cc >> Jeanan Yasiri: This course
is offered by the University of Wisconsin
School of Human Ecology. I'm Jeanan Yasiri.
As we begin today, I'd like to extend thanks to our partners
for supporting this course, the UW Office of Corporate
Relations, the UW College of Engineering for their technical
support, and the Ewing Marion Kauffman Foundation for
financial support. They advance academic education
in entrepreneurship. Additionally, we'd like to thank
our media partners, Wisconsin Public Television and their
University Place crew for taping today's lecture.
I'm very pleased to introduce our guest today, Craig Culver,
co-founder and CEO of Culver's. Craig, along with his wife Lea,
and his parents George and Ruth took a vision and created a
niche market restaurant, which features burgers and frozen
custard. He's worn several hats
throughout his career, always focused on his guests, team
members, franchisees, and his family.
Craig has deep roots in the Sauk Prairie community, where he grew
up and graduated from high school.
It all started with a root beer stand that Craig ran in Sauk,
and provided the foundation from which the Culver's concept grew.
The Culver family has been in the restaurant business for
almost 50 years. And after graduating from the
University of Wisconsin-Oshkosh, Craig went to work for
McDonald's for four years, and he gained a lot of insight in
that role that enabled him to make Culver's so successful.
In 1984, Craig and his family opened the first Culver's in
Sauk City, Wisconsin. In 1987, the franchising arm,
Culver Franchising System, Inc. was established.
And today, there are more than 420 Culver's restaurants in 18
states. As we discuss the path that
entrepreneurs travel in this course, it seems most
appropriate to welcome Craig Culver to our course.
Please join me in welcoming him. >> Craig Culver: Thank you,
Jeanan. ( applause )
Thank you. Good afternoon, everybody.
Okay, let's participate a little bit here.
Help me out. It's good to be here.
I never ever thought I would be speaking in an engineering hall.
I got a degree in biology, yes, but I'm a burger flipper.
Come on, Engineering Hall?! Really?!
Pretty special for me. I'm going to share today my
story with you, and then we're going to do a little Q&A.
If you have questions, you know, I'll stay as long as you
have questions. But before I start the story
I'm going to talk a little bit about the last few years
at Culver's. It's been a little tough.
It's been a little tough on business.
It's been tough in our industry. It's been a little tough
on Culver's, as well. Back in 2008, we had a great
year at Culver's. When we talk about sales at
Culver's, we always compare ourselves to the year prior.
We call that comparative sales, or comp sales.
We had a wonderful year. We headed into 2009, hearing
all the media talk about how bad things are and
how bad things are going to be. We had our convention in 2009
in February. And we went to convention with
all of our franchisees, and our team members,
and we were a little arrogant, as a matter of fact,
about heading into 2009, because what we said at that convention
was, you know, we're fine. We're okay.
This whole thing that the media is talking about, this recession
and stuff, it's not going to touch us at all.
We're just going to say we're not going to participate.
Well, we got through February, March and April, and things
were going along okay. And then it was like a wall
went up. We ran right into it.
We hit the recession. We did.
2009 was the worst comparative sales year
Culver's has ever had. I have never had a negative year
of comp sales at Culver's in my 27 years with Culver's.
Well, in 2009, we were down 3%. Doesn't sound like a lot,
but I'll tell you what, when you have never been down
you start to doubt yourself. You know, business people
do that. A lot of people do that when
things are not going quite as well as they want,
they start to doubt themselves. Well, I started to doubt myself.
I started to doubt our business. What's wrong, what are we going
to do about it? Well, we put our heads down,
and we just started competing and competing and competing.
2010, we got to 2010, we had a 1% sales increase in 2010.
We didn't make up our decrease from 2009.
Now here we are in 2011, currently we have a 2%
comp sales increase, still not enough.
My expectation for this year is a 5% to 6% comp sales increase.
For whatever reason I'm optimistic, I am.
I'm seeing some loosening up in the business world
with the banks a little bit. But at Culver's, I'm optimistic
for this year. So, as an entrepreneur you know,
you have your ups and downs. When you have your downs,
you've got to figure out how to get back up.
Well, that's kind of the whole Culver's story, as well.
I got started in the restaurant business in 1961.
I was 11 years old at the time. I'm really not
the real entrepreneur of the Culver family.
That would be my father. I look at entrepreneur
as maybe a little different than academics look at it.
I look at entrepreneurialism as this guy or this woman
that's really willing to take some risk.
Really willing to take a chance and get into business, and maybe
not know anything about the business, but still get into it.
That's the definition of my father, and that's what
I believe is the definition of entrepreneurialism.
My father in 1961 came from a completely different background.
He knew nothing about the restaurant business
when we got into it. Yes, it was just a little
5- and 10-cent root beer stand, an A&W it was, with 15-cent
hot dogs and hamburgers. But he and my mother
knew nothing about it, and had no training to get into it.
I, on the other hand, grew up in the restaurant business,
so I have at least had training. Yes, I consider myself
an entrepreneur, but I love the story about my father coming
from, you know, a totally different industry and getting
into the restaurant business. He had so much confidence
in himself. My dad was an entrepreneur.
