P. Terry’s Burger Stand has built its business around the core belief that taking care of people and building a great business aren’t competing ideas; they’re directly tied to each other.
Twenty-one years after opening its first burger stand, P. Terry’s has grown to 37 locations and 1,800 employees. In June 2026, the company transitioned to an Employee Ownership Trust (EOT), an ownership structure in which a trust holds company shares for the benefit of employees, and introduced a profit-sharing program for eligible employees. Cofounders Kathy and Patrick Terry remain actively involved as the company continues to grow.
In this Owners Session, Common Trust cofounder and CEO Zoe Schlag sat down with Kathy to talk about what that belief looks like at scale: how culture moves beyond the founders, why P. Terry’s ultimately chose an EOT, and what it takes to make employee ownership meaningful across dozens of locations and a large frontline workforce.
Key takeaways:
P. Terry’s people-first practices came before employee ownership.
Scaling culture meant moving trust and judgment beyond the founders.
The EOT gave Kathy and Patrick a way to protect independence while continuing to lead and transfer ownership over time.
Profit sharing makes the financial benefits of ownership more immediate for employees.
Bringing ownership to 1,800 employees takes ongoing communication and business education.
Creating a people-first foundation
When Kathy and Patrick Terry opened the first P. Terry’s Burger Stand in Austin in 2005, they wanted to do fast food differently: serve high-quality food at accessible prices and build a company that took care of the people helping make it work.
A lot of the culture that followed was shaped around ordinary moments inside the business. For example, the company’s interest-free loan program started after an employee’s car broke down before a shift. Kathy and Patrick knew one unexpected repair could quickly become something bigger for an employee living paycheck to paycheck: a missed shift, a lost job, a missed rent payment. The loan program offered a way for P. Terry’s to support employees through those hardships.
“Vin needed his job, and we needed Vin,” Kathy said.
That same level of thoughtful observation inspired other efforts, including P. Terry’s birthday cake program and Giving Back Days. After realizing she’d been working alongside an employee all day without knowing it was their birthday, Kathy started tracking birthdays and baking every employee a birthday cake herself — a practice that’s grown into a full-time role at the company. And the company’s Giving Back Days came from seeing another restaurant donate a night’s profits to a local nonprofit. P. Terry’s adopted a similar program, which has raised nearly $3 million to date for local causes.
None of those practices were designed around a future employee ownership transition; they came from paying attention to the people around them and finding ways to respond as the business grew.
Scaling without losing the culture
P. Terry's didn't grow quickly at first. It took four years to open a second location — something Kathy described as "kind of a blessing" in hindsight. The extra time gave the company a chance to establish its rhythm before trying to replicate it: how people were trained, how quality was maintained, what employees could expect from the company, and the trust underneath it all.
As more restaurants opened, that trust had to travel with the people opening them. Experienced employees moved into new stores, and many of the leaders helping train new teams had started in frontline roles themselves. Managers needed to understand what the company valued and trust that P. Terry’s would stand behind them when they acted on those values.
Kathy shared one story about a children’s home that needed Christmas Eve dinner after another restaurant could no longer provide it. Casey, a P. Terry’s manager, took the initiative to commit the company to helping and recruited team members to run the catering truck.
“You just always have to do what you say you’re going to do,” Kathy said. “If you do, then they believe you.”
That trust extends to customers, too. Kathy talked about maintaining high-quality food, keeping prices as accessible as possible, being transparent when prices change, and continuing to show up for the community. With 1,800 employees working across 37 locations and a range of shifts and roles, culture has to move beyond the founders and live in the decisions employees make every day.
From people-first to employee-owned
Years before P. Terry’s transitioned to employee ownership, Kathy and Patrick explored selling the business to an outside buyer. They received an offer and came close to accepting it, but the experience led them to picture what P. Terry’s might become under someone else’s ownership.
As Kathy thought about what new ownership could mean, she found herself asking: "Who's going to make the birthday cakes?" She and Patrick knew the things they cared about, from the food to the culture around it, might not look the same after a sale.
Selling no longer felt like the right fit, but neither did passing the business to their daughters. Kathy and Patrick wanted them to choose their own path rather than inherit one that had already been chosen for them.
They continued to explore different ownership models, including Employee Stock Ownership Plans (ESOPs) and Employee Ownership Trusts (EOTs). An ESOP had advantages, but annual valuations, share administration, and retirement-based benefits didn’t feel like the right fit for a restaurant workforce with regular turnover. Kathy was also unsure whether a majority-owned ESOP could offer the same protection against a future outside sale.
The EOT was the first model Kathy felt could “check all the boxes.” It offered a way to:
Protect P. Terry’s long-term independence. Kathy said this was the piece she hadn’t been able to find elsewhere — a structure designed to help keep the company independent and preserve the culture beyond her and Patrick’s tenure.
