May/June 1997 WSU Alumni News

Private Enterprise


Few entrepreneurs post successes like his, and fewer still remain so grounded in the basics of family, community and hard work.

Dan Carney, the 1997 WSU President's Medal honoree, has some
novel advice for young entrepreneurs: "Go find out what you don't
like. This way, you'll know what you'll enjoy working at." He adds
with a smile, "No one pays attention to you anyway, until you're 27."

He fidgets, capping and recapping the pen he has commandeered from the top of his office desk. And as long as he's the subject, Daniel M. Carney '53 answers interview questions politely, deliberately, stoically as if bearing up under a most distasteful burden.

But change the subject to anything else — pizza, polo, private enterprise — and his eyes fire up, his voice takes on a life of its own and his pen finds its freedom among the papers on his desk.

Carney, who along with his younger brother Frank pioneered a worldwide distribution system of Pizza Hut restaurant franchises, dislikes being in the public eye. His shyness for personal publicity is no sham. He simply prefers the exhilarating competitiveness of a new business venture, the challenge of perfecting a golf or polo swing, the quiet pleasure of a family get-together, even — to overstate the matter just a jot — the pain of broken bones to the pinched uncomfortableness of talking about himself and his accomplishments in a public forum.

"He's a very private person," explains Beverly Carney fs '53, who met her future husband in a history class at the University of Wichita. The Carneys now have six children and 10 grandchildren. "We all have our own comfort zones."

With that one exception, Carney's comfort zones are legion.

"He's comfortable in the most complex business discussion imaginable," Frank Carney says. "He's a great teacher, a great people person, a great student. He's extremely intellectual, a home and family person, very religious. He's the most empathetic and sympathetic person you can find. He's a real genuine person."

And, to his dismay, a newsworthy one.

The public's fascination with the Carney brothers is founded on one of the most famous entrepreneurial Cinderella stories ever told and re-told. The plot's skeleton is as familiar to native Wichitans as the name Pizza Hut has become to pizza lovers the world over.

The setting: Wichita, 1958. Dan, 27, and Frank, 19, were both students at the University of Wichita. Dan was working on a master's degree in business administration that he would later miss completing by only 3 credit hours, and Frank, thinking of a career in electrical engineering, focused on math, engineering and business.

The brothers worked evenings and weekends in the family grocery store on E. Kellogg and Bluff. Their father, Michael H. Carney Jr., who had been a meatpacker for 23 years before going into business for himself, died when Dan, the eldest brother among seven Carney siblings (within a blended family of 12 children), was a junior in high school.

Always business-minded, Dan had been an undergraduate business major at WU and a member of Alpha Gamma Gamma fraternity (now Beta Theta Pi). After graduation, he studied the concept of franchising during a two-year stint in the U.S. Air Force during the Korean War. He then broadened his business repertoire at Boeing, an experience that taught him going to work with 33,000 people every day wasn't particularly appealing to him. His natural bent was dealing with people one-on-one and growing businesses from scratch.

That opportunity came when the owner of a small building next door to the Carneys' grocery store showed Dan and Frank a copy of a Saturday Evening Post article about a new food craze sweeping the country: pizza. The landlady's motivation wasn't purely conversational. She'd been listening to compaints of rowdiness about the patrons of the B&B Lounge and couldn't pass up the chance to suggest, "Why not get rid of those troublesome tenants and open a pizzeria!"

The Carneys decided "why not" and borrowed $600 from their mother. They bought second-hand equipment and came up with the name Pizza Hut because the steep little roof of the old B&B Lounge made the building look rather like a hut and, more importantly, there was room for no more than nine letters on the old B&B Lounge sign. After teaming up with McConnell airman John Bender, who whipped up a French bread recipe from the Joy of Cooking and mixed the first batch of dough in a baby's bath tub, they swung open the doors of the first Pizza Hut on June 15.

On Aug. 6, they placed their first major ingredient order: 100 pounds of Mozzarella cheese. Eighteen years later to the day, the Pizza Hut chain would place the first order ever for one million pounds of cheese.

In just over a year, the Carneys had opened five more restaurants in Wichita, including one that became a WU hangout. In an interview last year, Bill Parcells '64, a veteran National Football League coach now with the New York Jets, reminisced about his collegiate days, which included working at Pizza Hut. "I remember a lot of football players worked at the Pizza Hut on the corner of Hillside and 17th," Parcells said. "That was back when there were only about six or eight Pizza Huts in the whole world."

"That particular Pizza Hut was a wide-open college spot," Dan remembers with a smile. "It was a zoo. We hired quite a few big football players to make pizzas. They were bouncers, too."

