American Dream Achieved
IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability. In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories. It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.
The Story of Bill & Bob Beye (Arby’s)
By Nesha Ruther
Bill and Bob Beye have a lifetime of experience to prove that sometimes, mixing family and business can be a successful combination. The brothers grew up in Florida and both graduated with degrees in hospitality from Florida State.
The unique program provided students with business management experience, specializing in hospitality. “We both got into it,” Bill says. “We really thought that we would go into hotel management or more sophisticated restaurant management.”
Despite the appeal of the hospitality industry, both brothers were adamant about wanting to work for themselves. In the 1960s fast food was still fairly novel, but quickly was becoming the industry of the future.
The thought was that as more women entered the workforce and had less time to cook for their families, fast food would become an increasingly necessary part of people’s lives. “At Florida State, we learned that the industry of the ‘70s, ‘80s, and ‘90s was going to be fast food. That seemed intriguing,” Bob says.
Fast food allowed the brothers the opportunity to flex their entrepreneurial muscles in a way higher-brow establishments would not. “The fast-food industry offered us an opportunity to control our destiny, in so far that we could run our own business,” Bill says.
This decision was uncommon among their peers, and Bill recalls the horror expressed by Peter Dukas, the head of their department at Florida State when the brothers shared their ambitions.
“Mr. Dukas felt that when you get a degree in [the hospitality] industry, you either go into country club management, or you start at the bottom and learn to manage one of the finer dining houses in a major metropolitan area. Your end goal should be being the manager of a 500-unit Sheraton or Hilton. We were pointed in the direction of managing larger, more sophisticated enterprises. He probably looked at the fast-food industry with a little bit of disdain because he felt we were suited for greater undertakings.”
Despite Mr. Dukas’ disapproval, the brothers were adamant about pursuing a career in fast food. In 1967, Arby’s opened its 27th location in Fort Lauderdale, with great success. “They did $700,000 that first year they opened, that was absolutely unheard of,” Bill says.
The brothers’ father recommended the two look into opening their own Arby’s, although he may have had his own ulterior motives for making the suggestion. “I found that I was constantly taking their sandwiches home to my dad, he loved them,” Bob recalls.
While some of the Fort Lauderdale Arby’s success could be attributed to its novelty, its performance continued to be strong well after its first year of business. In the late 1960s, Arby’s sales surpassed even that of McDonald’s, despite having far fewer locations.
To open an Arby’s was also relatively affordable. The process, referred to as a turnkey operation, involved Arby’s leasing a property, and sub-leasing it to the franchisee. In exchange, the franchisee would pay a $25,000 up front, including a $5,000 security lease deposit that was refundable in five years. For context, McDonald’s costs $100,000 upfront to open a location.
“My brother and I on our own, fresh out of college, trying to work out a lease with somebody might not go over so well,” Bob says. “So, Arby’s would find a location, they actually had a construction department to build the building, put in all the equipment, you come along, and you just turn the key in the back, and you walk in, it’s ready to go.”
This was appealing to Bill and Bob, who began looking at potential locations. They even went to Youngstown, Ohio to meet with the founders of Arby’s, another pair of brothers—Forrest and Leroy Raffel. “They said, ‘Well we can offer locations in other parts of the country.’ One of the areas they suggested was Seattle, Washington,” Bob says.
The Raffel brothers weren’t the only ones who approved of Seattle. Bill and Bob’s father recommended looking for cities surrounded by new-technology industries. “He said, ‘You don’t want to go to Massachusetts. That’s older technology, that’s textiles.’ He negated the Midwest saying, ‘Antiquated technology. That’s auto, that’s the rust belt,’” Bill says.
Their father liked Seattle because of its connection to Boeing and aviation. His word was powerful enough to prompt his sons to move over 3,000 miles away from their home state of Florida. “His philosophy was to go to areas where there was going to be the technology of the future, not technology that’s fading into the past. That was something he encouraged us to do, and it did pay a dividend needless to say,” Bill says.
