By John Jay Hooker

Editor’s note: Last week, the Nashville Scene published an abridged excerpt from Bill Carey’s just-released Fortunes, Fiddles, & Fried Chicken, a history of Nashville business based on more than 300 interviews and 14 months of research. The excerpt, chronicling the birth and downfall of Minnie Pearl’s Fried Chicken, did not include comments from company founder John Jay Hooker, because Hooker declined to be interviewed for the book. While we feel Hooker should have spoken with Carey, who is one of the city’s most respected business writers, we are nonetheless happy to give Hooker space to provide his version of events.

After I read Mr. Bill Carey’s story, I called the Scene and asked for an opportunity to respond. The truth is that Mr. Carey wanted to interview me, but I had had some experience with him, and I told him, “I don’t think you will write the story on a fair and accurate basis, so you can’t interview me as I don’t trust you. But I hope you will quote me to that effect if you decide to write the story.” Now Mr. Carey has written his book and in fact did not include the quote, “I don’t trust you.”

The true story of Minnie Pearl’s Chicken, yet untold, is a fascinating story of enterprise, hard work, and overnight wealth. It’s also the story of how a sinister political vendetta brought down a financial empire. Some have tried to tell this story and got it wrong. I know the true story. I lived it.

Minnie Pearl’s was a phenomenon born of extraordinary circumstances beginning with the fact that Jack Massey, a local Nashville businessman, had bought control of Kentucky Fried Chicken, and he and a young lawyer named John Y. Brown, neither of whom had any experience in the food business, were making a great success out of it. The stockbrokers and Wall Street investors couldn’t get enough of it. As the KFC slogan went, “It’s Finger-Lickin’ Good,” and Wall Street was licking its chops.

One day after I lost the governor’s race in 1966, I walked to my brother’s office and he was talking on the telephone. I heard him say, “What’s the P.E. ratio?” Then I heard him say, “Buy 10,000 shares for Union Street.” That was the name of our investment company. When he got off the phone I said, “What is a P.E. ratio?” He said, “You must be kidding. You don’t know what a P.E. ratio is?” I said, “Henry, I’m a lawyer and a politician, not a stock trader. What the hell is a P.E. ratio?” He said, “Well, if a company makes a million dollars and the company stock sells for $10 million, then the P.E. ratio is 10. If it makes a million and sells for $20 million, the P.E. ratio is 20. In other words, it is the quotient between the earnings and the price of the stock. And he said, for example, the average Wall Street P.E. ratio is about 12, but there are companies like Kentucky Fried Chicken, because of its growth, where the P.E. is 40.”

I said to him, “You mean if we were in the chicken business instead of law that Wall Street would pay us 40 times what we’re making as lawyers? And he said, “Yes, you got it.” And I said, “How long has that been going on?” And he said, “A long time.” And I said, “How long have you known about it?” And he said, “A long time.” And I said, “Why ain’t we in it?” And he said, “Because we don’t know anything about the chicken business.” And I said, “Jack Massey and John Y. Brown don’t know anything about it, either. If they can learn it, why can’t we?”

That day, I went to the Belle Meade Country Club to have lunch and play golf. While I was having lunch, Mr. Massey walked in to the back bar and said, “Well, today was a great day. A man came to me and offered me $30 million for my stock in Kentucky Fried Chicken,” and everybody in the room listened. One of his friends asked him, “Jack, what did you tell him?” He said, “I told him to come back next year and bring $150 million, and I might sell him half my stock.” Mr. Massey asked me, “John Jay, what are you doing now?” I said, “Mr. Massey, I lost the governor’s race, but I didn’t lose my law license. I’m still practicing law with my brother. But I’ll tell you what I’m gonna do. I’m gonna get in the chicken business because my brother has explained to me about P.E. ratios, and when that guy comes back next year and brings that $150 million, he’s going to drop some by Ol’ John Jay’s house ’cause I’m gonna get in the chicken business.”

