Made from scratch

Phil Johnston

Now based in Greensboro, with 54 restaurants in North Carolina and Virginia, Biscuitville Inc. grew out of two bread stores that Maurice Jennings opened in Burlington 43 years ago this month. High Point lawyer and serial entrepreneur Phil Johnston chronicles the company’s “recipe for success” in his new book. In the abridged chapter that follows, Biscuitville’s founder tells how it came about.

My dad bought an interest in a bakery in Burlington in 1941, so we moved there from Greensboro. The bakery had a retail store and about a half-dozen wholesale routes. The first Christmas there I worked setting up carryout boxes. I could pretty much eat all of the bakery products I wanted. So while nobody paid much attention, I ate about three dozen doughnuts in one day. I did not eat another doughnut for two years.

I worked in the bakery a lot because help was so hard to get during the Second World War. I also did the usual adolescent things — played football and baseball, etc. I was never very good at either one. I’m lucky they kept me on the teams. When Charlie “Choo Choo” Justice was playing football for Carolina, I used to thumb to Chapel Hill for every game. I’d wait until they played The Star Spangled Banner and for the police to salute at attention, and then I would climb the fence and watch the game standing up inside. Most people stood up when Carolina was on offense anyway.

A bunch of us formed a boxing club called The Blue Streak Boxing Club. The name came from the fact that when we tried to print tickets for a boxing match in my basement there was a blue streak from the printer on the tickets. We staged matches in my basement. Lace Hall, who is in the Carolinas Boxing Hall of Fame, was our star. We didn’t make much money. A local businessman had gotten the franchise for Tucker Torpedo automobiles and built a building. The Tucker Torpedo did not work out, so I rented his car-wash area and organized a group of us to wash cars on the weekends. I did make a little money out of that.

I remember always having a paper route from the time I was about 12. In fact, most of the time I had two routes. I delivered the Greensboro paper in the morning and the Burlington paper in the afternoon, both along a similar route. I had to get up at 5:30 a.m. for the morning route because the papers had to be delivered by 7 a.m. I would deliver every day and collect once a week. I caused quite a furor when I told my customers we were changing procedures and collecting once a month instead of once a week. A lot of my customers didn’t want to pay once a month. My brother would help me on the route, especially when I was out of town.

Dad’s bakery did pretty well. However, he had a disagreement with his partner and sold his interest in 1948. He went into the brokerage business, selling bakery ingredients on commission. At that time, it took about two years to get started in the brokerage business; he suffered a stroke in 1950, two years after he started. He was 42 and never able to work after that. I was 15, my sister, Janice, was 11, and my brother, R.B. Jr., was 9. All of the money from the sale of the bakery had been spent. I worked in restaurants during that time because they were some of the few places that would hire young people. It was fairly easy to get a job. I also worked in a movie theater, clothing store and radio station and on a farm.

After my senior year in high school, I figured if I was going to college I’d better get on with it. I went to Elon College and talked with Dean Hook. He told me to come on up and we’d see how it worked out. So I did. About that time, Johnny Loy and I opened a short-order restaurant in a building owned by his dad. I don’t remember what we named it. We had about 15 counter seats with counter service only. The health department closed us down because we did not keep the place clean. I never forgot that lesson.

I attended one quarter at Elon and joined the Air Force for various reasons. (In 1972 I enrolled in Elon College again for two years and took about every business course they offered. Later, I served on the board of trustees for 20 years. I retired in 1999. My son, Burney, graduated from Elon in 1985 and serves on the board now.) I was sent to Lackland Air Force Base in San Antonio, Texas. From there I went into pilot training. I failed flight school from lack of interest and went to Warren Air Force Base in Cheyenne, Wyo. In Cheyenne we did troop shows, which was a lot of fun. From there I went to Far East Air Force Headquarters in Tokyo. I worked in the Office of Information Services, which handled media — radio, television and newspapers — for the bases. I wrote, produced and handled radio and television programs and wrote for the newspapers.

In 1955, after six months in Japan, I got a hardship discharge and came back home to try to save the family business. After his stroke, my dad could not talk, so my mother traveled with him to talk for him and try to sell bakery ingredients. When I came back, my mother stayed home and ran the office while I tried to develop the flour part of the business, which was the most profitable. We did fairly well. Our first year’s commission was $5,000. That became $10,000, then $15,000 and went on up from there. Out of that we had to travel and live as best we could. My brother still has the flour business, and he sells a lot of flour, more than I ever did. However, the high point of my flour-brokerage career was when I sold 25 barge loads of flour to Kern’s Bakery in Knoxville, Tenn. A barge load is 15 rail cars. The commission was $15,000, and that was a lot of money in those days.

When Patricia Gordon and I were married in 1957, two families had to live on the profits of the business. Patricia and I had three children: Mary Nell was born in 1959, Fran in 1961, and Burney in 1963. Mary Nell had microcephaly. Her brain did not grow. She had an abnormally small head. We kept her at home until just before Fran was born and then put her in an institution that cares for children like her. We transferred her to a North Carolina state institution when she was 6. She has been in an institution all of her life. Fran is a homemaker in Charlotte. She and her husband, Chris, have two children. Burney is president and CEO of Biscuitville. He and his wife, Dina, have four children.

