“We had access to too much money, too much equipment, and little by little, we went insane.”
Originally spoken by Francis Ford Coppola about the filming of Apocalypse Now, I think this statement applies just as well to the marketing misadventures of Rax Roast Beef circa 1991.
I’ve been fascinated with the downfall of Rax ever since I saw Hank Green made a video titled “The Commercial that Killed a Fast Food Chain.” Obsessed, even.
The basic marketing errors! The groupthink! How could a company make so many mistakes, and then try to justify them in what can only be described as a propaganda video?
I want answers. Journey with me into the heart of darkness (aka the dining room of Rax).
In this video: Hank Green remembers some weird ads he saw as a child. The title suggests that the ads killed Rax, but Hank’s opinion seems more nuanced than that. But still…I want answers!
Seriously? You want to write a whole article about Rax Roast Beef?
I know what you’re thinking. “Why in the hell should I care about a midwestern restaurant chain that fell apart in the 1990s?”
There are two really good reasons to pay attention to Rax’s downfall in the early 1990s. First, it’s the perfect illustration of what happens when you break the golden rule of marketing: “understand your audience.”
Second, and perhaps more importantly, the series of decisions that went into Rax’s downfall are simultaneously hilarious and sad, but more than anything, fascinating. It’s the marketing equivalent of The Room, a film whose name is synonymous with “so bad it’s good.” As I’ll discuss later, the management team – captured in a 13-minute video defending their objectively bad choices – is radiating some serious Tommy Wiseau energy.
So what was Rax Roast Beef?
Rax Roast Beef was a regional fast-food chain based in Ohio, Kentucky, Indiana, and Illinois. It was founded by Jack Roschman in Springfield, Ohio. The year was 1967.
The menu, up until the 1980s, was pretty simple at its core. You could get roast beef sandwiches, salad at the salad bar, soft drinks, fries, and baked potatoes. WRKR 107.7 FM described it as being “once as common as their competitor Arby’s” and the menu sounds pretty similar too. And honestly – it sounds pretty good to me!
At its peak, Rax had 504 locations in 38 states, and they were starting to dip their toe into international business as well. Rax had really nailed this sort of heartland cuisine approach by the mid-1980s. Their Wikipedia article implies that Rax had a solid working-class clientele, which based on the locations, the price of the items on their menu, and the food itself, sounds intuitively right. (Good luck finding hard evidence for this assertion, though. Original sources are shockingly poor as this was a regional restaurant in a pre-internet age.)
Overall, Rax strikes me as the sort of place I could have rolled up to on a long road trip somewhere out in west Tennessee. I mean that as a very sincere compliment.
Why the Golden Age of Rax Roast Beef ended so soon
So around the mid-1980s, Rax had a pretty good business model going. They had a lot of locations, a simple, revenue-generating menu, and a group of people who ate there on a regular basis.
But then things started changing, and there wasn’t a clear reason. Rax started tweaking their menu, first adding baked potatoes, a harmless enough addition. Then they added pizza, a pasta bar, Chinese food, a taco bar, “endless” salad bar, and a dessert bar. (I’ve found conflicting sources on whether the menu changes or growth in number of locations came first.)
Around this same time, they started massively overhauling their restaurant architecture, most of which was built within the last decade and did not need to be renovated at all. They did expensive renovations, including adding solariums and wood elements. The idea was to basically make Rax a fancy place to eat (while still advertising their food’s inexpensiveness and the large serving size, neither of which are associated with fanciness).
The financial impact of all these sudden changes
These changes sound a little weird when you first read about them, but if you read again as a business professional, they’re disastrous!
First, Rax added a large variety of different foods, many of which people did not go to Rax for in the first place. So without looking at the books, I can only assume that drove variable costs through the roof. On top of that, these expensive, capital-intensive renovations sure couldn’t be doing them any financial favors either. In full transparency, I must admit I don’t have their books in front of me, but I think few could doubt my assertion here given the visible evidence.
