Fast Food

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But the White Castle restaurants were not geared to truly fast service. They typically included counter seating with a two-person staff to perform all functions in the restaurant: cooking, cleaning, and ringing up bills. Their clientele tended to be male, a fact that reduced the customer pool significantly. White Castles did not—as McDonald’s was to do so successfully later—find a way to make their restaurants family-oriented. White Castles were often referred to in those early days as “truck stops,” even though many were located in urban centers.

A&W appeared in 1924. The name was derived from the initials of its founders, Allen and White. A&W was based on a single product: Alien and White’s root beer syrup. It did not begin serving food until much later, a fact that eventually spelled the chain’s decline.

Though A&W is not a thriving chain today, it is still noted for its earliest franchises—the ones in Washington, D. C., where J. Willard Marriott got his start in the restaurant business. By 1928 Marriott had changed the name of his A&W stands to Hot Shoppe, forming a restaurant chain specializing in barbecue sandwiches. The sandwiches proved popular. The profits Marriott realized on the Hot Shoppes served as the foundation for the Marriott Corporation, one of America’s largest hotel chains.

The path followed by Marriott was one Howard Johnson had already traveled. In 1925 Johnson scraped together five hundred dollars and invested it in a money-losing drugstore located in Quincy, Massachusetts. The drugstore contained a soda fountain, but the previous owner had served only three flavors of ice cream, all purchased from a local supplier. Johnson decided the ice cream was not rich enough for his clientele, so he set about producing a blend that doubled the butterfat content common in ice cream at the time. Working in his basement with a hand ice-cream maker, he came up with a product that soon had customers lined up. Riding on his success, he quickly added hot dogs and hamburgers to the menu. What started out as a soda fountain gradually expanded into a restaurant.

 

Others had also turned failing restaurants around, but it was Johnson who brought something wholly new to the game. In 1929 he once again expanded his operation. He opened a second restaurant in Quincy, using the techniques he had refined in the first. With the success of the second restaurant assured, he naturally began thinking of opening more. He would supply them himself from his own food-processing system, above all maintaining the high quality of his ice cream.

The Depression, however, proved formidable. Tight money cut into Johnson’s sales, and made it difficult to expand. Surveying the situation, Johnson decided on a plan that would be followed by every food chain for the next sixty years: he would franchise.

Johnson convinced a restaurant owner on Cape Cod to use the Howard Johnson name and began supplying the new restaurant from his food-processing plant. By supplying the food himself, Johnson was able to maintain quality control while increasing the visibility of his chain. The new restaurant was a success, and more franchisees came forward. Six years later there were twenty-five Howard Johnson restaurants along the East Coast. By 1940 the Howard Johnson chain had expanded to a hundred restaurants, lining the Eastern seaboard. They were linked by a consistency in food quality and by the orange roofs that effectively attracted passing travelers.

Even if Howard Johnson’s did not rely on a true fast-service system for its success (though it would later introduce Ho Jo’s in an unsuccessful attempt to compete with the newer chains), it established a needed precedent when it came to franchising. Investors saw that properly franchised fast-serve restaurants could be big business. Perhaps no one understood this better than Harry Axene, the dominant force behind Dairy Queen.

Axene was on a family visit when he stopped at a Dairy Queen in East Moline, Illinois, in the 1940s. The store was operated by Jim Elliott, but the ice-cream manufacturing process was owned by John McCullough from Davenport, Iowa. McCullough had purchased the rights to the manufacturing process from Harold Oltz, who had invented a five-foot-long cylinder that chilled a liquid dairy mix. By opening a spigot on a machine and gently rotating the cone beneath the flow, the countermen were able to produce a serving in seconds.

McCullough saw potential in soft ice cream, but he did not know how to market it. Axene did. They formed a partnership with the intended purpose of franchising Dairy Queen nationally. To do so, however, they needed backing. With the advice and help of a Chicago ice-cream-cone manufacturer, Axene rounded up twenty-six investors from the ice-cream trade to attend a meeting in a Moline hotel. Axene approached the meeting as a businessman, with extensive charts detailing the potential profits in a typical Dairy Queen franchise. The investors, it turned out, were just as interested in the ice cream. They devoured the samples Axene provided, and Axene realized the product sold itself.