My mother, on the other hand, not an entrepreneur.
My mom-- We lost mom two years ago.
My dad will be 89 this year. He's still an entrepreneur
yet today. But mom, not an entrepreneur.
She grew up with a family of 13. She was one of 13.
On a farm near Oshkosh, Wisconsin, actually in
Pickett, Wisconsin, if anybody knows where that is.
Not one of the brothers or sisters of hers
ever got into business. It just wasn't in their DNA.
Well, she matched up with a guy that wanted to get into
business, being my father. The two of them together
just balanced each other. Over the years, they were
just a great partnership. They truly were.
But I do joke about my mom. She probably had the first
dollar she ever made, and my dad was always willing
and ready to spend it to take another risk,
another entrepreneurial risk. They bought that little A&W,
it was a shack of a place, outside bathrooms,
gravel parking lot, car hop service.
You don't see that much anymore. They bought it, and the kids--
I have a brother and sister-- We were all involved
with helping in the business, even as a youngster.
And in 1968, I graduated from high school from
Sauk Prairie High School, my dad decided to sell
the little A&W drive in. I went off to school
at UW-Oshkosh. I got a degree in biology,
of all things. Not business, not hospitality.
Biology. My dad couldn't sit still
very long after he sold the A&W, being the entrepreneur
that he is. He bought a resort about
12 miles north of Sauk City at Devil's Lake State Park.
How many have been to Devil's Lake State Park?
Probably one of the finest state parks in the Midwest.
He bought this resort called The Farm Kitchen.
Of course, we attached our last name to it,
Culver's Farm Kitchen Resort, like we did with all the
businesses we have had. We've always put our last name
on it, same with the A&W. He bought this resort, 40 acres
right at the north entrance of Devil's Lake State Park,
24 cottages, swimming pool, amusement barn,
two big dining rooms, a lodge. What's he thinking?
He knows nothing about running this business.
He came from the hot dog stand. And now he's willing
to take on this? Of course, as children,
we just follow is all we do. We just assume that they know
what they are doing. Looking back at my parents,
you know, I didn't get it back then as a person,
as a child working along with a family, but later on
in my business life, as I started my career
and grew in my career, I look back at my parents and
I marvel at how they surrounded themselves with wonderful
people. They always seemed to do that.
They always seemed to form a great team around them.
They just had a knack for that. They surrounded themselves
with talented people. They surrounded themselves
with people that worked hard. They surrounded themselves
with people that had fun. But they also surrounded
themselves with people that had great hearts.
They always did that. They always had this great team
around them. Well, the Farm Kitchen
was a wonderful place. It was never--
Back then, it was never my intent to stay
in the restaurant business. Watching my parents
over the years work from early in the morning
till late at night, seven days a week,
I said I don't want to do this. I don't want to be
my mom and dad. And so, when I finally graduated
from college at UW-Oshkosh, I came home, and my dad
sat me down, and he was having health problems at the time.
And he said son, will you take over the Farm Kitchen and be
the general manager of it? I looked my dad right back
in the eye and I said dad, no. I don't want to be you and mom.
I don't want to work from early in the morning till late
at night, seven days a week. And he said okay.
He didn't get mad at me or anything like that.
He just said okay. Well, he went off
and sold the Farm Kitchen. Well, I had no job,
just graduated with my degree in biology.
Not too many people were interested in this guy
with a degree in biology. And like I said,
I needed a job pretty bad. A couple offers did come
my way in the way of sales, but for whatever reason,
it didn't seem right to me. My sister suggested to me,
she was living in Madison at the time, she suggested that I
talk to her next door neighbor. That happened to be Tom Showers.
Tom Showers was an area supervisor for McDonald's
here in town. Back then, this is 1973,
back then, all the McDonald's in town were all corporately owned,
McCopco owned them. Today they are all franchise.
When my sister suggested that to me, I said Georgia,
that's her name, Georgia, first of all,
I don't want to stay in the restaurant business,
and second of all, I sure don't want to work for McDonald's.
She said Craig, you need a job. You better talk somebody.
And she was right, I needed a job.
So guess what? I go talk to Mr. Showers.
He interviews me once. They interview me a second time.
They interview me a third time. This is just for a position
at McDonald's. They interview me a fourth time
before they finally said Culver, you're hired.
I go to work for McDonald's as a manager trainee,
much like many of our young managers do at Culver's today.
I started at $9,400 a year. I thought I was on top of the
world, making $9,400 a year. As I said, I started as
a trainee, became a general manager with them.
Within a year, I ran several restaurants for them, and
I learned a lot from the McDonald's people, I did.
I learned a lot from my parents over the years, as well.
The things I learned from McDonald's were the systems
approach to our business, our industry.
Working with your family in family-owned businesses,
especially back then, and true today as well, you know,
we didn't have profit and loss statements.
We didn't have cash flow statements.
We didn't have waste control, inventory control,
labor controls. I didn't carry a clipboard
around working with my family at the Farm Kitchen or the A&W.
When I worked for McDonald's, guess what I was carrying
around with me? A clipboard, because all
those tools were so necessary in running their business.
