Austin Monthly : P. Terry’s is on the Cusp of Becoming Texas Fast-Food Royalty

Terry, it seems, positions himself as that very special jackass.

At his Jetsons-meets-Friday Night Lights burger stand that now boasts 19 locations around Central Texas,
the signature dish is made with 100 percent all-natural Black Angus beef, a house-baked bun, toppings in the form of naturally ripened tomatoes and fresh lettuce, and special sauce (onions and pickles are noticeably absent because Kathy has an aversion to them on burgers, although they’re available by request). A single-patty version goes for a dime more than Patrick’s aforementioned high-water mark for quality and value—a figure that has only gone up $.70 since the Terrys debuted their first restaurant at the corner of South Lamar and Barton Springs Road in South Austin in 2005. Fifteen years since opening that 527-square-foot drive-thru, the Terrys have hired more than 650 employees, expanded beyond city limits, and brought in a category ringer, CEO Todd Coerver, who has been instrumental in the rise of several fast-food giants, including Texas icon Taco Cabana.

This is all because Patrick and Kathy have big, big plans for their former mom-and-pop brand. Think P. Terry’s’ Atomic-Age architecture dotting all major arteries of the Tex- as map. Think fresh-squeezed lemonade and all-natural burgers in every small town in the state, its neon signs appearing at interstate exits to lure travelers away from the omnipresent glow of the Golden Arches. In terms only Texans can truly appreciate: Think a burger destination that is as big as Whataburger.

“We certainly have that ambition,” says Patrick, in regard to competing with the big orange elephant in the room. “And we think our brand and what we serve is strong enough.” While their immediate plans for expansion are focused along the I-35 corridor, the Terrys eventually hope to build in towns both big and small across Texas.

Mind you, that’s a task that could prove taller than Big Tex or the San Jacinto Monument. Compared to Whataburger, which launched in 1950 and has had multiple decades to inspire devotion, P. Terry’s is a relative newcomer. The latter is also a company with deep ties to Austin. Will the rest of Texas embrace a capital city interloper that prides itself on their veggie burgers and a sourcing ethos inspired by Eric Schlosser’s Fast Food Nation?

That’s what the Terrys are banking on as they eye major growth in Houston, San Antonio, and everywhere in between. And with confidence in the once-infallible Whataburger shaken after the A-frame goliath sold a majority stake to a Chicago-based investment firm in June 2019, homegrown P. Terry’s seems uniquely poised to be the next cultishly adored burger purveyor, griddling its way into the hearts and stomachs of Texans everywhere.

 

GROWING UP IN Abilene, Texas, Patrick Terry would often look up at the massive neon sign at Mack Eplen’s Drivateria—complete with a cartoon chef and a “Time to Eat” clock that the town set its watches by—and daydream of opening his own stream-lined burger stand while indulging in his typical order of a #7 kids burger (complete with Eplen’s famous square patty and special sauce). “Mack [Eplen] had his own kitchen and made everything from scratch, even the hamburger buns,” he says. “It was an amazing way to run a business and had a huge impact on my childhood.”

In fact, when Patrick started dating Kathy in 1999, he’d often wax poetic about opening a burger spot like Drivateria while downing cheeseburgers with her at Chuy’s or Shady Grove in Austin. “I thought it was a really cute idea, but never thought he’d actually do it,” she says. Soon after they married in 2004, however, Patrick left his previous consulting gig and secured a location at the high-traffic intersection of South Lamar and Barton Springs Road. Formerly the spot of an empty Short Stop burger stand, it proved a logical starting place for their nascent drive-thru empire. Kitty-corner from a busy McDonald’s, it also provided the necessary logistical challenge for the Terrys on how to differentiate their burgers from the biggest name in fast food.

Kathy had just read Eric Schlosser’s Fast Food Nation, a book that examined America’s often unhealthy relationship with fast food restaurants, and how chains foster customers’ addiction from an early age. Sealing the fate of their fledgling business, she gave her husband a copy and said, “If we’re going to do this, we’re going to do it right.”