All of this might be justifiable if their audience wanted it, but if this “working-class clientele” theory I mentioned earlier holds up, it really wasn’t. Their customers were likely looking for cheap, decent sandwiches. They weren’t looking for exotic, ultra-diverse menus. The restauraunt business has super slim margins and you can’t afford to muddy your menu.
You could make a case for changing things up…but not this way!
Now at this point, a keen reader might object and say, “you’re missing the point. This was a play for market share.”
I think so too. It’s the only logical explanation for making a dramatic change to a working business model. It was likely a plan to compete with Wendy’s, Arby’s, and the rest of its ilk. The only problem was that it was implemented with all the clarity of a fever dream.
The evidence for Rax trying to capture a different market can be found in their ads. The Hank Green video I mentioned earlier goes through a rapid series of ill-conceived ads in its first 75 seconds. Even with Hank narrating over the ads, you can tell that they were grasping at straws trying to find a new audience. They just didn’t know which audience they wanted to sell to.
Advertising was really important to chain restaurants in the 1980s and 1990s. This was the network era, and you couldn’t just target someone’s smartphone because they happened to be close to your Starbucks location. You had to make catchy ads – memes before memes existed – to make people remember your name and go to your restaurant.
Rax just never pulled this off.
The Hail Mary Ad Campaign: Mr. Delicious
To paraphrase Anna Karenina: successful companies are all alike; every unsuccessful company is unsuccessful in its own way. Rax rattled apart in a way that I can only describe as confusion crashing into decadence and covered up by confirmation bias.
It’s time to talk about Mr. Delicious.
Steel your nerves.
Who Was Mr. Delicious?
Well, hello, Mr. D again. Our subject: value express combos at the Rax drive-thru. These tasty delights are priced in low, even-dollar amounts so there’s no change.
That’s just grand because Mr. Delicious just had some rather delicate surgery. If there’s no change he doesn’t have to squirm so much to put it back in his pocket, now does he? He just grabs his combo, and drives ever-so-slowly over the speedbump.
Dickety-dee.Mr. Delicious, 3rd TV Ad, 1991
So as you can tell if you watched the video, Mr. Delicious is a middle-aged, crudely drawn sad sack cartoon drawing. An anti-spokesman, if you will. The ad I selected for your viewing pleasure is the third in a series, of which there are perhaps five or six TV ads, with a few on the radio as well. I haven’t quite been able to confirm how many there were.
Here are all the ads I found, if you need to punish yourself for some transgression by clicking on them:
At various points in these ads, Mr. Delicious does the following:
- Insists that Rax is a restaurant for adults
- Attempts to rebrand Rax as classy and upscale
- Talks about his vasectomy
- Talks about how Rax isn’t paying him enough
- Shows relief that the change leftover from his inexpensive (but somehow still upscale?) food left him with enough money to have a therapist “keep his hostility all locked up”
- Talks about a vacation in Bora Bora with two young “friends” that left him unfulfilled
- Reveals his love of cheap romance novels
- Rolls into a Rax with a terrible hangover from a long night at the Rusty Anchor
- Uses Rax’s lovely and timeless slogan – Rax: You can eat here
And lest you think this is some high-concept comedy, you must realize that Mr. Delicious delivers all his lines in an incredibly low energy way devoid of any joy, sarcasm, or variations in pitch or timbre.
In short, it’s overwhelmingly sad.
What was Deutsch Inc. thinking?
In 13-minute documentary film about Mr. Delicious put out by the Rax Roast Beef Ministry of Propaganda (which I’ll discuss in a bit), the chiefs make a big to-do about hiring on Deustch Inc.
Deustch Inc. is this smart, successful advertising agency. They’ve put out a lot of good ads in their time, including the ultra-progressive IKEA ad featuring a gay couple in 1994. Also on their resume is Volkswagen, Target, Taco Bell, and much more. They have loads of awards and generally exude an air of competence. These folks know what they’re doing.
So what the hell happened?
Personally, I think this can be attributed again to Rax’s confusion over their core audience. Even the best marketing agency in the world is going to struggle if the client cannot articulate their strategy. They were probably given some bad instructions and told to do the best they could with them.
