Shoney's

Shoney's North America, LLC
Sholand, LLC
Shoney's
Private
Industry Casual dining restaurant
Predecessors
  • Shoney's, Inc.;[1]
  • Shoney's Big Boy Enterprises, Inc.;
  • Danner Foods, Inc. (merger);
  • Shoney's Big Boy Franchising Companies, Inc.;[2]
  • Parkette Commissary, Inc.;
  • Parkette Foods, Inc.
Founded 1947 (1947) in Charleston, West Virginia, United States (Parkette);
1959 (1959) in Madison, Tennessee, United States (Danner Foods)
Founder Alex Schoenbaum
Raymond L. Danner, Sr.
Headquarters Nashville, Tennessee
Key people
 David Davoudpour, CEO
Products
  • All American hamburger
  • Hot Fudge Ice Cream Cake
  • Slim Jim sandwich
  • Strawberry pie
Number of employees
 15,000
Website www.shoneys.com

Shoney’s is a privately held restaurant chain headquartered in Nashville, Tennessee, United States. Operating primarily in the South, Shoney's also has restaurants in the Midwest and Lower Mid-Atlantic states. Founder Alex Schoenbaum opened the first Parkette Drive-In in 1947, and became a licensee of Big Boy Restaurants in 1952. Two years later the name was changed to Shoney's, and aggressive subfranchising followed. Thirty years later, having outgrown its Big Boy territory, Shoney's dropped the Big Boy affiliation.

The current corporate entity is Shoney's North America Corp., with David Davoudpour as chairman and chief executive officer. Davoudpour acquired Shoney's in 2006 through Royal Hospitality Corp. in Atlanta. He is the founder and chairman of Royal Hospitality. As of 2016, there were around 150 company-owned and franchised Shoney's restaurants in 17 states, stretching from Maryland to Florida in the east, and from Missouri to Texas in the west, with the northernmost location being in Ohio.

History

Alex Schoenbaum

In 1947, Alex Schoenbaum opened the Parkette Drive-In next to his father’s bowling alley in Charleston, West Virginia.[3] After meeting with Big Boy founder Bob Wian in 1951, Schoenbaum became a Big Boy franchisee on February 7, 1952, now calling his several locations the Parkette Big Boy Shoppes.[4][5] In May 1954, a public "Name the Parkette Big Boy Contest" was announced, and in June 1954 Schoenbaum's five Parkette Drive-Ins were rebranded as Shoney's.

Shoney's (the Parkette) was originally the Big Boy franchisee for West Virginia; however, Schoenbaum rapidly grew the chain through subfranchising, expanding his Big Boy territory through the southeastern United States, excluding Florida only because the rights already belonged to fellow Big Boy franchisee Frisch's.

Schoenbaum's earliest subfranchisees operated under their own names. In 1955, Leonard Goldstein became a subfranchisee in Roanoke, Virginia. Originally operating as Shoney's, he eventually changed to Lendy's Big Boy after another Shoney's subfranchisee called Yoda's Big Boy opened across town. In 1956 a subfranchise was sold to the Boury brothers in northern West Virginia, who operated as Elby's. Elby's, Lendy's, and Yoda's units were originally listed with Shoney's units on the back of the Shoney's menu. Also in 1956, Schoenbaum sold a subfranchise to Abe Becker in Rochester, New York, for Becker's Big Boy. Two Philadelphia area subfranchises, Tunes and Arnold's, were opened during this period as well. In 1959 Shap's Big Boy was subfranchised in Chattanooga, Tennessee, later assuming the Shoney's name. After this, all subfranchises went by the name Shoney's.

Doubling in size every four years, Shoney's became the largest Big Boy franchisee, operating over one third of the Big Boy restaurants nationwide. As Shoney's dominated Big Boy, a 1959 franchisee named Raymond Danner would dominate Shoney's, acquiring the company in 1971.

