YouSaid · the spoken record

William Rosenberg

lines on the record: 73
first: 2022-02-12
most recent: 2022-02-12
sittings or episodes: 1
sources: podcast

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“Unfortunately, the Chili's division of Dunkin' Donuts posed substantial losses over the next several years. These losses drained Dunkin' Donuts' profits, and as a result, our stock began selling for far less than its true value. Somebody from Canada saw the bargain prices and decided to raise us. In nineteen eighty nine, I got a phone call from Bob. Dad, he said, a company is raiding our stock. I told Bob I'll do anything to help out, but by then the media had caught on to what was happening. So they're getting raided. They don't have the money to fight back. So it's either take a hostile takeover. Remember, this is the late 80s. We saw this before on previous books.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hundreds of millions of dollars of wealth for you and your franchisees. Why the hell would you like, hey, you know what? Let's get into a sideline. Let's buy a Chili's franchise. What are you talking about? I felt we should have remained focused on our coffee and donut concept, put our time and effort into that. It was the final blow, concluding a series of many disagreements that had occurred between us over the years. At that point, I was 73 years old, and though I had originally planned to retire by the time I was 75, I thought, what difference would a few years To move on. And so now what happens? Fast forwarding a little bit. You know, you already know where this is going. Bob runs the company aground.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Me. So there's a backstory to what I'm reading to you that I failed to fill you in on. So their business is selling franchises, right? That is what their business is. Bob gets this idea, he's like, we should buy franchises. And so let's buy a Chili's franchise. And so he's looking at the contract and he's like, son, we're on the wrong side of the transaction here. Like, look at the money that's left over. That's not enough money to make this a profitable business. This is a bad deal. You can't take it. You should stick to what we're good at. Not buying franchises, selling them. And Bob's like, nope, you know, you have a bunch of experience. You have an A3 education, and you built this company from nothing. You owned 100% of it, and you got public. I know better. No, you don't, Bob. They decided to purchase a Chili's franchise. I felt we should have remained focused on our coffee and on donuts, but our time put our time and effort into that. Why wouldn't you think that? You've built a fabulous business that has generated”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“On which we strongly disagreed ultimately for the sake of the team I went along. I've made many mistakes in my life, but I believe one of the biggest mistakes was trying too hard to accommodate my son's desires. Whatever my son wanted to pursue, I backed him, though many times I disagreed. Harsh as this may sound, if there's any lesson I can port to others from this, it is to never assume others will treat you as you treat them. I presume that my son would do for me as I would for him, but I was wrong. In reality it simply doesn't always work out that way. Family relationships, especially when they are tied to business are complex. But that's another story and another book. Because of my emotional bonds and my love for my son, I made business decisions that otherwise I would not have made. I gave up control to my son and ultimately allowed him to control the board. As it turned out, Bob and the board of directors out.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't even know why I'm getting broken up over this. And then the relationship a man has with his son. And so that to me is really the part that resonated and like made me sit and think and really ponder about like what am I learning from this one, this one-sided conversation with Bill Rosenberg. And I think that is the value in reading the book is like when you're going to have these relationships either with the previous generation that raised you or the generation that you're raising it's important to internalize there. This is a smart capable driven person making mistake after mistake. That is extremely important for us to realize. It'd be foolish to think that we're just going to dodge this easily if we don't learn from the experience of others. I guess what I'm trying to tell you. So it says some of our interpersonal dynamics were typical of many father-son relationships. I had arguments with Bob. All fathers and sons have them, especially those who are in business together. As much as I was torn about certain decisions that Bob and his group were taking when push came to shove over different nations.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Know I don't have much time left. I'm going to write down on my lessons so you could benefit. They explicitly say that just like Bill did in the beginning of this book, right? And so when I think about the time I spent, I probably spent, I don't know, 14, 15 hours reading this book, something like that. It's like, I'm having one-sided conversation with, first of all, somebody that's dead, right? So there's only a way I can talk to them now. But I'm having a one-sided conversation with an 80-year-old super successful founder. And he's telling me the lessons of his life, both good and bad. And all I'm thinking about it, because a huge part of this relationship, or excuse me, this book at the beginning, it's a relationship that a man has with his father. And then...”