Culver's: Craig Culver

Craig Culver says that when he opened the first Culver’s restaurant in a small Wisconsin town, there were three cars in the parking lot on a good day – and two of them were his family’s. Those early years of selling frozen custard and ButterBurgers were hard, but the business was in Craig’s blood. He grew up working in restaurants run by his parents, and Culver’s was a family affair too—one that was more challenging to run than a typical burger joint because of its large menu, with pot roast, soups, and fried fish. The restaurant wasn’t supposed to grow into a behemoth chain, but it franchised quickly, and today there are nearly 900 across the country. On a per-restaurant basis, it’s one of the most profitable quick service restaurants in the country. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 1:32Guy Raz?

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• 5:12Speaker 01

  There was an event, a McDonald's event in Madison. And a friend of mine, a McDonald's guy, came up to me and said, Culver, you're as far as you're gonna go.

• 5:26Guy Raz?

  He had about 15, 16 locations about that time, maybe 18.

• 5:30Speaker 01

  Yeah, that's right. And, you know, I wanted to punch him in the nose. I never said anything, but I thought to myself, baloney with that.

• 5:39Guy Raz?

  Did that kind of feeling ever motivate you? That feeling of like, I'll show you? Did you have some of that inside of you?

• 5:47Speaker 01

  Yeah. Yeah, I do.

• 5:56Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:08Guy Raz?

  I'm Guy Raz, and on the show today, how Craig Culver turned a struggling family restaurant into Culver's, one of the most profitable fast food chains in the United States.

• 6:26Guy Raz?

  You've heard me talk about the concept known as the paradox of choice. It was first identified by the psychologist Barry Schwartz. In his book, Barry argues that the more choices we have in life and as consumers, the less happy we actually are. Now, apply that concept to a place like Chipotle, or In-N-Out Burger, or Raising Canes Chicken, and you understand what Barry was talking about. Burger, cheeseburger, double cheeseburger, chicken tenders, fries, slaw, toast, taco, burrito, bowl, quesadilla. Simple and efficient. Restaurants with fewer items can create

• 7:08Guy Raz?

  a better economy of scale because there are fewer menu items to make, and thus, fewer ingredients to buy. And this is a great way to build a successful business, especially in food. Except if you're Craig Culver. He's the founder of a fast food chain called Culver's, and he built it into an empire of now almost 900 stores, with a menu that includes at least 50 different menu items. Burgers, chicken sandwiches, fried fish, pork loin, pot roast, chopped steak, salads, soups, cheese curds, and on and on it goes.

• 7:47Guy Raz?

  Culver's practically thumbs its nose at the idea that choice shouldn't be vast and abundant. Everyone should be able to get what they want. And that approach has made Culver's one of the 10 most profitable fast food chains in America on a per-restaurant basis. On that basis, it's more profitable than Burger King, KFC, and Taco Bell. Craig Culver started Culver's with his first wife and his parents back in the mid-1980s in Sauk City, Wisconsin. At the time, it was one restaurant, and really, that was the goal. In the early years, just keeping the lights on at Culver's was hard. It stood across

• 8:29Guy Raz?

  the street from two huge competitors, a Dairy Queen and a Hardee's.

• 8:35Guy Raz?

  But over time, people discovered Craig Culver's now famous Butter Burger and also his frozen custard. And slowly but surely, Culver started to expand, first inside Wisconsin, then to neighboring states, and eventually to much of the United States. Craig Culver grew up in Sauk Prairie, Wisconsin, in the 1950s and 60s. His dad was a dairy inspector until 1961, when he came across an opportunity he couldn't pass up and bought an A&W burger restaurant.

• 9:10Speaker 01

  Yeah, A&W drive-in, exclusively a drive-in. The little shack of a building had the bathroom on the outside of the building, gravel parking lot, 5 and 10 cent root beer, 15 cent hot dogs, hamburgers, and french fries. We sold cigarettes, of all things, and car hop service. There was no inside seating. It was all car hop service. When the cars would come onto our lot, they'd literally park around the building with no markings on where to park. They just parked wherever. And so the car hop would go out and she'd put a number on the windshield and take their order. And I shouldn't say she, because we had males

• 9:55Speaker 01

  as car hops as well.

• 9:57Guy Raz?

  This was, I mean, this was like the heyday of the car hop era. I mean, people think of the 50s, but really, it's the 60s, the early 60s that they're thinking about, which is like the golden era of going to the car hop and having a waiter, a waitress, or on roller skates sometimes coming and serving you food.

• 10:14Speaker 01

  That's true. Yep.

• 10:16Guy Raz?

  You were 11 years old. And from what I understand, it was you, you had a brother, Kurt, a younger brother and a sister who was older, Georgia. And basically, it was a family business. You were expected to work at the A&W from the time you were 11. Is that more or less true?

• 10:33Speaker 01

  That is very true. And I compare it to farming. Everybody's expected to go to work and that's, you know, because our parents owned the place, it was okay for us to work there, but otherwise it would have been illegal.

• 10:47Guy Raz?

  Would your parents leave early in the morning? You'd make your way to school and then after school you would come to the restaurant work?

• 10:53Speaker 01

  Yeah, but it was a seasonal business. So basically, oh, April 1st or so, April 15th, we would open and then we'd close shortly after Labor Day. So after Labor Day, my parents then would have to get another job.

• 11:10Guy Raz?

  Wow.

• 11:11Speaker 01

  To get through the winter months.

• 11:13Guy Raz?

  What was your dad like as a, I mean, because from what I understand, he was, he could be tough, right? And tough on you guys and high expectations.

• 11:22Speaker 01

  You're right. Dad, Dad was a tough guy. And yeah, he, he expected a lot of us and we were, you know, we were just kids. But one of the things about dad was, you know, he'd get mad at you. He'd react very, very quickly. And, but then it would be 10, 15 minutes later and he'd have his arm around you.

• 11:45Guy Raz?

  Hmm. You know, it sounds like through most of your time in high school, you were working at the family business.

• 11:54Speaker 01

  Yep.

• 11:55Guy Raz?

  Do you remember being in high school and just feeling like I, all my friends get to do this and I have to be here? Like maybe even feeling resentful when you were a teenager working all summer as a restaurant?

• 12:09Speaker 01

  Very much so. We were working when other families were off on vacations and those families were coming to, to our place of business, as a matter of fact. We were serving them while they were, they were enjoying their friends and stuff. But, you know, saying that, I mean, still.

• 12:29Speaker 01

  My parents, I don't want to make them sound like they were driving us crazy with work because they were good parents. What can I say? They were great parents.

• 12:40Guy Raz?

  So, all right, so I guess 1968, they sell that restaurant. And was there a reason behind it? Did they, do you know why they sold it?

• 12:50Speaker 01

  No, I, you know, I really don't know why they sold it, but my dad was an entrepreneur and he saw something else that put a sparkle in his eye and that was the Farm Kitchen Resort.

• 13:05Guy Raz?

  That was in a place called Baraboo, which wasn't too far from where you were.

