Skip to main content

Logan’s Roadhouse, Inc.

Logans Roadhouse, Inc.

565 Marriott Drive, Suite 490
Nashville, Tennessee 37214
U.S.A.
(615) 885-9056
Fax: (615) 885-9058

Wholly Owned Subsidiary of CBRL Group
Incorporated:
1991
Employees: 5,100
Sales: $101 million (1998)
NAIC: 72211 Full-Service Restaurants

Logans Roadhouse, Inc. is a chain of more than 40 company-owned and five franchised full-service restaurants located in Tennessee, Kentucky, Indiana, Alabama, Georgia, Virginia, West Virginia, Florida, Louisiana, Ohio, Texas, Oklahoma, and the Carolinas. The restaurants have a casual honky-tonk decor and atmosphere, complete with wooden planked floors, a jukebox full of country music, and open, gas-fired mesquite grills. Buckets of unshelled peanuts on each tablewhich patrons shell onto the floorare the restaurants trademark. Logans menu is standard steakhouse fare: steak, ribs, burgers, and grilled chicken and seafood, along with appetizers, salads, sides, and desserts. The restaurants moderate pricesan average of $8.75 for lunch and $12.00 for dinnerappeal primarily to a middle-of-the-road, mainstream customer base. By offering selections that range in price from the more budget-minded to the higher end, however, the restaurant attracts a wide spectrum of casual dining patrons.

1991: The First Logans

The initial Logans Roadhouse was established in Lexington, Kentucky, in 1991 in a building that had previously housed a Western Sizzlin steakhouse. Its founders were Dave Wachtel, a restauranteur from Nashville who had earlier served as the CEO for the Shoneys chain, and his partner Charles McWhorter. Striving for a unique casual dining experience that combined reasonably priced, quality food with a fun atmosphere, Wachtel and McWhorter came up with the concept for Logansa restaurant that would have the look and feel of the American roadhouses of the 1940s and 1950s. The duo fleshed out their concept with atmospheric touches, such as hand-painted murals, wooden floors, a Wurlitzer jukebox playing foreground music, and a menu of American steakhouse staples. Soon, Logans atmosphere, in combination with its down-to-earth fare and affordable prices, proved to be a formula for success. Whereas Western Sizzlin, the previous occupant of the site, had been doing approximately $9,000 in weekly sales, Logans averaged around $50,000. With reaffirmed confidence in the Logans concept, Wachtel and McWhorter began planning for expansion. One of their first moves was to contact Edwin (Ted) Moats, Jr., a successful restaurateur in his own right.

A 1970 graduate of Vanderbilt University, Moats had begun his career as staff assistant to the president of the First American National Bank in Nashville. Working in business development and commercial lending gave him the opportunity to analyze what worked and what did not for various businesses. One of his most successful accounts was Shoneysa large, Nashville-headquartered restaurant chain founded by Ray Banner and formerly headed by Wachtel. While handling the Shoneys account, Moats developed a strong relationship with Danner, who was to serve as his mentor throughout the coming two decades. Moats entered the restaurant business himself in 1978 when he took over a Captain Ds seafood restaurant, rapidly turning it into one of the chains most profitable units. Together with a partner, Moats successfully took on several more Captain Ds, and by the time Wachtel and McWhorter approached him, had proven himself to be both a shrewd financial analyst and a skillful restaurant operator.

Moats began serving as a consultant to Logans in January of 1992. His first move was to visit the restaurant quietly and inconspicuously, as a regular patron. Noting that some customers were waiting as long as two hours for a table, Moats suggested enlarging the kitchen to handle more volume and adding more seating to cut down on the wait. He also proposed beefing up the menu to include more choices. Within months of implementing the recommendations, Logans weekly sales had increased by 60 percentand Moats had agreed to become the companys president. Shortly thereafter, Wachtel and McWhorter relinquished active leadership roles, leaving Moats to pilot the fledgling company on his own.

1992-95: Adding Links to the Chain

For the first two years of Moatss leadership, Logans grew at a conservative pace. Aware that a too rapid expansion could sabotage an otherwise successful concept, Moats opened only one additional restaurant in 1992in the Hickory Hollow area of Nashville, Tennessee. The following year was likewise slow-paced; at the end of 1993, there were only three Logans in operation. In the next two years, however, the company picked up steam; by the end of 1995, there were nine Logans Road-houses located in Kentucky and Tennessee.

Part of the reason for the companys modest growth rate during its first three years was the painstaking care Moatss management team took in selecting good sites. Logans strategy was to locate in middle-sized cities with populations of 175,000 to 500,000. If a city looked promising, Moats analyzed the existing restaurant dynamic to see how competitors were faring. If newcomers are taking business from the tired, older concepts, thats OK, Moats was quoted as saying in a May 12, 1997 article in Nations Restaurant News. But if the new concepts are competing, thats a sign of saturation. Favoring high-traffic areas, Logans frequently located near malls, on major thoroughfares, and in college towns.

