Holland Burgerville USA

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Holland Burgerville USA

109 West 17th Street
Vancouver, Washington 98660-2986
U.S.A.
Telephone: (360) 694-1521
Toll Free: (800) 371-1138
Fax: (360) 694-9114
Web site: http://www.burgerville.com

Private Company
Incorporated: 1992
Employees: 1,600
Sales: $50 million (2000 est.)
NAIC: 722211 Limited-Service Restaurants

Holland Burgerville USA is the holding company for the Burgerville USA chain of fast food restaurants, which in 2001 comprised 39 outlets located in Oregon and Washington. The company remains privately held, with President Thomas Mears, son-in-law of founder George Propstra, and his family still majority stockholders. Burgerville has striven over the years to become and remain a Northwest tradition, looking to nurture a strong connection with the communities in which it is located. Specialties, such as fresh strawberry shortcake, raspberry and blackberry sundaes and walla walla onion rings, appear seasonally, in addition to real ice cream milkshakes and fresh halibut fish and chips. Big change came to the company with the closing of the landmark Holland Restaurant in July 2001.

From 1920s Creamery to Family Restaurant

In 1922, Jacob Propstra, a Dutch immigrant who had moved to the United States in 1912, and shortly thereafter took a job at the Old Imperial Creamery in Portland, founded the Holland Creamery in downtown Vancouver, Washington. The butter and egg business evolved into the Holland Butter and Ice Cream Co., and when Sunday visitors stopped by to sample the product, Propstra added cones. In 1928, the business moved to another nearby location. Propstra put in tables and chairs, and, in 1933, he began to offer cheese sandwiches at the newly expanded Holland Restaurant. The average per customer sale at the time added up to about 11 cents.

In 1935, shortly after the restaurant began to offer sandwiches, George Propstra, Jacob’s son, who was three months short of completing a college business degree, joined his father in the family business. George Propstra had started out scooping ice cream, washing cans, and wrapping butter as a boy, along with his two brothers—all “part and parcel of being in one of those dairy families,” as he described it in a 1982 Oregonian article.

In 1956, Jacob Propstra retired and George Propstra assumed control of the business and “realized that the butter, egg, and ice cream businesses were all to be dominated by big outfits.. . . We finally saw the handwriting on the wall,” he was quoted as saying in the Oregonian. ”[A]t the time, we were a one-horse operation.” However, there was room to grow in the restaurant business. “We had had a taste of the restaurant business and could see it was a small man’s business. You could grow slowly and carefully, opening one restaurant at a time.” In 1957, The Holland added a $30,000 bakery addition, located in the restaurant building; the bakery sold Danish and French pastries and all types of cakes.

Burgerville USA Emerges in the 1960s

Under George Propstra’s leadership, the company began to grow. In 1961, Propstra opened the first Burgerville USA in Vancouver, and, in 1962, The Holland Gateway in northeast Portland. In the beginning, the Burgerville restaurants featured hamburgers garnished with Burgerville’s secret sauce, beverages, and fries, with walk-up service only. Building at a steady rate in Oregon and Washington for the next twenty years, the chain had 22 outlets and was building new executive offices in Vancouver by 1978. Sales at The Holland Restaurants in Portland and Vancouver were $14 million or more in 1979, and the company was interested in advancing its image.

By 1982, there were Burgervilles located throughout the southwest Washington and northwest Oregon—from Centralia, Washington, to Albany, Oregon, and from St. Helens, Washington, to The Dalles, Oregon. In 1979, the company added another Holland Restaurant in Gladstone. In 1982, it opened Henry’s Fish Co., a pet project of George Propstra, north of Vancouver. Propstra was still 85 percent owner of The Holland Inc. with the rest of the stock held by 12 other shareholders, most of them company executives.

In 1981, Propstra began to appear in the company’s television ads. The 67-year-old restaurant owner, who had a reputation for getting to The Holland everyday at 6 a.m. to booth hop, for demanding loyalty, and for being blunt to the point of occasionally being brusque, derided national chains for using frozen meat in his unmistakable gravelly voice. Proclaiming Burgerville’s adherence to fresh ingredients, he appeared as an angel, a devil, in his nightclothes, and even clutching a squealing pig to advertise Burgerville’s bacon burger. In one ad, Propstra slammed a competitor’s frozen patty against the side of a truck; in another, he fired a company executive for suggesting the chain compromise on quality. In 1986, as part of its yearlong 25th anniversary promotion, the company aired a 3-D commercial, giving away glasses for viewing at all of its stores.

The commercials, despite being low budget, quickly developed a cult following for Burgerville. According to an article in Portland Business Today in 1986, the key to the company’s success lay in creating an image for itself that differentiated it from other fast food chains and from its newest competition, convenience stores, such as 7-Eleven, which had begun to sell hamburgers. The chain’s “inconveniently located” advertising campaign took off a few years later, continuing to emphasize Burgerville’s difference from the crowd, taking what might be seen as its disadvantage—its limited market—and turning this into something positive about the company. “We say we’re local in a very innovative way,” said Pat Klinger, the company’s marketing concepts director was quoted as saying in a 1990 Statesman Journal article.

Another of Burgerville’s attempts to separate itself from other fast food chains came with its introduction in 1983 of salad bars and of its Unburger in 1986. The Unburger, a vegetarian patty served on a hamburger bun with condiments, proved an immediate success, averaging up to six percent of sales throughout the chain. It helped prompt management’s decision to increase the number of Burgervilles. The chain, which had been expanding at the rate of up to three new Burgervilles a year, began franchising its establishments in mid-1987.

