Fatz Cafe wasn’t just a regular restaurant

Fatz Café closed the last of its 18 locations on August 23, 2023, days before its Texas-based ownership group declared bankruptcy.

Media outlets across the Carolinas, Georgia, Tennessee, and Virginia characterized the shutdown as a shock to customers and employees. But insiders who had been monitoring the chain since its sale to an investment firm in 2008, two decades after Jimmy Rogers opened the first Fatz Café in a converted Spartanburg peach shed, weren’t surprised. By the mid-2010s, the troubled company was sloughing off locations in a bid to compensate for plummeting sales.

It first filed for bankruptcy in 2018, citing crushing debt associated with ill-advised menu changes and costly renovation projects.

Yet those bad business decisions didn’t just drain bank accounts. Years of mismanagement obscured the proud legacy of one of the South’s most significant regional family dining chains, which was never formally eulogized for delivering the kind of hospitality that’s unheard-of in an era defined by the anonymity of delivery orders and social media messaging. Fatz Café was one of the last mass-market brands to recognize that restaurants are in the business of serving people, rather than food.

With this oral history, The Food Section endeavors to properly memorialize Fatz’s achievements.

FEATURED SPEAKERS

Sara BRAY was first hired as a bartender at Fatz Café’s Greenville location. She later became an operating partner and was promoted to vice president of training and development in 2005. Bray is now the National Restaurant Association’s vice president of workforce and business development.

Lee BROWN is from Holly Springs, South Carolina, the same Upstate community where Fatz Cafe founder Jimmy Rogers grew up. He worked at WYFF in Greenville for 44 years before retiring in 2020.

Steve BRUCE served as CEO of Fatz Café’s parent company, Café Enterprises, Inc. He’s now retired.

Bill BURTON was the owner of Café Enterprises, Inc. He was named South Carolina Restaurateur of the Year in 2003, when Fatz’s same-store sales were up 11.9% from 2002. Around the same time, sales were down at comparable chains such as Lone Star Steakhouse, Ryan’s Steakhouse, and O’Charley’s Restaurant & Bar.

Steve CORSON served as vice president for human relations for Café Enterprises, Inc. He’s now retired.

Bryan HOODE joined Fatz Café as an operating partner in 2004. He rejoined the company in 2020 as its vice president of operations. He is now Island Wing Company’s chief operating officer.

Zeb SMATHERS is mayor of Canton, North Carolina. He graduated from Pisgah High School in 2001.

Ernie WASHINGTON joined Fatz Café as an operating partner in 1996. He now works as a substitute schoolteacher.

The Fatz Café story starts with Spartan Food Systems’ purchase of Quincy’s Family Steakhouse, an upstate South Carolina-based chain where Burton went to work following his 1977 graduation from Clemson University.

THE BEGINNING

BRUCE: I got into business with Spartan Food Systems back in the ‘80s, and that’s where I met Bill. I think it was ’85 or ’86. We worked together there in several different roles.

BURTON: Then, there was a private equity sale, and I was asked to leave in 1993. And we knew we wanted to be in business for ourselves. So, we bought half of Fatz Café when it was four restaurants.

BRUCE: It was a local favorite.

BROWN: It was really the quality of the food that kept people coming back. The fact that Jimmy was a good old boy from Holly Springs was just an added benefit. And he gave back to the community, so that endeared a lot of folks.

BURTON: Driving around, the one common theme in the Fatz parking lots is that there were a lot of cars. Having a background of operating with Spartan Food Systems, we kind of knew how to make those numbers work. Steve and I met on our back porch, and I said, ‘I think we got a bear by the tail here.’

BROWN: When they opened, my family was young, and if we were going out to eat, Fatz was a good location because the prices were decent, and they had a really good menu for that time. What you would find then was a lot of fast food, and a lot of steakhouse chains: the Western Sizzlers, the Quincy’s. All of those were popular, but Fatz had a good general menu.

BURTON: We bought the other half of the business in 1998. We had 11 restaurants at that point, and then we grew it. We weren’t going to necessarily be in Charlotte and Knoxville and Nashville and Atlanta, but we were going to be in Orangeburg, South Carolina and Greenville, Tennessee, smaller communities where a lot of times there weren’t all that many restaurants.

BROWN: They would show up in places where that kind of restaurant would probably be successful because, first, it had a good reputation for the food. But the second thing was a lot of those towns at that time didn’t have that much.

SMATHERS: In the early 2000s, when Asheville was still underdeveloped, a Fatz Café opened right there in West Asheville. Someone we knew was a manager, and they invited us to opening week. It was just amazing. It was really different than the Applebee’s and the Cracker Barrels: It had its own Southern flair.

