The Howard Johnson^® story is a classic example of American entrepreneurship and solid American values at work.

Howard Dearing Johnson was one of those rare human beings who see their destiny, and have the drive, the talent, and the imagination to seize it. He set out to make a name for himself - and didn't rest until that name had become one of the world's great brands, and one of the best known landmarks in travel.

He not only built one of the first great restaurant chains and one of the first mid-price hotel chains, he pioneered many of the most successful food service and hospitality innovations. The franchisee ownership concept, the turnpike restaurant concept, the super premium ice cream concept, the "Theme" restaurant concept, the commissary food distribution concept, the "America's Menu" concept, the quality motor lodge concept, the "Kids-Go-Free" family travel concept - they are all classic examples of the business and marketing genius of Howard Johnson.

He set a standard of consistent quality, honest value, fun, clean environments and caring customer service that would change family travel - and the hospitality world - forever.

As it is with any great enterprise, there were bumps in the road. But Howard Johnson - the proud brand name, the standard of service, and the solid values - not only survived, but grew stronger than ever as the baton was passed: enter Cendant Corporation.

Today, Howard Johnson has earned its place as one of the world's best known family of hotels - the hotels that "make you feel at home."

It's a great American success story - and it all began at a small town soda fountain.

In 1925, Howard Johnson borrowed $2,000 to buy a small corner drugstore in Wollaston, Massachusetts. It sold candy, newspapers and patent medicine - but Howard quickly noticed that the real action was at his old marble soda fountain. He figured that if he could invent a better tasting ice cream cone, the world (or at least Wollaston) would beat a path to the Howard Johnson store.

He came up with a "secret formula" for vanilla and chocolate ice cream. The secret was, in fact, based on his mother's recipe for ice cream - with all natural ingredients and twice the normal butterfat content. It was an immediate sensation, so he quickly added other flavors. He had invented a super premium ice cream.

When summer came, he opened a beachfront ice cream stand, and that first summer he sold $60,000 worth of ice cream cones - at a nickel a cone. By 1928 he was selling $240,000 worth of ice cream cones. He kept adding flavors until he reached 28 varieties.

"I thought I had every flavor in the world," Howard remarked. "The 28 flavors became my trademark." He advertised it, truthfully, as "New England's Best Ice Cream," and his success reinforced what became the guiding principle of his business life: "Quality sells."

Over the next few summers he added more beachfront stands, and decided to do for the lowly hot dog what he had done for the ice cream cone. Instead of using the normal hot dog stand method of slapping them on a greasy grill, then wrapping them in stale buns, he invented the idea of clipping the frankfurt ers at both ends, notching them lengthwise, and then cooking them in pure creamery butter that would infuse into the meat. He used only the highest quality meats (unheard of in those days) and lightly toasted, buttered fresh rolls. He had elevated the hot dog to connoisseur status, and it was to become one of the unforgettable joys of visiting Howard Johnson's restaurants for generations. Again, that little extra drive for quality would pay enormous dividends in the years to come.

His success was beginning to be noticed by others, and thus he was able to convince some skeptical bankers to lend him enough money to open a restaurant in Quincy, Massachusetts. It was located in Quincy's first "skyscraper" - a ten-story granite art deco building that still looks magnificent today. This first Howard Johnson's restaurant featured fried clams, baked beans, chicken pies, those elegant frankfurters, and, of course, the now locally famous Howard Johnson ice cream. He was restless to expand - but the stock market crashed, the Depression began, and the banks weren't lending money.

Then Howard had a remarkable idea, one that would change the course of American business enterprise . In 1935, he persuaded an acquaintance to open another "Howard Johnson's" restaurant in Orleans on Cape Cod under a franchise. Howard Johnson would design the space, create the menu, set the standards, and deliver the food and ice cream. The franchisee, under a license, would own the property and receive the bulk of the revenues. Howard, always a stickler for quality, demanded that the restaurant be run by his quality standards, or the contract was void and the franchisee would have to remove the Howard Johnson sign.

