When a major supply chain outbreak hits, customers can instantly turn away and say “Hello, no!” to a brand they once trusted. Managing supplier risk is not just about food safety or logistics—it is the cornerstone of protecting customer trust, company reputation, and long-term sellability. In this episode, M&A expert and host Michelle Seiler Tucker uses the Taco Bell lettuce outbreak as a compelling case study on how operational issues can become valuation nightmares overnight. Drawing from her book, Exit Rich, she breaks down how to leverage the 6 Ps—People, Product, Processes, Proprietary assets, Patrons, and Profits—to fortify your business against unexpected disruptions. Discover how to build a resilient, buyer-ready enterprise that can withstand any crisis and exit on your own terms.

—

Watch the episode here

Listen to the podcast here

Hello No Taco Bell!

How Supply Chain Disruptions Instantly Jeopardize Brand Trust

I’ve specialized in buying, selling, fixing, and growing companies for a very long time. In this episode, we’re going to use something big that has dominated the news and has been all over the place. If you haven’t heard about this story, then you must live under a rock. We’re going to talk about Taco Bell. We’re going to talk about what happened with the huge outbreaks. We’re going to use this as a case study, not to criticize Taco Bell, but to help every business owner understand how to protect customer trust, company value, and long-term sellability.

This wasn’t necessarily a Taco Bell issue. This issue was from the farm itself, but we’re going to talk about the story. The reason I like to use this as an example is that a business can be doing great and can be generating millions upon millions of dollars in EBITDA, Earnings Before Interest, Tax, Depreciation, and Amortization. However, one thing can happen and practically put your company out of business overnight.

Taco Bell never saw this coming because Taco Bell is not the creator of this problem. They are the ones who sold the goods that were provided by the farms. We’re talking about lettuce here. We’ll talk about the lettuce outbreak. It is one incredible lesson that teaches us about business value. This episode is not about tacos or Taco Bell. It is about transferable risk. It’s about how your business can be shut down overnight. Even though you think everything is perfect, everything is going well, and you have a well-oiled machine, but like that, you can go out of business.

One ingredient or one supplier issue, and suddenly, a nationally recognized brand is dealing with sick customers, disrupted operations, and negative headlines everywhere, like, “Taco Bell is hurting people. Taco Bell is killing people.” There are negative headlines and questions about trust, like, “Can I go to Taco Bell? Can I eat at Taco Bell again?” We all love Taco Bell. I love Taco Bell. One thing can rip and destroy your branding practically overnight. That is how quickly an operational problem can become a valuation problem overnight.

The outbreak investigation involving shredded iceberg lettuce served at some of Taco Bell’s locations is not just a food safety story, but a business story, especially in the restaurant industry. This can happen in any industry. You’ve heard situations like this where there have been different outbreaks that have affected some of the major chains, including McDonald’s.

When I look at a situation like this, I see the 6 Ps. You’ve heard me talk about the 6 Ps in my book Exit Rich. What are they? People. Remember People? We have to have a great team. Product, Processes, Proprietary assets, Patrons, and Profits. Your customer doesn’t care whose fault it was. They don’t care that it was the farm’s fault. Nobody is talking about the farm. They are talking about the farm a little bit, but everybody is talking about Taco Bell and how this happened at Taco Bell. They don’t care about whose fault it was here.

The first lesson is they don’t care. When something goes wrong inside your supply chain, customers separate you from your company and your supplier. They don’t make that separation. They’re like, “This happened at Taco Bell. I paid for the food at Taco Bell. I got sick at Taco Bell.” They’re not talking about the farm itself. They’re not talking about the suppliers. They see the name on the building. They see the logo on the packaging. They see the charge to their credit card.

People & Leadership: Managing Crisis Control Beyond The Owner

Even when a problem begins outside your four walls, the customer often assigns that risk to your brand. Overnight, it can destroy a brand. Some businesses can never recover from this. In many cases, some businesses have never recovered from this. For Taco Bell, I have the confidence that they will. Supplier risk becomes brand risk. Vendor risk becomes customer risk. Operational risk becomes valuation risk. That is true whether you own a restaurant, manufacturing company, healthcare organization, technology platform, or professional service firm. This is huge in healthcare as well. You owe the final promise to the customer.

