I’m glad that Lou brought up the example of Howard Johnson. Not only is his analysis of the company’s decline — which practically opens his book — interesting, it’s an interesting parallel to businesses of today.
HoJo got its start in Quincy, Massachusetts — I’ve even gone on a pilgrimage of sorts to the site of the original drug store — and eventually expanded to be one of the official lodging companies for Disney’s theme parks, as well as to have sales greater than those of McDonald’s, Burger King, and Kentucky Fried Chicken combined.
But when times got tight, they cut and cut and cut. And the experience suffered. That, along with general changes in travel trends — i.e. the rise of the road warrior — contributed to HoJo’s humdrum current state of business (88 motor lodges and 605 restaurants in 1961 to 10-20 survivors today — according to the book; the Web indicates that there are about 500 HoJo franchises today).
There’s nothing sadder than a boarded-up HoJo. Some have even been converted into other commercial businesses, university buildings, and other facilities, which is creative reuse.
This rise and fall reminds me of a story about Krispy Kreme that may very well be apocryphal. Word is that when Krispy Kreme closes a store — not a plant, which it’s been doing lately given the one-time low-carb craze — it doesn’t just close it, it razes it — overnight. One day it’s there and open; the next day there’s just an empty lot. Because the company doesn’t want people to see closed Krispy Kremes. They just want us to see open, active Krispy Kremes. And that kind of makes sense, brand and experience wise. Because there may be something sadder than a boarded-up HoJo: a boarded-up Krispy Kreme.
This brings up a bigger issue, however. How you close a business is as important as — if not more important than — how you open one. Not far from the office, there’s a Barnes & Noble that’s going out of business. They’ve got a fire sale on the front tables, and the shelves are more and more bare every day. Stopping by yesterday didn’t make me feel very good about the location — closings are sad, even if you don’t work somewhere — but it also didn’t make me feel good about Barnes & Noble. The shelves were relatively bare and disorganized. There were staff members just lounging around chatting in the back. There was no sense of order to the checkout lines.
And the experience of that location closing spilled over to the company at large.