Seemingly overnight, out of the depths of the Depression, a phenomenal business success was born. By the following summer there were 17 Howard Johnson's restaurants. All were successful beyond anyone's wildest expectations. Paul Herbert, for instance, opened a 70-seat restaurant in Cambridge, putting up $10,000 as one-third the cost, the remainder to be financed over three years. Mr. Herbert hoped he would gross $60,000 a year, but he actually grossed $200,000 during the first twelve months. It was something of an derstatement when he declared, "You're in a good business when you own a Howard Johnson franchise."

That sentiment was to be repeated by many hundreds of happy and wealthy franchisees. By the end of 1936 there were 39 more franchised restaurants.

Howard Johnson moved with lightning speed, for he had seen that the growing popularity of the automobile was sending millions of hungry Americans out on the road, and there were no decent places to satisfy their needs. He created the highway landmark concept, featuring the bright orange roof and the Simple Simon and the Pie Man road sign. By 1939 there were 107 Howard Johnson restaurants along East Coast highways generating revenues of $10.5 million.

All were run according to the "Howard Johnson Bible" - a set of strict standards of cleanliness, service, recipes, menu items and quality (as well as interior and exterior design) that were developed and rigidly enforced by Howard Johnson himself. It was quite a voluminous bible, and it left nothing to chance. The author meticulously wrote every instruction on everything and anything that had to do with the running of his restaurants. He would allow no variation from one restaurant to the other. One chapter was devoted to "Howard Johnson Waitresses - Your Appearance from Head to Toe." An entire page covered the subject of being courteous, including instructions on how to "assist customers with their wraps."

As the vast American highway system began to span the continent, millions of travelers, in their Ford "woody" station wagons and Chevy coupes, eagerly searched for the familiar orange roof and the big Howard Johnson sign with Simple Simon and the Pie Man on top.

They searched, and the kids clapped and cheered when they saw it, for they all knew exactly what they would find inside - the best fried clams anywhere, hot dogs grilled in butter and served on toasted rolls, old-fashioned chicken pot pie, generous turkey dinners with mashed potatoes, moist rich brownies, games and puzzles for the kids, high chairs for the tots, and 28 flavors of the world's best ice cream. All served family style, by smiling waitresses in their prim, starched blue and orange dresses, all to be enjoyed in spanking clean, colorful surroundings.

Here was the nation's "Host of the Highway," where everyone invariably found a warm welcome, a familiar experience, and a special feeling that became part of growing up in America.

In less than 14 years, the dreamer who aspired to create a better ice cream cone now directed a mammoth franchise network of over 10,000 employees, with 170 restaurants, many serving a million and a half people a year.

And the heady beat went on.

The Pennsylvania, Ohio and New Jersey turnpikes were built, and Howard Johnson bid and won exclusive rights to serve the hungry turnpike multitudes. There were 200 Howard Johnson restaurants on the morning that America woke up to three huge black letters on the front page: "WAR!"

With World War II came gas rationing, food stamps and the end of pleasure trips. One by one, the restaurants were forced to close. By the summer of 1944 only 12 remained in business. Howard manage d to stay barely afloat by serving commissary food to war workers and army recruits. But by the time America was celebrating V-J Day, Howard Johnson was working late into the nights getting ready for the travel boom and the highway expansion that he knew had to be coming.

He was about to make one of the biggest comebacks in business history. After the war, this country turned its incredible energy to building houses in a new world called "suburbia," building big, powerful cars that seemingly everyone could afford, and building the endless interstate highway system that connected our cities and our people, coast to coast. It was a world custom-made for our "pioneer of the highways" Howard Johnson. And he didn't waste a minute.

By 1947, construction was under way or about to begin on 200 new Howard Johnson restaurants that would stretch across the Southeast and Midwest. These were slightly smaller buildings than the prewar originals, but Howard Johnson still provided over 700 items, including his famous fried clams, saltwater taffy and 28 flavors of ice cream. By 1951 Howard Johnson sales totaled $115 million.

By 1954 there were 400 Howard Johnson restaurants in 32 states. About 10% were company-owned turnpike restaurants that were extremely profitable. The orange roof just kept spreading until it rivaled Coca-Cola's trademark as the most familiar icon in America. And countless memories of family travel were born under every orange roof.

