Ken’s Foods, Inc.

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Ken’s Foods, Inc.

1 D’Angelo Drive
Marlborough, Massachusetts 01752-3066
U.S.A.
Telephone: (508) 485-7540
Fax: (508) 485-6882
Web site: http://www.kensfoods.com

Private Company
Incorporated: 1958 as Ken’s Food, Inc.
Employees: 670
Sales: $200 million (2006 est.)
NAIC: 311941 Mayonnaise, Dressing, and Other Prepared Sauce Manufacturing

A private company based in Marlborough, Massachusetts, Ken’s Foods, Inc., is the United States’ third largest salad dressing manufacturer, trailing only Kraft and Unilever’s Wish-Bone. All told, the company offers more than 400 varieties of dressings and sauces, sold under the Ken’s Steak House label through grocery stores as well as to foodservice companies. Ken’s also does contract work, such as the manufacture of the Paul Newman dressings. In addition to regular dressings, Ken’s offers lite and fat free varieties, as well as marinades. Manufacturing is conducted at plants in Marlborough; McDonough, Georgia; and Las Vegas, Nevada. Ken’s is owned by members of the Crowley and Hanna families, the business an outgrowth of the homemade dressings offered by Ken’s Steak House, the Framingham, Massachusetts, restaurant founded by Ken Hanna.

KEN HANNA OPENS FIRST RESTAURANT: 1935

Ken’s Foods grew out of the Ken’s Steak House restaurant in Framingham, Massachusetts. The man behind the name was Ken Hanna. He and his wife Florence opened their first eatery in Natick, Massachusetts, in 1935. Although it was named the Lakeside Café because of nearby Lake Cochituate, patrons soon began calling it “Ken’s.” The couple closed the restaurant in 1940 and relocated to Sandy Burr Country Club in Wayland, Massachusetts, some 20 miles west of Boston. Just one year later, they bought McHale’s Diner on Route 9 in Framingham and renamed it 41 Café, although it was inevitable that it, too, would be called Ken’s. At the time, it was just a one booth, eleven seat operation in a poor location. The fate of restaurants on this stretch of highway was so dire that it was known as “Starvation Alley.” Ken Hanna was to have better luck, however, due in large measure to the loyalty of old customers who followed him from Natick. Within the first year he added the rustic Fireplace Room and continued to build a clientele, offering good simple food at reasonable prices, including steaks, chops, and baked potatoes. What set the restaurant apart from the competition were the salads, and what made the salads so appealing was the restaurant’s homemade Italian dressing.

Credit for the salad dressing went to Florence Hanna, as did other aspects of the restaurant operations. Possessing both a French and Italian heritage, she used the former to decorate the restaurant like a Normandy country house, employing leaded-glass windows and exposed timbers as well as a fleur-de-lis emblazoned on the bar’s polished countertop, while she drew on the latter to provide her mother’s recipe for salad dressing. It was a combination of oil, vinegar, vegetables, and herbs that was flavorful without being too sharp or oily.

Another 80 seats were added after World War II with the addition of what became known as the Lamp Post Room. The restaurant continued to grow in the postwar years as the economy boomed and Americans went out to eat more often than ever before. In the mid-1950s the 41 Café name was dropped in favor of Ken’s Steak House, but in many respects it was the salads with Italian dressing that were the star attraction, not the steaks. Ken Hanna later recalled, “Pretty soon people were asking why I didn’t put the salad dressing in a bottle and sell it.” One couple in particular, their friends Frank and Louise Crowley, were the most enthusiastic about such an idea.

Born in Worcester, Massachusetts, Frank Crowley, Jr., earned a degree from Cornell University and after serving in the Army during World War II became the manager of a Framingham-area super market. According to his wife’s memories, recorded in a 2002 Boston Globe article, for several months, “He went to the restaurant at night and sat near the cash register where Ken Hanna rang up sales. Like a suitor, Crowley touted his credentials and urged Hanna to share the recipes, and finally Ken Hanna agreed. It was 1956.” The two men forged a partnership based on nothing more than a handshake, and Crowley was allowed in the kitchen where he took notes and watched how the cooks prepared the cherished Italian salad dressing. Two years would pass before the friends formalized their agreement and created Ken’s Food Inc., with both families receiving a half-interest, or 50 shares each. Ken Hanna served as president while Frank Crowley became treasurer, although in practical terms Crowley acted as the chief executive officer.