And they are necessary. They're necessary
in running any business. That is one of the things
I learned from the McDonald's people.
I like to say I kind of got my business degree from them.
My family, I learned many lessons from them as well.
My dad, I consider my dad a foodie.
My dad is a food guy, a recipe guy.
But one principle my dad taught me a long time ago was
Craig, you never cheapen the product.
You never monkey with the quality.
If you do anything, you enhance the quality.
And if you have to, you charge more.
Right now, we're in the commodity market where things
are going sky high, the beef, the dairy, all the stuff is,
and corn. Everything is going higher
and higher in price. And right now, it would be
a pretty easy time to tweak some products at Culver's,
and cheapen them. And you know what?
You probably wouldn't even recognize it, or you wouldn't
even know that we tweaked it or cheapened it a little bit.
But as I've said so many times, if I do it once--
If I do it once, and the next time commodity prices go up,
I'll do it again, and then I'll probably do it
again the next time. All of a sudden, that great
frozen custard that we started with back in 1984,
isn't the same product. Well, I'll tell you what, that
principle that dad taught me-- My parents didn't go to college,
or anything like that. My dad was lucky
to get through high school, but he's so smart, so savvy.
He has great common sense and great business sense.
That principle that he taught me back then sticks with me.
And I guard the gate at Culver's concerning all of our products.
We will not cheapen our products just to get to
a lower price point. We won't do that.
My mom, what I learned from my mom, great parent,
loving parent. But she was also a great example
to me and my brother and sister. Mom had this knack about when
somebody walked into our place of business,
whether it was the Farm Kitchen, or earlier the A&W,
later the A&W, as well, or later yet, Culver's,
she had this knack, this hospitality knack
of like putting her arms around the people,
the guests when they walked into our place of business.
She had a great heart. She did.
We have an award at Culver's called the Ruth.
My mom was Ruth Culver. That award at Culver's
is coveted. Everybody wants to receive
that award. Well, mom, you know, she was
wonderful in the business, even though they wasn't
an entrepreneur, she was a great business person.
She truly was. When I look at running a
business, you know, hospitality, hospitality and customer service
are crucial. By the way, they're not
the same. Customer service, in my eyes,
is a quantifiable thing. You can attach numbers to it.
In our case, speed of service is a customer service thing.
We can attach seconds and minutes to it.
Cleanliness of a restaurant is a customer service thing.
We can attach degrees of cleanliness.
But hospitality is something that I believe
comes right from the heart. It's something very special.
I don't believe you can fake hospitality.
I think all of you know when somebody says thank you,
please to you, you know if they mean it or not,
don't you? You know if it's coming
from the heart or not. Well, I'll tell you what,
those two things, great customer service and
great hospitality, I believe if you've got 'em, that is
such a competitive edge. Well, that's what I try
and have at Culver's. That's what we try and teach
at Culver's, day in and day out. It starts with great people.
You have to have great people to begin with.
If you don't have them, it may not happen.
Okay, so I learned some business things, the systems approach
to the business from the McDonald's people.
I learned, I thought, these lessons from my parents over
the years working with them. I've been with McDonald's now
four years, and something started to grow within me.
It was an entrepreneurial spirit was starting to grow within me,
just like my dad. I'm becoming my dad.
I didn't want to become him, but now I'm becoming my father.
Well, I wanted my own business, I did.
However, I didn't have any money.
I'm married now to my wife Lea at this point, at this time
in my life. I didn't have any money,
but I knew what I wanted to do. I wanted to move from Madison
to Sauk City and Prairie du Sac, and buy the A&W back
that my family once owned. That's what I wanted to do.
I wanted to go back home, I really did.
I wanted to move back, grow my family there, be part of the
community, part of the schools, and live happily ever after.
Well, like I said, I didn't have any money.
Bankers aren't too interested in talking.
They'll talk to you, but they're sure not going
to borrow you any money if you don't have any money.
You've got to pay them back, you know.
So what am I going to do? Entrepreneurs, if they want
to do something, they're going to find a way
to get it done. Much like my father,
somehow or another, I was going to get this done.
Well, I knew of a source of some money.
I knew of a person that was pretty entrepreneurial
that I thought would help me. Yeah, good old dad.
I gave my dad a call one day. They were living in Madison
at the time. I gave dad a call and said dad,
can I come over and speak to you tonight?
My dad, like I said, knows me pretty well, a pretty savvy guy,
he knew why I wanted to come over that night.
I came over to their house, mom's on the couch reading the
newspaper and watching TV. And dad is at the kitchen table
playing his favorite game of cards, solitaire.
I just talked to him before I came over to Madison today,
and I should have asked him, but I know my dad was sitting
at the kitchen table with a deck of cards playing solitaire.
He always does that when he's at home.
Anyway, I marched right into their place, sat down with dad
at the kitchen table, and I said dad, let's go back to Sauk City
and buy that A&W back that we once owned.
The little A&W that we originally started with
in 1961 had burned down some years ago, and the new prototype
was built in its place. The new prototype has an outside
ordering canopy with car hop service, much like Sonic does
today where you push a button and somebody answers, and the
car hop takes the food out to them.