• 13:09Speaker 01

  No, it was 13 miles, 13 miles north of us. And it was at the north entrance of Devil's Lake State Park.

• 13:16Guy Raz?

  And it was a sit down restaurant?

• 13:18Speaker 01

  Well, it's more than a restaurant. It's a resort. 24 cottages, swimming pool, you know, the shuffleboard thing, amusement barn. We had miniature golfing, horseback riding, which dad leased, yeah, dad leased out to other, other people. In between the two dining rooms sat basically our living room because we also lived there in the winter months. Again, a seasonal business. And then we had a big kitchen and everything was made from scratch. It was a wonderful place to dine.

• 13:55Guy Raz?

  Huh. And so you would work there during your, your college breaks? Cause I think this is when you were, you were at college, you were at the University of Wisconsin.

• 14:02Speaker 01

  Oshkosh.

• 14:03Guy Raz?

  And, and you would go down there and do what during the like wait tables, cook, cook in the kitchen? What would you do during the summers at, at the resort?

• 14:12Speaker 01

  Whatever it took.

• 14:14Guy Raz?

  Yeah.

• 14:14Speaker 01

  We'd wait tables. My brother and I, we were washing dishes. We'd take care of the lawns, the gardens. Sometimes we were cleaning the rooms out in the cottages. And I mean, there was a lot of work there. But you know what? I loved the place. I did. And I'd usually stick around the place on my. On my day off, don't ask me why. I guess I just, I did like the place.

• 14:42Guy Raz?

  Yeah. And I think while you were there, you actually met a woman named Lee, who would become your wife.

• 14:49Speaker 01

  Became my first wife, yes.

• 14:51Guy Raz?

  Yeah. And, and so you were both college students at the time, I guess, working there?

• 14:55Speaker 01

  Mm hmm.

• 14:56Guy Raz?

  Right. And you studied, you studied biology in college. Was it so, it seems like you were kind of exploring things a little outside of, of the restaurant business. But, but I guess around 1973, which is when you graduated, your dad was having some health issues. I guess he couldn't keep running the farm kitchen. And, and he, I guess the story is he kind of sat you down and said, hey, would you take over, become the general manager of the resort? What, what do you remember about that conversation?

• 15:29Speaker 01

  It's one I talk about a great deal. It's one of the great regrets I have is saying no to my father. But, you know, I watched my parents and so many others in the industry. I mean, lots of hours, lots of hours. And

• 15:45Guy Raz?

  Yeah.

• 15:45Speaker 01

  I'll tell you what, seven days a week, I just, I didn't want to be my parents. I didn't.

• 15:50Guy Raz?

  You said no?

• 15:51Speaker 01

  Yeah. Here I am, a graduate from UW Oshkosh with a degree in biology, seemed to be going nowhere, you know, sending resumes out everywhere, not getting much of a response from anybody. And my dad sat me down, as you said, because he recognized something in me that I didn't know I had, a passion for people, a passion for the food service industry. So, yeah, when dad asked me to take over the farm kitchen, be the general manager, what an opportunity thrown right at me. And I told my dad, no.

• 16:29Guy Raz?

  Was your dad disappointed?

• 16:31Speaker 01

  You know, dad and I had arguments about many things. And I thought for sure he would blow up. But he didn't. And he just said, son, you go find your dream then. He said, I'm going to sell the place. And I said, okay, dad, you do what you got to do. I'll do what I have to do. And, you know. I love you and it was a mistake on my part.

• 16:59Guy Raz?

  I mean, a mistake, I guess, because it could have given you, well, it depends how you look at it, of course, because we're

• 17:03Speaker 01

  Of course, I didn't know, I didn't know the future. I've got to say this about my parents and I didn't realize this until years later. You know, my dad barely got through high school, handicapped with a loss of hearing in both ears, eventually goes blind. My mom, sure, she got through high school, but no college. And I looked at, looked back at them and I said, wow, mom and dad were smart people. And what they were so good at in, in the business world was they were so good with people. People that know how to say, please, and thank you, and my pleasure, and it comes from the heart.

• 17:48Speaker 01

  That's who they surrounded themselves with, and that's what any great leader certainly wants to do. He wants to, or she wants to surround themselves with people like that.

• 18:01Guy Raz?

  So I guess you decided to pursue your own path and you've graduated college and nothing's coming through for you. You're down in Madison, Wisconsin. And I guess your sister, your older sister, Georgia, says, hey, I want you to meet my friend, Tom, who works at McDonald's, because he might have a job for you.

• 18:25Speaker 01

  That's right.

• 18:26Guy Raz?

  Why don't you meet him? Is that because you just had no, you just didn't have a job? You didn't know what you were going to do?

• 18:31Speaker 01

  Well, Georgia, my sister is Georgia, and she knew I needed a job.

• 18:37Speaker 01

  Georgia said, why don't you go visit with Tom? See if you can get a job with a McDonald's.

• 18:44Speaker 01

  And that's what I probably did with Georgia. I just laughed and I said, Georgia, you know, I don't want to work in the restaurant business and I sure don't want to work for McDonald's. And she said, Craig, you need a job. Get over there and visit with Tom. See if you can get a job. You know, informally, we did meet and eventually they, they offered me a job as a manager trainee.

• 19:09Guy Raz?

  So you started as a trainee, a management trainee at a McDonald's location in Madison?

• 19:13Speaker 01

  Yeah. And I became a general manager with them within a year. And, you know, you think, okay, McDonald's, big deal. Well, it was a big deal. I mean, in 1973, they were the king.

• 19:30Guy Raz?

  Yeah.

• 19:30Speaker 01

  And I learned a great deal. And after almost four years with them, I decided I wanted my own place of business. And

• 19:40Guy Raz?

  Yeah.

• 19:40Speaker 01

  I had all these years of training with my family and with the McDonald's people, I could do this. And, well, I kind of was becoming my father. I was becoming the entrepreneur that he was. And I knew where I wanted to go. I wanted to move back from Madison to my hometown of Sauk City in Purdeacock and buy that A&W back now for the second time.

• 20:08Guy Raz?

  Wow, the one that your parents used to run?

• 20:10Speaker 01

  Yeah. But I had no money. So that's when I visited mom and dad and said, help me out.

• 20:17Guy Raz?

  You were, this is 1976, you're, I think, 26, newly married. You and Lee are newly married at the time.

• 20:24Speaker 01

  Yeah, we are.

• 20:25Guy Raz?

  And I mentioned Lee because she, she will factor prominently in, in the rest of the story of Culvers, which we'll talk about later. But you essentially go back to your dad and say, hey, you remember that A&W that you sold in 1968? Why don't we buy it back and operate it? Is that, is that essentially what you said to him?

• 20:48Speaker 01

  Yeah, I was, we were both living in Madison at the time. And I went over to visit and the story goes, mom's on the couch, reading the newspaper and watching TV and dad's at the kitchen table, playing his favorite card game of Solitaire. And mom's within earshot of what our conversation is going to be. So I sit down with dad. I said, Dad, help me out here. Let's buy the A&W back in Sauk City.

