MAXE is expanding into the franchise arena.
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February 2, 1998
Max & Erma's franchises sites in Mountaineer State
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Brian R. Ball Business First
Max & Erma's Restaurants Inc. has tentative plans to develop West Virginian markets through a franchisee.
The Columbus-based casual dining chain has signed a letter of intent with Max Lee Enterprises to develop the first site in Charleston, the state's capital city.
Pending completion of a franchise agreement this spring, the letter of intent calls for a second and third site once certain revenue levels are hit at the first site. The state eventually could have four or five sites.
Max & Erma's CFO William Niegsch said franchising could become a new growth vehicle for the 47-unit chain. It now has just three restaurants operating under license agreements -- two at Cleveland Hopkins International Airport and one at Port Columbus International Airport.
"We're not at the point where we'll run ads in Nation's Restaurant News for franchisees," said Niegsch. "We'll bring on a few on and see how they perform. If it goes smoothly, we'll step up the pace."
Max Lee Enterprises owns a Ponderosa in its home base of Ripley, W. Va., and Char House restaurants in Charleston and Parkersburg. A third Char House is under construction just outside Charleston.
A Max Lee affiliate, MWL Inc., actually operates the restaurants.
"These are guys we feel know the West Virginia market and have the operational background to do a multi-unit deal," Niegsch said.
Other potential West Virginia markets for Max & Erma's include Huntington, Morgantown and Parkersburg.
If the Charleston store hits the average annual revenue of $2.2 million per store, royalties will bring in about $100,000 per year. Initial franchise fees will be about $25,000 to $40,000.
Max Ludwig, Max Lee partner and MLW president, said he and partner Lee Wilson became familiar with Max & Erma's during trips to Columbus, Pittsburgh and Cincinnati.
He noted the balance the restaurant chain achieves as a place where a person could take the family out to dinner or just stop by for a cocktail.
"It had a theme we were looking for," said Ludwig.
c 1998, Business First
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