The Pizza Hut franchise chain was founded in 1958 by a pair of brothers from Wichita, Kansas, Frank and Dan Carney. Having started in the food business by working for their father, a local grocer, they borrowed $600 from their mother to convert a 600-square foot bar into a pizzeria. "Money was different then," Dan has said.
Carney Brothers Beginnings
Both brothers had studied business at Wichita State University in their hometown. While interrupting his education to serve in the U.S. Air Force, Dan studied the early successes of fast-food pioneers McDonald's and Kentucky Fried Chicken, and noted the increasing popularity of pizza, before returning to Wichita State to complete his degree.
"At that time," Dan has said, "there were no courses on franchising. In fact, franchising was pretty much relegated to the auto business at that time. Still, it gave me the background to form my own company, and basically our own franchise agreement, which evolved over time. Today you have entrepreneurship classes and all kinds of different courses that would pretty much give you the basic background to go into business for yourself."
Against the advice of one of his professors, who suggested that collective bargaining was more important, Dan (who thought it a boring subject) wanted to write his Wichita State master's thesis on the subject of franchising, having correctly seen that it would be the future of foodservice. But the professor wouldn't accept it, and Dan left short of a master's degree. A few years later, he tried to go back and complete his master's degree and was told that, due to his success, he'd be better off teaching the course.
Naming Pizza Hut
There are two stories as to how the brothers chose the name "Pizza Hut." One version says that the sign they bought only had enough space for nine characters, including spaces. The other is that the building they used, the former bar, had a shape that reminded the ex-Airman Dan Carney of a hut.
After opening their Wichita location using second-hand equipment, they started franchising in 1959 with the first franchised location in Topeka, Kansas. The following year saw the opening of the Aggieville, Kansas Pizza Hut—the first Pizza Hit to offer delivery (on a three-wheeled scooter for starters).
Dan and Frank ran the company with help from John Bender, an Air Force buddy of Dan's who had worked in a pizza parlor in Indiana until they bought him out in 1963. Within 10 years of the company's founding, the Carney brothers had grown their single outlet to over 300 stores, with the stores' red roof becoming a logo and eventually an icon.
Pizza Hut went international in 1970, and within a year it had become the world's largest pizza chain. In just one more year, they crossed the million-dollar mark in the U.S. market, were listed on the New York Stock Exchange, and made its first common stock offer.
In 1977, the brothers sold Pizza Hut to PepsiCo, which had also bought Kentucky Fried Chicken and would also buy Taco Bell. While PepsiCo has sold all three chains, they remain under a single umbrella called Yum! Brands. Frank remained a board member and the president of Pizza Hut until 1980.
Beyond Pizza Hut
Since then, Dan has been a venture capitalist and is involved with the Kansas branches of various charities, including Chairman of the Board of Cerebral Palsy Research Foundation of Kansas. He also sits on the boards of various listed companies.
Frank stayed in the pizza business, helping John Schnatter found and run Papa John's and becoming a Papa John's franchisee in 1994. By 2001 Frank owned 133 Papa John's locations, eventually selling his franchise to Terry Newman. Frank is a past president of the International Franchise Association (IFA).
Both brothers have also been major donors to scholarship funds at Wichita State. Frank Carney and his former wife Zenda also established an endowed scholarship in entrepreneurship at the university.