Most everybody in the room laughed, except Mr. Massey. The next morning I went to work and told my brother Henry I wanted to get in the chicken business. That night I went to make a speech, and Frank Woods, a young man studying to be a lawyer, drove me. I told him I wanted to get into the chicken business and I was looking for the right image to compete with Kentucky Fried Chicken. He suggested Minnie Pearl. The next day, I called her and asked if she wanted to get in the chicken business with me, and she said, “No, I’m from the country and I’ve done growed my last chicken.” I said, “Minnie, I’m not talking about growing chicken, I’m talking about selling fried chicken. It seems to me you ought to have a good recipe and you ought to be able to sell more chicken than Col. Sanders.” She said, “I bet I can.”

The next day I went back to Henry, excited, energized, and determined. It seemed to me to be all a matter of common sense. First, you had to get the best-tasting chicken you could, and there were food chemists around that obviously knew how to do that. Then you had to get a good image, and Minnie Pearl seemed perfect. We could literally copy Kentucky Fried Chicken, and it made sense to me that if there is a Coca-Cola, inevitably there will be a Pepsi Cola.

Henry and I, John Seigenthaler, the editor of The Tennessean, and Amon Evans, its publisher, had put together a first-class political organization in 1966 in all 95 counties. I saw how Kentucky Fried Chicken had sold those franchises and I believed we could sell them, that we could have a chicken that tasted as good or better than theirs, and that the Minnie Pearl charisma would help attract sophisticated franchisees who could manage their territory like our campaign managers in each county had managed theirs.

It was a self-seller! I went to see Ed Nelson, my college roommate at Sewanee and one of the most intelligent men I ever knew. He directed me to Price Waterhouse to help us draw the business plan. Henry and I borrowed $750,000, largely because Ed Nelson believed in the concept and sold it to Mr. Ed Potter, the principal owner of Commerce Union Bank, and Mr. Bill Earthman, the president. Ultimately, Ed Nelson bought $5,000 worth of the stock and Earthman liked the deal so well that he asked Nelson to sell him half of his. A year and a half later, Earthman sold his stock for 80 times what he paid and bought his house in Belle Meade.

When I ran into somebody I knew and liked, I told him I was going into the chicken business and I’d sell them $1,000 worth of stock. If I knew them well and liked them a lot, I told them I’d sell them $2,500 worth of stock. If they were one of my favorite people, I’d sell them $5,000 worth of stock. I told my papa, the most talented lawyer I ever knew, who just loved Minnie Pearl and loved to eat fried chicken, that I’d sell him $25,000 worth of the stock. He wanted more, and I said “No, Sir. You know, I may just be wrong about all this.” The word got out, and it seemed to me everybody who I ever knew not only wanted the stock but also thought they had a right to demand that I sell it to them. I made many people mad because I didn’t want to sell more than $749,000 worth, because Henry and I wanted absolute control. I sold the stock to federal judges and public figures who’d helped me in my campaign, to lifelong friends, and people I wanted to help. I was convinced I had a winner and I wanted to share it.

The first thing we did was employ the Griffin Food Laboratories in Chicago, the leading food chemist in America, to develop the recipe. Years later, in 1984, when I started Hooker Hamburgers, I went back to the Griffin Laboratories and they still had the Minnie Pearl files and bragged about the chicken and had a picture of her on a wall. They thought, after all that time, it was the best chicken recipe in the world, and so did I.

We sold franchises to sophisticated people, as we wanted to develop markets, not just individual units. We didn’t sell the franchises; we awarded them. If I didn’t like your looks, you didn’t get one. I knew that I was going to run for governor again. I wanted to pick my business partners wisely, and I wanted to make enough money so that my brother and I could easily fund the governor’s race with our own money. While I had been a liberal in politics, supporting Martin Luther King Jr. and the civil rights movement, I was also by nature a capitalist. Plainly put, I didn’t want to be beholden to anyone.