Before they could open their first restaurant, however, the brothers had to go back to school—sandwich school. The two-week program taught new Arby’s owners the operational aspects of running a fast-food restaurant. “They taught you obviously how to work in a store, on the front counter, and on the slicer table. Back in those early days, all Arby’s made was roast beef sandwiches. It was an amazing concept,” Bob says. They even went to work at the Arby’s in Fort Lauderdale for a year to really understand the nuances of the company.
Finally, the time had come. The pair moved to Seattle and opened their first Arby’s at a location in Lynnwood. At the time, there were two locations available, one in Lynnwood and the other in Bellevue. Bellevue had a higher per capita income, and larger population density, so it was a surprise when the Beye brothers chose Lynnwood. “The Raffel brothers thought Bill and I were nuts,” Bob says. “Up in Lynnwood, there were only 14,000 people living there. In those early days, people actually used to come to our store and tie a horse to a telephone pole outside. The Raffel brothers couldn’t figure out why the hell we would take Lynnwood over Bellevue.”
Bill and Bob were not ignorant of the decision they were making. Despite higher income and population density, the Bellevue location had a serious flaw: its layout. The store was right up against the street, with only five parking spots, two of which were handicapped. The difficult layout and minimal parking made it challenging to attract customers. The franchisees that ended up buying the Bellevue location did not last a year.
Bill and Bob Beye opened the Lynnwood location in April of 1969 and found immediate success. Their father had given them $25,000 to go toward the opening of the first store; they were able to pay him back by the end of that summer.
While Bill and Bob’s father wisely believed in following new technology, there was no way he could have predicted the economic turmoil that would come to Seattle. Not long after the brothers opened their first Arby’s, Boeing laid off nearly 72,000 of its employees, plunging Seattle into a major depression.
“There was a 17% unemployment rate in the Puget Sound area for the late ‘60s and very early ‘70s,” Bill says. “We only survived because neither Bob nor myself were married, so we had minimal costs and expenses. We were able to survive where other fast-food concepts did not.” It was so bad that a now-famous billboard in Burien, Washington read, “Will the last person leaving Seattle — Turn out the lights.”
Arby’s unparalleled success did not last forever. In the early ‘70s, the franchise’s parent company, Arby’s Incorporated, filed a Chapter 11 in order to settle with creditors. Not everyone was as attracted to the potential as Bill and Bob, and the chain had more sites than franchisees who wanted to run them.
However, the community of Arby’s franchisees endured. “Three major franchisees gathered all the others together and said, ‘If we’re going to survive, we have to try to cohesively keep things together. We have to combine our marketing and purchasing. We can’t do this individually,’” Bill says. The judge made Arby’s Incorporated join the marketing group led by Arby’s Franchise Group.
Over 300 individual locations made up the Arby’s Franchise Group, one of which belonged to Bill and Bob. Bill credits that coalition as keeping them going through difficult moments, such as the Seattle depression. “It kept us solvent, and the exchange of ideas with other franchisees was very beneficial. It enabled all of us to go forward and be successful.” Arby’s Incorporated later made it out of Chapter 11.
Despite these challenges, Bill and Bob were able to go on and open additional stores in Lakewood and Burien, Washington. It was while they were opening the Burien location that tragedy struck. Bill and Bob’s father, who had done so much to support them in their ambitions, passed away. “We hadn’t gotten the store open yet, and he passed away due to a heart attack, but he had fulfilled his dream of helping his boys get started in business,” Bob says.
Bill and Bob’s father only had a 10th-grade education; he dropped out of school at a young age to support his family. Yet he possessed strong instincts for business, and became an entrepreneur himself, owning multiple kitchen cabinet factories in Brooklyn and Long Island. When he encountered trouble with unions, he moved his family to Florida and opened a hotel in Pompano Beach.
