Every year brings a combination of creation and destruction. As the world looks forward to 2017, it’s a good idea to take a look back at 2016 to see what has been left behind. Earlier in the year I wrote to you about the closing of the last Howard Johnson’s in New England. I wrote:
Investors are taking their eye off the ball. With all the hand wringing over what the Fed is—or isn’t—going to do with rates, there’s a much bigger problem lurking in most investors’ statements. It’s called survivorship bias. Most of the big movers never existed when I was a kid. Great ideas or concepts don’t last forever.
The decline of what was once America’s largest restaurant chain is chronicled in an article by Brian MacQuarrie at the Boston Globe. He wrote:
Launched in 1925 by Howard Deering Johnson from a single store on Wollaston Beach in Quincy, his simple merger of quality food and a friendly atmosphere grew into a commercial behemoth.
By its zenith in the late 1970s, Howard Johnson’s had more than 1,000 restaurants and 500 motor lodges whose orange roofs signaled dependability for millions of customers.
Johnson pioneered the franchise model along the way — the first franchise opened in Orleans, Mass. — in which he sold the Howard Johnson name for a fee and insisted that the owners buy their food and supplies from him.
The chain also operated the first turnpike restaurant in the country — in Pennsylvania in 1940 — and eventually had the largest number of restaurants on toll roads from coast to coast.
Johnson correctly saw how the country’s growing mobility could help his highway-conscious business, but the company could not stave off the mushrooming growth of fast-food outlets from the 1960s onward.
Other competition came from hotels that began offering continental breakfasts, and salespeople who did their business on phones and computers rather than the road. After Tuesday, the only HoJo’s restaurant left standing will be in Lake George, N.Y.
Read more here.