Industry News | October 13, 2010

Gold Star is Growing—and Not Just in Cincinnati

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Gold Star Chili is growing, with plans to open three new stores by early 2011 and three additional stores later in the year.

In the near term, a new store in Erlanger, Kentucky, on the corner of Dixie Highway and Kenton Lands Road opened for business on October 7. The new Erlanger store is owned by two long-time Gold Star franchisees, Wafa David and Basim Daoud, and adds to Gold Star Chili’s already strong presence in Northern Kentucky.

Other projects under way include a new store in Versailles, Indiana, and a new store in Ashland, Kentucky, where Gold Star is remodeling a failed Skyline Chili restaurant in a prime location. The Ashland store grand opening is planned for later in 2010 and Gold Star expects the store to be quickly profitable as a result of a newly formulated franchise economic model and business plan. In the interim, Gold Star plans to create an early presence in the market and build brand awareness by deploying its Chilimobile to do product sampling at select area events and is sending in its Local Store Marketing team to build relationships with community leaders and organizations. Additionally, the Gold Star location in Milford’s River’s Edge area has been remodeled and is under new management and showed an immediate surge in sales since the management change.

Gold Star is actively pursuing new store site evaluation and selection in the Cincinnati-Dayton corridor, Central Indiana, and select Kentucky cities. Company CEO Mike Rohrkemper is optimistic about Gold Star’s ability to expand in these surrounding markets and believes that there are great franchisee opportunities for savvy business people with previous restaurant experience who meet Gold Star’s screening criteria.

“Gold Star’s management team has spent considerable time and research to fine-tune the franchise economic model and optimal store design to enable new, well-financed franchisees to operate profitably in a short amount of time,” Rohrkemper says. “Additionally, most of the potential outer market sites that we are considering have media coverage from the Cincinnati Bengals and Cincinnati Reds radio networks. Therefore, even though these locations may be outside of the Cincinnati DMA, new franchisees will still be able to benefit from some of our core market media buys and the existing awareness for Cincinnati-style chili that these broadcasts have created over the years.”

An additional selling point for potential new Gold Star franchisees is the strong performance of many of its stores outside of the Cincinnati DMA, where the uniqueness and growing national awareness of Cincinnati-style chili makes Gold Star a destination restaurant. For example, year to date, Gold Star’s Lexington (Hamburg) store sales are up 11.1 percent over the same period last year; Maysville, Kentucky, up 6.3 percent; Huber Heights, Ohio, up 12.35 percent; and Seaman, Ohio, up 6.8 percent.