HOOD: We always had a Southern touch or feel to us, both with our decor and our food, and hopefully our hospitality, but we kind of looked like Applebee’s or Texas Roadhouse and the rest of casual dining chain America. But when you went there, it was a completely different experience.

BURTON: Our operating philosophy came from an article in Harvard Business Review that we studied and worked on as a team and read till the guys were kind of getting tired of reading it.

It’s kind of a circular thing: Profit and growth are driven by guest loyalty. Guest loyalty is a direct result of satisfaction. Satisfaction is a function of value created by happy, loyal, and productive associates, and associate satisfaction results from high quality leadership, teamwork, and policies that enable us to deliver results.

BRAY: If you look at our operating philosophy and our Operating Principles, those were the things that we held ourselves accountable for.

HOOD: The 21 Operating Principles were the guidelines we lived by.

WASHINGTON: It was like The Ten Commandments.

OPERATING PRINCIPLE #7: WE WILL BUILD A TEAM WHO CARES ABOUT EACH OTHER AND HAS A DESIRE FOR OUR COMPANY TO GROW SUCCESSFULLY.

BRUCE: It was discussed very, very early in the process that no one minds the store like the owner. There were a couple of businesses out there that had something similar [to Fatz’s operating partners program]. You had Outback doing their deal, you had Chick-fil-A doing their deal.

BURTON: We tried to find out exactly what they were doing, and find their documents and all of that, but we never could. So, we said, ‘OK, we’ll figure it out.’

BRUCE: I don’t know how many renditions of the operating partner agreement that we went through. It was probably a half-dozen or more.

BURTON: It was $25,000 they put up, and then they would earn a percentage of the cashflow, and they would sign a five-year employment contract, and at the end, they would earn a payout based on the last two years of the employment contract. So, everyone was incented to grow their business.

HOOD: Bill made that partnership so financially strong that he got a lot of guys and gals that had been vice presidents of major corporations and stuff like that. They came in because they wanted to run their own business. They were not micromanaged. We were encouraged to say that we were the owners of our restaurants.

OPERATING PRINCIPLE #15: WE WILL TALK WITH AND GET TO KNOW OUR GUESTS, REALIZING THAT IN ORDER TO DO SO, WE MUST CONSISTENTLY BE IN OUR RESTAURANTS, WORKING WITH OUR TEAMS TO TAKE CARE OF OUR GUESTS.

BRAY: When you became an operating partner, you were knighted with a jacket. It was a big deal. I’ve still got mine.

Everybody in the community knew the operating partner at Fatz. Their name was right over the door. You knew when you went out, whether it was to the grocery store or church, you represented the company.

HOOD: We were expected to live in our communities. I was living in Irmo: I mean, we’re talking about a 15-minute ride to Lexington over the dam. And they’re like, ‘We’d really rather you lived in Lexington.’

On my schedule every week, it said ‘Streets’ on one of the days. I would go out to local businesses and shake hands and invite ’em in. Hey, when you coming in next to see me? And then I would greet ’em at the front door, shake their hand at the front door. Hey, so glad you came out to see me. Thank you so much. Let’s get you in here. Get ’em sat. Then be working around a little bit. But be at the door when they’re leaving to thank them, hug them.

WASHINGTON: The only thing I knew was that you wanted to visit every table and be sure that every guest was extremely happy with what they got, and invite ’em back. And that’s basically all you had to do.

HOOD: Even though we modeled it after the Outback managing partner program, it was completely different, because Outback kept their operator in the back of the house, in the expo station. Outback believed that as long as the food was perfect, they’d keep coming back. Obviously, that model worked for them because Outback is tremendously successful.

We believed differently. Yes, the operating partner was involved in the kitchen, and was responsible (for) the food coming out fantastic and in a timely fashion. But the operating partner spent a majority of time in the dining room, touching tables, getting to know their guests.

OPERATING PRINCIPLE #19: WE WILL DISCUSS AND RANK RESULTS AND RECOGNIZE AND CELEBRATE THE WINNERS. WE WILL SUPPORT THOSE WHO NEED HELP, AND WE WILL REACT TO THOSE WHO UNDERPERFORM.

WASHINGTON: You earned stars for your jacket. You might get a gold star, you might get a silver star, but I probably got a lot of bronze.

HOOD: We had a report called The Weekly Cost Report, and that would come out every Monday. I can remember being in that restaurant before 5 A.M. every Monday to do my inventory with my kitchen manager. And I think I had a cell phone, but it didn’t have the whole internet on it and stuff like that, so I had to wait to get my email at work to find out where I ranked. I would never dream of leaving before the cost report came out.