In 1959, the company founder, who still made his headquarters in Wollaston, Massachusetts, decided it was time to turn the reins over to his son, twenty-six year old Howard Brennon Johnson, who succeeded him as president. Young Howard, a graduate of Andover and Yale, told a reporter, "I knew from the age of five that I wanted to join the company. It was all we talked about at home. And my father was the kind of person you almost couldn't let down." The senior Howard Johnson remained as chairman and treasurer, though he was now able to enjoy his sixty-foot yacht and his growing art collection. He died in 1972, at the age of 76.

Another postwar phenomenon was developing in the fifties, and the Howard Johnsons, father and son, were quick to take advantage. As the highway system improved, an army of business men and women took to the road to sell their goods, promote their companies, and visit the branch offices of the country's sprawling new industries. They became known as "road warriors." They would spend a week or more on the road, continuously driving from city to city. Just as family travelers in the thirties were unhappy with their restaurant choices, these business travelers were too often appalled at the overnight accommodations they found on their routes. Dirty, cramped motels ruled the road - many with broken plumbing and no services.

It was to meet this need, as well as to provide nicer accommodations and a better value for family travelers, that the Howard Johnsons entered the hospitality industry. They created the concept of the Howard Johnson Motor Lodge - clean, modern lodging with big guestrooms, fresh sheets, air conditioning, a modern bath, and that newfangled device that was sweeping America - television. So that everyone would know that here they could count on quality and value, they topped each motor lodge with the familiar orange roof, and made sure a Howard Johnson restaurant adjoined the property. By 1961, the year the Howard Johnson Co. went public, there were 88 franchised Howard Johnson's Motor Lodges in 33 states and the Bahamas. That year there were also 605 restaurants, 265 of them company operated and 340 franchisee-operated.

Annual sales increased every year between 1961 and 1979. During that time, the company's founder, his son and his daughter sold nearly two million shares of stock for a sum estimated at $125 million - the ultimate proof that it does pay to build a better ice cream cone. Howard Johnson was sailing along - not aware that just ahead were two dangerous shoals. One was called the energy crisis. The other was called The Big Mac.

Although Howard Johnson kept expanding, reaching over 1,000 restaurants and over 500 motor lodges in 42 states and Canada by 1975, the seventies marked the beginning of the end of the original Howard Johnson concept. Over 85% of the company's revenues depended on automobile travel. And when the oil embargo of 1974 created nationwide gas shortages and inflated gas prices, more and more Americans kept their cars in the garage.

At the same time, new competition delivered a one-two punch that hit the restaurant business and the lodging business, and it nearly was a knockout blow. America had become a nation in a hurry, and fast food restaurants met the new demand for a good, quick meal at a good, low price. Suddenly everyone was singing, "You Deserve a Break Today" and "Have It Your Way at Burger King." Howard Johnson seemed like yesterday's news. Changing times overtook the hospitality business as well. Somehow the spanking new Holiday Inn^®, Ramada Inn^® and Marriott^® hotels that were springing up everywhere made those once modern Howard Johnson's Motor Lodges look...well, not so modern anymore.

In September of 1979, Howard Johnson accepted an acquisition bid from Imperial Group PLC of Great Britain. Imperial obtained 1,040 restaurants (75% company owned) and 520 motor lodges (75% franchised).

During the next ten years it seemed that there was nothing permanent except change. The brand had two different owners, countless new restaurant concepts were launched, many of the properties were sold off, and operation of the franchised hotel system was separated from the restaurant chain. Few great brands have ever gone through such a dizzying chain of disruption. There were those who wondered if any brand could survive such turmoil. But they didn't understand the hidden magic in the Howard Johnson name. Finally, in 1990, someone came along who did.

Enter Hospitality Franchise Systems...

In 1990, the Howard Johnson name and lodging system were sold to HJ Acquisition Corp., later to become known as Howard Johnson International, Inc. This new company was a subsidiary of Hospitality Franchise Systems Inc., or "HFS".