Ray Danner

Selling vending machines in the late 1950s, Ray Danner noticed the popularity of Frisch's Big Boy and other drive–in restaurants. Danner, who had operated small businesses, wanted a single Big Boy in his hometown of Louisville, Kentucky. Because Frisch's had a Louisville franchisee, he and business partner James Craft contacted Alex Schoenbaum and bought the Shoney's Nashville franchise for $1000.[6] In 1959, the pair opened their first Shoney's Big Boy in Madison, a Nashville suburb, built four more by 1961,[7] and a total of seven Shoney's Big Boys when Danner bought Craft's interest.[6] Then known as Shoney's Big Boy of Middle Tennessee, by 1966 the company operated 10 Big Boys. That year Danner acquired the Louisville Kentucky Fried Chicken franchise, which would grow to 22 stores over 15 years.[6][8]

Shoney's in Hendersonville, Tennessee.

In 1969, Shoney's Big Boy of Middle Tennessee and the KFC subsidiary became a public company and was renamed Danner Foods, Inc., with Danner as president.[9] The company now included 14 Big Boy restaurants, and by 1970, added one Big Boy in Columbus, Georgia and another in Opelika, Alabama.[10] Danner wanted additional Shoney's territory but Schoenbaum was developing those areas himself, so the company opened a similar "Danner's Family Restaurant" in Louisville, the first of several.[11] Danner Foods also opened a fast-food seafood and hamburger concept, Mr. D's.[12] Nine stores would open by January 1971, and over the next four years, Danner's namesake Mr. D's would be renamed Captain D's, refocusing exclusively on seafood.[10] Danner Foods also opened Mr. D's Islander Restaurant in Huntsville, Alabama, offering gourmet dining including seafood, steaks and Cantonese cuisine.[13]

By 1971, Danner's company had become the second largest Shoney's franchisee by number of units.[14] That year, Danner Foods bought the Shoney's trademark and assets from Alex Schoenbaum, Danner becoming president and CEO, moving the headquarters and commissary from Charleston to Nashville; Danner also changed the legal name of the companies from Shoney's Big Boy Franchising Companies, Inc., Parkette Commissary, Inc. and his Danner Foods, Inc. to Shoney's Big Boy Enterprises, Inc..[6][15] Schoenbaum became Chairman of the Board of Directors. As director of a public company, he was forced to close his personally owned Shoney's #1, the original Parkette Drive–in, by 1975.[16]

Leaving Big Boy

Five years after being renamed Shoney's Big Boy Enterprises, Inc., stockholders approved changing the company name to Shoney's, Inc. Shoney's said this reflected the company's diverse food service brands, but added, "Shoney's is not the southern reincarnation of Frisch's Big Boy."[17] However, as Schoenbaum's wife Betty said, the change would permit Shoney's to continue expansion beyond the boundary of its Big Boy territory.[18]

In 1978, the several Danner's Family Restaurants in Louisville, were renamed Danner's Towne and Country[19] using logos increasingly similar to Shoney's.[20][21] In 1982, the company opened two Towne and Country restaurants in Tallahassee, Florida, also Frisch's Big Boy territory, but these were co–banded as Shoney's Towne and Country.[22] This caused Frisch's to sue for unfair competition, claiming a strong association of both the "Shoney's" name and "Towne and Country" concept with "Big Boy".[23] Frisch's had already filed similar civil actions against the Wheeling, West Virginia–based Elby's Big Boy franchise, which in 1971, broke ties with Frisch's and operated non–Big Boy Elby's restaurants in Ohio.[24] In March 1984, a Federal district court denied Frish's request for a temporary injunction blocking Shoney's building additional units in Kentucky and Florida.[25] (Frisch's appealed, but in April 1985, a Federal appeals court affirmed the ruling.[26])

