How Two Broke Brothers Invented Pizza Hut... [sound of commercial]
Fresh, chewy, cheesy and delicious - the pizzas we’ve come to know from Pizza Hut have a
lot more history than we’re giving them credit for.
After more than 6 decades of offering the biggest variety of freshly baked, cheesy pies,
Pizza Hut has become a name that’s recognized all over the world - all thanks to two brothers
called Dan and Frank Carney, and a decision they made on May 31, 1958.
With barely any knowledge about pizzas and 600 dollars in their pocket, that they’d
borrowed from their mother, Dan and Frank took their best chance and made themselves
an empire out of practically nothing, and eventually sold it to PepsiCo for 300 million
dollars.
Welcome to Planet Biz.
Chapter 1 - The Two Brothers
Born in 1931 and 1938, nobody knew that the two brothers would go on to lay the foundations
of what we now know as a billion dollar pizza chain.
Dan and Frank were two out of seven children and grew up attending local schools and helping
out at their family’s small grocery store.
While things were never really great for the Carney family, things changed for the worse
after the Carney brothers lost their father, who was the town’s local grocer.
The passing away of the head of the Carney family didn’t just take a toll on their
children emotionally, but the family also faced a terrible financial loss after that.
The two brothers had no choice but to work to keep the household going.
Frank was only 10 years old when his father passed away, which was way too young for him
to process anything at all.
However, before he died, he made both of his sons promise that they would finish their
college education to sustain themselves.
““If you want to do something, do it for yourself,” Frank recalls his dad telling
him.
The two brothers took this advice to heart and made sure that despite all odds, they
received an education that would help them grow an empire for themselves out of nothing.
Because Dan and Frank worked at their family’s grocery store ‘Carney Market’ from a young
age, Dan knew that he wanted to go into the food industry.
Which is why he went on to polish his skills by studying business at Wichita University
in their hometown and was soon followed by Frank who did the same.
Despite his professor’s disapproval, Dan went on to write a Master’s thesis on franchising,
because he believed that it was the future of the food business - and he wasn’t wrong.
Sadly, Dan’s thesis wasn’t accepted and he didn’t get his degree.
However, he didn’t let this set back affect his aspirations and continued to learn more
about the world of fast food and franchising.
He started off by studying the business models and strategies for successful fast food chains
like McDonald’s and KFC.
"At that time," Dan has said, "there were no courses on franchising.
In fact, franchising was pretty much relegated to the auto business at that time.
Still, it gave me the background to form my own company, and basically our own franchise
agreement, which evolved over time.”
Even though the brothers practically had nothing to their name, they still worked hard and
tried to learn about the fast food industry as much as they could before stepping out
into the field and risking everything to set up their business.
Chapter 2 - Risking It All And On their search for success, the Carney
brothers coincidentally ran into a local estate agent who convinced them that opening a pizza
place would be their best financial bet.
Frank and Dan believed that this would be the solution to all of their financial problems.
So, with a little bit of faith, the two brothers borrowed $600 dollars from their mother and
used up all of them to set up a small pizzeria.
Because of their small budget, Dan and Frank had to buy used equipment to meet the rent
costs for their building.
They ended up with zero dollars after setting up a small pizza and beer place, mainly targeted
at students.
Instead of hiring chefs, the brother asked their friend John Bender to help them figure
out how to actually make pizza.
In fact, their earliest pizza recipe didn’t even have a strategy - Dan and Frank just
put together a pie that felt and tasted right, and that was that!
"Two weeks before we opened, we found someone to teach us how to make it," Carney later
told Nation's Restaurant News.
They started off with a 500 square feet space that could only seat 25 people.
But that didn’t stop the Carney brothers and they put in all of their energy into their
pizzeria’s opening night on June 15th 1958.
They ended up giving free pizzas to everyone as their first business strategy - which proved
to be a very successful move in introducing people to their restaurant.
As far as the name goes, Pizza Hut was actually named by Dan’s wife Beverly who decided
that it would go with the restaurant’s hut shaped building, which has now become a signature
part of every Pizza Hut franchise.
Dana and Frank put in all of their energy and resources into making Pizza Hut a success
in its very early days.
A few years after the successful launch of Pizza Hut, around 1969, Frank had to drop
out of college because he wanted to spend most of his time trying to elevate his business.
However, because of the promise he made to his father, the new entrepreneur decided to
go back to school - even if it was remotely.
He used to receive his lectures and assignments on videotapes and this is how Frank received
his Bachelor’s degree later in 2000, while running a successful business side by side.
“By happenstance or by God’s good grace,” Pizza Hut became an instant success, Frank
said.
Despite Dan and Frank not knowing anything about pizza making, they were able to turn
Pizza Hut into a local success.
However, Dan and Frank had a little trouble which led to other people franchising.
By 1964 the Carneys had developed a branding for the Pizza Huts, establishing the familiar
huts with red roofs that we know today And because of that, Pizza Hut had opened over
145 outlets in 1966.