BRAY: We were a competitive group. Everybody wanted to be at the top, and we’d give each other a hard time if our numbers weren’t where they were supposed to be, but also help each other with tactics and solutions to improve.

BURTON: We paid a lot of attention to profit and loss. We paid a lot of attention to sales. And we did a lot of contests. I mean, we took trips to Mexico, to Chicago, to Las Vegas.

WASHINGTON:I’d been with the company for a little while, and I wasn’t running very good food costs. I was running about 38% and the tall man, Mr. Bill Burton, looked at me and said they couldn’t live with 38% food costs. So, that right there opened my eyes greatly. I thought ‘I might better go to work.’

You’ve got to have better control. You’ve got to order the right amount of product. You’ve got to be sure that product is going to the guests and not out your back door; that we’re putting the right amount on the plate or right amount into a recipe.

OPERATING PRINCIPLE #3: WE WILL NOT LIE, CHEAT, STEAL OR UNDERACHIEVE.

SMATHERS: It wasn’t called Skinny’s. A friend of ours, he’s a Methodist minister, and I remember to this day, he would stand up after eating there and say, ‘I sure am feeling Fatz!’

HOOD: The poppy seed rolls were fried, yes. So again, not necessarily nutritious, or healthy, but they were freaking delicious, with homemade honey butter that everybody loved. It was craveable, addictive food that helped bring people back.

SMATHERS: I remember they were perfectly round, and they hit that consistency between a roll and a doughnut. You felt like you were eating a roll, but if you had any doubt that it was high in calories, you’d just dip it in honey butter. I remember the rolls were too big for the little black cups the butter came in, so you had to dig it out.

HOOD: The food quality was at a whole different level, not everything cooked in microwaves and just quick-to-order stuff. It wasn’t that at all. Of course, we had Calabash chicken tenders, which was our bread and butter. It’s still the best chicken tender I’ve had, ever, bar none.

BRAY: It was addictive. I mean, tender, plump, juicy, marinated chicken tenders, dipped in buttermilk and hand-fried, golden crisp. When I tell you I’m part Calabash chicken, I’m not making it up.

BROWN: Now it seems like everybody does a version of Calabash Chicken, but they were one of the first to really come out with what I considered Calabash as a partaker of that. It was a very tasty recipe. I don’t know how they did it or what they did, but they marinated it, and it had a good breading on it, and it became a staple.

BURTON: We sold well over a million pounds of Calabash chicken a year.

OPERATING PRINCIPLE #1: WE WILL TREAT EACH OTHER AND OUR GUESTS WITH COURTESY, DIGNITY, AND RESPECT.

HOOD: Our slogan was something about ‘Where regulars are treated special, and everyone’s a regular.’

SMATHERS: My grandmother Frances loved it. She would treat us for dinner on Friday nights.

He retired from Southeastern Container, having been a Coca Cola truck driver with them for over 30 years. He enjoyed fishing, hunting, and Busch Lite, as well as daily visits to Fatz Café in Asheville.

—from Joe B. Carrothers’ obituary, May 12, 2021

BURTON: I remember being in a meeting one time and someone sharing that a guest wanted a Coke. Well, we served Pepsi. A server went out on their own to the convenience store around the corner and bought the guest a Coke. We celebrated that so much because that was really the epitome of what we’re all about. We’re going to do whatever we can within our power to take care of the guests.

HOOD: We used to say our three favorite words are ‘We’ll be back.’

Like so many, I frequented Fatz, not just for the wonderful food, but in hopes Chief would be there to make my day a brighter one. When it was “Girls Night Out,” we usually headed to Fatz. Chief always greeted us with a hug and would whisper, “Dessert’s on me.” Lord only knows how many pieces of cheesecake, peanut butter pie, brownies, and peach cobbler he gave away with a smile.

—posted by Debbie Poole on the memorial page for Richard “Chief” Ward, who joined Fatz after retiring as an executive in the modular home industry

BRUCE: During the heyday, you were going to be waiting in line for a while. We sat 240 in every restaurant, and we had lines. But the deal was you had a relationship with your guests. You knew people and you talked to ’em while they were waiting. There’s one thing that everybody loves to hear when they go out to eat, and that’s their name.

WASHINGTON: I can’t tell you how many times I sent potato soup to regular customers that might be in the hospital.

I am one of the servers/bartenders at Fatz Café that had the honor of serving Richard and Wanda. Wanda always loved my hair and every time I approached their table or passed by, she would say in that sweet little voice, “I just love your hair.” I cup her little chin and say, “Well, I just love YOUR hair.” We would sit and talk about hair appointments, nail appointments, and family. I loved seeing photographs of their children and grandchildren. I can assure the family that the Fatz family is sincerely heartbroken over this loss, and we pray for each of you.

