Case Study - Developing Hospitality/Tourism Culture

Doug's Fried Chicken

Within four years of assuming the presidency, Judy Hart brought the market share of Doug's Fried Chicken from 2% to 20%. She was a risk-taking, innovative entrepreneur. She increased the chain from 400 outlets to 1,743 and rapidly expanded into 27 countries. "I've got to be involved in a continual go-go growth cycle. Because of my successful track record, the franchisees and the board go along with any programs I propose," Hart believed. Hart was flamboyant and sensational. She shifted the annual franchisee convention from Des Moines, Iowa, to New York. She moved headquarters from a converted post office into a new $5.8 million building.

Then, one Friday afternoon, Doug's board of directors dismissed Hart from the presidency. "Judy," said Chairman Doug Jones, "for a while we liked your 'full-steam- ahead' attitude. But you can't seem to slow down. You're trying to change too many things too fast."

The board elevated John Davis, vice president for finance, to the position of president. Davis was a conservative, accommodating executive who watched budgets closely and believed in rigorously controlled expansion. He emphasized fiscal responsibility. Davis set up a centralized purchasing system (which Judy Hart had always opposed). Board Chairman Doug Jones was pleased; he considered Davis to be "in tune with the mood of the board and the franchisees at this point in time."

Judy Hart was unemployed over the weekend. Then she was enthusiastically hired by Berger's Burgers, a company that had achieved financial stability only in the last couple of years. Now they were in a strong cash position. "Judy," said Horace Berger, chairman of the board, "we think we're ready to take off. We want to triple the number of Berger's Burgers outlets within three years. Can you do it?"

"Can do, Mr. Berger," said Judy happily. "But first we've got to refurbish this tacky headquarters building and change the site of the annual convention. I envision a truly spectacular party for the franchisees in Las Vegas."

1. How do you explain Judy Hart's unceremonious dumping from Doug's and her warm welcome at Berger's?
2. Did Doug's make the right decision? Did Berger?