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Believe in the cause, but I was overruled by Bob. Sure enough, they hired this Philadelphia lawyer, and as sure as hell they lost the case. They spent a lot of time in court preparing and fighting legal battles instead of building the business. I stuck by my son and his team. My fortune in Dunkin Donuts stock, which is about everything I had, went from thirty million dollars to three million. Even if I was going to be destroyed financially, I was going to write it out, and I did”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or let him run the business. I always chose in his favor favor had it been anyone else but my son, I would have fired him, I would have made the change. I wanted desperately to have him run the family business that I worked so hard to bill and built, and I was afraid that letting him go would destroy him. And so that was nineteen seventy one. Here's what Bob does in nineteen seventy two. In nineteen seventy two, Bob's group got into a problem with some of the franchise operators by forcing them to buy some of their equipment from the company. Bob and his executives were smart, but they lacked wisdom. We ended up in a class action lawsuit that was brought to us by the franchisees. So now they have to fight a lawsuit. They recommended a Philadelphia attorney because the trial was taking place there. We met with him. I could easily tell by the way he talked that he knew nothing about franchising. When the attorney left, I told the others not to hire him. My experience had taught me that people don't win when they don't win.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lost money, and now we're going through. So now the company's been around for 21 years has never lost money. The sons just a fused into his tenure and is essentially destroying the business. The question arose whether to write off the loss over a long period of time or buy bullet and take it in one year. So they go, they talk to people that know about public equities and also their accountants. And they said the accountant said, they said take the $3 million loss all at one time. Our accountants agreed, and so that's what we did. As a result of that, the stock fell. The stock had been trading at $66, slipped below $12, and then bottomed out at $1.75. And so the Board of Directors meets and they're telling Bill. They're like, we got to fire Bob. Bob doesn't know what the hell he's doing. The director said that they felt I needed to replace Bob. I had to make a choice that repeated itself many times over the next few decades. I came to a crossroads with my son where I either had to fire him”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so one of his executives comes to him and says, listen, there's a manager who's mishandling funds, so stealing money, and we fired him. Next thing I know, Bob rehired this man, so Bob's his son rehired this man to work in the real estate department. And Bob's like, oh, I'm doing this because this guy is smart. And he says to his son, I don't care how smart he is. You'll never have enough people to watch a crook. It wasn't long before my son called to tell me that we had a problem. So this guy is working in a Dunkin' Donuts. He's stealing money. He gets fired by the old school, rehired by the new school, right? Because he's quote unquote smart. Let's see how smart this guy is. So let's hire him for the real estate. It wasn't long before my son called to tell me that we had a problem, a big problem. It had come to Bob's attention that we had 100 stores in bad locations. He wanted to go with me to check on these stores. So he goes with Bob. Sure enough.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“He likes to do everything to the extreme, so he eats and he gets fat, but then he'll go to this almost like an adult fat camp at, it's called like the rice diet, very popular at Duke University. And so he'd constantly go away for like six weeks to lose all the weight really fast. Then he'd go back out and then you gain a bunch of weight. So he says essentially like he couldn't maintain his weight. He would gain 20 pounds and then lose 20 pounds. And that's how he did everything. So he'd be E2 excess. This seems like a really bad idea to me, so I'm telling you that. Eat to excess and then starve yourself and then do it back and forth. It's just like, why don't you just maintain a healthy weight, dude? I don't know what you're doing here, but he's got to fight all these health issues and it takes time away from the business. And this is one of this is the fact that he had to have cancer surgery. He was a smoker. So he's like, don't ever smoke. He says that in the book. So in 1971, fighting cancer and then recovering from the surgery and regaining my strength took up most of my time. I ceased to be as active.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I didn't realize it at the time, and this is so, it's just not worth it. Think about the sentence how crazy it is. I didn't realize it at the time, but it seemed my son and I were slowly growing apart. So he is 50. I think his son is 25 at the time. And one of the problems too, I understand what he's about to say here. This is a couple years later. So his dad's like, you know, his dad. His son was like, I think I should be CEO. I can run the company or whatever. And so he acquiesces to that request, but it's not, it's CO and title only. So he says, I didn't care about titles. So Bob became president and CEO on paper. I was chairman of the board and the treasurer. In reality, I was still the man in charge. So he mentioned in the introduction of the book that he had to fight cancer multiple times. He had hip replacement surgery. I'm omitting a lot of this from the book. He's got this weird relationship with his weight where he's just like...”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“They know how to build a damn business. I think I should have listened more closely, so they're talking about all these people that they want to replace. And so he's getting information from his other employees that have been with him a long time. They're like, hey, are you sure this is the right idea? And he's like, I didn't know what was happening. And so he was essentially telling us the mistakes he made so we can avoid them. I should have listened more closely, but I didn't. Little by little, some people left or were let go. I had put my son in charge and I stood behind many of the decisions he made, but I was torn internally. I couldn't turn my back on my principles and what I believed. This conflict of interest between my son and me became a source of many heated arguments in the years to follow.