• 21:18Speaker 01

  Dad, the entrepreneur, he immediately said, let's do it. Mom, on the other hand, not a risk taker whatsoever. She was crying, holy hell. And I tell the joke that we took a vote and she lost two to one. So, but the A and W, the original place that burned down, that little shack, and the new prototype was built in its place, was seating for 74 inside, a canopy off the back with electronic ordering stations. So, we bought something different than what we originally had. But we bought it back from the same gentleman Dad had sold the old place to.

• 21:58Guy Raz?

  Right. So, so you're now operating an A and W franchise. It's burgers and shakes and sodas and stuff. And, and your dad was essentially retired at that point.

• 22:08Speaker 01

  He was.

• 22:09Guy Raz?

  So, was he, basically, did he help put up some of the financing and you kind of operated it? Or was he also in there, running it with you?

• 22:17Speaker 01

  Mom and Dad were both in there as well, Lee too. And I didn't put up any money. And, you know, eventually Dad gifted me a portion of it and just sweat equity type of thing. And, but yeah, Lee and I ran the place, but Mom and Dad were certainly there as well.

• 22:38Guy Raz?

  And how did it do? Did it do pretty well?

• 22:41Speaker 01

  We were successful. We cash flowed immediately. And as a matter of fact, the first year, we closed for six weeks in the winter months to take a nice vacation to Florida. And that was the last time we did that. We didn't, we didn't do that again.

• 22:58Guy Raz?

  Yeah. So, this, what's so interesting about this is that history kind of repeats itself, right? Because it's the second time that your dad and you are involved with an A and W, the same one. And then, like, six years into running this thing, once again, you guys sell it. Your dad makes a decision, you guys make the decision to sell it to some investors. Why? Was it, I mean, it's going well, it's doing pretty well. Why did you guys sell? Was it, was just the price was, was so good that you couldn't say no?

• 23:29Speaker 01

  We're entrepreneurs. We can buy low and sell high. That, that's, honestly, that was kind of our mindset. And we can go find something else. And we decided to sell to these two gentlemen from Madison. And part of the deal was I had to stay on for two months training them in the business. And the other part was we sold it on what's called a land contract. And that's where we're the banker in the deal.

• 23:58Guy Raz?

  You're basically giving them the loan.

• 24:00Speaker 01

  We're financing it. Yep, we are. And so if something goes awry, well, we could get it back.

• 24:07Guy Raz?

  When you'd made the decision to sell, I mean, you guys had bought it for, I mean, roughly, how much would it have cost in 1976 to buy that A and W? Like 500,000?

• 24:16Speaker 01

  Oh, no, no, no, no, no, no. I'm guessing maybe we bought it at maybe 200. When we sold it to these two gentlemen, I believe the number was 350,000 we sold it at.

• 24:30Guy Raz?

  Got it. So a nice tidy profit, 150 grand, you know, six years on, and most of that money was going to your dad. But you had to find the next thing that wasn't going to be enough to sustain you for, you know, the rest of your life. And I guess, again, history kind of repeating itself was you guys with your parents, you use the profit to buy like a little supper club. Once again, in Baraboo, Wisconsin, is that right? Called the Ritz Supper Club?

• 24:58Speaker 01

  Yeah, this story is full of circles and you're absolutely right.

• 25:01Guy Raz?

  Full of circles. It's unbelievable.

• 25:03Speaker 01

  It was called the Ritz and like all the other businesses, even the A and W, even the farm kitchen, we always attached our last name to the business. So it was Culver's Ritz Supper Club. And Wisconsin is famous for supper clubs, which basically are independently owned restaurants. Not fine dining, but steak restaurants, prime rib on Saturday night, fish fry on Friday night. It's like a religion here. Salad bars, martinis, Manhattans, and the state drink is a brandy old fashioned sweet.

• 25:42Speaker 01

  But yeah, we bought the little Ritz for the first time and we ran it again as a family. It was Lee and I and Mom and Dad and we did quite well there. But we only had it two years because the people that bought the A&W from us were failing. And remember, this was bought in a land contract. It's our money in there. And eventually, one day, we got a phone call saying, please take this thing back. We don't want it.

• 26:16Guy Raz?

  Wow.

• 26:17Speaker 01

  And honestly, I couldn't wait. I wanted it back.

• 26:20Guy Raz?

  So basically, what happened was they were paying you essentially a mortgage fee, right? You were the financier and they said, we can't pay it anymore. We're done and you guys can have it back. So it's almost like they rented the business from you for two years.

• 26:37Speaker 01

  That's true. You can look at it that way.

• 26:39Guy Raz?

  But when you did take it back, you didn't want it to be an A&W anymore. I mean, you basically wanted to like, I guess, defranchise it, right? To kind of start your own place, your own restaurant?

• 26:50Speaker 01

  Yes, we sure did. And we didn't think that we needed the A&W. We liked the idea of doing something different and being independent. And so that's what we did. I remember, we got rid of all the oranges and browns of the A&W and everything became blue and white.

• 27:14Guy Raz?

  I mean, this is interesting because on the one hand, of course, it worked out well, which we're going to get to. But starting a new brand, Craig, is really hard. That is the eternal theme on this show, right? And you already had a brand. A&W is a national brand. So, I mean, was the idea at the time to start a big brand? Or were you thinking this is just going to be our next fun project, our next one-off business for the next few years? Or did you have a bigger vision at the time?

• 27:44Speaker 01

  I'd love to tell you we had a big vision.

• 27:48Speaker 01

  That would be a lie. No, it was we get to move back to our hometown of Sauk City and Prairie Sack and get an opportunity to have the business. Hopefully it's successful. And we never dreamt we could fail. That never entered our minds. We're entrepreneurs. We don't fail. Well, yeah, entrepreneurs do fail, by the way.

• 28:13Guy Raz?

  So 1984, you decide, this is not going to be A and W. This is going to be your own restaurant and it's going to be called Culvers. And the basis of this restaurant was going to be two things, frozen custard and something called the butter burger.

• 28:32Speaker 01

  And here I've, I gotta tell a little backstory. One day while I was at the Ritz in the afternoon, not much going on, sitting down with a friend of mine and he was from Milwaukee, Wisconsin. And he was telling me about when he was a kid, there was a little custard stand called the Milky Way and they served the butter burger. And when he said that to me, man, a light bulb went off and I attached the two together, custard and butterburgers. How can you possibly go wrong?

• 29:11Guy Raz?

  When we come back in just a moment, how things in fact do go wrong after Culvers opens and how they eventually start to go right. Stick around. I'm Guy Raz and you're listening to How I Built This.

• 29:35Guy Raz?

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• 32:06Guy Raz?

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• 32:50Guy Raz?

  through Stripe, with Stripe's users processing a combined $1.9 trillion last year. So if you're already thinking about what's next for your business, see what's possible at stripe.com.

• 33:10Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1984, and Craig has just decided to take his A&W restaurant and turn it into his own place. His new establishment has indoor dining and a carport for carhop service. And the menu is going to center on two things: butter burgers and frozen custard. So let's start with the frozen custard. Frozen custard is basically soft-serve but with egg, right? Like a custard-based ice cream has egg in it versus a milk-based ice cream.

