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Issue Date: September 2009, Posted On: 9/10/2009


For Houston franchisee, Charley's is worth the wait

By Martin Desmarais

Charley's Grilled Subs features made-to-order, signature Philly CheeseSteak subs and sides, such as fries, above. The chain also offers chicken and other deli choices. Photo courtesy of Charley's Grilled Subs

HOUSTON – Like many in franchising, Nick Patel joined the industry because he knew it would be a good investment. However, his decision to join Charley's Grilled Subs was also driven by the fact that he loves the food – so much so that he persisted for 10 years until finally getting his franchise shot.

Founded in 1986 and headquartered in Columbus, Ohio, Charley's Grilled Subs is best known for its made-to-order, signature Philly CheeseSteak and other steak, chicken and deli subs, as well as fries and freshly-squeezed lemonade.

Patel first came across the sub chain in the early 1990s during a layover in Atlanta while traveling. His first visit to Charley's was a simple food refuel in an airport terminal.

"Myself I am a Philly cheesesteak guy. If there is a cheesesteak option that is always my first choice," Patel said. "I ordered my meal and I ate it and I was sold and then I knew someday I wanted to own one."

At the time, Patel, who has a background in retail and lives in Houston, admitted that he was not looking for a franchise, but his immediate love of Charley's Philly CheeseSteak caused him to contact the chain to inquire about opening a franchise. Patel had been extremely impressed with the airport location he saw in Atlanta and he figured if he was going to open a location he wanted one that would have access to all the airport customer traffic. Subsequently, he was not interested in a strip mall or street location. The problem was Charley's did not have any airport locations near Patel to offer him. So he waited, and waited.

Close to a decade after he first encountered the chain, Patel received a letter in the mail seeking buyers for a Charley's Grilled Subs in the George Bush Intercontinental Airport in Houston. He had a meeting with the chain the next day, he said.

He officially joined the chain in 2004 with a location in Bush Airport's concourse C.

Just last year, Patel expanded his Charley's holdings, buying another franchise location The Woodlands mall in Houston. This year he bought another strip mall location in Houston.

According to Patel, the airport location, in particular, continues to thrive and grows 10-15 percent a year. He says that the food is a great selling point and customers really love it. He says one of his biggest fans is the chairman and chief executive office of Continental Airlines Larry Kellner, who eats at his Charley's whenever he is in the area. "How much better of a compliment do you want?" he said.

Currently, Charley's has approximately 387 locations in 14 states and 13 countries. More than 90 percent of its restaurants are independently owned and operated by local franchisees. The restaurant chain has been recognized at the top of more than 10 national lists for successful franchising.

According to the chain, all Charley's subs are made with real dairy cheeses, freshly sliced vegetables, 95 percent lean USDA Choice steak, all-white meat chicken and authentic Italian buns, and are cooked without oil on a flat top grill without the use of microwaves, heating lamps and pre-packaged cold cuts.

Charley's also periodically introduces specialty sandwiches, such as the Chipotle Chicken sandwich, which was available from May to July this year. The sandwich, originally launched in 2006, is made with fresh grilled chicken, jalapeño bacon, grilled onions, provolone cheese and Marzetti's Chipotle Ranch sauce.

Patel is more than thrilled at his decision to join Charley's. Naturally, his love of the food is still there and he taps into that to provide a passion for his business. "I look at it as if I sell something I've got to like it to," he said. "I eat a Philly Cheesesteak literally every day."

But he also has been impressed with the corporate structure. "Being with Charley's it is like your family has a franchising system," he said.

"The honesty, the integrity, the support is awesome," he added. "It is unbelievable how quickly someone gets back to you."

Patel has aspirations for the chain and wants to do his part, which is one of the reasons he says he has bought two more locations and went back on his original intention of only opening an airport location. "It is going pretty good plus [with the additional stores] I am getting more presence for Charley's," he said.

That and airport customers constantly ask him if there is a Charley's outside of the Houston airport, and he figured he might as well point them to one of his own stores.

He is also considering becoming an area developer for the chain looking to grow the Houston area, which only has two other Charley's franchises in addition to his three.

"Truly speaking Charley's doesn't really have any competition in the area," he said. "If you take a bite out of a Philly CheeseSteak from Charley's it will bring you back – it is that good.

"The food is good. There is no question that it is. There are no 'ifs, ands or buts' about it," he added.

Born and raised in Zambia, with his family from Gujarat, Patel came to the United States in 1982. He opened a liquor store in Houston in 1983, launching a career in that retail segment. According to Patel, he has owned 10 different liquor stores since then, with four at one time being the most. He currently still owns a wine and liquor store in Houston. He also owned a franchised hotel for close to 10 years. Buying a GuestHouse International Inn in 1999 and selling his interest in the property just last year.

According to Ed Randall, vice president of operations for Charley's, Patel is pretty typical of the chain's franchisees as a predominantly single-unit owner, who may choose to expand after some success.

"We are encouraging our best operators to become expandable and open multiple locations," Randall said. "I think, in our business, it is best if franchisees stay in current locations for a year and make sure location number one is on autopilot before you go forward with number two."

However, according to Randall, because Charley's is typically in mall locations the chain does not attract as many multi-unit operators because geographically the stores might be pretty spread out, as malls are not usually that close to each other.

Randall finds that the best franchisees are people oriented, "very self-motivating" and "very proactive and aggressive" in going out and marketing their business. He says a franchisee needs to be "mayor of their two-mile radius" and "well respected and well liked by the people in their community."

Like all businesses and certainly franchising, Randall said that 2009 has been challenging economically for Charley's, but he feels that the sandwich segment has been suffering less than others in the industry.

He added that Charley's is targeting 40 new openings for the year.

"Sales for 2009 are about flat compared to last year," Randall said. "In terms of how we are performing compared with the industry we are pretty fortunate."

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