Rank no. 222 – Howard Johnson- US
Products & Services: Hotels
Number of Locations: 447
Total Investment: $184.66K – 7.94M
Began Franchising: 1954
About Howard Johnson
With a loan of $500, Howard Dearing Johnson purchased a small patent medicine shop in Quincy, Massachusetts, in 1925. He used an old-fashioned, hand-cranked freezer in the store’s basement to make vanilla, chocolate and strawberry ice cream for the shop’s soda fountain. Three years later, with menu additions like hot dogs and hamburgers, he opened the first Howard Johnson’s Restaurant.
By 1935, there were 25 Howard Johnson ice cream and sandwich stands in Massachusetts. Five years later, with more than 100 restaurants on the Atlantic Coast, Johnson opened the first turnpike restaurant on the Pennsylvania Turnpike. In 1954, when the company operated 400 restaurants, the first Howard Johnson hotel opened in Savannah, Georgia.
After Johnson’s son took over the company in 1959, it was subsequently acquired by three different companies before Cendant Corp. bought the hotel chain in 1990. Howard Johnson Int’l. franchises offer mid-priced lodging at Howard Johnson Plaza Hotels, Howard Johnson Hotels, Howard Johnson Inns and Howard Johnson Express Inns. Children stay free at Howard Johnson, and Road Rally and AARP offer senior discounts at the hotels.
Where Seeking Franchisees: Franchisor is seeking new franchise units worldwide.
Startup Costs, Ongoing Fees and Financing
Total Investment: $184,670 – $7,954,200
Franchise Fee: $35,000
Ongoing Royalty Fee: 4.5%
Term of Franchise Agreement: 15-20 years
Howard Johnson’s, or Howard Johnson, is a chain of hotels, motels and restaurants located primarily throughout the United States and Canada. Founded by Howard Deering Johnson, it was the largest restaurant chain in the US throughout the 1960s and 1970s, with over 1,000 company owned and franchised outlets.
Howard Johnson hotels are now part of Wyndham Worldwide. Howard Johnson’s restaurants are franchises which license food and beverage rights from La Mancha Group LLC of New York.
After borrowing $2,000 in 1925 to buy and operate a small corner drugstore in Wollaston, a neighborhood in Quincy, Massachusetts, Johnson was surprised to find it easy to pay back the money lent to him after discovering his recently installed soda fountain had become the busiest part of his drugstore. Eager to ensure that his drugstore would remain successful, Johnson decided to come up with a new ice cream recipe. Some sources say the new recipe was based on his mother’s homemade ice creams and desserts, while others say that the new recipe was from a local German immigrant, who either sold or gave Johnson the new ice cream recipe. Regardless, the new recipe made the ice cream more flavorful due to an increased content of butterfat. Eventually Johnson came up with 28 flavors of ice cream. Johnson is quoted as saying, “I thought I had every flavor in the world. That ’28’ (flavors of ice cream) became my trademark.”
Throughout the summers of the late 1920s, Johnson opened up concession stands on beachfront property along the coast of Massachusetts. The stands sold soft drinks, hot dogs, and ice cream. Each stand proved to be successful. With his success becoming more noticeable every year, Johnson was able to convince local bankers to lend him enough money to operate a sit-down restaurant. Negotiations were made and toward the end of the 1920s the first Howard Johnson’s restaurant opened in Quincy, Massachusetts. The first Howard Johnson’s restaurant featured fried clams, baked beans, chicken pot pies, frankfurters, ice cream, and soft drinks.
In 1929, both the first Howard Johnson’s restaurant and Howard Johnson’s company received an incredible break due to an unusual set of circumstances: The Mayor of nearby Boston, Malcolm Nichols, prohibited the planned production of Eugene O’Neill’s play, Strange Interlude, from performing in his city. Rather than fight the Mayor, the Theatre Guild moved the production to Quincy. The five-hour-long play was presented in two parts with a dinner break. The first Howard Johnson’s restaurant happened to be near the theater; hundreds of influential Bostonians flocked to the restaurant. Through word of mouth, more Americans became familiar with the Howard Johnson’s company.
Expansion in the 1930s and 1940s
Corporate logo of the Howard Johnson’s company, circa World War II, showing a depiction of an orange-roofed restaurant, characteristic typeface, and “Simple Simon and the Pieman” logo.
Howard Johnson’s second logo used throughout the Howard Johnson Company’s existence.
Howard Johnson entered the airline catering market segment.
Howard Johnsons restaurant entrance with trademark weathervane.
Johnson wanted to expand his company, but the stock market crash of 1929 prevented him from doing so. After waiting a few years and maintaining his business, Johnson was able to persuade an acquaintance in 1932 to open a second Howard Johnson’s restaurant in Orleans, Massachusetts. The second restaurant was franchised and not company-owned. This was one of America’s first franchising agreements.