Transfer ownership gradually while continuing to lead the business. The EOT let Kathy and Patrick begin moving ownership into the trust without stepping away from P. Terry’s, with future transfers unfolding over time as the company continues to grow.
Keep important commitments in place over time. In the trust, P. Terry’s sought to protect practices and priorities including profit sharing, interest-free loans, high-quality food at accessible prices, and the company’s approach to growth.
Make room for employee benefit and continued growth. The transition was structured so P. Terry’s could introduce profit sharing, continue opening stores at a measured pace, and manage the financial obligations of the ownership transfer.
For Kathy, that combination made the EOT feel less like an exit plan than a way to carry the business forward. “The EOT is our legacy,” she said.
Making shared success tangible
To help employees connect ownership to the work they do every day, Kathy and Patrick believed its financial benefits needed to be something employees could feel in the near term. Many P. Terry’s employees are thinking about buying a car, paying for a home, or putting children through school — not only what they may receive at retirement.
Alongside its transition to an EOT, P. Terry’s introduced a company-wide profit-sharing plan for eligible employees, with the pool starting at 5% of operating income and planned to grow to as much as 20% over time. The program is based on tenure rather than job title or level of responsibility, recognizing that longtime employees can make meaningful contributions without ever wanting to become managers.
Kathy described what she hopes that can make possible for longtime frontline employees:
“If I can create a future where someone like Maggie, who only wants to work the grill, can — because of her loyalty and commitment — retire with dignity, put a child through college, or buy a home, then I feel like we have fundamentally changed what it means to be a frontline restaurant worker.”
Bringing ownership to 1,800 employees
For a company spanning 37 locations, introducing employee ownership meant deciding what employees needed to understand first — and accepting that the rest would take time.
P. Terry’s introduced the transition first to managers, then shared a high-level message with employees across the company. Kathy and Patrick were staying, employees’ jobs weren’t changing, and the trust was designed to benefit employees while protecting commitments they already knew from the business.
Managers and shift leaders are continuing to learn more about the company’s financials, while employee training uses everyday examples (even how many ketchup packets go into a bag) to show how small decisions add up across dozens of restaurants. Kathy emphasized that P. Terry’s is still early in that work and continues to experiment with ways to make financial and business education useful across different roles.
P. Terry’s has also made the transition visible to customers through public communications and signs at its restaurants. Kathy said customers have responded with excitement for employees.
Building for the long term
When asked what other business owners should consider as they think about what’s next, Kathy suggested starting with what they want to leave behind. For her and Patrick, the EOT gave them a way to stay involved in P. Terry’s while protecting the values and independence they want the company to carry forward.
“The joy is not in the exit. To me, I think the joy is staying and building these relationships, and building this legacy,” Kathy shared.
Quick facts about P. Terry’s employee ownership journey
Is P. Terry’s employee-owned?
Yes. P. Terry’s transitioned to an Employee Ownership Trust in June 2026. Kathy and Patrick Terry remain actively involved as the company continues to grow, while the ownership transfer is designed to unfold over time.
What is an Employee Ownership Trust (EOT)?
An Employee Ownership Trust is a form of employee ownership in which a purpose trust holds company shares for the benefit of employees. Unlike models where employees receive individual shares or retirement accounts, ownership is held collectively through the trust. The structure can be designed to support long-term independence, preserve important company commitments, and allow employees to share financially in the company’s success through mechanisms such as profit sharing.
Why did P. Terry’s choose an EOT instead of an ESOP?
Kathy and Patrick explored several options for the company’s future, including an outside sale, passing the business to their daughters, and an Employee Stock Ownership Plan (ESOP). Kathy said an ESOP’s annual valuation and share-administration requirements felt cumbersome for a restaurant workforce with regular turnover. An EOT offered a different fit for their goals, including a gradual ownership transfer and long-term independence.
How does profit sharing work at P. Terry’s?
Employees become eligible after two years with the company. The profit-sharing pool begins at 5% of operating income, with plans to increase it to as much as 20% over time, and allocations are based on tenure rather than job title or level of responsibility. The first distributions are expected in early 2027.
How is P. Terry’s introducing employee ownership across 1,800 employees?
The company began by introducing the transition to managers, followed by high-level communication to employees across its locations. Early messages focused on the things employees most needed to know: Kathy and Patrick were staying, jobs weren’t changing because of the transition, and the trust was designed to benefit employees and protect the company over the long term. P. Terry’s is now building on that foundation with business and financial education aimed at helping employees understand how their everyday work affects company performance.
Continuing the conversation
P. Terry’s found an ownership structure that matched what Kathy and Patrick wanted for the company’s next chapter. The right answer will look different for every business.
If you’re exploring employee ownership and want to understand whether an EOT could fit your goals, we’d love to talk. Schedule an advisory call with our team to learn more.