That’s your name on your promise. Talk about the promise to deliver quality, safe food. It’s that final promise to the customers that the customers will always believe and hopefully trust. Talk about earning that trust back. Let’s look at people. Who takes control? Let’s start with people. During a crisis, who has the authority to act? Who contacts suppliers? Who communicates with customers? Who speaks with regulators or the media? Here’s a big one. Who is doing public relations?

Who is out there doing quality control in the media? Who is out there saying, “The Taco Bell supplier is where we got this lettuce from.” Who is doing damage control? Who is making sure this doesn’t spread like wildfire and can control it? Who updates employees? Who can stop distribution or remove a product without waiting for three hours for the owner to approve it? If every important decision depends upon one person, you do not have a scalable organization.

We know Taco Bell is a huge conglomerate. Taco Bell has layers of management. Does your business have layers of management, or does your business depend upon you to make every single decision? You have a bottleneck. If you are the owner and the business depends upon you, you are the bottleneck. Your team should know their roles before a crisis ever happens. I’ve seen this happen in small restaurants before. Let’s put the restaurant completely out of business.

Employees should not be learning what to tell customers by reading social media. Ask yourself, “If something serious happened tomorrow morning, would my team know exactly what to do within five minutes?” If the answer is no, your people need attention. They need training. They need more attention. A sellable company has capable employees, defined responsibilities, and a management team that can operate without the owner. They need to be trained on crisis control. Crises always occur. Problems always occur.

Employees need to be trained, especially in upper management, on crisis control. They’re like, “What do we do if this happens?” If you’re controlling every move, then you’re going to have continued chaos, and nobody is going to know how to respond. Your product is not simply the finished item you sell. It includes every single ingredient, component, technology, service provider, and vendor required to deliver the customer’s experience. A restaurant is not only selling a taco or refried beans. It is selling the expectation that the food is safe, consistent, available, and prepared correctly.

Taylor Farms is the problem. We all know Taylor Farms is the supplier to Taco Bell. Taco Bell did not create this problem. Taco Bell is a victim of this problem. Taylor Farms is the one that sold contaminated lettuce to Taco Bell chains. We’re going to continue to talk about this. This is not Taco Bell’s responsibility. They are victims just like all of the customers that got sick. Taco Bell is also a victim. Taco Bell should have better quality control.

A software company is not only selling access to a platform. It is selling security, uptime, integrations, and reliability. I’m trying to get off of restaurants here so you can see that this issue that Taco Bell and Taylor Farms had goes from industry to industry. You can have a catastrophic event happen overnight in any industry that you’re operating in. This is why this is such a good case study to talk about, reflect on, and see how you can better your systems and your 6 Ps in your company.

A manufacturer owns the performance of every sourced component inside the finished product. Customers do not care whether the failure came from a supplier or a subcontractor. They purchased the promise from you. They purchased this from Taco Bell. Even though it’s not Taco Bell who created the problem, Taco Bell’s promise is to provide safe, quality food, and they did not do that. You need to identify the product components that could stop your operation in its tracks, harm a customer, or damage your reputation or even worse, hurt an employee.

Processes & Systems: Documenting Procedures Before Chaos Hits

Do not wait until a crisis to discover that you have no backup. Go back and look at your systems now. How could Taco Bell have prevented this? How could they have done better quality control? How could they have kept this from happening? You need to look at your business and look at it the exact same way. Processes. You cannot improvise trust. Process is at the heart of this story. Your company should have documented procedures for suppliers’ approval, quality control, product tracking, incident responses, alternative sourcing, customer communication, employee training, and decision-making authority, especially in a crisis.

You cannot build those systems while the crisis is unfolding in front of your eyes. You’re in it. Taco Bell is in the story. It’s very hard to go back and create those processes and systems. You cannot wait for customers to complain before deciding who can remove a product. You cannot wait for a regulator to call before figuring it out. Where are your records stored? You’ve got to know where your records are stored. Where are your policies and procedures stored? What did you do to prevent this outbreak? Even though you were not the original problem. Taylor Farms was.

What did they do on their end to prevent this problem? We’re talking about a massive company. A multibillion-dollar company has these resources and these systems. They have a lot in place. What do you think about your company and your industry? What are you prepared for? What crisis training have you done? What are you going to be able to do? How are you going to communicate to the public that you have a problem that occurred and is under control? You cannot protect a company with a process that exists only inside the owner’s head.