Since Big Boy was removed from the company name in 1976, the Big Boy was becoming less and less prominent at Shoney's, disappearing completely from the company's 1983 annual report. Once called "a meal in one on a double–deck bun",[27][28] a company official now called the Big Boy hamburger, "a Depression burger, a lot of bread and no meat".[23] Following the March 1984 federal court ruling favoring Shoney's,[25] Marriott Corporation, then owner of the Big Boy trademark, negotiated a settlement that would allow Shoney's to buyout its Big Boy franchise agreement.[29] And in April 1984, Shoney's withdrew from the Big Boy system, paying Marriott $13 million (equivalent to $30.6 million in 2017).[29] (In August 1984, Elby's likewise dropped its remaining Big Boy affiliation in West Virginia and Pennsylvania.) At the time Shoney's was the largest Big Boy franchise, with 392 Shoney's Big Boy Restaurants, representing more than a third of the national Big Boy chain.[29] Like the former Big Boy stores, the Towne and Country units were renamed simply Shoney's.[30][31] Additional Shoney's restaurants opened in Frisch's Big Boy territory, three in the Cincinnati area, with plans to open three more annually until the market was saturated.[32]

Racial discrimination

In April 1989, a class action lawsuit was filed in Pensacola, Florida charging Shoney's with widespread racial discrimination where African American applicants were denied employment, and African American employees were denied promotion, harassed or terminated without cause, based on race, and that white managers were harassed or terminated for objecting to the practices.[33][34] The case, joined by the NAACP Legal Defense and Education Fund, was filed by nine named plaintiffs: five black employees and four white managers.[35]

The lawsuit claimed that racial policies were systemic, involving upper management including chairman Ray Danner, who was named individually as a co-defendant.[36] On restaurant visits, Danner would allegedly tell managers to "lighten the place up" if he felt too many blacks were employed at the location,[37] as "the number of blacks [needed] to coincide with [the] neighborhood ethnic group". Restaurant managers testified that Danner didn't want blacks seen by customers, because no one wanted to eat at a restaurant where "a bunch of niggers" were working.[38][37] (Danner responded that he could not remember making such statements, and denied use of the racial epithet or having such racial policies.) Managers also testified that company officials instructed them to "blacken the 'o' " in the Shoney's logo (or the "A" in Application) on job applications of African Americans.[37]

In 1993, the court approved an award of $105 million, ($132.5 million including costs and fees) the largest discrimination settlement at the time.[33][34][37][39] Danner, who in the interim became a member of the NAACP, surrendered 2.9 million shares of company stock worth $60 to $65 million toward the settlement,[40] and resigned from Shoney's board of directors.[41] The court also ordered a detailed company-wide affirmative action program, including training and educational programs.[42]

Among an estimated 40 thousand persons in the class, compensation was awarded to every African American person employed at Shoney's company-owned restaurants between February 4, 1985 and November 3, 1992. Eleven persons received the maximum $100,000,[34] (equivalent to $169,000 in 2017). The suit included company-owned food service operations such as Shoney's, Captain D's and Lee's Famous Recipe, but excluded franchised restaurants.[43][44]

After Danner

At its peak in 1998, the restaurant chain operated or franchised over 1,300 restaurants in 34 states. None of those businesses remains a part of the Shoney's restaurant enterprise today.

In 2000, the company filed for Chapter 11 bankruptcy protection and was acquired by Texas-based investment group Lone Star Funds two years later.[45] On January 1, 2007, Lone Star announced that the Shoney's chain - at this point down to 282 restaurants - was being sold to David Davoudpour, founder and CEO of the Atlanta-based Royal Capital Corporation, the largest franchisee of Church's Chicken restaurants.[46] Davoudpour set up a new company, Shoney's North America, LLC, as a subsidiary of Royal and currently serves as its chairman and CEO. Lone Star had originally planned to sell the chain to Centrum Properties, a Brentwood, Tennessee, investment group, but Centrum later sued to get out of the deal.