Only later would the name change to Ken’s Foods, but at first it was just a one-item company, run by the Crowleys without much input from the Hannas. The Crowley family set up a makeshift production area on a model-railroad table in the basement of their house, and there with the help of their children and their friends they mixed the Italian dressing, bottled it, and applied crude labels boasting “Ken’s Steak House Salad Dressing.” Ken’s Steak House began selling the bottled dressing, as did area grocery stores. The dressing held up well in a bottle and developed a following that drove growth.

The business soon outgrew the basement table and in 1959 the operation was relocated to the basement of Ken’s Steak House, where the Hannas became more directly involved. On occasion the Hanna children helped mix the dressing, and Florence Hanna was able periodically to taste the bottled dressing to make sure it remained true to the original. Also in 1959, Ken’s Foods trademarked “Ken’s Steak House Salad Dressing,” an uneventful step at the time but one that would have eventual consequences.

FIRST FACTORY OPENS: 1963

Ken’s continued to enjoy strong growth in the 1960s, and demand soon outstripped the restaurant’s production capacity. In 1963 the company found its own home, moving into a Framingham building. Here Ken’s business received a major boost when the Stop & Shop supermarket began carrying the Italian dressing. The restaurant, in the meantime, began to experience a changing of the guard. Ken and Florence Hanna’s oldest child, Mark Hanna, took over as general manager in 1960. A gregarious man, the younger Hanna proved to be an excellent person to have at the front of the house. He easily made friends with the entertainers—the likes of singers Wayne Newton and Robert Goulet, and comedians Rodney Dangerfield and Don Rickles—who appeared at nearby nightclubs. To cater to them, Hanna made sure the kitchen stayed opened late in order to feed the hungry performers after they finished their final shows of the evening. A number of them even stayed at his home when they were in town. Hanna was also a sports fan and befriended sportscaster Howard Cosell and often provided free meals to members of the New England Patriots football team. In 1980 Mark Hanna became president of Ken’s Steak House.

COMPANY PERSPECTIVES

When it comes to business, many say there’s no such thing as a recipe for success. At Ken’s we happen to disagree.

In the early 1970s, Ken and Florence Hanna began to sell off their shares of Ken’s Foods. First, they sold back 17 of their shares to the corporation for $81,600, making the Crowleys majority owners, and then in 1973 they divided the remaining 33 shares and sold them to son Timothy Hanna and son-in-law Joseph Shay for $155,000. Given the growth of Ken’s Foods, which was expanding into other types of salad dressings while steadily spreading into new markets from its Northeast base, it proved to be a wise investment for the second generation. The Crowleys’ six children, on the other hand, would ultimately inherit their parents’ interest in Ken’s Foods, divided among them on an equal basis.

Even after Ken Hanna sold his interest in Ken’s Foods, he continued to serve as a radio pitchman for the company in the 1970s. Ken’s Foods roared into the 1980s. Desperate for production space, the company bought land close to Interstate 495 in Marlborough, and on the site of a former cornfield built a new 318,000- square-foot plant. Just as was the case with the steak house, a second generation, sons Frank Crowley III (“Andy”) and Brian, along with Hanna’s son-in-law Shay, who became the company’s vice president of finance, assumed control of Ken’s Foods.

Both Ken’s Steak House and Ken’s Foods relied on the “Ken’s Steak House” name, and Ken’s Foods included a picture of the restaurant on its label, the bond between the two entities remaining strong because of the friendship between Ken Hanna and Frank Crowley. Despite having no ownership stake in the business, Ken Hanna served as chairman of the board of Ken’s Foods until the early 1990s. Thus, there had never been a need to formalize an agreement to license the “Ken’s Steak House” name, and the 1959 trademarking of “Ken’s Steak House Salad Dressing” was more of an effort to protect both parties than a power grab by Ken’s Foods. Cordial relationships, both between the companies and within the Hanna family, began to fray in 1995 after Ken Hanna died. The Hanna children fought over their father’s estate, a matter that would linger in Middlesex County Probate Court for many years. In addition, Mark Hanna and the youngest child in the family, Timothy Hanna, had a falling out, which resulted in Mark leaving the restaurant in 1995. He then filed an age discrimination suit against his brother, but it was ultimately dismissed. Timothy told the press than Mark relied on “less-than-acceptable management practices.”