• 33:44Speaker 01

  It does have egg yolk added to it. You're right. There are ice creams as well, premium ice creams, that also have egg yolk added to it, but not too many. But yes, custard is served at about 18 degrees, has very low air beat into it.

• 34:02Guy Raz?

  So it's denser.

• 34:04Speaker 01

  That's denser. You're right. If you take a... A quart of vanilla custard and a quart of vanilla ice cream. The custard is going to weigh considerably more because you're right. It's denser, doesn't have the air beat into it. I mean, I don't think frozen custard can be beat. I'll call it the best premium ice cream in the world.

• 34:26Guy Raz?

  All right, so you had that idea. And then butter burger, which was going to be not a burger slathered in butter. Basically, just a buttered, the bun had like was buttered and toasted, right? That's what a butter burger is?

• 34:38Speaker 01

  Yeah, that's, we buttered the bun. It's a tavern burger is what it is. We grilled the bun. We use all fresh meat and we press the meat out on the grill. It's not pre-pressed like padded meat. And we got the butter burger.

• 34:56Guy Raz?

  It's become very fashionable in the last 10 years. But what is now called a smash burger, you guys were doing it in the early eighties.

• 35:03Speaker 01

  We did it well before any of those people did it.

• 35:06Guy Raz?

  Yeah, because it's basically you get the burger, the patty really thin. You get it crispy. Anyway, just out of curiosity, did you have to put a big amount of investment capital up to get the machine for the, you know, because I imagine a custard machine isn't that, isn't cheap and?

• 35:22Speaker 01

  It was $19,000 back then.

• 35:25Guy Raz?

  Wow, that's a lot.

• 35:26Speaker 01

  Today it's considerably more, but yeah, we had to, we, we sold the Rith Supper Club to the same people that had bought the farm kitchen from us years prior.

• 35:38Guy Raz?

  So you made a little bit there.

• 35:39Speaker 01

  Yeah, we had, we had a little money there, but we still needed a banker because we remodeled the place inside and out.

• 35:47Guy Raz?

  And you used, from what I understand, you didn't have a big budget. So you basically kind of used the oval of the A and W, right? Like, and you just kind of used, you already had the oval outline of the A and W in the restaurants, you just like poked out the middle and put culvers in there?

• 36:02Speaker 01

  That became our logo, you're right.

• 36:04Guy Raz?

  All right, you were going to be, I guess your mom and Lee would be front of house, sort of checkout and taking orders. You would be in the, you'd be? Cooking, you'd be, you know.

• 36:16Speaker 01

  Primarily in the kitchen, yes.

• 36:18Guy Raz?

  And then your dad would help out too. And then you hired some people, of course.

• 36:22Speaker 01

  Of course.

• 36:23Guy Raz?

  Restaurant opens July 18th, 1984, summertime in Wisconsin. Really nice.

• 36:28Speaker 01

  Mm hmm.

• 36:29Guy Raz?

  Uh, warm.

• 36:30Speaker 01

  A very busy highway as well, Highway 12.

• 36:33Guy Raz?

  Busy highway, all right. And, uh, and, and that first day, how'd it do? Was it packed?

• 36:37Speaker 01

  No, no.

• 36:41Speaker 01

  Nobody knew what a butter burger was. Nobody knew what frozen custard was. So there was an extreme learning curve. Right across the road from us was Hardee's. Uh, 1984, the fastest growing burger chain in America. Their parking lot is full. Also across the street from us was the Dairy Queen. 1984 is the year the Blizzard was invented. Their parking lot is full. And, and I like the joke that, you know, here we sat with two or three cars and, uh, I drive a car, my dad drives a car. And so if you do the math, we maybe had one, one customer.

• 37:24Guy Raz?

  I mean, did you think, all right, well, we're, but we're different than Hardee's. Or were you able to explain to people, our burgers are different than Hardee's? Or our custards are different than Dairy Queens? Or, or was it frustrating because you couldn't get that message across at the beginning?

• 37:38Speaker 01

  Well, we didn't have any marketing funds, so where that came across was if they visited our place and had a burger or had the custard. Because custard, again, I'll never say anything negative about any of my competitors, but frozen custard is not, not Dairy Queen. Clearly it's not Dairy Queen. And, uh, you know, my dad and I, we are, when it comes to quality, we may have to charge more and we do at Culvers. Uh, but we're, we're not going to cheapen something, uh, to get to a bottom line easier.

• 38:14Guy Raz?

  And by the way, at the beginning, when you opened up, and we're going to, I mean, the menu today is very extensive, but then was it just burgers and custard and fries? Or did you have other things on the menu from the beginning?

• 38:24Speaker 01

  No, we had other things. Uh, we had an extensive menu. Um, chicken, bone and chicken and, uh, pork tenderloins and, uh,

• 38:35Speaker 01

  Of course, our cod filet sandwich, which really was a carryover from the Friday night fish fries at the supper clubs that we had.

• 38:45Guy Raz?

  That's a lot of menu items. I mean, we've done, on this show, we've, we've talked to the founders of Chipotle and of Raising Canes and Five Guys, and they don't have that many things on their menu.

• 38:57Speaker 01

  No.

• 38:58Guy Raz?

  You had a lot of stuff, and that's tricky. I mean, that-

• 39:02Speaker 01

  Well, you gotta remember where we came from. We're in a small town, small town in Wisconsin. And for example, Taco Bell, you know, has a pretty defined audience.

• 39:15Guy Raz?

  Yeah.

• 39:15Speaker 01

  Their audience is maybe 18 to 30, or 16 to 30. Well, in a small town, you've got to attract everybody. Young people, the middle-aged people, the seniors. And coming from the supper club business, we were used to big menus and things like that. But-

• 39:33Guy Raz?

  Yeah.

• 39:34Speaker 01

  Thinking back, I mean, I would have loved to had a simple menu like In-N-Out or something like that where, you know, it's just basically a burger. I mean, it's so much easier to operate. But again, in a town of, you know, 5,000 or 6,000-

• 39:51Guy Raz?

  You had to be everything.

• 39:53Speaker 01

  We had to attract everybody, and including all those people going by in the highway.

• 39:58Guy Raz?

  Yeah.

• 39:58Speaker 01

  We needed them in the worst way, and we needed the townspeople as well to support us.

• 40:04Guy Raz?

  All right. So you opened up 84, and you're right across from a Hardee's and a Dairy Queen.

• 40:09Speaker 01

  Yeah.

• 40:09Guy Raz?

  Which is tough, because those are national brands. And so how did you do? I mean, were you sustainable by year one? Were you making a profit?

• 40:18Speaker 01

  No. No. We lost lots of money during that first year, and-

• 40:23Guy Raz?

  How did you, how did you survive? What, how did you pay your employees? And I mean, was it just loans, bank loans?

