Building A Better Burger
Dave thomas' face is everywhere: billboards, TV commercials,
life-sized posters in the window of every Wendy's restaurant.
It's the face that launched a hamburger chain, and built it
into a $4.2 million dollar empire.
With more than 4,500 restaurants in the United States and 34 other countries, Wendy's repeatedly beats McDonald's as the number one burger joint in an annual survey by Restaurant & Institutions magazine. Burger aficionados consistently rate Wendy's high on the quality scale. And it's all due to Thomas' hard work, dedication and commitment to building a better restaurant.
"In 1940, at the age of eight, I dreamed that one day I would own the best restaurant in the world. All of the customers would love my food, and all of my employees would do everything they were supposed to do. But most important, everyone would think I was a good boss, and every day when I walked into the restaurant, people would be glad to see me," writes Thomas on the opening page of his autobiography, Dave's Way (Berkley Books).
Thomas candidly admits that achieving that dream was a study in survival. "Early on, I realized there is no easy way," says Thomas. "If you want something, you have to go out and work for it. The idea is to do something you love."
Ask him what it takes to be a successful entrepreneur, and Thomas tells you straight out that anyone can be successful if he or she is dedicated to a service or product, has strong convictions and is willing to work hard to build experience. As the saying goes, however, it's easier said than done.
In The Beginning
Thomas was adopted by Rex and Olivia Thomas when he was six weeks old and christened Rex David Thomas. His adoptive mother died when he was five, and after his father divorced his second wife, Thomas began to get up close and personal with the restaurant business.
"We started going to restaurants for our meals," says Thomas. "It was then that I decided I wanted to own my own restaurant because I liked to eat, and I just thought restaurants were really neat, exciting places. By the age of nine, I had become a real expert on restaurants. I knew what customers expected and I knew what kind of service and quality was acceptable. I overheard complaints and compliments and I soaked it all in."
Thomas spent his teen years learning the grunt side of the restaurant business. When he was 15, his family moved to Fort Wayne, Indiana, where he landed a job as a busboy at the Hobby House Restaurant. "By then, I was a veteran restaurant worker," Thomas chuckles.
At 18, he made another major career move: He enlisted in the army and enrolled in the cook and baker school to learn the skills of a master baker, as well as the rudiments of managing a mess hall that served 2,000 meals a day. He learned to negotiate with vendors and buy in quantity.
"It turned out to be a great learning experience," says Thomas. "I learned how to be an entrepreneur and it didn't cost me anything. It was like running my own business, without any of the risks."
When he finished his three-year army stint, he got back his job as a short order cook at the Hobby House. There he met and fell in love with a pretty waitress named Lorraine Buskirk. They married in 1954, when Thomas was 22 and Lorraine 19.
Kentucky Fried Marketing
Marriage only made Thomas more determined about building his career. It was 1956 when his boss, Phil Clauss, opened a barbecue restaurant called the Ranch House. There, Thomas met the legendary chicken baron, Harland Sanders, better known as "the Colonel," the founder of the Kentucky Fried Chicken (KFC) chain.
"The Colonel was traveling nationwide, promoting his new fried chicken franchise," says Thomas. "He turned out to be a man who had a profound influence on my career."
Seeing an incredible opportunity, Clauss bought a KFC franchise. He sold the chicken through the Ranch House and Hobby House, and Thomas, now Clauss' right-hand man, learned the chicken business.
In 1962, Thomas got an opportunity to prove himself. Clauss made the mistake of buying four failing KFC carry-out locations in Columbus. At his wit's end about the crumbling businesses, he made Thomas an enticing business offer: If Thomas could turn around the stores, pay off a $250,000 debt and turn a profit, Clauss would give him 40 percent of the Columbus franchises. "The Colonel warned me that the stores were almost bankrupt," says Thomas, "but I figured I had nothing to lose. I knew it would be difficult, but with four kids to support on a salary of $135 a week, I'd have been foolish not to try." Thomas studied the ailing restaurants and found a solution.
"There were too many items on the menu, many of which took a long time to prepare," he says. So he trimmed down the 100-plus items to a manageable staple of chicken and salads. To promote the restaurants, he bartered buckets of chicken for TV air time. Business turned around practically overnight. In March 1967, the $250,000 debt was paid off. He and Clauss opened a fifth location in Columbus, before selling their stores back to the parent company in 1968. Thomas was then a millionaire at the age of 35.