In January 2014, Shoney's opened its first mall-based location, in Sugarloaf Mills in Lawrenceville, Georgia. It includes a full bar.[47]

Shoney's Inn

In 1975, the restaurant chain founded Shoney's Inn, a motel chain. After the motels were sold off in 1991, Shoney's continued to collect royalties on the name. Between 2002 and 2006, the last remaining Shoney's Inns were re-branded as GuestHouse.[48]

References

  1. ↑ "Shoney's Lists 1976 Earnings". Charleston Daily Mail. December 25, 1976. p. 3B. Retrieved February 5, 2017 – via newspaperarchive.com.
  2. ↑ "Shoney's merges with Danner Foods of Nashville". Kingsport News. XXXIV (23). Kingsport TN. February 3, 1971. p. 2. Retrieved February 5, 2017 – via newspaperarchive.com.
  3. ↑ "Shoneys Inc Facts, information, pictures | Encyclopedia.com articles about Shoneys Inc". www.encyclopedia.com. Retrieved July 15, 2016.
  4. ↑ "Parkette Advertisements". Charleston Daily Mail. Charleston WV. February 6, 1952. p. 5. Retrieved February 5, 2017. You Can Get A Parkette Big Boy Tomorrow!
  5. ↑ "Parkette Advertisements". Charleston Daily Mail. Charleston WV. February 7, 1952. pp. multiple. Retrieved February 5, 2017. You Can Now Get A Big Boy At The Parkette. Don't Miss This Sensational Treat!
  6. 1 2 3 4 Thompson, Jim (April 8, 1984). "Big Boy's big boy: One man's trek from West End to executive suite". The Courier-Journal. Louisville, Kentucky. p. E1, E3. Retrieved April 21, 2018 – via Newspapers.com. (Subscription required (help)). part 2
  7. ↑ Cason, Albert (October 20, 1961). "Food firm expands Nashville outlets". Nashville Business. The Tennessean. Nashville, Tennessee. p. 49. Retrieved April 24, 2018 – via Newspapers.com. (Subscription required (help)). Shoney's Big Boy Drive in Restaurant!, will open its fifth unit here in about four weeks.... Shoney's franchise owners here are Ray Danner and James Craft.... The Shoney's chain Includes approximately 40 restaurants In the southeast. Locally, Danner and Craft opened the first one in Madison Square Shopping Center three years ago.
  8. ↑ "Shoney's celebrates 25th". The Clarksdale Press Register. Clarksdale, Mississippi. January 31, 1984. p. 10. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  9. ↑ Cason, Albert (April 6, 1969). "Danner Foods, Inc. names financial aide". Nashville Business. The Tennessean (Second ed.). Nashville, Tennessee. p. 12–F. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  10. 1 2 "Serving the south [advertisement]". The Tennessean. Nashville, Tennessee. January 10, 1971. p. 7. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  11. ↑ "'Louisville, if you like Danner's you already like Shoney's' [advertisement]". The Courier-Journal (Metro ed.). Louisville, Kentucky. March 5, 1986. p. D–5. Retrieved April 26, 2018 – via Newspapers.com. (Subscription required (help)).
  12. ↑ "Danner Foods, Inc. opens new chain". Business News. The Daily News-Journal. Murfreesboro, Tennessee. August 28, 1969. p. 5. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  13. ↑ "5 good reasons [advertisement]". The Tennessean. Nashville, Tennessee. January 11, 1970. p. B+I 3. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  14. ↑ Tharpe, Gene (October 10, 1971). "Shoney's still a growing 'Big Boy'". The Atlanta Constitution. p. 24–C. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  15. ↑ "'Involvement' Danner Foods growth secret". The Tennessean. Nashville, Tennessee. January 10, 1971. p. 16. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  16. ↑ Haas, Richard (December 12, 1975). "End of an era: Shoney's locks doors to 1950s teeny boppers spot". The Charleston Daily Mail. p. 7–A. Retrieved April 26, 2018 – via Newspapers.com. (Subscription required (help)). The closing was mandated by a 1971 agreement with the Securities and Exchange Commission made at the time Shoney's Big Boy Enterprises sold a public stock issue. Under the agreement, Schoenbaum, Shoney's chairman, and Ray Danner, the company president, agreed to divest themselves of the Shoney's restaurants they owned personally. The SEC would not permit the two to act as both company officials and franchisers [sic].