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“becomes blind to some of the drawbacks of such an arrangement, but this didn't become apparent until later. So then he starts talking about the mistakes that siding with his son caused him to make the detriment of the business. We had a good group going, but they supposedly weren't sophisticated. He put that in quotes. So this is what his son is saying, oh, these people aren't sophisticated. Remember, the son and the business school graduates, no experience, tons of education are telling these old school guys, generation older who've now built this business from nothing that you're not sophisticated. That's fucking ridiculous. And why are they not sophisticated? Because they didn't write out reports and sit at meetings to the degree that my son's group did. But they knew how to go out, and he's talking to his group, but they know how to go out and make money and build a business. It was a difference in culture that arose between the old and the new regime. So the new regime obviously is the son, the older, the people that are like him. They may not have, in many cases, not only they don't have college degrees, they don't even have high school. They didn't finish high school.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so again, my son's only two, you know, but I could never, I just could never imagine putting this business out for the public, like this family business out for the public. It just seems odd to me. There's something that he repeats in the book over and over again, the importance of sharing. He felt like you should pay your employees as well as much as possible. Your goal should be to make everybody works with you as rich as possible. This is going to remind me a lot. The note I left myself here is this is the Lesh Schwab way. So I'll tell you what I mean by that. I used to say to our employees and franchisees, I only have one wish for you, and that is I hope every single one of you becomes a millionaire. Frankly, if all you become millionaires, I'll become a multimillionaire. That's how I thought then and I still think today. Try to bring along great people. Give them incentives to do well. Remember that point. The more people you have doing well, the better off you'll be. It was absolutely my philosophy and my policy, and I did not tolerate anyone who thought otherwise.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of this company, and tell me you like hostess donuts. Don't you like Dunkin' Donuts? I buy hostess donuts, he said, and eat them at home. I said, Bobby, you better throw those hostess donuts down the toilet and start eating dunkin donuts, and learn what a good donut is and what we stand for. You cannot be president of this company and not wholeheartedly believe in its products. You just can't do it. And my thought is like you never even use the products of the company that your dad has been running for multiple decades. The company has generated the profits that it's given you a wonderful life, a life that is 180 degrees different from the life that your father had to struggle through. What the hell was that? This is what I meant. It's going to be really hard to read this book and come away with a positive outlook on his son.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, this part made me laugh, and when I read it, so I just wrote what this made me laugh. That's the note, right? I didn't realize how, this is like a warning sign. Red lights flashing now that I look back on this. And so his son graduates from Harvard Business School. He comes into the company, and this is before he turns over the CEO role to his son. And he's just talking to his son about this. Like any dad might talk to their son, right? Give him advice. You must know how the coffee should taste and what our standards are. He said, I don't drink coffee, dad. You don't drink coffee. Are you kidding? I couldn't believe my ears. He said, no, I drink milk. I said, Bobby, if you're going to be the president of this company, you better learn to like coffee, and if you don't start to drink coffee, this is funny. If you don't start to drink coffee, you're going to get it in the form of an enema. One way or another, you're going to like coffee. He laughed and then he said, I like hostess donuts. I said, how the hell can you be present?”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so then he talks about the fact that his business and his life were intertwined. The summary of this section, it says, keep your foot on the gas and stay close to the money. And so he said so much of my life dependent on the success of my business. As much as I was enjoying the fruits of our success, I never sat back. I was always a stickler about the maintenance and operations of the stores. I constantly call my people if quality didn't meet our standards. It was my belief that you had to be where the cash registers were because that's where the customers are. And so later on this fierce dedication to the customer, which you and I have seen over and over again in these books. Later on, he'll have a meeting with an executive and they're like, here's the organizational structure of this business that we've built. Look at it and they're looking at it. And he'll like Terrence into the guy. He's like, I'm not at the top of the company. He's like, what the hell are you talking about? You're the founder, the CEO, the chairman? Like, of course you are. He's like, the customer is. And he'd rip up the papers and make him redo it. He's like, the customer is the boss. They are the most important part of the company.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“He's making enough money and getting rich enough that his son can go to Harvard Business School. And his son is in Harvard Business School, and he's like, Dad, I don't understand. Like, you have an eighth grade education, but you've been telling me my whole life the stuff that now I'm learning in Harvard Business School, like, how did you do that? And so he says to his son, that's how I learned it. I learned from people like me who started successful businesses. I learned from other successful people how they achieved their goals. If I had to make a choice between a formal and an informal education, I would take the informal education. I think you learn a hell of a lot more once you get out into the world and really do it. You really don't know what the world is all about until you get out into it. And so that was the first mention of something that's going to come up later on because his son tells him, hey, I want to be like you, Dad. I want to come into the family business. He's thrilled that his son says that and eventually he's going to turn over the company to his son, but his son hires all these business schools.