In fact, Burgerville was unable to compete with McDonald’s in attracting the younger crowd, but it had a solid following among adults, especially women. In 1986, Burgerville enjoyed 14 percent of the fast-service hamburger market in Portland and 40 percent in Vancouver. With close to 30 restaurants, The Holland Inc.’s annual sales were reported as being in the $20 to $30 million range for several consecutive years in the mid-1980s. In 1989, despite unprecedented competition, Burgerville began construction on two new restaurants, part of its move to expand into the area located within a 40-mile radius of Vancouver. The two new buildings were designed to look more like old-fashioned store fronts than fast food outlets.

New Direction and Ownership in the 1990s

However, despite optimism about the company’s prospects for growth, all new additions were postponed until 1992 when Tom Mears, Propstra’s son-in-law, completed the buyout of The Holland Inc. from George Propstra and became the new head of the business that then included 34 Burgervilles, three Holland Restaurants, 1,200 employees, and revenues of $35 million a year. The company marked the changing of the guard with a giant retirement party for George Propstra to which all employees were invited.

In keeping with the old-fashioned theme, the company opened Burgerville Drive in Portland in 1994, a drive-through only restaurant with trimmed-down menu and lower prices, a return to the drive-in concept of the 1960s. Chickenville, a drive-through and walk-up-only chicken outlet followed later that same year two doors down. Separating the two fast-food outlets was Garden Golf, a miniature golf course also owned by The Holland Inc.

In 1995, The Holland became a joint venture partner in opening the Beaches Restaurant in Vancouver. Located along the Columbia River, the 6,700-square-foot restaurant specialized in serving steaks, seafood, and pasta. At the same time, the company began remodeling many of its Burgerville USA establishments, investing in an $8 million remodeling campaign to give its fast food outlets a 1950s retro look. There were Wurlitzer juke boxes (updated to play CDs instead of records), neon ceiling trim, checkerboard floor tiles, and a bright red, black, and white motif. Along with the remodeling came an expanded menu and a new marketing plan aimed at shifting Burgerville into a niche between fast food and casual dining. Burgerville set up “Great Perks Espresso” bars in the remodeled restaurants, taking its 37 stores into the specialty coffee business.

The remodeling was in part response to competition from the 100 McDonald’s, Burger Kings and Wendy’s in the Portland area. “As a small, local company competing with major fast food restaurants, we found our market share declining and guest counts declining from the mid-1980s into the 1990s,” Tom Mears was quoted in a 1997 Oregonian article. The prototype, opened in the summer of 1995, was expected to do about $1.2 million in annual sales, rather than the typical Burgerville’s $900,000. It turned out instead to do closer to $1.6 million. “We knew we were onto something,” Mears said of this success.

Company Perspectives:

Our mission is to “serve with love“. Our mission includes serving our guests, employees, and communities with love. We promise you an experience like nowhere else in all our restaurants. This experience includes the taste of a full service restaurant, the convenience of fast food and the welcome of home. We invite you to expect and demand the best. And that way, we are always striving to improve and provide the best possible dining experience.

The company built four more restaurants and remodeled eight in the new format within the next two years. When it had finished all remodels by 2000, it had spent $8 million. In 1997, it added milk shakes, yogurt, and dessert dishes. It reentered the breakfast business it had abandoned earlier in all but six outlets, baking its own bagels on site. All menu items were cooked to order. Revenues from 1996 were $35 million, up 18 percent from $30 million the year before. In 1997, revenues totaled $38 million. The new breakfast business accounted for 7 to 10 percent of the average Burgerville outlet’s total revenues.

The so-called “hamburger wars” continued to drive Burgerville to rethink its marketing strategy into 1997. Trying to strategically market itself to each community where it was located, it looked at different residential areas and provided products and services to suit that area. In 2000, it expanded upon its first efforts to advertise its regional nature with promotions of fresh strawberry shakes, shortcake made with fresh biscuits, walla walla onion rings, and burgers.

Big change came to the company with the closing of the Holland Restaurant in July 2001 after the landmark eatery experienced financial struggles. The Holland had been serving traditional family style meals since its opening. George Propstra, who had made it a practice to know the majority of The Holland’s customers by name or face, was interviewed in the Columbian at the time of the closing; there he was quoted as saying, “Every restaurant has a lifespan.... Bodies wear out. We wear out. Ideas wear out. Today there’s a new concept in restaurants that’s more pleasing to people.” President Tom Mears concurred, adding that “Restaurant styles and consumer food tastes have changed dramatically in the 65 years that The Holland has been in business.”

Following the closure, The Holland Inc.’s management gathered to talk about Burgerville’s future. The decision was reached to behave more like a Northwest neighborhood eatery and less like a large national chain. The company, which owned the building in which The Holland was located, would also explore various alternatives for its renovation. The future would likely see more Burgerville locations and further changes to the restaurants’ appearance and menu, including a smaller version of the restaurant suited to a strip mall setting. However, Holland Burgerville USA, which had had company-wide revenues totaling approximately $50 million at its 38 restaurants in Oregon and Washington in 2000, remained a conservatively run company satisfied with a five to 10 percent annual increase in sales.

Principal Competitors

McDonald’s Corporation; Burger King Corporation; Advantica Restaurant Group Inc.; Triarc Companies INc; IHOP Corporation.

Key Dates:

1922:: Jacob Propstra founds The Holland Creamery in downtown Vancouver.
1924:: The creamery, now also serving ice cream, moves to a new location in Vancouver.
1933:: The Holland begins serving cheese sandwiches.
1935:: George Propstra leaves college to begin working at his father’s business.
1956:: Jacob Propstra retires and George takes over the business.
1961:: George Propstra, Jacob’s son, starts Burgerville USA in Vancouver.
1982:: Tom Mears becomes company president.
1992:: George Propstra retires.
2001:: The Holland Restaurant closes.