  17. ↑ "Shoney's Changes Corporate Name". The Charleston Daily Mail. October 30, 1976. p. 5B. Retrieved December 17, 2017 – via Newspapers.com. Top management ... believes Shoney's is much more than the southern reincarnation of the Frisch's Big Boy.... 'Our company is quite diversified within the food service business ... We believe the new name is less restrictive and more appropriate to the broader operations we have developed'
  18. ↑ Moore, Kara (Spring 2012). "All-American Tradition". WV Living Magazine. Archived from the original on October 18, 2015.
  19. ↑ Statement of assumed name (PDF), Commonwealthh of Kentucky, Office of Secretary of State, February 27, 1978, retrieved April 20, 2018, Shoney's ... intends to conduct and transact business in the assumed name of Danner Town and Country
  20. ↑ "Enjoy two delicious Danners dinners for only $7.49 [advertisement]". The Courier-Journal (Indiana ed.). Louisville, Kentucky. January 27, 1982. p. C-15. Retrieved April 20, 2018 – via Newspapers.com. (Subscription required (help)).
  21. ↑ "12th anniversary specials [advertisement]". The Courier-Journal (Metro ed.). Louisville, Kentucky. March 20, 1983. p. I–5. Retrieved April 25, 2018 – via Newspapers.com. (Subscription required (help)).
  22. ↑ "Shoney's new chicken supreme dinner $4.99 [advertisement]". Tallahassee Democrat. August 28, 1983. p. 9C. Retrieved April 22, 2018 – via Newspapers.com. (Subscription required (help)). 2014 Apalachee Pkwy., 2833 N. Monroe St.
  23. 1 2 Silverstein, Stuart (May 20, 1984). "Shoney's going after new markets". The Atlanta Constitution. pp. 1–K, 6–K, 7–K. Retrieved April 22, 2018 – via Newspapers.com. (Subscription required (help)). part 2, part 3
  24. ↑ Frisch's Restaurant, Inc. v. Elby's Big Boy, 661 F.Supp 971, 1265-6 (S.D. Ohio 1987).
  25. 1 2 "Frisch's denied injunction request". The Cincinnati Enquirer. March 10, 1984. p. C-10. Retrieved April 23, 2018 – via Newspapers.com. (Subscription required (help)).
  26. ↑ Frisch's Restaurant, Inc. v. Shoney's Inc., 759 F.2d 1261 (6th Cir. 1985) ("In the case at bar, the district court concluded that the "Big Boy" mark was neither an indicator of origin nor distinctive, but was "a relatively weak mark".... By emphasizing "Shoney's Big Boy Restaurants", as it did in its advertising, Shoney's has identified itself as the source of the services.").
  27. ↑ "Shoney's Big Boy combination [advertisement]". The Bee. Danville, Virginia. February 6, 1974. p. 12–B. Retrieved April 24, 2018 – via Newspapers.com. (Subscription required (help)).
  28. ↑ "Shoney's Big Boy special — Tuesday [advertisement]". The Charleston Daily Mail. February 12, 1968. p. 17. Retrieved April 24, 2018 – via Newspapers.com. (Subscription required (help)).
  29. 1 2 3 ...
    • Zuckerman, David (May 7, 1984). "Shoney's secedes from Big Boy system". Nation's Restaurant News. Penton Media. Archived from the original on July 8, 2012. Retrieved April 15, 2014.
