The Original Pancake House ignores the competition

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Articles - June 2010
Friday, May 28, 2010
STORY BY ROBIN DOUSSARD // PHOTOS BY KATHARINE KIMBALL

It's certainly an unusual business playbook: buy only the best ingredients, don’t keep track of food costs, don’t advertise, don’t crunch numbers, don’t chase trends, ignore the competition, value relationships over profit, don’t answer the phone, worship butter. Don’t change. Anything. Ever.

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Back row, left to right: Ron Highet, Jon Liss and Elizabeth Highet. Front row: Ann Liss (left) and Elinor Highet.
THE ORIGINAL PANCAKE HOUSE
Originalpancakehouse.com
FOUNDED: 1953
FRANCHISES: 111
LOCATIONS IN OREGON: Six
EMPLOYEES: More than 3,000

This true north has been unwavering ever since pater familias Lester Highet opened the first Original Pancake House in 1953 on SW Barbur Boulevard in Portland. Lester and wife Doris begat Ron who wed Elinor and they begat Ann and Elizabeth. These four owners, along with Ann’s husband, Jon Liss, have begat 111 franchises in 27 states that gross approximately $155 million in annual revenue. It’s all built on the irresistible foundation of a big, buttery mound of grilled batter.

So you want to know the secret to the long lines of devoted customers and the steady growth of nationwide outlets, unscathed by economic meltdowns and diet fads. You want to take a look under the hood, talk about spreadsheets and market research. You are, after all, a serious business journalist, not here to review the award-winning food. Leave that to James Beard or Jane and Michael Stern. The family looks at you like you’re nuts.

“The only thing we have going for us is the quality of the food,” says president Ron Highet, who cooked for decades in the kitchen and at 77 still visits the franchises. “We’re so good it allows us to be arrogant.”

It’s fitting that the weekly corporate meeting of the four family owners and Jon, who is general counsel and corporate chef, takes place above the kitchen and while business is conducted an enormous apple pancake and a Dutch baby are delivered from below.

 

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“Our food is not processed. No trans fats. No high fructose. It is fine, fresh ingredients. The body is happy to eat it,” Jon says as he begins to do just that. “That’s why we’ve remained strong through all the health fads. There was no dip in business during the no-carb phase. The trends never move us. When times are good they want our sugar and when times are bad they want our sugar.”

“The secret is that there is no secret,” says Elizabeth, the treasurer. “We’ve been the same since 1953.”

This family is seriously, deeply in love with their food. Poseurs need not apply.

“We’re looking for [franchisees] who are the bizarre blend of getting behind the grill and having a lot of money,” says the enviably slim 46-year-old Ann, who holds the title of secretary, while her mother is vice president.

“It’s how we do it. It’s simply the daily dedication to perfection. We’re drawn to people with that desire,” says the 55-year-old Jon, who fell in love with Ann at the restaurant years ago when they were kids. They and Elizabeth, who is 43, all have law degrees, and you wonder if this amount of sugar and butter could turn other lawyers into such nice people. “If they’re too into the numbers and not about the food, it won’t work,” adds Elizabeth. “We don’t even know what our food costs are.”

The family approves about three to five new franchises every year. It’s a $60,000 fee to get in, and the Highets get 2% of monthly gross receipts. Operators get 10 weeks of training at the Portland mothership. Jon says they are being cautious about new deals and they are not in the business of fast growth. They want high quality and strong relationships instead.

“We just plod,” says Elizabeth. “We’re slow and steady and thorough.”

As with every family business, the question of who will take over is an important one. The Highet succession plan is simple. The daughters are buying 3% of the company each year from their parents, and the older generations are counting on the youngsters (four grandchildren between ages 5 and 12) falling equally in love with the pancake trade.

“We hope they realize that what we have is so wonderful that they come into the business,” says Jon. “We just have to believe one of those children will feel that passion. It would break our hearts to sell. Our plan, if you want to call it that, is for them to take over.” A small back and forth between Jon and Ann about their young son who wants to be a rock star is quickly dropped.

It’s all very homey, but don’t let that fool you. The running of this operation is very intentional and detailed, even if that isn’t expressed in spreadsheets and corporate jazz. They know what success looks like and it’s a serious business with a holy undercurrent.

“It’s not just work,” says Ron. “It’s someone’s breakfast.”  

 

Comments   

 
Erin
0 #1 URL has typoErin 2010-06-21 15:57:48
Great article. The URL to The Original Pancake House has an extra 'a' in it and the link is broken because of the typo.
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Ben J
0 #2 Thanks for pointing that out; fixed itBen J 2010-06-22 08:59:03
Thanks for alerting us to the typo in the URL. It's fixed.
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D.M.
0 #3 Even in Michigan...D.M. 2010-06-22 13:29:03
I grew up in Portland, and the Original Pancake House was always a family favorite. When we had to move away from Portland last year, we were THRILLED to find an Original Pancake House in Birmingham, Michigan, near our new home in Bloomfield. We were also amused to find the locals here to be almost as reverent towards OPH as they are in Portland.

The food is excellent... though I would still say there is something special about the original Original. (But we were delighted that the Birmingham, MI OPH is open until 9pm... we go on Sundays at 4pm and never have to wait in line. ; ) )
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Guest
0 #4 RE: The Original Pancake House ignores the competitionGuest 2014-12-02 21:24:11
To Whom It May Concern,

Your manager at your Royal Palm Beach Florida on State Rd.7 has such a wonderful waitstaff....Un fortunatelym your Manager, not worth asking his name: wears glasses and is tall & heavy set, has been so rude to not only our group but comments heard during our meals by so many other patrons that since we love your food and service, we continue to go there. IHOP has been the change for a lot of customers you have lost because they can't hold back their anger. How the waitstaff puts up with him only means one thing: they live near by and NEED their jobs. If undercover boss show ever went to this store, he would be gone.
Sincerely,
Gloria Kappen
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