Maid-rite Chain's Comeback Is Cooking

Iowa-based Maid-Rite celebrates its iconic status.

DUBUQUE, IA (Sunday, November 12, 2006) - Before there was fast food, there was Maid-Rite.

The Iowa-based restaurant chain invented quick service with its loose meat sandwiches in Muscatine 80 years ago this month.

Today, new owners, including some well-known Iowa business leaders, are trying to reinvent the Maid-Rite brand.

They're using technology in the kitchen, as well as at the cash register and in the back room. They're controlling portions and switching to healthful ingredients. They're adding menu items, including ice cream from another Iowa business icon, Wells Blue Bunny, and they are injecting large doses of nostalgia in the form of neon signs and vintage posters in their bid to jump-start the Maid-Rite brand.

Some stores have even gone smoke-free, said Debra Lyons, who recently banned smoking at her newly renovated Maid-Rite site in Dubuque near Kennedy Mall.

The restaurant reopened to rave reviews from customers on Oct. 23, after being closed for six weeks of extensive remodeling that included installing all the bells and whistles of the new Maid-Rite, while keeping Lyons' prized possession, "an old jukebox that still plays 45s," she said.

The smoking ban is even getting a thumbs-up, she said.

"Customers were really amazed that this was the same amount of space because we didn't move any walls or anything. Everything just seemed brighter and more spacious," Lyons said.

The experience of Lyons, a 13-year owner of a Maid-Rite franchise, helps convince Bradley Burt, the company's chief executive, that he's hit on something big.

"I thought this is a unique opportunity that is never going to come along again in my lifetime," said Burt, a former banker and consultant who put together an investor group to buy the company four years ago. Investors include businessmen Gary Kirke, Dick Jacobson and others who were clients when Burt worked at Bankers Trust years ago.

Kirke said he became an investor because he trusted Burt. It's turned out to be a good investment, but that wasn't the only reason he joined the investor group, he said.

"I loved the Iowa story. I've loved Maid-Rites all my life, and I thought it would be great to keep it going," Kirke said.

Burt said that when he discovered the company was for sale he went home to his wife, Tania, who is now his executive vice president, and said: "This could be another McDonald's."

In fact, when McDonald's and Burger King were just getting started in the 1950s, Maid-Rite already had more than 500 stores across the Midwest, according to newspaper stories.

It was then, and still is, one of the oldest franchise operations around. In the food business, only A&W is older, and only by one year.

Somewhere along the way, though, Maid-Rite stumbled and lost its edge.

The truth is that until a few years ago, many Maid-Rite restaurants looked much like they had in the 1950s or '60s, and their methods of operation were antiques, too, Burt said.

Maid-Rite pretty much missed the fast-food boom during the latter half of the 20th century that pushed McDonald's to grow to more than 30,000 restaurants in more than 100 counties and Burger King to more than 11,000 sites worldwide.

While they were growing, Maid-Rite was shrinking.

In recent years, the number of Maid-Rite restaurants had dwindled to fewer than 60, although it is now back up to 70. It should surpass 100 stores in the next year or so. Burt's expansion plans target investor groups capable of developing entire geographic regions in a few years. The 10-year target is for more than 1,000 stores.

This isn't the first effort to revive the brand, but unlike efforts in the 1980s and '90s, this one is making headway.

The business had already fallen on hard times in the 1980s when the grandson of founder Fred Angell sold it to what seemed an odd pair of partners: Clayton Blue, a farm owner from Russell, Ia., with a criminal record that included bank fraud and farm machinery theft charges, and Des Moines contractor John Gillotti.

Blue had a plan to revive the 100-store chain and sell shares of stock to the public, but he never got that far.

He did add about 40 franchises, but then the chain became tangled in disputes with and between franchisees.

Gillotti was in and out of the operation, but became the sole owner before he had a heart attack and died unexpectedly at age 72 in 1991.

A lengthy court battle followed his death with Gillotti's heirs battling Blue and his family over the question of who owned the chain.

The legal case dragged on for years, before a Polk County District Court finally ruled in 1995 that the Gillotti family was the rightful owner. Two years later an appeals court upheld the decision.

By then, though, the prize was tarnished.

The court proceedings were "a long, drawn-out process," Lyons recalled. "It was kind of in limbo for a long time."

Maid-Rite franchisees were left to fend for themselves for so long, that by the time the Gillottis tried to regain control, it was an uphill battle. Many stores were in a second or third generation of family ownership, or had been passed from one owner to another with little or no oversight by the parent corporation.

The Gillotti family's efforts to restore order to the franchise were rebuffed by owners who didn't want to pay increased franchise fees for such things as group advertising or to buy ingredients and supplies from a common source.

Product control had become a big issue, Burt said. The food served by Maid-Rite restaurants no longer had a consistent taste and texture. Nor did stores share a common look.

As part of the effort to regain control, the Gillotti family hired Burt, who had started a business consulting and marketing firm after he left Bankers Trust. Burt was to help the family regain control of franchisees and relaunch the Maid-Rite brand.

Many of the franchisees were resistant, though and the Gillottis became discouraged at how much money and effort it would take to turn the chain around, Burt said.

In 2001, they told Burt they'd decided to sell the business and wouldn't be needing his services any more.

That's when Burt went home and told his wife about his plan to invent the Iowa version of McDonald's.

He contacted Kirke and Jacobson and others and put together enough money to buy the operation and relaunch the brand. When the Gillottis heard what he had planned, they agreed to stay involved as investors in the operation, Burt said.

It took time, though, and the first couple of years weren't easy. As many as 20 longtime franchisees decided they didn't want to be part of the new Maid-Rite and quit the chain, Burt said.

But things kept moving forward.

"It took a couple years just to get the food right," Kirke said.

Three corporate-owned stores in the Des Moines area act as a campus for what Burt calls Maid-Rite University, where new owners or management trainees attend a 10-day course on how to prepare Maid-Rite food and learn how to use computerized systems for controlling payroll, inventory and other expenses.

The company has also created a uniform decor that is used in new stores, such as the one that opened in Loveland, Colo., last week and one that opens this week in Ames, and for remodels, such as Lyons' Dubuque store.

In addition to signs, seating and countertops, the decor includes posters of vintage Maid-Rite stores, including one in which founder Angell is seated at a counter enjoying the sandwich he invented 80 years ago in Muscatine.

View all Maid-Rite Press Releases

This article has been read 271 times.

Printer Friendly