    • "Graph of Shoney's net income since 1974; At Shoney's, details count". The New York Times. June 8, 1984. ISSN 0362-4331. Retrieved November 29, 2016. Shoney's started expanding outside of its franchise territory in 1982 by opening coffee shops without Big Boy markings in neighboring states. A fellow Big Boy franchisee sued to stop the move, but after Shoney's won a favorable court ruling in March, Marriott quickly agreed to scrap the franchise agreement for $13 million in cash.
  30. ↑ Statement of assumed name (PDF), Commonwealthh of Kentucky, Office of Secretary of State, October 14, 1981, retrieved April 20, 2018, Shoney's ... intends to conduct and transact business in the assumed name of Shoney's Restaurant
  31. ↑ "Louisville if you like Danner's you already like Shoney's [advertisement]". The Courier-Journal. Louisville, Kentucky. March 5, 1986. p. D5. Retrieved April 20, 2018 – via Newspapers.com. (Subscription required (help)).
  32. ↑ Boyer, Mike (November 20, 1985). "Shoney's squaring off with Frisch's in tristate". The Cincinnati Enquirer. p. D1. Retrieved April 21, 2018 – via Newspapers.com. (Subscription required (help)).
  33. 1 2 Haynes v. Shoney's, 803 F. Supp. 393 (N.D. Fla. March 12, 1992).
  34. 1 2 3 Haynes v. Shoney's, WL 19915 (N.D. Fla. January 25, 1993).
  35. ↑ Crawford, J. Craig (April 5, 1989). "Shoney's slapped with job bias suit". The Orlando Sentinel. pp. A-1, A-4. Retrieved April 15, 2018 – via Newspapers.com. (Subscription required (help)).
  36. ↑ Altman, Burt. "Haynes et al. v. Shoney's, Inc. Papers, 1959-1997". Florida State University Special Collections & Archives. Retrieved April 15, 2018.
  37. 1 2 3 4 Coates, Rodney D. (2004). Race and Ethnicity: Across Time, Space, and Discipline. BRILL. p. 257. ISBN 9004139915 – via Google Books.
  38. ↑ Watkins, Steve (2013). The Black O: Racism and Redemption in an American Corporate Empire. University of Georgia Press. p. 216. ISBN 9780820344034 – via Google Books.
  39. ↑ Kaczor, Bill (January 26, 1993). "Judge approves racial discrimination settlement". Tallahassee Democrat. p. 7B. Retrieved April 15, 2018 – via Newspapers.com. (Subscription required (help)).
  40. ↑ Duke, Lynne (February 5, 1993). "Shoney's bias settlement sends $105 million signal". Washington Post. ISSN 0190-8286. Retrieved April 15, 2018.
  41. ↑ Bagli, Charles V. (July 20, 1997). "Siege at the Neighborhood Salad Bar". The New York Times. ISSN 0362-4331. Retrieved April 15, 2018.
  42. ↑ "Notice of proposed class action settlement and consent decree [legal advertisement]". The Times. Munster, Indiana. November 25, 1992. p. C5. Retrieved April 15, 2018 – via Newspapers.com. (Subscription required (help)).
  43. ↑ Baxter, Emme Nelson (April 5, 1989). "Suit charges Shoney's with 'hostile, racist' policy towards workers". The Tennessean. p. 6-B. Retrieved April 15, 2018 – via Newspapers.com. (Subscription required (help)).
  44. ↑ Martin, Tim (July 1, 1993). "Shoney's sparks Danner's anger". The Tennessean. pp. 1-A, 2-A. Retrieved April 15, 2018 – via Newspapers.com. (Subscription required (help)).
  45. ↑ "Lone Star Funds buys Shoney's restaurant chain". Business News. The New York Times. January 25, 2002. p. C–1. ISSN 0362-4331. Retrieved July 15, 2016.
  46. ↑ "Royal Hospitality Acquires Shoney's" (Press release). Business Wire. January 2, 2007. Retrieved April 28, 2018.
  47. ↑ Williams III, G. Chambers (June 11, 2014). "Coming soon to a Shoney's near you – beer and wine". The Tennessean. Nashville, Tennessee. Archived from the original on April 28, 2018. Retrieved April 28, 2018.
  48. ↑ Freed, Jason (January 4, 2011). "Boomerang to relaunch Shoney's Inns". Hotel News Now. Retrieved October 4, 2016.
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