A large double chocolate milkshake takes eighteen seconds to make at P. Terry’s Burger Stand.
At least it does in the practiced hands of Kathy Terry, cofounder of the Austin-based chain. In smooth, skillful fashion, she grabs the turquoise cup, dispenses soft-serve from the stainless steel Electro Freeze, pumps in two big squirts of chocolate syrup, spins the drink with a metal mixer, and tops it off with a plastic lid. On this bright Friday afternoon, at a P. Terry’s location that opened just before Christmas in New Braunfels, she’s working a shift alongside more than a dozen employees. They operate in a tight rectangular space surrounded by eight fry stations, a large grill, drink dispensers, ice machines, sinks, and the humming Electro Freeze. The thousand-square-foot restaurant doesn’t have a dining room; instead, a two-lane drive-through is serviced by a takeout window as well as outdoor “runners” who receive orders, collect money, and distribute food.
Kathy’s double chocolate shake goes out the drive-through window to an older woman sporting brightly dyed red hair and huge sunglasses. She and a disconcerting number of other customers forgo face coverings as they holler out requests for ketchup packets or extra napkins when they reach the window—despite clear restaurant signage asking them to mask up. The customer is frowning as she’s handed the shake, but then sucks hard on the straw (a whole different shade of red from her hair), nods to no one in particular, and smiles. The shake: it is good.
Someone who has been in the business of making shakes like this for more than fifteen years surely can’t be excited about the prospect of more shakes to be made. But as she stands next to the mixer, Kathy lights up, which is apparent even behind her black face mask. “Have you had the Turtle shake?” she asks excitedly, referring to that month’s caramel, pecan, and chocolate special. “It’s the bomb!”
P. Terry’s serves more than shakes, of course, but not that much more. By design, it has kept its menu small enough to fit on a single painted sign in the drive-through lane. No need for a digital display with dozens of options here. The offerings are centered on burgers-fries-shakes (there’s also a limited breakfast menu), although the fresh-squeezed lemonade is great, and cofounder Patrick Terry, Kathy’s husband, swears by the banana bread, one of two dessert offerings, along with oatmeal chocolate chip cookies. Except for last year’s launch of the crispy-chicken burger, the menu has remained consistent. P. Terry’s itself, though, is undergoing its most signification transition since its founding in 2005. Not only is it finally expanding beyond the Austin metro this year—resuming plans postponed by the pandemic—but the chain in February raised the minimum wage for its employees to $15 an hour.
P. Terry’s first location, at South Lamar Boulevard and Barton Springs Road in Austin, was an ode to Mack Eplen’s Drivateria, a fifties-style drive-in restaurant in Patrick’s hometown of Abilene that was known for its square burgers. The Drivateria’s Googie space-age architecture and aesthetic, evoking retro spaceships and cars with big fins, has informed P. Terry’s design, menu, neon lighting, and even its fonts. But Patrick cared most about the food. “I loved the idea, the simplicity, of burger, fries, and milkshake. There’s just something about it that makes me smile, and I wanted to be a part of it.” He was in advertising when he met Kathy, an intellectual property lawyer, at a gym in 2000. After they married in 2004, Patrick couldn’t shake the idea of creating a Drivateria-inspired burger joint; when the prime South Lamar property opened up, he leapt.
The first year was challenging for the new restaurateurs. Kathy, detail-oriented and laser-focused, helped saved the business as it struggled to find its footing. She turned the 527-square-foot space into a more-organized, better-flowing business and helped improve its hiring of employees with the right skillsets. She also dealt with a few unforeseen challenges. “The first day we opened, we were putting French fries in these little [cardboard] boats, and they were going everywhere. Things like that just evolved,” Kathy says.
