Web Exclusive | March 2012 | By Kevin Hardy

The Tennessee Titan

National franchises are growing their sales by millions after visiting one regional burger chain.

Most businessmen study the leaders of their industry to gather tips on growth strategies. But many national quick-service chains are seeking advice from a regional burger chain populating rural towns in East Tennessee.

And the advice they’re getting seems to be working.

Pal’s Sudden Service has become something of a legend in the quick-serve arena, and for the last decade has shared its strategies with nonprofit organizations and businesses—including other quick serves—through its Pal’s Business Excellence Institute.

The Institute launched as a way for the Kingsport, Tennessee–based chain to share its success and teach best practices in everything from human resources to customer service, says Pal’s CEO Thom Crosby.

A 2001 Malcolm Baldrige National Quality Award validated the work at Pal’s and also placed a heavier emphasis on the chain’s role as teachers; Baldrige winners are expected to share their winning strategies with others. The Baldrige Award, given annually by the President of the U.S., recognizes private and public organizations for performance excellence.

At Pal’s Business Excellence Institute, participating operators can take courses in leadership, strategic planning, data analysis, customer service, and process management, among other areas. Courses become more individualized and follow-up consulting is more detailed as an organization’s relationship with Pal’s progresses.

“One of the big pieces is we will follow up with you and say, ‘How’s it going?’” Crosby says.

Robert Tortorice was immediately impressed the minute he walked into a Pal’s Sudden Service late last year. He was struck by the restaurant’s cleanliness, organization, and speed with which the small chain executed orders. His food was prepared within a matter of seconds.

“They’re like a finely tuned machine,” says Tortorice, COO of Jason’s Deli, one of the latest restaurant chains to learn from Pal’s Business Excellence Institute. “When you walk in you’re blown away.”

Jason’s Deli executives are determining ways in which Pal’s model of performance excellence can help their 234-unit chain.

Texas-based K&N Management, owner of Mighty Fine Burgers, Fries and Shakes and operator of four Austin-area Rudy’s Country Store & Bar-B-Q locations, was an early participant of the Pal’s Business Excellence Institute. Co-owner Ken Schiller says K&N leaders made about a dozen trips to Pal’s locations throughout the nine years they worked with the organization.

Sales at Rudy’s and Mighty Fine Burgers stores are two-and-a-half times what they were when they started the Institute.

“Basically, they were our mentor and reference point from beginning to end,” Schiller says. “Our journey was just about getting better and wanting to be more like Pal’s.”

Schiller says the speed and efficiency of the Pal’s line gave K&N a new reference point of what was possible in their own restaurants.

“We can move our line now with more than double the speed,” he says. “We’ve pretty much reinvented everything we do. Everything’s much more aligned.”

While it may be unusual for quick-service restaurants to lean on other chains for training purposes, executives say their companies have gained valuable intel from working with Pal’s. And their results prove it.

“I knew very early on in the process that this is something that’s going to have a long-lasting impact on us,” Jason’s Deli’s Tortorice says. “It could take us from good to great.”

Schiller says sales at the company’s Rudy’s and Mighty Fine Burgers stores are now two-and-a-half times what they were when they started the Institute. What’s more, after completing Pal’s training, K&N Management won a Baldrige Award of its own.

A&W Canada, which sent a group of regional managers to learn from Pal’s how to boost its drive-thru business, saw millions in revenue increases after participating in the institute.

Neal Farmer, director of operations for the 750-store A&W Canada, says about 90 percent of A&W Canada stores implemented procedural changes in 2008, encouraged by the work with Pal’s. Those stores saw about $15 million in incremental annual revenue growth, totaling $45 million over three years, Farmer says.

Further, drive-thru sales at its 450 stores with drive-thru windows are growing three times as quickly as inside sales, a monumental shift considering that for years the two were about equal, he says.

“What we took away from Pal’s was how important the engineering of the processes were,” he says. “When you leave, you have a clear idea of what’s possible.”

As for Pal’s, the iconic burger chain doesn’t see financial gain in its Business Excellence Institute. Crosby says the company self-subsidizes its educational program and doesn’t rely on it as a revenue stream.

The real benefit is in the good Pal’s is doing for the rest of the industry.

“Our thought process was the stronger and the better companies could function around us, the more dynamic the economy would be,” Crosby says. “And the more people who are employed, the better the economy will be, the better for us.”


