photo by Chris Harrison
At first blush, you wouldn’t think running a chain of Waffle House restaurants would have anything in common with running a chain of super-deluxe hotels like Ritz-Carlton. Bill Johnson would have told you otherwise.
William B. Johnson made his first fortune at the Waffle House, a restaurant that, like Johnson himself, started life in Georgia. For readers who live in the 25 states without Waffle Houses, the chain offers diner-style food at its 24-7 locations, especially concentrated (and especially beloved) in the South. The food is inexpensive and unfussy; it is hard to imagine an atmosphere more different from that of a luxury hotel.
Yet Johnson built his first success as a Waffle House franchisee and parlayed his fortune into hotels. After opening his first Waffle House location in 1966, he eventually grew his enterprise to include over 150 restaurants; according to a 2002 article in the Atlanta Journal-Constitution, at one time Johnson ran more Waffle Houses than any other franchisee in the chain.
This success allowed Johnson to move from low-end dining to high-end hospitality. He bought Boston’s most famous hotel, the Ritz-Carlton, in 1983. Johnson realized that a lot of the value in his new property was in the name – and that he could take the name to lots of other places. So in addition to the hotel itself, he also acquired the rights to use the Ritz-Carlton name in North America. Within a decade or so, Ritz-Carltons appeared in many of the places that attract big spenders, whether of their own money or their company expense accounts.
The contrast between the Ritz-Carlton and the Waffle House was striking on the surface. Colleagues reported that Johnson instructed employees to do what it took to make sure customers expecting a luxury experience were satisfied, whether by providing live harp music at tea time or sending overbooked guests to another hotel in champagne-stocked limousines. It was a far cry from “smothered and covered” hash browns (that is, hash browns liberally covered in cheese and onions) served at three in the morning.
But for a businessman, many of these differences are merely cosmetic. What Johnson understood was that whether you are selling a $2 plate of eggs or a $2,000-per-night hotel suite, customers expect quality and value for their money. It’s classic entrepreneurialism: Figure out what people want and do whatever it takes to deliver it. When you do, people will gladly hand you their cash.
Johnson had many other classic traits of entrepreneurs. He took risks, and that meant he sometimes failed. He filed for personal bankruptcy earlier this year, a proceeding that concluded less than two weeks after his death on June 12. Some of his enterprises faced bankruptcy as well, including a hotel venture in 2011. Even his Waffle Houses faltered; he was a major owner of Northlake Foods of Brandon, which filed for bankruptcy protection in 2008 when it could not keep up with royalties to the parent company.
Johnson also got into disputes with counterparties. These sometimes landed in court, although often Johnson ultimately settled. And by all accounts, he could be an extremely tough and demanding boss, quick to pull the trigger on an employee who wasn’t getting the job done to Johnson’s satisfaction.
Does this sound like anyone else who has been in the news recently?
William Johnson did not share a single iota of Donald J. Trump’s love of the limelight. He did not give many press interviews and preferred to exercise his clout behind the scenes. A deeply religious man, he stayed married to the same woman for more than half a century, and his personal life never put him on Page Six.
But when you hear Hillary Clinton or one of her many surrogates refers to Trump’s business disputes and the failures of his enterprises (or of those that merely rented his name), think of Bill Johnson. When you do, you might realize that while there are many things Trump has done that are unique to him and fair game for criticism, the attacks on his business record really amount to an assault on this sort of entrepreneurial spirit generally.
I think Trump and Johnson would have recognized a lot of themselves in one another. They are both the sort of guy who could be equally comfortable running a Waffle House or the Ritz.