Chief executive steps down from Elmer's helm.

Byline: ED RUSSO The Register-Guard

Eugene residents William Service and Bruce Davis have been partners on and off since childhood. Now they have entered a new phase.

Service has resigned effective Nov. 1 as chief executive of Elmer's Restaurants Inc., the Portland- based restaurant chain that he and Davis bought with the help of other Eugene investors four years ago.

Service, 41, said he's stepping down for personal reasons. "I'm using this as an opportunity for me and my family to take some personal time off," he said.

Service will be an adviser to Elmer's and remain on its board of directors. "I remain very optimistic about Elmer's' future and will continue to be involved in shaping it," he said.

Davis, chairman and president, will take Service's place as chief executive. He said that Service could be an executive again someday, subject to board approval. "The board of directors and I believe that Bill's involvement with Elmer's has been invaluable and exceptional," Davis, 41, said.

Service and Davis are the largest individual shareholders in Elmer's, each owning 10.4 percent of the company's common stock.

In May, Service owned 240,382 shares, according to the company's annual proxy statement. The stock's Friday closing price of $5.29 per share gives Service a financial stake in Elmer's valued at $1.27 million.

An accountant by training, Service was paid $125,000 by Elmer's in the last fiscal year, and was to receive $174,000 this fiscal year. He will not receive a severance package, a company spokeswoman said.

Service and Davis have been friends since they were youngsters in south Eugene. Their first business was a soda pop stand at Roosevelt Junior High School.

After high school, college and early business careers, the two men reunited in 1993 when they formed Jasper's Food Management Inc. The firm operated Jasper's Delis, a blend of delicatessen and gambling parlor with video poker and other Oregon Lottery games.

In 1998, the partners and Eugene-based financial backers paid $4.5 million, or $6.39 a share, to acquire 53.8 percent of Elmer's Restaurants. The deal was funded by local real estate-developers Tom Connor and Don Woolley. Restaurateur Cordy Jensen of the Oregon Electric Station also invested.

Then, Elmer's had 29 restaurants in six states. Eleven of the restaurants were company owned; 18 were franchises. Today, there are 31 Elmer's in five states. Ten of the eateries are company owned, including one that opened in Springfield in 2000, and 21 are franchises. Another franchise restaurant is to open Wednesday in Klamath Falls.

Because of the executive team's experience with deli-video parlors, Elmer's owns 13 Jasper's, Ashley's and Richard's delis in Oregon. In 2000, Davis and Service struck a deal for six Mitzel's American Kitchen Restaurants around Washington's Puget Sound. Elmer's since closed one.

In its last three fiscal years, revenues at Elmer's have risen from $22.2 million to $33.8 million, while profits inched from $939,549 to $1 million.

Service said he is proud of what he and Davis have accomplished. The pair have tried to convert Elmer's from its image as a pancake house to a restaurant known for breakfast, lunch and dinner.

"We have meaningfully improved the profitability of the business, built a very strong management team, and positioned the company for solid growth," Service said.

"I am very pleased to have been a contributor to the company's success and have enjoyed my time with Elmer's immensely."