“[Our father] always wanted to be in his own business, call his own shots. We got to observe what it was like to be in charge of your own destiny and follow that vision,” Bill says.
At this point, the brothers decided it would be more lucrative to put their money towards purchasing the locations they had been leasing, rather than continuing to open new stores. “If you’re leasing a location and you have a landlord, you can work your butt off for 20 years, 30 years, and have the property become so valuable you would be forced out. Even though you built up your reputation, you’d have nothing to sell. Bill and I said, ‘We’re going to have less development, but we’re going to start buying our locations,’” Bob says.
By owning the physical location, Bill and Bob could continue to profit from the restaurant, without having to pay rent. If for whatever reason they decided to close that particular Arby’s, they could still have income from renting the location out to someone else. “I think the fact that Bill and I bought a lot of the real estate was a huge factor in our success,” Bob says.
Bill and Bob continued to buy and manage Arby’s restaurants, at one point operating 12 restaurants, eight of whose locations they owned, and overseeing 250 employees. They quickly learned the importance of having a reliable team of people working with them. “One thing we learned is that you can’t go anywhere without good people,” Bill says. “We always wanted to develop a management team that would stay with us. We didn’t want to churn and burn people.”
The brothers set up a system in which their staff would start as hourly-wage employees before eventually moving up to salaried positions. By the time they retired, they had staff members who had been with them for nearly 20 years, most of whom began as hourly-wage employees. One example was their director of operations, who had been hired at the age of 16 to work the counter. “It was very gratifying,” Bill says of witnessing the growth of their staff.
While the brothers occasionally looked outside of the business when hiring for a general manager or supervisor, they preferred to promote from within their staff, as it allowed them to fully trust in the work ethic of the employee.
In order to retain employees for so many years, Bill and Bob learned to go above and beyond for their team. “It was people development, taking care of your people, doing as much for them as humanly possible,” Bill says.
While every business wants to treat its employees well, doing so is often dependent on incoming capital. “You’re only as good as your sales in so far as growth and employee retention is concerned,” Bill says. “But we learned that it’s imperative to take care of your people, understand your people, and utilizing the skills of your employees.”
One example of this was a decision Bill and Bob made to give their managers Saturdays off. At the time, it was standard for employees to work six days a week. By giving their managers a two-day weekend, Bill and Bob increased longevity among their staff and decreased turnover. They also decided to create a monthly bonus system to give their employees something to look forward to and motivate them to continue doing good work.
Taking these steps was incredibly important, as fast food in particular is an industry that struggles with employee retention. Most people don’t go into fast food with the intention of staying forever. Therefore, if you want employees to stay loyal to the company, leadership needs to ensure there are systems by which employees can grow and succeed.
“Retention is so extraordinarily difficult in the fast-food industry,” Bill says. “But it’s imperative that any businessperson, regardless of industry, treat their employees with courtesy, respect, and understanding. You cannot be a success without your employees. Without their buy-in, their integrity, and their honesty, you can’t go anywhere.”
Part of what helped Bill and Bob treat their employees so well was that they had a deep understanding of what it meant to be in their position. Before becoming franchisees, both had worked at Arby’s for $1.65 an hour. They scrubbed floors, cleaned toilets, and closed the restaurant at night.
Over time, Bill and Bob developed a stronger understanding of their strengths, and what areas of the business best allowed them to thrive. Bob took over site acquisition, remodeling and construction of buildings, and marketing. Bill handled the financials, management, and personnel end of operations. Despite their varying strengths, they always came together to make decisions. “We always conferred on significant decision-making processes,” Bill says. “I always went to him usually to sign certain things, and likewise he would come to me. We always were on the same page.”
Over the course of their 46-year career, Bill can only remember two times when he and his brother disagreed on an issue. “We would just take a timeout and agree to disagree, we would come back and talk about it a couple of days later when we had cooled off,” Bill says. Few siblings can claim such a harmonious relationship, whether professional or personal!
