(FORTUNE Magazine) – Never underestimate the power of entrepreneurial energy. Back in 1980, Massachusetts native Stephen Bernard made good on his dream to start up a company selling premium potato chips. He thought his chips might attract consumers because they were "kettle cooked"--fried longer, more slowly, and in smaller batches than regular chips. The process gave them a harder, crunchier texture. He named his company Cape Cod Potato Chips after the popular tourist haven where he lived, and then he started up the fryers, charging 30 cents or so more than competitors for each sack of his crispy delights.

Before long, Bernard's Cape Cod chips had developed a cultlike following on the East Coast. His Hyannis factory even became a tourist destination, with thousands of chip aficionados making the trek to tour the source of their favorite brand each year. Without spending a dime on advertising, he managed to jack up annual sales to $7 million, and by mid-1984 he was turning an annual profit.

Then came the offer he couldn't refuse. In 1985, Anheuser-Busch paid an undisclosed amount to buy Cape Cod to touch up its Eagle Snacks division. Bernard stayed on as president for another five years, adding popcorn to the line and introducing his products nationwide and into Canada. Sales hit $40 million.

But PepsiCo's powerful Frito-Lay division gradually began to declaw Eagle. Though he remained president, Bernard drastically cut back his time in 1991 after Anheuser began to lose interest in pushing his products. Uncaring beer distributors gave the chips little heed, and over the next five years Cape Cod sales skidded back to $12 million.

The whole idyll seemed near its end last year once Anheuser shut down its Eagle division and shuttered the Cape Cod operation. But Bernard just couldn't give up his dream, so he bought Cape Cod back from Anheuser for a song and reopened the factory. "It was an emotional experience," he says. "When I entered the factory and told 100 employees that we were back and their jobs were safe, they began to cheer and my knees began to shake."

Bernard acted fast. First he joined with a group of outside investors, Stolberg Partners in New York, in a fifty-fifty partnership to raise enough capital to grow. Then he hired several new employees, rehired others to set up financial and sales systems, and called major retailers in the Northeast and Florida to tell them the brand was back.

With the company founder returned to the helm, the comeback has started. By the end of 1997, sales should be close to $30 million.

--Linda Grant