Failed Fortunes

Editor’s note

The following is an abridged excerpt from Fortunes, Fiddles, and Fried Chicken: A Nashville Business History, which was just published by Providence House Press.

1968 was a milestone year for Nashville business. Hospital Corporation of America was formed. Genesco peaked at 65,000 employees. The National Life & Accident Insurance Co. and Third National Bank formed NLT—then the South’s largest financial institution. The Country Music Association awards were televised for the first time. However, for many Nashville residents, the most remarkable company in 1968 was Minnie Pearl’s Fried Chicken. And to understand Minnie Pearl’s, you have to know a bit about Kentucky Fried Chicken.

In the 1930s, an eccentric man named “Colonel” Harlan Sanders began selling fried chicken out of the back of his gas station in Corbin, Ky. Two decades later, he began to franchise his secret chicken recipe of 11 herbs and spices. By 1963, the Colonel’s chicken was being sold at over 500 locations, most of which were sit-down restaurants that featured it on the menu.

However, Sanders didn’t do too much to standardize his operation, advertise it, expand it, or squeeze profits out of it. In 1963, a Nashville businessman named Jack Massey and a Louisville lawyer named John Y. Brown Jr. talked Sanders into selling them his business for $2 million. Massey and Brown moved Kentucky Fried Chicken’s headquarters to Nashville. And after spending a few months studying the business, they began standardizing KFC locations, adding new franchises, and spending a lot of money on advertising.

At first, the new owners of the company didn’t get along with franchisees that had grown used to the Colonel. But those restaurant owners who stayed with the company, signed new contracts, built new outlets, and acquired stock options eventually would have cause to be very happy about the new program.

In 1966 and 1967, KFC opened about 300 new outlets. In 1968, it opened about 600. Its earnings—$800,000 in 1965—grew to $12.1 million four years later. Massey and Brown—neither of whom had ever taken a business course in their lives—had revolutionized the restaurant business. By that time, some of KFC’s franchisees had become millionaires. One was Dave Thomas, who would later go on to start a hamburger chain called Wendy’s.

KFC had many imitators. One of them was Minnie Pearl’s—the brainchild of John Jay Hooker Jr., a colorful, energetic, and well-connected Nashville attorney who narrowly lost the Democratic nomination for governor in 1966. As KFC grew and its franchisees and shareholders became wealthy, Hooker and his younger brother and law partner, Henry, became convinced that there was room for a second fried chicken chain. According to several people with whom they discussed the idea, they built their case on two arguments. One was that the success of KFC paved the way for such a business, much like Coke had paved the way for Pepsi. The other was that there were many medium-sized markets into which KFC had not yet moved.

There was, however, one important difference between Minnie Pearl’s Fried Chicken and Kentucky Fried Chicken. KFC had started small and grew under the watchful eye of Harlan Sanders, who spent years perfecting his recipe and cultivating his market. The Hooker brothers, on the other hand, had not run a single restaurant before.

Nevertheless, John Jay and Henry Hooker were thinking big. And both acknowledged that they were inspired by Rogers Caldwell, who 40 years earlier had put together his financial empire in the same building that in the mid-1960s housed the law office of Hooker & Hooker. “I hope you make as much money as I did in this building,” Caldwell told the Hooker brothers in the early 1960s. “But I hope you keep more of it than I did.”

In early 1967, the Hooker brothers sold stock in the new venture to their friends, relatives, and political supporters—some got in for 50 cents a share, others $1 per share. Among them were U.S. Rep. Richard H. Fulton, former Tennessee Secretary of State Eddie Friar, Tennessean publisher Amon Carter Evans, Tennessean editor John Seigenthaler, Banner publisher Jimmy Stahlman, former state legislator (and later federal judge) Tommy Wiseman Jr., attorney Jim Neal, Democratic activist (and later Davidson County sheriff) Fate Thomas, former University of Tennessee football coach Doug Dickey, and Ingram Corp. president Bronson Ingram.

Some early stockholders, such as Fulton, Seigenthaler, and Ingram, would later claim they were reluctant to buy the stock at first and did so only after some arm-twisting by John Jay Hooker. “In Bronson’s mind, it was money he had kissed goodbye forever,” Martha Ingram said. But according to Jimmy Bradford Jr. of J.C. Bradford & Co., many people were begging John Jay to let them have a shot at it. “People just went hog-wild,” said Bradford, who said he never bought any of the stock. “I remember going to a cocktail party where John Jay walked in and there were about 10 people wanting to grab him because they wanted to get in.”