The Founder's Friend

Founders are special people in the restaurant industry. Starting a new restaurant concept takes a certain level of grit, guts and vision that most people just don’t have. But the history of the industry shows that a founder’s vision for their concept can land at any point on a very broad spectrum. Operations have announced grands plans for hundreds of locations before opening a single door, while industry leading chains like Outback were started with a simple vision of creating a 5-unit regional chain.

Inevitably, a founder’s vision for his or her chain will be challenged. Sometimes the change could be due to a realization that an opportunity is greater than expected, like Outback recognizing far greater potential outside of the Tampa area. Other times, that grand vision for an emerging concept meets the harsh reality that growth in the restaurant industry is not easy.

“Our goal was to build one restaurant, execute our product and our service and our hospitality, and then we started thinking about the second restaurant…We didn’t think about the 100th restaurant back then. I think a lot of people get in trouble with that because they get an idea, a couple of them work, and they start thinking about, ‘oh man, let’s go raise some cash and let’s go grow and let’s have 50 of these in three years.’ When I hear numbers like that I kind of laugh because I know its not going to happen because human resource wise and execution wise and quality wise, it’s almost impossible to do off a small base.”

-Bob Basham, Innovation Leads to Imitation

Founders’ visions are also challenged as growth requires an influx of new people, ideas and strategies, not to mention unforeseen industry trends that may necessitate further changes. For instance, Outback’s initial strategy was to focus on dine-in dinner occasions. But the founders realized that the first location had opportunities at lunch. Then, it was an Outback managing partner who started car-side to-go service when his dining room was packed full. Initially, the founders opposed the idea, but eventually came around.

Previous to starting Outback Steakhouse, co-founders Bob Basham and Chris Sullivan had worked with Gene Knippers at S&A Restaurant Corp and Sunstate, a Chili’s franchise group. And if Norman Brinker, the founder of Steak & Ale and Bennigan’s, is the grandfather of the casual-dining industry, then perhaps Knippers is the great uncle.

Knippers’ entrance into the restaurant industry is a story of new beginnings; worn out of the clothing business, he decided to take on a new job in a new industry with a new business partner in a new city. To be exact, that was becoming a joint venture partner for Steak & Ale in Atlanta.

At the time, Norman Brinker’s Steak & Ale chain was just getting off the ground, being only a few years old but not far off from becoming the first leader of the casual-dining segment. Knippers was brought on to oversee operations in Atlanta for the Dallas-based chain. But his contributions would far exceed that.

For instance, Steak & Ale is often cited as one of the first chains to bring the salad bar into the mainstream. But while the concept was founded with a salad bar, the initial offerings weren’t too exciting – some lettuce, red cabbage, croutons and dressings. Knippers decided he’d make things a little more interesting by bringing in new ingredients, contributing to the evolution of a popular offering that would soon find its place in casual-dining restaurants across the country.

“I wanted to do more than that in Atlanta…I go out to the market, I get some cherry tomatoes, some pickles and four or five other items to put out there, and it was an instant success. But there were a lot of people who said they didn’t want to change the salad bar, but I changed it big time.”

-Gene Knippers, The Founder’s Friend

Years later, Steak & Ale was acquired by Pillsbury. While both Brinker and Knippers stayed involved with the company, Brinker had taken on more corporate roles, even stepping away from Steak & Ale to turn around Pillsbury’s Burger King. But he still relied on Knippers to be his boots on the ground, providing him with the unit-level insights that he wouldn’t hear from the corporate office. For instance, one of Knippers’ stories on price increases instituted by Pillsbury resulted in Brinker quickly pulling back prices to become more competitive.

Then, Brinker left Pillsbury to join Chili’s, something we’ve discussed in detail in other episodes and articles. A major development here was that Brinker didn’t go alone - in fact so many people followed him that Pillsbury threatened to sue him.

Knippers was Brinker’s first call when he decided to step down from the Pillsbury board. So naturally, Knippers was the first person to leave to follow Brinker, bringing along several Bennigan’s executives.

Knippers headed up Chili’s first franchise group, working with both Norman Brinker and Chili’s founder Larry Lavine to grow the concept throughout the Southeast. Notably, this growth wasn’t just limited to new units but included operational strategies as well. Knippers and his team brought in new ideas, such as more polished uniforms, and helped clean up an under-performing locations in their territory, from which managers were dealing drugs.

“Larry Lavine’s managers ran around in jeans and tennis shows and a dirty towel in their back pocket they used to wipe tables down with. We put our managers in khaki pants and golf shirts and nice shoes and took that dirty towel out of their back pocket…we made a lot of changes in our group.”

-Gene Knippers, The Founder’s Friend

After working with Brinker and Lavine at Chili’s, Knippers then went on to work with another founder: Jim Melody. Knippers’ partner at Sunstate, Chuck Winship, had made a deal with Jim Melody to franchise Beef ‘O’ Brady’s, and he was hoping to involve Knippers.

Melody was an entrepreneur in every sense of the word, making Beef’s famed wing sauce in his garage and using handshake deals in lieu of legal documents for franchised locations. He had grown the concept to 30 locations, but the brand needed more structure to keep growing. That’s where Knippers and Winship came in – they knew what it would take to get Beef ‘O’ Brady’s to the next level. And in addition to structure, they also brought in some changes to the menu. For instance, this included a chicken sandwich highlighting the wing sauce.

“(Beef ‘O’ Brady’s) didn’t have any franchise agreements to speak of or anything. They had a letter, but it wouldn’t hold up, it was not a legal document. He was a success just because he was good at what he did. He made his own sauce in his garage and sold it to his franchisees. And that’s how Chuck and I were able to make a deal with him, we painted a picture that we were going to build a chain.”

-Gene Knippers, The Founder’s Friend

Knippers’ advice for those wanting to get into the restaurant business aligns with his career: find something that’s working, try to get involved and help make it better. After all, founders can’t do everything alone. While they can ideate salad bars and formulate wing sauces, an outside perspective can help make the salad bar better or experiment with the wing sauce in other applications.

“I bought into every deal I did. I found that pioneering a new concept is extremely risky, especially the restaurant business.”

-Gene Knippers, The Founder’s Friend

And eventually, when founders are no longer a part of the chain they founded, they may need someone to commiserate with. There’s no shortage of stories detailing founders’ frustration with what became of their brainchild, and many chain restaurant founders very well may be rolling in their graves.

As for Brinker, he minced no words about what Pillsbury did to his Steak & Ale banner.

“Norman and I discussed it together, that Pillsbury couldn’t have hired someone to help them devise a plan to destroy Steak & Ale any more efficiently and fast as they did.”

-Gene Knippers, The Founder’s Friend

To learn more about Gene Knippers' career in the restaurant industry, check out our podcast

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