It’s no small irony that the son of a contractor has abided throughout his career by a principled credo of building both people and communities.
For James H. Maynard, chairman of Raleigh, N.C.-based Golden Corral Corp., that philosophy has been instrumental in transforming a fledgling family steak concept into a $1.5 billion behemoth throughout 41 states and in nurturing a management cadre that has led the 474-unit chain to become the undisputed leader in the grill-buffet segment.
“I think people would say I’ve always been a willing and pretty capable delegator,” Maynard says. “I assign people work and then let them have the freedom to do it. I’ve never been a manager who has to check on every detail. I’ve always had a large degree of trust in my people. Sometimes you pay a price for it, but on balance it’s been great.”
But an “aw shucks” humility and disarming regional inflection belies Maynard’s financial acumen and an unbending work ethic that was instilled in him while growing up in Jacksonville, N.C.
He received his first primer on the nuances of supply and demand at age 8, when he was regularly picked up at 3:30 a.m. by a local newspaper distributor and driven to a nearby military base where he and other children were handed stacks of newspapers to sell to the servicemen.
On more than one occasion sales were disappointing. But on the day the legendary Babe Ruth died, there was such demand to read the obituary, that many of the soldiers simply handed the papers back to Maynard and the others when they finished. The enterprising ones in turn quickly learned that they could double their earnings by simply reselling the tear sheets.
After graduating from East Carolina University, Maynard went to work for Burroughs Corp. selling computer systems, but the entrepreneur in him grew restless.
“It was the late 1960s, and I knew I wanted to get into some type of business like a Pizza Hut,” he recalls.
But neither he nor a colleague from Burroughs, William Carl, had the experience or the capital to be granted a restaurant franchise.
They were rebuffed by a number of such established chains as Bonanza and Ponderosa, before a local steak-house operator agreed to teach Carl the operations side of the business. While Carl was learning the back-of-the-house, Maynard approached both family and friends to sell stock in his venture.
“Your family and friends treat you differently when you ask them for money,” he says. “But I felt I understood finance reasonably well and how to access capital.”
A once-optimistic six-month-to-eight-month schedule to open their restaurant dragged on for nearly two years. Maynard, who married his college sweetheart and by then had a young child as well, subsequently incorporated as Investors Management Corp. and began selling shares in the startup venture.
He ultimately raised some $20,000 and signed notes for an additional $20,000. He later managed to secure a small public company, Carolina Wholesale Florist, as a partner. The company, which had about 600 shareholders, had capital, but virtually no earnings. Maynard invested the startup money in the company’s stock and hammered out an agreement whereupon IMC would take control of the unprofitable concern, liquidate the assets and deploy the capital back into his and Carl’s restaurant venture.
Maynard’s family and friends who were prescient enough to invest became 20-percent stockholders in what would eventually become Golden Corral Corp. Maynard eventually took that company private.
“Most of the original shareholders were friends who were schoolteachers and educators,” Maynard recalls. “I always knew that schoolteachers were smart folks.”
On the third day of 1973, Maynard and Carl’s restaurant opened on Bragg Street in Fayetteville, N.C., albeit under the moniker of Golden Steer.
From the outset, Maynard and his partner set out to establish points of differentiation from the legions of budget steak competitors that dotted the roadways and high-volume arteries of the mid-Atlantic region.
“We looked at what the industry was doing and we asked ourselves how can we do something that would give the customer a clear difference,” he says.
They hand-cut USDA Choice steaks in lieu of using frozen meat and manually cut the French fries.
“Our products were higher-quality than our pricing,” Maynard says. “But we tried to offset that with lower labor costs. Our motto was, ‘We make pleasurable dining affordable.’”
The pair also received a lesson on the importance of name registration. As they prepared to open their second unit, they discovered that Golden Steer had already been taken. Maynard’s wife Connie suggested Golden Corral just prior to the debut of the second store, which came eight months after the inaugural unit.
However, the brand’s emphasis on quality and higher standards, paired with the affordable pricing structure, began to weigh on the upstart company’s bottom line.
“We had three restaurants open and two of them were losing money,” Maynard says. “At that point, we began to question our concept. We opened a casual-dining restaurant that was profitable, and that helped get us over the hump.”
Exacerbating their P&L malaise was a decision by then-President Nixon to initiate a price freeze on cattle, a ruling that caused a run on sirloin and forced Maynard and Carl to venture north to purchase beef in Canada.
It took nearly a year and a half before they distilled Golden Corral’s operations systems and menu management into a profitable strategy that could be replicated.
