Seasoned fast-food franchisee couldn’t stay away

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Fred Kaufman says it’s easy to explain why fast food is popular in these parts.

“People in the Midwest eat hamburgers, fries and Cokes,” he said. “They always have, and they always will. And that’s OK. There’s nothing wrong with that.”

Kaufman, 77, would know. He has seen people gravitate to burgers since he worked as a teenager at Dave’s Automatic Drive-In, a trailblazer of the drive-thru concept in his hometown of Chicago. He helped open the first Burger King restaurant in Indiana, a Gary location, in 1965.

He met iconic McDonald’s CEO Ray Kroc, and Kaufman once discussed the idea of opening Wendy’s locations in northwestern Indiana with Dave Thomas.

In the 1980s, Kaufman moved to Carmel to become a prominent Burger King franchisee in central Indiana. An attempt at retirement more than a decade ago didn’t stick, and he’s now the co-owner of two Rally’s locations in Indianapolis.

When asked about his personal taste in hamburgers, Kaufman said he likes a patty with everything on it—and it’s OK if the beef is cooked slightly rare.

But he’s generally a fan of any hamburger.

“It’s been so good to me,” he said. “It’s tough to say anything bad about it.”

The Rally’s restaurant at 4905 Kentucky Ave. drew Fred Kaufman back into fast food in 2012. Last month, he opened his second Rally’s, at 7311 W. 10th St. (IBJ photo/Eric Learned)

Across six decades, Kaufman said, he’s witnessed two seismic shifts in his industry. The first arrived when customers adopted credit cards as their primary form of payment.

The second is recent enough to be described as ongoing: the rise of delivery drivers and customers who place orders in advance for pickup.

Rally’s, known for its double drive-thru format, decided in 2021 to devote one of its lanes to delivery drivers and customers who order ahead.

Kaufman oversees Rally’s restaurants at 4905 Kentucky Ave. and 7311 W. 10th St. The Kentucky Avenue location opened in 2012 and features a conventional dining room. The 10th Street location, which has no indoor seating, opened in February.

Regardless of restaurant format, Kaufman said, it’s crucial for employees to be attentive to customer service.

Nick Neonakis

“You can make this a tough business, or you can make it a friendly, pretty easy business,” Kaufman said. “But it takes people, and it takes handling it right at that front counter. If not, it can go to hell in a hurry.”

Nick Neonakis, founder of the Franchise Consulting Co., said he’s not surprised Kaufman ended his retirement to return to running restaurants.

“There is something about owning a business and being part of a team,” said Neonakis, who’s based in Florida. Kaufman “sees kids in their first jobs, and he gives people the opportunity to have a hand up in a business. Restaurants do that.”

Eric Roach, district manager of the Kentucky Avenue and 10th Street Rally’s, is the son of two people who worked for Kaufman during his Burger King era: Dave Roach, who died in 2018, and Cindy Craney.

Eric Roach

The ownership group of the two Rally’s locations includes Kaufman, Tharp Realty founder Don Tharp and Roach, who’s 32.

“It’s what I always wanted to do,” Roach said. “I wanted to follow in my dad’s footsteps and grow through a business. Fred’s helped me get there.”

Kaufman said the Kentucky Avenue restaurant is a “home run” for generating revenue. Open until 2 a.m. Sunday through Tuesday and until 3 a.m. Wednesday through Saturday, the Rally’s location does strong business with people working overnight shifts, Roach said.

“We have warehouses all around us,” he said. “You go to some [fast-food restaurants], and you sit in line for 15 minutes. But your lunch break is 30 minutes. We’re fast. We get them through here.”

“It’s speed of service,” Kaufman said. “People need something good but fast. If you can do that, and do it consistently, you can make a lot of friends.”

Classic era

Kaufman started working at Dave’s Automatic Drive-In in 1962, the year in which iconic cars-and-burgers film “American Graffiti” was set.

Similar to Mel’s Drive-In in “American Graffiti,” Dave’s Automatic Drive-In was a place to see and be seen, Kaufman said.

“Kids drove their cars,” he said. “That was the goal: to have transportation. If you had resources, you had sexier transportation. Certainly on Friday and Saturday night, you wanted to troll the fast-food restaurant.”

Kaufman, however, was a 16-year-old who relied on a bus to get around.

“I appreciated it all, but I also knew I had to work to get it,” he said.

Dave Brooke, the owner of Dave’s Automatic Drive-In, became a mentor.

“He was the first guy I was around who had some money in his pocket, and that got my attention,” Kaufman said of Brooke.

Kaufman attended Illinois State University and spent a few years teaching in Illinois before he joined Brooke’s organization that operated Burger King restaurants in the Chicago metropolitan area and northern Indiana.