In 1968 in New York, through a mutual friend, Henry Hooker met an underwriter by the name of Burt Kliener—one of the most intelligent men I have ever met—and brought him to Nashville. We spent an evening with him, and he said he wanted to take the company public and that it would be an extremely “hot stock” in view of the success of Kentucky Fried Chicken and the plausibility of the Coca-Cola/Pepsi Cola comparison. We decided to bring the stock public at $20 per share, 18 months after we’d started the company, for stock that we had bought and sold to others at $1 a share. That stock had been split 2-for-1, so that the original stock was really 50 cents a share. So at $20 it came public at 40 times the original investment, and on opening day, the stock went from $20 a share to $40 a share, and Burt Kliener said, “You’ve got to get some of the original stockholders to sell some of their stock at $40 a share. Otherwise, I can’t hold the market. The stock will go to $60 or $70 a share, and you don’t want to have to live up to the expectations that would entail.” I then contacted the original investors and gave them all an opportunity to sell their shares for 80 times what they paid for the stock, and many of them did.

We had so much money invested and could be at the caprice of a major change in the national economy that my brother and I decided to look for a suitor. One of the things we did was enter into a contract to sell 1,000 franchises to Ralston-Purina, at that time the largest chicken grower in America. This transaction would put us in a position later to merge with Ralston-Purina, a major American corporation, and thereby put Minnie Pearl in a position to be a dominant force in the fast-food business on a worldwide basis. The investment for Ralston-Purina was going to be so heavy that the board of directors decided against it, and so Henry and I went to Burt Kliener and found another suitor, National General, a conglomerate that owned insurance companies, movie theaters, and Bantam Books. National General sent its team to Nashville and spent six weeks doing due diligence. Its officers were convinced that the fast-food business was the highest and best use of their capital and that Minnie Pearl was properly positioned. The company bought $15 million worth of stock from Henry and me, another $15 million from the company, and was poised to buy any available stock in the public market. They wanted to get as much Minnie Pearl stock as possible, then fund it to make the company the leader in the fast-food business. In October of 1969, Henry and I went to Los Angeles and signed the deal. It was an emotional moment.

Sometime later, I learned through a chain of conversations that President Nixon, who desperately wanted to defeat Sen. Al Gore Sr. and elect a Republican governor in Tennessee, was going to start a Securities and Exchange Commission investigation of Minnie Pearl. I knew I was in for a fight. I told National General about that circumstance before they bought the company. Their position was, “No worry. We’ve checked the company out, including all the accounting, top to bottom, and there’s nothing the SEC can do to hurt us.” I can remember Gene Kline, president of National General, saying, “If we’re willing to buy the stock after our due diligence investigation, they’ve got no business trying to interfere with that.”

But it soon became apparent that Nixon’s enemies list included Minnie Pearl’s. There is no other way to explain the investigation the SEC began by subpoenaing all the documents of the business. National General soon realized that the Nixon camp was determined to destroy the company and became concerned the investigation would turn to National General and that it would likewise be harassed with a politically inspired investigation. This was particularly so, since Gene Kline, the president of National General, was a great friend of Hubert Humphrey. Humphrey and I were also great friends, which had accounted for part of the chemistry between Kline and me. Kline was not a man who wanted to back off, but he was also an intelligent man and realized the only thing to do was to jettison the Minnie Pearl investment, write it off, and get out of the line of fire. This circumstance, because of the velocity with which Minnie Pearl was proceeding, was a malignant problem as the SEC would not permit the company to raise money from any other source.

This was taking place in the context of my 1970 race for governor. The Nashville Banner was getting leaks from the SEC, calculatingly trying to undermine PSI, the corporate name of Minnie Pearl’s Chicken. Anybody who rereads the stories on the front page of the Banner during 1970 will not only see journalism at its worst, but the power of the government to assassinate any person or business in broad daylight.