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he says, he's like, maybe I'll start another franchise. And like a franchise organization, he realizes this is going to be a mistake. In addition to Dunkin' Donuts, I kept my eye for other ventures. At one point, I opened a hamburger and fries place and called it Gulp and Gallop. And so he's got a partner that wants to come in with a lot of money for Gulp and Gallup. Hood offered me $500,000 line of credit to get involved in Gulp and Gallup Gallup. I agreed, but after I gave it some consideration, I realized we didn't have the organization to do that and Dunkin' Donuts. I went back to Hood and explained my thoughts. Ultimately, Gulp and Gallup wasn't the way to go when we closed it. I wanted to devote my time to expanding Dunkin' Donuts, and so we see that the idea that I think Steve Jobs put it the best way, focus is saying no. He's saying no to $500,000 in another business because he can't do that and Dunkin' Donuts. So I just mentioned that he says that the franchise franchises in the 1950s were the dot-com stocks of their day.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“So they have like a four month float here. We found ourselves in a position where we had credit from the supplier and cash from the customer. And he really hits on an important point that like what you think is you really have to know what your bottleneck is. And then if you can identify your bottleneck, put all your resources into attacking that bottleneck. He wants to grow fast and he says, finding franchisees he compares multiple times in the book that at this point in American history franchisee or franchising is was like really popular and hot. He said it was like the internet stocks of their day. Remember he's writing the book in 2000, 2001. That's probably why he's making that comparison. But he realizes like, I can find tons of people that want to buy Dunkin' Donuts. That's not the problem. He says, finding franchisees or locations wasn't the problem. Financing stores was the problem. And so as Duncan's growing, he's looking for other opportunities because you have McDonald's growing at the time, Kentucky Fried Chicken is growing at the time.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to the banks. For instance, I convinced my suppliers to finance my growth. I pointed out that they would benefit with the increased volume of sales. Some help with a small loan, but most gave us longer-term credit to pay them off. Why is that important? Because he says, unlike many companies, which had to wait for their money to come in, in our business, we got the cash the minute we sold our product. Some suppliers went as far to give us $120-day credit.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I took Jack's advice and I let them go. For two years the company had stagnated. Beginning anew I sat our people dad down and said what we have to do now is start franchising as rapidly as possible. So there's all kinds of struggles that he has trying to build a franchise at this point. He's trying to look for alternate sources of money. But the problem is a lot of those sources of money come with a partner. And he says, he's like, I need a partner, like I need a hole in my head. Like, he's done. I'm not doing a partnership anymore. And we see the closest thing he has a partner is going to wind up being his son's going to come into the business. And that does not go well. So he's basically what I'm trying to tell you here is that banks wouldn't finance. So he's got to find other solutions. And so he says, as Duncan grew from 5 to 10, then 20 and now 30 stores. I did what I could to find sources of financing other than...”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I got Harry's down payment and agreed to pay him out so much over time. In 1955, so this is five years after he founded Duncan, I bought Harry out. Harry had the right to compete with me if he wanted to. That's the deal we made. I then found out that Harry and our former mutual lawyer had formed a company called Mr. Donut. Look at what they do here. We also found out that two outstanding locations that our former lawyer had been negotiating for Dunkin' Donuts had contracts drawn up for Mr. Donut. That's shady. That was a breach of fiduciary relationship. Both Harry and the lawyer had been employed by Duncan Donuts at the time. I told Jack about it and I told him I thought we should sue. Jack being the kind of man he wasn't interested in starting lawsuits and he gives him good advice here or advice at least that Bill agrees with. He said Bill for Christ's sake forget about it. Let Harry have them. Continue on. Build your business. Go ahead and do it because you could spend all that time fighting in court.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Offering you if you don't want it, I'll take it vice versa in any regardless of who winds up with the business, the other person can go out and start their own donut business and then run it the way they see fit. And so that seems like pretty fair. Harry did not want to do that. He just kept stalling. And Harry winds up having like scumbag behavior. Says everyone knew that Harry didn't want to run the whole thing. So they're going to go into equity court to figure this out. Our former mutual lawyer had convinced Harry to turn the business over to the kid who left the eighth grade with the implication that it wouldn't be long before things would go downhill and the uneducated kid, he's obviously talking about himself, wouldn't be able to pay the money he owed. It wouldn't be long before Harry would own and run the business. Everyone knew I wanted to buy him out. I founded the business. I wanted to stay in the business. Although we were successful, we hadn't built up a large cost balance because we kept reinvesting to build the company. I had to dig up the money to pay Harry. I went to my friend Abe and I borrowed $50,000 from him. I borrowed money from some of my suppliers.