Moatss diligence was not limited to choosing locations; he was meticulous about virtually every aspect of his new venture. Applying wisdom he had picked up from Shoneys Ray Danner, as well as findings from his own restaurant experience and research, he developed a handful of key principles that he used to drive the budding chain: quality, consistency, attention to detail, and low employee turnover. In a May 1997 interview with the Tennessean, Moats credited his mentor, Danner, with teaching him the importance of details. How does our grill look? How does our deli case look? Is the music at the right level? Moats asked, demonstrating the breadth of his attention to minutiae. What are the restrooms like? Is the parking lot litter-free? Whats the attitude of our employees?

Moatss last example, employee attitude, was especially important to him. In an industry notorious for its high work force turnover, he set out to improve employee retention and thereby improve overall consistency. Focusing on employee quality of life, Moats structured a work schedule that was somewhat atypical in the restaurant business. Each Logans location employed six full-time managers, working five-day, 45- to 50-hour weeks, as opposed to the six-day, 60-hour week commonly required in other restaurants. As a result, the company was able to maintain a substantially lower-than-average rate of management turnover: nine percent in 1995, as compared with an industry standard of about 30 percent. Logans also was able to keep turnover of hourly employees lower than the industry norm120 percent as compared with the typical 200 percent.

Moatss tactics paid off. Between fiscal 1993 and 1994, sales climbed from $8.8 million to $15 million, and net income more than tripled. At the mid-year point in 1995, Logans eateries posted revenues of $13.26 millionmore than double the total sales for the first half of 1994. Net earnings also were up: $770,000 for the six-month period, as compared with $464,000 for the previous years corresponding time frame.

1995: Going Public

In July of 1995, Logans went public in an initial public offering (IPO) that generated more than $13 million in net proceeds. Trading on the Nasdaq market under the ticker RDHS, Logans stock debuted at $13.50, climbing almost immediately to $17.50 and exceeding the companys expectations. Moats offered his interpretation of the rapid jump-up in Logans stock in a September 1995 interview with Nations Restaurant News. Weve been on a good run for several years as a private company, he said. And we hit the market at a time when investors are looking for a company with good growth potential. Restaurant stocks showing that potential are the ones that are coming back.

Logans added another six sites in 1996, bringing its total to 15 and spreading out from its Tennessee-Kentucky base into Alabama, Georgia, and Indiana. Year-end sales were $41 million, with net earnings of $4.1 million. The companys strong performance continued to attract investor attention and generate activity in the market. In April of 1996, a secondary public offering netted approximately $20 million, and two months later, Logans issued a three-for-two stock split. Between its 1995 IPO and the end of 1996, the companys stock price had increased by well more than 100 percent, positioning it as the leader of the casual dining category in stock appreciation. Logans banner year was recognized by Business Week, who ranked it number nine in its 1996 list of 100 Hot Growth Companies.

Company Perspectives:

Our mission is to be a growing restaurant company that achieves superior financial results by consistently exceeding our guests expectations. Our commitment to and our strong belief in the training, development, and retention of performance-oriented team members will drive our success. We are passionate about providing the Logans Roadhouse Experience to each of our guests:

Great food, great drinks, great prices Friendly, enthusiastic people Fun, casual, upbeat atmosphere Great value

Also in 1996, the company signed its first franchise agreement, with a franchisee who agreed to develop locations in Arkansas, Oklahoma, and Texas over a five-year period. Under the terms of the contract, the franchisee paid an initial $30,000 fee and agreed to monthly royalties of three percent of gross sales. The companys first two franchised restaurants opened in May and November of 1996, in two Oklahoma locations. Viewing franchising as a good auxiliary growth tactic, Moats began looking at similar opportunities. His strategy was to hand-pick developers who would agree to grow franchises in regions falling just outside the companys identified growth areawhich was the southern Midwest and the Southeast.

1997: Rapid Growth

During 1997, Logans added nine new restaurants, increasing their growth rate and exceeding their own goals for the year. Eight of the new restaurants were located in markets new to the company. By the end of the year, there were 24 company-owned and three franchised Logans Roadhouses operating in Alabama, Georgia, Indiana, Kentucky, Louisiana, Tennessee, West Virginia, and Oklahoma. Five more restaurants were under construction. The company also had signed its second franchise agreement, covering the areas of North Carolina, South Carolina, and Augusta, Georgia.

Each Logans location was serving approximately 6,800 patrons per week. With average check prices of around $10.00 per person, each restaurant was grossing roughly $3.5 million annually. According to a May 1997 article in the Tennessean, that number compared favorably with Logans competition. The Tennessean reported an annual gross of $2.5 million per location for the OCharleys and Lone Star chains and approximately $3.1 million for Outback Steakhouse.

