chicken on.

Chicken cooking. Right?

Some chicken thighs. Okay. We got some turkey breasts.

Let's see what we got.

Oh, you see Oh, those are smell that smoke.

So that's chicken pieces right there.

Yeah. We've got This pit can hold about 35 to 40 briskets at one time.

You guys mentioned earlier off camera that you got... You would need to replace this. Why do you need to replace it?

Yeah. So we're actually going to a a full wood smoker.

Barbecue's evolved. When our dad bought this, it was the idea of mass production. Yeah. And now, through the advent of what I like to call a craft or boutique style barbecue, people are looking for a little bit different flavor profile, a little bit different technique.

Is it number of hours? Is it the sauce? Is it the season? What makes a best brisket? Everything.

I mean

So it's gonna be it's gonna be your wood. It's gonna be the cut of meat, how you prepared the cut, and then what you season it with. We have our own blend of seasoning that we it.

Yeah. It's our own...

I saw dad's original recipe is, like, a base. We add a

couple other things to it. On average, when someone checks out here at the register, what's the average cart value? And, typically, what are your ingredient costs? Just the food cost on that checkout.

He plugs us in every day.

Brent guy?

Yeah. Every day he's doing this.

So we... Our food cost is between 2730%. Okay. That's what we try to be. Anything over that, we're losing money. Yeah. So we try... Like, our goal is 25, especially with catering. So catering gives you the opportunity to keep your food costs as low as possible because there's no waste. People are Oh, I see. Buying for a 100 people, you get the food for a 100 people. With a restaurant, we don't know how many people are gonna come in today.

Yeah. You're We're cooking today hoping a certain number of people come in.

So you're working on projections. You know? So you... Sometimes you're right. Sometimes you're not.

So with all that being said, what is the average checkout value? Like, I know when I just got my lunch, I think it was, like, $25 just for one person.

You're right about 26 to $28.

Okay. That was right on the money.

I'll get 26 to 20 per per person per person.

So if I do the math in my head, you're doing between a thousand and 1,200 meals here per week. Assuming average month has four obviously weeks and I can take the 4,000 ish meals per month times that 25 to 30 price point. That means you're doing somewhere between 100 and $120 a month in revenue just from the the line.

You got it. That's about right. Yeah. That's about right.

No. Without Uber Eats, without DoorDash yet or is that probably included?

That's included. Yeah.

That's all included.

But not included in the catering though.

So then I can... Can I reverse engineer if a 120 is 30% of your business? It means all in you're doing about three times that per month Yep. With the fare plus the catering?

5%.

Yeah. So it's like We

average it.

We average it.

We average.

The fair is only twenty four days.

Yeah. Yeah. Yeah. Yeah.

The back... The fourth quarter of the year is our biggest biggest time of the year. Okay. Because we have the state fair. As soon as that's over, we roll into Thanksgiving. Huge catering time for us.

Can imagine.

And then as soon as that's over, we roll into the Christmas season.

What did you finish all in last year in 2025? Do you remember?

Right right under it. We were at three eight.

Three eight. And what about the year before that? The year before, we were at three five. Three five. Okay. So is that like... Is that the right growth rate to target a sort of increase by 300 to $400 per year in revenue?

Yeah. For the last, two years, we were losing a lot of money. We were going like, what's going on? So we hired a restaurant coach about eighteen months ago

So instead of making... Instead of taking home 18%, we might be taking home five So it's like we're generating... The revenue's going up every year, so you would think our income's coming up every year, it wasn't. Because our parents were mom and pop. Yeah. They were keeping the lights on. They were making sure we were in private school. They were making sure we're going to college. They were not effectively growing the business.

We weren't understanding how to actually grow the business in terms of, you know, what are the positions that we need? Who do

we need to hire?

We didn't make sure that the things we're investing in were actually generating revenue.

That's right. You guys know this online just talking directly to you. You know, I know these guys are ahead of the curve because what most people do is they just look at top line revenue and they go, how do I scale that as fast as possible? Very few people look at what they actually So if you can focus on making sure what you keep is big on a percentage basis and then scale, that is definitely the

right order of operations. If you agree with how these guys are... Did it, you know, economics first, scaling second, leave a comment below, show them some love. Seeing the sauce up here and I do know when I just ate here at the lunch, the sauce was absolutely delicious. Is this something that you guys sell separately?

We do. So we sell the sauce online, and then we also sell the sauce through an H and B affiliate, which is called

Joby Joby Smart Smart Shop. Okay. And the funny thing about that is growing up, I didn't like barbecue sauce. I didn't like condiments. And once I started to eat our barbecue sauce, I thought it was the best thing ever. I thought that's going to be our future. And we're learning that maybe it's not.