“We had a great relationship. Family-run businesses are supposed to be poison, but we had a lot of fun, a lot of enjoyment, and those 46 years went by very, very quickly,” Bill says fondly.
One thing the brothers recommend all business owners do is use times of surplus as an opportunity to build cash reserves rather than give themselves bigger salaries. They used these reserves to open more stores and purchase the real estate of the locations, which they were later able to sell for an extraordinary profit. For example, the brothers purchased their first Arby’s for $135,000 and sold it for $2.9 million. “We found that it was so important to keep money. Once we got up to around 10 locations, we tried to keep about $300,000 to $500,000 in reserve. We might use that to buy another site, but most importantly, we just felt comfortable,” Bill says. “It’s like a rainy-day fund for peace of mind and comfort.”
This philosophy came in handy in 2008. Economic activity had all but collapsed, and the brothers had large amounts of property taxes to pay. Thankfully, they had $500,000 of reserves to keep them afloat. In less strenuous economic moments, the reserves allowed them to expand their business with low risk and high reward.
Bill and Bob’s forethought did not prevent them from making mistakes. Despite their overall success, there were a few occasions where they opened an Arby’s in a specific area, only to have the market or traffic patterns change or economic situations impact the state of the community. When crime grew in a location, the restaurant struggled. In the Bellingham location, there was a trailer park behind the store. “We found that people were coming in [to the Arby’s] and shooting up. We were finding needles in the bathrooms,” Bob says.
They had hoped the Bellingham location would be a success because it was near Western Washington University, thinking that the students would prove ideal customers. Not long after, the university opened on-campus food establishments, and their sales dropped significantly.
“Nobody has a crystal ball,” Bill says of these disappointments. “The most important thing is you’ve got to learn from those mistakes. I don’t know a businessman that never made a mistake. If there is one, they have to be God. Learn from those mistakes and it makes you a better decision maker and wiser businessman.”
Over time, Bill and Bob sold three locations, dropping from 12 to nine. By the time they had reached their mid-70s, they decided it was time to sell the remaining Arby’s. They reached out to Gregory Kovsky and IBA to facilitate the sale.
“Gregory knows his business upside down,” Bill says. “He is gifted at selling businesses. He has the knowledge and the background.”
“Greg looked at our sales in each store and figured out a good price for each particular store. He did a great job negotiating the whole thing,” Bob adds.
To make the process even easier, the brothers already had a buyer in mind: a franchisee who had purchased 12 Arby’s in San Diego. In 2015, Bill and Bob sold their restaurants and began their retirement. Their buyer now owns 50 locations across the country.
Despite both McDonald’s and Starbucks showing interest in the locations, the brothers felt extremely loyal to the Arby’s brand and all it had done for them. “It was important to Bob and me that we keep them all Arby’s. The Arby’s concept has been great to us, and we’ve had a beautiful lifestyle, we’ve been very fortunate. Being Arby’s franchisees gave us one hell of a life,” Bill says.
As much as Arby’s has done for the Beye brothers, the franchise owes just as much to hardworking and dedicated franchisees such as Bill and Bob.
Over the years, Bob and his family left Seattle and moved to Idaho. Soon the brothers will once again be reunited, as Bill is in the process of moving out there now.
For Bill and Bob Beye, the American dream is the opportunity to have a successful business and a comfortable life and a career in an industry they are passionate about.
“The American Dream is wanting to get ahead in the world and accomplish something,” Bob says. “We did that, we worked for 46 years. “We’re retired now, it’s a beautiful, sunny day, and life is good.”
Bill adds on to that feeling of gratitude, saying, “Just to summarize: two brothers out of Pompano Beach, two of the luckiest kids in the world. A brilliant dad with a 10th-grade education that gave us great advice, believed in us and financed the first location. Then, two other brothers, Forrest and Leroy Raffel, founded Arby’s and made us very affluent and very successful, and most importantly gave us the underpinnings for a very happy and beautiful life. That’s something to be thankful for,”
Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.