More Char-Grills coming

Franchisees could take a bite of the Raleigh burger and fries restaurant in about three months

Char-Grill built its reputation and business slowly, one burger at a time.

But after 32 years, expansion is on the front burner for the landmark Raleigh business.

In about 90 days, Char-Grill will start to sell franchised locations, creating the potential for the kind of rapid growth that has made other burger joints household names.

There's nothing fancy about the burgers, milkshakes and fries that have already made Char-Grill a household name in Raleigh. But company co-founders Mahlon Aycock and Ryon Wilder are hoping that the simple fare will help them grab a bigger piece of the $60-billion-a-year burger business.

It won't be easy.

Nearly every restaurant serves a burger or two, and the number of specialty burger restaurants is growing as Red Robin, Five Guys Famous Burgers and Fries and Steak 'n Shake enter the market.

This is the second time that Aycock and Wilder have tried franchising.

The first time was in the early 1990s, when three franchised Char-Grills opened that, Wilder said, "were all miserable failures."

"All of the people we did business with were from Raleigh and were friends and acquaintances," he said. "As my daddy used to say, 'You don't know your sweetheart 'til you marry her.' "

Those three Char-Grill outlets closed, and the company held steady with four corporate-owned locations -- all in Raleigh -- until two months ago, when a fifth opened in Cary.

This time, Wilder and Aycock say they are wiser: They brought in experienced help.

Kurt Sexton has operated franchised businesses including 7-Eleven and Jersey Mike's Subs. Sexton, who is from New Jersey, also has a business partner who is experienced in franchising, though he declined to be named for this story.

Together, the pair will handle the franchising for the chain. They already have started: The fifth Char-Grill location in Cary is the prototype for all future franchised Char-Grills.

Unlike most Char-Grills, which are in separate buildings in shopping centers, the new restaurant adjoins other tenants. It also has indoor seating -- something that has not been a standing feature for Char-Grill.

That design is intentional and likely to be repeated in most franchised locations, Wilder said.

"The free-standing locations have much higher overheads than this new store that has been built in Cary," he said.

But other features of Char-Grill will remain the same. The food will be the same, and the fill-in-your-own-ticket system will also remain.

Sexton is operating the Char-Grill in Cary to make sure that the model works. After he is sure that it does, Char-Grill will start selling franchises, starting first with sites in North Carolina.

Buying a franchise will cost $30,000, Sexton said. In addition, like most franchise arrangements, franchisees will be required to pay 6 percent of their sales to the company, plus 3 percent for their share of the advertising budget.

Sexton declined to say how many stores he would like to sell, but said there is lots of interest, "as many as we can safely sell and build and support," he said.

There is lots of opportunity for burger joints nowadays, said Darren Tristano, executive vice president of Chicago food research firm Technomic.

"We're starting to see the emergence of a higher-quality burger," he said. "Jack in the Box just went to a sirloin burger. McDonald's is testing Angus" beef.

Still, even selling a good burger at a reasonable cost won't be enough if Char-Grill expands too quickly, Tristano said.

"The fact that there's five stores means they're very interesting and hard to get," he said about the chain's burgers. "If all the sudden there are 15, people might not feel the same way about it."