Charles Elmer Doolin decided to try his hand at entrepreneurship when he purchased a corn chip recipe, a handheld potato ricer and 19 retail accounts for $100 from a local corn chip maker. Thus was born the Frito company, Doolin’s new business. He ran everything out of his mother’s kitchen, producing about ten pounds of chips every day with each product costing about 30 cents. Doolin sold those first bags for five cents, netting a profit of about $2 per day from an average of $8 to $10 in sales.
With the development of the hammer press in 1933, production increased substantially to 100 pounds per day. By then Frito was a company, with a production line operating in both Houston and Dallas. Frito moved its operations to Dallas to capitalize on the city’s location, and it opened a research and development lab in 1937.
This lab produced some amazing products, like the Frito peanut butter sandwich ad peanuts. This was after the invention of the “Fritato” potato chip.
Herman Lay was doing something similar, selling potato chips he’d made from the back of his car. He was a hired food salesman, so he knew the trade, and he parlayed that experience into his own company.
He bought a plant in Memphis for $60,000, then followed up with more plants in Jacksonville and Mississippi. By 1944, Lay’s Potato Chips were easy to find at almost any store.
The two companies merged in 1945, after Frito granted Lay the rights to franchise and manufacture its chips in the Southeast of the country. During that time, they became allies working toward national distribution. The merger took place formally in 1961, cementing a relationship most within the circle had already come to know and love.