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Introduction to the 1994 EOY issue that presents the judges and process behind the award. - Unconventional Wisdom
The three winners of the 1994 EOY and the business they started, as well as a list of the runners-up. - Opposite Attractions
A look at the two winners of the 1994 Master EOY titles, their companies, and the runner-up. - The Decade-Long Overnight Success
The turnaround EOY for 1994: A close-up look at a one company's struggle to return to former glory. - The Personals Touch
The winner and runners-up of the award for the company that promises continued rapid growth, Emerging EOY. - Head of the Class
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The Socially Responsible EOY winner and runners-up for 1994.
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Unconventional Wisdom
The three winners of the 1994 EOY and the business they started, as well as a list of the runners-up.
Published December 1994
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BUY A REPRINTHow do you build a breakout business in an industry in which everything's been tried? Ask Outback Steakhouse, whose short hours, high food costs, and huge payouts to managers are just some of the convention-defying ingredients in the nation's hottest restaurant chain
Overall Winner
Entrepreneur of the Year
An individual who displays management excellence in every respect
The Winners
Robert Basham, Timothy Gannon, and Chris Sullivan
Outback Steakhouse, Tampa, Fla.
Restaurant chain
Founded in 1987
$271.2 million in 1993 revenues*
$23.3 million in 1993 profits*
8,000 employees*
*Excludes franchise units
The Runners-up
Allen Chao
Watson Pharmaceuticals, Corona, Calif.
Drug manufacturer
Founded in 1983
$67.5 million in 1993 revenues
$20.1 million in 1993 profits
318 employees
Ted Waitt
Gateway 2000, North Sioux City, S. Dak.
Mail-order-computer company
Founded in 1985
$1.7 billion in 1993 revenues
$153.9 million in 1993 profits
3,840 employees
Steve Case
America Online, Vienna, Va.
On-line computer service
Founded in 1985
$40 million in 1993 revenues
$5 million in 1993 profits
236 employees
Fran Sussner Rodgers
Work/Family Directions, Boston
Provider of referral services for work-and-family issues
Founded in 1983
$44.2 million in 1993 revenues
$7 million in 1993 profits
247 employees
When it came time to choose a name for their new restaurant venture, Chris Sullivan, Robert Basham, and Timothy Gannon hunkered down to drink beer and brainstorm at a Tampa jazz club. They'd already decided on an Australian theme. It was late 1987, and Americans were interested in the land down under. The movie Crocodile Dundee II was out, and Australia was on the verge of its bicentennial. "None of us had ever been there," says company president Basham, "but Australia had a friendly, casual image, and there's a mystique about the place."
The hard part was thinking of a good name. Dundee's? Nah. Sydney's? Basham's wife, Beth, pulled out her lipstick and started writing the ideas on a mirror. And sometime that night, the name Outback came up. It had just the right ring. It was easy to remember, and it had a rugged, outdoorsy quality. "The concept had good marketing potential. It provided a real point of differentiation," says chief executive Sullivan. The company had found its name: Outback Steakhouse.
Catchy name or no, Outback's founders would need all the points of differentiation they could muster to win in a business that's teeming with me-too dining "concepts." Restaurants open, shine briefly, and expire regularly as low-wage staffers tune out and take off, as costs spiral, and as popularity and prices sag.
The founders -- Sullivan, Basham, and senior vice-president Gannon -- had the industry experience to recognize those dangers. (See "The Origins of Outback," page 7.) They had modest ambitions, envisioning four or five restaurants in the Tampa Bay area. "We thought with five stores generating about $200,000 each, we could all have a nice lifestyle, stay in an area we liked, and play some golf," says Basham, the operations chief.
So much for plans. Six years after the launch, the three are piloting one of the country's hottest restaurant concepts. There are 210 Outbacks to date, including 42 franchise units, and growth is in full swing. Next month alone 12 new Outbacks will be opening. Systemwide, 1994 revenues from Outback's steak houses alone (the company now has a stake in an Italian-eatery chain, too) are estimated at $544 million, up from $347.5 million in 1993. The company projects that total sales will reach $739 million in 1995, and $956 million in 1996. By then it hopes to have 350 steak houses, 82 of them franchises. And it has no intention of stopping there.
"Our next big goal is 450 stores," says Sullivan, the company's master strategist. "Two years ago we studied markets around the country and felt we could comfortably build 450 without doing much in the West. If the West works for us -- and our initial units in Las Vegas and California are doing well -- there might be another 100." That's the plan through the end of 1998.
Counting franchises, Outback has created more than 14,000 jobs since its inception. Publicly traded since 1991, its stock, once adjusted for stock splits, had by this past fall shot from $3.50 a share to about $30. Its three public offerings have yielded $68 million, and by late 1995 the company expects to begin internally financing its expansion. It has even become a college-football sponsor -- the name behind the Outback Steakhouse Gator Bowl. And its TV commercials feature supermodel Rachel Hunter.
