Keeping the Faith
He did it his way in the fast-food business. La-Van Hawkins broke rules and made it big. But he kept faith in his values, reinvesting them in the community.
DETROIT — It's almost 3 o'clock in the afternoon, way past the lunch hour, but the cars keep rolling past the drive-through windows at a tiny, tidy, slightly eccentric-looking, red-and-white-tiled Burger King.
The colors make a splash here at the corner of Mack and Conner Streets, a particularly gritty slice of Detroit's inner city.
Asked why they come here, two patrons don't even mention the food or the service. "It's because of who owns it," says one teenage girl.
A young man in a baseball cap gestures at the color photograph of the very large figure of the owner plastered on the outside wall of the building. "I want to support somebody who's doing something good for the community."
That somebody is La-Van Hawkins - franchise owner, high-profile African-American entrepreneur, self-appointed savior of the nation's inner cities, and a man not troubled by immodesty.
"I'm not in the burger business," Mr. Hawkins likes to say. "I'm in the people business."
But he is definitely in the burger business, plus. His UrbanCityFoods operates 72 Burger Kings, he says, with another 150 getting ready for takeout by 2001. Last summer, he says, he raised $40 million to buy 89 Detroit-area Pizza Huts and broke ground for the first of a reported 60 Perkins Family Restaurants.
But even before the deals with Pizza Hut and Perkins, Hawkins was a significant player.
La-Van's the man, say some, who humbled the giants of the franchising world. Until he came along, say his supporters, even the big players like Burger King hadn't a clue how to tap the lucrative potential of the inner city.
"From the standpoint of urban development, La-Van is unique," says Clyde Rucker, vice president of diversity business enterprise for Burger King. "He's given us some flavor, taught us how to get out and present our brand, how to build customer loyalty." Plus, says Mr. Rucker, "He's just a good businessman."
Hawkins, who never finished high school, was definitely a small fry when he started in fast food (see story, right) but by 1996 had become a major force.
In that year, he signed a whopper of a deal with Burger King. It was worth millions and put him on the line to develop 125 Burger Kings in 18 different economic-empowerment zones - hard-edged, inner-city neighborhoods.
For Burger King, Hawkins brought the opportunity for inroads into the inner-city, a market company officials admit they had never been comfortable with and where McDonald's had the edge.
In a business where conformity and consistency reign supreme, Hawkins insisted on doing it his way. He says he imposed two conditions: flexibility to change Burger King's standard formulas for appearance and menu; and leeway in programs to bolster crumbling urban areas.
"Seventy-five percent of the focus of what I'm doing is helping urban kids," Hawkins insists. "I have a fiduciary responsibility to give back to my community."
Hawkins wasted no time. First he jazzed up the restaurants with red-and-white tiles and touches of neon. Focus groups among inner-city consumers quickly revealed that Burger King's traditionally muted colors were all wrong. "Who turned down the lights in there?" asked one respondent.
And he jazzed up the music, piping in R&B and hip-hop music, in some cases blasting it back out onto the street through stone-encased speakers.
He fiddled with the menu, adding Cajun fries and banana milkshakes and removing onion rings and salads. (The company has since pulled the fries and shakes for tweaking.)
Hawkins also persuaded Burger King to adopt the double drive-through, a format he brought over from his former franchisor, Checkers.
Most of Hawkins's units are small, and many have no interior seating. In some of the tougher neighborhoods, bulletproof glass separates customers and employees.
But perhaps the most unusual feature is the large picture of Hawkins on display by the take-out window.
He is not a shy man.
Before he enters a new market, Hawkins advertises both his face and his message: An African-American-owned Burger King is coming to help the community and would appreciate your patronage.
Hawkins says that just by showing up in neighborhoods that frighten most retailers, he's providing a service: creating jobs, giving kids a path up and out.
But he doesn't stop there. Out comes his checkbook: in Baltimore, $500,000 to city schools; in Detroit, another $500,000 to a local council of ministers.
Hawkins "deserves a lot of credit" for his work with urban youths, says Dennis Lombardi of Technomic Inc., a Chicago-based food-service consulting firm. "He's become a role model."
Mr. Lombardi also credits Burger King with the foresight to deal with Hawkins. "It's been a win-win situation," he says. "It's allowed Burger King to experiment and to win more market share."
"Market share" is one of Hawkins's specialties. He says his units average almost $2 million in annual sales, about twice the typical Burger King. (The company will only call his operations "very successful.") In 1997, he says, sales totaled $98 million.
Hawkins plans to add Burger Kings in Chicago, Los Angeles, New York's Bedford-Stuyvesant and Harlem, Philadelphia, Washington, D.C., and Newark and Camden, N.J.
Next month, he plans to move his headquarters to downtown Detroit in his own building.
Many of his newly acquired Pizza Hut units (he owns virtually the entire Detroit market) lie outside the city, but Hawkins plans an urban remake - neon, black-and-white tile, stainless steel roofs, and a spicier menu.
"He knows the market, and he knows best how to sell to it," says a company official.
Hawkins also promises changes for Perkins Pancake Houses, with a focus on soul food: ribs, pork chops, Southern-fried chicken, macaroni-and-cheese, and black-eyed peas.
Not everybody is a Hawkins fan, however. His company reportedly faces several lawsuits over allegations of unpaid fees.
"There's concern that he's all hype and that ultimately he's self-motivated," says one observer of the franchise community. Others criticize him for not using minority contractors on all his projects.
"Let them talk. I'll walk," Hawkins counters. "They criticize, and I continue to grow a little stronger every day."
And he refuses to be modest. "I'm the greatest salesman of all time," he boasts. "I'm in the process of making history. I've been able to make a difference."