GOSH’s march toward Philly cheesesteak dominance will also be aided by Lennys, a brand acquired about a year ago. Hoback says at the time of purchase, Lennys was a broken restaurant with a dwindling footprint. It faced declining sales and a lack of enthusiasm from franchisees, which make up nearly the entire system. But now, Hoback says Elias Moaikel, president of Lennys, has placed the proper systems and processes in place and refined franchise execution.
Hoback notes 78-unit Lennys shares some commonality with Charleys in terms of the cheesesteak identity, but it’s also more of a traditional sub shop with a full line of deli sandwiches. GOSH, which executed meticulous research with Lennys, as well, plans to leverage the high brand awareness in core markets with 10 new stores in 2021.
“We'll see beyond that regional expansion what kind of capability it has, but we plan on really just focusing on its existing markets, primarily in the Tennessee, Southeast markets, then see where it can go from there,” Hoback says. “Originally, I think the thought was can it be converted to Charleys, but I think as we've gotten into it, there's a lot of enthusiasm amongst the franchisee base. Now they're making more money. Sales are up. That's always a good thing.”
GOSH’s most differentiated brand, BIBIBOP expects to add 15 stores to its 43-unit total. To support that growth, the healthy fast-casual is attracting talent through a path to ownership program for general managers who achieve operational excellence.
Hoback says the initiative was borne from the fact that BIBIBOP has impressive unit economics that allow the chain to attract the best and brightest. He adds that the program gives general managers the opportunity to have an owner’s mentality and share in the cash flow of the restaurant. The first two were promoted in November and more are to come in 2021.
“It’s apparently a demanding process that they go through in terms of proven results, but also an interview process on their approach to people, profit in operations, and guest service,” Hoback says. “… In the restaurant business, the GM is the primary leader, and we want to be able to have proven operators that have proven themselves within the BIBIOP system.”
With COVID cases on the rise, Hoback says there is concern when it comes to malls, which have been on the decline well before the pandemic started in March. However, he notes that each brand has experienced the same jolt that other quick-service restaurants have benefitted from in recent months. If stores are required to shift back to off-premises only, they are prepared to do so.
As Hoback describes it, the pipeline is “pretty well teed up” and real estate is becoming more accessible and affordable. He explains that growth will come down to three things—the position, uniqueness, and differentiation of the brand, the strength of the unit economic model, and the support systems and infrastructure offered to franchisees.
He says that GOSH is optimistic about each of those targets because of how Charleys, Lennys, and BIBIBOP are performing. There are no plans to hunker down this winter.
“We think the positions of the brands are dead on,” Hoback says. “We’ve got really strong unit economics, and we're starting to fill the pipeline. We've actually been hiring a lot of key people in our infrastructure to get ready for the growth.”