The Carneys began franchising within two years of start-up, offering franchises to many of their college fraternity associates, an inordinate number of whom would become millionaires. One of the earliest franchisees was Bob Geist '64. "I'll tell you," Geist says, "the organization started by the Carneys was the fairest, most democratic in restaurant history. So many deals were done on a handshake, so many promises kept."

The first franchise unit opened in 1959. Frank recalls, "Dan and I were driving up to visit our first franchise in Topeka. Dan, who pretty well ran the company for the first 10 years, had gotten us our first company credit card. It had Pizza Hut, not even Pizza Hut Inc., on it, and we were thinking we're pretty important. We stopped for gas, and Dan gave the attendant our credit card. I'll never forget that guy waving goodbye and saying, 'Thanks, Mr. Hut,' as we drove away. We broke up laughing."

In 1969, 350,000 shares of Pizza Hut common stock were offered to the public. That same year, the company went international, ushering in a new round of phenomenal growth and prosperity. Yet the resulting corporate complexity had its downsides: business deals, for instance, could no longer be sealed with simple handshakes. And Dan Carney, who had learned years ago he didn't enjoy working through five levels of management to get something done, stepped down as president.

"When we went public," Frank says, "Dan came to me and said, 'I'm for doing this, but you'll have to run the company.' To me the changes were exciting, but Dan knew he wouldn't like it. It was a test of character, a matter of being true to who you are. Dan's his own person. There isn't any way to describe the depth of character that's in that guy."

As chairman of the board, Dan continued to help Frank oversee company affairs. The objective, though, was to disengage from that position, too. "He told me how I'd know when he was ready to leave," Frank says. "'You'll know it,' he said, 'when my files on Pizza Hut are gone and all that's left is other business files.' Four years later the files were gone."

Dan, who in 1973 held more than $10 million worth of Pizza Hut stock directly and indirectly, stayed on as a member of the board. By 1977, Pizza Hut — with its history of constant expansion, constant change — had become the number one pizza restaurant chain in the world in both sales and number of restaurants. That same year, PepsiCo purchased the corporation for $300 million.

Since then, Dan and Frank have focused on private investment ventures. As president of Gaelic Management, an investment management firm, Dan does what he has always liked to do. "The fun part," he says, "is taking an idea and putting a plan together that will make it grow."

"Dan has an entrepreneurial mind," says Fran Jabara, who taught Carney in 1949, during his first year as a business professor at WU. Jabara went on to found WSU's Center for Entrepreneurship and was instrumental in arranging for the original Pizza Hut building to be moved to campus. "But what makes Dan unique is he does things in such a quiet, dignified way."

Carney's quiet way of doing things isn't confined to the business arena. His behind-the-scenes philanthropy touches the lives of many, including the abused, the physically and mentally challenged. Of the many charitable involvements he maintains, his favorite is the Cerebral Palsy Research Foundation of Kansas and its Daniel M. Carney Rehabilitation Engineering Center, a resource center created to help physically disabled people gain employment through the use of modern technology. Basic research efforts are achieved through a working relationship between the foundation and WSU's College of Engineering.

John F. "Jack" Jonas Jr., the foundation's president and founder and one of Carney's lifelong friends, says simply, "Dan is a caring and loving man. He has compassion for those in need."

Carney's longstanding service to his alma mater has often been given with the caveat that his contibutions be kept in confidence. So it is with little fanfare, but geat pride, that Wichita State has honored him with the 1997 WSU President's Medal.

"When you win at something," Carney says, "you owe something back to the community. One reason I've won is my education."

Another reason is surely his grounding in family and community. Another, his belief in hard work. Perhaps a little Irish luck. And, no bones about it, his fiercely competitive nature had something to do with it, too.

"He loves the game, the challenge," says his wife of more than 40 years.

On shelves behind his office desk sit many photographs of his family. Among them is a photo of two polo players. Dan Carney may not point out that he's one of them, but if asked he just may kick back in his chair and comfortably expound on the more punishing aspects of the ancient game. "Yeah," he says, pointing to his shoulder and then holding up one of his wrists, "polo can do some damage. I've broken my shoulder and my wrist — nothing major."

He may or may not have been playing on the winning team when that photo was snapped. But two things are certain: he played fair — and full tilt.


For the Sake of Art

Art historian Mira Pajes Merriman has just retired as professor of art after 32 years at Wichita State.

Private Enterprise

Dan Carney, the 1997 WSU President's Medal honoree, has some novel advice for young entrepreneurs: "Go find out what you don't like. This way, you'll know what you'll enjoy working at." He adds with a smile, "No one pays attention to you anyway, until you're 27."