• 40:28Speaker 01

  Yeah, we had a banker that believed in us. He didn't believe in the concept of Culvers necessarily. He believed in the Culver family. He had worked with us in other businesses that we've had, and he knew how hard our family worked. And he knew that we would do whatever it took. But saying that, midway through that first year-

• 40:53Speaker 01

  Man, if I didn't have my family around me, I would have thrown up the white flag and got out of there and done something else. But my family was there. And that second year in business is when we started to, the business started to work.

• 41:11Guy Raz?

  What changed?

• 41:12Speaker 01

  Nothing really changed. It didn't. What changed was, we had a marketing program. And you know what the marketing program was? Our guests were telling other people about this little place in South City with a blue roof that serves butter burgers of all things. And so our business started, people were coming from 50 miles around to have frozen custard or a butter burger. And it was the third year when we made money.

• 41:43Guy Raz?

  Craig, one of the things that I'm curious about was, I know there was an emphasis on customer service. Like, when you go into a Chick-fil-A today, doesn't matter where you go, they have a reputation for just being incredibly friendly. Same with In-N-Out Burger. But having great food isn't enough. Like, to be treated well and kindly goes a long way. And how, how did you get your team, how did you get people to understand that? To, to really make people feel welcome when they came in?

• 42:12Speaker 01

  You know, I'll, I'll take that story way back to my mother. Mom was one of those people, when you walked into her place of business, she just made you feel warm and fuzzy. And she made you feel like she knew you like family, like she's, she knew you for years and years and years. And what a competitive edge that is. And she set the example for us kids, and for the other team members, and like the farm kitchen, the Ritz, and also the guests. When you go into a restaurant, and you know who the owners are, don't you watch them?

• 42:54Guy Raz?

  I do, totally.

• 42:55Speaker 01

  I watch them.

• 42:55Guy Raz?

  Totally.

• 42:56Speaker 01

  What are they gonna do? Do they do whatever it takes? Do they bend over and pick up, you know, some trash that might be on the floor, or clean the floor, or do whatever? Do they carry bus tubs back to the kitchen? That was my mother.

• 43:09Guy Raz?

  It's also such an easy, well, I shouldn't say easy, but it's a fairly simple hack. It's not expensive, right? You can, if you have a restaurant that is in a competitive environment, like a pizza place or a burger place, you can really differentiate it with customer service. You can really, if it's exceptional and people come in there and walk out of there feeling like they were treated really well, they'll go back.

• 43:34Speaker 01

  Absolutely. I mean, I want to go where I'm treated with respect and kindness and, and they fuss about you. Heck, why wouldn't you want to go to that place? But man, if you can add great food with great hospitality, that's a powerhouse. I don't want to compete against people like that, as a matter of fact.

• 43:56Guy Raz?

  Yeah. But how do you get the people in the restaurant who are hourly workers, hourly employees, to do that, to believe in that in the same way? It's very hard. When it's yours and you're cleaning the floor, it's yours is a little different than when you've got an hourly employee who, you know, for a variety of reasons may not have the same incentives to, to be like that.

• 44:17Speaker 01

  Well, that's why the hiring process is so important. And just to hire bodies, it's not the right answer. I'd rather go without than hire, you know, people that just don't have a heart. And then, once you bring them on your team, do you have a training program in place on not only the operations, but also on hospitality?

• 44:42Guy Raz?

  Yeah.

• 44:42Speaker 01

  And then the leader has to set the example for everybody around them.

• 44:48Guy Raz?

  All right. So sort of a year and a half in, you start to see the light, like you're starting to turn a corner. By year three, you start to see a profit. But from what I read, there was a really important, a really important decision that you made, which was to, right? You put in a drive-through that year.

• 45:07Speaker 01

  Yeah. It was a scary time.

• 45:09Guy Raz?

  And that was something you originally did not want to do. You liked the carport idea because it was, it was still a, like A and W style carport, right? Like you would go out and they'd take your order, they'd bring the food to you. Very nice, very personable. A drive-through seems could be a bit more impersonal, but right? It was that you're feeling about it, your fear?

• 45:29Speaker 01

  It was, yeah, it was. And. It was just too difficult to have the carport and a drive through as well and the inside dining. I just thought that would be way too difficult. So, but a friend of mine who sold us our custard mix at that time said, Craig, if you put a drive through in this business, we, I think we did like six, $700,000 the prior year. He said, if you put a drive through in, you'll take this place over a million dollars in sales. And at that time, that was a milestone to have a million dollar restaurant.

• 46:08Guy Raz?

  Yeah.

• 46:09Speaker 01

  And so we made that decision. And yes, it was a tough decision because I remember, you know, the local TV stations from Madison coming out and do stories about us frozen custard and car hop service and all that stuff. And

• 46:24Guy Raz?

  Yeah.

• 46:24Speaker 01

  But we made the decision and we took it over a million dollars in sales, just like that gentleman said.

• 46:30Guy Raz?

  And so just to put this in context, a million dollars in sales in that year, you still had a lot of employees, 16, 17 employees. So still a small business, but a big milestone was the, I mean, I'm assuming drive through just infinitely more efficient than the canopy and the car hops. Is that right? Is it, and you can just, you can cycle through customers faster?

• 46:53Speaker 01

  Well, we weren't very good at it, certainly to begin with. And still yet today, I mean, we're still in the kind of the car hop service.

• 47:02Guy Raz?

  Right. You don't get the food from the window. You only get the drinks and then you got to park your car.

• 47:06Speaker 01

  That's right.

• 47:06Guy Raz?

  And then somebody still brings your food to the car today, to this day.

• 47:09Speaker 01

  So you can call that person a car hop if you want.

• 47:12Guy Raz?

  Right. But why was it so much more profitable than the canopy and car hops? Is it just because it was more efficient?

• 47:19Speaker 01

  Oh, we were doing more business.

• 47:20Guy Raz?

  Yeah.

• 47:21Speaker 01

  Playing more business and not all through the drive through. The dining room became much busier as well. Back then, I mean, our drive through was maybe 20% of our sales. Today it's in excess of 60% of our business.

• 47:37Guy Raz?

  Yeah.

• 47:38Speaker 01

  So it energized our business even more than what it was.

• 47:42Guy Raz?

  And Craig, I mean, here's, I mean, this really was, it was a family business, right? Because it was, of course it was, it was, your parents were involved.

• 47:52Speaker 01

  Yeah.

• 47:52Guy Raz?

  It was you and Lee, your wife, and she was all, you also had kids too, and she was also working at the restaurant. Well, tell me a little bit about what, what Lee was doing at the restaurant.

• 48:03Speaker 01

  Well, Lee was a full-time mom and also working, I don't know, 30, 40 hours at least.

• 48:10Guy Raz?

  Wow.

• 48:11Speaker 01

  In the, in the restaurant. And one of the, the most difficult things, and probably for any business, is balance of life. And I mean, my balance was totally out of whack, and Lee's was not easy. And I got three great daughters, and if it wouldn't be for Lee, you know, don't know, because I wasn't always there.

• 48:37Guy Raz?