I do not know what took place with the Clintons in Whitewater, but I firmly believe they got a dose of the same corruption in that matter that I got in Minnie Pearl. The Minnie Pearl investigation ended in a whimper. To end the investigation, the SEC required the company to sign a consent decree. It stated we would not violate a rule changing the accounting principles we had previously followed. Minnie Pearl’s used Price Waterhouse for its accounting. Price Waterhouse had told us to declare franchise sales income as income in the year of the sale. Of course, we didn’t want to do that, because we’d sold so many franchises that we could not be certain we could keep up the pace. Henry Hooker was so determined not to declare the franchise sales as income that he made the Nashville office of Price Waterhouse go to the main office in New York and urge our case. The main office said there was no alternative, that generally accepted accounting principles required us to take the franchise sales as income. Henry said, “Write me a letter to that effect.” It was that letter that kept the SEC from being able to claim that we had done something wrong. And in order to terminate the matter after almost three years and millions of dollars spent, the SEC simply changed the rule and declared victory.

Good friends who made money somehow figured they were the smart ones. And those who lost money figured it was my fault. Minnie Pearl’s was a phenomenon, not just a business. It was a crusade. It wasn’t started simply to make money but to use money to pursue political power, to give me the opportunity to fight for freedom for those who were less advantaged and to pay for the fight with money that I made in the marketplace of ideas. There would not have been a Minnie Pearl’s if not for Kentucky Fried Chicken.

I have made by good fortune, and lost by bad fortune, millions upon millions of dollars. I have known the sweet taste of victory. I had the opportunity to make my mother and my father, in today’s dollars, millions and millions of dollars. I’ve had the opportunity to love and be loved by Muhammad Ali, Bobby Kennedy, and Hubert Humphrey. While I never was elected to the United States Senate, I had the opportunity to play a United States senator in Warren Beatty’s classic movie, Reds; I had the opportunity to be the chairman of STP and stand in the Winner’s Circle with Richard Petty, driving his STP car; and I had the opportunity to be the publisher of a newspaper which (along with Richard Nixon, Bill Brock, and those Nixon disciples at the SEC) tried to destroy me. I am now 70 years old, blessed with good health, looking at an opportunity to do the most interesting business deal in my life, and I am sure of one thing: that the most important thing is to “grade your own papers.”

I don’t think of myself as either a winner or as a loser. As Rudyard Kipling wrote in his poem, “If,” winners and losers are both “imposters.” One must not feast on mountains climbed or mourn mountains unclimbed. I have done all that one needs to do. I have been a “challenger,” determined to do the best I could. Not long ago I almost died from a potentially deadly but temporary illness, and I felt enormously blessed when I said to my children, and meant it, “I’m not afraid to die.” I also told them, “Remember this above all else.... I did the best I could.”

Good friends who made money somehow figured they were the smart ones. And those who lost money figured it was my fault. Minnie Pearl’s was a phenomenon, not just a business. It was a crusade. It wasn’t started simply to make money but to use money to pursue political power, to give me the opportunity to fight for freedom for those who were less advantaged and to pay for the fight with money that I made in the marketplace of ideas. There would not have been a Minnie Pearl’s if not for Kentucky Fried Chicken.

I have made by good fortune, and lost by bad fortune, millions upon millions of dollars. I have known the sweet taste of victory. I had the opportunity to make my mother and my father, in today’s dollars, millions and millions of dollars. I’ve had the opportunity to love and be loved by Muhammad Ali, Bobby Kennedy, and Hubert Humphrey. While I never was elected to the United States Senate, I had the opportunity to play a United States senator in Warren Beatty’s classic movie, Reds; I had the opportunity to be the chairman of STP and stand in the Winner’s Circle with Richard Petty, driving his STP car; and I had the opportunity to be the publisher of a newspaper which (along with Richard Nixon, Bill Brock, and those Nixon disciples at the SEC) tried to destroy me. I am now 70 years old, blessed with good health, looking at an opportunity to do the most interesting business deal in my life, and I am sure of one thing: that the most important thing is to “grade your own papers.”

I don’t think of myself as either a winner or as a loser. As Rudyard Kipling wrote in his poem, “If,” winners and losers are both “imposters.” One must not feast on mountains climbed or mourn mountains unclimbed. I have done all that one needs to do. I have been a “challenger,” determined to do the best I could. Not long ago I almost died from a potentially deadly but temporary illness, and I felt enormously blessed when I said to my children, and meant it, “I’m not afraid to die.” I also told them, “Remember this above all else.... I did the best I could.”