Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

Franchise Hot List: 5 Fast-Food Chains That Didn’t Last

by Laurie Swenson on April 6, 2015

in Chicken Franchises, Franchise Hot Lists, Hamburger Franchise



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Burger Chef

This Franchise Chatter Hot List was written by Laurie Swenson.

Along with storied fast-food restaurants like A&W and White Castle, which are closing in on a hundred years, and others that opened later and are still serving burgers today, there are those that didn’t survive. Some have been gone for years, while others have a store or two remaining, or operate in other countries but no longer have restaurants in the United States.

The more I read about these restaurants, the more it feels like a roll of the dice. Why did one restaurant make it big while another tanked? It’s hard to say, partly because historical data is sketchy and sometimes inconsistent, but these stories illustrate the principle that you shouldn’t count your chickens – or burgers – before they’re hatched. Or fried. Or flame-broiled.

Burger Chef

Burger Chef, a fast-food chain that began in 1954 in Indianapolis and grew to more than a thousand locations by 1973, was at one time a close second to McDonald’s in number of locations. The difference was much smaller than the chasm that separates McDonald’s from Burger King and Wendy’s today.

The Big Shef, a double burger, and the Super Shef, a quarter-pound hamburger, were Burger Chef’s big sellers. The restaurant also had a “Works Bar” where customers could add their own toppings to their burgers. There’s more: Burger Chef also patented the flame broiler, becoming the first restaurant to sell flame-broiled burgers.

If you’ve never heard of Burger Chef, I know you’re familiar with what the chain gave to the fast-food industry. The McDonald’s Happy Meal, and other fast-food kids’ meals that come with toys, owe it all to Burger Chef, which introduced the concept.

Its Funmeal included the Funburger; stories about Burger Chef (a mascot voiced by actor, comedian and ventriloquist Paul Winchell), his sidekick, Jeff, and their friends; along with puzzles, riddles and little toys. Burger Chef sued McDonald’s when the Happy Meal was introduced in 1979, but ended up losing its lawsuit.

Burger Chef, originally opened by Frank and Daniel Thomas but owned by the General Foods Corporation since 1968, was sold in 1982 to Imasco, a Canadian company that also owned Hardee’s. Burger Chef stores were eventually converted to Hardee’s or other brands, or were closed. The last Burger Chef in operation closed in 1996.

It sounds like a raw deal to me for a fast-food restaurant that patented the flame broiler, came up with a burger-topping bar, and invented the fast-food kids’ meal, only to become swallowed up by Hardee’s.

White Tower

White Tower Hamburgers, which started in Milwaukee in 1926, bore a suspicious resemblance to White Castle, which had debuted five years earlier in Wichita, Kan. By the time White Castle sued for unfair competition in 1929, White Tower had already opened 130 locations in Wisconsin and Michigan.

White Castle won its Minnesota lawsuit in 1930 and in 1934 finally won White Tower’s countersuit in Michigan, where it was shown that White Tower had taken photographs of White Castle and hired a former White Castle operator.

White Tower was, perhaps surprisingly, not forced to change its name, but did have to change its look, which first moved to an art deco design and then to more modern styles. The two chains ended up operating in different regions and basically stayed away from each other; perhaps the 1920s and ’30s were just a friendlier time.

At its peak in the mid-1950s, White Tower had 230 stores, but as people started to move from inner cities to suburbs, White Tower’s city locations dwindled. Today only one White Tower Restaurant remains, in Toledo.

Lum’s

The first Lum’s, a hot-dog stand turned family restaurant, opened its doors in 1956 in Miami Beach. The restaurant’s specialty was hot dogs steamed in beer.

After opening four restaurants by 1961, Lum’s grew quickly, so quickly that the company, Lum’s Inc., was able to buy Caesar’s Palace on the Las Vegas Strip for $60 million in 1969. The company’s food operations, which included 400 stores, were sold in 1971, and again in 1978, when 273 locations remained. Milton Berle was the restaurant spokesperson in the 1970s, but Berle couldn’t stop the new owner from filing for bankruptcy in 1982.

Lum’s isn’t quite done yet, though. Although the original location closed in 1983, one location is still in operation in Bellevue, Neb., and what’s more, another Lum’s opened in 2010 in Seekonk, Mass. Maybe Lum’s is working on a slow comeback.

Sambo’s

Sambo’s, which sold Sambo burgers and Sambo pancakes, got its unfortunate name from the names of its founders, Sam Battistone and Newell F. Bohnett. Just think – they could have instead named their Santa Barbara restaurant Batbo’s, or New Sam’s, or Bohsam’s, or even Wellstone’s.

The name “Sambo” was associated with the children’s book “The Story of Little Black Sambo.” The 1899 book depicts a dark-skinned child in India, but “Sambo” was already a racial slur against people of African descent (or mixed-race with African descent) in some countries.

The restaurant capitalized on that connection by decorating with scenes from the book. The illustrations were later changed to depict a lighter-skinned Indian boy, and Sambo’s tried unsuccessfully to shift focus to the tigers in the story.

The restaurant enjoyed years of success, with more than 1,100 restaurants in 47 states at its peak in 1979, but continued complaints by anti-discrimination protesters were already weighing heavily on the restaurant by that time. The chain tried using the names “Sam’s” and “The Jolly Tiger” in some of its locations, but ended up collapsing gradually.

The company filed for bankruptcy in 1982, and all locations except the original were closed. By 1983, 618 locations were renamed Season’s Friendly Eating, and several became Denny’s restaurants. Season’s Friendly Eating seems to have dropped off the face of the earth, so apparently that branding didn’t work either.

The original restaurant in Santa Barbara, still named Sambo’s, is owned by Chad Stevens, grandson of Sam Battistone.

Minnie Pearl’s Chicken

Grand Old Opry star Minnie Pearl, also of “Hee Haw” fame, ended up with her name on a chicken restaurant in the late 1960s, in a move designed to compete against Kentucky Fried Chicken. Minnie Pearl Chicken, started by Nashville brothers and law partners John Jay and Henry Hooker, saw initial success and swift franchise sales. This was partly due to the popularity of Pearl, whose real name was Sarah Ophelia Colley Cannon.

However, the inexperience of the Hookers in the restaurant business caught up with them before many of the franchises could even open. Some restaurants struggled, others closed, and stock prices fell.

It certainly didn’t help matters that the brothers knew nothing about chicken, and no two restaurants had the same chicken recipe. This is strange enough on its face, but doubly strange considering they were supposed to be in competition with a restaurant known for “Colonel” Sanders’ secret recipe with 11 herbs and spices. How do you compete when you don’t even have your own recipe?

The chain collapsed in the late 1960s, its demise hastened by an SEC investigation into alleged accounting irregularities. No charges were ever filed, but the last Minnie Pearl’s Chicken restaurant closed in 1971.

Pearl, known for her big fancy hat with the tag still on it, died in 1996, but John Jay Hooker, a politician who earned the Democratic nomination in two unsuccessful bids for governor of Tennessee in 1970 and 1988 and continued to run through 2014, is still living. He was born in 1930.




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