  Yeah. I mean, as, as somebody who, who runs a business with my wife, I, it can be really great, but also tough, because, you know, everything's integrated, work, life, it's all, it's all the same thing. And

• 48:50Speaker 01

  That's right.

• 48:51Guy Raz?

  Did you, I mean, from a business perspective, I mean, you know, your dad was involved, your mom was involved, you, Lee, how did you all decide who did what?

• 49:01Speaker 01

  It just fell in place. Dad counted the money in the morning. I'd take care of ordering the provisions for the restaurant. Lee and I were both involved with hiring our staff. But dad took care of the back office with the financial stuff.

• 49:21Guy Raz?

  And you were ordering, presumably, I know you weren't ordering like pre-made patties, but probably some things are more, made more sense to have delivered frozen, like french fries, I imagine, right?

• 49:32Speaker 01

  Oh, yeah. French fries were, it didn't make sense to us. We looked at cutting our onions for onion rings and flouring and batter dipping them ourselves. But other than that, I mean, you know, as far as the produce and stuff, it all came in fresh, and we sliced and diced everything. We made our own soups. We made the chili. The pot roast, we used to buy inside rounds. They were about 20 pounds of Big chunks of beef roast and, and we'd salt and pepper it, put onions over it, leave it in the roaster overnight and then come in in the morning and it would be at a stage where it literally would fall apart. And I mean, when you came into the restaurant

• 50:17Speaker 01

  in the morning and you'd smell that beef roast cooking, man, did it smell good. But today it's different. We've got suppliers that probably do a better job at what we were doing back then than what we did.

• 50:31Guy Raz?

  So Craig, for the first few years, it seems like it was clear to you that this was going to be a standalone family business, Culver's, great, you know, community restaurant, and that was going to be it. That was it. But four years in, you did get somebody who was interested in, in opening a franchise. And I guess you agreed to do it.

• 50:51Speaker 01

  After our third year, Dad and I looked into the possibility of franchising. And we hired a company out of Chicago and they got us licensed to franchise in a few of the surrounding states in Wisconsin. We really didn't do any marketing on that, but family approached us. I won't mention the town because one year later, we got a letter in the mail from them saying, you know, we don't want to be part of this story.

• 51:23Guy Raz?

  They could not make it succeed.

• 51:25Speaker 01

  I won't say that. They decided they didn't want us involved in it. And in other words, they, you know, they have to pay a royalty and things like that for the name and everything else. And they decided they could do this on their own. They didn't need us. So they hired an attorney. We negotiated out of the deal. And I said, after that event, I'll never franchise again.

• 51:51Guy Raz?

  Yeah. Sounds like you didn't get along. Well, you didn't see eye to eye. There was not a lot of chemistry between you and them.

• 51:56Speaker 01

  And that's the way it turned out. Yes.

• 51:58Guy Raz?

  Yeah. Okay. So you vowed not to franchise again, but of course, you did. In 1990, you decided to give it another try.

• 52:09Speaker 01

  Yes.

• 52:10Guy Raz?

  And, and why? What was that? Because your vision for what Culver's could be changed? Or were you starting to think it could be a national business? Or were you still thinking, no, it's going to be, you know, maybe just a small number of locations?

• 52:24Speaker 01

  Yeah, I still wasn't looking, you know, on a grand scale whatsoever. How could you? I mean, we weren't successful in the first one, but now we got a shot at a second one. What I did learn is we've got to put together a formal training program. If we're going to be in the franchise business, which we really didn't have before. For the first franchisee, I think we, it was two weeks. Well, you can't learn this business in two weeks. Today is a 17 week program at Culvers.

• 52:58Guy Raz?

  Right.

• 52:59Speaker 01

  The other thing with an extended training period is you really get to know the franchisees, the trainees, and that's a culture building opportunity for your company. The stronger the relationships are, the stronger your culture.

• 53:16Guy Raz?

  So, but I'm curious, I mean, you had a successful business. Then you've got the first successful franchise. And after that, you really, I think you opened many, about 14 of them in the next year, 1991, 92. But you still weren't, I mean, what was limiting your ambition and scale of this thing? Like, why weren't you thinking, we can be the biggest fast? Like, today, you meet an entrepreneur, right? And they'll say, and they have one shop and they might say, we're going to be the biggest taco place in the world in 10 years. You know, you hear that a lot, right? And of course, it doesn't always happen, but you understand the ambition. But it seems like you were very, you weren't really that interested in becoming that big. Am I right about that?

• 53:55Speaker 01

  That's true. And still yet today, I mean, yes, we continue to grow and I know growth is important. But, you know, I'll never forget, one of the things my dad said to me early on. He said, Craig, it's not important how many restaurants you have. What's important is how many good restaurants you have. And you need strong leadership in every restaurant to make it work. And, you know, so early on, yeah, we did grow by about 14 restaurants in a year's time in the early 90s. And we couldn't handle that growth. It was too much for us. We didn't have. The infrastructure in place, meaning we didn't have the people in place to open

• 54:40Speaker 01

  those restaurants, to train those people. But so what happened is we decided to close down franchising for about a year to get the infrastructure in place. And what I found out was when you tell somebody that's interested in a franchise that they can't have one, they want it even more.

• 55:02Guy Raz?

  Yeah.

• 55:03Speaker 01

  So when we finally reopened about a year later, I mean, we had a lineup of people that wanted a Culver franchise.

• 55:14Guy Raz?

  When we come back in just a moment, how somebody from McDonald's belittles the business and how that just motivates Craig to grow faster. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 55:41Guy Raz?

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• 56:26Guy Raz?

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• 57:56Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's the early 1990s and after one bad experience trying to franchise Culvers, Craig decides to try it again.

• 58:09Speaker 01

  Franchising is a quicker way to grow and it's not all your money going into each location.

• 58:17Guy Raz?

  Yeah.

• 58:18Speaker 01

  In order for us to grow that way, it would have been very slow. And eventually we would have probably had to go public to get more funds.

• 58:28Guy Raz?

  Or take on a lot of outside, outside money.

• 58:30Speaker 01

  Yeah, and really be leveraged. And that wasn't how we thought. And we assumed, or I assumed back then, that franchising is easy. You just find somebody like yourself and, you know, and it'll work. Well, that's not, that's not how it works. The first franchise experience we have was when sour and

• 58:54Guy Raz?

  Yeah.

• 58:55Speaker 01

  It isn't as simple as just finding somebody like yourself that's going to work every frickin' hour of the day, you know? Just doesn't work that way.

• 59:02Guy Raz?

  This is the thing, right? Because you're running your own restaurants at the time and that now you're starting to franchise in Wisconsin and then throughout the 90s, more and more even outside of Wisconsin. Now you are the The mayor of a city, right, essentially. You are, you've got a constituency of franchisees who have their own views on how things should run. And now it's just not just you and Lee and your mom and dad in the kitchen. You've got a lot of cooks in the kitchen. You've got all these franchise owners saying, you know, down here in our part of the country, people don't want this, or cheese curds don't work here, or, I mean, you must have started to get some of that.