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“His wife lets him have it and she starts getting his partner's wife starts yelling at him. She let go at me. You are egotistical. You want to have all the publicity. Now the whole problem no longer rested in common sense and logic. It became fueled with jealousy and envy. Success rather than failure was doing us damage. Success was becoming more difficult to deal with. So this fight goes on for quite a while. Bill's trying to avoid a lawsuit. So he's like, listen, I'll buy you out, okay? Or you could buy me out, whatever. So I made him an offer. I told him he could buy me out or I'd buy him out for $350,000, which is the total book value of the company. In other words, 100% of the book value for 50% of the business. I told him I didn't want to get out of the business if he bought the company. He would have the names, but I'd have the right to go back into the business. I would not sign a non-compete agreement. He could not, or excuse me, he would not have the same rights if I bought him out there. So what he's saying is like, listen, I'll take the deal.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“They buy a franchise from us. He brought suppliers and friends to the office to convince his stupid, crazy partner that he should be satisfied and not expand. This is terrible. He even got the people who sold us the donut mix to come and talk to me and tell me how crazy I was. And I said, I think this is where the future lies. I could not be talked out of it. I refused. It's going to wind up leading to a lawsuit because Bill goes out and sells franchisees, but his partner won't sell any agreement. He didn't want a franchise and wouldn't allow me to sign a franchise agreement. He said he owned 50% of the company. He said everyone told you that you were crazy and you can't franchise. I told him I don't care what they said. I believe that we have a great thing.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Different through franchising I could grow the company before somebody else came up with my idea and took over our leadership position. And so he goes back to his partner and says we're going to expand. We have this idea. This starts like a two-year fight. And so this is going to play out on a couple different pages. The notes I have is you can't have a partner like this. And then later on, childish, crab behavior. And so essentially he's getting a lot of press and a lot of attention. He is an eighth grade dropout. His partner is a highly educated business school educated person and there's just jealousy. And this is like the downside to human nature. So it says he and his wife kept asking why I was never satisfied. Why did I have to keep building? Why aren't you satisfied with what you have? What is your problem? And then they start to say, it's like, no, your idea is stupid. No one's going to buy franchises. Who would want to buy a franchise from us?”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he says, I don't have to go out and sell accounts at the factories in the donut business. It was just a matter of getting a store, opening it up, and you own the customers. The name Dunkin' Donuts attracted people. Customers liked our products and the way that we conducted business. And so it's going so well. This is the first sign that him and his partner really what they're going to break up over. And he's going to wind up buying his partner out is because his partner Harry's like, no, we got enough stores. Five's enough. What's wrong with you? And Bill's, as you've already picked up so far, like he's an extreme character. He's like, no, no, my foot is staying on the pedal. I want to get to thousands of stores or whatever the case is. Harry was very happy with five stores we had. I, on the other hand, wasn't content to rest on my loyals. Good enough wasn't good enough for me. I saw that we had a good thing going and I wanted to expand in a big, big way before somebody else did. I decided that we're going to sell franchises. And so he has this idea to take a cross-country road trip.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so he's running Dunkin' Donuts, his other company, the Industrial Lunch Service Company, is much larger at the time, but then he starts to realize, so think about it, maybe you have 200 trucks, maybe he's got at this point, I think like three stores, something like that, four donut stores. Actually, this chapter is called The First Five Donut Stores. So he has up to five stores at this point. And he's just realizing he's comparing the two businesses. One is big and mature, and the other one's small and growing. He's like, I like the donut business way better. And so he talks about that here. He says the donut business didn't require going out and selling accounts, which we had to do for industrial lunch. So he had to go into the factory. And really, the way you think about this is like, how can you get closer to the customer and then just keep maintaining that relationship if the factories, he doesn't have a direct relationship with his customer? Their factory employees and the factory can change their mind as some of them do and say, hey, you know, we're moving you out because we have somebody else. We gave your contract to somebody else.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“So he says on opening day we gave away a free dozen donuts with every dozen bought. Needless to say, we opened a store with a bang. We attracted such a crowd that my wife and kids and our friends who had come to wish us well all had to help wait on the customers. So imagine that. Your promotion works so well. Your wife and kids show up. Your friends are showing up to support and you're like, hey, put on an apron. I need you to get to work.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I can actually improve on. So it says right from the start, we were very different. We were the first to put seats and beverages in a retail donut store so customers could eat out on the premises. So all the donut stores were just like takeaway counters. The typical donut store had only four kinds of donuts. I wondered why can't we make 28 different kinds, or 52 different kinds, or 108 varieties of donuts? And then the second thing is donut stores made all their money on donuts. That's where they focus on, but they also sold coffee, but their coffee sucked. So he says, so he's like, what if we had the highest quality coffee you could get anywhere? People talked as much about our coffee as they did about our donuts. So his first donut store is going well. Now he's trying to expand to a different location and he's saying it was like, well, we're still not well known. Like not many people know what open kettle is, but they know what donut is donuts are rather. And he's like, well, how do we get traction? So he had an idea. It works too well where he doesn't do this in the future.