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INSIDE DISH: Mug-n-Bun rides on 50-year formula

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Inside Dish

Welcome back to IBJ’s new video feature, “Inside Dish: the Business of Running Restaurants.”

Our subject this week is Speedway’s landmark drive-in Mug-n-Bun, founded in 1960 and purchased in 1998 by electrician Jay Watson for $1.2 million. Rather than mess with success, the fledgling restaurateur stuck with the eatery’s signature elements, such as curbside service, cook-to-order fast fare, and vanilla-tinged homemade root beer.

Mug-n-Bun has been profitable for 10 of the last 12 years, Watson said. The recent profits aren’t exactly mind-blowing—usually in the five-digit range—because Watson includes himself on the books as an employee and tends to plow earnings right back into upkeep.

While sticking with Mug-n-Bun’s 50-year formula for success, Watson has tinkered with the mix to accommodate present-day diners and shifting economic conditions (see video below). Unwilling to close the eatery during the slow winter months, Watson personally renovated an adjacent building in 2009 to create indoor seating for dining in frigid (or scorching) temperatures. He also broke a 50-year cash-only tradition in January by beginning to accept credit and debit cards. Both moves came with a cost but have had a positive effect on sales, he said.



With repeat customers returning again and again for their favorites, Mug-n-Bun tends to measure its top-selling items in cases and tons. In the video below, Watson takes inventory of how many onion rings, tenderloins, hamburgers and other items he sells per year.



More Dish: Notes from the back of the napkin

Restaurant: Mug-n-Bun
Concept: Classic American drive-in, virtually unchanged since the 1960s, with curbside service, picnic area and new indoor seating. Signature eats include homemade root beer, hand-dipped onion rings and large breaded tenderloins.
Location: 5211 W. 10th St., Speedway
Phone: 244-5669
Web site: www.mug-n-bun.com
Founded: 1960
Owner: Jay Watson (since 1998); $1.2 million purchase price
Total sales/profit: $1.1 million/$24,000 (2005); $860,000/$18,000 (2006); $910,000/$27,000 (2007); $820,000/$11,000 (2008); $870,000/$22,000 (2009).
Seating: 48 parking spaces for curbside service; 110 seats in picnic area; 52 seats in new indoor-dining annex.
Recent projects: Watson opened an indoor-dining annex in an existing building in December, doing the majority of the build-out work himself. The final cost was about $60,000.
Goals: Increase public awareness of restaurant; generate more sales through new dine-in annex.
Good to know: Mug-n-Bun has entered the realm of social networking and currently counts 5,600-plus Facebook fans. The restaurant accepted only cash until finally joining the credit- and debit-card bandwagon in January of this year. While that move has increased sales by as much as 10 percent, Watson estimates, the restaurant must pay credit card companies 1.39 percent of every sale, as well as a 19-cent processing fee for each transaction.

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  • Sounds Good
    Never been to it. It looks like I may have to make a trip to the westside to check out the place.
  • Great onion rings and root beer, terrible "tenderloin"
    I go there once in a while for the excellent onion rings and root beer, but that "tenderloin" is terrible. I used the quotes because that's not a tenderloin, but rather a fritter. Too bad they come out of a freezer instead of making them onsite.
  • old times are still alive
    Mug n Bun is the perfect date. Share your dinner, laughs and privacy in your own vehicle. The root beer is the bomb and fried mushrooms whoo whoot!
  • Nostalgic
    Great place to take the kids, hubby and I still enjoy it even if we're by ourselves! You can always celebrate Spring w/trip to Mug n'Bun for that footlong w/everything on it, fried mushrooms and rootbeer!! Thanks for the memories!
  • Gotta love the Mug-n-Bun
    Love that place and so glad to know that they are doing well!

  • Yummers!
    Just had a tenderloin with lettuce, tomato and mayo there a couple of nights ago. Sure cured the crave!! Great place! Sure glad they started accepting debit and credit cards. My husband and I would always forget they only did cash; we'd have to go to an ATM the go back. But it was always well worth it.
  • Donald: Check this out!
    You might see if you can run the videos -- they're kind of interesting too.
  • A local favorite
    At least once every summer, a group of us acknowledge a collective crave and leave the office behind for a trip to Mug n Bun. The root beer is delicious - even the diet version. The food is exactly what you'd expect, and when that's what you're looking for, Mug n Bun always delivers. Thanks for giving such a great spot some well deserved ink.
  • Yeah
    I worked as a carhop at the Mug-n-Bun when I was a teenager (40 years ago). My brother was a cook at the same time. Maury was the owner then. It was a ton of fun!!!! AND, the food was, and still is, GREAT! Foot long cheeese dog with sauce, french fries/onion rings, and a chocolate malt! I use to be able to eat that way! Hah!

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  1. The Walgreens did not get a lot of traffic. It was not located on the corner of the intersection, and not really visible from Emerson. Meanwhile the CVS there is huge and right on the corner. I am guessing a lot of people drove by a million times and never knew the Walgreens was there. Although, with the new Walmart market going in, that area could really see a lot of increase in traffic soon.

  2. You folks don't have a clue. There is a legal way to enter this country and to get aid. This left unchecked could run us to ruin quickly. I also heard that 'supporters' were getting major $$ to take them in? Who's monitoring this and guess who pays the bill? I support charitable organizations... but this is NOT the way to do it!

  3. Apparently at some time before alcohol has been served at the fair. The problem is that beer or wine used to be a common drink for people before soft drinks and was not thought to be that unusual. Since many folks now only drink to see how much they can drink or what kind of condition they can end up in it becomes more problematic. Go to Europe and its no big deal just as if you had sodas of milk to drink everyday. Its using common sense that is lacking now days.

  4. To address the epic failure of attracting race fans to both the Indy 500 and Brickyard 400 would take too much of my time to write. Bottom line Boles is clueless and obviously totally out of touch with the real paying fan base. I see nothing but death spin coming for the Brickyard, just like Indy. Get somebody in a place of power that understands what race fans want.

  5. I am a race fan through & through. It doesn't matter if it's Indy cars or Nascar. I love a great race. I go to several other tracks each year and you can see the entire track. I know Indy has tradition, but fans want to see the entire race. I sit in the Penthouse, am almost 60 years old, and would like to see a better TV screen in turn 1 so you can see the entire race. Then I think Indy needs to install an escalator so us old folks can make it up to the Penthouse and down again if we want more options to purchase food and drinks. Just a race fans opinion. Lights won't make the race any better, but you might be able to see the TV better at night. Turn 1's screen needs replaced with a better and bigger screen.

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