• 59:40Speaker 01

  Early on, I had a gentleman from Chicago that he wanted to change the name of the Butter Burger to the Better Burger. You can't call it the Butter Burger. My God, what are you thinking? He said to me-

• 59:53Guy Raz?

  Right, trans fat butter, butter went out of fashion at a certain time.

• 59:56Speaker 01

  And I remember that meeting. Finally, I slapped my hand down on the table. I said, "We're not changing the name of the Butter Burger to the Better Burger. It remains and will retain the name Butter Burger." And he stormed out of my office and eventually they, they sold a short time later. But I wasn't going to change the name of the Butter Burger. No way. Boy, I'm not glad I did.

• 1:00:27Guy Raz?

  Yeah. But, I mean, it requires a lot of handholding, a lot of management, a lot of, presumably a lot of travel, too. Like, now you're running a network of Culvers. You are in charge of preserving the brand integrity. Did you ever go into any of the restaurants early on, you know, in the 90s and just get frustrated, like, "No, you're not, this is not right. This is, you're not doing this right."

• 1:00:54Speaker 01

  Of course, of course. And yes, that's, that's very frustrating. But today, and I visit a great deal of restaurants, and I'm not going in there to be an inspector. I'm a cheerleader. But obviously, if I see something that's definitely wrong, I'll change it on the spot. But- That's not why I visit the restaurants. That's the job of other people in our organization. They're the so-called inspectors.

• 1:01:24Guy Raz?

  Yeah.

• 1:01:25Speaker 01

  It's a partnership. It's a collaboration between everybody in our organization.

• 1:01:31Guy Raz?

  How did you? I've read that you have said in the past that your approach to the business was early days, earlier, you know, you focused really on the customer. The customer was king, which is certainly not a bad way to approach it. But you realize ultimately it was your employees who had to come first. I mean, it sounds like that maybe there was a, you know, it was a hard lesson to learn, that maybe you were not focused enough on your employees as much as you should have been, certainly in the early days.

• 1:02:06Speaker 01

  That's correct. And I think that was a mindset of most people back then. The most important person in your business, it's the customer, stupid. It's the customer. No, it's your team members. And if they know that they're that highly regarded, they're going to take care of our customers or our guests, as we like to say, as if my mother was taking care of them. So, yeah, I learned that after enough people tapped me on the back and said, I'm going someplace else to work or going to go do something else. I always hated that tap on the back because I knew what it meant.

• 1:02:48Guy Raz?

  Craig, the business really begins to take off in the 90s, right? And, you know, I wonder when it started because, you know, now we think of Chipotle or Five Guys or Shake Shack as just these ubiquitous brands that have been around forever, and they haven't. But I wonder if as you were expanding in the 90s, do you remember ever getting any skepticism from the bigger players in the industry? You know, the kind of thinking or maybe kind of signaling to you that like, hey, don't, you know, don't get ahead of your skis here. You're still small potatoes.

• 1:03:20Speaker 01

  Yeah, there was an event. It was a McDonald's event in Madison, a fundraising event for the Ronald McDonald House. And I went and as I was exiting that evening, a friend of mine, a McDonald's guy, came up to me and said, Culver, you know, you're as far as you're gonna go.

• 1:03:46Guy Raz?

  And when was this roughly?

• 1:03:47Speaker 01

  Probably 93, 94, something like that.

• 1:03:51Guy Raz?

  You had about 15, 16 locations about that time.

• 1:03:54Speaker 01

  That's right. Yeah, that's right. And, you know, I wanted to punch him in the nose. But I never said anything. But I thought to myself, baloney with that. We'll be just fine. And I'll never forget that. I never will.

• 1:04:12Guy Raz?

  Did that kind of feeling ever motivate you? That feeling of like, I'll show you? Did you have some of that inside of you?

• 1:04:19Speaker 01

  Yeah. Yeah, I do. Yeah, I do.

• 1:04:29Guy Raz?

  So Craig, did you have a particular strategy about how you expanded? I mean, presumably you start in Wisconsin because you're known there. And then was it, okay, then we'll go to the next state, then we'll go to Minnesota, then we'll go to Illinois? Or was it just whoever wanted a franchise?

• 1:04:47Speaker 01

  We did have our philosophy on how we were going to grow. And it was kind of like within the 50 miles of the last restaurant that we opened. And we stuck to that until we opened in Texas. And my sister wanted to open a restaurant in the Dallas area. And another gentleman, who was originally from Chicago, was living in Austin, he wanted to open a Culvers there. And me, forgetting how big Texas was, said, okay, if I got two, two, we can do this.

• 1:05:28Speaker 01

  Well, it's so difficult when you don't have any scale. So I made that mistake many years ago, but we continue to grow in concentric circles. So we take our brand along with us, and that's very important because that takes a lot of the risk out of, out of it for the, that operator opening just outside the last restaurant.

• 1:05:51Guy Raz?

  Um, as you really started to expand rapidly, right? In the nineties and in the two thousands, I imagine you were on the road all the time. Did you go to pretty much every new franchise opening?

• 1:06:03Speaker 01

  I did.

• 1:06:04Guy Raz?

  I, I know that by 2012, you had something like 470 locations, 20 states, mainly in the middle of the country and of the United States. And this is important, Craig, you know, we talk about everything on this show because what happens in business has an impact on personal life and professional life and, and oftentimes are intertwined. And I wonder, I know that you and Lee split around this time and, you know, she helped you build this business up for sure. And I wonder if, I mean, there are always personal sacrifices that happen when you, when you pursue your work, right? And, and I don't know, I mean, were you on the road all the time? What, what, did it mean that you in some way, some senses couldn't focus as much on family?

• 1:06:50Speaker 01

  Balance of life was very difficult for me because my life was culvers, culvers, culvers, culvers. And, uh, yeah, you know, I wasn't the best spouse and I probably wasn't the best father either. And nor was I probably as good to myself as I should have been. And I also talk about spiritual life as well. I believe it's very important to find time for your spiritual life. And I'm not saying don't work hard.

• 1:07:21Guy Raz?

  Yeah.

• 1:07:22Speaker 01

  But yeah, I, I find if you can find more balance in your life, you're going to be better at all walks of your life. I believe that. And so I probably should have stayed home more than what I did.

• 1:07:38Speaker 01

  I should have told my wife I loved her more than what I did. I should have gone to more of the volleyball games and soccer and stuff with the children. You know, I can't take it back, however, but I can be a better person going forward.

• 1:07:59Guy Raz?

  Yeah, it's interesting because the way you talk about your dad, right? I mean, your dad was always working and he was not around all the time. But you talk about him with incredible fondness. He was tough on you, he was tough on your brother. But it's also almost as if your memories of him have changed and shifted as you've gotten older and you've kind of seen life through your prism and understanding his better. Am I right about that?

• 1:08:28Speaker 01

  Yeah, yes. I mean, Dad and I and Mom too, I mean, we were business partners. They were my parents, but we were also great friends. I mean, we'd get together at least once a week. So, you know, Dad mellowed as he got older. Mom was always as sweet as she always was and had a lot of, a lot of great times together.

• 1:08:55Guy Raz?