Soon, though, P. Terry’s found its following (and began serving fries in paper sleeves), and the Terrys began opening other restaurants across the region—there are now nineteen in Austin, Pflugerville, Georgetown, and San Marcos, as well as an offshoot restaurant, Taco Ranch, in Austin’s Sunset Valley (another Taco Ranch opened near the University of Texas campus, but it has since been converted into a P. Terry’s Burger Stand). Before long, the restaurants became easily recognizable Austin landmarks: those bold wedges, the flame-red poles, the turquoise color scheme. The couple’s approach was simple: retro styling plus progressive, high-quality food, and workplace practices inspired by Eric Schlosser’s Fast Food Nation.
“We were always more interested in a higher-quality burger,” Patrick says. “The idea was always to shove a quality burger that people weren’t used to getting into a fast-food drive-through. That was the impetus for the whole idea.” The beef in the burgers is antibiotic and hormone-free and sourced from Texas and Oklahoma ranches, the potatoes for the shoestring fries are fresh from Idaho and cut in-restaurant, the bread for the buns is baked daily, and the ketchup packets contain no high-fructose corn syrup. The veggie burger recipe was created by Austin chef Andrew Brooks using brown rice, cremini mushrooms, black beans, oats, onions, and parsley.
The chain’s principles have worked in a city that, while it’s known for tacos and barbecue, also worships its yoga, bike trails, and no-kill animal shelters. “P. Terry’s is truly beloved in Austin,” says Nadia Chaudhury, editor of Eater Austin, the popular dining website, where stories about the burger brand tend to do well. An expansion throughout Texas seems like the logical next step after building up such a devoted fan base, she adds, saying, “P. Terry’s is a Texas company, so naturally, fellow Texas cities are into the idea of P. Terry’s opening in their area.”
For the company’s fifteenth anniversary in 2020, the Terrys were gearing up for a big year, with plans to open at least four more restaurants outside of the Austin area, which Patrick says is well saturated. The plans came to a halt with COVID-19, although the New Braunfels drive-through opened in December. Three locations will open in San Antonio by the end of this year or early 2022, and then the chain will expand into the Houston area. The Terrys hope to have thirty burger stands in Texas by the end of 2022.
The expansion was accelerated by the hiring of a new CEO who came on board after a headhunter-led search: Todd Coerver, who previously worked for two other Texas favorites. Coerver was head of marketing and innovation at Whataburger until 2009 and later served as chief operating officer at Taco Cabana from 2012 to 2016, in San Antonio. The way the Terrys ran their business had impressed Coerver for years. “It always feels like, man, these guys just seem to do everything the right way,” he says. “It became abundantly clear why. They lead with their heart, and that’s very different from most businesses.”
The company has long been known for its philanthropic efforts in Central Texas, in addition to what it does for its own employees. Four times a year, P. Terry’s holds a “Giving Back Day,” donating 100 percent of its restaurant profits to community organizations. During the winter storm in Texas last month, the Terrys stepped up in a different way: Kathy Terry reached out to Susan Hewlitt, executive director of Dell Children’s Foundation. “She texted, ‘What do you need?’ as she always does,” Hewlitt says. Kathy offered to make five hundred burgers. It was at the height of electrical outages and icy road conditions, so Kathy, Patrick, and their two daughters—ten-year-old Kate and thirteen-year-old Caroline—first had to get a ride from their snow-sealed home to the North Lamar P. Terry’s restaurant. Other staffers were able to get there to help the family. Patrick worked the grill, the girls toasted buns, and Kathy wrapped up burger after burger for the hospital order. “We have food reserves, but couldn’t get anything fresh for a few days,” Hewlitt recalls. “The burgers were fed to associates and patient families that night. It’s just so cool to have a partner in the community who is always there with a ‘What do you need?’” The Terrys went on to do the same for other groups, and they gave employees access to the restaurants to cook personal meals and draw water during the snowstorm crisis.