Frank Carney then attempted to make long term plans as far as the future of his company
was concerned.
Which is why Pizza Hut decided to go public.
The move resulted in an incredible growth and by 1977 and soon, Pizza Hut was sold to
PepsiCo for more than $300 Million USD.
Chapter 3 - Moving On While Dan moved on from Pizza Hut to become
a venture capitalist and stayed out of the limelight after that, Frank stayed back as
the President and a member of the board.
In 1980, Frank Carney decided to leave his business behind and move on to other things.
In a 1998 interview with Nation's Restaurant News, Carney said: "I had no desire to get
back into the pizza business.
I never saw anything that was compelling enough to get back in.
. . ." This sudden decision was mostly because Frank didn’t agree with the way PepsiCo
transformed the company.
From a small, homegrown business, Pizza Hut had turned into a giant empire that ran on
marketing rather than anything else, leaving Frank with no option but to distance himself
from the name.
As hard as it was for him to leave his own business, Frank Carney then tried his hand
at real estate, oil and gas exploration, the automotive, rental and recreational industries
- but nothing at all to do with pizza.
However, he did spend a couple of years working in food service when he was appointed the
chairman for West Sizzlin’ Steak House.
In 1994 he was named vice chairman of TurboChef Inc., a company involved in the design, development,
and manufacture of high–speed cooking systems for the food service industry.
However, Frank realized that his true passion still lay somewhere in the world of fast food
franchising.
So, even after moving on from Pizza Hut, Frank found himself going back to his roots of growing
and nurturing a business.
Chapter 4 - Returning Back to Pizza While Frank refused many offers from Pizza
companies that attempted to involve him in their business, it was a surprise to everyone
when we announced that he was joining the Papa John’s pizza franchise in 1994.
He decided to give the Pizza industry another shot when his friend Martin Hart asked him
to sample Papa John’s in a taste test.
Frank must have really liked what he tasted because that was all it took for him to get
on board.
He believed that their product had the potential to make it big in the world of fast food.
Not just that, but Frank wanted to experience the thrill of building a business from scratch
once again.
"I'm probably having more fun now than ever before," he told Nation's Restaurant News.
"It's more fun than anything I've ever done.
It's kind of like a replay.
The difference is like being a parent and a grandparent.
The first time everything was new.
This time I'm more experienced, more relaxed."
Papa John’s was Frank’s attempt to fix everything that went wrong during his time
at Pizza Hut, including the merger with PepsiCo that cost his brand its initial identity.
After Frank joined Papa John’s, his stake in the business quickly grew higher and higher.
He took on the responsibility for marketing his new brand by pitting it against Pizza
Hut - which proved to be a little controversial.
But, Frank believed in his new business and stood by that belief.
Frank’s former colleagues at Pizza Hut were also upset about his changing loyalties.
Which is why they started coming up with new marketing tactics to one-up Frank and Papa
John’s.
However, with the use of the tagline ‘Better Ingredients, Better Pizza’ in 1995, Frank
really hit the nail on the coffin and proved that he would do whatever it takes for the
success of his business.
"They had become an assembly line product company," said Carney.
He said PepsiCo's drive for growth at almost all cost caused them to reduce the product's
quality.
Even then, Carney believes that his old company is making progress to set things right.
As far as his own career with Papa John’s goes, In 1998, he told an interviewer for
Your Company: "I wanted to relive the best time of my life—growing Pizza Hut.
I'm lucky to ride two horses like this in a lifetime."
“The story of Pizza Hut is changing lives,” Wichita State University President John Bardo
has said.
“It’s about willing to take a chance on yourself, about reaching out to your friends,
and about caring … That’s the story of Pizza Hut.
That’s the story of Wichita State.”
The Carney brothers have truly lived a rags to riches story.
From having nothing, to growing an empire for themselves - and still continuing to do
so - is no easy feat.
From the humble beginnings of Pizza Hut to becoming a legacy in the world of franchising
with Papa John’s, Frank Carney’s story hasn’t been easy.
But it proves that with the right amount of dedication, everyone can achieve great things.
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This is Planet Biz.
Sources https://www.encyclopedia.com/education/economics-magazines/carney-frank
https://www.kshs.org/kansapedia/dan-and-frank-carney/12003#:~:text=Dan%20Carney:%20Born:%201931.,Born:%20April%2026,%201938.&text=Dan%20and%20Frank%20Carney%20established,and%20pizza%20restaurant%20for%20students.
https://www.pizzamarketplace.com/news/whos-who-frank-carney/ https://mentalitch.com/history-of-pizza-hut/
https://www.insider.com/pizza-hut-fun-facts-2018-11#pizza-hut-offered-the-first-online-delivery-service-19 https://thetakeout.com/a-food-critic-explains-why-pizza-hut-remains-the-paradi-1798260345
https://www.mentalfloss.com/article/70987/15-things-you-might-not-know-about-pizza-hut