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the weird thing is Bill makes the point. He's like, these companies are wholesalers. So they open one retail store. Why wouldn't they keep doing this? And they just didn't do that. So it says it hit me on the head. Wow. Here's a situation where I could get into a business and utilize Alvin without utilize Alvin. And so I said to him, hey, how would you like to run a retail store for me? So Alvin agrees he's not going to last long. He winds up being an undercover alcoholic. We open it up Memorial Day weekend in 1950 and we called it the open kettle. So Alvin's going to run away. He disappears in a drunken stupor and so he winds up recording. Bill rinds up recruiting some people that he used to work for at the shipyard. And he makes a really interesting point here and I think again it's like central to how to think about his what he learned from his life and career. He's like, listen, these things existed before dinosaurs existed. I did not invent them. I just made them better. And so he's constantly looking for like, what are these people doing, right? So he's going to copy the best ideas. But then he's also going to be like, okay, what are they not doing?”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he's realizing he's like, man, well, let me just read this to you. The more he grew, the more donuts and coffee comprised a big portion of our sales. Over 40%. To take advantage of that, I decided I wanted to have our own donut department. And so he tries to recruit this guy named Alvin, who works at this company called Puritan Donut Company. And they're donut wholesalers. And so they're having lunch. He told me about his background and his experiences at the Puritan Donut Company. He said, do you know something, Bill? We had 12 wholesale trucks. And then we opened a little retail store in front of the donut making plant, and we made more money from that one store than we made from 12 wholesale trucks. He explained the reason for it. If retailers sold donuts for a nickel, as we did, they paid the manufacturer two and a half cents so the retailer has a 50% food cost. But when the people at Puritan donuts sold in their own retail store for a nickel, they had no delivery costs, no trucks, no employees or anything of that nature, no delivery employees that is. So it was much more profitable for them.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“He left a note that said Mr Rosenberg, I can't face you, I'm sorry for what I've done in the past, but I did it again. Rather than face me, he killed himself. I felt so sorry that in trying to be a decent person and giving a man another chance, I actually cost a man his life. Whether he would have done it anyway, I don't know. I certainly felt guilty. Okay, so now we get to the beginning of what's going to turn into.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“He was heartbroken. He said, you know, Mr Rosenberg, you've been so good to me all these years, I'm very sorry for what I've done. And so Bill does something here in his early days of career of his career I don't think he would do later on. You should be terminated, I said, but every man deserves a second chance. You seem like you're sorry and you realize your problem. You don't want to destroy your family. You love your children and wife, but you started running around with this woman buying her gifts. I'm going to give you one more chance, but I want to make damn sure you don't ever do this again. He promised, so he gave him another chance. A year later I got a call telling me that he had been found dead. He put a shotgun in his mouth and pulled the trigger.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Drunk or a drug addict, it was pretty difficult to correct those problems. And when I'm reading that, I really think of what Charlie Munger says. He's just like, stop trying to be brilliant, just avoid being really dumb. And if you're a thief, a gambler, and a drunk are a drug addict, you can be really hard. If you just avoid those things for your entire life, it's very hard to have a great life when you're drunk or a drug addict. One unfortunate time one of my executives came to me and said that a manager was falsifying the reports and taking some money. They had caught him red-handed. You're going to see he just struggles like, to you and I, this seems like this is like a basic thing that you shouldn't have a problem with. But so many people do have a problem with. And we might have to hire or work with those people or hopefully avoid them. I guess there's a lesson here. So he says this guy's, you know, why are you taking money from the store? Like, you have a good job. What the hell are you doing? He was a married man with two children, but he had a problem spending money he didn't have because he was running around with another woman. They called me and I went to see him.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“As Mr. Inside and Mr. Outside. When they try to stop Mr. Inside, Mr. Outside went ahead and scored touchdowns. I knew if we could get a top flight inside man, someone who had strengths and systems and cost control and purchasing, we would make the business fly. There was no question how fast and how far we could go if I was free to get out and devote my time to bringing in new customers and making sure the old customers were satisfied. So I started thinking, who do I know and who can I get?”