Well, it took my dad about five seconds, being
the entrepreneur that he is, about five seconds to say
yes, let's do it, son. My mother, not the entrepreneur
was crying holy hell. ( laughter )
She was not real pleased with our decision.
Well, dad and I out-voted her 2-1, and dad and I make a little
trek from Madison to Sauk City. We end up buying the A&W back,
now for the second time, from the same person we had
sold it to some years prior. So here we are
in business again. We're operating as a family.
My mom and dad, and my wife Lea, are my partners in the business.
Lea and I predominantly run the business, but my parents,
they were there, too. They certainly were there, too.
We run this little place in Sauk City.
We moved the family. Actually, Lea and I have our
first child while we are there. We run it for six years.
And we get a phone call. We get a phone call from a
couple of gentleman that wanted to buy the business from us.
My dad and I, we're entrepreneurs, we'll listen.
We sat down with these people and we ended up selling
the business to these two gentlemen from Madison.
It was my job to stay on for a couple months and
train them to run the business. And what I found out--
What I found out is how important passion is.
How important love is of what you are doing.
Guys and gals, don't do something just for money.
Don't do that. I think you are all smart enough
to know that. Do something because you have
a true passion for it, because you have love of it.
Working with these two gentlemen, I can train people
to do this, and this, and this, in the restaurant.
But I can't train you to have a great heart.
I can't train you to love what you are doing.
I can't train you to have passion for your team members
and your guests in the business. I can't train that.
That's got to come with the deal.
I stayed there for two months. I had to get on with my life,
and not feeling real good about what was happening there.
I start looking for another business.
Dad and I, we teamed up again and bought a little restaurant,
a little supper club in Baraboo, Wisconsin, back where the
Farm Kitchen was, a little supper club on Highway 33
and Highway 12 in Baraboo, Wisconsin.
It's called the Ritz Corners, that corner is, because
the Ritz Supper Club was there. That's what we purchased.
Of course, we put our name up there again on the sign,
it's now Culver's Ritz. If you're thinking Ritz Carlton,
it wasn't that by any means! We take the little business and
operate it as a family again. We operate it for two years.
And by the way, that corner today, I'll tell you how good
a piece of property is, I just wish I had a Culver's
on that corner today, because that corner is occupied
by Walgreens today. They get the best corners
in the business, they do, and they pay premium price for them.
Unfortunately, I didn't sell them that lot.
I wish I would have. But we're there for two years.
By the way, for those of you not from Wisconsin, a typical
Wisconsin supper club, those of you from Wisconsin,
Friday night what? >> Fish fry.
>> Absolutely. Saturday night what?
Prime rib, very good. You've got to throw some steak
and lobster in there as well. Of course, brandy Old Fashioned
sweet for those of you that even know what that is anymore.
Brandy Manhattans and Martinis up, and things like that.
We had this little place for two years, and we get a phone call.
When we sold the A&W, we sold it on a land contract.
That's where we're the banker in the deal.
They pay so much down, and then they pay off the mortgage
to us over a period of years, just like you would a bank.
Well, things weren't going so good down there.
You know, I heard the rumblings. I heard the rumors.
I knew what was happening. But we get a phone call
from the two gentlemen one day, and they say,
please take this thing back. I couldn't wait.
I wanted to hear that phone call, I really did.
I couldn't wait to get that phone call, because we had
an idea what we would do with that place if we got it back.
We ended up getting it back. We were fortunate enough
to sell the Ritz, the little restaurant to the same people
we sold the Farm Kitchen to some years prior.
This story is full of circles, it really is.
We get the place back, we sell the Ritz and we decide
to defranchise the restaurant. Get rid of the A&W name.
We are going to put our own name up there.
Culver's Frozen Custard and Butter Burgers.
Where did frozen custard come from?
Any time I or my family got near Milwaukee, Wisconsin--
Who's from Milwaukee here? The home of frozen custard.
Copps, Leons, Gilles. You know the places.
I love those places. I do.
Any time I got near Milwaukee, I had to stop at one of those
places and get a custard cone. This was the best ice cream
in the world. It was so good.
When we got the little place back, that was going
to become part of the signature, one of the signature items
at Culver's. The butter burger, where
the heck did that come from? Again, it came from Milwaukee.
There was a little custard place that's been gone
for many, many years. This, by the way, came over
a conversation at the Ritz with a friend of mine with
a glass of beer in our hands. He was from Milwaukee, and he
was sharing with me this story that when he was a kid,
there was a place called the Milky Way
in Milwaukee, Wisconsin, an old custard drive-in.
They served the butter burger. When he told me that story,
it just stuck. I said if I ever get the chance,
I'm going to use that. Today, if we opened Culver's
today, would I call it a butter burger?
I am not so sure of that. But it's iconic at this point
in time, and we're certainly not going to change the name.
So, those two items were going to be my signature items.
We got the A&W back, we got rid of the oranges and browns,
their colors. The roof was a steeple roof
on that building. We cut that off, brought it
up to a general peak. Painted the roof blue.
