Employees at PepperJax Grill restaurants aren't just doing their best at slinging Philly cheese-steak sandwiches in hopes of pleasing customers and getting raises. They're also working hard for the chance to be part-owner of their own store.
It's a new program that owner Gary Rohwer is rolling out for his Omaha-based restaurant chain. Rohwer created a holding company to raise money from investors to supply capital for franchised stores. The general managers — because they know the business and have the experience — manage the stores, invest $12,000 each and are given a 15 percent equity stake.
“I want to create the American dream for my managers,” Rohwer said. “I just want them to have the same opportunities for success that I've had.”
In some sense Rohwer is paying it forward, though he's humble about that.
The 71-year-old built a restaurant chain, sold it, patented a meat product used in restaurants, sold that and now has come out of retirement to pursue a third venture that combines all those experiences.
His new holding company will add to the PepperJax chain's expansion plans, which include eight new locations opening this year in Nebraska, Iowa, Kansas, Missouri and South Dakota.
The company already has 10 stores in the Midwest, including seven in Omaha. It reports $1.25 million in annual sales per store, Rohwer said.
When PepperJax employee Justin Palladino heard about the new program, he was shocked.
“It's a once-in-a-lifetime opportunity,” he said. “It's amazing how he (Rohwer) really wants us to succeed and genuinely wants to help those people underneath him.”
But it's not the first time Palladino has seen the generous side of Rohwer. When Palladino was diagnosed with leukemia in March 2011 and had to travel to Seattle for a stem cell transplant, Rohwer held Palladino's management position and even continued to pay the 26-year-old while he was out for nearly a year of treatment and recovery.
“We didn't even give it a second thought,” Rohwer said. “We just told him, ‘Take care of your cancer and don't worry about your salary.' We just kept paying him because that's the least we could do for a good employee like Justin.
“He's a great guy. You have to take care of the people who take care of you.”
Palladino, who has worked in restaurants since he was 15, said that kind of response is “unheard of.”
“I've never had a boss like Gary. To know that I had a job after treatment and that I was valued was so uplifting.”
Palladino, 26, who's now considered cancer-free, is working at light tasks and on track to once again manage a store and possibly have a piece of ownership in one, too.
“It's a remarkable story, it really is,” Rohwer said.
But so is Rohwer's own story. There were many doubters in the beginning.
Rohwer started his restaurant career in 1981 when he opened the Chartroose Caboose, a Philly cheese-steak concept in Lincoln.
He “got a little too excited” and expanded too fast, opening about 15 restaurants in five states. And there were struggles.
The meat took too long to cook. Some employees needed stitches after getting cut on the meat slicer. And the meat was often cut too thick or too thin.
Rohwer decided he needed to figure out a way to create a thin enough steak that could hold moisture and cook quickly. Not everyone was sold on the idea. Beef associations across the country thought it was impractical, and locals in the food service industry weren't biting. It was hard to find someone to back his idea, but he pressed on.
With help from agricultural experts from the University of Nebraska-Lincoln, Rohwer spent three years developing “Steak-EZE,” a Philly steak that cooks in 35 seconds or less and retains moisture and flavor. It's the same steak that's cooked right in front of the customers at PepperJax today.
Rohwer got a patent on the product and realized he could make more money selling Steak-EZE to the food service industry than selling Philly sandwiches to his customers. So he sold the restaurant business in the late 1980s and focused on selling Steak-EZE across the country on his own.
For a while it was hard to get anyone from the service industry on board because very few people understood the new steak concept.
In 1989, Pat Harman, now 58, answered a newspaper ad and joined Rohwer as his first employee.
She did just about everything for the company and eventually became the national sales manager. Steak-EZE took off.
“We really started to see things happen in 1993,” Harman said. The distributor lists kept growing, more employees joined the company, and, by the mid-1990s, several companies, including Hormel and Tyson, had shown interest in buying the company.
