October 24, 2010 marked a culinary crossroads for Charlotte. Penguingate, as it had been dubbed
on Twitter, was coming to an end and regulars of the Penguin Drive-In restaurant gathered to say
farewell to their local hang-out as they knew it. The next day, the doors would be closed and a
new chapter would begin for the historic restaurant as well as its proprietors.
How, though, did a property that started out as an ice cream shop become the center of a media
firestorm and lead to the splintering of friendships, partnerships, and a local community?
It All Started With an Ice Cream Shop
In 1954, Jim Ballentine bought an ice cream shop that had been known as the Penguin since the
late forties. He bought the Penguin building, lot, and existing equipment and embarked on a
dream that he had shared with his wife on their first date – to own a restaurant (Markovich,
Jim and his wife, Jean, took the ice cream shop and turned it into a classic drive-in, complete
with traditional diner fare and a beer selection. The Penguin grew and so did the Ballentine
family with the addition of five daughters. Popularity of the Penguin forced Jean to quit her job
as a nurse to become a full-time partner with Jim. As the restaurant became a home away from
home, it was only natural for the daughters to be involved with the family business.
The Penguin never had to advertise; word of mouth about the drive-in spread all over Charlotte.
Patrons kept coming back to the restaurant for the food and cheap beer. Ballentine opened the
Penguin seven days a week, 365 days a year. He told his family, “There are people depending on
me to be there” (Suchetka, 1995).
After 50 years of being in business, the classic drive-in was starting to show its age. Eventually,
crime increased and break-ins became routine. The Penguin became known as a shabby
neighborhood joint where drug addicts hung out.
In 1999, Jim Ballentine fell ill and retired, leaving ownership in the name of his wife, Jean. With
no one to continue running the restaurant, the Ballentine family knew it was time to close the
Then Came the Fried Pickles
Around the same time the Penguin closed, two locals, Brian Rowe and Jimmy King, had been
playing with the idea of opening a bar. Friends encouraged them to approach the Ballentine
family about reopening the Penguin. Rowe and King signed a five-year lease agreement for the
property and use of the Penguin name with Jean Ballentine in 2000. The lease and name was
renewable for a second five-year term. Their promise to Jean was to maintain the spirit of the
Penguin that the family had worked so hard to establish (WSOCTV.com, 2010).
King and Rowe set out to fulfill their dream of opening the Penguin as a bar. However, due to
North Carolina laws, the business also had to serve food in order to obtain a liquor license. So
Rowe invited the caterer from his wedding, Greg Auten, to develop the menu and manage the
King and Rowe invested their own resources into reviving the Penguin by renovating the
building, buying new kitchen equipment, and adding a jukebox. King also re-vamped the logo to
create a sleeker, more modern penguin logo. In an interview, King said, “We wanted to make it
authentic. We didn’t want to make it like Happy Days. We didn’t want the Marilyn Monroe and
the Elvis Presley vibe. ‘Cause in the fifties they were current” (Markovich, 2011). The Penguin
reopened in May 2001.
King was the daytime front office guy while Rowe, a former Marine, covered the night shift.
Auten developed a unique menu that would prove to be a key to the Penguin’s future popularity.
All three sported heavy tattoos and a biker-bar swagger that helped to create the business they
wanted: “a dive bar that wasn’t threatening,” a cool, safe place for people to hang out
It took three years of working seven days a week, but the Penguin began to see lines stretching
into the parking lot on a daily basis as socialites, businessmen, students, and bikers all converged
on the place now nicknamed “The Bird.” It was known for its food, friendly welcoming staff,
and laid-back attitude. Lisa Ballentine, one of Jim Ballentine’s five daughters, said, “They
[Auten, King, and Rowe] breathed new life into the Penguin” (Schwab, 2010).
Customers’ favorites included grilled pimento cheese sandwiches, the Hemi and Small Block
burgers, and black bean hummus. By far, the most popular menu item was the fried pickles.
Auten estimated that 90% of the orders were accompanied by a basket of fried pickles (Suchman,
“The Bird” Goes Nuts
The Penguin family lost its patriarch when Jim Ballentine passed away on January 11, 2007
(Obituaries, 2007). His wife, Jean, became owner of all their assets, including the Penguin. In
Jim Ballentine’s obituary, Auten, King, and Rowe were listed as “extended family.” Meanwhile,
his beloved Penguin was about to step into the spotlight.
