Going public after a co-founder’s sudden death (1985)

What could not be transferred into an institution

What this decision sat on was not a need for capital but the absence of a person. A structure of 1% royalties and demanding franchise screening presupposed trust with carefully chosen partners, and what maintained that trust day to day was the supervisors in the field. Only after losing the one man who carried that load did it become visible that the chain’s strength rested on individual ability. The reason a listing — an implausible sort of memorial — was the instrument chosen appears to be that the company was trying to replace a lost function with an institution rather than another person.

Where the line fell between what could be moved into an institution and what could not is shown by the management that followed. The listing raised the speed of store openings and procurement, and store count reached the top of the industry in the first half of the 1990s. Yet the role of binding the chain together through philosophy stayed with the founder himself, and after his sudden death in 1997 came confusion over the succession and unease among franchisees. Putting the shape of an organisation in order and handing on the gravitational pull that makes the organisation move are not the same task — and this decision posed, early, the question every founder-led company eventually faces.