My dad died in 1962. I traveled all over the East selling bakery flour. I bought my first airplane, a Beechcraft Bonanza, in 1962 and used it in the business. Later, I bought a Beechcraft Baron, which we used mainly to find and visit suppliers. We still have a small interest in a Beechcraft King Air, which we use in our business. I enjoyed flying and used our airplanes well in our businesses. However, I do not encourage anybody to take up flying. It is dangerous compared to professional flying, and it takes a lot of time to learn to fly, especially instrument flying. During that time, I saved $30,000, enough to start another business — Pizza-To-Go.

One of my flour prospects was L.S. Hartzog in Memphis. He owned Hart’s Bakeries. He had opened bread stores in St. Louis selling fresh bread at wholesale prices. That was the first thing I had seen that looked better than the flour-brokerage business, so I decided to go into the bread-store business. We opened our first two on Oct. 4, 1966, in Burlington, one on North Church Street and the other on East Webb Avenue. On the first day there were six of us — me, supervisor Max Fogleman and four cashiers. I still remember it like it was yesterday. We had room in the store that we didn’t need, so we put in pizza to go. Pizza was just getting started in the South, and it was very popular. In fact, the pizza was more popular than the bread, so we took the bread out and kept the pizza.

McDonald’s made the restaurant business respectable. Until McDonald’s franchised and made some people wealthy, the restaurant business was usually a one- or two-person business where the owners, usually husband and wife, worked most of the time. But I remember sitting in a restaurant one time with my Uncle Maurice, and he looked around and said, “This is a good business.” I said, “What business?” He said, “This business, the restaurant business.” I said, “You have to be there all the time.” He said, “Have you ever been in a Howard Johnson’s?” I said, “Yes.” He said, “Have you ever seen Howard Johnson there?”

Anyway, we put in picnic benches for seats. We served pizza at the counter. We had a vending machine for drinks. I caught a lot of flak from my family and friends about that. Later, we put in a drink fountain and tea and coffee. We still called it Pizza-To-Go. At first we bought all of the ingredients ready to assemble and bake the pizzas. I remember the first time we bought bulk pepperoni I opened the box and said, “How do you cut this stuff?” An employee said, “I’ve got a pocket knife.” I said, “Whip it out.” He did and started sawing on the end of the pepperoni. I said, “This ain’t going to work.” So we bought a slicing machine with a cylinder, loaded the pepperoni and sliced it.

It was a slow winter. So slow that we closed the store on East Webb Avenue and concentrated on North Church Street. We had closed down half of our restaurants. During this time I kept up my flour sales because the restaurant was not profitable yet. I still managed the Pizza-To-Go. In the spring, business started picking up, so I hired my first manager, Jack King, a high-school classmate with a lot of restaurant experience. Jack once told me things were “picking up.” He said they came and “picked up” his television, “picked up” his car. He always had something like that to say. And he still does.

About that time a guy opened a steak house called The Peddler in Greensboro. He opened at 6 p.m. and closed at 10 p.m. He sold rib-eye steak cut to order, with a salad bar, baked potato and bread. He also had some desserts. That looked like a good idea, so I opened one on South Church Street in Burlington. At first we called it The Patrician, then changed the name to The Cutting Board and operated it 35 years until it burned in 2004. By that time, I had had the steak house half of my life. I never cried about it, but I came close. After we took the building down. I rode over to the lot and sat there thinking. It was sad but it was over. Some fellows in Burlington bought the rights to The Cutting Board and have reopened it close to where it was originally. Wayne Bunting called on us for Kraft Foods. I saw his talent and talked him into coming to Burlington to run The Cutting Board. Later, I got him to run all of our restaurants. He did a good job. He eventually left us to start his own restaurant chain, Blue Ribbon Grills.

The restaurant business is a sales business. By that I mean, as sales go up, costs do not go up as fast, so you make more money. Our first pizza restaurants did $700 to $800 a week. When we opened on Battleground Avenue in Greensboro, we did $1,800 a week, and I thought that was great. We were getting better. Later, we reorganized our restaurants and added spaghetti and a salad bar. We had become a quick-service restaurant, which did not fit the name Pizza-To-Go, so we changed the name from Pizza-To-Go to Pizzaville and expanded to 10 units.

I traveled a lot, finding supplies and looking at other restaurants. Anytime I heard of an interesting restaurant or restaurant concept, I got in the plane and flew there to take a look for myself. I also did a lot of driving. We bought our tomato products and a lot of our ingredients from a wholesale supplier. Early one spring our supplier told me they would not have any more tomato products until summer when a new crop of tomatoes would be harvested, so I went out and found and bought enough tomato products to last us until the new harvest. I decided that if I was going to have to do that, we might as well make some money on it, so we began distributing our own products. We still distribute everything our Biscuitvilles need except fresh produce and dairy products. There are many advantages, including controlling our costs and not having various suppliers in the Biscuitvilles. Working closely with our distributing company is our repair and maintenance department. We want all of our restaurants to be repaired immediately and all of our restaurants to look like they have just been remodeled.

