A Baldrige Award-Winning Restaurant Chain That Makes Education Its Business

Pal’s Sudden Service received the Baldrige Award in 2001. Since then, the quick-service restaurant chain’s founder, Pal Barger, has repeatedly shared why he considers his company’s heavy investment in employee training to be cost-effective—despite high turnover in the industry. Other business leaders reportedly ask Pal, “What if you spend all this time and money training someone and then they leave?’” His response to them: “Suppose we don’t, and then they stay?”

Over the past 15 years, an extraordinary commitment to customer-focused excellence and workforce development has continued to benefit Pal’s Sudden Service. The 27-restaurant chain based in Kingsport, Tennessee, has received wide attention and recognition for both its strong customer focus and uncommon practices in educating employees.

A profile of the company published last November in The Washington Post described the “secret sauce” for Pal’s success: Noting that Pal’s inventory turned over 143 times a year, compared to an industry average of 27, the authors of the article attributed Pal’s high productivity to streamlined work processes designed around “laser-like intensity on one thing: the customer.”

In April 2014, when Inc. Magazine named Pal’s to its list of “25 Most Audacious Companies,” it reported that Pal’s senior leaders and managers each spend 10 percent of their time daily training employees.

The training Pal’s Sudden Service provides its workers goes beyond standard practices to cultivate behavioral traits for them to become future leaders—in the same or other businesses. And the company offers training to leaders and employees of other organizations too: the Kingsport-based training center of Pal’s Business Excellence Institute (BEI) regularly provides classes to help organizations in its community and globally improve their performance.

Pal’s BEI was created as a systematic mechanism for Pal’s Sudden Service to carry out its responsibility as a Baldrige Award-winning company to share its role-model practices with other companies of all types.

“It has been supporting the Malcom Baldrige National Quality Award’s mission by systematically inspiring and enabling other organizations to learn and immediately apply simple and effective performance-excellence practices since 2000,” noted David McClaskey, Pal’s co-founder (along with Thom Crosby) and president. “Since 2012, 100 percent of the organizations that have attended have applied one or more practices they learned within four weeks of taking a class,” said McClaskey.

For example, in August, school-nutrition employees of the Kingsport City (TN) Schools received customer-service training from Pal’s instructors at the facility. “They are now busy applying what they have learned,” he added.

Pal’s BEI is “a full-time operation providing training and consulting based on Pal's role-model performance-excellence principles and practices,” said David Jones, the institute’s vice president. “We train over 700 per year from around the world in our Kingsport training center,” said Jones. “Our reach extends to thousands more [in our role] as speakers at conferences and workshop leaders. About 50 percent of our clients are restaurants; the other 50 percent are from all types and sizes of for-profit and not-for-profit organizations.”

Training at Pal’s BEI covers principles and practices related to the Baldrige Excellence Framework, including the Baldrige Criteria for Performance Excellence. “We make it a point to teach that adopting the Baldrige Criteria as a basis for the company’s management and work systems is what took Pal’s from good to great,” said Jones. He added, “Pal’s still uses the [Baldrige] Criteria to do internal assessments. So even though you haven’t heard from us on the applicant scene, we are still very much involved and generating even better results today than we did in 2001.”