You’ve heard me talk about this over and over again. If the business depends upon you, and every crisis decision is in your head, you’re going to have nothing but more chaos and probably end up going out of business. Catastrophic events shut companies down like that. It doesn’t give you a warning sign. It doesn’t give you time to respond. It doesn’t give you second chances in most cases. Do your due diligence.

A sophisticated buyer might say, “Show me the incident responses you’ve had in the past. What was your plan? How did you overcome that? What was your public relations campaign? Who’s on standby when a catastrophic event occurs? Where’s the plan? Show me how you qualify suppliers. Show me how quickly you can trace a product. How could Taco Bell have traced that product back quicker?” This is what buyers want to see. They’re like, “Show me what happened during your last disruption.”

Notice the most important words. It is, “Show me.” Buyers do not pay top dollar because you tell them your company is well run. They’re not going to believe that. They’re going to want to come in and see the proof of where you had catastrophic events or where you had an incident occur and how you overcame that. They want to see how the team was prepared to overcome that and communicate to the public. They pay for evidence. They don’t pay for what you say. They want evidence documented. Repeatable processes make a company more efficient, scalable, transferable, and a lot more valuable.

Let’s see how proprietary plays into the Taco Bell story. Your brand is a huge asset. Let’s talk about Proprietary. You’ve heard me say this over and over again. Proprietary assets are not limited to patents and trademarks. Proprietary is your number one multiple that can take you from a 5 to a 7 to a 10, or an even higher multiple. Your Proprietary assets must be protected. Your brand is Proprietary. Your reputation is proprietary.

Your training programs, systems, contracts, customer data, supplier relationships, content, recipes, technology, and goodwill can all contribute to the enterprise’s value, which are those proprietary assets. My co-author Sharon Lechter always likes to say, “Assets are sexy.” One of the biggest assets a company has is its brand, its reputation, and its name. Taco Bell is not valuable simply because it sells tacos. Other companies can sell tacos. A lot of other companies sell better tacos. The real value is in the brand, operating systems, customer loyalty, franchise infrastructure, marketing power, and goodwill.

Goodwill is fragile. You can see how your goodwill can be broken like that. Everybody has lost trust in your product and your quality. Equipment does not lose value because of a negative headline. A brand can. That is why protecting your reputation must be treated as an operating responsibility, not merely a marketing responsibility. Operations is the foundation of your company. Marketing is after the fact when a horrible event like this has occurred. Marketing and public relations have to jump in and save the day.

Patron Trust & Proprietary Assets: Protecting Reputation And Enterprise Value

Patrons. Trust determines what happens next. Patrons are your customers. They are the fuel to your business. During a crisis, customers evaluate two things. What happened and how the company responded. How the company responded is so much more important than what happened. You can’t control what happens, but you can control how you respond to a catastrophic event. Your response is what will dictate how this catastrophic event will affect Taco Bell and your business when a catastrophic event occurs.

I say when because it will always happen in every business and every industry. Mark my words. Was the communication fast and clear? Did employees appear informed? Did the company show concern for the customer? It’s like, “You’ve got sick customers here.” Did different locations provide different answers, or was everyone cohesive? Did Taco Bell say the same story for each location? Buyers, customers, everybody wants to hear consistent responses. They don’t want to hear chaos. They don’t want to hear different messaging. They want to hear the same messaging in a response.

This customer is not studying supplier contracts or legal liability. The customer is asking, “Do I trust this company enough to buy from it again?” I’m not going to talk about it anytime soon. I’m in New Orleans, Louisiana. It didn’t happen here, but it does make me second-guess. They want to know, “Do I trust this company enough to buy from it again?” That is a patron’s question, and it is a valuation question. It is a question of whether this business can continue on and continue to grow. They will forever have a tarnished brand because of this catastrophic event.

Your company should already be monitoring customer complaints, reviews, social media conversations, refunds, cancellations, declining orders, and declining order frequency. When I work with a client, we do an evaluation. Part of the evaluation is a reputation checklist. We want to go to our social media channels. We want to look at the Google reviews. How many reviews are there? What are people saying? Will people buy from them again?