Convictions About Hamburgers
By 1969, Thomas had a clear vision of the kind of business he intended to build. Hamburgers were, and still are, Thomas' favorite meal, and he knew he could beat his competitors by offering a better burger.
"Some people have convictions about the making of fine silver. Others have convictions about how to run universities. I had convictions about hamburgers that came from my experiences as a kid," Thomas says.
"My burgers were going to be hot off the grill. No hamburger would be put on a bun until we had an order. Customers could choose their own toppings, rather than buy burgers with condiments already sitting on them." The burger meister also intended to offer meatier burgers containing less fat.
In 1969, Thomas finally made the big move and opened Wendy's Old Fashioned Hamburger Restaurant in downtown Columbus at a cost of less than $90,000. The restaurant's logo featured a cute little pigtailed girl who was based on Thomas' eight-year old daughter, Melinda Lou, nicknamed Wendy.
Thomas' first Wendy's did well immediately, earning $300,000 in its first year, but he was determined to move cautiously. "I had no grand five-year plan," he says. "It was more like, 'Let's get on our feet before barreling ahead.' I wanted to make sure we had a viable product that would make money."
Early on, he learned to surround himself with the best people he could find. He hired people who loved the restaurant business as much as he did. It didn't hurt if they were passionate about hamburgers, either.
"If you hope to grow your business, you've got to learn to trust and support people," says Thomas. "If they don't perform, you go out and find people who can get the job done." He also kept a watchful eye on the competition, never second-guessing or underestimating them. "I looked at the competition and tried to figure out what they were doing better so we could improve our operations."
Thomas decided to test the franchising waters cautiously. He wanted to be certain that franchising worked, and that his concept could easily be franchised. He also wanted franchisees who understood the restaurant business and would be successful. If they did well, Thomas would do well and the Wendy's image would be strengthened. By his second year in business, potential franchisees were beating down his door. Four years after launching his company, Thomas sold his first franchise.
In 1970, Thomas opened another restaurant in Columbus, and sales reached above $600,000. By the end of 1974, total restaurant sales hit nearly $25 million. There were 100 Wendy's restaurants in 1975. About a decade later, Thomas celebrated the opening of his 3,000th restaurant in the French Quarter of New Orleans.
It's not that Thomas was lucky; luck played no part in his extraordinary ascension to entrepreneurial superstardom. Thomas credits listening and observing-and determination, dedication and hard work-for his success, skills he began honing as a teenager. Everyone he worked for served as his teacher. Their successes and failures taught young Thomas everything he needed to know about running a successful business.
"I learned to look at everyone's business style and philosophy," says Thomas. "I picked and chose compatible ideas and rejected the others. There are a lot of ways to get downtown and they're all right. It's just a question of picking the best path for you. It's the same way in business."
In the mid-1980s, Thomas stepped down into an advisory role and took the titles of senior chairman of the board and founder. He hired an experienced team of managers to run the company on a day-to-day basis, most of them former franchise owners with impressive credentials in the food business.
The "Where's the Beef" advertising campaign, starring retired Chicago manicurist Clara Peller, exploded onto the scene of the 1984 "Burger Wars," between Burger King and McDonald's, and stole the spotlight from Thomas' larger competitors. Some groups raised a fuss, saying the ads made fun of seniors, but by the end of its second wave, the campaign had increased public awareness of the company from 37 to 60 percent.
In 1989, Thomas was brought back into the fray to act as the company's spokesperson, a job he enjoys almost as much as he enjoyed building his company. At 63, he is on the move constantly, making public appearances and doing TV spots. In the last six years, he's made over 383 TV ads. This year, he's scheduled to make 90 commercials. Put it all together, and Thomas is on the road almost 200 days a year.
When Thomas is trying to do a thousand things at once, he does exactly what he's been doing for 25 years: He finds the nearest Wendy's and has a double cheeseburger with mustard, pickles and onions, a bowl of chili and an order of french fries, and then washes it down with a large Frosty. After that he's charged and ready to go.
Bob Weinstein is a frequent contributor to national magazines.