In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Great Steak franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Great Steak franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Great Steak’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average and median gross sales for the 55 Great Steak franchised stores located in the United States that were open for at least 12 consecutive months
Section I – Background Information
Great Steak Changes Image, But Not Its Signature Philly Cheesesteak
Sometimes the numbers don’t show the nuances. While Great Steak shrunk from more than 200 locations a decade ago to less than 100 a couple of years ago, a number of initiatives have the chain poised to gain back the ground it lost and then some. It has climbed back above the 100-restaurant mark in 2016 and looks to continue the upward momentum.
The chain has taken these steps amid rebranding, a refreshed menu that re-emphasizes cheesesteak, new product offerings that complement the traditional cheesesteak, improved customer service, increase in focus on the web and social media, and heightened focus on expansion.
Founded Through Philly Trip
Great Steak, formerly known as Great Steak and Potato Company, was founded in 1982 in Dayton, Ohio, by a pair of brothers who had discovered the Philly Cheesesteak while traveling in Philadelphia. One location quickly ballooned to five, and growth continued.
The chain is now owned by Kahala Brands, which also owns Cold Stone Creamery, Planet Smoothie and other popular franchises.
Great Steak Covers All Bases With Three Kinds of Cheese
Great Steak has served millions of cheesesteaks since its inception. The classic cheesesteak, immensely popular in the Philadelphia area, has been growing in popularity in the rest of the country, from small shops to major chains like Subway and Firehouse Subs.
More than most sandwiches, this one is the focus of perennial arguments of what constitutes an authentic cheesesteak (mainly the cheese). Provolone? Philly cheese? American cheese? Whatever the argument, Great Steak has it covered, as it offers all three cheese options (one sandwich even has all three cheeses!)
Great Steak also tries to make everybody happy, from cheesesteak purists to young millennials who may want more innovative touches. The sandwiches, which feature premium sirloin steak, are created in front of customers and are grilled to order.
In addition to the beef-based Philly Cheesesteaks, Great Steak also offers four styles of the chicken Philly sandwiches. Customers can also enjoy other specialty grilled sandwiches, build their own baked potatoes and enjoy other sides and fresh salads.
Two Franchise Concepts: Food Court, In-line Restaurant
Great Steak comes in two franchise concepts: a food court model and an in-line restaurant, each of which features a small footprint, a low operating overhead and a small staff. The food court model is generally located within shopping malls, while the in-line model is ideal for business-savvy entrepreneurs who want to operate in the heart of their communities.
The chain does not require franchisees to have restaurant experience, but they should have managerial experience, a spirit for entrepreneurship and a desire to support their communities.
Beer and Wine Could Be on Regular Menu Someday
The chain has tested beer and wine options in some locations, to positive results. Whether Great Steak will offer these alcoholic beverages in its regular restaurants is unknown.
Section II – Estimated Costs
- Please click here for detailed estimates of Great Steak franchise costs, based on Item 7 of the company’s 2016 FDD (updated).