Pie in the Sky : Marie Callender Had the Recipes and an Oven. Son Don Built a Family Baking Business Into a Southern California Empire.

Well, it started so many years ago. I answered a help- wanted ad in our area in Long Beach for someone to help in a delicatessen. I worked part time there, making salads and bringing out something hot every day.”

To the other people lunching in the elegantly appointed Marie Callender’s on Wilshire Boulevard, the speaker--a spry, compact woman in a pink pantsuit--could have been anyone’s grandmother reminiscing about her first job.

“Then the owner opened a little snack bar,” she continues, “and he wanted me to make pies in there. Well, that was impossible because the oven wasn’t the right type. So my mother and I made pies in our kitchen at home, and he picked up the pies there. Then he invested in a bakery in Long Beach, so I went down there and was supposed to make a few pies.”

Marie Callender’s eyes sparkle at the memory, and she pauses to take another bite of chicken sesame salad. “I didn’t know anything about making pies like that. One Saturday I made 100-some pies myself. And I was dragging around 100-pound sacks of flour. So I told this man, Mr. Black, ‘I’m going to quit this because I don’t know what I’m doing, and I’m tired.’

“He said, ‘Well, why don’t you take the oven, start a pie business yourself, and I’ll buy pies from you?’ ”

That’s precisely what she did, and so began a mom-and-pop (and son) operation that last year posted sales of $180 million. Sitting in the $5-million flagship of the restaurant chain that bears her name, Marie Callender reflected on its earliest days.

Now 79, she makes it clear that if she had to do it over, she probably wouldn’t. “I’d hate to be starting out today,” she says, adjusting her glasses, which have a tiny M etched on one lens. “But I was in my early 40s then, and it was easy.”

Easy? Far from it, to hear Marie (and son, Don, president and driving entrepreneurial force behind the 119-restaurant chain) describe the tight finances, lean years and marathon workdays it took to build the business.

To act on Mr. Black’s advice, Marie Callender had to overcome one nagging detail: no money. The family did, however, have a new Chevrolet. The car was sold, and once the household bills were paid, about $700 was left.

With that, the Callenders--Marie, her husband, Cal (who died in 1984), and Don--bought some baking utensils, rented a Quonset hut in Long Beach and began making pies in 1948. Marie remembers that “there were only three of us, and there were no machines. We had three rolling pins and this old oven, and we used to work all night.”

At that point, Callender’s was strictly a wholesale operation. But baking was only part of the business, Marie says. “My husband would bake all night, shower and get cleaned up, and peddle the pies during the day.”

Don Callender may have inherited his work ethic from his parents, but in any case, his entrepreneurial leanings surfaced early. “I always wanted to make money,” he recalls, sitting in the lobby of the Newport Beach Marie Callender’s, where he conducts his day-to-day business.

“I always wanted to be enterprising in some way. I remember one time when I was 5 years old, Mom made me some fudge, and I went out and tried to sell it house to house. Some big kids robbed me. That was the end of the candy-making business.”

But it was hardly the end of his diligence. In high school, he had not one but two newspaper routes, delivering 500 papers a day: “I’d get up at 2 in the morning and work until school started. Then after school I’d work till 10 at night.”

After high school, Don enrolled at Long Beach City College at his parents’ urging, even though, he maintains, “school was just never very important to me.” While in college, he held down a job delivering chickens and eggs.

But when Mom and apple pie beckoned, it was a good opportunity to leave college--and to work even harder. “When we began making pies,” he says, “I started at 11 at night and I’d work till 5 or 6 the next afternoon. Straight through.”

The Callenders continued at that energetic pace of wholesale baking for more than a decade. But, as Don remembers it, “we just didn’t make very much money.” He decided they needed to broaden the business and aim for bigger profits.

His solution--after convincing his reluctant parents--was to enter the retail world with a pie-and-coffee shop. The prototype of Marie Callender’s restaurants, their first shop opened in 1962 on Tustin Avenue in Orange.

With an abbreviated menu offering coffee and a handful of pie choices, and little name recognition outside of wholesale circles, the immediate challenge was to attract customers. Don put to work his flair for solving problems: He offered a free slice of pie and cup of coffee to first-time visitors.

His gimmick succeeded; the resulting line outside the shop was three blocks long, Marie recalls. And, more important, the taste of the pies lured people back as paying customers. Two years later, the Callenders added soup and sandwiches to the menu. Then they built more restaurants, then bigger restaurants with extensive menus and cocktail lounges. The Callender success story now reaches beyond Southern California into 11 other states.

Marie says the opening of the Orange shop was one of her biggest thrills. “Oh, yes, I think it was very exciting when we opened our first restaurant in Orange, and the fact that we put the oven in the window, so people could see the pies going in and out of the oven--I think that interested people.

“That was really the start of these restaurants taking off like they did. It’s just absolutely gone far beyond our expectations. And who’d ever dream of anything like this?” she asks, gesturing at the opulent interior of the new Wilshire restaurant.

The Wilshire location is one of the two deluxe Marie Callender’s restaurants that Don refers to as “ego trips.” He acknowledges that those ventures into upscale dining have been costly; the Wilshire store and another in Phoenix pulled down the company’s 1985 earnings, which increased by an unusually low $5 million from 1984. Nevertheless, two other such larger restaurants--in Colorado Springs and Ontario, Calif.--are under construction.

Overall, particularly in recent years, the chain has enjoyed significant success, with sales increasing by $18 million from 1982 to 1983 and leaping another $17 million from 1983 to 1984. The Callenders believe that Marie’s pie recipes are at the core of this long-term success. Even with the haze of uncertainty hanging over the early days of the bake shop, both Don and Marie were positive that her pies were good enough to build a business around.