Why is that? What happened?

Because the rub is where it's The rub is where it's at. This is

a rub that dad created years ago. This is what he started cooking with those smoked turkeys. He would season that with that.

We sell this rub in HEB. So it's in like over 120 HEBs throughout the state. We sell both of these in Jovies and then we sell not this exact packaging, but the banana pudding.

All three of these are in HEB today? They're in Jovies Smart Shopper. Which is an HEB affiliate. Yes.

Exactly.

Okay. How did... When was the first year you sold your first one of these in Jovie's?

Well, they just opened the first Jovie's here in 2024. When Jovie's was coming to Dallas, said, Hey, we'd like to get your sauce and rub. And they asked us to do the banana pudding as well. We'd never ever considered manufacturing banana pudding. Our peach cobbler has always been our star. And so when they came to us to ask for banana pudding, thought, Sure, we can look into that. But the peach cobbler, because we've already... We know

that you can cook the peach cobbler, we know that it freezes, we know that you can ship it. We've done that for people. We never tried any of that with banana pudding. And so they asked us for it, we're like,

we don't know. Which one's your best seller? Oh, I would have not expected that.

I would have number one.

If you told me we'd be where we are today with three products in the store, what would be the number one seller? I would have said this.

Of course.

Or or the... Definitely not the... I would

have said the sauce a 100 times just because I think our sauce is really good.

And this is perishable. And that's perishable. What do you guys sell these to the H E B affiliate for?

$50.03 for the 16 ounce, and we sell the 32 ounce for $10.50.

What does that one retail for? $7.77. So I don't know what those wholesale margins are like. Are those healthy?

It's decent.

For us, I don't think. Yeah. Yeah. Yeah. Mhmm.

Yeah. Okay. Why can't someone just rip this off? Is there some secret ingredient dad came up with? I'm talking to

her about this recipe. Okay. It's alright. And we actually make it the exact way she did over a double boiler. So this is handmade pudding.

How many of these units will you sell in a given month through H and B affiliates?

Close to 5,000. We stumbled into this because they requested it. And so we went to one store and then they were opening a second store. So, okay, you guys ready? Sure. Yeah, of course. Because we're not making any money selling into one store. We added three stores, and then another store in Houston wanted it, so we added four. Now this product's in all 14.

What's the growth plan? How do you guys grow this business, and where can I help? Is there a capital request you guys have and need?

HEB's asked us for another product. Okay. We're gonna launch it in Jovies with the goal to to be able to get that to HEB. 100%. Okay. There's... Including Mexico, there's like 400 HEBs.

What is this new product you guys are excited about?

Sweet potato pie. Right now, nailed the recipe. Now the next step is to be able to scale the recipe. The break point is, do we make this product like we're doing the pudding ourselves or do we have a co packer? Okay. If we make it ourselves, we gotta buy equipment.

How much would you need all in to do that?

All in, I think 50,000 gets us all in.

I think it's more.

What do you think it'll be? I'm thinking if you're gonna... At the level that we're talking about, I mean, they've... If we use the kitchens where we are, we've gotta go to a bigger kitchen. So your your your your fixed cost is already higher, much I think we need about 100 ks to be able to launch this full program for the sweet potato pie to get everything on the ground, get everything set, get the boxes, the labeling, the whole process.

Okay. Well, look, you guys are doing well over 4,000,000 of revenue. So 100 k of debt or 100 k equity would have where I'd make an offer here. It seems doable if you guys don't have other debt on the balance sheet. Do you guys have any other debt on the balance sheet?

Yes. We're about to pay it off this year. About 38,000.

Okay. That's still relatively low, though. To me is easy. I'll just collateralize against the equipment. Okay. Use the funds is the equipment, just like a bank gives you a home mortgage. And then we just have to then think about how long is it gonna take you to launch the new program, generate enough cash flows to then pay that back down.

So they want it in the store this year. Unlike the banana pudding where we rolled it out in a store here and then two stores, we're going in full blast. So they're going in 14 stores from the beginning.

Are you guys open to selling equity?

It's funny you say this. We've had this conversation. We've not had partners before. Yeah. Well, our dad's experience with partners didn't go well.

What happened?

He had one that took cash, one who was a genius. They had a great idea and he passed away.

Yeah. Well, I can assure you of two things. I won't embezzle cash, and I'm not a genius. So I I think we're probably... Those are two good steps. Let's just start with... Looking pretty safe. Yeah. Looking pretty safe right now.