When I go on Google and I’m going to a business, which could be a Walgreens pharmacy, one of the first things I do is check the reputation of that location. If I see 1, 2, or 3 stars, I won’t go. I will have my prescription changed to another pharmacy. If I’m doing business with somebody or going to a restaurant, I check the reputation. If it’s not favorable or it’s not at least four stars, I typically will not go to that establishment. Why? It’s because I know that I’m probably going to get a bad experience.

You want to pay attention here. Take inventory. A lot of business owners never even look at this. This is the first thing we look at in a business evaluation. Guess what? The buyers are going to do it. The buyers are going to go look at your online reputation. They’re going to take inventory. They’re going to want to know what your customers are saying. Do not wait for the financial statements to tell you that trust is disappearing. You’ll know that. When Taco Bell starts looking at their bottom line, Taco Bell has already lost a lot of money. I can tell you that.

Can they recover? Absolutely. I feel they can recover. They’re a big enough conglomerate. They’re a big enough company and a big enough business. They have the teams in place that they can recover, but could you recover? Your customers will usually tell you first that there’s a problem. A lot of business owners go, “The customers are always right.” Keep saying that and see how many customers you have left, especially when an event like this occurs and people are getting sick, people are getting hurt, employees are getting hurt, etc.

Profits & Performance: Identifying The Root Cause Of Shrinking Margins

Listen to your clients. It’s so much easier to keep a client than to try to replace a client. Let’s look at Profits. The financial damage comes last, eventually. You’ll hear everybody online, “Don’t go to this place. Don’t do that. They’re terrible. Their operations are horrible. I would never go back in a million years.” Do a good job in your business, and a few people will go give great reviews and say, “You should try this place. It was great. I had a great experience. Go here.” If they’re unhappy, everybody complains.  They want to tell everybody else about their negative experience.

People prefer to complain rather than tell the good. It doesn’t make sense, but it’s human nature. You want the financial story to tell the story, but it comes last. Weakness across the other Ps shows up in Profits. I always say this. Your company has a lack of Profit. I always say this to all of my clients. “If your company has a lack of Profits, the lack of Profits is never your problem. It’s the symptom of not having any other five Ps in place. You might not have the right management team. You might not have the right people in place. You might not have the right competent people in place.

You can have people, but not have competent people. You might have one way that you get paid, one profit center. No synergistic, congruent revenue strengths. You might not have protected proprietary assets, so you’re being sued because of trademark infringement. You might have customer concentration and not customer diversification. These are all things that will cause your Profit to start shrinking. Profits are never your problem. It’s never the issue. It’s a symptom of. Go back and look, “Do I have a lack of Profits? What five Ps am I missing? What’s my strongest? What’s my weakness? What can I fix right away so we can increase profits?”

A product safety problem can create lost sales, refunds, disposal and replacement costs, legal and regulatory expenses, public relations costs, employee overtime, insurance claims, and lost customer lifetime value. Think about that. It’s not lost customers, but lost customer lifetime value. Declining Profits are often a symptom, not the original problem, as we talked about. The original problem may be weak people, an uncomfortable product, a missing process, damaged proprietary value, or damaged brand.

One of your number one proprietary assets is your brand or lost patrons. This is why revenue does not automatically equal profit or value. Lawyers want profitable companies, but they also want to know that those profits are protected by strong systems in place. They want to make sure you have your SOPs, Standard Operating Procedures, for every single department. Think about that. Take inventory. What do you have? What do you not have? What are your strongest Ps? What are your weakest Ps?

The GPS Exit Model: Navigating Business Resilience And Buyer Due Diligence

Let’s talk about the GPS Exit Model. You’ve heard me talk about the GPS Exit Model before. I’m going to continue to talk about this until I can no longer talk about anything. One of the biggest mistakes that all business owners make is that they don’t plan their exit. They get in their business and get busy running the day-to-days. I call entrepreneurs firefighters. They are always busy putting out fires with no strategies and no solid foundation in place, like the 6 Ps.

They call me up one day and say, “Michelle, I want to sell my business. A catastrophic event occurred. I’ve been diagnosed with cancer or I lost my wife.” Something catastrophic has occurred, and they call me up and want to sell their business. They want to sell it for a big number. I love selling companies for big numbers. That’s what I do. I help people exit rich. Here’s what you need to know, destination. Are you building a company that merely produces revenue? Are you building an enterprise that can survive disruption? Are you building an enterprise that can survive disruption and still remain valuable?

