INSIGHTS/

The Demise of 3 Iconic Fast-Food Chains

Fallen Brands The nation’s love affair with fast food has lasted nearly 70 years, since Ray Kroc bought McDonald’s. Not surprisingly, the quick- service landscape is littered with fallen brands. Their stories bear some lessons for restaurant operators today. Here’s a look at the fatal flaws that took down three of the industry’s most storied […]

June 10, 2024
The Demise of 3 Iconic Fast- Food Chains

Fallen Brands

The nation’s love affair with fast food has lasted nearly 70 years, since Ray Kroc bought McDonald’s. Not surprisingly, the quick- service landscape is littered with fallen brands. Their stories bear some lessons for restaurant operators today. Here’s a look at the fatal flaws that took down three of the industry’s most storied brands.

Brand abandonment. Founded in 1957, Burger Chef patented flame-broiling technology and popularized the quarter-pound Super Shef and double-burger Big Shef meals. In 1971, Burger Chef came within 100 restaurants of overtaking McDonald’s as the nation’s largest chain. The No. 2 chain also dared to lock horns in court with McDonald’s, claiming that its rival stole the idea for its 1979 launch of the Happy Meal from Burger Chef’s 1973 invention, the Funmeal. (Burger Chef lost.)

Burger Chef was purchased in 1968 by General Foods, which took heavy losses on a failed Australian expansion and eventually sold the brand to a Canadian company in 1982. The new owner converted many locations to Hardee’s restaurants or other brands. By 1996, Burger Chef had vanished, a victim of poor parent-company support.

Weak financing. Pizza Haven was founded in Seattle in 1958 and blazed new trails in pizza delivery, offering the first “dial-a-pizza” service. Roving drivers carried stacks of pizzas in warming ovens and made home deliveries in response to calls from restaurant employees. The chain expanded internationally into Europe and the Middle East, peaking at 42 locations.

But the rise of better-financed rivals including Domino’s and Pizza Hut, coupled with leasing problems at some mall locations, undermined the chain, and a missed tax payment forced the company into bankruptcy in 1998. Although Pizza Haven retained the loyalty of fans in the Pacific Northwest, its only remaining restaurant, located in Seattle, finally closed in 2012.

Weak Ownership. Lum’s restaurants became famous in part for a unique menu item — hot dogs steamed in beer. Founded in 1957 in Miami Beach, the chain expanded to more than 400 locations in the U.S. and Europe. Lum’s was purchased in 1971 by a group led by John Y. Brown, chairman of Kentucky Fried Chicken. But as restaurant competition increased and Brown’s costly efforts to launch a hit menu item called the Ollieburger flopped, Lum’s steadily shrank.

The chain’s 273 remaining restaurants were sold eight years later to a Swiss company, Wienerwald Holdings A.G. Wienerwald filed bankruptcy in 1982 and dragged Lum’s along with it. Although a Lum’s restaurant had a cameo appearance in Martin Scorcese’s 2019 film “The Irishman,” it was too late to save the chain. The last Lum’s restaurant, in Bellevue, Neb., closed in 2017.

West Coast Franchise Law

If you have any questions about franchising, please contact the experienced franchise and business law attorneys at West Coast Franchise Law today at (206) 903-0401 to discuss your situation. Nate Riordan is a 2023 Franchise and Bankruptcy Super Lawyer with over 20 years expertise helping clients achieve their business goals.