Most people know Dave Thomas as the folksy founder of Wendy's who appeared in thousands of TV ads. Far fewer know how he got the money to start it - and who, in a roundabout way, paid for it.

A Mentor Named Colonel Sanders

Thomas got his first restaurant job as a teenager in Fort Wayne, Indiana, working for Phil Clauss, who owned the Hobby House restaurant. When Clauss became one of the first Kentucky Fried Chicken franchise owners in the mid-1950s, Thomas worked alongside Colonel Sanders himself and absorbed everything he could about the fast-food business. Sanders became one of his strongest early mentors.

Four Stores Nobody Wanted

By the early 1960s, Clauss owned four KFC franchise locations in Columbus, Ohio - and all four were losing money. He offered Thomas a deal: rescue the stores, and earn a 45% ownership stake if he could make them profitable.

Thomas accepted. He simplified the menu, focused on signature fried chicken, and came up with the revolving red-and-white striped bucket sign that became a KFC trademark recognized worldwide. One by one, the stores turned around.

The $1.5 Million Exit

In 1968, Thomas sold his 45% stake back to KFC corporate headquarters - not to Colonel Sanders, who had already sold the company to investors in 1964. The payout came to more than $1.5 million. Thomas was 35 years old.

He had already decided what he was going to do with it.

The Burger Chain He Built Next Door

On November 15, 1969, just over a year after cashing out, Thomas opened a hamburger restaurant in Columbus, Ohio. He named it after his daughter, Melinda Lou - a girl everyone called Wendy. Her pigtailed face went on the sign, the bags, and the cups.

The company he built using KFC's money is now one of the largest fast-food chains in the world - and a direct competitor to the brand that made him. The colonel's student had built KFC its biggest rival.

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