Rodriguez’s exit from M Crowd began last summer, when his partners tapped Greg Good, a former chief operating officer of the Cheddar’s Casual Cafe chain, to replace him as CEO. “I felt like the luckiest guy on the planet,” says Good, who took over in September 2008. He says the decision to relieve Rodriguez was mutual. “In the end, Mico wanted to be bought out,” he says.
Before coming onboard, Good met with Rodriguez, Ray Washburne, and Consilient Restaurants founder Tristan Simon, who served as a mediator. Once Good was in place, Rodriguez offered his guidance to ensure Good was up to speed on M Crowd operations. Still, Good says he was apprehensive. He feared internal resistance might stymie the transition. “I was following a legend,” he says. Yet, Good says, there has been no turnover, and the company has not lost a single restaurant manager since the transition. “I’d love to take credit for it, but I didn’t hire them,” he says. “Mico did.”
M Crowd partner Ray Washburne disputes Galvan-Rodriguez’s claim that Rodriguez was forced out because of his struggles with alcohol. Washburne says he and his brother Dick personally escorted Rodriguez to rehab on more than one occasion. “We got him the best care we could, multiple times,” he says. “I could have stayed and worked with someone through that, which we did, for a number of years. When he is focused, he is a brilliant operator. I think money, success, and the celebrity of being a high-profile restaurant owner distracted him from the reality of a life and a work ethic.”
It was financial irregularities that ultimately drove a wedge between Rodriguez and his M Crowd partners. Almost since the inception of the company, Washburne says, Rodriguez and his wife would spend their profit disbursements without setting aside money to meet tax obligations, generating a series of IRS tax liens. County records show that in the years between 1997 and 2004, Rodriguez and his wife racked up more than $2.7 million in federal tax liens attached to their Preston Hollow home.
“They’d let the tax obligations pile up for two or three years, and they’d come to us for help,” Ray Washburne says. “They received millions of dollars from us over the years to supplement their lifestyle and pay their taxes and penalties. We were always there to bail them out as a partnership.”
They bailed them out through loans and stock sales, which through the years reduced Rodriguez’s interest from 50 percent to 22 percent. In addition, sources say that in the past several years, Rodriguez had channeled roughly $700,000 of M Crowd funds into his own accounts. That total included diverted vendor payments and payroll checks set up for “ghost” employees.
“Last summer,” Ray Washburne says, “a lot of things came to light, and that’s when it started unraveling very quickly as things were uncovered.”
Galvan-Rodriguez says that’s not true. “There was a lot going around that he was a thief or that he embezzled money,” she says. “I could say a lot of things about Mico, but he is not a thief. He didn’t embezzle any funds out of M Crowd.” She says they considered filing a slander suit against M Crowd. She says that the financial settlement they reached to cash out their M Crowd stock was unfair. Both parties refuse to disclose the terms except to say that Rodriguez is under a two-year noncompete clause that bars him from opening a Mexican restaurant in Texas. “This offer is offending to me,” she says.
===Sources say that in the past several years, Rodriguez had channeled roughly $700,000 of M Crowd funds into his own accounts. “There was a lot going around that he was a thief or that he embezzled money,” says Carolina Galvan-Rodriguez. “I could say a lot of things about Mico, but he is not a thief. He didn’t embezzle any funds out of M Crowd.”!==
Some wonder whether M Crowd can thrive as the inventive company it once was without the creative force of Mico Rodriguez at its helm. “I don’t see where the soul of the company is any longer,” says La Duni’s Taco Borga.
CEO Greg Good says he is embarking on an aggressive expansion beyond North Texas, redirecting focus on what he calls the company’s “beans and rice” group: Mi Cocina and Taco Diner. Immediate plans call for Mi Cocinas to open in Lexington, Kentucky; Tulsa, Oklahoma; and Chicago. He insists his experience in chain expansion and regional sourcing will overcome whatever past difficulties M Crowd confronted expanding outside of North Texas. “Mi Cocina is the P.F. Chang’s of Mexican food,” Good says.
The company is also reconfiguring its restaurants outside of the “rice and beans” umbrella, those once tucked under its Restaurant Life division. Its Mercury Chophouse in Fort Worth was sold this summer to managing partner Zach Moutaouakil. Plans call for two new restaurants in Highland Park Village, the shopping center purchased in May for $170 million from Henry S. Miller Interests by a partnership headed by Ray Washburne. These new ventures, developed by Chris Ward, will include an Asian restaurant and an American grill.
“The Mi Cocina brand has the potential to be the El Chico or the El Fenix of the 21st century,” says Matthew Mabel, president of the hospitality consulting firm Surrender. “How much of Mico’s soul was keeping that going and how much will fall away when an executive from Cheddar’s takes over? We are about to find out.”
After cutting ties from Mico and M Crowd, Carolina Galvan-Rodriguez founded her own restaurant company. “People don’t know too much about me because everything was Mico,” she says. “He was the king, the legend. But I was behind the scenes. I was the heart of the company.” Galvan-Rodriguez claims she ruled the culinary side of M Crowd, overseeing a crew of some 44 chefs—this despite the fact she had no official M Crowd title and wasn’t on the payroll. “Mico always said it wasn’t necessary because I was an owner,” she says.
She calls her new company After All Restaurant Group, an umbrella that encompasses two Carolina’s Mexican Cuisine outposts, which opened in North Dallas and Plano in June and early July; and Taco Mundo, a Taco Diner emulation with a location in Dallas and one in Fort Worth.
To bankroll the company, she is leveraging her share of the divorce settlement swollen with M Crowd buyout proceeds. She’ll capitalize the venture further once she sells their ranch-style home on a lush 1.2-acre creek lot in Preston Hollow, less than half a mile from President George W. Bush’s estate. Asking price: $1.895 million.
The Dallas restaurant community will watch closely to see how she and how M Crowd will do without Mico Rodriguez. But an even larger question looms: how will Mico Rodriguez fare without them?
He described his New York project as an upscale Mexican restaurant not unlike Javier’s in Dallas. But as of this writing, the project is all but scuttled. In mid-June, Rodriguez was scheduled to meet in New York with his business partners. “He didn’t show,” says Henry S. Miller, who has been offering Rodriguez business support for the project. Sources say Rodriguez had checked himself into an Austin rehab program in June, but Galvan-Rodriguez says that’s not true.
“He had everything, and everything going for him,” Dick Washburne says. “I mean, it’s really pathetic. Here is a guy who has real charisma. Everybody wants to love him. He has genuine talent and ability. And yet practically everything he touches he turns into a stake he’s trying to drive through his own heart.”
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