By the end of 1936, there were 39 more franchised restaurants, creating a total of 41 Howard Johnson’s restaurants. By 1939, there were 107 Howard Johnson’s restaurants along various American East Coast highways, generating revenues of $10.5 million. In less than 14 years, Johnson directed a franchise network of over 10,000 employees with 170 restaurants, many serving 1.5 million people a year.
The unique icons of orange roofs, cupolas, and weathervanes on Howard Johnson properties helped patrons identify the chain’s restaurants and motels. The restaurant’s trademark Simple Simon and the Pieman logo was created by artist John Alcott in the 1930s.
When the Pennsylvania Turnpike, Ohio Turnpike, and New Jersey Turnpike were built, Johnson bid on and won exclusive rights to serve drivers at service station turnoffs through the turnpike systems. There were 200 Howard Johnson’s restaurants when America entered World War II.
By 1944, only 12 Howard Johnson’s restaurants remained in business. The effects of war rationing had crippled the company. Johnson managed to maintain his business by serving commissary food to war workers and United States Army recruits.
In the process of recovering from these losses, in 1947 the Howard Johnson’s company began construction of 200 new restaurants throughout the American Southeast and Midwest. By 1951, the sales of the Howard Johnson’s company totaled $115 million.
Entering the hotel business
HoJo motor lodges used a lamplighter character lighting a lamppost with the Simple Simon character pointing to the light.
By 1954, there were 400 Howard Johnson’s restaurants in 32 states, about 10% of which were extremely profitable company-owned turnpike restaurants; the rest were franchises. This was one of the first nationwide restaurant chains.
While many places sold “fried clams,” they were whole, which was not universally accepted by the American dining public. Howard Johnson popularized Soffron Brothers Clam Company’s fried clam strips: the “foot” of hard-shelled sea clams. They became popular to eat in this fashion throughout the country.
In 1954, the company opened the first Howard Johnson’s motor lodge in Savannah, Georgia. The company employed architects Rufus Nims and Karl Koch to oversee the design of the rooms and gate lodge. Nims had previously worked with the company designing restaurants. The restaurant’s trademark Simple Simon and the Pieman was now joined by a lamplighter character in the firm’s marketing of its motels. According to cultural historians, the chain became synonymous with travel among American motorists and vacationers in part because of Johnson’s ubiquitous outdoor advertising displays.
In 1959, Howard Deering Johnson, who had founded and managed the company since 1925, turned the reins over to his son, then 26-year-old Howard Brennan Johnson. The elder Johnson would observe his son’s control of the company until his death in 1972 at the age of 76.
Howard Johnson’s Company went public in 1961; there were 605 restaurants, 265 company owned and 340 franchised, as well as 88 franchised Howard Johnson’s motor lodges in 32 states and the Bahamas.
In 1961, Johnson hired famed New York chefs Pierre Franey and Jacques Pépin to oversee food development at the company’s main commissary in Brockton, Massachusetts. Franey and Pépin developed recipes for the company’s signature dishes that could be flash frozen and delivered across the country, guaranteeing a consistent product.
New chains and a changing public
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In the early 1960s, H.B. Johnson tried a new concept for his father’s company with the creation of a steakhouse restaurant chain called Red Coach Grills. Only a handful would open and, while they maintained some success, they weren’t profitable enough and eventually all the Red Coach Grills closed.
In 1969, Johnson once again tried a new restaurant concept, Ground Round. It proved to be successful. Though it was not a Howard Johnson’s restaurant, the Ground Round chain of restaurants were company-owned and -franchised, thus increasing the Howard Johnson’s company profit.
By 1975, the Howard Johnson’s company had over 1,000 restaurants and over 500 motor lodges in 42 states and Canada. The company reached its peak that year, but the late 1970s would mark the beginning of the end for the Howard Johnson’s company. Because of the oil embargo of 1974, the Howard Johnson’s restaurants and motor lodges, which maintained 85% of revenues from travelers, lost profit when Americans couldn’t afford to drive long trips or take frequent vacations. Also, the company model of serving pre-made food with high quality ingredients in traditional dining rooms was costly when compared to the innovations introduced by fast food outlets like McDonald’s, which designed its products and restaurants to appeal to families with younger children.
The company also suffered from two infamous incidents at a property in downtown New Orleans within 18 months of one another. The first was a July 1971 fire, set by two irate guests who had been kicked out of the hotel, which killed six people. The second, in January 1973, was a harrowing day-long siege, as former Black Panther Mark Essex used the hotel’s roof as a sniper’s perch, killing three New Orleans Police Department officers, the hotel’s general manager and assistant general manager, and a couple from Virginia on a belated honeymoon, while also wounding police officers, firefighters, and civilians.
Johnson attempted to streamline company operations and cut costs, such as serving cheaper food and having fewer employees. It proved disastrous as guests were finding this new era of Howard Johnson’s restaurants and motor lodges unsatisfactory, compared to the services they had come to know for years.
Desperate to make the company more successful and profitable, Johnson created other concepts, such as HoJos Campgrounds and 3 Penny Inns for lodging, as well as Deli Baker Ice Cream Maker, Chatt’s, and Bumbershoot’s for restaurants. All of these concepts failed, furthering the company’s demise.
