Entrepreneur’s fortune cookie biz grows by breaking tradition

Mike Fry had a dream. Actually, he had 167 of them. At age 19, he read the book "Think and Grow Rich," by Napoleon Hill, and was encouraged to write down everything he wanted to see, do and become. Fry not only wrote those things down, he set out to accomplish them. He's crossed 87 of them off the list. Along the way, Fry, 46, became a Ringling Bros. and Barnum & Bailey Circus clown, star of his own children's TV show, a performer with Chicago-based comedy troupe Second City, and the owner of a growing manufacturing operation.

No. 118 on the list was to invent things and get them patented. Who knew that would lead to the founding of Indianapolis-based Fancy Fortune Cookies, by all accounts the only non-Asian-owned fortune cookie operation in North America?

Fry started Fancy Fortune Cookies near Fort Wayne in 1989. He moved the company to Indianapolis in 1992 and now operates out of a small facility on the northwest side. Annual sales are approaching $2 million.

With the launch this spring of a new cookie-making machine he designed and several new flavors, Fry is projecting record sales.

He's poised to license his turnkey fortune cookie operation to entrepreneurs outside the United States. Already, he has five solid leads and is looking for a CEO to help his company grow globally.

The outsider

The Chinese-led fortune cookie industry is one cloaked in secrecy. Few track the industry or have a handle on its size. Industry sources guestimate there are 40 to 50 fortune cookie factories in the United States, most of them mom-and-pops, cranking out a few million cookies annually.

The industry knows only three giants: New York-based Wonton Food, Chicago-based Golden Dragon and Los Angeles-based Peking Noodle, all of which make hundreds of millions of cookies annually. Many are sold or given away in one of 40,000 Chinese eateries in this country.

By contrast, Fancy Fortune Cookies sold 3.3 million cookies in 2006, even though Chinese restaurants have steadfastly refused to carry them.

"There's an inner network I haven't been able to penetrate," Fry said. "The Chinese don't want to mess with tradition. Chinese also don't like to eat bright-colored or sweet things."

After Chinese restaurants and traditional fortune cookie distributors turned him away, Fry turned to the promotional markets and created a virtual store at www.fancyfortunecookies.com.

Fry's client roster reads like a Hollywood A-list and includes Oprah Winfrey, Ozzy Osbourne, Donald Trump and Magic Johnson.

Sixty percent of his business is from clients who use cookies as a promotional tool and want a customized message.

Most fortunes are custom-printed with any note, fortune or message the client wants. Fry, who refers to himself as Indiana Confucius, writes the rest of the fortunes out of a crowded office stacked ceiling to floor with self-development and other books and research material.

"To get people to hear your message, you first have to get their attention," said Bob Bonwell, president of Advantage Marketing, which has operations in Indianapolis, Cincinnati and Detroit. "Mike has a unique product, and it gets people's attention. I've seen Mike's cookies used at trade shows and other events nationwide. The spread of his product is phenomenal."

Inspired by Jelly Belly

Though Fry's 10-person operation is profitable and growing, he said Fancy Fortune Cookies' future wasn't always so dream-like.

The idea for the company was one of several that occurred to him over the course of one month in 1987–a period, Fry said, when inspirations for inventions and businesses bombarded his mind nonstop.

"Some of them were just crazy," Fry said. "But one kept coming back to me." Fry, an avid Chinese food fan, said one day while eating out, he was struck by a fortune cookie's bland taste.

"I thought, 'Why doesn't anyone make fortune cookies in fun colors and fruit flavors that actually taste good, like Jelly Belly does with its gourmet jelly beans?'" Fry said. "I decided to pioneer the idea. Cold logic should have warned me about how hard my Willy Wonka-style idea would be to pull off."

The company is one of only a handful in America that makes the Chinese-born treats in multiple flavors. Fry sells 22 flavors and colors, ranging from Very Berry Raspberry to Cool Cappuccino. A hundred cookies sell for $45.

In March, Fry unveiled a fortune cookie that weighs more than a pound. It measures almost 10 inches across and contains a foot-long fortune. Chocolate-covered or in various flavors, it sells for $29.95.

With his new fortune-cookie-making machine, which he claims is a one-of-a-kind invention, Fry expects to lower his operating expenses while increasing output up to tenfold. Efficiency is critical, Fry said, because it's four to six times more expensive to make colorful gourmet fortune cookies than the traditional cookie.

Machete juggler

Fry's unique cookie operation is just the latest in a string of unconventional endeavors.

The Huntington native bypassed college to follow one of his first dreams, becoming a clown with the "Greatest Show on Earth" in 1981. After being chosen from among 5,000 applicants for one of 60 clown slots, Fry traveled the country by train performing in such places as Madison Square Garden and the Super Dome.

Along the way, he learned to juggle machetes, walk a tightrope and work the trapeze. But the work was physically demanding, and the travel endless. So when WFFT-TV Channel 55 in Fort Wayne offered him a television show in 1982, Fry jumped at the chance.

After eight years as host of the live, 90-minute TV show "Happy's Place," Fry left to take a position with Second City, which featured such stars as John Candy and brothers Bob and Doug McKenzie.

Starting a fortune cookie company would turn out to be his biggest challenge.

"It's a really close-knit, niche industry that is difficult to get into," said L. Joshua Sosland, editor of trade publications Milling & Baking News and Baking & Snack International.

Fry said he couldn't get anyone in the business to listen to his ideas and couldn't even get anyone to sell him the manufacturing equipment needed to launch his company.

Derrick Wong, vice president of sales and marketing for Wonton Food, North America's largest fortune cookie maker, isn't surprised Fancy Fortune Cookies had trouble taking off.

"People like what they know," Wong said. "People don't like change, especially when it comes to fortune cookies."

And there's considerable tradition behind the fortune cookie, Wong added.

Invented by Chinese-Americans in California, the cookie has essentially been the same since its conception about 100 years ago. It consists mainly of sugar, flour and water. Some include egg whites, oil or butter to help bind the cookies.

Almost two years after coming up with his idea, Fry found a Korean supplier in Chicago willing to help him launch his business. After he incorporated, it took 18 painstaking months to perfect the first varieties of flavors.

"The flavoring and coloring of the batter really affected its consistency," Fry said.

When there was no income, Fry admitted, he had his moments of doubt, but never despair.

"Mike has a great entrepreneurial mind," said Tony Scelzo, executive director of Rainmakers, a central Indiana business networking organization. "He's fearless and creative and his unique, diversified background gives him the perspective to solve a problem."

Scelzo is a Fancy Fortune Cookies customer and has had Fry speak at several Rainmaker events.

"His energy is contagious," Scelzo said.

"For me," Fry said, "this is about being who I want to be."