 

P. Terry’s co-founders, Kathy and Patrick Terry, are ready to introduce their brand to the rest of Texas. Photo courtesy The Southern Influence.

 

Outside of In-N-Out Burger—the California-based chain lauded in Schlosser’s seminal work for its sourcing and employee welfare—it was a rarity for a fast-food restaurant in 2005 to concern themselves with sourcing ingredients like all-natural meat (which the USDA defines as having no added artificial ingredients or coloring, with minimal processing) or avoiding highly processed ingredients like high-fructose corn syrup. P. Terry’s prioritized both, applying the message wherever possible. Until 2012, for example, their menu didn’t offer bacon as a burger topping because it took that long for the company to find a high-quality, affordable source for all-natural bacon. To this day, the restaurants serve all-natural beef and chicken, cage-free eggs, coffee from Austin roastery Ruta Maya, and fresh-cut fries that are free of trans fats and hydrogenated oils.

Attention to detail extends beyond the ingredients to a meticulously managed customer service experience. For instance, take the drive-thru, often an afterthought at other big chains. At P. Terry’s, the experience is inspired by the highly manicured lines that zigzag in front of theme park rides. Lined by careful landscaping, hand-painted signs usher drivers through a meandering route to the window and classic rock plays over speakers to make wait times more enjoyable. As other fast- food companies rely more and more on touch-screen ordering and digital menus inside their restaurants, P. Terry’s has doubled down on hand- painted menu boards for a more personal, old-fashioned touch. WiFi is deliberately withheld in an effort to encourage conversation, and plants lighten the space with greenery.

An emblematic example of how P. Terry’s manages the customer experience can be seen in its response to the coronavirus pandemic. Upon opening its first post-shutdown din- ing room in mid-May at their latest location on Martin Luther King Jr. Boulevard, the company released videos on social media demonstrating what customers could expect once they arrived, including a socially distanced line, single points of entry, protective shields between customers and staff, and contactless pay. Once Gov. Greg Abbott announced that restaurants were allowed to seat up to 50 percent capacity as part of Phase II in the state’s reopening strategy, P. Terry’s became one of the few brands assuaging potentially anxious customers with detailed instructions on what their new din- ing experience would look like.

Another crucial element in the company’s success—and one that‘s helped distinguish it in the increasingly crowded fast-casual space—is its unmistakable branding. With a throwback midcentury design and an iconic color palette, P. Terrys’ lo- cations are impossible to miss. In- spired by a book on the futurist Googie style of California architecture, the Terrys enlisted renowned local architect Michael Hsu to capture its themes of acute angles, starbursts, and cantilevered roofs for every one of its locations starting after 2009.
Unlike the cookie-cutter aesthetic that defines most fast-food chains, P. Terry’s takes the opposite approach, insisting that each location have its own singular look; a veritable snow- flake among the concrete wilds of corporate monotony.

“At first, we weren’t sophisticated enough to put a sign up saying ‘Coming Soon, P. Terry’s,’” Patrick says. “Now we don’t have to.” That’s because customers immediately recognize its style, which can be interpreted as Terry’s West Texas roots filtered through a Palm Springs fever dream. Each building combines the hallmarks of glass, stone, red steel beams, and a shade of teal green so closely associated with the brand that you can go into Austin-area Sherwin Williams stores and ask for it as “P. Terry’s Green”—Pantone color 570 C.

 

Photo courtesy P. Terry’s.

 

HAVING EARNED A loyal Austin-area clientele, the Terrys began to have serious conversations about conquering the rest of Texas in 2018. But recognizing the limitations of their expertise when it came to a tactical multi-city expansion, the duo brought in reinforcements to help lead the way. A native Texan that’s well- versed in the means of fast-food growth, Todd Coerver was hired in March 2019 as the first move in a more aggressive development strategy for the P. Terry’s brand.