Early on, when we were remodeling buildings and building restaurants, I would be at the contractors and subcontractors before they went to work to see if they were going to show up and what they were going to do that day. I never felt I could ask builders to do something and depend on them doing it. I always felt I had to follow up. Bob Burton, a Chicago restaurant designer, did most of our early design work. I got on to Bob through Jim Prentiss, who ran Shoney’s South with his cousin, Terry Young. One day I called Jim and asked him who was the best restaurant designer in the country. He said he didn’t know, but that Bob Burton did his work. I told him that was what I was asking. Bob Anderson, who had worked in marketing with McDonald’s, was also instrumental in our restaurant design. Bob said our building should be our sign. When people see our building from a distance, they should recognize the shape and color and know it is ours.

With pizza, spaghetti and a salad bar, we opened at 11 in the morning because there really wasn’t a market for our products earlier than that. We tried doughnuts and coffee and would do about $30 a day. Not enough. I remember the exact time I thought of biscuits. I was on my way to our Chapel Hill Pizzaville, and it occurred to me that we could take the salad bar down at night and open the next morning with a jelly bar and freshly made buttermilk biscuits. I love sweets and could see people taking their biscuits down the line and getting all kinds of jams and jellies. So the next Pizzaville we opened (in High Point), we did that. In addition to butter biscuits, we also had country ham and sausage biscuits. People would come in, look at the jelly bar and say, “Isn’t that a cute idea? Give me a ham biscuit and a cup of coffee.” And out the door they’d go. So we kept the biscuits and took the jelly bar out. I still have one of the jelly bar labels to remind me where we came from.

A restaurant chain called Chock-Full-O-Nuts “showed” me how we could cook country ham and sausage without a grill and hood system, which we did not have. They cooked hamburgers on a vertical grill that fried on one side and broiled on the other to lessen the need for a hood. However, they were prone to catch fire, and we eventually put in grill and hood systems. We put biscuits in all of our Pizzavilles. With the success of our biscuits, I wanted to try an all-biscuit restaurant. Naturally, we would call it Biscuitville.

We opened our first one in Danville, Va., in 1975 in an old Rich’s Hamburgers building. We served the same way we had in a Pizzaville. We baked the biscuits in advance, loaded them plain or with ham and sausage and stored them in plastic containers. When we got the order, we rang it up, turned around and put the biscuits in a small countertop pizza oven to reheat, got the beverages, took the warmed biscuits out of the oven, wrapped them, served them and made the change. It was pretty efficient, and the biscuits were always warm. Later, we set up our Biscuitvilles with service similar to a Wendy’s, including the drive-through window. We baked the biscuits on a conveyor oven as they were sold and held them warm until we got the order. Then we assembled the biscuit with just about anything you can think of that goes with a biscuit: ham, sausage, cubed steak, fried chicken, cheese, lettuce and tomato, etc. We also had platters with ham or sausage, eggs, biscuits and grits or any other side order our customers wanted. We have the freshest biscuits in the industry.

One of the high points in our business was opening our Biscuitville in North Asheboro. We opened there doing $12,000 a week, and that was big. What I should have done when we opened it is to have dropped everything else and concentrated on Biscuitville. Instead, like a true entrepreneur, I tried about a dozen different things. No use listing them: The point is, when you stumble on something that really works, you should concentrate on that, almost single-minded, like you’re running in a straight line. Later we converted all of our Pizzavilles to Biscuitvilles and concentrated on expanding.

Fran and Burney never worked much growing up. They asked me any number of times if they could get a job. I told them a lot of kids needed jobs and that at the time they did not; they should let the other kids get the jobs. I also told them that if we ever needed the income, I would tell them, and they could get a job. When they went to work, they would work long enough. Meanwhile, they both worked in the Biscuitvilles and The Cutting Board for enough time to see what it was like. I paid them both separately so it would not penalize the managers, who worked on profit share. Burney runs the company now: second generation. He is already planning for possible third- and fourth-generation succession. Incidentally, Burney entered the business kind of through the back door. He started his own Spaghetti Bowl, but there was not enough demand in our area for a just-spaghetti restaurant. So he closed it down and helped me find Biscuitville locations and then just worked his way into running the business.

As you can see, it took quite some time to go from flour salesman to bread store to pizza to biscuits. There is no substitute for the amount of personal time it takes to get a successful business started. But most businesses are not successful, no matter how much time a person puts in; most businesses fail. Income must exceed outgo or outgo must be less than income. Our operators are compensated entirely on the performance of their Biscuitville stores. At the beginning of the year, they are assigned a percentage for their cost. Everything below that percentage is their profit share. In 2006–07 our average operator made almost $100,000 a year.