This is is speculation, mind you. I don’t think we’ll ever know what went down in the room where it happened. This is simply my guess based on my own experiences running a marketing agency.
This is why I opened the article with a quote from Heart of Darkness: A Filmmaker’s Apocalypse (incidentally also from 1991). You put talented folks in a no-win situation, you can see some uniquely awful results.
A word on Generation X
In the late 1980s, Generation X was really starting to get noticed. They’re the group of folks born between about 1965 and about 1980. We associate them with events like the rise of home computing, the AIDS epidemic, the dot-com bubble, grunge music, and MTV.
At the time Rax was running these ads – 1991 – Generation X was analogous to Generation Z in 2021. They were the rising generation of kids who were starting to get some serious buying power. The common stereotype is that they’re slackers and cynics. You know, the disaffected latchkey youth. The Breakfast Club generation.
Even a few years ago, buying power was concentrated in the hands of everybody’s favorite generation, the Baby Boomers. Pitching to them was – and still is – a totally different ball game than pitching to Generation X. What Baby Boomers would take at face value, Generation X would scoff at.
Mr. D was a terrible attempt to reach out to Generation X
My digression above has a purpose. Remember how I said that Rax was probably making a play at a different market, but kept changing their minds on who to pursue?
I bring this up because I believe Mr. D was a terrible attempt to reach out to Generation X. I think some out-of-touch fogeys in the board room were looking at the cultural millieu of the time and saying, “well, that Simpsons show is pretty popular. All we have to do is be rude and ‘realistic.’ The kids will love that.”
So they stereotyped Generation X to make Mr. D. It’s like assuming you can win over Millenials but putting avocado toast in front of a farmhouse background or by saying all of Generation Z loves Billie Eilish. It’s just lazy.
Mr. D was a symptom of not knowing who the real audience was
Now I want to make something crystal clear. Mr. D was a terrible ad campaign. Angels wept when they saw Mr. D’s sad, sad face on their heavenly televisions.
But I don’t think Mr. D killed Rax. I think he was a symptom of a terminal illness within the management of the company. He was just one more nail in the coffin, and only represents Rax’s death in a spiritual sense. Truth is, the company probably died sometime in the late 1980s, and this campaign just happened to come out in 1991.
Let’s face it: that menu was costing the company a fortune, and the renovations were eating up capital. They would have been much better off if they just kept leaning into their menu, which worked pretty well, and keeping their working-class lack of pretension front and center. This technique worked wonders for Dunkin’ Donuts.
The tragedy of the 13-minute video released by Rax to defend Mr. D
If you’ve got 13 minutes to kill, I highly recommend you watch this video. It’s peak cringe from the time before anybody used “cringe” as a noun. It’s unclear exactly who this video is intended to be shown to, but I buy Hank Green’s theory that this was being shown to pissed off franchisees, who one can only assume were wondering what hallucinogens the management team had been taking for the past five years.
I called this video propaganda early in the post, and I really mean it. The dictionary definition of propaganda is “information, especially of a biased or misleading nature, used to promote or publicize a particular point of view.” In this case, the point of view being pushed – without evidence – is that the Mr. Delicious campaign was actually a stroke of genius. It was a 12-dimensional chess game being played by management.
Yeah, right. Tellingly, at the 0:07 mark, a woman is quoted saying “he gives me chills.” The inclusion of that quote in this hagiography of a video shows a serious lack of awareness.
President of Rax Roast Beef, Bill Underhill, says early in the video “Mr. Delicious shares the same kind of problems and difficulties that we do, and casts them in a humorous and enjoyable light.” Except he doesn’t. He’s an off-putting upper-class sad sack with no humor in his delivery. The video then goes on to show more Mr. Delicious ads that are hard to find on YouTube outside of this mini-documentary.
The seventh highest commenter on YouTube, Jeff Strichart, says: “You can tell in the ‘documentary’ that the Rax executives spent all their money on Mr. D and can’t start over so they are trying to convince themselves that it was a good idea.”
I completely agree with this take. It seems most likely true given the massive expenses Rax was incurring up until this point and the bankruptcy that followed this ad campaign by less than a year. It really seemed like a hail Mary, and the team was trying to convince themselves it was a good idea. It’s classic groupthink, possibly with some undertones of bro culture too.
