A Taste Of Philly
Charley’s Grilled Subs targets lifestyle and strip centers, with an ultimate goal of 3,000 units.
Susan H. Fishman

One of America’s fastest growing franchises is bringing the taste of Philly to shopping centers around the country and the world. Headquartered in Columbus, Ohio, Charley’s Grilled Subs has 300 locations worldwide in 39 states and 10 countries. It was founded in 1986 by Charley Shin after he encountered his first cheesesteak on a family trip to New York City, where they accidentally “detoured” to South Philly. His restaurateur mother loaned him some money and he opened his first Charley’s Grilled Subs across from Ohio State University.

Charley’s Grilled Subs is best known for its made-to-order, signature Philly Cheese Steak and other steak, chicken and deli subs, gourmet fries and freshly squeezed lemonades. The restaurant chain has been recognized at the top of more than 10 national lists for successful franchising, entrepreneurship and management in its 20 years of business.

The first Charley’s Grilled Subs was 400 square feet with a mere 16 seats. Today’s Charley’s is around 500 to 600 square feet for a mall food court location and 1,200 to 1,500 square feet for a strip center or lifestyle center space. Typically, there are 40 seats in a restaurant, which is designed with soft yellows and reds to create a warm and inviting place.

In 1991 Charley’s began franchising, starting with mall food courts, which is where the majority of the stores are located. From there the chain entered a number of airports and then developed a relationship with several army/airforce bases. Currently, the company has around 65 locations in army/airforce bases around the world.

“We have been a very successful mall food court player and will continue to be going forward,” says Bobby Drouin, vice president of development for the company.

“The mall food courts are very easy for us to do — it’s a captive market. We’ll go into as many of those as we can.”

The company recently celebrated its 300th grand opening at Branson Landing in Branson, Missouri. For this event, Charley’s partnered with Big Brothers Big Sisters of the Ozarks, holding a 2-week drive at the new location in an effort to attract new “Bigs” to the non-profit Big Brothers Big Sisters organization.

With $130 million in sales in 2005, Charley’s opened 62 new units this year and plans for fiscal 2007 call for 75 more. The company would like to grow 20 to 25 percent per year, moving from 300 units to 3,000 units. To do that, Charley’s plans to pursue more strip center locations.

“We have a 70/30 day part, so our strip centers cater to office clientele,” Drouin notes. “We are looking for locations that have 10,000 to 12,000 people within a mile. We understand their need to get back to the office, and we’re really focused on delivering a high quality product very quickly. We aim to go from getting the customer’s money to placing the order to getting him a hot, grilled sub within 90 seconds.”

A franchise-driven company, Charley’s units are roughly 95 percent franchise.

“We will only do corporate stores where there’s a strategic value, either for training or for testing,” says Drouin. “Otherwise, we don’t want to be in the company-store business.”

The company looks for franchisees with $100,000 in cash and a $300,000 net worth. A significant number of Charley’s franchisees are first- or second-generation immigrants, and 50 percent are multi-unit operators.

Over the past several years, Charley’s focus has been taking over competitors’ locations within food courts. “We’ll go in and, on average, we will increase business 45 percent,” notes Drouin.

Charley’s Grilled Subs goes after the same lunchtime customer as a Quiznos or Subway, but there are numerous locations where both brands successfully co-exist.

What sets Charley’s apart is the company’s focus on its franchisees and a higher quality of food, delivered in 90 seconds, according to Drouin. “People who need to get in and get out and want good food — we’re the place to go for that.”


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