Brian Rowe said, “The first year it was slow, the second year it was slow. Around the fourth
year, things started to pick up and the sixth and seventh year we were very busy. Then that Food
Network thing aired and we went nuts” (Hodges, 2010).
In March 2007, Guy Fieri, star of the Food Network’s Diners, Drive-Ins, and Dives, filmed a
segment at the Penguin. Auten, King, and Rowe were all featured in the segment, though most of
the attention was on Auten’s menu creations.
On May 7, the same day the Penguin made its national television debut, Ballentine Family
Investments, LLC was formed. Ownership of the Penguin was transferred from Jean Ballentine
to the limited liability company, which would later be managed by Lisa Ballentine, one of Jim
and Jean’s daughters.
After the segment aired on May 7, the Penguin was no longer Charlotte’s hidden gem. We “took
the spot from relative obscurity to a thriving hotspot,” King said (King, 2010). Now, not only
were patrons lining up outside the door, so were businessmen who were looking to capitalize on
the Penguin’s success. Franchising seemed like an obvious next step.
The International Franchise Association defines a franchise as “a license that describes the
relationship between the franchisor and franchisee, including the use of trademarks, fees,
support, and control” (International Franchise Association, 2011). Franchisors [sellers] are
entrepreneurs that have an established business they are looking to expand by licensing their
brand including, but not limited to, trademarks and trade dress. Franchisees [buyers] are also
entrepreneurs who are looking to reduce the risk and expense of starting their own business
through use of an established brand and business model.
“Franchisees have the legal right to operate a franchised business and use the business’s
trademarks...” (Melvin, 2011). Trademarks are a form of intellectual property that can consist of
distinctive marks such as business name, logo, package design, décor, and any other aspects that
tend to promote the respective product or service (Stim, 2010). An individual or business can
apply to the United States Patent and Trademark Office [USPTO] to protect ideas, designs, and
written words. Trademarks are most commonly recognized as a specific name (e.g., McDonalds)
or logo (e.g., the Nike “swoosh”).
Trade dress is a type of trademark that is not easily defined and is a continually evolving form of
intellectual property. It is best described as the elements used to identify a product or service.
Trade dress protection covers all sensory impressions that consumers associate with a brand or
business. These elements can include décor, uniforms, layout, and menus. A famous example of
trade dress protection would be the Hard Rock Café brand (Stim, 2010).
Trademarks are an important business asset, especially for franchises. Trademarks, including
logos and trade dress, communicate the brand to all the stakeholders associated with that
franchise. Registration of trademarks is a way for franchisors to protect their brand and is an
absolute requirement when establishing a franchising business model. Franchisees are buying the
right to use an established brand. It would be a foolish investment for a franchisee to invest in a
brand with unregistered trademarks.
In summary, trademarks help to ensure brand recognition. Successful franchises (e.g.,
McDonalds) provide a consistent delivery of the brand, and consumers demand consistency.
Through the collaboration of the franchisor and franchisee, trademarks are leveraged to build
consumer awareness in new markets and gain loyalty through consistent brand execution.
The trio initially declined franchising offers, contending that the secret of the Penguin was the
mix of food, environment, and people, which could not be replicated. That sentiment changed
after the premiere on Diners, Drive-Ins, and Dives.
Martin Sprock, the successful franchisor of brands such as the Flying Biscuit and Moe’s
Southwest Grill, approached Auten, King, and Rowe about franchising the Penguin. Negotiations
between Sprock and the three Penguin partners lasted about six months, but a deal was never
signed. Sprock said, “I didn’t try to buy this particular little restaurant right here. I was buying
the name and the marks and the rights to expand the Penguin, all over into fifty states if possible”
In 2008, to protect the Penguin brand from knock-offs, King and Rowe worked with Jean
Ballentine to trademark the Penguin logo and name. When the trademark was filed, King and
Rowe’s names were absent from the registration, even though King had redesigned the logo that
graced bumper stickers and t-shirts advertising the restaurant and bar. The trademarks for the
Penguin logo and name were filed, respectively, on July 29 and 30, 2008. (see exhibits C and D)
Rowe recalls Jean Ballentine saying, “… as long as you’re running the Penguin, you can use the
name” (Markovich, 2011). Documents exist that prove this, but they are not part of the public
Rowe felt the relationship he had with the Ballentine family was simple: the family owned the
building and the name; the three partners [Auten, King, and Rowe] were tenants and owned the
actual business model that occupied the building.
