Dan Simons, co-founder of Founding Farmers, a farmer-owned restaurant group generating $100 million in annual sales across eight locations, joins Jaime Oikle, show host and RunningRestaurants.com founder. Dan candidly shares his journey from early failures, bankruptcy, and mental health struggles to building a thriving, values-driven business. He discusses Founding Farmers' unique farmer-equity model, strategic growth plans, and product innovations. The conversation also covers profitability challenges, AI tools transforming restaurant operations, mental health investment as good business practice, and Dan's commitment to mentoring underrepresented entrepreneurs.
Learn more at https://www.wearefoundingfarmers.com
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Episode Article: Takeaways & Analysis
Restaurant success stories are almost always told backward. By the time most people hear about Founding Farmers, the eight-restaurant, roughly $100 million Washington, D.C. group known for farmer ownership and scratch cooking, they hear about full dining rooms, a strong brand, and a confident founder talking about growth. What they don't hear is that co-founder Dan Simons once lived in his mother-in-law's basement for three years, personally on the hook for a failed first restaurant's debt, or that margins today are harder to protect than at any point in his career, even with eight units and a strong brand behind him.
In a recent episode of the Running Restaurants podcast, Simons joined host Jaime Oikle to talk about what those years taught him: about capital, growth, technology, people, and the discipline of continuing to question a model that already works.
For independent operators, his story is a useful reminder that a durable restaurant business needs more than a strong concept. It needs the willingness to question assumptions, learn from failure, and keep changing, even when things are going well.
Failure Can Become a Competitive Advantage
Simons is unusually open about his early failures and what they cost him personally. That openness matters, because failure isn't unusual in restaurants. Operators make bad hires, misread markets, sign weak leases, overbuild menus, and chase ideas that don't work.
The real danger is a culture where people are afraid to admit problems. A manager who can say labor is running high can fix it before the month is lost. A cook who reports a mistake helps prevent the next one. A GM who flags declining traffic early gives the business time to respond instead of reacting after the damage is done.
The goal isn't to excuse poor performance. It's to build a business where problems stay visible. Failure by itself doesn't create wisdom. The value comes from examining what happened, naming what needs to change, and making a better call the next time.
Your Capital Partners Help Shape Your Business
One of the most unusual things about Founding Farmers is its ownership structure. The company is majority owned by American family farmers, primarily through the North Dakota Farmers Union.
That structure shapes more than financing. It influences sourcing, sustainability commitments, employee investment, and growth speed. Family farmers tend to think in generations, not quarters, which creates room for decisions that may not maximize this year's profit but strengthen the business over time.
For independent operators weighing investors or expansion capital, the lesson holds regardless of scale: money is rarely just money. Whoever provides it usually has a say, stated or not, in what the business eventually becomes.
Before taking outside capital, ask: What will this money eventually ask us to become?
Growth Does Not Have to Mean More Restaurants
Founding Farmers operates eight restaurants concentrated around D.C., choosing geographic density and operational control over a national footprint. That approach improves vendor leverage, management development, training consistency, and brand awareness, while keeping leadership close to daily operations.
At the same time, the company is testing growth that doesn't look like another full-service restaurant: smaller café formats, airport locations, and direct-to-consumer products like scratch-made chocolate and bakery goods.
The bigger point for independent operators: growth gets defined by unit count far too often. Catering, private events, retail products, and smaller formats can produce real growth without duplicating an entire restaurant's overhead and risk.
Before signing another lease, ask whether a full-service location is really the highest-return use of your brand, your management bandwidth, and your capital.
Keep Challenging the Model
Full-service restaurants continue to face pressure from wages, food costs, occupancy, insurance, and shifting consumer expectations. Even restaurants with strong sales can watch margin disappear.
Simons' response isn't to work harder inside the existing model. It's to keep asking whether the model itself still holds up. One exercise he runs on himself constantly is worth stealing: Imagine you got fired tomorrow. What would the person who replaced you change in the first 90 days?
That question creates distance from decisions operators get attached to. The menu might be too big. A daypart might quietly be losing money. Staffing structures might have crept up. Pricing might not reflect current costs. A process might still exist only because nobody's challenged it in years.
Run this with your management team once or twice a year. Ask everyone to assume they just bought the restaurant and have 90 days to improve it. What would they stop doing? What would they change? Where would they actually spend money?
AI Is Becoming an Operating Tool, Not a Buzzword
Simons is genuinely bullish on AI, but not primarily as a way to cut headcount. He treats it as a tool for removing friction and getting repetitive work off his team's plate so people can spend time on higher-value work.
