Entrepreneur Path of Howard Deering Johnson - Essay Sample

Introduction

Howard Johnson was an entrepreneur who for more than seven decades led the pioneering chain of motor lodges and restaurants in the United States. He started off as a store drug dealer before going into his successful franchise of restaurants. He was a franchising pioneer who established the world's largest hotel chains during his time. His restaurants and motor lodges had a distinguishing orange roof along the roads, and in 1965 his restaurants had the biggest sales (Sammarco, 2013). Howard Deering Johnson was born in Boston, Massachusetts in the year 1897 (Sammarco, 2013). As a young boy, Howard dropped out of elementary school and started to work for his father who was running a cigar company (Sammarco, 2013). He worked for his father for 15 years before eventually become the company's salesperson.

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However, his father died when he was at the age of 27 years and was left to inherit the company and his father's debt (Sammarco, 2013). Due to the big debts, he was unable to settle them and the cigar company collapsed in 1924 (Sammarco, 2013). Howard was forced to work in restaurants so that he could settle his father's debts. He first worked at a small shop in Quincy, Massachusetts, and when the owner of the shop died in 1925, he managed to buy the store. He took a small loan and opened a drug store, and as an entrepreneur he discovered that marble soda fountain was bringing more returns and he decided to invest on it by rebranding it (Sammarco, 2013). He became famous for his ice cream which he claims that he got his secret recipe from his mother and William Hallbauer, a German immigrant who also sold ice cream in the area (Sammarco, 2013). What distinguished his ice cream from the rest was the he only used natural ingredients, additional flavors and doubled the amount of butterfat to create a premium ice cream which gave him a good revenue. Together with the ice cream, Howard also sold premium hot dog sandwiches that he grilled in butter.

In 1928 he had made a name for himself from the beachfront ice cream. In 1929, Howard managed to get a loan from his local bankers to start up his own restaurant known as Howard Johnson's, which served frankforts, soft drinks, chicken pot pies, ice cream, fried clam strips among others (Sammarco, 2013). When the theater production of Eugene O'Neill relocated to Quincy, Howard's restaurant picked at a fast rate due to the crowds that flocked his restaurants for the good food, and soon word spread of the good restaurant. Howard thought of opening up branches but due to the financial crisis in 1929, he could not and that is when he started the concept of franchising (Boutellier & Heinzen, 2014). Howard's system required that those licensed were to bear the costs of startups, and only purchase from Howard's distribution network (Boutellier & Heinzen, 2014). The concept of franchising was a success, and in 1932 Howard sold his first franchise to a colleague in Orleans which was a success, and his name attracted many investors across the city of New England. In 1935, the restaurants had grown to 25 and by the end of 1939; there were 107 restaurants and the company's gross revenue shot up (Sammarco, 2013).

He ventured into the state turnpikes and secured hospitality contacts to run restaurants at rest stops (Olk et al., 2015). He also signed up agreements on food rights which helped grow the Howard Johnson's food chains. His success was crippled by the World War II in 1941 because of the restrictions imposed on gas and food and the scarcity of raw materials (Sammarco, 2013). A good number of his food chains collapsed. He however decided to supply food for the U.S. military, army recruits and the war volunteers, and after the war, Howard Johnson returned to his franchising business in 1945 (Sammarco, 2013). He participated actively in the food industry during this period of war because he had a good stock of sugar and food that he could supply to the army, and this strategy helped him to remain in the business as many food industries were going under during that time.

To keep his food chains and restaurants relevant and sustainable in the market, Howard hired Rufus Nims, an architect to construct his restaurant to fit in the modern day view of a restaurant (Olk et al., 2015). Howard also used some catchy phrases such as host of the highways and landmark for hungry Americans and the orange roofs to distinguish his restaurants and as a marketing strategy, to create a recognized brand (Olk et al., 2015). The most famous works of Nims was the series 77 restaurants (Sammarco, 2013).

Howard claims his success was due to his hard work, claiming that business was his only hobby and he thought of nothing but his business. He also stressed on the need for quality, insisting that quality sells and nothing can substitute quality, making him spend 48% of his revenue on fresh food supplies and ingredients (Olk et al., 2015). Howard also had very strict standards and constantly did surprise inspection on his employees across his food chains (Olk et al., 2015). He was driven with nothing but success and his mentality made him a great leader. Howard also belied in professional work and delegated important jobs to professionals, for instance, his restaurants were constructed by architects, his picked the finest top chefs and his uniforms were designed a designer and in particular Christian Dior .

