Restaurateur served up unpalatable sexual bias

DANNY EVINS ENTREPRENEUR 11-10-1935 - 14-1-2012

By InvestSMART · 21 Jan 2012

By InvestSMART ·
21 Jan 2012

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DANNY EVINS

ENTREPRENEUR

11-10-1935 14-1-2012

BY DOUGLAS MARTIN

DANNY Evins, who turned a $US40,000 loan into a $2.4 billion highway restaurant chain across the United States and fought a losing battle to discriminate against gay employees has died of bladder cancer in Lebanon, Tennessee. He was 76.

Evins was an oil jobber (middleman between petroleum refiners and retailers) when he hit upon an idea that would change his life and the American highway: a down-home restaurant with rocking chairs on the front porch, a potbellied stove and fireplace inside, and a checkerboard on every table.

The typically Tennessean food including catfish, biscuits and gravy, and pineapple upside-down cake would be ample, reasonably priced and swiftly delivered.

Evins' concept, marketed as the Cracker Barrel Old Country Store, is now offered in 600 company-owned restaurants in 42 states. And year after year Cracker Barrel wins polls for excellence as a family restaurant.

Evins staked out real estate at exits on interstate highways to establish a distinctive alternative to fast food one that included gift shops featuring homemade jellies in old-fashioned glass jars.

However, he ran into a barrage of criticism after a January 1991 directive to all the company's restaurants to fire employees "whose sexual preferences fail to demonstrate normal heterosexual values".

He claimed gay people made customers in rural areas uncomfortable. About 16 openly or suspected gay employees were promptly fired.

Protests erupted at restaurants in dozens of cities and towns, boycotts were organised and shareholders complained. At a time when discrimination against gay people was not prohibited under the laws of most states or the federal government, Cracker Barrel's action stood out for its sheer blatancy.

By March that year, Evins had apologised and said the policy had been rescinded. But the New York City Employees Retirement System, which owned more than $6 million of Cracker Barrel shares, and its allies, fought until 58 per cent of the shareholders in 2002 persuaded Cracker Barrel's board to vote unanimously to explicitly forbid anti-gay discrimination in its equal employment policy.

Born Dannie Wood Evins (he later changed his first name to reflect the conventional spelling) in Smithville, Tennessee, he attended military school and served three years in the United States Marine Corps.

He then worked for two years as an aide to his uncle, Joseph Evins, a 15-term US congressman from Tennessee. In the late 1950s, he returned to Lebanon and worked as a teller in his brother's bank, before becoming a jobber for Consolidated Oil, a company founded by his grandfather.

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Frequently Asked Questions about this Article…

Who was Danny Evins and why is he important to everyday investors interested in Cracker Barrel?

Danny Evins was the entrepreneur who founded the Cracker Barrel Old Country Store. He turned a $40,000 loan into what the article calls a $2.4 billion highway restaurant chain, building a recognizable brand with 600 company-owned restaurants in 42 states. Investors may note how a founder’s vision and reputation can shape a company’s growth and public profile.

What is Cracker Barrel’s business model and where are its restaurants located?

Cracker Barrel’s model focuses on highway-adjacent, down-home restaurants paired with gift shops selling old-fashioned goods. The chain emphasized real estate at interstate exits to attract travelers, offering country-style food and retail in 600 company-owned restaurants across 42 states, according to the article.

How did Cracker Barrel grow from a small loan into a large restaurant chain?

According to the article, Evins leveraged a $40,000 loan, chose strategic real estate at interstate exits, and offered a differentiated, family-oriented dining and retail experience (home-style food plus gift shops). That concept helped the business expand into hundreds of company-owned locations and achieve the scale described.

What was the 1991 Cracker Barrel employment controversy and how did it unfold?

In January 1991 Danny Evins issued a directive to fire employees "whose sexual preferences fail to demonstrate normal heterosexual values," leading to about 16 openly or suspected gay employees being fired. The policy prompted protests, boycotts and shareholder complaints; Evins apologized and rescinded the policy by March 1991.

How did shareholders and investor activism affect Cracker Barrel’s employment policy?

Shareholders — notably the New York City Employees Retirement System, which owned more than $6 million in Cracker Barrel shares — and their allies pressed the company on its practices. The article says their efforts continued until 58% of shareholders in 2002 persuaded Cracker Barrel’s board to vote unanimously to explicitly forbid anti-gay discrimination in the company’s equal employment policy.

What were the reputational and investor risks highlighted by the Cracker Barrel controversy?

The article documents protests, organized boycotts and shareholder complaints after the 1991 firing directive, showing how public controversies can trigger consumer and investor backlash. For everyday investors, this underscores that controversial executive actions can create reputational risk and spur governance activism.

What was Danny Evins’ background before founding Cracker Barrel?

Before founding Cracker Barrel, Evins worked as an oil jobber (a middleman between refiners and retailers) and for Consolidated Oil, a company founded by his grandfather. He also served three years in the U.S. Marine Corps, worked as a bank teller, and served as an aide to his uncle, a longtime U.S. congressman.

What practical takeaways does the Cracker Barrel story offer investors about corporate governance and leadership?

The article illustrates that founder-led decisions can rapidly affect a company’s brand and shareholder relations, and that sustained investor pressure can lead to formal policy changes (as happened in 2002). Everyday investors should watch for governance issues, reputational risks and active shareholder engagement when assessing long-term investments.