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then he's got another great metaphor here. It's the Mr. Inside and Mr. Outside metaphor that he learned from watching football. And he just realizes, like, where are my strengths? So I need to maximize spend all the time where I'm strong at and just hire somebody that can take care of where my cover up and take care of my weaknesses. His strength is like motivating people, managing people, and sales. And he's like, I need somebody to deal with the details, the numbers, like almost like an accountant kind of type. And so he talks about this as being Mr. Inside and Mr. Outside. Mr. Outside is obviously him. Mr. Inside is going to be his partner and they're going to wind up falling out. And then after this, he's going to swear off partners. But he says, I wanted to spend more time doing the things I was best at, promoting and developing the business. But I was unable to do that because I was devoting so much time to inside concerns of the organization. In those days, West Point's Army football team was the best football team in the area. The team became champions as a result of the halfback and the fullback. The papers used to write them up.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“So he's talked a lot about what happens when you get bad people, but now he's going to give a short story about what happens when you have good people. That first winter, we had a huge snowstorm, and the entry in and out of our garage became snowed in. So the trucks can't get out for that day. We made all the sandwiches, everything was ready to go, but the trucks couldn't get out. All the food spoiled, it was a bad day. That same winter, another big snowstorm came. This time I got up and said to myself, I better get down there and shovel so we can get the trucks out. I went down at 3.30 in the morning and found Jimmy and a group of other employees that he had assembled shoveling out the driveway. I swear I had tears in my eyes. Jimmy came up to me and said, Bill, I got the gang together because I didn't want you to get stuck with all that merchandise and have to throw it away again. Their loyalty was heartrending.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was sick to my stomach, but it wasn't the flu. It was the pressure that got to me. And I said, who needs this goddamn shit to hell with it? I'll just take a job and be happy like everybody else. I won't have all these headaches and problems. What am I going to do about tomorrow? I came from within inches of quitting that day. Then I said, wait a minute, I've worked really hard. I found a way to get these things done before everything couldn't get done. I did things when everyone told me that they couldn't be done. Now I've got to convince myself that I can do it. I pick myself up and went back in. And he talks about good thing he did this. Not many things are as exciting and satisfying as being part of a business that is succeeding and growing rapidly. There's an atmosphere and a feeling that's tremendous.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very much like Paul Orfalla, the founder of Kinkos, spending a lot of time just going around the country looking at the stores. And I think his observation that this is just it doesn't take a genius to just improve things. Just look at it and be like, okay, how can this be better? What if I make it 1% better every time I come here? Over the years, if I do so, this business will drastically outperform the competitors that are just not doing this. They're fine just showing up, turning on the lights and waiting for the customers and seeing how the day plays out. So what I just described to you earlier is about he's growing, he's adding trucks, he's adding routes. That's the euphoria. Remember the famous Mark Andreessen quote that startups and startups you only feel two emotions, euphoria, and Terra. This is the terror part, and this is the closest he gets to ever quitting. He says a year and a half into the business, I damn near went out of business. Due to a serious flu that was going around, many of the men got too sick to come to work. People were sick at the factories too. We worked all night and pushed the carts all day. I got so upset. I walked outside and said to myself, who needs this shit? I stood on the curb and threw up in the gutter.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“About so now I need to focus on sales, but he's always focused what I'm about to read to you everything he does is like this. He's constantly just observing the workflow. And I'm like, okay, how can we make this better, faster, better for the customers, cheaper for us? And so he says, I noticed the lines that the factories are getting tied up because our men had to stop and look at the sandwiches and then read each label in order to charge the correct price. I thought, why couldn't we get waxed paper with a blue stripe, a red stripe, yellow, and a black stripe? Red would represent a 25 cent sandwich, blue a 20 cent sandwich, blue a 20 centww, and so on and so forth. That way my man could stand back with his money changer and bang, bang, bang. Look at the colored stripes and know the prices instantly. So we established a color code system and that sped things up. And so he's doing this many, many years before he does Dunkin' Donuts. Later in the book, after Dunkin' Donuts, he gets to 100 stores and it gets to 500 stores. Then it gets to 1,000 stores. He spends a lot of time.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“I want you to know many years later I heard a rumor that Miller and Siegel, his two old, his other partners that he just left, got into an argument and that one killed the other and wound up in jail. And so he gets started with limited money. He's got to buy all the equipment secondhand, but he's really good at sales, so he'll go out and he'll sell the factory saying, hey, let me provide lunch and breakfast and everything else for your employees. It's no cost to you. So says, over the next two years, we grew rapidly. We were expanding our commissary to the next empty store until we took over the whole block. We grew like crazy. We had more routes and more trucks. Remember, he said he started off with one truck and then eventually builds his business to 200 trucks. But everything didn't go as easy as it sounds. And so we get into his workaholic nature here. We had to get up at 2 a.m. to assemble the sandwiches and make coffee. We had to get everything ready for the men so they could be out on their roots and be the first and be at their first stop by 6 a.m. And then he talks.