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    Pal’s: The Iconic Burger Chain Built by Employees

  • The Southern drive-thru only chain has a unique approach to expansion.

    Web Exclusive September 18, 2019 By Rachel Taylor
    Pal's Sudden Service
    While the first two locations were walk-ups, founder Fred "Pal" Barger decided to switch to a drive-thru model when the brand started to expand in the early 1980s.

    If you’re passing through Northeast Tennessee and Southwestern Virginia, chances are you’ve seen one of Pal’s Sudden Service’s technicolor drive thrus. The bright blue buildings, topped with giant sculptures of burgers, fries, and hot dogs, are hard to miss. The 29-unit chain has a rich history in the region since the first one opened in 1956.

    While the first two locations were walk-ups, founder Fred "Pal" Barger decided to switch to a drive-thru model when the brand started to expand in the early 1980s. Around this time, chief executive Thom Crosby joined the company. “I took over one of the restaurants and I’ve been here ever since,” he says. 

    One thing that stands out at the brand is its methodical, but steady growth strategy. Unlike other quick-service chains that develop a footprint by analyzing different markets, Pal’s grows from within through leadership development. “We don't approach it by number,” Crosby says. 

    “Where a lot of people’s strategy is how much money do we have access to or where are we going to build, or where can we get a good deal on the property and then as an afterthought they think of who’s going to go run and lead these operations,” he says. “We do it backward.”

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    Employees who want to rise through the ranks at Pal’s need to be self-starters, Crosby says. Those who show initiative can run their own location one day.

    “The driver for us to build new stores is that we've got a world-class leader, who has come up through the ranks, who's trained to Pal’s, and we just need to build them a store,” Crosby says. 

    The method, naturally, takes time. Candidates go through an interview and selection process with existing Pal’s leaders before interviewing with Crosby himself. Once they feel like the candidate is a good fit, they’re accepted into the training program. The timeline from entering the pipe line to getting a store is about a 48-month process. 

    This process might seem slow to some in the fast-paced food industry, but it’s the way the brand’s operated since Crosby came on board. The 30th Pal’s location is currently under construction and set to open later this year. 

    “Since our view is that we're putting in place the chairman of the board, president, CEO of a one restaurant enterprise for every restaurant that we build, it's critically important to get that leadership person correct,” Crosby says. “We get in no hurry about the interview process in the selection, but once you get selected … We are very diligent in our development of people.”

    Pal's Sudden Service
    The timeline from entering the leadership pip line to getting a store is approximately a 48-month process. 

    Crosby expects growth to ramp up over the next few years. There are 13 people in the training pipe line with more candidates applying each year. 

    “As we get larger, we’re able to develop more and more people,” Crosby says. “As we move forward, we’ll keep adding more people to the leadership development process we have going on, and as we grow, we’ll expand that pipe line of capable leaders.”

    This system is one reason leadership has remained consistent over the past few decades. Crosby notes the company has only lost eight leaders since he joined in 1981—one for medical reasons, three to retirement, and four who wanted to take a path in a different industry. Pal’s is built by its employees, he says, and it’s “world-class individuals who are going to drive us forward.”

    Behind-the-Scenes Technology 

    Pal’s growth strategy isn’t the only way the company rebels against industry norms. 

    When you pull into a Pal’s, you won’t be greeted by a digital menuboard or a speaker. You’ll be greeted with a smiling face to take your order. While the drive-thru only chain may have the looks of a retro restaurant, behind the scenes is a different story, Crosby says. 

    Instead of dazzling customers with a high-tech ordering experience, the team at Pal’s has kept the customer experience relatively simple. 

    “Technology wise if you look at us, we're a simple hamburger hot dog chain in the hills of Tennessee and Virginia and we don't utilize technology for order,” Crosby says. “From all that, you think that we're not very technology savvy, but behind the scenes we’re probably I would put our technology head to head with anybody in the industry.”

    Pal's Sudden Service
    At Pal's, customers are face to face with employees when they order. 

    From training to scheduling to ordering, Pal’s technology was developed in-house. The control over its digital tools allows the brand to run efficiently, Crosby says. 

    Pal’s limited menu also contributes to efficiency throughout back-of-house operations. The company’s mission is to delight guests, Crosby says, and by sticking to what Pal’s is good at allows it not to get bogged down by inefficiencies. 

    “We have a very, very, very limited menu so that we can focus on the quality output of everything,” Crosby says, “Because the way we view it, the more diverse that you make a menu, the harder it is to pay attention to all those lines of product going out and getting quality right.”

    The menu segments don’t cross dayparts. Breakfast is breakfast, and lunch and dinner are just that. A simple concept of selling breakfast all day can add complexity to operations in the kitchen, he says. When operations start to get complicated people start to mess up, so Pal’s just avoids adding any unnecessary steps.

    One piece of technology Crosby refuses to incorporate into the system is online delivery. He believes it compromises the quality of the product.

    “Ordering online is a guaranteed way to make sure you get cold food,” Crosby says. “So instead of us jumping into what a lot of people see as the way to the future, we actually think people are going to learn the experience is not right. I'm going to go back to the tried and true of what’s right with the experience.”