After years of turmoil, it was now time to find business and marketing focus for this grand old brand name. HFS (which merged to become Cendant in 1997) quickly made it clear that from now on Howard Johnson would again be positioned as a mid-price hotel chain catering to family and business travelers. Fried clams and ice cream represented the past. And that went for the orange roofs as well. Hotels were the future for Howard Johnson International. Bigger, better hotels.

Instead of rushing to add new properties and new concepts, the new owners sought a sharper focus for Howard Johnson. A plan to upgrade all Howard Johnson hotel properties was put in place, and a strict quality rating system was established.

Gradually, Howard Johnson was moving down the road to recovery. But by 1997 it was clear that the brand still had a long way to go. And competition in the mid-price hospitality world was becoming fiercer than ever.

That is when the management decided to take dramatic, bold steps to make Howard Johnson more relevant for today's family and business travelers, and to make it a major international travel brand.

The first step was a research study to determine the current strengths of the Howard Johnson brand, to find out how people really felt about Howard Johnson, and to assess the qualities that set Howard Johnson apart from other travel brands.

It was this study that revealed the hidden magic in the Howard Johnson brand name. The brand might have briefly lost its way, but it had not lost its soul. It was there, deep down, perhaps ignored for too many years by too many owners. Howard Johnson represented solid American values. The very same values that built the brand back in the thirties - taking care of families, solid quality, clean, comfortable surroundings, good, honest value, a name travelers could trust - were the values that American consumers echoed 75 years later. Remarkably, in spite of all the changes and all the disruptions, the underlying strengths of Howard Johnson, the very soul of Howard Johnson, had not changed. Howard Johnson, it turned out, had always stood for a lot more than an orange roof.

After reviewing the findings, management agreed to rebuild the Howard Johnson brand based on solid values - and to do so on a global scale. A new marketing and advertising initiative was launched under a theme that clearly expressed the solid values concept: "Howard Johnson Makes You Feel at Home ^SM."

To demonstrate kinship with families traveling with children, Howard Johnson launched a greatly expanded Kids Go HoJo^SM program, as well as an added-value program called Howard Johnson Comforts of Home^SM. To make business travelers feel at home, Howard Johnson Home Office^SM rooms were introduced throughout the chain, along with the popular frequent-traveler program, Howard Johnson SuperMiles^SM.

Equally important, a major, system-wide property upgrade program was initiated. New, larger Howard Johnson hotels have been built or are being built nationally and internationally.

One of the most visible changes is the system-wide signage program that has literally changed the way the world sees Howard Johnson. The bright new blue Howard Johnson sign is now the smiling new face of Howard Johnson, a cheerful greeting to today's travelers.

In 1999, to communicate the new Howard Johnson message to the world, TV commercials were launched that feature real American families and business travelers that share the Howard Johnson name and the solid values that the name stands for. Each commercial concludes by telling viewers, "We've got a great name to live up to."

Today there is a powerful new momentum behind Howard Johnson. Revenues are on the rise and new hotels are joining the family at the fastest rate ever in countries all over the world. To sustain this momentum, management has initiated a series of specific programs to raise the standards for performance, quality and growth. Together, these programs represent one of the most extensive efforts in the history of the brand to assure the highest quality standards, franchisee profitability and growth of the brand.

The Howard Johnson story began 75 years ago. It has been a long road, with more detours than the founder and namesake could ever have envisioned. Few brands have seen more change over the years than Howard Johnson. But that only serves to underscore the extraordinary strength of this great brand name. For today, more than ever, Howard Johnson is a name that people trust, respect and look forward to seeing, wherever they travel. It's a name that stands for honest quality and solid value. It's a name that makes travelers feel at home. Today, in 1999, the Howard Johnson name is on nearly 500 hotels in 14 countries. It is one of the most well known mid-price hotel families in the world. And this year, over 15 million people are expected to visit Howard Johnson Hotels.

Howard Johnson has a proud heritage. It's a heritage on which to build a great future. That is why it should be the goal of every member of the Howard Johnson family to uphold the commitment that was first laid down 75 years ago - after all, "We've Got a Great Name to Live Up To".