Steak Your Claim
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In my home state of Texas, it's widely believed you can be hanged for improper preparation of a beefsteak. So when I was assigned the task of sampling a product conceived in Philadelphia that consisted of a shaved steak mixed with onions and cheese, I was tense.
Throwing caution to the wind, I visited one of the country's newest The Great Steak & Potato Company's locations in Lewisville, Texas. Great Steak sells grilled sandwiches, cold subs, fries, baked potatoes and, to a limited extent, salads in a slightly upscale fast-food environment. The biggest seller remains the "Great Steak"--the company's signature cheesesteak served with onions and provolone. One bite and I was hooked.
Unfortunately, the name "Great Steak" does not readily convey what can be purchased inside. For months, I drove past the Great Steak location in Lewisville under the misguided impression that it sold prepackaged steaks. Local franchisee Danny Choate now handles this by posting a big sign in the window that reads, "Philadelphia Cheesesteaks."
The lesson? As a potential franchisee, you're best served by building in an area where it's not necessary to educate the consumer. This would not be as great an issue in a mall food court, or in Ohio, Illinois or California, where Great Steak has strong presences and customers have learned to expect great fast food from it. The chain is the largest in the Philadelphia-style grilled-sandwich category, with 211 locations operating in 38 states, Canada and the Middle East.
The Great Steak concept currently operates in four formats: mall locations, airports, strip centers and freestanding buildings. Keep in mind, though, that some mall and strip-center landlords, lured by the high profitability of food-court locations, are becoming franchisees themselves of the various food concepts in their centers.
As for the freestanding version of Great Steak, a prototype in Cincinnati has only been open since December 4, 1998, and though this store posted record systemwide sales for its opening week, the initial investment is considerably greater than those located in strip centers. These totals are not included in the company's offering circular, but plans are in the works to make this option available to franchisees soon.
If I were to become a franchisee, I would try for a location in an established market and on the end cap of a strip center so a drive-thru window could be added while the franchisor continues to refine its freestanding design.
The estimated cost of opening a strip-center location--where the chain is focusing most of its future growth--runs up to $260,000. This estimate doesn't include advertising, which could add substantially to the cost if you're in a new market.
If you're interested, you should know successful candidates typically have a net worth of approximately $200,000, $75,000 of which should be liquid.
Entrepreneur's 2000 Franchise 500
1. THE GREAT STEAK & POTATO COMPANY (NO. 161 OVERALL)
2. PENN STATION EAST COAST SUBS (NO. 192 OVERALL)
3. CHARLEY'S STEAKERY (NO. 208 OVERALL)
4. THE STEAK ESCAPE (NO. 212 OVERALL)
5. PHILLY CONNECTION (NO. 320 OVERALL)
6. SOUTH PHILLY STEAKS & FRIES (NO. 461 OVERALL)
For the complete listing, visit http://www.entrepreneur.com/franchise500
Todd D. Maddocks is a franchise attorney and small-business consultant. You can reach him at TMaddocks@aol.com
The Great Steak & Potato Co.,http://www.thegreatsteak.com