Cheesecake Factory CEO took his family business nationwide
The gig: David Overton, 66, is founder and chief executive of Cheesecake Factory Inc., based in Calabasas Hills. The publicly traded restaurant company has about 170 eateries, and last year it earned a profit of $95.7 million on sales of $1.8 billion.
Last week Overton was named a regional entrepreneur of the year by Ernst & Young.
Humble beginnings: In the 1970s his parents started a food business in Detroit, specializing in cheesecakes. “My mother got her cheesecake recipe out of the newspaper,” Overton said. “She always wanted her own business, and she worked very hard. My father was great at sales.”
A different drum: Overton started playing drums professionally at age 15 and helped put himself through college at Wayne State University in Detroit. He went on to UC Hastings College of the Law in San Francisco, dropping out during his first year to pursue a career as a musician.
At age 26, realizing he was not going to be a rock star, he moved to Los Angeles, where his parents had relocated their business. At that point the Cheesecake Factory, as they called it, produced more than 20 kinds of the cakes and other desserts to sell to restaurants and other wholesale accounts.
Turning point: “We knew we had the Cadillac of cheesecakes,” Overton said, but they had a tough time persuading restaurants to take more than one or two flavors. So he decided to open his own restaurant in Beverly Hills that would also sell salads, hamburgers and other entrees. The cheesecakes were promoted as the main event.
“I wanted to prove to other restaurateurs that people would enjoy a restaurant with a large dessert menu,” he said. “I thought if I could take my parents’ cheesecakes direct to the people, it would do well and other restaurants would follow.”
The first Cheesecake Factory restaurant opened Feb. 25, 1978. “We started strong,” Overton said. “A line formed within the first 10 minutes. The cheesecakes were a huge draw. Back then, we had 12 varieties. Now we have 50.”
Sticking with it: “Shortly after I opened our first restaurant in Beverly Hills, a relative congratulated me on the successful opening and told me I should sell the restaurant and go do something else,” Overton said. “He said I could probably make $50,000 if I sold. Somehow I just knew I wasn’t ready to sell — and 34 years later, I’m certainly glad I didn’t.”
New outlets: With the success of the restaurant, he started to evaluate locations for expansion. He said the best advice he ever got was to not jump at a site just because it could be gotten at a bargain price. “Never let the deal drive the site. Let the site drive the deal,” he said.
Focus groups: He doesn’t believe in them. When it comes to food choices, Overton makes the decisions. “My taste buds represent that of the regular people we have dining at our restaurants,” he said. “If I love the food, it goes in the menu.”
Portions: Cheesecake Factory restaurants are known for serving huge portions of food that is often high in calories and fat. Even the menus are huge. “We have always said that whatever America wants to eat can go on the Cheesecake Factory menu,” Overton said.
But in the face of increased warnings about obesity, many diners want food that’s not so fattening. Last year the chain introduced its SkinnyLicious menu of about 50 items, each with a calorie count under 590. That’s not exactly diet fare, but it’s far lower in calories than many of the regular menu items.
Has the initiative boosted business? “It’s difficult to identify the exact impact,” Overton said. “However, it is a very popular and growing segment of our menu.”
The next generation: Overton is married and has three sons, none of whom want to work in the food industry. “I would have preferred for my sons to be interested in joining the family business, but it doesn’t bother me that they didn’t,” he said. “They’re all very creative, and I think it’s most important that they pursue something that they love, like I did.”
Still drumming: Overton has drums set up in his house even though he doesn’t get to play them much. “I wish I could play in a band, but being the CEO keeps me busy,” he said. “I am from Detroit, so I like to listen to Motown sounds.”
