Donohue buys Rax trademark
Published 12:00 am Thursday, February 14, 2008
If you want to open a Rax, you’ve got to talk to Rich.
In December, Rich Donohue bought the Rax trademark.
Not bad for a guy who started working as a sandwich maker in the 1980s for the franchise he now owns.
Last year, Donohue formed From Rax to Rich’s and bought the Rax trademark from Ohio Valley Fresh Foods. Donohue’s company was planning on expanding with more stores in Kentucky.
“It was getting expensive because of license costs,” he said. “So it made economic sense if we wanted to have more stores. We thought it would be to our advantage to buy the trademark and bypass the licensing expense.”
Stores that have a lifetime license keep the Rax name as long as the store is open, but new ones have to negotiate with Donohue’s company.
“If someone wants to open a new Rax they would have to pay my corporation a fee,” he said. “We would help them get the things they need for the concept.”
New franchise stores are part of cooperative of owners that buy food and supplies.
“We all buy rights to operate as Rax and then you join the cooperative which allows us the buying power of all the stores as one,” Donohue said. “It gives us a lot better buying power this way. We all benefit from it.”
From Rax to Rich’s was named with full pun intended. Donohue started with the Ironton Rax in 1982 and worked his way up to store manager. He left in 1992 and bought it in 2002.
“It was an opportunity, we thought it would be a good investment,” he said. “It was a way to cut out the middle man.”
Besides the Ironton store, he also owns one in Kentucky. The Rax in the mall closed recently because the owners of the Ashland Town Center wanted to cut down the size of the food court to make way for the JC Penney store that is under construction.
“We are working on a couple more stores,” Donohue said. “We have selected a couple sites in Lawrence County and at least one in Kentucky.”
Rax got its start in Wheeling, W.Va. in 1962 when J. Patrick Ross started a company called Restaurant Administration Corp. (RAC) with a single Burger Chef store. RAC grew by franchising restaurants and began serving roast beef sandwiches through its JAX Roast Beef.
Over the decades, the name changed from JAX to RIX, back to JAX and then finally to Rax in 1978 with the first Rax store opening in Columbus.
By 1982, there were 221 Rax stores in 25 states. By 1994, it merged with Hardee’s and all the stores were going to be named Hardee’s but the company faced bankruptcy again in 1996 and sold off the Hardee’s. Wendy’s bought 37 of the Rax stores and turned them into Tim Horton’s.
There are about 30 Rax stores left.
Jobs that are being performed in Lawrence County now because of this purchase are marketing, payroll and human resources, franchising, operations, legal, training, new product development, and accounting.
Donohue said buying the name Rax hasn’t created any new jobs, but it may in the future.
“Most of our people here just absorbed the workload,” he said. “Right now, we are up about two people versus what we were a year ago, but that isn’t to say there won’t be more people hired over time if the concept grows back.”