July 18, 1984, almost 27 years ago, we opened as Culver's
Frozen Custard and Butter Burgers.
You know what? The place looked pretty slick,
it did. We landscaped it nicely.
We did not spend a lot of money on it, but it looked slick.
I've often said, it looked like a franchise restaurant,
it looked so slick. That first year in business
was not a glorious year. For those of you that
have ever heard the story, it was not good at all.
Have you ever thrown a party and nobody came?
That's what opening Culver's was like, it was.
It was that sad. We lived in Baraboo at the time.
My dad and I would team up early in the morning, drive down
the 15-minute drive from Baraboo to Sauk City.
We'd get the restaurant ready early in the morning, and
then our wives, my mom and Lea, would come down a little later.
And that drive with my dad, that 15-minute drive
from Baraboo to Sauk seemed like three hours to me.
Because business was so awful. Nobody knew what Culver's was.
Nobody knew what frozen custard was.
Nobody knew what a butter burger was.
And nobody was coming, except a few friends maybe,
and some family. That drive, as I said, was
the longest drive in my life, because my dad would remind me
in very, very colorful language how it was my blankety-blank
silly idea to do this thing called Culver's.
We lost a lot of money during first year in business,
a lot of money. To the point, we had never been
unsuccessful in a business prior to that, never.
Never even dreamt it could be unsuccessful.
That's the mind set of an entrepreneur.
They don't think they're going to be unsuccessful.
It just isn't going to happen. They don't see all these
hurdles, all these pit falls that can happen to them.
I sure didn't see that coming, I didn't.
During that first year of business, during that first year
of business, I got down. I mean, depressingly down.
Probably close to the point of sickness, because I had
never experienced that before. It is no fun, when you don't
have money to pay the bills, when you don't have any money
to pay yourself. It's a terrible, terrible
feeling. Well, I was very, very fortunate
to have some people around me, although my dad,
he gave me hell a lot, but he was still was there
to support me. He still was there for me,
same with my mom, and same with my wife.
They were there for me. They said somehow or another,
we are going to get through this year.
We are going to make it. I'll tell you what,
we persevered as a family. We got through it.
Earlier, I said I didn't want to be in the restaurant business,
because I didn't want to work early in the morning till late
at night seven days a week. Guess what I was doing early in
the morning to late at night, seven days a week,
because I had to. You do whatever you can.
I call that competition. I call that competing.
You do whatever it takes to get to the end point.
Otherwise, it was failure. Nobody wants to fail.
I sure didn't want to fail. Somehow or another,
we got through that year, and we started to grow the business.
The second year at Culver's, we broke even.
The third year at Culver's. we started to make money
at the business. Now we're thinking, you know,
all these wonderful thoughts, what about expanding?
What about franchising? We did the expansion thing.
We opened a second restaurant in Reedsburg, Wisconsin.
By the way, I took a partner in on that restaurant.
That partnership didn't work. Be careful who you choose
as your partners, by the way. It's very important process,
especially when you're in franchising.
That partnership didn't work. My dad and I ended up buying
that partner out after one year. So, more mistakes on our part,
my part. But we bought him out.
We're operating successfully now in Reedsburg.
We open a third little unit at Tommy Bartlett's Water Ski Show
in Wisconsin Dells, a summer unit.
Now we're operating three units. Here, I started to learn
something about myself. I was one of those control
freak, I'm still somewhat of a control freak, but you know,
I was the decision maker. I was the general manager
of all the restaurants. And if you're going to grow,
you have to learn to empower some other people.
You've got to allow some other people to make some decisions,
and you have to allow some other people to make some mistakes
along the way, as well. I look at making mistakes,
if you have the right people in place, they're going to learn
from those mistakes. They're going to correct
those mistakes, and they're going to grow because of it.
I think that's terribly important.
I found out with my life. I can't be at all three places
at the same time. That's impossible.
I had to empower some other people.
I had to let go, somewhat. And I finally did.
That was a real turning point for me.
That was a turning point that really allowed us
to start to grow the business. Well now, franchising
is on our mind. More mistakes on my part.
I said several times, surround yourself with the right people.
My very first franchising experience in a community
not far from Sauk City, I didn't surround myself
with the right people. I didn't do my due diligence.
Maybe it was my fault, I'm certain the franchisee,
it was maybe his fault too. It was both of our faults.
One year after opening our very first franchise restaurant,
I get a letter in the mail from his attorney saying
my client doesn't want to be part of this franchise thing
with Culver's. He wants out.
He doesn't want anything to do with you.
He can do this on his own. My first franchising experience.
I made two mistakes. One was I didn't surround myself
with the right person, didn't do my due diligence there.
The second mistake we did, was we didn't charge a franchise fee
for the first one. My dad and I were so giddy
about our first franchising experience,
we said let's give it away. Stupid idea.
Something for nothing has no value.
There's no perceived value for something you didn't pay for.
So we had a couple things going wrong with us.
As I said, we got the letter. We hired an attorney as well.
We negotiate out of the deal. And we walk away, of course,
we force them to, you know, change the colors, and all kinds
of things like that. But after that experience my
first franchising experience, I said I'm never going to do
this again. We'll just operate our
own businesses and, you know, hopefully that will work.