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, this is his first bad experience with a partner. Remember, he'll remember that for later because he'll have another bad experience, and then later on he's like, no, no, no, no more partners. He's going to wind up owning 100% of Dunkin' Donuts before it goes public. So he's like, I'm ditching my partners. I'm going to do the same business, but instead of doing it, I think he's in Connecticut at the time. He's like, I'm going to go back to Boston. Without question, I like the business, but I had made up my mind. I was going to go back to Boston and open up an industrial lunch service without these two characters. I was back to square one. And so this is a crazy thing. Memories around like 30 years old the time he's married. He's got two kids. And I just wrote how bad do you actually want it? He could have got a job. You know, his skills are in demand, but he's like, I don't want to work for anybody. So he moves his small family back in with his parents. My wife, my two kids who are now eight and five years old, moved temporarily into one bedroom's place. We slept in one room until I got myself organized. These were pretty tough times.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Fast buck buying their wives mink coats and driving Cadillacs. They did not have the same ideas that I had about building a business. These guys didn't care about gaining respect, about being honest and honorable. I didn't want to be in business with people of that nature. And so he's going to wind up leaving. There's this fight they're having. Give me my money and I'll get the hell out of here. It was a bad relationship and I didn't do well financially. And then he has a great line here. Adversity is a great teacher. Little did I know that this downturn of events would catapult me to a higher ground.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“These fellows were disorganized. I decided it didn't make sense to go out canvassing for additional business until we had the commentary working efficiently. And then he just realized that they were doing shady stuff. It came to my attention to my partners were not on the level. They had been getting contracts for candy and cigarettes, things that were not available because of the war, so you had special exemption that you could get these things, right? And then they would turn around and sell them on the black market. We had been allocated these desirable items because we were serving them to people working for the war effort. See how shady that is? So these supplies are people that are building supplies for the war effort. They're saying, hey, because other people can't get them, they're valuable in the black market. Let's not give them to the people that are building for the war effort. Let's sell them for a profit. When I discovered what was happening, I realized I was in business with the wrong people. They were short-sighted, unpatriotic, and dishonest. And they were not interested in building a long-term business. They were only interested in a”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Wind up buying, they had bought old trucks, like out of service ice cream trucks from Bill's old boss. And they were retrofitting them so they could be lunch trucks that they were a new thing at this time, but they're very common if you go to any construction site or anything else, you'll see these trucks that are serving food. And they're like, hey, they give him a call. They're like, hey, we want, you know, let's partner up or excuse me. We want you to work for us. And he's like, no, no, I'm not working for anybody. So he says, we'd like you to come work for us. Look, I'm not going to go work for anybody. I'm going into business for myself. And so they approach him multiple times every time he says, no, no, no. They're like, okay, what if we make you a partner? And so he's able to buy into the business. He says, for $2,500, I bought a third of the company. I had $1,500 in war bonds, and I borrowed the remaining thousand dollars from my mother. So he does not have a lot of money at this time. These fellows, and then here's the problem, what I meant about you can't make a good deal with a bad person.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now I felt the time had come to prove myself to myself what I knew I could do and what I had long desired. I knew I could do better for myself with the terrible loss of my brother and the end of the war his brother was fighting in Germany and get shot in the head and killed. Nothing could stop me. I wanted to go into business for myself. I had a fire in my belly, he repeats that phrase over and over again. Fire in the belly. I had a fire in my belly, that essential ingredient that all entrepreneurs must have to go out on our own. So he's like, all right, I'm going to do this. I'm going to do like a lunch truck. He gets approached and this is another example. There's a lot of shady people that he's dealing with. And again, another example of that. You can't make a good deal with a bad person that Warren Buffett quote. And so he gets a call, these two partners, Irving Miller's one of them, and his partner with the last name of Siegel, I think.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source
“He says in every venture that I've ever undertaken from a project such as a welding issue that he's dealing with at this point in his career in the shipyard to later on when I was building the organization that became Dunkin' Donuts, I ran into people who resisted what I was trying to do. You have to figure this into your equation. The most important thing to learn from this is to not let these people get in your way. Negativity is part of human nature. It is part of life. You'll find these people wherever you go, but don't let them stop you. Do whatever it takes to pass them by. And so now at this point in the story, he's 29 years old. We're getting to the end. World War II is ending, so now he can go back to work. He doesn't have to work in the shipyard anymore. And a tragic tragedy is going to happen. And he's reminded how fragile life is and that he's got to hurry to build a life he wants now because he doesn't know how much time he has. So he writes, the desire to have my own business had been stirring me for quite some time.”
2022-02-12 · Founders · #231 William Rosenberg (Founder of Dunkin Donuts) · IDENTIFIED FROM THE TRANSCRIPT · source