In the late 1990s, the Howard Johnson’s Candy Factory and Executive Offices in Wollaston were purchased and renovated by the Eastern Nazarene College to form the Adams Executive Center.
Changes in ownership
In 1979, Johnson accepted an acquisition bid from Imperial Group PLC of England and sold the Howard Johnson’s company to G. Michael Hostage for over $630 million. That money would remain in the Johnson family estate, as would the chain of Ground Round restaurants, which became an independent venture after the sale of the Howard Johnson’s company.
Hostage would be the last man ever to control the Howard Johnson’s company. Imperial Group PLC obtained, circa 1979, all of the remaining 1,040 restaurants (75% company owned/25% franchised) and 520 motor lodges (75% franchised/25% company owned). After years of failed attempts to make it more profitable and successful, Hostage sold the Howard Johnson’s company to Marriott Corporation in 1985.
Howard Johnson’s restaurant painted in 1970s “environmental” color scheme
A former Howard Johnson’s restaurant in Bay City, Michigan which closed in 2005. Note the adjacent former motor lodge, now occupied by Econo Lodge.
Marriott was more interested in the motor lodges than the restaurants. While all of the company-owned and -franchised motor lodges remained untouched, Marriott quickly took all of the company-owned restaurants and had them either demolished or converted into other restaurant chains. The number of Howard Johnson’s restaurants remaining circa 1985 was sharply reduced as only the franchised restaurants would remain untouched.
One year later, in 1986, Marriott sold all of the company-owned and -franchised motor lodges to Prime Motors Inns. Prime Motors Inns continued to preserve the lodges, just as Marriott had. In 1990, Prime Motors Inns ceased operations.
Those involved with the company-owned and franchised motor lodges banded together and formed the “Howard Johnson Acquisition Corporation.” They successfully obtained all the rights to operate and maintain the company-owned and -franchised lodges. With these rights maintained, they changed their name to “Howard Johnson International Incorporated,” which became a subsidiary of “Hospitality Franchise Systems Incorporated,” which eventually merged with other companies to form Cendant. In 2006, Cendant sold itself off and HFSI became part of Wyndham Worldwide.
Wyndham operates the Howard Johnson brand under many “tiers” based on price, level of amenities, and services offered. Howard Johnson Express Inns, Howard Johnson Inns, Howard Johnson Hotels, and Howard Johnson Plaza Hotels range from limited-service motels to full-service properties with on-site concierges and business centers. Howard Johnson recently has begun offering its “Rise ‘N’ Dine” continental breakfast.
While the Howard Johnson’s company-owned and franchised motor lodges have stood the test of time since being sold by the Howard Johnson’s Company in 1979, the restaurants have not. Because Marriott took control and eliminated all of the company-owned restaurants, the owners of the franchised restaurants, fearing elimination, banded together in 1986 while Marriott was selling the motor lodges to Prime Motors Inns. The new company that the owners of the franchised restaurants created was called “Franchise Associates Incorporated” or (FAI). In 1986, Marriott gave FAI the rights to operate and maintain Howard Johnson’s restaurants. While the Howard Johnson’s restaurant chain was preserved, FAI did not have enough money to expand with new Howard Johnson’s restaurants.
When Cendant acquired the Howard Johnson’s motor lodges, they offered to work together with FAI to ensure the expansion of the restaurant chain. With the exception of opening a new Howard Johnson’s ice cream parlor in Puerto Rico, FAI never opened a new restaurant or expanded the restaurant chain. Instead, an already built and operating restaurant in Canton, Massachusetts was remodeled to serve as the prototype for a new era of Howard Johnson’s restaurants. The concept failed and, after less than a decade of operation, the prototype restaurant closed in 2000.
FAI ceased operations in 2005. Cendant acquired the rights to operate and maintain the remaining Howard Johnson’s restaurants. In 2006 Cendant sold them to La Mancha Group LLC.
As of June 2012, only three original Howard Johnson’s restaurants remain: one in Lake Placid, New York, another in Bangor, Maine and the third in Lake George, New York. The Lake George restaurant has been closed since the spring of 2012 and is still for sale. It is the Howard Johnson’s where the television personality, food chef and author Rachael Ray was employed when she was living in Lake George as a teenager. As of May 2013, the Lake Placid location is also for sale but is still operating.
In popular culture
A substantial portion of the Mad Men season 5 episode, “Far Away Places”, involves Don and Megan Draper’s trip to the Howard Johnson’s Restaurant and Motor Lodge in Plattsburgh, New York. However, exteriors were actually shot in Baldwin Park, California. In response, Howard Johnson’s launched a promotion referencing the appearance.
In the film 2001: A Space Odyssey, in the scene where the Russian scientists share a drink with Dr. Floyd, it is shown that the hotel chain servicing the space station is Howard Johnson’s. The chain featured a 2001 tie-in in their children’s menu.