Fresh off a stint as the CEO for Larkburger in Colorado, Coerver could also point to his unique pedigree of having guided two major Texas brands through similar key periods in their evolution. As COO of Taco Cabana in 2013, he oversaw the massive brand and restaurant redesign that marked its 35th anniversary. And most notably, as vice president of marketing and innovation at Whataburger in 2007, he helped push sales to $1 billion for the first time in the company’s history. “I interviewed dozens of people be- fore we came upon Todd,” says Patrick. “Forty-five minutes into [our] conversation, I just knew he was the right guy.”

Up until now, says Coerver, P. Terry’s has been “an Austin-based company serving Austin.” With the goal of moving into small, mid-range, and large markets down the I-35 corridor, his strategy is all about maintaining a “super high touch” casual culture, in which the C-suite executives regularly stop by individual locations for check-ins, and employees have easy access to the top brass, including himself and the Terrys. That said, he adds, “If we’re going to make it to our twenties, we’re going to have to grow up a little bit… add little layers of sophistication or added discipline where it’s needed.”

 

CEO Todd Coerver has a history of popularizing big brands, including Wha- taburger and Taco Cabana. Photo courtesy The Southern Influence.

 

For Coerver, the key to maintaining P. Terry’s core identity while in the midst of expanding relies on a commissary model. Currently, there’s a commissary kitchen in Austin’s North Loop neighborhood where cookies, banana bread, veggies burgers, and other menu items are made, then ferried to various P. Terry’s lo- cations via refrigerated truck. And while the introduction of new San Antonio locations may only require additional refrigerated vehicles, spots farther afield (such as Houston) will require additional commissaries to serve as hubs for new regions beyond the scope of Austin-based routes.

“It’s about playing deep, not playing wide,” says Coerver, referring to his strategy for a calculated roll- out that won’t overwhelm P. Terry’s carefully selected suppliers. That means targeting one region at a time, and developing that region thoroughly. Within Central Texas, they’ve already opened locations in George- town and San Marcos and have plans to expand to San Antonio and New Braunfels by early 2021. While the
coronavirus pandemic has admittedly disrupted its timeline, Patrick says that within three years, there will be an additional 10 to 12 San Antonio locations, and several openings in Houston. With apologies to expect- ant fans in Waco and Dallas, plans to expand north along I-35 have not yet been cemented.

“If we can keep our furthest-away restaurant to a four-hour drive, that allows us to protect and maintain the magic.” Coerver notes, adding that, as of right now, P. Terry’s has no plans to ever expand beyond Texas.

As for the restaurant itself, P. Terry’s doesn’t plan on fixing what isn’t broken. In May, it added the first
new sandwich to the menu in 15 years: a breaded and fried version of their ground chicken burger, topped with Swiss cheese, pickles, lettuce, tomato, and mayo. Even in the thick of a national health crisis, sales of the sandwich are strong, but the Terrys are still vacillating over its longevity. Patrick is extremely protective of the menu—insisting that keeping it streamlined keeps prices low, while safeguarding P. Terry’s all-important high-quality ingredient supply chain, two tenets upon which their company’s reputation is built.

It’s that reputation for quality and affordable pricing that has kept their original location thriving across the street from that bustling McDonald’s since 2005. And it’s what they’ll need to maintain as they go up against the burger heavyweights of Texas in coming years. “Hell, anybody can do what the other guys are doing. Why would you come to P. Terry’s if they’re already doing that?” asks Patrick. The restaurant’s expansion across the state banks on the answer to that question: Will hearty, beef-loving Texans line up under cantilevered drive-thrus to order their all-natural Black Angus patties, or will they settle for the old familiar chains they’ve always frequented? Will sharp teal green and red neon signs soon dot the vast Lone Star horizon, like Mack Eplen’s did all those years ago in Abilene?

A self-assured clue lies in the hand-painted sign that bids customers farewell from each P. Terry’s drive-thru: “See you tomorrow.”

Originally published by Austin Monthly