No end of the Rainbow

The Ifuku family is working on a succession plan to keep alive the 46-year-old drive-in's legacy

STORY SUMMARY »

After 46 years, the family that has run Rainbow Drive-In is preparing to hand over the business to its employees, many of whom have remained loyal to the company for decades.

Unlike other mom-and-pop operations, which have shut down after failing to create a succession plan, the Ifuku family, which opened the drive-in in 1961, has started to restructure the company so that its managers can continue to keep their legacy alive long after the second generation of Ifukus retire.

The small business has spent more than $100,000 to overhaul operations, which have included hiring a consulting firm, developing written procedures, putting together a company handbook, offering training programs and providing evaluation processes for managers and employees.

The popular drive-in at 3308 Kanaina Ave., off Kapahulu Avenue, sells more than 1,200 plates and in excess of 300 sandwiches per day. Its annual gross revenue is more than $3 million.

Rainbow drive-in

» Opened in 1961 at 3308 Kanaina Ave. off Kapahulu Avenue.
» Most popular dish: Mixed plate, which includes mahimahi, boneless chicken cutlet and barbecue steak.
» Sells more than 1,200 plates and in excess of 300 sandwiches per day.
» Cost for an average plate lunch: $6.
» Records annual gross revenue of more than $3 million.
» Hours: 7 a.m. to 9 p.m. daily
» Telephone: 737-0177

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FULL STORY »

The clock is ticking as the last members of the Ifuku family assemble a team to keep the venerable Rainbow Drive-In alive as they prepare to retire after more than four decades.

The second generation of the Ifuku family do not have a younger generation to carry on the business that they took over from their parents, the late Seiju Ifuku and his wife, Ayako.

To avoid the fate of many family businesses that have shut down after failing to create a succession plan, the Ifukus have spent more than $100,000 to restructure the company that was founded in 1961 so the employees can continue to perpetuate the Ifukus' legacy.

"We determined we needed to start training managers and people to take over the business outside of the family," said company vice president Jim Gusukuma, Seiju and Ayako's son-in-law, who heads the business with their other son-in-law, Harvey Iwamura. "If we wanted to continue the business, we would have to look outside of the family ... or the alternative was to keep running it until we got tired and quit."

So about five years ago they began to train employees to manage the mom-and-pop operation, which had been entirely controlled by family, including Gusukuma's wife, Sherie, a retired University of Hawaii librarian. Sherie now runs the Ifuku Family Foundation, which contributes $75,000 annually to educational grants and scholarships.

The family initially hired a consulting firm, but still had to tailor the new structure to their style of business. Overhauling an operation that had been in place for decades is an extremely daunting task, particularly for small businesses that don't have the resources or time.

The Ifukus transformed the business into a more corporate operation with policies and protocols for managers and its six owners, which include Ayako, her two daughters and son, Seiki Ifuku, who recently returned from the mainland to help with the drive-in.

For instance, the family developed written procedures, a company handbook, training programs and evaluation processes for managers and employees. They also set performance goals and targets, and began scheduling regular meetings between owners and managers and codifying all business decisions, now made through a process involving managers.

"When you're an owner, anything you say becomes company policy, but when you have managers, it becomes a bit more complicated," Jim Gusukuma said.

One of the biggest challenges was attracting and retaining responsible employees, some of whom come in at 4 a.m. to begin prepping each day.

Fortunately, the family has put in place a core team of workers they can trust with day-to-day operations, he said.

"It's very scary for a family business to trust outsiders to run the business that they've nurtured over the years," Jim Gusukuma said. "It's not only a matter of training employees to take over management, it's a matter of also training owners to accept non-family managers."

Pam Martin, who has worked for the company for more than 20 years, is now general manager, running the kitchen and handling the food ordering, while Christine Ishimine, who began her first job at the drive-in, is now the administrative and operations training manager. The family added assistant managers and a night shift manager to complete the team.

Ishimine, who started as a cashier in 1995 after graduating from Kaimuki High School, said the Ifukus, who gave her a scholarship to earn a college degree, have always treated her like family.

So much so that after working the counter for eight years, Ishimine was promoted to handle the billing and administrative work and later human resources and training.

"They really cared about your well-being," Ishimine said. "My role started to get bigger and bigger. I never thought I would be here to take over those roles."

The family decision to pass on the drive-in to workers was based on the fact that about a third of the company's 35 employees have devoted more than 10 years to the business, which also has attracted lifelong customers, Jim Gusukuma said.

"We felt that as long as we were able to find a structure for it, we would like to keep the business and those people employed, and also give them an opportunity to share in the success of the business," he said.

Gusukuma, a former general manager of United Airlines, said he is now semi-retired from the drive-in, where he worked a deep fryer, made plate lunches and cashiered up until three to four years ago.

"It was fortuitous for us that we were able to recognize this," he said. "We don't know what the final outcome is -- it's still a work in progress -- but the options are limited."