“Have it your way” was introduced as Burger King’s slogan in 1974, the same year Kaufman made fast food his full-time career. The ad campaign made a dent in the business of perennial industry leader McDonald’s, but Kaufman said he advised people to buy stock in McDonald’s when it dipped in value.

“They were going to figure it out,” Kaufman said of the Golden Arches. “It was just a matter of time.”

Brooke exited the hamburger wars by selling his restaurants to major Burger King franchisee Chart House in 1976. Kaufman took a role with Louisiana-based Chart House, eventually ascending to be a regional director responsible for more than 80 restaurants in Chicago.

By then, he was intent on following an entrepreneurial path.

“Once you do the big thing, you know you want to do it yourself,” Kaufman said.

Indianapolis days

Kaufman moved his family to Carmel in 1982, when he became the owner of seven Burger King restaurants in Indianapolis.

The portfolio of Burger King locations included a restaurant at the intersection of Ohio and Delaware streets downtown, which later was home to Barcelona Tapas from 2007 to 2017.

With business partner Richard Deignan, who died in 2015, Kaufman established Omni Restaurants Inc. and owned 45 Burger King locations in central Indiana.

“It’s not like I came to town with money hanging all over me, because I didn’t,” Kaufman said. “One of the people I met early on was Don Tharp.”

During Kaufman’s Burger King era, Tharp developed locations where new restaurants were built.

Now Kaufman’s business partner at the Rally’s locations, Tharp purchased a Dairy Queen Brazier restaurant in 1974—the same year Kaufman left the teaching profession.

If philanthropic giving is an indication of financial success, Kaufman fared well as a Burger King franchisee.

In 2000, he and his wife, Donna Kaufman, donated $1.5 million to Illinois State University toward construction of the Kaufman Football Building that’s home to a locker room, training room and offices.

Omni Restaurants Inc. sold its locations to Burger King Corp. in 2005. Similar to many Burger King franchisees at the time, Omni declared bankruptcy before the sale.

“I can’t say that everything we touched was gold,” Kaufman said.

Reorganizations at the corporate level hurt the company, according to Kaufman. From 1982 to 2005, Burger King’s parent company cycled through 13 CEOs.

A new branding strategy often accompanied a regime change, Kaufman said.

“It gets to the point where the customer doesn’t know who you are,” he said.

Modern times

There’s no identity crisis at Rally’s, said Robert Bhagwandat, senior director of franchise development for Rally’s parent company, Checkers Drive-In Restaurants Inc.

“Let’s face the facts: People don’t come to fast-food restaurants because they want to have a salad and lose 10 pounds,” Bhagwandat said. “They’re looking for an indulgent treat. We try to make sure our products are definitely something that’s satisfying to consumers but at the same time make sure that it’s affordable for the consumer.”

A restaurant needs a signature product, Kaufman said. He’s confident the seasoned fries at Rally’s fill that role.

“If there’s something that everybody talks about, it’s the fries at Rally’s,” he said.

The first Rally’s opened in Jeffersonville in 1985. Florida-based Checkers Drive-In Restaurants Inc. operates as Checkers in the Southeast and Northeast and as Rally’s in the Midwest and West. The company has about 800 restaurants.

Kaufman said the new 10th Street restaurant, which previously was a Rally’s under different ownership, benefits from its proximity to the 3,000 students who attend Ben Davis High School.

When looking to a franchisor for assistance, Kaufman said he counts on the delivery of systems, product and advertising.

“If they fail in any one of those areas, it can bite you pretty hard,” he said.

Franchise consultant Neonakis, who’s presenting an event titled the Great American Franchise Expo in Cincinnati on April 13-14, said the power of advertising can be conveyed by the “Ba da ba ba ba” jingle sung by actor Brian Cox in McDonald’s commercials.

“It’s been drilled into us for a couple of years now,” Neonakis said of the tune associated with long-running slogan “I’m lovin’ it.”

Corporations help franchisees, Neonakis said, by buying space on airwaves, billboards and corners of the internet.

“Each one of these people could never afford to put a TV ad out there,” he said. “But with the franchisor, you have a percentage of your total revenues, known as the ad fund, that then is allocated to advertising. It doesn’t matter if you have 40 Burger Kings in Indiana or one, you’re going to get the same utilization of that advertising if it’s on a national scale.”

When talking about what Kaufman brings to Rally’s, Bhagwandat said the veteran restaurateur trains employees to take pride in the food they’re offering.

“The consumers recognize that,” he said. “Of course, the ultimate compliment that you get from that is a repeat visit.”•

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