Thomas, Dave

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Thomas, Dave

(1932-)
Wendy's International
Incorporated

Overview

As the founder and chief spokesman of Wendy's chain of fast-food restaurants, Dave Thomas has built his company into the third-largest hamburger chain in the world, with more than 4,000 restaurants in over 30 countries and sales of $3.8 billion. Thomas started out as a drug store soda-counter helper at age 12 and became a millionaire by the age of 35. As the star of Wendy's television commercials, the plain-speaking Thomas's success was based on knowing what customers wanted and reaching the audience with honestly and sincerely.

Personal Life

Dave Thomas was born July 2, 1932, in Atlantic City, New Jersey. Adopted by Rex and Auleva Thomas from Kalamazoo, Michigan, when he was six weeks old, Thomas never knew his biological parents. His adoptive mother died of rheumatic fever when Dave was five years old. His father, a construction worker, remarried three times, moving his family frequently throughout the South and the Midwest to take different jobs. Thomas' lifelong interest in adoption comes from his own less-than-happy experiences. Thomas revealed to Marilyn Achiron in a profile for People, that he had learned at the age 13 that he had been adopted, and said, "It really hurt that nobody told me before. It is a terrible feeling to know my natural mother didn't want me." The few constants in his early life were the summers he spent with his adoptive grandmother on her small farm in Michigan. Thomas credits her with teaching him the value and pleasure of hard work.

To help with his family's finances, Thomas began working at the age of 12 as a counter boy at Walgreen's Drug Store in Knoxville, Tennessee. He spent his offhours eating in cheap restaurants with his father, an activity that would influence his career choice. In his autobiography, Dave's Way, Thomas recalled, "It was then that I decided I wanted to own my own restaurant because I like to eat, and I just thought restaurants were really neat, exciting places." When his family moved to Fort Wayne, Indiana, in 1947, Thomas took a job as a busboy in the local Hobby House restaurant. After finishing the 10th grade, he dropped out of school to work there full-time. When Thomas was 15, he stayed on in Fort Wayne when his family relocated again, living on his own in the local YMCA .

Serving in the Army during the Korean War, Thomas attended the army's Cook and Baker's School and became the youngest soldier ever to manage an enlisted-men's club. In Germany Thomas was a cook and staff sergeant feeding up to 2,000 people a day. He recalled in his autobiography that the experience taught him "some important skills about the big picture of feeding a lot of people."

Thomas married Lorraine Buskirk, who he met in the Hobby House restaurant, in Fort Wayne on May 21, 1954. They have five children. In 1969, his eight-year old daughter Melinda Lou provided the inspiration for the name of his chain of hamburger restaurants. Her siblings mispronounced her name as "Wenda," eventually becoming the nickname "Wendy."

An outspoken advocate of adoption, Thomas was appointed by President George Bush as the national spokesman on adoption issues in 1990. He has established the Dave Thomas Foundation for Adoption, and has pledged the profits from his 1991 autobiography to national adoption awareness. Declaring in a 1992 article in Profit, "I think every baby and every boy and girl deserves a home. Yes, it is a mission. I like to talk about it; it's the right thing to do."

Thomas received the Horatio Alger Award in 1979 and the 1995 Pioneer Award from Nation's Restaurant News, issued annually to a veteran in the restaurant business who is recognized for professional dedication and contribution to the industry. Speaking frequently to teenagers, urging them to stay in school, Thomas practiced what he preached, earning his general equivalency diploma (GED) from Coconut Creek High School in Florida in the early 1990s. An avid golfer, Thomas now resides in Fort Lauderdale, Florida. Despite enormous wealth, he has remained true to his background, living modestly, with his dream meal still a double cheese burger with mustard, pickles, and onion, a bowl of chili, French fries, a Frosty, and a diet Coke.

Career Details

Thomas' drive and work ethic was developed early in his first restaurant job. He reported in Profit that his boss "wore a three-piece suit, and you would see him mopping the floor, working behind the dishwasher, cleaning tables, you name it. I thought, 'If my boss can do everything, then I can too.'"

