Preferred Shares
Preferred Shares Podcast
Chain Restaurants and the Interstate
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Chain Restaurants and the Interstate

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Welcome to Episode 15 of the Preferred Shares Podcast.

In this episode—another in our series on the beneficiaries of the spending on the interstate highway system of the United States—we take turns discussing Howard Johnson’s, McDonald’s, and KFC.


In this episode

  • The Johnson’s family cigar business

  • Howard Johnson quitting school at age 12

  • Worked at a drug store until buying it out, expanding sales

  • Johnson’s ice cream becomes hugely popular

  • Great Depression forces a pivot - franchises

  • WWII forces more changes

  • 1959 IPO and continued growth

  • 70’s struggles leading to an eventual buyout by Imperial Group PLC in 1979

  • Imperial eventually sells to Marriott in 1985

  • The first McDonald’s

  • Revamps, simplifications, and innovations

  • Ray Kroc’s entrepreneurial spirit

  • Kroc drops out of school at age 15

  • Countless business ideas and odd jobs

  • The Silent Night club’s simplified menu leaves a lasting impression

  • Becoming a disposable cup salesman

  • Cups leading Ray to Prince Castle and the Multimixer

  • WWII almost killing the mixer industry due to copper constraints

  • The Multimixer leading Ray to the McDonald brothers

  • An immediate realization of opportunity

  • Rapid expansion due to Harry Sonneborn, Franchise Realty Corp, mass marketing of automobiles, post-war suburbanization, the GI Bill, and the continued buildout of the interstate highway system

  • McDonald’s 1965 IPO and beyond

  • Harland Sanders tough upbringing in rural Indiana

  • Leaving home at age 12

  • A passion for cooking mixed with a a highway service station

  • Sanders’ special way to make fried chicken

  • Interstate 75 killing Sanders’ first restaurant

  • At age 66, Sanders starting over again to by creating franchises in a unique way

  • The 1964 sale of KFC and then 1969 IPO

  • Acquired by R.J. Reynolds, then RJR Nabisco, then sold to Pepsi in 1986

  • KFC spun off in 1997, and KFC China spun off as Yum China in 2016

  • Our takeaways

1969 Highway Statistics, U.S. Department of Transportation
ArcGIS Interactive map, Interstate Highway System, McDonalds Locations, Continental United States
KFC, Kuwait City, 1980, Miranda Kopetzky
Colonel Sanders’ business card, late 1940s
Life Magazine, 7/2/1951, Vol 32 no. 1

Episode Resources

Additional Reading

Curious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:

"Going South: Implications of Business and Population Migration", a whitepaper by Douglas Ott (Andvari Associates) and Lawrence Hamtil (Fortune Financial) published June 2024.

A Few Thoughts On Diversification Strategies”, Lawrence Hamtil (Fortune Financial) published October 2024.


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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

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Preferred Shares
Preferred Shares Podcast
Exploring the rabbit holes of business, history, and business history.