TRADEMARK LITIGATION: 2002

With Timothy Hanna now the owner of the restaurant, dealings with Ken’s Foods also began to deteriorate. By this point, Ken’s Foods was many times larger than Ken Steak’s House and Timothy Hanna, with his 20 percent stake, was its largest shareholder and owed his wealth to the success of Ken’s Foods, the growth of which was so strong that in the late 1990s a second manufacturing plant was opened in McDonough, Georgia. Nevertheless, some of Timothy Hanna’s actions provoked the ire of Ken’s Foods. In 2002, a year after Frank Crowley died, the matter came to a head when Andy Crowley sued Ken’s Steak House, alleging trademark infringement and contending that Timothy Hanna and the restaurant were making unfounded connections to the foods company. For example, his comments to Nation’s Restaurant News in a July 2002 article implied that he was actively involved with the company. Ken’s Foods contended that Timothy had no involvement and that he was wrong in his comments about the ingredients used in the salad dressings. Moreover, the suit claimed that the restaurant was selling Ken’s dressings on its web site, implying that the product was produced at the restaurant when in truth the bottles were bought at the supermarket and then marked up. “The problem is one of confusion,” Andy Crowley explained to the Boston Globe, saying further, “Consumers were calling us, complaining about the service they were getting from Ken’s Steak House or the price they had to pay.”

Timothy Hanna promptly countersued Ken’s Foods. He contended that the trademarks were controlled by Ken’s Steak House, which granted an implied license to Ken’s Foods that could be revoked at the discretion of the restaurant. The countersuit also maintained that the Ken’s Foods suit was “completely unmeritorious and is just the most recent act of harassment in a long line of abuses Ken’s Foods has committed against Ken’s Steak House.” In a written statement, Timothy Hanna added, “If my parents were alive, this suit would never have happened. No one would have the guts to look my father in the eyes and say, ‘Ken, you don’t own the name of Ken’s Steak House.’ It’s absurd.”

KEY DATES

1941:: Ken and Florence Hanna establish 41 Café, later known as Ken’s Steak House, in Framingham, Massachusetts.
1956:: Hanna allows Frank and Louis Crowley to bottle restaurant’s signature Italian dressing.
1958:: Ken’s Food Inc. formed.
1963:: Company moves into first dedicated plant.
1985:: Marlborough, Massachusetts, plant opens.
2002:: Ken’s Foods sues Ken’s Steak House over trademark.
2005:: Trademark issues resolved.

To complicate matters further, some members of the Hanna family sided with the Crowley family against Timothy Hanna. Mark Hanna submitted an affidavit in support of Ken’s Foods, and Connie Shay, the only girl among the five Hanna children, also sided with Crowley. She was accused by Timothy Hanna of being sent by Ken’s Foods to urge him to “let Ken’s Foods have the Ken’s Steak House name in order to make peace in the family.” She denied his claim in a written statement, adding, “I merely expressed to him my view that his entire net worth was based on the success of Ken’s Foods, and that I can’t understand for the life of me why he continues to create trouble for the company he owes so much to.”

While the trademark battle simmered in the background, Ken’s Foods maintained its strong growth. In 2002 a third plant was added in Las Vegas to provide regional coverage. By this point, the company was doing business in all 50 states and a number of countries. All told, Ken’s generated revenues of more than $200 million, but only 40 percent of that amount was the result of retail sales. The rest came from the manufacture of private-label dressings and copacking deals, the most significant of which was Newman’s Own salad dressing.

In February 2005, Ken’s Foods and Ken’s Steak House reached a settlement on trademark rights just before the matter was about to be tried in U.S. District Court. While details of the agreement were kept secret, it brought peace to the restaurant and the salad dressing company whose histories had been inextricably linked.

Ed Dinger