Howard Johnson & Franchising, Turnpikes
In 1932 Howard sold his first franchise to an acquaintance in Orleans, Massachusetts. The Orleans location was also a hit, which led to additional franchising as the newly popular “Howard Johnson” name gained traction across New England.
By 1935 there were 25 roadside restaurants. There were 41 by the end of 1936, and that number swelled to 107 restaurants by 1939 when the company’s gross revenues eclipsed $10.5 million.
[ Howard Johnson’s was not the first food company to franchise – that achievement goes to Harvey House, a fixture in railroad terminals in the late 1800s. There were also the Horn & Hardart Automats as early as the 1880s, and A&W Root Beer who sold their first franchise to J. Willard Marriott in 1925 when he founded Hot Shoppes. However no one before Howard Johnson’s had combined the standardization, strict recipe guidance and exclusive food distribution network. ]
For the 1940 World’s Fair the company built America’s largest roadside restaurant in Queens, New York. The thousand-seat restaurant featured luxurious touches such as crystal chandeliers, elaborate murals, and a grand staircase.
One of Johnson’s smart early moves was securing exclusive hospitality contracts along state turnpikes. He realized the turnpike offered a relatively captive audience of long-commute drivers who would need a rest but were reluctant to leave the highway. When some of the early toll roads were paved in 1940, it was Howard Johnson who bid for and won exclusive rights – via gargantuan 40-year contracts – to run restaurant services at rest stops on the Pennsylvania, Ohio, Maine, and New Jersey Turnpikes (the Pennsylvania contract alone provided for 24 restaurants).
This was followed by a similar negotiation & agreement for the exclusive food rights on turnpikes in New York, Connecticut, Massachusetts, and Indiana. Others, such as Kansas and Illinois would follow in the late 1940s. Fortunate timing played a role as few companies of the era had the capacity to fill and staff the early large-scale hospitality requirements of the burgeoning turnpike system.
The turnpike deals from 1940 helped grow the Howard Johnson’s chain by nearly 50% in one year. Within three years, additional deals saw the number grow to more than 200 restaurants by 1942.
Howard Johnson’s: World War II and Postwar Recovery
The only thing that could derail Howard Johnson’s rise to the top was international war. After the United States entered World War II in 1941, food and gas rationing restrictions crippled the hospitality services industry. Fewer Americans traveled and raw materials were more scarce. Howard Johnson restaurants contracted quicker than they expanded; by 1944 all but twelve closed.
Johnson adapted his business as a food supplier for the U.S. military. His large pre-war stock of sugar and cream were valuable to the armed forces, where these supplies were strictly rationed. Johnson’s established network of commissaries offered a synergistic large-scale distribution system that could satisfy the requirements of the U.S. Government with minimal alteration. From 1942 until 1945 the Howard Johnson’s chain performed in this role, expansion plans on hold as the company served food to domestic war volunteers and Army recruits.