Okay, well maybe we'll stay away from equity then if you guys aren't comfortable, but you know, one thing we could do, I'll just plant the seeds if If you we, if you can't accurately forecast the new revenue that will come from the new line, that makes it really hard to put a payment schedule back on the debt. Right. The only really way to do it then would be an equity tranche.

Gotcha. Would it be an equity for a period with a buyout plan?

So we could do something where it's a $100,000 offer where you're only responsible for paying maybe $50,000 back. The other $50,000 we could choose to convert into equity at a set valuation. The valuation question obviously is a whole another question. Have you had anyone come in and offer to buy the whole business before?

Yes, we get them pretty much two a week.

Two a week? Yeah. What was the largest one you've got?

So they're always around 1,000,000, million and 0.5.

Okay.

Which for us, mean, that's just that's not worth it for what... Where we see that we can take the business. We haven't even scratched the surface at this point.

3,000,000 all cash up front for 100%. Do you take that deal?

I don't think so.

No. Sisters, goal is to be able to build this business up to at least 15,000,000 to $20,000,000 valuation so that we can take care of her and take care of all of our families. And then that's something that we're that's what our goal is.

We got to get a big enough number that makes sense so that if we're going to do all the work and then share the wealth that we can do that without any regrets, without any hard feelings, without any any questioning why did we do it.

Yep. Yep. Well, look, I've heard a lot. It's it's helpful for me to see you guys react to these different things. Throw out a second. I'm starting to go, okay. What are they likely to... What would work for them? What would not work for them? So what my offer will be is a $100,000 for you guys to go use to launch the new product. And what then we'll have you do is pay that back to its debt. You pay it back in time, make back 1.2 x that. So a $120,000.

Okay.

The question would be like how... Is it fixed monthly payments? Is it a percent of monthly revenue? You know, how do we structure the payback?

Our question would be how fast could we go from the 15 stores to actually going into HB? What? Because now you're talking about if we're able to go into at least 200 of those stores, we're talking about we can make those payments back quickly.

Is it a two year payback doable? Can you do it in a year? Do we need to extend it to three years?

It would probably have to be a three year payback.

Okay.

But our goal is always going to be to Yeah, beat

100%.

I mean, we're... So here's where I'll do this, because if my money is outstanding longer, it means it's at risk longer. My offer is $100,000 If you pay back in a year, you pay back $110,000 1.1 X multiple. Pay back in two years, it's a 1.2 x. Okay. Payback in three years is the 1.3 x.

Yeah. That's fair.

That's fair. That makes sense.

This is what you do, Nathan?

I mean, it's it's gotta be a brainstorm. You know? It's a two way street. Yeah. I ultimately, though, I'm not really interested in a 100 k check. I like the business. You guys also have... What you can't buy in a brand is, like, legacy and story. Right. Right? It's this. It's the wall and you guys. Yeah. That's, like, the real value. The question, it's just a matter of time before we get to 15,000,000 of revenue. Right. So I should actually change my offer. I also want the the the the option to buy five percent of the business for a $250,000 anytime over the next five years.

That's that's really interesting.

That's a that's a...

I love it.

Consider it.

While they're while they're doing their brotherly look into each other's eyes and decide how to respond thing, I'll talk to you guys on YouTube and act like I'm not listening. I'm listening very closely. I'm acting like I'm not. But what what do you think? Would you guys take Yeah. That I I sort of valued the business. You know, basically said 5% at $2.50. So you guys can do the math on that multiply times 20. Right? That

gives the value of the business. But the reason I'm doing that is basically it's a it's upside extra for me. Right? If the new product does really, really well, right? A 100 k. It allows me to basically lock in a valuation where I can get some more upside before the growth happens. So that's why I sort of package the offer that way. Ultimately, though, they've got to know what the cash flow looks like, what the HEB deal looks like, see if they can make the numbers and economics work. Obviously talented team, talented product, a lot of fun. So what are you guys thinking?

It's cheap money. It is cheap money.

Let's say yes.

Got a deal?

Alright. I'll tell Think on it.

Let's see where this goes. But guys, I

feel good about this. Alright.

I wanna work with you guys.

We wanna work with you.

Let's see what happens there. Alright, Brent. Good to meet you. Thanks, Nathan. Juan, Brent. Yeah. Thanks so much. It. If you guys like that deal, remember, new episodes drop every Wednesday. Click here to subscribe so you don't miss out. Also, wanna see more deals like this one? Click here to see the next deal immediately.