Golden Corral relishes lean times.

• Author: Wittebort, Suzanne
• Position: Steakhouse chain's strategies to cope with the economic downturn

With red meat in retreat, this steakhouse chain is cooking up a new look and menu to keep it fat and happy.

In 1990, when Raleigh teen-ager Tonya Fowler returned home after a term as an exchange student in Russia, she had an announcement for her parents. No longer, she declared, did she eat red meat.

Such a proclamation wouldn't cause much of a fuss in many households because large numbers of Americans are eating less meat. But beef has kept bread on Tonya's table for a long time: Her father, Ted Fowler, is president and CEO of Raleigh-based Golden Corral Corp., one of the nation's biggest steakhouse chains.

But Ted Fowler was unfazed. "That's OK," he says he told Tonya. "You can still find plenty to eat at Golden Corral."

Golden Corral has been changing with the times to appeal to customers like Tonya Fowler as well as its traditional beef-eating clientele. Beset like other family steakhouse chains by bruising competition and shifting tastes in the late '80s, Golden Corral is revamping its traditional steakhouse image with bright, airy new restaurants offering an imposing variety of hot and cold entrees, baked goods, salads and desserts. Meanwhile, it's modifying its corporate strategy to boost growth through franchising.

Management is so confident of its new formula that it's betting the ranch: Over the next five years, it hopes to increase its number of restaurants from 440 to as many as 1,000 and to more than triple chainwide revenues from $500 million this year to $1.7 billion, bucking the trend in a business that's been shrinking, not expanding. "By 1997, we want to be the leading family restaurant worldwide," Fowler says.

The first Golden Corral began selling its steaks, baked potatoes and small garden salads on Bragg Boulevard in Fayetteville in 1973. It was a small, no-frills establishment where customers raised their hands for their orders when waitresses called out their numbers. The company was founded by William Carl and James Maynard, now chairman of Golden Corral, a wholly owned subsidiary of Investors Management Corp., a private holding company he controls. Maynard, 52, an Onslow County native, alumnus of East Carolina University and former salesman for Burroughs Corp., says family steakhouses attracted him because "I thought they offered great value and they were places I personally liked to eat and take my family."

When he and Carl failed to qualify for a franchise from the national chains, they decided to start from scratch, aiming to offer fresh-cut, USDA Choice steaks at only a slightly higher price than the frozen, imported steaks served by budget steakhouses. Carl left the company in 1984, but remains a director and stockholder.

Financed by sale and lease-backs, bank loans and internally generated cash, the chain grew rapidly, expanding into 38 states, topping 500 restaurants in 1987 and peaking at $457 million in revenues the following year. But then times started getting tough. Golden Corral found its market share shrinking, and revenues and profits dipped. Still, says Fowler -- who along with other company officers holds stock in Investors Management -- the company never lost money. Golden Corral began closing restaurants, dropping a net 87. (Several closed units are reopening as Ragazzi's, an Italian chain also owned by Investors Management.)

Golden Corral wasn't alone in feeling the pinch. Bonanza, Western Sizzlin', Quincy's and Western Steer all cut restaurants between 1986 and 1990, according to Technomic, a Chicago...