The Mob sent Pizza Hut public?

[snopes]

Comment: My brother supposedly heard this from a business professor in
school. I did some minor research online, but have been unable to find
any accounts of the story. It goes like this:

The founders of Pizza Hut (Dan and Frank Carney) were approached by the
Mafia and were ordered to have Mafia owned and operated pinball machines
in all their locations. This was not a negotiation. It was just a
statement telling them that's how it was going to be, or they'd presumably
pay big time. The founders then went to their lawyer who basically said
sorry you're screwed. Instead of giving in to the Mafia, however, this
was the inspiration for the founders to take the company public, making
the many shareholders and increased transparency impossible for the Mafia
to deal with.

From what I've read this would have had to occurred in the early 1970s.

[snopes]

The founders then went to their lawyer who basically said
sorry you're screwed.

Eh? "I'm sorry, but due to a loophole in the statutes, the mob is legally allowed to extort you."

[GenYus234]

It could be that the mobsters never said anything that could be considered threatening, not even "Nice place you have here, would be a shame if anything were to happen to it." but simply relied on their reputation for violence to "speak" for them.

Or, their lawyer was on the Mafia's payroll.

Or, it is a story where facts take a trunk to the narrative.

[overyonder]

I was doing a little digging around about the mob and pinball machines, but I just couldn't see much association between the two (except for hear-say).

I'm not sure that the mob would be interested in placing machines themselves. Now, extorting pinball parlor operators, I could see.

Pinball machines need a lot of TLC and it takes a fair amount of effort to keep them running.

OY

[diddy]

I agree - if they wanted to exploit Pizza Hut in some way they would use something that would make them money like cornering the market on the ingredients and making sure a nationwide chain used a particular brand.

Maybe the OP was conflating Pinball machines with the Mobs association with gambling devices (many of them being coin operated)

[UEL]

The mob and pinball machines, absolutely. Just as vending machines, coin operated laundromats, video game arcades and other mechanical devices that use money.

It is moderately profitable, but also a relatively untraceable way to launder money. After all, who keeps receipts for the money they spent on pinball, Dance Revolution or on cola from a machine?

[Thera]

I remember when Pizza Hut had video games. They were table top versions, usually of Pac Man or similar. That was back when they were the only pizza place around and you actually went in to eat, and had to wait for a seat because of how busy they were.

[Hero_Mike]

Originally Posted by UEL

The mob and pinball machines, absolutely. Just as vending machines, coin operated laundromats, video game arcades and other mechanical devices that use money. It is moderately profitable, but also a relatively untraceable way to launder money. After all, who keeps receipts for the money they spent on pinball, Dance Revolution or on cola from a machine?

This exactly. Back in the 70's, any of us kids would be teased for supporting "the mafia" if we used a pop machine, and this then extended to pinball machines and arcades. The money laundering aspect was lost on us but it was a widespread rumor.

Years later a long-time alleged mobster in my home town was killed late at night in one of his many businesses. It was a company which operated and serviced pop machines. The used to service cigarette machines and arcades but those businesses had faded away years ago. His other businesses included automated laundromats and car washes, and parking lots - all "cash only" businesses. He also owned some liquor delivery and service industries (such as a company that services beer kegs and taps), but that was probably a front for a "protection" racket. It was only then that someone explained the whole money laundering take, and the links to supporting the mafia as a kid.

[Auburn Red]

Wouldn't Godfathers Pizza make more sense?

[illiop]

Originally Posted by Auburn Red

Wouldn't Godfathers Pizza make more sense?

I never thought of that. That's all kinds of awesome.

[Esprise Me]

Originally Posted by snopes

Eh? "I'm sorry, but due to a loophole in the statutes, the mob is legally allowed to extort you."

Well, a good lawyer won't just tell you what the law is, but how things really shake out in practice. Even if you're threatened with something illegal, there may not be much you can really do about it, especially if you can't prove the threat was made.

My parents make hang gliders. Lots of people kill or maim themselves with these products. As such, my folks get sued a lot. Some of these lawsuits are groundless, but it's still usually cheaper to settle than it is to fight--and their lawyers will tell them as much. On one occasion that I know of, they decided to go to the mat over what was really a ridiculous claim--the injured plaintiff had been flying a glider made by a different manufacturer--and hired the biggest firm in the state where the suit was filed, who threatened the other attorney with Rule 11 sanctions for even filing such a frivolous lawsuit. They were able to convince him to drop it.

Other times, however, on the advice of their attorney, they've just paid up. There was a case in Alabama in which a young pilot decided to teach himself to fly--not a good idea, and recognized as such even back then--and failed to connect his harness to the glider before taking off. This is a real rookie mistake that lessons probably would have prevented; one of the steps they teach you as part of your pre-flight checklist is something called a hang-check, where you pull your feet up and hang from the glider to make sure you're secure before taking off. Anyway, he ran off the mountain without hooking himself in, and worse, he panicked and clung to the control bar as the ground receded farther beneath him, until he couldn't hold on anymore and fell to his death.
My dad consulted with an attorney, who told him that, although she believed he was legally in the right, there was enough doubt about how the case would actually come out at trial that he really ought to settle. The way she put it, he and his partners would be "a couple of blond surfer punks from California" versus "a sobbing 19-year-old widow" in front of a "country jury in the deep South." (Not exact quotes, just paraphrased from my memory of what my dad told me, which was of course based on his memory from decades ago, so take with a grain of salt.) Given what it would cost just to go to trial and win, and the not-insignificant chance (in her professional opinion) that they might lose, she strongly urged them to settle the claim. They did.

It's not exactly parallel, I realize, but I don't find it hard to believe a lawyer would tell his client there was nothing he could do about an illegal action taken against him.

[snopes]

Originally Posted by Esprise Me

Well, a good lawyer won't just tell you what the law is, but how things really shake out in practice. Even if you're threatened with something illegal, there may not be much you can really do about it, especially if you can't prove the threat was made.

But that's really more of an issue to discuss with the police and/or the district attorney, isn't it?

[Esprise Me]

It is kind of odd that the founders would go to their lawyer instead of the cops. Maybe they feared retaliation? Or maybe the story is bunk. My only point was that a lawyer in this situation might reasonably have responded as he did.

[TrishDaDish]

I believe it. It's the only explination for those damned claw games at the Pizza Hut here. How many quarters does one need to spend before the claw grabs the Tweety wearing a Detroit Lions shirt? I mean, even if the claw grabs it, it's no proof that it'll make it to the drop slot. And why do they insist on football shirts for teams not from this area? Wha?

[Lainie]

On another note, early 1970s seems late for Pizza Hut to have gone public. It was a nationwide chain by the time I got my first-ever job there, in 1977.

[Jahungo]

According to this and this, Pizza Hut went public in 1972 (and according to the latter were already the world's largest pizza chain before that, in 1971).