—posted by Stephanie Gooch on the memorial page for Wanda Pelfrey Zimmerman of Bent Tree, Georgia

BRAY: I had a couple in Greenville that brought in cakes every time it was somebody’s birthday on my team. They also came to our holiday party and bought us Christmas presents, bought us birthday presents all the way up until they died.

BRUCE: Stan and Shirley became regulars before we even had a restaurant in their hometown. They lived in Morganton, North Carolina, and I can’t remember where they discovered us, but Shirley had her own construction hat. And that was because every time we shared that we were doing a new restaurant, they would go to wherever it was before the restaurant was finished. And (we) would always give ’em a tour of what was going on. Eventually, we opened one in Morganton, and that was their restaurant.

OPERATING PRINCIPLE #16: WE WILL BUILD PRIDE IN OUR RESTAURANTS THROUGH FOCUS, DISCIPLINE, AND RESULTS.

BURTON: There were 48 restaurants when the business was sold in 2008.

HOOD: He sold right before the crash. Amazing timing, but not surprisingly with Bill. He outsmarted a group of bankers and sold the company literally 90 days or so before the crash.

The timing didn’t help, but a lot of private equity groups that buy these successful chains unfortunately have a different agenda. Obviously, the original ownership wanted to make money, and they did. But the bottom line wasn’t the end-all, be-all.

BRUCE: I was invited to leave in 2011.

HOOD: It was the day that things turned for Fatz Cafe, and it just was never the same. Steve was Fatz. It was Southern; it was compassionate to people; it was hardworking; it was blue collar, but it was fun. Steve Bruce was all those things, and he role-modeled that behavior for all of us.

BURTON: I am trying to think of how to say this. We don’t want to throw anyone under the bus, but after Steve left, the company changed.

OPERATING PRINCIPLE #18: WE WILL FOCUS ON PROFIT GROWTH THROUGH SALES GROWTH AND COST CONTROL. WE WILL NOT SACRIFICE ONE FOR ANOTHER.

HOOD: It became much more about just cost control, labor control, food cost control. Once you put that squeeze on and you change to a culture of cost control, you’re done.

Alright, I’ll go ahead and rank it. Good parking places. Still though, the barbecue sauce was horrible, and the steak was so small, and the bathrooms had paper towel all on the floor… if you have a family, this might not be the place for you, because I just paid $50 for me, my wife, and my daughter.

—from the “Fatz Café in Shelby, North Carolina review” posted to YouTube by Tracy Hannon on February 5, 2021

HOOD: The new ownership didn’t put any money into the buildings, so they all [had] old, ripped booths, ceiling tiles hanging, and stained carpet. And they changed the Calabash chicken. They changed the Calabash chicken! You’ve got to be kidding me. So stupid. They had taken away the poppy seed rolls.

That Calabash chicken was not like it always be. That junk was off the chain, OK? This was extra crispy, a little bit harder than it normally be. I was like, ‘Can I have a refund? I asked for some Calabash chicken.’ This is Calabash chicken, but it’s not.

—from the “Tesha went to Fatz Café” video posted to YouTube by Jorasha Johnson on January 27, 2010

HOOD: One of the things that the new company steered away from, believe it or not, was the 21 Operating Principles that protected the culture that Bill and Steve had created. It was like our soul. And they just ripped it out and said, ‘No, this isn’t the way we do things. It’s not what we believe in.’ We had it posted in all the restaurants, and when I came back in 2020 as vice president, you couldn’t find any remnants of it.

I don’t know exactly what happened there, but it was a huge vacuum when I got back. The culture, the feeling, the people, it was gone. That was part of the challenge that brought me back: To try to be able to help restore such a phenomenal brand. It was the greatest brand, and the greatest company, I had ever worked for. But it was just gone. It was gone.

OPERATING PRINCIPLE #21: WE WILL WIN. WINNING IS FUN. LOSING SUCKS.

CORSON: If you surround yourself with good people and treat ’em right, it works out pretty good.

HOOD: It was a truly, truly brilliant Southern regional chain that brought so much joy, and so much happiness to hundreds of thousands of people in its heyday. The great brand that Bill Burton and Steve Bruce created should be recognized.

BURTON: Werepresent about 3,500 people that we worked with. It was a huge team, and fortunately the principles and the philosophy went throughout the organization. Was it perfect every day? No, it wasn’t, but it was 3,500 people all rowing in the same direction.

BRAY: Those were really special times. If any one of the gentlemen from the leadership team knocked on my door today and said, ‘Follow me,’ I would.