Well, time heals wounds. And I was wounded
in that experience. But time does heal wounds.
It wasn't long, and somebody else approached us
about franchising a restaurant. That was in Baraboo, Wisconsin.
In 1990, we opened what I call our first successful
franchise restaurant in Baraboo, Wisconsin.
Guess what? I charged this person
a franchise fee. By the way, at that time
it was $13,500 for a franchise. Today, it's $55,000
for a franchise. I also got to know who
my partner was going to be. I learned.
I did my due diligence. I did the right things there.
Of course, today still that is our first successful
franchise restaurant. Today here we are on Monday,
we just opened a restaurant, our eighth restaurant
in the Phoenix market in Glendale, Arizona.
That's 431. We're in 19 states,
actually, Jeanan. I would never have guessed.
I mean, when I opened the very first Culver's,
that was my dream. My dream was to move back
to my hometown of Sauk City and Prairie du Sac, open this
business, have my family there, as I said earlier,
and live happily ever after. That was my dream.
Somehow along the way, we've been very blessed, we have.
We've been very blessed, because of the great people around us.
From my team members in each one of our restaurants,
to my team at Culver franchising, to all of
my franchise partners as well. That's how you grow
a great business. I don't care if you're selling
computers, or burgers, or what you're selling,
the magic to a great business is surrounding yourself
with great people. And people that, you know,
care about each other, people that work hard,
people that are talented, but as I said earlier,
people that have great hearts. I think that great heart thing
is really, really, really important.
And that's what we try and do at Culver's each, you know,
with each of our team members. That's what creates a great
culture about our company. That is something that
you work at day in and day out. Never trust that your culture
won't continue to grow. That's something as a leader,
you know, that's a responsibility of mine,
that's a responsibility of everyone, of every leader,
to help grow their company, grow their culture.
That's kind of the Culver's story, ladies and gentlemen.
You know, as I like to end it, you guys will be going out
in the work world, probably some of you,
maybe next year, some of you, maybe in a few years.
One of the things that I've always struggled with
in my work life, in my career, is balancing my life.
I've not been very good at it. I like to say I've been married
to two gals in my life, one is my wife Lea, 35 years,
and the other is Culver's Frozen Custard.
Guess who got most of my attention during
the last 27 years of Culver's and the years prior
with our other businesses? It wasn't my wife Lea.
Culver's got most of my attention.
I've got three wonderful daughters.
Brittany is 29, Mandy is 25, and Chelsea is about to turn 20.
Three great girls. But you know what?
I didn't get to all their events in school and stuff.
I didn't get to the choir things, the show choir things,
the soccer, the volleyball. I didn't make all those events.
I'm a little embarrassed actually, to even tell you that.
But that's, I guess, just the way it was.
I love so much of what I do, I really do.
I love being around the people of our organization,
but I love my family as well. What I'm telling you is,
you know, learn to balance your life.
I'm not saying don't go out and work hard.
I want you to go out and work hard, but it's not
all about money. Money will come.
It will. But do something, as I said
a little bit earlier, do something because you enjoy it.
Do something because it makes you happy, and it makes
other people happy, as well. Be passionate about what you
choose in life, and the people that you surround yourself with.
Thank you, everybody. ( applause )
All right. >> Craig, the students know
that I pass off the mic to those folks who put their hands up
and have questions for you. So I can see we have one.
Go ahead and introduce yourself. >> Hi, my name is Alyssa.
That was wonderful. You had a great story.
Thank you. >> You're welcome.
>> This is my roommate from Minnesota.
And she's been to Culver's 1010 times and brags about it.
>> Hey, just stop there. How many people
have been to Culver's? I like that.
What if we were on State Street? Would that work?
>> Yeah! ( laughter )
>> Okay, I'm sorry. >> I'm not from the Midwest,
and I was wondering if you have looked into
opening to the coasts. >> Are you California?
East coast or west coast? >> East coast.
>> As far east as we are-- And that's a great question.
As far east as we are right now is in Columbus, Ohio
is as far east as we are. We're disciplined on our growth.
What we want to do as we grow is take our brand along with us
to take risk out of it. Another mistake that I made
back when, is I jumped over a whole bunch of states to go
to Texas about 14 years ago. I shouldn't have done that.
What I try and do is grow concentrically like this, so
we're taking the brand with us. As far as getting to New York
or wherever-- Are you a New Yorker?
Oh, I got lucky. I want to fill in Ohio.
I want to fill in Pennsylvania. And I want to grow there
versus just jumping over states to get there.
So we try and stay very disciplined on that.
I wouldn't mind going to the east coast.
California, on the other hand, is a state I'm not sure
if we'll ever do business in. It has lots of business
to be had, but it's a very difficult state government-wise
to do business in. So I'm not sure.
We're a privately-owned company. We're family-owned.
I was telling somebody earlier, it's my intent to stay that way.
I have no plans on selling to some private equity company,
or merge with another company, or so on and so forth.
