One night's takeout spawns new career.

Real estate broker Kenneth Berg stopped by Koo Koo Roo to check out what was attracting crowds; now he's chairman of the chicken chain

Kenneth Berg left his home in L.A. one evening in 1990 to buy some chicken. He picked it up at a takeout eatery on Fairfax Avenue, and headed home to eat it while watching the Academy Awards.

On the way home, he happened to drive by the Koo Koo Roo Inc. eatery at the comer of Beverly Boulevard and Orlando Avenue and saw a line outside the door. He stopped the car and got in line. Those in line with him raved to him about the Koo Koo Roo chicken, he says.

Berg went inside and ordered a two-piece combo. "It was the best chicken I ever had in my life," he says.

He went back to the eatery the next day and ordered the entire menu, which consisted of six different side dishes and four chicken pieces.

Berg, who spent most of his career in real estate, befriended the eatery's owners, two brothers named Mike and Ray Badalian. Later he bought 50 percent of the company for $2.5 million. At that time there were two Koo Koo Roo outlets, the second in Koreatown, he says.

But Berg was only an investor and had no hands-on control at that time. "I couldn't even get a sandwich put on the menu," he says.

He finally bought out the other owners in 1992 and took the company public that year. He is now chairman of Koo Koo Roo.

Koo Koo Roo now operates 16 outlets nationwide. The quick-serve eateries serve chicken, turkey, sandwiches, salads and 23 side dishes. Some outlets also have coffee and dessert bars.

The chain is losing money right now because it is spending $5 million a year on corporate overhead that includes a large, expert, expensive management team, Berg says. At the moment, many of its stores are profitable, but there aren't enough of them to cover the expensive overhead.

However, the costly management team, which took three years to put together, is in place to position Koo Koo Roo for a big expansion. The expansion would opening 40 outlets on both U.S. coasts during 1996.

Koo Koo Roo reported a loss of $1.2 million, or 9 cents a share, during its fiscal first quarter ended Sept. 27, compared with a loss of $840,000, or 10 cents a share, during the year earlier period. Revenues were $5.6 million vs. $2.6 million a year earlier.

With the expansion, Koo Koo Roo should go into the black by the second or third quarter of 1996, he says.

Its stock closed at $6.56 on Jan. 9, off 35 percent from its 52-week high of $10.18. Investors are waiting for the company to expand and start making money, Berg says.

Berg says working at Koo Koo Roo "isn't work."

"I really love what I do," he says. He must. Berg says he works seven days a week and hasn't taken a vacation in two and a half years.

He says he finds the business very rewarding because, for one, some doctors tell their heart patients to go to Koo Koo Roo so that they will eat healthier food.

He also gets a kick out of watching celebrities come to the eateries. "I love to watch them eat and enjoy our food," he says, declining to name specific celebrities who patronize the chain.

Berg "establishes bonds with all kinds of people at all levels," says Robert Krautz, Koo Koo Roo's vice president and chief financial officer.

Berg credits his management team for much of the chain's success in building revenue. It is extremely important to pick the right employees for the right jobs and then motivate them, he says.

It is also important to respect them and earn their loyalty, he says.

Further, he lets them do what they want without interfering and "gives them room to grow," he adds.

"He's a very warm, supportive person to work with," said company Vice Chairman Donna Guido. He has very high standards but he's easy on people, she said.

Berg is also a firm believer in good training for employees. Each member of Koo Koo Roo's management goes through a four-month training program, he says.

"Everything he does has to be first class," says Koo Koo Roo President Michael Mooslin.

In the future, Berg says, he plans to expand Koo Koo Roo using "controlled growth" to "make sure everything goes properly," he says.

About 25 of the 40 eateries the company plans to open this year are expected to be in California, he says. Up to 10 of these should be in L.A. County, he adds.

The expansion is being financed by $18.5 million the company raised in two private placements last February and June, he says. Berg grew up in Metuchen, N.J. He originally wanted to be a doctor, but he wasn't smart enough or dedicated enough, he says. And he didn't have a 4.0 average.

So he attended Indiana University and majored in economics. One summer while in college he worked for a housing developer in Edison, N.J. The developer paid him $10 for every house he sold. Berg says he ended up selling 97 houses in less than three weeks.

"I found out I was a good salesman," he said.

After he graduated from college in 1951, he went back to Edison, N.J., got his real estate broker's license, and started selling houses.

He opened his own brokerage office, but by 1958 he had four offices in New Jersey. He continued to build the company and 11 years later, in 1969, he was operating 14 offices in that state. The company was called the Berg Agency.

He took the Berg Agency public in 1970 so that he could begin to acquire other real estate brokerages and expand nationally. At that point, he changed the name to Berg Enterprises Inc.

Berg Enterprises continued to grow over the next 11 years, and by 1981 had 2,200 brokers. It also expanded into the home mortgage business, and began selling homeowners and casualty insurance. Berg was its chairman and president.

The residential brokerage business was sold to Sears Roebuck & Co. in 1981. The rest of the company, still called Berg Enterprises, was finally sold in 1985 to American Can Inc., which is now known as Travelers Insurance Cos.

Between 1985 and 1990, Berg continued to act as chairman and president of American Can's Berg Enterprises subsidiary and left to "kind of" retire in 1990. He lived in New York but had an apartment in L.A.

It was while he was staying there that he discovered Koo Koo Roo's chicken.

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Kenneth Berg

Native of: Metuchen, N.J. Resident of: Los Angeles Age: 69 Education: B.S. in economics, Indiana University