One of Thomas' important mentors was Harland Sanders, the founder of the Kentucky Fried Chicken (KFC) restaurant chain, who he met in the mid-1950s. Sanders impressed Thomas with his flair for promotion and commitment to quality fast food. When Thomas' boss at the Hobby House, Phil Clauss, failed to make profitable four restaurants in Columbus, Ohio, he proposed that Thomas take over their management and in exchange for paying off the restaurant's debts would receive partial ownership of the chains. Against the advice of Colonel Sanders and friends who thought the nearly bankrupt stores were unsalvageable, Thomas took up the challenge. He realized that the stores were failing because the store's 100-item menu was intimidating and confusing to customers. He made them Kentucky Fried Chicken franchises, reducing their menu to include mainly chicken and salad and introduced the famous rotating bucket of chicken sign that became a KFC trademark. Trading buckets of chicken for radio advertising, Thomas began to make the stores profitable, adding four additional locations in the Columbus area. In 1968 Thomas sold the restaurants back to the KFC company for $1.5 million.

Chronology: Dave Thomas

1932: Born.

1947: Began work at the Hobby House Restaurant in Fort Wayne, Indiana.

1962: Managed Kentucky Fried Chicken franchises in Columbus, Ohio.

1968: Sold his share of his Columbus franchises for $1 million.

1969: Opened First Wendy's Old Fashioned Hamburgers restaurant.

1973: Wendy's franchises sold around the country.

1982: Resigned as chief executive of Wendy's and retired from day-to-day operations of the company.

1989: Returned as Wendy's spokesman and starred in television advertising.

1990: Appointed national spokesman on adoption issues by President George Bush.

1992: Established Dave Thomas Foundation for Adoption.

1993: Wendy's franchises reached a total of 4,200 in more than 30 countries.

Thomas then took a position at the parent company as a regional operations director, but left KFC within a year. He helped found the Arthur Treacher's Fish & Chips chain, but longed to build his own chain that would specialize in hamburgers. In Thomas' view, McDonald's and Burger King, who dominated the hamburger fast-food business, were not selling the kinds of hamburgers he liked. He would offer a variety of toppings, use fresh meat instead of frozen patties, and be cooked to order rather than prepared in advance. Detecting a niche in the fast-food hamburger market for quality, fresh food, Thomas opened the first Wendy's Old Fashioned Hamburgers restaurant in Columbus, Ohio, on November 15, 1969. With an original menu of hamburgers, chili, French fries, soft drinks, and the Frosty Dairy Dessert, Thomas created a relaxed and homey atmosphere for his restaurant with carpeting, Tiffany-style lamps, and bentwood chairs. Within six weeks of its opening, Wendy's began to show a profit. Thomas anticipated opening only a few Wendy's as local stores where his children could work in the summers. But due to their popularity, in 1973, Thomas began selling Wendy's franchises for entire cities and regions in an unprecedented innovation in the industry. In the next decade, more than 1,000 franchises had opened. The number of franchises would increase over the years to more than 4,000 restaurants worldwide to make Wendy's the third-largest hamburger chain in the world, behind McDonald's and Burger King.

In the late 1970s, Thomas agonized over whether to stray from his original menu and vision by introducing a salad bar and reluctantly agreed to the change. When salad bars proved to be a considerable success, Thomas, who had grown tired of the bureaucratic side of the business, decided it was time for him to step down. As he was quoted as saying in a Forbes article, "I think an entrepreneur has limitations. I thought it was the best time to back off and let other people who were smarter than me to do things." In 1982 Thomas gave up his title as chief executive of Wendy's and hands-on executive supervision, retaining the title of senior chairman.