Two specific applications stood out. For private dining and catering inquiries, which can be worth $1,500 to $2,000 or more per event, Founding Farmers uses a tool called Hermetic that engages web-form leads within seconds, even at 11 p.m. on a Saturday, instead of making a prospective customer wait until Monday morning while a competitor books them first. For phone calls, they use Slang AI to handle inquiries around the clock. Internally, the team has been using Claude for a year to connect scheduling, error rates, and guest reviews shift by shift, catching patterns that would otherwise stay buried in separate spreadsheets.
Simons was equally clear about what he avoids: AI features bolted onto existing legacy systems, where the underlying model is often cheaper and weaker than what a native AI company would use. His vetting bar is simple: real restaurant expertise on the founding team, real funding, and a track record that suggests long-term thinking rather than a rushed feature release.
The question worth asking isn't whether to adopt AI because it's fashionable. It's: Where are we currently losing leads, time, or useful information that a tool could recover starting this month?
People Problems Become Financial Problems
The other major theme in Simons' approach is the direct link between employee well-being and restaurant performance. Restaurants tend to treat people issues and financial issues as separate conversations, but burnout drives turnover, weak management drives absenteeism, poor communication drives service failures, and constant replacement hiring drives up recruiting and training costs that rarely get tracked back to their real cause.
Founding Farmers backs this with real investment, including subsidized access to therapy. Most independents don't have that budget, but the cultural piece costs nothing. Simons' own tactic: at the start of a shift meeting, before running through specials or VIP tables, stop and ask the team, genuinely, "how are you?" Then stay quiet. Expect silence the first few times, because nobody will believe the question is real. Keep asking anyway. When someone opens up, tie it back to the shift: the team performs better tonight when people actually feel checked in with each other first.
Culture is the accumulation of what a manager tolerates, rewards, and repeats every single day. In an industry where turnover is one of the most expensive line items on the P&L, building a workplace people want to stay in isn't just good leadership. It's good math.
Keep Feeding Your Thinking From Outside the Restaurant
Simons' work outside Founding Farmers follows the same practical instinct. Through Our Last Straw, he worked directly with manufacturers and legislators to phase out single-use plastics in a way that actually functioned for restaurant operations, rather than banning a product without a workable replacement. He also teaches entrepreneurship as an adjunct professor at George Washington University and mentors early-stage founders, including women and minority entrepreneurs he's intentional about supporting.
Neither is a side project disconnected from running restaurants. Both are inputs. Teaching forces him to articulate what actually works instead of running on instinct. Mentoring keeps him close to how younger employees and future operators actually think, instead of relying on assumptions about the next generation.
The takeaway for a busy independent operator isn't "start teaching a college course." It's simpler: build one deliberate input into your routine that isn't restaurant-specific, a book, a mentor relationship, a peer group, a class, so your thinking keeps moving instead of hardening into habit.
Play the Long Game
Operators spend most of their time on what's immediately in front of them: tonight's staffing, this week's food cost, next month's cash flow. The operators who build durable businesses also protect time for the bigger questions. Are we building the right company? Are we growing for the right reasons? Do our capital partners actually support the long-term vision? Are we using technology to recover time and revenue we're currently losing? Are we developing people who can lead the next stage?
Most importantly: are we still willing to challenge the systems that made us successful in the first place?
Dan Simons' story doesn't offer a clean formula. That's probably why it's useful. He failed, rebuilt, changed his thinking, and kept evolving the business long after it had already become successful. For independent operators, the real takeaway isn't that there's one right restaurant model. It's that the best operators build organizations capable of changing their model before the market forces the change on them.
Operator Takeaways
- Use failure as information. Identify what went wrong, fix the system, and make it safe for employees to surface problems early.
- Choose investors carefully. Capital partners influence more than financing. Make sure their expectations fit the business you actually want to build.
- Don't confuse growth with unit count. Catering, retail, events, and smaller formats can outperform another full-service location.
- Challenge your own model twice a year. Ask what a new owner would change if they took over your restaurant tomorrow.
- Name your biggest lead or time leak and fix it with a specific tool, not a general AI strategy. Vet on real restaurant expertise, funding, and track record.
- Treat culture as an economic issue. Start shift meetings with a genuine check-in. It costs nothing and turnover is expensive.
- Feed your thinking from outside the four walls. A book, mentor, or class keeps your playbook from calcifying.
