Culver's story inspires Wisconsin Group One bankers

Northwestern Financial Review, Mar 15-Mar 31, 2004 by Bengtson, Tom

Craig Culver, the CEO and cofounder of the restaurant chain bearing his name, inspired bankers attending the 100th annual meeting of the Wisconsin Bankers Association's Group One in Minneapolis Feb. 14. Culver highlighted the morning meeting that also included reports from state regulator Lorrie Keating Heinemann, an investment expert, and WBA leadership.

Culver explained how the Culver's restaurant franchise grew from a single A&W shack in Sauk City, Wis., in 1961 to 241 restaurants in 12 states today. After selling the root beer restaurant and getting it back a few years later, Culver's father got an idea for a new kind of place to eat. In 1984, the Culver family converted the old A&W into the Culver restaurant with the blue and white trim that people know today. "We sold butter burgers and frozen custard," explained Culver. "It was slow."

He was competing against fast-food giants McDonalds and Hardies. Leveraging his own experience at McDonalds, the A&W and a family-owned supper club, Culver eventually found a winning formula. "That first year, we had $300,000 in revenue and we lost money," Culver explained. "The second year, things began to happen and we broke even. By the third year, we were making money." Revenue grew to $650,00 per year, and it topped $1 million annually after a drive-up window was added.

Today, the average restaurant has annual revenue of $1.57 million. Culver said it costs about $2 million to open a new restaurant, with most of the cost going for land. The franchise fee is $50,000.

Business meeting

Group One bankers elected James Mayo of security National Bank, Durand, Wis., as their secretary/treasurer for 2004-2005. William Waldvogel of the Cumberland Federal Bank, Cumberland, Wis., presided at the centennial meeting, which was commemorated with a desktop digital clock given to each participant. Susan Gilbert of First National Bank in Hudson, Wis., became the organization's first female president at the conclusion of the meeting.

State/National economy

Keating Heinemann described the "grow Wisconsin" strategy, promoted by Gov. Jim Doyle, that will work to build a competitive business climate, invest in people, attract capital and reform regulations to make government more responsive.

"Banking plays a key role in economic development," Keating Heinemann told the group that included her mother.

She encouraged bankers to consider the factors that are supporting the payday lending industry, which collected $73.5 million in fees in 2003. "Wisconsin has become a haven for payday lenders," said Keating Heinemann, who further noted that three-quarters of the state's 345 such lenders are based out of state.

Keating Heinemann also cited predatory lending as a concern, although she said bankers are not part of the problem.

Without providing details, Keating Heinemann mentioned an interest in updating the Wisconsin Consumer Act.

Consumers are feeling optimistic about the economy, but there is nervousness about the lack of job growth, reported Alan Polsky of Dougherty & Company. "Jobs will be a sticking point for the president this election," Polsky said. "He will be the first president since Herbert Hoover to see job loss during his administration."

Polsky said 2.25 million jobs have been lost in the United States since Bush became president. Many of the jobs, he said, have moved overseas. he noted it is less expensive for companies to set up call centers in India where labor costs are low, than to set up such centers in the United States.

The slow job situation, however, may help to keep rates low. "We won't see a meaningful change in interest rates until we see people going back to work," he said.

By Tom Bengtson