Yes, we want to continue to grow and we will grow by about
20 restaurants this year. But that's not
the most important thing to me. What's so important is that
each and every guest that walks into our place of business,
when they leave, they leave happy.
That's our, that's our job. So opening new restaurants
is wonderful. But more important, it's
taking care of what we've got. Never forget about
where you came from. I hope I answered your question.
Thank you. >> Hi, my name is Jillian.
>> Where are you? >> Right here.
As far as I'm concerned, your Oreo Concrete Mixer
is the best thing in the world. >> Thank you.
>> But you said that you are in 19 different states.
I was just and wondering if you have regulations, or how
you try to keep the Midwest values in these other states.
>> For one, it's amazing how many people are from
like Wisconsin. I think close to 70 of our
restaurants outside of Wisconsin are actually Wisconsin people
that are franchisees. The growth in Wisconsin, there
aren't many place to grow here any longer.
If they want to be part of our business, they'll have to move.
So many of them are already from Wisconsin.
But there's great values. I don't care what state
you are in. There are great values
of people all over the place. One of the things we do
is we have a thing called Discovery Week.
It's virtually going on every single week, where people are
interested in a franchise. They come to us and they spend
six 10-hour days in one of our family-owned restaurants,
which we have nine of. You might call them
corporate restaurants. We don't use that term.
We call them family-owned restaurants.
That's what they really are. They spend six 10-hour days
in our restaurants. They get the idea.
Now, they have not signed a franchise yet, but they get
the idea, the flavor of what it's like to be in one of our
restaurants, you know, what this life would be like
as an owner of a restaurant. They get an idea of what we're
like as well, as people. We, as well, are looking at them
saying will this be a good fit for us?
Can this person help grow our culture?
And at the end of the week, I usually sit down
with each one of those people and interview them.
The president of our company does the same.
The chief operating officer does the same, and then we come
to a conclusion on whether we think the person will be
a good match for us. We don't say yes to everybody
out there with a $55,000 check. We turn a lot of those people
away, just because we don't feel it would be a good fit for us.
The last thing we want to do is put somebody in a situation
where they fail. We don't want anybody to fail,
including us. So we want to make sure
the people we do partner with, we feel very good about them.
If you love people-- Or if you don't care to be
in the people business, our business is certainly not
the business to be in. It sure isn't.
So, we're very anal about some of those things,
and on who we partner with. I think that's how we carry
that culture forward. So far, I think we've done
a pretty good job of that. I really do.
Thank you. >> My name is Jewel.
I'm actually really interested in learning more about
a franchise. I know you just said that you
kind of interview people and see if they're a good fit.
But the franchise, like the cost that you get from them,
do they pay you over the year, or is it like a one-time fee?
If they do start saying maybe bring a bad name to the Culver
business, do you guys have rules set into place?
>> Yes, we do. There's a document called
the Franchise Agreement. It's a document like this
that everybody signs. And it costs $55,000
to sign on the dotted line. But that is only for that,
you know, just to get the right to use our name and our recipes,
and everything else. We are not in the real estate
business. So unlike McDonald's,
where McDonald's owns all the real estate
of their franchisees, we don't necessarily do that.
They own the real estate and the building.
So, they have a $2 million investment on top of that
$55,000 franchise fee. The Franchise Agreement as well,
you know, every franchise has one and they're very similar.
We all have some of our own verbiage in there, however,
but yeah, if standards aren't being met in our restaurants,
and we are out in our restaurants all the time,
if standards are not being met, then we have opportunities that
can say you have to either get better.
They always have an opportunity to cure a problem,
which is usually 60 days. If it isn't cured by that time,
we can say, you know, we're not partners any longer.
That's not what we want. We don't want that.
And rarely, rarely has that happened.
>> My name is Alyssa. My question is, since,
like local grown food is new like fad--
>> Buzz words? >> Yeah, fad, and the new push
right now, do you have any ideas to bring like local grown food
to the fast food business? >> Well, that's a great
question, and one I get asked. I'm a foodie like my father.
I love great restaurants. I love Culver's, but I love
great restaurants, as well. You know, the thing with local,
it's a difficult thing for a chain restaurant
that's in 19 states. If there's a chain out there
that says they are buying local, they're lying, because
it's next to impossible. if I have a restaurant
like L'Etoile on the square, I can take my little buggy
around on Saturday mornings at the Farmer's Market, and
I'll put my logo all over it so everybody knows that
this is all local produce going to that restaurant there.
Don't tell them I said that story, okay?
But for us to be local exclusively,
it's almost impossible. Our custard mix, you know,
it is local, it's all made here in Neenah, Wisconsin.
But that doesn't mean it's local in Texas, you know.
Unfortunately, it has to be shipped all that way, and
that's not a very green thing. All our cheese is made here
in Wisconsin. But again, that's not local
to those restaurants. All our beef comes from
a 200-mile radius around Omaha, Nebraska.
What we try and do is buy the highest quality products we can
you know, where they're made. All of our potatoes,
our french fries are made in the southeast corner
of the state of Washington, and some of Idaho.
Again, the best potatoes for french fries in the world.
So, that's what we try and do. But your question
is a very good one. It's one of the buzz words.