Howard also specialized in location, and he claimed that a strategy location is vital for any business. He had strict regulations on operations by requiring his managers to have six-month training while his waitresses attended four-day training before being allowed to wait on a custom (Boutellier & Heinzen, 2014). Managers were indistinguishable from other workers and he believed that this strategy cut on unnecessary labor costs. He also had a book known as Howard Johnson Bible which had all the regulations concerning management and operation of his business, customer service and dress code. He also had strict rules on consistency and ensured that his high standards of quality never changed (Boutellier & Heinzen, 2014). Since he insisted that all other food chains and franchises to buy food supplies from his distribution network, he established commissaries and centralized distribution system to ensure food consistency (Boutellier & Heinzen, 2014).

Another strategy he developed was the introduction of motor lodges alongside his restaurants (Olk et al., 2015). Just like his restaurants, his motor lodges were constructed in such a way to portray his orange roof brand and iconic billboards across the country. His motor lodges had the best hospitality management and provided for fresh daily linens, large guest rooms, tubs, shower, and the modern facilities that depicted luxury (Olk et al., 2015). Apart from the restaurants and motor lodges, he also introduced the frozen packaged foods that were sold in grocery outlets across the country. His business faced a crisis in 1957 when he refused to serve Ghana's finance minister and this was protested across the nation for racial discrimination, especially by the Congress of Racial Equality (Sammarco, 2013).

In 1957, Howard hired his son Howard B. Johnson who made improvements on the company as he was relatively skilled having studied in Harvard Business School (Sammarco, 2013). His son modernized the company and was more in interested in customer's feedback as a way of improving their services. Howard also invented the Rapid Reservation Service (RRS), which enabled customers to reserve hotel rooms from long distances which were a new idea at the time (Boutellier & Heinzen, 2014). Howard tried to make his own soft drink known as Hojo Cola; however it was not successful and eventually disappeared in the market (Boutellier & Heinzen, 2014). Faced with competition from other food industries such as Burger King and McDonald's, Howard introduced the Hojo Junction fast food concept of disposable containers and was very cheap to attract more customers, and this concept too was not successful (Boutellier & Heinzen, 2014). This led to emergence of Ground Round which was a family dining restaurant.

Howard's restaurants and motor lodges faced a bad reputation over the years that led to its crumbling. There were too many law suits against it and it had bad reputation after several people were killed and the murders associated with Howard's businesses (Ziemnowicz & Parnell 2013). A singer was also raped in one of his restaurants, and this bad publicity negatively impacted on his businesses. The company also declined due to the change of its strategy, and it no longer paid attention to the customer's need s and quality. The expense on ingredients was cut and it stopped offering some of the best services such as bottomless cup of coffee to its customers (Ziemnowicz & Parnell 2013). The company also faced stiff competition by companies that copied and blueprinted his methods, and some even doing better with his methods.

Howard failed to embrace these changes and innovations and due to cost cutting, he lost his brand, recognition and customers. Only a handful of his companies still exist, but the brand is long gone. Despite the fact that Howard's companies came to a shocking fall, characterized by bad reputation and publicity, he contributed positively on the food industry and hospitality management. He gave out rules and an operation strategy that has been used by many upcoming restaurants over the years and invented many customer services such Rapid Reservation Service. Howard also instilled the idea of quality and good site location for any business. His good food and quality lodging have been adopted by many restaurants to set the standards for any industry.

References

Boutellier, R., & Heinzen, M. (2014). The Myth of the Pioneer. In Growth Through Innovation (pp. 71-84). Springer, Cham.

Olk, P., Rainsford, P., & Tsungting, C. (2015). Creating a Strategic Direction.

Sammarco, A. M. (2013). A History of Howard Johnson's: How a Massachusetts Soda Fountain Became an American Icon. Arcadia Publishing.

Ziemnowicz, C., & Parnell, J. A. (2013). The Growth and Demise of the Howard Johnson's Restaurant Chain: a Schumpeterian Perspective.