“We lived the business day and night,” he says. “An easy week for me was 30 hours of sleep. We had a culture in the company of long hours, but exciting work.”
Buoyed by Carl’s operations expertise and Maynard’s finesse with financing and site locations, Golden Corral began to accelerate its expansion. Within six years of opening its first unit, Golden Corral had more than 100 units. That accomplishment is even more impressive given the fact that the company didn’t have to close one unprofitable restaurant until after it had surpassed the century mark.
In 1982, the chain doubled in size when Maynard struck a deal to acquire nearly 200 restaurants from competitor Sirloin Stockade. Golden Corral kept the restaurants but sold the franchise rights back to the company.
“At one point we were opening a store a week,” Maynard says. “When you’re growing that fast, you begin to attract a lot of folks.”
Among his early hires were two veterans of the Sambo’s chain: Kent White, who had been a vice president at the family-dining concept, and Theodore “Ted” Fowler, a multiunit franchisee who came aboard in 1977 and who began as an area supervisor.
“I can’t believe he allowed me to make all the mistakes I did with his money,” says Fowler, now Golden Corral’s president and chief executive. “But it’s been an incredible 30 years. I could not have had a better mentor or friend. He gave me a pat on the back or a jolt when I needed it. He never had anything but my best interests at heart. He not only has an incredible understanding of finance, but a humanistic side as well.”
Carl and Maynard later devised a plan that allowed the early Golden Corral managers to become partners. Carl, who died in 2005, had retired from active management in 1982 but remained on the board until 1996.
In the 1980s, Maynard and his executive team also gauged the unmistakable trend of customers gradually weaning themselves off red meat.
“Suddenly, it became fashionable to eat items such as pasta and question red meat,” Maynard says. “At first, we just wanted to give the customers a wider choice of food. So we expanded the salad bar.”
But expanding the salad bar eliminated nearly 30 seats from each unit. To make the food bar a profit center, the units had to become larger.
After testing various prototypes, the decision was made to supplant the traditional 5,000-square-foot units with the Metro Market concepts: 10,000-plus-square-foot boxes housing a 170-item “Golden Choice” buffet and Brass Bell bakery to augment the steak offerings.
“We were fortunate to be able to make that transition,” Maynard says. “A lot of chains weren’t able to do that, so they either shrunk or went away.”
James H. Maynard
Title: chairmanCompany: Golden Corral Corp., Raleigh, N.C.Annual sales: $1.53 billionNo. of units: 474Check average: $8.30Career highlights: computer sales, Burroughs Corp.; co-founder Golden Corral; founder, Investors Management Corp.Hometown: Jacksonville, N.C.Education: East Carolina University, graduated 1965 with a degree in psychologyPersonal: married, two children, two grand-childrenHobbies: golf, fishing, bird hunting
Golden Corral made an aggressive push into franchising in the early 1990s, and today the chain has roughly a 3:1 ratio of licensees to company stores. In 1993, the company went international, opening a unit in Juarez, Mexico.
Today, Maynard spends his time overseeing IMC, which over the years has served as the umbrella company for a host of businesses like Ragazzi’s, an Italian casual-dining chain; O’Briens, a rib house; and Quick 10, an oil chain and lubrication brand that Maynard eventually sold to Jiffy Lube. He also began KDI Investments, a money management firm.
Under Maynard and his executive team, the company is also heavily involved in civic and philanthropic initiatives, including raising some $1.4 million for disabled veterans and serving more than 1 million free meals to active duty and retired military personnel.
“James and the company have been terrific community citizens, and that’s a reflection of his philosophy,” says Harvey Schmitt, president of the Raleigh Chamber of Commerce. “They’ve been extremely involved in education issues and a big supporter of the schools. James also has made staff members available for various community initiatives.”
“I’ve literally known him all my life,” says Van Eure, owner of the Angus Barn in Raleigh and a member of the Golden Corral board. “He’s a brilliant businessman and his mind is always working. But he will always take the time to help an individual and listen. He’s smart without the pretense. You don’t see that too often. It’s funny, but several years ago they were planning to roast him, and they couldn’t find anyone to say a bad word about him.”
As a tribute to Maynard and to commemorate the 30th anniversary of Golden Corral, the company established the James H. Maynard Excellence in Education Award, a $5,000 cash prize presented annually to two foodservice educators for their accomplishments both in and out of the classroom.
“When we set out to do this, we wanted to do it well and earn a good living,” Maynard says. “I don’t think we could have come as far as we have if it hadn’t been fun to do. It’s staggering for someone like me, who grew up in a small farming community and whose family often lived paycheck to paycheck, to see and experience everything that’s happened. I really have been blessed.”