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The Economist: How HoJo Lost Its Mojo

The last HoJo in the world is up for sale. That is quite a letdown for arguably the earliest pioneer of business format franchising. HoJo's was the McDonald's of big restaurant chains before McDonald's became the bellwether. In the first half of the twentieth century, where franchising was more about product distribution, it was Howard Johnson's that took the next step for foodservice retail outlets.

Howard Johnson's had this insight: consumers would perceive the food they ate not just by its taste but by the ambience of the restaurant that they dined in. The business format of its chain of franchised restaurants would need to be lifted and standardized.

The Economist reports:

Growth coincided with the rise of the car, the highway system, the middle class and family holidays. Each franchise had to adhere to the "Howard Johnson's Bible", which dictated everything from decor to the amount of tartare sauce; and each had to use food prepared by central commissaries, which was delivered to the restaurants for final cooking. The large menu included 28 ice-cream flavours, tender sweet Ipswich fried clams and butter-grilled "frankforts".

Mr Johnson took food quality seriously, spending 48% of his gross revenue on food (Chipotle, a present-day food chain, which prides itself on using fresh products, spends only 35%). In 1960 he hired chefs from Le Pavillon, then the finest restaurant in New York City. One, Jacques Pépin, turned down an offer to be President Kennedy's White House chef. Food quality was part of the chain's appeal, as were affordability and reliability. Before Howard Johnson's, travellers found only greasy spoons and truck stops which were not family-friendly. A Howard Johnson's meal was affordable glamour for the growing middle-class. The waitresses wore uniforms designed by Dior.

But its reputation slipped in the 1970s. Food quality diminished. The brand became synonymous with bland, says Paul Freedman, author of "Ten Restaurants that Changed America". People began to joke that Howard Johnson's ice-cream came in 28 flavours and its food in one. It had difficulty competing with fast-food chains, which imitated its business model while stripping it down (no real kitchens or wait staff).

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.