Cheesecake Factory Turned a Family Bakery Into Global Restaurant Chain

The Cheesecake Factory is one of the top 40 restaurant chains in the US, known for its voluminous menu of cheesecakes, pastas, sandwiches, and appetizers, such as its famed avocado egg rolls.

But fans may not realize that the publicly traded company, with a market cap of nearly $1.7 billion, was a family-run bakery business for years before it scaled across the US and abroad.

"Growing up, it was all about cheesecake. And we knew people loved it," Cheesecake Factory CEO David Overton said in a video on the company's website.

Overton is referring to his mom's cheesecake business. On and off for years, Evelyn Overton sold her cheesecakes to local restaurants in Detroit and Los Angeles. But her wholesale bakery never took off. Many restaurants scoffed at the idea of selling flavored cheesecakes.

So the younger Overton, a musician at the time, decided to open a restaurant in 1978 to showcase his mom's variety of cheesecakes.

He had no restaurant experience. But he had determination.

"We knew we had the Cadillac of cheesecakes, and we knew that everyone loved our cheesecake," he said in the video. "I've got to get our cake to people."

Over the next 45 years, Overton turned his mom's cheesecakes into a national sensation. Slices and whole cakes are sold not only in restaurants but also in supermarkets around the US, including the grocery sections of Target and Walmart.

It all started with a recipe clipping from a Detroit newspaper.

Take a closer look at The Cheesecake Factory's early beginnings.

In the 1940s, Evelyn Overton found a dessert recipe in a local Detroit newspaper that inspired her to create her "original" cheesecake.

She tweaked the recipe and started making her own cakes. She eventually opened her own bakery.

"Everyone loved it," David Overton said. "It became famous."

In time, she gave up the business to focus on raising her two children, David and Renee. She moved her baking equipment into her basement kitchen and continued selling cheesecakes to Detroit restaurants.

Source: The Cheesecake Factory

In the late 1970s, David Overton moved to San Francisco to study law. He persuaded his parents, who were then in their 50s, to move to Los Angeles to give his mom's cheesecake business another chance.

Source: The Cheesecake Factory

In 1972, at the behest of their son, Oscar and Evelyn Overton moved to Los Angeles and opened a 700-square-foot commercial bakery in North Hollywood.

"This was probably the size of one of our walk-ins today," David Overton said in the video.

His parents opened The Cheesecake Factory bakery in 1972 and began selling Evelyn Overton's cheesecakes to restaurants throughout Los Angeles.

They worked around-the-clock attempting to turn her lifelong dream of owning a successful business into a reality.

Source: The Cheesecake Factory

Evelyn Overton developed more than 20 varieties of her cheesecake and other desserts. Her husband was the salesperson. He drove from Santa Barbara to San Diego selling his wife's desserts to restaurants across Southern California.

While their business found modest success, the patriarch would get the same feedback: "No one needs more than one flavor of cheesecake."

This frustrated David Overton, especially as some restaurant owners began switching to other suppliers that made less-expensive cheesecakes that he saw as inferior.

"Literally for $0.05, some of these restaurants would switch to another brand," David Overton said.

Source: The Cheesecake Factory

David Overton, a musician in San Francisco at the time, moved to Los Angeles in the late '70s to help his parents with the bakery business.

"I have never seen people work so hard. And so I moved down to Los Angeles to help them," he said.

To prove diner demand for his mom's desserts, he decided he had to open his own restaurant in 1978. He had no restaurant experience. David signed the Beverly Hills restaurant lease in 1977, and it opened on February 25, 1978. He named the restaurant The Cheesecake Factory after his parent's bakery.

On opening day, he was so nervous he didn't open the restaurant until 2 p.m. to avoid the lunch rush.

Source: The Cheesecake Factory

Because he lacked restaurant experience, David Overton "created a simple and straightforward menu with generous portions," The Cheesecake Factory told Insider.

Many of the scratch dishes were things he knew how to cook.

The original menu was one page with two sides. One side featured lunch and dinner options such as burgers, hamburger steak, quiche of the day, and roasted chicken. Salads and grilled and open-faced sandwiches included classic American staples such as crab Louie and tuna salad. One dish, Oscar's special sardine sandwich, was named after his father.