Some of the things we are doing along those lines, not local,
but we are bringing in two new chicken sandwiches
into Culver's, the crispy and the grilled.
They are both going to be ABF, antibiotic free.
We can't wait to get that into the restaurants.
We're very proud of that. Our custard mix--
I just ran into a wall here-- but I would like it to be
bovine growth hormone free, BGH free.
We're working on that as well. We're working on a whole bunch
of things like that. Those are things we can do.
But I can't just buy my tomatoes here and here and here and here,
because we want consistency as well.
Thank you. (inaudible)
Thank you. As well as healthier options.
we're in the frozen custard and butter burger business.
You guys probably don't think that's real healthy.
But they sure are good. ( laughter )
But we have a program that we created about six months ago,
and if you have been in Culver's lately you'll see
a green placemat that says "mindful choices" on it.
We are going more and more in that direction with calories,
and things like that. We have already reduced a number
of our items at Culver's with the sodium, and we're
going to continue to do that. One of the things with reducing
sodium, is you've got to be very careful.
You've got to do it gradually, or you lose taste right away,
and so we are doing that on a somewhat gradual basis.
But all those things are important things to me.
I'm a green guy. We are building our first
LEED certified-- Are you familiar with LEED
certified buildings, anybody? A number of them here on campus
are LEED certified. It stands for Leadership
in Environment and-- Oh, gosh, yes, thank you.
Design. We are building our first silver
LEED certified building in Baraboo, Wisconsin.
We're actually moving from one location to the next,
and we can't wait. We'll have voltaic cells there
for power. We're going to gather rain water
off the roofs for taking care of our plants, and the little
lawn that we have. We actually have two plug-ins
for electric cars. A lot of neat things
going on there. We're actually
going to heat our water with spent french fry oil.
When it's no good, we're going to burn it to heat the water
in the place, as well. So, those are all things.
We recycle. I don't know if you've seen
in a number of our restaurants, we've got recycling bins
in there as well. We have trash
and recycling bins. As I said, those are things
that are real important to me. Yes?
>> A couple more questions. >> Hi, my name is Ben.
You've kind of answered this question already,
but how do you differentiate yourself from your competition?
Because it's a very competitive market.
>> Back when we opened in 1984, it was easier.
We were different. Today, there's a lot of people
coming after us, and kind of cloning us along the way.
But you know, like I said, I'm not going to give up
on quality, I'm not. I'm not going to cheapen
our products. As an entrepreneur, you know,
entrepreneurs do that. They differentiate themselves.
They don't want to be the same as everybody else out there.
As I get older, and in the business longer, you lose some
of that entrepreneurialism. You know, you lose a little bit
of that spark. I can't allow myself
to lose that spark. So, I've got a dream.
You go to bed at night, and put a pad of paper next to you,
and dream. If something strikes you,
you know, write it down. That's what leaders, CEOs,
I believe do to stay affront. They have to be dreamers.
They have to be visionaries, and bring that vision to their
company and continue to separate themselves from the competition.
It's not an easy thing to do. The last thing I want to be is
like everybody else out there. I want to continue
to be different. Thank you.
Yes? >> Craig, I'm wondering,
I believe you had a restaurant called the Blue Spoon
in Middleton. >> Always, somebody
brings that up! >> Well, my question is,
was that restaurant a victim of the recession,
or was it because you deviated from the brand?
>> Well, the brand was the Blue Spoon, not Culver's.
So, you know, that's the second one in the world,
or was the second one. We've got a cafe in downtown
Prairie du Sac, something we started eleven years ago now
in the year 2000. A great coffee shop, it
overlooks the Wisconsin River, downtown Prairie du Sac.
It was right next to our offices in downtown Prairie.
We have since moved our offices about a mile north,
again, overlooking the river. But we had this space and
I wanted to create this little coffee shop
and sandwich and soup shop. And it's just a beautiful
little restaurant. Well, three years ago we decided
let's see if we can do it, being in the franchise business,
reproducing something, you know, we can do that.
We have done it so many times. We can do it with this, too.
Tried to do it in Middleton, Wisconsin and we failed.
And we failed for a number of reasons.
Again, more mistakes. You try and learn
from your mistakes. I guess what I learned
from this is the Blue Spoon in Prairie du Sac will be
the only one in the world, and that's the way I want it.
Culver's is our bread and butter burger, bread and butter,
and that's the way it's going to stay.
I'm not sure if I answered your question well or not.
But if you ever get to Prairie du Sac, riding your bike
through or whatever, stop at the Blue Spoon downtown,
Prairie du Sac. It's a wonderful little place.
Also stop by Culver's, too. Thank you, everybody.
It was a pleasure speaking to you.
( applause ) >> Well, Craig, we want to
thank you very much. You took a lot of time
out of your busy schedule. We want to thank you, of course,
with a Badger mug. You're an honorary--
Probably a Badger fan anyhow. >> Very much so.
>> Honorary Badger faculty now that you have joined us.
>> Oshkosh never gave me one of these.
( laughter ) >> Thank you very much, Craig.
We appreciate it. >> Thank you.