2010 marked the ten-year anniversary of the Auten, King, and Rowe era of the Penguin. Early
that year, Auten left the Penguin to start his own restaurant, Pinky’s, on the west side of town
because he “wanted more of his own thing” (Schwab, 2010). In May, King and Rowe signed a
lease to own and operate another landmark Charlotte restaurant, the Diamond, in a joint venture
with fellow restaurateur, Andy Kastanas. King and Rowe “thought it would be cool to run two
historic restaurants not just in the same neighborhood, but on the same block” (Markovich,
2011). The new venture was intended to complement the existing setup at the Penguin.
After King and Rowe signed the lease on the Diamond, Lisa Ballentine approached the two
about ownership in the Penguin. She wanted to keep 51% ownership in the Penguin, with the
remaining 49% to be split between King and Rowe. She was authentic about her partnership
offer, but she also had concerns about “napkins . . . flying out the back door ‘cause the
Diamond’s out of napkins” (Markovich, 2011).
King and Rowe declined the offer. They felt the Ballentine family only owned the building,
name, and logo, not the business. The business belonged to King and Rowe, and they were not
going to sell out their business for minority ownership, especially when they rebuilt the Penguin
from the rotting building they leased in 2000. The ownership negotiations ceased. Lisa
Ballentine reflected, “Yeah, the lease was coming to an end, but you were going out with another
girl anyway . . . We’re all doing what’s best for the Penguin” (Schwab, 2010).
In July 2010, the Ballentine family approached Martin Sprock about franchising the Penguin.
Little is known about the content of the discussion, but in September 2010, Martin Sprock’s
representative announced that Ballentine Family Investments would not be renewing the lease
with King and Rowe and that the Penguin would be under new management. King and Rowe’s
lease on the Penguin would end November 1, 2010. The announcement said, “The Ballentine
family has decided to give their restaurant a new lease on life while staying true to the dreams
their family has always kept for the Penguin” (Hodges, 2010).
King and Rowe also issued their own press release affirming their stance on ownership, stating
“The Penguin Drive-In [would] cease to operate under the current ownership effective October
24th” (see exhibit E). Although King and Rowe threatened legal action against Ballentine Family
Investments, no official paperwork was filed.
With the announcement about the Penguin’s new management and potential franchising,
websites, Facebook, and Twitter lit up with Charlotteans’ reactions. #Penguingate became a
trending topic as Charlotte’s active social media community vocalized its outrage and
disappointment with the announced changes.
An event page was started by Mark Cline titled Boycott the Penguin as of Oct. 24. Cline, a
supporter of the Penguin under King and Rowe’s management, wrote that he “started this event
to show support for Brian and Jimmy, that’s it.” Cline only sent the event invite to about 50
Facebook friends and by the next day, he had received 300 confirmations. The event page
eventually grew to include over 15,000 people planning to boycott the Penguin as of October 24.
Cline went on to comment, “I, in no way, intended this to be aimed at current, past, or future
owners in a negative way” (Boycott the Penguin, 2010).
A comment written in response to the boycott on The Charlotte Observer blog said, “I won’t eat
in that building after October 24, and I won’t respect anybody that does. I won’t eat in a Penguin
franchise. I won’t eat in a restaurant owned by anybody involved in the travesty of a “new”
Penguin. I will boycott” (Opinion, 2010).
News of the boycott spread beyond the Charlotte city limits. Andrew Mark Veety, resident of St.
Louis, Missouri, wrote on his blog, “I think it’s time to retire my Penguin tee-shirt after wearing
it with pride around St. Louis for almost three years. It’s a sad day for Charlotte…Fight the good
fight -- boycott the New Penguin Drive-in!” (Veety, 2010).
Charlotte Magazine summed up the situation: “Rowe was stunned by the online push to boycott
the New Penguin. Lisa [was] bewildered by the new reality of social media, where sarcastic
insults and conspiracy theories can become fact when they’re repeated and re-tweeted often
enough” (Markovich, 2011).
It’s Not All Black and White
As the last embers of the social media firestorm burned out, it left the city torn between two
restaurants, the Penguin and the Diamond. However, in this situation, there was no clear victor.
“No one wins a fight over sliced dills and seasoned flour,” said restaurant critic Helen Schwab.