The companys performance earned accolades from both business and restaurant industry authorities. In the spring of 1997, Nations Restaurant News designated Logans as one of the countrys nine hottest concepts, based on its originality in menu, atmosphere, service, and consumer appeal. The following November, Forbes magazine named Logans number 17 of the 200 Best Small Companies in America. In addition, for the second year in a row, the company was included on Business Weeks annual list of the top 100 small U.S. businesses.

Logans closed out 1997 with total revenues of $66.5 millionan increase of 62 percent over 1996. Net income increased almost 60 percent, to $6.6 million from the previous years $4.1 million. Despite strong financial performance and positive reviews, however, Logans stock was suffering at the year end. It closed at $15.50a 34 percent drop from 1996s close at $23.50. In the 1997 annual report, Moats wrote that the decline was partially attributable to the general softness in the restaurant industry that has led to disappointing results for many of our industry peers during the last two years.

1998-99: Joining Forces with Cracker Barrel

Logans had been ratcheting up its expansion rate since 1995, adding six new sites in 1996 and nine in 1997. The year 1998 brought a far greater acceleration in growth. By December of that year, Logans was operating 41 company-owned and four franchised restaurants in 12 states. The added locations pushed annual sales up to $101 millionan increase of more than 50 percent from the prior year. Net income for 1998 also showed improvement, climbing 27 percent to an $8.4 million total.

Having proven itself capable of succeeding in multiple markets and showing opportunity for significant further growth, Logans had become an attractive candidate for an acquisition. This potential came to fruition in December of 1998 when Logans announced that it was to be purchased by CBRL Group. CBRL, another Tennessee-based restaurant developer, was the parent company of Cracker Barrel Old Country Store, Inc., a 380-unit chain with locations in more than 35 states. Like Logans, the Cracker Barrel restaurants were fashioned to resemble establishments from a bygone age. Whereas Logans modeled itself after the American roadhouses of the 1940s and 1950s, however, Cracker Barrel stepped even further into the pastto the old country stores common at the turn of the century.

Cracker Barrel had only recently reorganized its corporate structure, creating CBRL Group as a holding company to facilitate the acquisition of new restaurant concepts. Its first acquisition after the reorganization was the Florida-based Carmine Giardinis Gourmet Markets. Logans was to be the second concept added to the CBRL stable. Under the terms of the deal, CBRL agreed to buy all outstanding shares of Logans stock at a $24.00 per share price, or approximately $179 million total. Logans would continue to function as a separate corporate entity and to maintain its own unique character. As with our other concepts, we intend to operate Logans Roadhouse as a separate company, said CBRL Chairman and CEO Dan Evins in a December 11,1998 press release. Logans shareholders approved the agreement by an overwhelming majority on February 5,1999, and the acquisition was completed two weeks later.

Looking Ahead

CBRL and Logans entered the spring of 1999 working to interface their management and accounting operations. Logans change in ownership was not expected to significantly alter its course of expansion. In a 1997 interview with Nations Restaurant News, Moats had predicted that there would be up to 60 corporate-owned Logans by the year 2000. At the beginning of March 1999, there were already 45 such sites, and CBRL had solid plans for continued growth. In a March 12, 1999 SEC filing, the company said it planned to open 13 new Logans in fiscal 1999 and an additional 11 sites in fiscal 2000easily enough to make Moatss prediction a reality.

Further Reading

Bernstein, Charles, At Steak: Newcomers Chase the Leader, Outback, Restaurants and Institutions, March 15, 1997, http:// www.rimag.com/06/steakhse.htm

Harris, Nicole, The Well-Done Steakhouse, Business Week, May 27, 1996.

Hartman, Stacey, Logans Roadhouse Satisfies Diners, Investors, Tennessean, May 8, 1997, p. IE.

Hayes, Jack, Edwin W. Moats, Jr.: Making Logans Roadhouse One of the Hottest Stops on the Casual-Dining Map, Nations Restaurant News, January 27, 1997, p. 150.

Papiernik, Richard, Logans Run: Roadhouse Follows Nasdaq Debut with Sales Spurt, Nations Restaurant News, September 11, 1995, p. 11.

Smyth, Whit, Logans Roadhouse Offers a Wagonful of Food and Good Times, Nations Restaurant News, May 12, 1997, p. 126.

Shawna Brynildssen

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Logan’s Roadhouse, Inc.." International Directory of Company Histories. . Encyclopedia.com. 17 Nov. 2018 <https://www.encyclopedia.com>.

"Logan’s Roadhouse, Inc.." International Directory of Company Histories. . Encyclopedia.com. (November 17, 2018). https://www.encyclopedia.com/books/politics-and-business-magazines/logans-roadhouse-inc

"Logan’s Roadhouse, Inc.." International Directory of Company Histories. . Retrieved November 17, 2018 from Encyclopedia.com: https://www.encyclopedia.com/books/politics-and-business-magazines/logans-roadhouse-inc

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.