Breakfast featured egg dishes, cereal, toast, and espresso drinks.

Source: The Cheesecake Factory

The original dessert menu featured a variety of baked goods and desserts, including cheesecake, carrot cake, zucchini cake, strudel, whipped-cream cakes, chocolate-mousse pie, black forest cake, cream puffs, ice-cream sundaes, milkshakes, banana splits, and Belgian waffles topped with ice cream and whipped cream. The ice cream on the menu was billed as "extra rich."

Prices ranged from $0.85 for a dish of ice cream to $1.95 for the chocolate-mousse pie.

Source: The Cheesecake Factory

The Beverly Hills salad bar was called the Fabulous Factory Salad Bar. The cost of a build-your-own salad was $1.95 for a medium plate or $2.95 for a large salad plate.

Salad bars at this time were more closely associated with steak houses. The first four Cheesecake Factory restaurants had salad bars. It stopped adding them when the fifth restaurant opened in 1991 in Washington, DC.

Source: The Cheesecake Factory

Candioty started working for Evelyn Overton in the bakery in 1977. She became the restaurant's first hostess and has held a variety of key positions within the company over the years. Today, she is the company's vice president of guest experience.

"She knew how to please the guest," David Overton said. "I loved operating. I love being in the background. She loved being in the foreground."

Source: The Cheesecake Factory

The fudge cake remains one of The Cheesecake Factory's most beloved desserts, the company told Insider.

The new location was in Marina del Rey, an affluent Los Angeles-area coastal community.

David Overton immediately fell in love with the location.

"I went there and I said, 'Wow, who wouldn't want to sit out here and have a wonderful meal,'" he said.

Candioty, in the company video, described the bay location this way: "On the water. On the beach. Palm trees. Volleyball. Windsurfers. It was amazing. And it was a zoo from the beginning."

The restaurant was slammed all summer.

"And we became an instant hit. It took us about five years to recover from that opening," she said.

After the success of the Marina del Rey restaurant, David Overton chose another coastal spot for its next location, Redondo Beach, California.

After that, David Overton set a goal to open at least one restaurant every year or every two years.

"So we started to grow because of our success and because people loved our product and our culture grew right along with it," he said in the company video.

The Redondo Beach restaurant had a lot of empty wall space. So David Overton turned to employee D'Astugues, who was known as an artist. He asked her to paint a ceiling mural and one behind the bar.

She painted while the restaurant was under construction.

"David really liked the aesthetic that Mary's artwork added to the restaurant, and from that point forward, as each new Cheesecake Factory opened in cities across the country, Mary painted custom murals for each location," the company told Insider.

Source: The Cheesecake Factory

David Overton, in a 2011 interview with CNN, said his parents were able to semiretire as the restaurants were performing well in the first several years.

"Our investors were making a lot of money," he said. "In September 1992, we went public. The stock opened at $20 and went to $27.25 the first day."

He became the CEO and chair of the board when the company went public. Before that, he was the company's president. He is the only CEO the chain has ever had.

The current stock price hovers at $32 a share.

The Cheesecake Factory ranks as the 37th-largest chain in the US in terms of sales on Technomic's top-500 list. Among casual dining chains, it's ranked No. 11.

Source: The Cheesecake Factory, Technomic, and CNN

This cheesecake favorite combines all of Adam's favorite childhood treats: Butterfingers, Reese's Peanut Butter Cups, caramel, and the chain's classic cheesecake.

Source: The Cheesecake Factory

The dish is made with broccoli, zucchini, asparagus, peppers, tomato, onion, garlic, and fresh herbs. It's tossed with Parmesan.

It's one of 18 pasta dishes listed on the menu.

Source: The Cheesecake Factory

Avocado egg rolls are a top seller on the menu.

The inspiration for it came after David Overton tasted a crunchy avocado cheese straw while dining at the Peninsula Hotel in Beverly Hills. Avocado was also used as a garnish on the dish.