The pandemic did more than postpone P. Terry’s expansion plans. The Terrys had to permanently close their downtown Austin dine-in location, and they temporarily shuttered all of their dining rooms for almost a year (most reopened last month). They also had to rethink what it means to care for their employees. Since the start, the Terrys have made rituals out of employee birthday cakes (Kathy baked them herself the first nine years), and they offered a free meal with each shift worked, holiday bonuses, and interest-free loans to their workers. As the pandemic spread, the business gave every employee $100 in cash and H-E-B gift cards as well as paid time off for anyone who needed to quarantine for two weeks.
Most significantly, starting in February, the company raised its minimum wage to $15 an hour. The pay increase stands out in a state where the average wage for fast-food workers is $10.24 to $10.53 an hour, according to the U.S Bureau of Labor Statistics. Getting the wage from $12 to $15 had been a goal of the Terrys for years, but the COVID-19 pandemic made the welfare of essential workers an even bigger priority. Last summer, the company’s executives began working to make it happen. “Unfortunately, it took a virus to shine a light on what our employees were going through,” Patrick says.
Alma Medina de los Santos, a P. Terry’s employee who has worked at the company’s MoPac expressway location in Austin for five years, cried when she heard the news. “I was making eleven dollars; I couldn’t believe it,” she says in Spanish. “I can use it for my rent, my car payment, and I’ll have a little bit left for my family in Mexico. I can send them money.”
Val Brown started working for the company in January, before she knew of the wage increase. “I was doing housekeeping in a hospital. I was around COVID patients; it was getting pretty dangerous. I’m not only working safer, I’m making a lot more money,” says Brown, who was living in her car before she got the job, something her employers weren’t aware of when she was hired. She’s training to be a shift manager at the Westlake burger stand. “It’s been great. It’s been a blessing,” Brown says. “They saw potential in me and are giving me an opportunity to grow.”
Patrick Terry says that he’s not out to get competing restaurants to raise their wages to match P. Terry’s, but he thinks it’s possible others could follow suit. “I certainly don’t tell other people how to run their business, but I will say that if we can climb this hill, there are plenty of others who can too.”
Will P. Terry’s succeed outside of Austin’s embrace of the funky, homegrown, and relatively healthy (canola oil for the fries, all-natural meats)? It’s hard to say. There’s Whataburger. Five Guys. In-N-Out. BurgerFi and Smashburger. And lots more from in and out of Texas that are trying to elevate the humble burger and fries combo into a premium experience. The chain’s reputation should help; in 2018, for example, Southern Living called P. Terry’s the best burger chain in America: “These burgers, fries, and shakes are worth a visit to the Lone Star State.”
So far, the Terrys and Coerver are looking at expanding P. Terry’s at a rate of about five to six restaurants a year while being deliberate about the chain’s growth in terms of food quality, employee welfare, and the goodwill of the brand itself. Patrick says he’s always afraid of peaking, of P. Terry’s being viewed as a once-great restaurant chain that expanded too fast and lost its magic. “The single biggest nightmare for me is if people said, ‘Oh do you remember when P. Terry’s was like that?’” he says.
Right now, the burger stands all rely on a central commissary next to the company’s offices in North Austin that does everything from bake cookies every day to grind cutlets for the P. Terry’s chicken-patty burger. The food is prepped and delivered fresh each day.
So far, only new locations that are within driving distance of the commissary are being considered. In the fall, P. Terry’s will move its commissary to a new location north of U.S. 183 and Burnet Road in Austin that will serve Austin and San Antonio locations as well as the first Houston stand sometime next year. When more restaurants open in Houston, Patrick says, a second commissary will open there.
Chaudhury says every burger chain in Texas is inevitably compared to Whataburger and In-N-Out. “Quality-wise, P. Terry’s is miles away better. I could see, in the future, P. Terry’s operating in the same ballpark as those two much-larger companies, especially if it keeps on the same growth path,” she says. The editor, who is “very into” the restaurant’s grilled jalapeños, hopes, however, that the expansion won’t change the chain. “I hope it doesn’t lose its core mission, because then it’s not really P. Terry’s anymore, right?”