Mr. Delicious was a terrible idea in 1991, but it might work in 2021
Yet for as awful as the Mr. Delicious ad campaign was, I couldn’t help but wonder if it would work better now. After all depression and anxiety memes have been circulating for years now, and the year 2020 itself has become shorthand for misery and pain. Even the slogan “you can eat here” would have been a hell of a flex last year.
Many YouTube commenters have said things to the effect of “this would work so much better today.” And honestly, I think there’s something to it. The ads would need to be retooled for a more modern aesthetic, but the basic idea might work.
Now again, this doesn’t absolve Rax of their mistakes here. Choosing between a badly timed ad and a bad ad concept in marketing is about as easy as Sophie’s choice. I’m just pointing out how things have changed since.
Avant-garde fast food advertising is pretty common these days. IHOP changed their name for about a week. KFC made a Lifetime Movie. Burger King made video games. Mr. Delicious may well have found a home in our neo-dadaist culture.
Besides, we’re all so broke now after COVID that we could all use tasty, affordable meals.
Rax went bankrupt in 1992, and the turmoil didn’t stop
Mr. Delicious wasn’t the only one squirming for the change in his pocket in 1992. Rax went bankrupt shortly after the Mr. Delicious commercials backfired.
Of course, the sordid tale didn’t stop there, because why would it? A restaurant as confusing as Rax deserves an equally confusing epilogue.
In 1994, Rax became a Hardee’s franchisee. Hardee’s holding company was going to convert all the old Rax restaurants into Hardee’s by 1997, but that never panned out, because Rax went bankrupt again in 1996!
On Wikipedia, a now defunct source in the citations reported said that Wendy’s was going to purchase the remaining 37 stores and turn them into Tim Hortons. (Remember when Rax had 504 stores? Those were the days.)
Wendy’s must have lost their nerve, though, because Rax was ultimately bought out by Cassady & Associates in 1997. From that point forward, the historical record gets even fuzzier, but we know one thing for sure: Rax kept losing restaurants over the years.
Now there are only five stores left. Well, probably. Which brings me to the fact that…
Rax still exists, but we cannot even confirm how many locations remain
Ever the researcher, I like having hard facts to give to my readers. But when I Googled the simple question of “how many Rax locations are there,” I got two different answers.
According to Google Maps and Wikipedia, only five Rax stores remain. According to Rax’s website, there are eight. At this point, I have no way of knowing which is true, but my instinct is that Google is right and Rax’s website is wrong.
Rax lost at least 98.5% of its business if we use assuming 8 locations remain. This figure increases to more than 99% if we assume they have 5 locations left. Remember: Rax had 504 restaurants at one point, with some even being international. Whether there are 5 or 8 locations barely matters.
We know for sure that there’s one in Lancaster, Ohio since That Nate Guy on YouTube found it. Like a lot of folks, he’s really nostalgic about Rax. Hard to blame them for it, since Rax seemed to have a good thing going for it. (Shout out to Lauren Rochon on Facebook for helping me find this video!)
So what have we learned?
If there is anything that you choose to take away from this post, it’s that not understanding your audience is a dangerous mistake to make. Marketing depends on products that fit real needs (that is, product-market fit). If you don’t know what to sell to your audience, that’s bad. If you don’t know who your audience is, then forget it. Save yourself the money, and come back later.
I think there are also a couple more lessons that we can learn from this as well. Another one is that once you have a good business model going, make sure you never lose sight of why people like you. If you don’t understand how you contribute value to the world, then you risk upending your hard work with pointless changes.
Finally, it’s a classic lesson, but one that bears repeating. Watch yourself with groupthink. Don’t assume that you understand what people like. Always test your assumptions and make sure that you at least hear out your dissenters. Defensiveness and stonewalling will ruin a business faster than Mr. Delicious’ marriage.
Now, if you’ll excuse me, writing this post has made me hungry, but only for salad. I think I’ve been put off of roast beef for the rest of my life now.