  Craig, you eventually got remarried and then came another major change in your life. In 2015, you stepped down as CEO of Culvers. I mean, I know you're still involved with the company, but, but how much? I mean, have you, have you slowed down or is your day still kind of focused around Culvers?

• 1:09:16Speaker 01

  Ask my wife that question.

• 1:09:20Speaker 01

  She says I've failed miserably at retirement, so I guess that's the answer there.

• 1:09:27Guy Raz?

  This was a entirely family-owned business. And by the way, over the years, you must have gotten a lot of offers to buy you out or to just take it over or private equity coming in, seeing the success of this business kind of happening under the radar.

• 1:09:42Speaker 01

  Yeah, we've had many, many offers and people calling and where you're going is we sold 30% of the business to Rar Capital.

• 1:09:52Guy Raz?

  Right.

• 1:09:53Speaker 01

  Minority share, family still has 70%, so we truly own the company.

• 1:09:59Guy Raz?

  But you decided to sell a percentage of it in 2017 and that was because? I guess you couldn't really take money out of the business, too much money out of the business up until that point.

• 1:10:10Speaker 01

  Well, it was, it was taking some money off the table. Not that we needed to do that, but I'm glad we did it and I'm glad that we did it with Rourke.

• 1:10:22Guy Raz?

  They own a bunch of, I think they own parts of Jimmy John's and they have steaks and Arby's.

• 1:10:27Speaker 01

  Yeah, they own a lot of our competitors, as a matter of fact. But I'll tell you what, they're a silent partner and they're a great partner.

• 1:10:34Guy Raz?

  Hmm. The pandemic happens, right? Comes down, you're not obviously the CEO, but still very much involved.

• 1:10:42Speaker 01

  Mm-hmm.

• 1:10:43Guy Raz?

  I'm assuming you were anticipating this is going to be like 2009 or worse.

• 1:10:48Speaker 01

  Didn't know what to think. Nobody knew what to think and I think the first thought that went through many people's minds was we got to lay everybody off. And I thought about that for a day or two and I said, wait a second. We can't do that. We got to keep our people. We have to. For one, we got to keep them working. But the other is we've got a drive-through and let's take care of our guests going through our drive-through as if they were coming in into our dining rooms. In other words, hospitality. Let's keep our hospitality going strong. And like most people in the QSR segment, we had positive years.

• 1:11:31Speaker 01

  We were up during the pandemic, we opened 101 restaurants and we were up a combined like 26% in comp sales.

• 1:11:43Guy Raz?

  Wow.

• 1:11:44Speaker 01

  And I think, I think most of our, most of our competitors would probably tell you similar stories.

• 1:11:50Guy Raz?

  Craig, over the years, you've seen other chains, QSR, quick service restaurant chains, flounder and some disappear. I mean, Hardee's was a huge threat to you earlier in your career and I don't even know where Hardee's is today. I mean, Steak and Shakes or Disappearing, there's a bunch of them, right? The Burger Chef used to be one of the biggest chains in America, doesn't exist anymore. So taste, tastes do change, right? I mean, of course, there are, McDonald's is around, Burger King is around, but tastes do change and chains, even big chains can go out of business. How do you make sure that you guys are innovating and staying competitive, especially when you see, I don't know, people moving, for example, to like, chicken's really taken off in the last 15 years, right?

• 1:12:35Speaker 01

  It sure has.

• 1:12:36Guy Raz?

  With Raising Canes and Chick-fil-A, it's a huge, I mean, even Taco Bell now has chicken, like, everyone's doing chicken. So how do you, how do you stay innovative and make sure that that doesn't happen to you?

• 1:12:48Speaker 01

  It certainly is, innovation is very, very important, but just because you bring in a new product doesn't make your business necessarily stronger. New things, I mean, it's great if you hit a home run and it's on your menu board forever or whatever, but usually give it six to eight weeks and it loses interest. So innovation is important, but being a leader in the business, that's far more important and continuing to attract the right people to your organization, that's far more important as well.

• 1:13:23Guy Raz?

  All right, Craig, so Culvers has, I think they're like 850 or more than that locations in 25 states in the

• 1:13:31Speaker 01

  Eighty-eighty-three.

• 1:13:32Guy Raz?

  Eighty-eighty-three, okay, as of this recording, probably more once.

• 1:13:36Speaker 01

  True.

• 1:13:37Guy Raz?

  You started this business with your dad, you know, really 1976 sort of, and, you know, came from a tiny place in Wisconsin, and here you are, the guy who's started this business with eight, almost 900 locations, one of the most profitable

• 1:14:00Guy Raz?

  Quick service restaurants in the US on a per restaurant basis, high demand to open new ones, and it's made you very wealthy, you know, whether you had anticipated that or not. I mean, it's a pretty remarkable, right? Especially given that you came from a tiny place and some butter burgers and frozen custard and turns into a national chain.

• 1:14:21Speaker 01

  Yeah.

• 1:14:21Guy Raz?

  How much of that, of everything we've talked about, do you think has to do with just how hard you worked and how much you grinded away? And how much of it do you think is connected to just getting lucky? And just the world being what it was at the time? And it kind of bringing your business to cruising altitude?

• 1:14:43Speaker 01

  There was a lot of work, a lot of hard work, a lot of care, a lot of love. Lucky, I'll take lucky anytime, but you know, as the golfer says, you know, the more I practice, the luckier I got. It's the same thing in the business world.

• 1:15:00Guy Raz?

  Yeah.

• 1:15:01Speaker 01

  I take our business so personally because I do love it so, so much. But I think if you don't take it that way, you may not care as much about it. So I can't just let it go. I can't. It's who we are, who I am, who my family is. And yeah, I have sleepless nights. I had a sleepless night last night, as a matter of fact. I always have a fear of it going in the wrong direction. I will. That's just who I am.

• 1:15:35Guy Raz?

  That's Craig Culver, co-founder of Culvers. By the way, the restaurant's fans are pretty serious about their cheese curds. Last year, as a joke for April Fool's Day, Culvers announced a new menu item called the Curder Burger. And the response was so huge that Culvers actually made it a reality. For one day only at Culvers, you could get a burger topped with a massive fried cheese curd, and they sold 136,000 of them. And most Culvers sold out of Curder Burgers before lunch.

• 1:16:15Guy Raz?

  Hey, thanks so much for listening to the show this week. If you enjoy our show and want to show your support, please spread the word. Tell a friend about How I Built This or send out a message on social media. If you want to contact the team, our email address is [email protected]. If you want to follow us on Twitter, our account is @howibuiltthis and mine is @guyraz. On Instagram, we're at howibuiltthis and I'm at guy.raz. This episode was produced by Alex Chung, with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Sam Paulson and technical assistance from Patrick Murray.

• 1:16:55Guy Raz?

  Our production staff also includes J.C. Howard, Casey Herman, Josh Lash, Liz Metzger, Carrie Thompson, Catherine Seifer, Elaine Coats, John Isabella, Chris Messini, and Carla Estvez. I'm Guy Raz, and you've been listening to How I Built This.