It made him wonder whether The Cheesecake Factory could make an egg roll stuffed with chunks of avocado. Experimenting commenced, and after multiple tries, The Cheesecake Factory's avocado egg rolls were developed. Their exact debut is unknown, but they've been around since the late '90s or very early 2000s, the company said.

Source: The Cheesecake Factory

The restaurant opened in the Dubai Mall under a licensing agreement with Alshaya Trading Co.

Today, The Cheesecake Factory has 212 domestic restaurants and 31 international locations. None of the US locations are franchised. International restaurants are licensed locations. This is an unusual tactic for a large publicly traded company, which typically grows through franchising. Other publicly traded chains that don't franchise include Chipotle and Shake Shack.

Source: The Cheesecake Factory

Some of the 31 international locations have opened in top tourist destinations around the world. In 2013, The Cheesecake Factory opened a restaurant in San Juan, Puerto Rico. In 2016, the company opened its first restaurant in Asia. The location opened in Disneytown at the Shanghai Disney Resort.

Source: The Cheesecake Factory

The bread launched under the Cheesecake Factory at Home brand. Other restaurant items sold in grocery stores include a handful of whole frozen cheesecakes, including the original cheesecake and the strawberry-topped original cheesecake.

Source: The Cheesecake Factory

To gain market share, DoorDash went after large, established restaurant chains. Early partnerships included The Cheesecake Factory, Buffalo Wild Wings, and Wendy's. While other restaurant chains have expanded delivery services to include other apps such as Uber Eats, Cheesecake Factory remains an exclusive delivery partner with DoorDash.

Source: Insider and DoorDash

"It became evident that the combination of two of the most experiential and entrepreneurial restaurant companies could drive greater value as one organization," David Overton said in a statement.

Source: The Cheesecake Factory

The April 2020 investment helped The Cheesecake Factory's "liquidity position" as it navigated the COVID-19 pandemic, David Overton said at the time.

In June 2021, The Cheesecake Factory reacquired most of the equity stake purchased by Roark Capital in a transaction valued at $457.3 million, according to the trade magazine Restaurant Business.

Source: Restaurant Business and The Cheesecake Factory

D'Astugues has painted murals for restaurants in the US and abroad, including locations in the Middle East, Mexico, and Asia.

Source: The Cheesecake Factory

In a December Vox article, the writer Alex Abad-Santos called The Cheesecake Factory an "uncanny" chain whose success was built on defying standard industry rules.

The chain's massive menu is one of those industry-defying traditions. Most chains preach operational efficiency by providing a limited menu of dishes that are all profit generators.

But not at The Cheesecake Factory.

"The menu was seemingly written by someone who was hungry for everything they could think of but couldn't name what they actually wanted at that moment," Abad-Santos said. "The rules that govern regular restaurants have no power over The Cheesecake Factory. If there is one rule at The Cheesecake Factory, it's that the conventional wisdom of the restaurant industry — keeping costs low, concepts simple, and menus under 200 items — is meant to be ignored."

Source: Vox

Fortune noted the chain's Wages Now program, which helps financially strapped employees receive 50% of their pay the following workday, instead of waiting for their semimonthly paychecks. Fortune added that the chain had maintained flat healthcare premiums since 2021.

Still, the chain does not have a perfect record when it comes to dealing with labor disputes.

In June 2018, the chain was found jointly liable in a wage-theft case in which California labor authorities fined The Cheesecake Factory and its janitorial subcontractor nearly $4.6 million. The agency said janitorial workers at eight Southern California restaurants were due $3.94 million in unpaid wages.

The case is ongoing.

"While the Company did not employ any of these individuals, the state also filed the claim against the company," The Cheesecake Factory told Insider in a statement. "On November 10, 2022, the parties participated in voluntary mediation and reached a tentative settlement on the wage citation. The settlement is subject to documentation and final agency approval."

Source: Fortune, the state of California, Nation's Restaurant News, and The Cheesecake Factory

"We're so different and yet we're in our hearts, it's still exactly the same company," Candioty said. "Our menu is still made from scratch. Everything fresh — back then and today. We're still here for our guests every single day. We have fun."

David Overton said: "We continue to try to function as a family business."

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