Taco Bell is going to be able to survive this. They have the infrastructure in place. You need to ask yourself about your current location. How dependent are you on one supplier? How quickly could you trace a defective product? Do you know how Taco Bell was able to detect this quickly? It took a while. How many suppliers do they have? How many farms do they work with? How long would it take to contact affected customers? What critical decisions still require you?

A target buyer or sophisticated buyer that is interested in buying your business will investigate supplier concentration. It’s like customer concentration. Eighty percent of your revenue comes from 20% of your customers. You have customer concentration. Guess what? If you lose 2, 3, or 4 of those customers, you are out of business. We were selling an agricultural farm. They produce vegetables. They had huge supplier concentration problems and huge customer concentration problems.

You need to look and say, “Do I have one supplier that provides everything that we need or all the ingredients that we need to produce this product, or do we have diversified suppliers or diversified vendors?” Your supplier could go out of business. Your supplier could cause a catastrophic event like in the case of Taco Bell. You need to look at that. Insurance, quality control, customer complaints, management death, and past operational issues. High revenue does not erase risk, and high revenue does not restore your brand.

Sometimes, it magnifies it. Timeframe. You cannot make a company crisis-ready 30 days before selling the business. Buyers want evidence. If Taco Bell went on the market, as big as Taco Bell is and as well-branded as Taco Bell is, they might have an issue. There’s going to be a lot of due diligence. Buyers want evidence that the systems have been documented, tested, and improved over time. Do you know why? You’re not only protecting this quarter’s earnings. You are protecting your employees, customers, family, wealth, reputation, and legacy.

4 Action Steps To Safeguard Your Business Operations This Week

The GPS Exit Model helps owners define their destination, understand their current value, identify likely buyers, establish a timeframe, and clarify why the exit matters. Your action plan here is four actions to take that I want you to think about. Go back and read this episode again, and let’s get into taking some actions. First, identify every critical supplier and determine how much of your operation depends on each one. This is very important.

Number two, create an incident response plan with clear roles and decision-making authority. You cannot make every decision when you’re in a crisis. You should not make every decision in your company. You certainly can’t make all the decisions when you’re in a crisis. Third, test your traceability. Choose one product or customer order and see how quickly your team can track every responsible party.

Fourth, calculate the financial effect of losing a major supplier or product line for 7, 30, and 90 days, or maybe even go out to 120 days. Do not guess. Know your numbers. The talk about the outbreak is about public health issues, but it’s also an important lesson in business resilience. A strong brand does not eliminate operational risk. High revenue does not enlighten supplier risk. Profitability does not automatically mean the business is protected. The business that remains attractive to buyers is prepared across all the Seiler Tucker 6 Ps that you’ll read in Exit Rich.

People who know their responsibilities. Part of the controlled risk quality control. Processes that are documented and tested. Proprietary assets that are protected. There are a lot of things that you can fix in a business. The hardest things to fix are reputation and branding. Those are two things that, in some cases, are impossible to fix. Patrons who are informed and respected, and profits that can withstand pressure.

Buyers do not pay top dollar because nothing has ever gone wrong. Most buyers have owned businesses before. They understand risk. It’s not about what goes wrong. It’s about how you respond. They pay top dollar for a company that knows exactly what to do when something does go wrong. Ask yourself, “Will my weakest P survive becoming tomorrow morning’s headline?” That’s a great question. Every business owner should ask themselves that. The answer is no. Fix it now. Build to sell even if you never plan to sell, so you can exit smart, exit rich, and guess what? Exit on your terms.

Thank you so much. I appreciate you. Join us on another episode of the show. I know you found some golden nuggets here. This is a great case study. I believe in Taco Bell. I love Taco Bell. Look at your business. Take inventory. Use this case study as a real learning experience to improve your foundation and improve how you run your company. Please share it with your network. I always say your network equals your net worth. Please subscribe to the show. We’ll see you next time. Thank you.

Important Links

• Exit Rich
• Michelle Seiler Tucker on LinkedIn
• Michelle Seiler Tucker on Instagram