It was a summer of turmoil for Luby's. The COVID-19 pandemic has driven down traffic in many restaurants, and the future of the beloved cafeterias is uncertain.
The company — which operates cafeterias and owns the hamburger chain Fuddruckers — announced in June it wanted to sell off its restaurants and assets. Then it announced it was going to liquidate its assets and dissolve the company. Now, it looks like a deal may be in the works for new owners to buy the company and keep it going.
Luby's has cultivated a devoted following of customers over the decades. It has always been the kind of restaurant that people either adored or avoided. A cafeteria line with an abundance of fried offerings and pies piled high with whipped cream is not everyone's cup of tea. But those who love it really, really love it. And some of that devotion might stem from the way the company was founded.
Austin author Carol Dawson co-wrote a book about the history of Luby's in 2006 called House of Plenty: The Rise, Fall, and Revival of Luby's Cafeterias. With Luby's in the news again this summer, KUT revisited a 2006 interview with Dawson in which she outlines the business and family intrigue that characterized the cafeteria chain's history. Dawson also explains in detail what Harry Luby had in mind when he started it in Springfield, Missouri, in 1911.
"He very much wanted to create a business that everybody would benefit from — the people who managed it, the people who worked in it," Dawson said.
That's why he implemented a generous plan in which cafeteria management would earn 40% of their restaurant’s net profits each year. Dawson believes that practice spilled over into the business's success.
"Luby's itself generated so much income from this spirit of cooperation and partnership and everybody doing well that that atmosphere, I think, pervaded to the public," Dawson said.
Those early cafeterias also filled a void in options for eating out. Dawson says prior to cafeterias, "there were only two options — either a very expensive hotel dining room or a saloon." But cafeterias, with a less expensive menu and a family atmosphere, provided what Dawson describes as a "democratizing way for everybody to eat out."
Listen to the interview or read the transcript below to hear more from Dawson about the roots of Luby's cafeterias.
Note: This transcript has been edited lightly for clarity.
Carol Dawson: Harry Luby founded Luby's in Springfield, Missouri, in 1911. And this was three years after the very first Ford Model A rolled off the assembly line. So, the whole notion of assembly line eating was a brand-new idea, and it was a sign of modernity in the early 20th century — like, “Oh, there's a whole new way of doing things.”
KUT: What was his operating philosophy? How did he run his business?
He very much wanted to create a business that everybody would benefit from — the people who managed it, the people who worked in it. He started establishing new cafeterias in new places, which he chiefly did because he wanted to keep refining his ideas. He would get managers in to manage the place he had just left after a year of operation in order to go found a new one. He decided on a 60-40% split, which is unheard of in any sort of food industry operation. Management earned 40% net profits of all the profits per annum in any cafeteria. And then the ownership would get 60%.
These were guys who would roll up their shirtsleeves and clean the grease traps. Not just management but the executives of Luby's. They knew how to do every job. They knew how to skin liver. They knew how to prepare every kind of vegetable. They knew how to mix every kind of salad dressing. They had mastered all the recipes.
How was the business side?
This created a sense of abundance. You know how a cafeteria line — you look at it and you go, “Oh my gosh, it's the groaning board. It's the feast.” Luby's itself generated so much income from this spirit of cooperation and partnership and everybody doing well that that atmosphere, I think, pervaded to the public. And as a result, Luby's was extremely successful. Even the tea ladies who push the carts around got stock options. Dishwashers got stock options.
Why did people respond so well to it?
Because it was a place where they could bring their families. When cafeterias first got started — and Luby's was the first cafeteria chain ever — it was a place where people could bring their families. Previous to that, there were very few eating out alternatives. Most people ate at home all the time. If they went out to eat at all in most small towns and small cities in America, there were only two options — either a very expensive hotel dining room or a saloon. And you couldn't take your mother-in-law to a saloon. And you can't take your kids to an expensive hotel dining room, which is formal and where there is a wait staff.
This was a democratizing way for everybody to eat out. And it was a very inexpensive way to eat because it eliminated a wait staff. And it was a novelty. At the time cafeterias started, nobody had ever seen this mode of eating before in general.
How did Luby's decide where to expand and where to keep building and opening more restaurants?
Harry first remained in Missouri for a little while. He opened cafeterias in Springfield and then in Joplin and St. Joseph. And then he decided to move on. And when he did, he followed the oil trail because at this point, oil fields were opening up in Oklahoma and then Texas. So, he followed the oil trail, moving from one new oil boom city to the next, because cafeterias were the perfect place for those workers and even middle-class and upper-middle-class people to eat in those communities.
Harry founded his last own cafeteria in San Antonio. And after San Antonio, his son Bob and other members of the family, which he pulled in to get involved in the cafeteria business — he started helping them found cafeterias in other Texas towns and eventually across 11 states.
Do you have a family history with Luby's? Did you grow up eating there?
Oh my gosh, yes. I think most people in Texas and a number of other states grew up eating at Luby's. My father started eating at what was then the New England Cafeteria, which was Harry Luby's early name for the Luby's cafeteria in Waco in 1924 when it first opened and my father was an 8-year-old.
Got a tip? Email Jennifer Stayton at jstayton@kut.org. Follow her on Twitter @jenstayton.
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