It wasn't until 1998, when Rohwer was 57, that he decided to retire. In a multimillion-dollar sale to Advance Foods of Enid, Okla., Rohwer, Harman and four other employees who had equity in the company had a “life-changing opportunity” and were able to retire.
“It was an opportunity of a lifetime, that's for sure,” Harman said.
Harman said Rohwer had awarded her a piece of the company for her efforts and loyalty to him and Steak-EZE, but he didn't have to do that. She said that shows the heart he has for hard-working employees.
“Even when no one else believed in him, he was persistent and very confident,” Harman said. “He sets goals and has a vision for the future. He's very forward looking and inspiring.”
After Rohwer had built his dream log cabin on a lake in the Rocky Mountains of Colorado and enjoyed retired life for about a year, he had another inspiration.
He saw the success of quick-casual restaurants like Qdoba, Chipotle and Baja Fresh, but thought the industry was missing something: a quick-casual concept where steak could be cooked right in front of the customer. With Steak-EZE, he could create that.
So after only a few years of being retired, Rohwer and his wife, Linda, jumped back into the food service industry, opening the first PepperJax Grill in 2002 near 132nd Street and West Center Road.
The first year was rough and the business operated at a loss for 11 months. But after about a year and a half, it started to turn a profit and “it just kept going up and up from there,” Gary Rohwer said.
“You just have to hold on and that's what we did,” he said.
Soon after, the business expanded into Kansas in Lawrence and Overland Park. Rohwer started a team of district managers and created a chain of command for the business. The couple operated the business out of their Omaha home until 2005, when they opened up a headquarters office in Omaha.
Rohwer said he knew the concept would do well in other states because it took off in Omaha, which he called one of the most competitive food towns in the country.
For a while, Rohwer was buying the steak for PepperJax from Advance Foods. But when his 10-year non-compete agreement ended, he started talking with Harman and the two decided they could produce their own Steak-EZE again for PepperJax.
So in 2009, Rohwer partnered with Harman to open Glenn Valley Foods, a meat processing company in downtown Omaha that produces a Steak-EZE-like product called STEAKERS Philly Release Steaks. Because the patent had also expired, there was no issue with Glenn Valley producing quick-release steaks and selling the product nationally.
Locally, other restaurants like Lansky's and King Kong also buy meat from Glenn Valley Foods.
Harman, who is the president and chief operating officer of Glenn Valley Foods, said Rohwer has taught her to never give up on something she believes in. That's exactly how he's been successful, too.
Ray Ashby, a chain account sales manager for US Foods in Omaha, a distributor for the food service industry, said he learned when he first met Rohwer in 2002 that he was the ambitious type who went after his goals.
Ashby said that even though Rohwer had only his first location of PepperJax open, Rohwer convinced him to put together a food-distribution program normally reserved for chains because he had a clear and concise vision on how he would grow the business into a chain. Chain account programs are less expensive because they require larger orders.
“He told me his vision and how he would grow and was so convincing of his future that I helped him,” Ashby said. “It wasn't an easy project, but he was up to the task.”
Mark Burrus, director of operations for PepperJax, said Rohwer thinks a lot about the future for his employees as well.
“He wants his employees to have the same opportunities to be successful like he's had,” Burrus said. “He wants people to enjoy being a business owner. Not everyone gets that chance, especially for as young as some of our managers are.”
Rohwer invites employees to his cabin in Colorado. After he gets his new lake house in Minnesota, he said, employees will be welcome there, too.
Rohwer has money, but he likes to wear jeans and cowboy boots and button shirts. He drives a three-year-old Lexus and lives in the Omaha home he's had near 132nd Street and West Dodge Road for more than 15 years. He goes to the office every day during the week and sometimes on weekends. He visits the stores on a weekly basis.
Palladino said Rohwer is “just in it 100 percent.”
“He knows his managers and crew members and that's really unheard of. I think of that show ‘Undercover Boss,' and Gary could never do that. Everyone knows Gary.”
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