Franchise Capital Of America

From 2,000 feet in the air, Rocky Mount, N.C., is a dusty stretch of asphalt and sun-baked buildings sitting amidst a patchwork of fertile green fields and stands of Southern pine. The muddy Tar River, its waters bearing legendary quantities of shad and striped bass, meanders across the countryside. Tobacco, soybeans, rural roads, one expects. A few country stores and a bank.

One does not expect Fast Food, U.S.A.

And yet, Rocky Mount, a quiet backwater of some 40,000 souls, is in all probability the fast-food franchise capital of the United States. It is the home of Hardee's Food Systems Inc., the fourth-largest hamburger concept franchisor in the country after McDonald's, Burger King, and Wendy's. It is also the home of no fewer than five growth-oriented franchise companies, enterprises that operate not one or two but dozens or hundreds of the giants' outlets (see sidebar, page 108). And then, of course, there are the outlets themselves: Howard Johnson's, Pizza Huts, and Taco Bells, in addition to the ubiquitous hamburger heavens. "There's no doubt about it," drawls a local businessman. Fast food is the largest generator of wealth in Nash County."

Hardee's, with 2,038 restaurants in 37 states and nine foreign countries is the biggest company around, and the progenitor of many of the others. But if there is one company in Rocky Mount that is regarded as a model, an ideal toward which all would do well to aspire, that company is Boddie-Noell Enterprises Inc. (BNEI). "They've been dedicated to business in a unique way since Day One," observes Spruill Bunn, the president of Hardee's, and other citizens voice similar sentiments. The consensus among local business folk, in fact, is that if Tom Peters and Bob Waterman had come to Rocky Mount, they would no longer be searching for excellence.

In 22 years, the Boddie brothers have transformed a single Hardee's restaurant into a sophisticated franchise company that operates 208 Hardee's restaurants in five states, grossing more than $210 million a year. In so doing, they have mastered what Peters and Waterman describe as one of the most difficult of managerial feats: sustaining the native entrepreneurial spirit and style that sparked a company's creation, while building it into a large, complex organization.

"When you head back north," one waitress suggests, "tell them about Nick and Mayo Boddie."

Sitting at a table at Carleton House -- the only non-fast-food restaurant the Boddies own -- Nick and Mayo attack their fried chicken with unabashed enthusiasm. Today, both men are in their fifties, casual Southern gentlemen in crisp slacks and handsome V-neck sweaters who also happen to be millionaires. But they grew up during the Great Depression, and remember its lessons well. "This," says Mayo, holding up a wing that has been gnawed clean, "is the way that we were taught to eat chicken."

"Heck," says Nick, "I've got a sister who eats half the bone."

Their father, Nicholas Bunn Boddie, was a farmer -- tobacco, corn, and cotton -- in Nash County, but he lost his land in 1933. The family's plantation, a once-grand estate of 10,000 acres that had by then dwindled to 700, was sold off. "We moved into a little house that our mother's mother owned," recalls Mayo. "We had a cow and some chickens, and our mother and daddy used to go to a farmer's market to sell chickens or eggs. If it hadn't been for that, and relatives giving us food, I don't know what we'd have done."

Mayo, the president of BNEI, and Nick, its executive vice-president, eked out about a year's worth of college each, but then went to work in small family businesses: Nick in a hotel that an aunt ran, Mayo for a Texaco distributorship that his father had obtained. By 1961, they had parlayed their interests and diligence into a motel and restaurant of their own, Carleton House; three independent service stations; and two laundromats. "We've always worked hard -- my brother used to cut pulp wood in the winters, and I pumped gas and changed tires," Mayo explains, "because we were always looking for something better."

That year, a combination of old friends and a new business seemed to provide exactly what they had been looking for. Leonard Rawls, who had attended Rocky Mount Senior High School with the Boddies and had since become Mayo's accountant, was also keeping the books for a restaurant in Greenville, N.C., owned by a man named Wilbur Hardee. He and another high-school buddy, Jim Gardner, had made a deal with Hardee to franchise the latter's charcoal-broiled-hamburger concept. Together, the three built the first Hardee's restaurant in Rocky Mount, which even today is dishing out cheeseburgers and Cokes at329 N. Church St. Rawls tried to interest the Boddies in a franchise. At first, the brothers declined. "My gosh, Leonard, how in the world are you going to make money selling hamburgers for 15 cents?" Mayo remembers asking. Then they saw how well the first Hardee's did. So Nick, Mayo, and an uncle, Carleton Noell, a tobacco executive who had helped finance Carleton House, purchased four franchises for $1,000 to $1,500 each. (Today, a similar franchise might cost $10,000.) The first Boddie-Noell Hardee's opened in Fayetteville, N.C., on January 22, 1962.

The first day, it sold $167 worth of burgers, fries, and shakes. "Course we opened that afternoon," Mayo is quick to point out. The store thrived for about six months, until a McDonald's opened down the road. "We were doing $20,000 to $22,000 a month -- that was good in those days -- and then, whammo! They cut us in half." But the Boddies persisted, recovered their market, and soon added a second unit, in Kingston, N.C., and a third back in Fayetteville. "We were really hungry," says Mayo, "hungry to do something, and we figured, if somebody else could do it, then we could do it as well."