“Oh, you betcha!” Marie exclaims. “I knew (the pies were good) because we were in competition with other (pie makers), and everybody predicted we’d go broke, but we outlived ‘em all. So we knew we had something better.”

After the company started to click, other restaurateurs aped the Callender approach, but without the same success. In the late 1960s, an employee who had been privy to the company’s well-guarded recipes and baking techniques resigned and was hired by Denny’s Restaurants Inc., which was launching a pie-shop offshoot. Callender’s filed suit, and after a prolonged legal battle, a judge ruled that pie formulas can’t be protected, but that the competitor could not use Callender’s exact recipes. In 1977, Callender’s successfully sought an injunction against an Oregon pie-shop chain started by another ex-employee. And in 1982, Callender’s filed a lawsuit asking $15 million plus damages against the owner of an Anaheim baking equipment company, claiming that he had sold its recipes to competitors. In that case, a restraining order was imposed on the defendant and Callender’s received an undisclosed amount in damages. The suits generated media coverage, including headlines about “pie spies.”

Today, Don Callender says such legal action and allegations of pie espionage are behind him. “You cannot put a patent on a pie, and all you’d be doing is feeding the legal society. So unless somebody did it in such a fashion that people were absolutely confused as to whether they were in a Marie Callender’s, I wouldn’t pursue any lawsuits.”

Since the pie-spy furors died down, the Callender name has been virtually absent from the media--largely because Don Callender does not believe in advertising. His distaste for publicizing Callender’s is just one of several quirks that have built his reputation as a maverick.

His casual style is another. Callender is president and chief executive of the company, but he rarely goes to the corporate headquarters in Long Beach. (He claims he doesn’t even have a card key to get through the gates.) Instead--usually sporting a knit shirt, shorts and tennis shoes--he operates out of a small room in the Newport Beach Callender’s not far from his Corona del Mar home.

“I’m very disorganized,” he says. “It takes me probably 15 minutes every morning to find my keys and wallet because I never put them down in the same place. And that (corporate) office is very organized. The reason it’s organized is because I’m not there.”

In the restaurant field, the organization Don most admires--and patronizes frequently--is McDonald’s. “Without question, McDonald’s has the finest system in the food business,” he says. “Their quality is always consistent.”

The admiration is mutual. Joan Kroc, widow of McDonald’s founder Ray Kroc, who once made an offer to buy Callender’s, says, “I think Ray recognized there was something very special about Don’s menu, about him as a person, and his integrity. Ray was so impressed that he wanted to buy Don out when Don was just getting started.

“As a result of Don’s not being interested in selling, Ray opened up a chain--Jane Dobbins pie shop--which was a direct copy of Don’s place, and Ray’s pie shop didn’t go. Don’s did, so you can see that Don must have really believed very much in his concept.” She calls Callender “a wonderful man.”

At a time when some of his other counterparts are experimenting with nouvelle cuisine , Callender is pushing his restaurants in the opposite direction. “We’re going back to basics. We’re going to shorten the menu, concentrate on potpies, sandwiches and soups.”

Callender says his original plans for the restaurant couldn’t have been more basic: “My original intent was to sell about eight pies a day, stick the money in my pocket and be happy.” As it turns out, he’s stashed a few million dollars in his pocket, drives a green Jaguar and pilots his own Learjet.

Despite Don’s aversion to publicity, Callender stories began to surface again last summer when he put the company up for sale with a $90-million price tag. According to Don, General Mills was among the corporations that had made offers to buy the chain in previous years. But now he was interested in selling. Or was he?

Industry observers doubted he was serious, citing the asking price and the potential buyers--including Marriott Corp. and W. R. Grace & Co.--he was refusing. They concluded that it would be a long time before Don decided to let go of Callender’s--if ever.

Then, in February, Don agreed to sell the chain to Ramada Inns Inc. The deal was for about $80 million in cash and stock and stipulated that he would stay on and run Ramada’s Marie Callender’s division for at least five years as director and chief operating officer of the wholly owned subsidiary. He’ll also serve as consultant to Ramada Inns’ hotel food and beverage operation.

Beyond financial considerations, Don’s love of a challenge seems to have figured in his decision to sell to Ramada. Hotels and motor lodges almost always lose money on their food services, he explains, and Ramada is no exception. He is enthusiastic about his game plan for the chain’s restaurants, which, he says, will “try to minimize the loss in the food service and still be good, still be nutritional.” He also wants to experiment with different offerings, such as afternoon teas.

“I really enjoy the people that run Ramada,” he says. “I trust them, I feel comfortable with the association, and I’m going to stay on and probably be busier than ever.”

At 58, when many workers are looking forward to retirement, Don will continue to work at the only pace that makes sense to him--fast. “The fact of the matter is you’ve got to pay your bills. You work partly out of being scared of going broke.” But, he adds, “I think accomplishment is a great big factor. The money is nice, but if you just had the money without the achievement, it wouldn’t be worth a damn.”

And what does the sale of the restaurant chain mean for its namesake?

Marie Callender maintains that she doesn’t know much about the business because she hasn’t been actively involved in it for more than 20 years. Then she proceeds to sprinkle the conversation with comments about new Callender products and restaurant locations, and other recent or impending developments. Though she lives in the Leisure World retirement community in Laguna Hills, she hardly sounds like someone long retired from the operation.

Actually, she later confesses, she eats at a Marie Callender’s at least once a month and passes any criticisms along to Don. In fact, she had ordered chicken sesame salad to test the dressing, which she had felt needed improvement after an earlier tasting.

The verdict?

“Now, this is good,” she said. And then Marie Callender ordered a piece of strawberry pie.