“The genius of the Penguin, the reason for the passion and the poison, is that folks come to feel
it’s their own, to hold it dear and not to take it for granted” (Schwab, 2010).
Best New Restaurant (Opened in Last 12 Months): The Diamond Restaurant. (2011, August 16).
Creative Loafing. Retrieved from http://clclt.com/charlotte/best-new-restaurant-openedin-last-12-months/BestOf?oid=2441187
Boycott the Penguin as of Oct. 24. [ca. 2010]. In Facebook [Event page]. Retrieved
August 13, 2011, from www.facebook.com/event.php?eid=149194901785607
Hodges, C. (2010, September 27). The Penguin Drive-In changes ownership. [Web log
comment]. Retrieved from http://blogs.creativeloafing.com/theclog/2010/09/27/thepenguin-drive-in-changes-ownership/
International Franchise Association. (2011). Retrieved from www.franchise.org
King, J. (2010, September 20). Penguin Drive-in changes ownership [Press release]. Retrieved
Markovich, J. (2011, March 29). Frayed Pride and Fried Pickles. Charlotte Magazine. Retrieved
Melvin, S. P. (2011). The Legal Environment of Business: A Managerial Approach. New York,
NY: McGraw-Hill Irwin.
Obituaries in the news. (2007, January 12). The Charlotte Observer. Retrieved from
Opinion: Losing a unique 'Penguin' hurts the hearts of its fans. (2010, October 6). The Charlotte
Observer. Retrieved from www.charlotteobserver.com/2010/10/06/1741504/losing-aunique-penguin-hurts.html
Schwab, H. (2010, September 21). “Everybody’s cool”: Penguin update. [Web log comment].
Retrieved from http://helendining.blogspot.com/2010/09/penguin-update.html
Schwab, H. (2010, October 3). Why we care about the Penguin's fate. The Charlotte Observer.
Retrieved from http://www.charlotteobserver.com/2010/10/04/1737743/thepolarizingplight-of-the-penguin.html
Spanberg, E. (2011, April 22). Growth on Martin Sprock's Menu. The Charlotte Business
Journal. Retrieved from http://www.bizjournals.com/charlotte/printedition/2011/04/22/growth-on-sprocks-menu.html
Stim, R. (2010). Patent, Copyright, and Trademark: An Intellectual Property Desk Reference.
Berkeley, CA: NOLO.
Suchetka, D. (1995, December 23). Camaraderies on Tap at the Penguin. The Charlotte
Observer. Retrieved from http://ttomlinson.blogspot.com/2010/09/penguin-version10.html
Suchman, P. (Producer). (2007, May 7). Diners, Drive-Ins, and Dives [Television broadcast].
New York, NY; Scripts Networks Interactive.
Veety, A. M. (2010, September 23). Penguin Drive-In - Say It Ain't So. [Web log comment].
Retrieved from www.andrewmarkveety.com/2010/09/penguin-drive-in-say-it-aintso.html
WSOCTV.com. (2010, September 21). The Penguin Drive-In to Change Management, Concept.
Retrieved from http://www.wsoctv.com/news/25097714/detail.html
Exhibit A: Timeline of the Penguin Drive-In
The Penguin was originally built to serve as a roadside soda and ice cream shop.
Jim Ballentine bought the Penguin building, lot, and equipment inside.
Jim retired and transferred ownership of the Penguin to his wife Jean Ballentine.
The Penguin closed its doors. The building was put up for rent.
Jimmy King and Brian Rowe signed the lease on the building and the Penguin
The Penguin re-opened as a bar and restaurant.
January 11: Jim Ballentine died.
March: The Food Network filmed a segment at the Penguin.
May 7: The segment aired on the Food Network.
May 7: The Ballentine family formed Ballentine Family Investments, LLC.
May 8: Jean Ballentine transferred ownership of the Penguin to Ballentine Family
Franchisor Martin Sprock approached Auten, King, & Rowe about franchising
July 29: Jean Ballentine filed trademark for the Penguin name.
July 30: Jean Ballentine filed trademark for the Penguin logo.
January: Greg Auten left the Penguin to open Pinky’s.
May 7: King & Rowe and Andy Kastanas signed a joint venture to run the
September 20: Ballentine Family Investments, LLC and Jimmy King issued press
release announcing decision not to renew lease with King & Rowe.
October 24: Rowe & King’s last night operating the Penguin.
Exhibit B: “The Bird” Bios
(Listed in order of introduction in the ...
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