- April 12, 2019
Business: Rib City and Veranda restaurants
Generations: Restaurateur Paul Peden and his son, Craig Peden
Succession plan: Craig Peden has been an owner in the family businesses since he started working with his father, Paul Peden, at age 21.
The Pedens are successful operators of Rib City, a chain of barbecue restaurants with 29 locations, and the upscale Veranda restaurant in downtown Fort Myers.
“Philosophically, it's not a good idea to leave your kids with a lot of money,” says Paul Peden, 65.
Instead of leaving him with the whole business as part of an estate after he dies, Paul Peden says he preferred to let his son share in the success of the business from a young age. “Craig has been an owner in all the restaurants for 25 years,” he says.
Each restaurant is set up as its own corporation, and members of the Peden family invest at different levels, sometimes more and sometimes less depending on their preference. Paul and Craig Peden control the majority shares of each restaurant because they're the only members of the family involved in operations.
Initially, Craig found it a challenge to fund his own shares in the first restaurants. “I had to borrow money; I had to use some savings,” he says. “The more you work for it, the more you enjoy it.”
Paul Peden says one advantage to making his son an owner in the business early is that he can benefit from the profits sooner. “When you're 65 and inherit, who cares? It would be nice if you were 20, 30 or 40,” Peden says.
Being an owner didn't mean Craig could start at the top, however. “When he was 12 he was doing the dishes,” says Paul Peden. “He did all the jobs and learned to handle people, which is a big skill.”
Paul Peden gave his son more responsibilities gradually, at first managing one restaurant and then managing more. Then Craig Peden became vice president of operations, dealing with issues such as bank financing and insurance. “He's had an education in all phases of the business,” says Paul Peden.
The elder Peden says he delegates more to his son now. “I advise a lot,” he laughs. “It wasn't that hard,” he says. “At some point in time you've got to realize it's up to the next generation.”
Paul Peden says his son will be the one affected by decisions they make today. “He needs to make the decisions that affect the future,” he says. “You don't own the decision unless you make the decision.”
For his part, Craig Peden says his father is an invaluable source of experience. “I learned from his mistakes,” he chuckles.