During the 1980s, Wendy's achieved great success with its "Where's the beef?" ad campaign, achieving such public recognition that Walter Mondale used the line in his debate with George Bush during the 1984 presidential campaign. Despite record profits in 1985 of $76.2 million, a huge investment in a breakfast program failed because made-to-order omelets and French toast could not be produced fast enough to satisfy customers, and many franchises were purchased by owners who were unconcerned about Wendy's high standard of customer service and quality products. In 1986, with a $5 million loss and company morale dropping, Thomas hired James Near as Wendy's new president. Near assumed the position with the condition that Thomas would come out of retirement as the company's spokesman and morale booster.

Thomas toured franchises and encouraged his troops with the simple business wisdom that had served the company so well and seemed to have been forgotten. He stressed that each of Wendy's employees should have an "MBA," a "mop bucket attitude," that stressed cleanliness and customer services. Better training and incentive programs including an employee stock-option plan helped create team spirit and company loyalty that had eroded. Thomas next turned to advertising to help communicate the message about Wendy's philosophy of quality food at a reasonable price. He was such an earnest pitchman to Wendy's advertising agency that members of the agency convinced him to star in Wendy's commercials, despite his ordinary looks, deadpan approach, and lack of polished diction or skill as an actor. Wendy's commercial starring Thomas succeeded precisely because of his ordinary qualities. As the Detroit Free Press reported, "Wendy's has done something none of its chief rivals, with their faceless boards of directors, could possibly do—it has identified its nice-guy-down-the-street founder with its all-American product line."

Starring in some of the most popular television ads, Thomas helped Wendy's rebound to a $51.3 million profit in 1991 with Thomas' stock shares worth more than $80 million. Asked in an article for Restaurants & Institutions how long he would stay involved in front of the TV cameras, Thomas replied, "As long as I'm having a good time. When I stop having a good time and having fun, I'll stop. I don't know when that's going to be. I've got a dual message: selling hamburgers and chicken sandwiches at Wendy's and adoption. After I do commercials, I use TV to talk about adoption and education." Thomas has remained committed to his two primary interests: sustaining a quality restaurant chain and speaking out on behalf of adoption awareness.

Social and Economic Impact

Thomas, like other successful fast-food executives, has helped to change the way in which America and the world eat. With the goal of a quality product at a reasonable price, Thomas has offered a vast mass market a new definition for the dining experience with irresistible tastes at affordable prices. The success formula of Wendy's, McDonald's, and Burger King has spread throughout the world and has rivaled other national cuisines and tastes. For Thomas, his innovation in fast-food was a "nobrainer." As he explained in an article for Restaurants & Institutions, "We make our sandwiches to order. It sounds real simple . . . . There's nothing better than a freshly made sandwich." Thomas has shown that attention to quality and customer satisfaction make a difference in the fast-food business. Thomas cites as the source of his success his work ethic and experience as a "grill man" to show him what could and should be done in his restaurants. Thomas also offers an important lesson that success is derived not simply from having a good idea but in sustaining it as the business grows beyond the capacity of a single person's oversight. As Thomas learned in the 1980s, remarkable success can quickly be followed by disastrous failure if a company's core values and vision are neglected.

As the fast-food franchise business continues to expand internationally, Thomas is mindful of his company's responsibility to maintain product quality. To the question of the future of his industry, Thomas reported to Restaurants & Institutions that "The whole industry really has to step up, from food safety to being nice. We got competition out there! We got chain stores, grocery stores, we've got kitchens in everybody's home." Despite nutritional and environmental concerns, Thomas is ever mindful of his important message: if the food doesn't taste right, people won't buy it. It is this deceptively simple lesson that Thomas has preached to oversee Wendy's growth from a single restaurant in 1969 to a global giant and neighborhood presence throughout the United States and the world.

Thomas has made a considerable impact as well in his advocacy for adoption. Drawing on his own experiences, Thomas has campaigned to overcome the stigma of adoption and to make adoptions easier. Under Thomas's leadership, Wendy's has implemented an innovative program, paying often prohibitive adoption costs so its employees can take in orphaned children, and Thomas has entreated executives of hundreds of major U.S. corporations to follow suit. As Thomas has argued in Profit, "It's the basics we have to get back to, the fundamentals of how this country was founded. That's what I am trying to do."