As a person very, very familiar with Pals I would hope they are clean inside, they do not have a dining area or restrooms for the public to change that. The inside "kitchen" and storage area are not more than 850 sq ft. Doesn't take alot of effort to keep it orderly and clean. Their design is a assembly line process. They prepare 75% of their food quite a long time before it is consumed and it is sold "fresh" with a great deal of help of a microwave. The blandness of their fries is greatly added by the addition of seasoning salt not attempted to be used by the bigger competitors. They are more known for their tea than anything which has been greatly and comparitively dupicated by their competitors and they probably are selling 75% to what they were 5 years ago. McD's drive thrus near them have doubled in cars in that time, while the limited length and entry and exit sizes lock out any real growth other than menu price increase for Pals. They do well in the Kingsport area but the further away from that base you don't see them as busy. The award they espouse is applied for, not awarded voluntarily. They have used that for quite sometime to PR their system/business. Quite a few times I have gone into their downtown Kingsport location early in the morning and they are cooking 30 to 40 burgers to be put in a warmer below the grill, sold an hour or two later after being kept in an au jus juice as they call it, lot of us call it warmed beef grease. They then sell it by preparing the top of the bun with toppings and then micowave the meat and bottom and fold together in a wrapper. That is why there motto is "sudden service in a flash"...not rocket science as some would sell it. The downtown location in Kingsport is one of two locations where you can actually watch the inside kitchen works, it has no drive-thru, and that is a mystery because it has been needed for 20 years, especially when it rains and for customers that are physically unable to leave their vehicles. Service is greatly helped because the menu is so limited. And they were smart enough to not add to it like the competitors and take advantage of those companies not realizing to increase volume, sometines less is more.

The Baldrige Award must be applied for as the company must supply reams of data from all segments of the business. It is the most rigorous vetting in the business world and many large corpora ration fail to achieve it as their standard are sub-par. Preparing the application and going through the Baldridge process requires companies to dedicate a team just to meet the rigid requirements of the Baldridge. The comments above regarding Pal's applying for the Baldridge as opposed to being awarded it are nonsensical as all companies must apply first to compete for the award.I have never been to Pal's but offered this comment in support of the prestigious Baldrige award itself. Kudos to any company that wins it. By the way all winners must share their processes throughout te business world. Any PR is a side bonus.

Actually, there is one location that DOES have a dining area and public restrooms - the Greeneville Commons location. This location is still very, very clean. As for the au jus, that method was done away with some time ago, and I assure you those hamburgers are not kept for hours - it's more like 30 minutes, if they last that long.

At Pal's we use premium fries cooked in premium shortening. Just as most restaurant we salt/season our fries. We do use a seasoning salt that give Pal's Frenchie Fries a unique one of a kind flavor. We sell more Big Tea each and every year than we did the year before. We measure to verify true growth by the growth in customers. We have for 31 years grown customers counts on a per store basis, even during the recession period we just experienced. We do not cook 30 to 40 hamburgers patties at one time and we do not hold our food for long periods of time. We cook product to keep it coming and made each sandwich as it is ordered. The individuals who come to visit Pal's for training can verify this because they spend time inside our operations watching it work.

Interesting article.

I totally agree with what Diane W has said in her comments, spot on to what these guys are best at....self promotion of an award that no other quick service had or since has APPLIED for. There has been no growth in many of their stores in customer counts and the only growth is menu price increases. They will be getting some competition shortly in the area of the Tri - Cities from a similar DT only concept and what Diane says about the downtown location and no drive-thru although plenty of room all these years I think is ego thinking they do not have to. That will change in about 2 months as they are getting a competitor who will provide a drive-thru for a much neglected market when it comes to that end of service. I fully excpect them to call "uncle" and put a DT lane in because of such competition. The real story about PALS sudden service is neither Crosby or Pal himself designed or created the concept. That was created and thought of by a former manager of the first PALS opened in Kingsport in the late 90's and early 90's. Alot of people in this small town know the real story and truth.

Avie R. As a recent business woman from out of state who just completed the PALS Business Excellence course we were allowed time inside one of the stores and we observed the foodservice line. I was impressed by the cleanliness of this 16 year location. I was impressed by the staff's professional dress. I did not see anything being held and re-warmed. I am not from this area and had no experience with PALS in the past. I am not a competitor, so no reason to be anything but honest with my observations. I got exactly what I ordered and how I ordered it and super impressed by the simplicity of their operation. Nothing is harder than it needs to be, which creates a smooth operation. So if anyone out there is reading this comment section, I highly recommend this course if you are serious and frustrated with how to achieve superior customer service. My family and I own a 37 year small retail store chain and are amazed at what we learned and how we can apply. Yes, it will be different than PALS as we are far more complex, but the core of the learning can be applied anywhere! Including my own home.

Pals Sudden Service current process and standards set the bar high for everyone in the industry. The commitment is intense and as far as I have seen no one has come close to touching the passion they show to the industry. As far as 'WHAT" you may conjure up in your little minds about how they prepare, cook and execute the food for the customers, the food is fresh and does not sit in JUS or a heat lamp or "Under the Griddle", thier exact sytems are so in tune that they know the frequency of the drivethru and cook basically to order to the demand. They are so loved in the community that POLICE have to direct traffic to the stores. I can only suggest to some that if you want to succeed then get to PALS Business institute, they will show you how to do it right...

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