Why Chargrill Charlie’s won’t franchise

13 September, 2017 by
Madeline Woolway

With 25 years of successful operation under its belt, Chargrill Charlie’s faithful adherence to family values underpins its careful approach to expansion.

Like many businesses, the evolution of Chargrill Charlie’s has been a mix of highs and lows. After opening their first store in Sydney’s Coogee in 1989, the family-owned and operated business invented and manufactured a patented rotisserie.

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The technology made the cooking process more efficient, allowing the business to open more venues, and like many operators, the team decided to try franchising. But rapid expansion isn’t necessarily the right model for everyone.

“We have a lot of skill-based dishes with lots of fresh ingredients,” says co-owner Ryan Sher.

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“The only way to do it well is to do it fresh on the premise every day, and so when we went into franchising, no matter how much training we gave the franchisees, they never seemed to really be trained enough.

“A lot of the time businesses start out complicated and then when they go to a franchise model, they kind of become simplified. To franchise, you have to simplify everything. To be honest, I was just never happy. It didn’t give me job satisfaction and I don’t think it suited the business. Those stores never met my expectations.”

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While managing a completely company-owned business has its hurdles — especially when it comes to expansion — for Sher, franchising presents far worse challenges.

“There’s slower growth [when you’re company-owned] because you have to use your own capital,” he says. “You aren’t in a position to open five or 10 stores a year as a result, but we’re happy with that.

“We’ve set ourselves a goal of opening three stores a year over the next three to five years. We’re about to open our tenth store in Annandale [Sydney], using the model we’ve taken a long time to perfect, which is a joint venture per store model.”

This means company-trained staff are offered the opportunity to become percentage equity partners in a store, while Sher and his co-owners remain majority owners in each location. Using this model means there’s a limit on how many stores the company can open per year, but it doesn’t constrict the total size of the business in the long-term, says Sher.

“We’re limited with the number of stores we can open because we’re self-funded and have to train all the staff ourselves.

“The way we support stores is with a totally different mentality than with a franchise model, because they are legitimately our partners.”

Marginal profits, maximum gains

Just as franchising posed a challenge to Chargrill Charlie’s, so too does the cost of running a business predicated on offering wholesome meal replacements for families.

“To source the right produce in terms of vegetables is not very difficult in Australia,” says Sher. “It’s more about getting the right price than the right quality.

“We don’t run on very good margins because we have extremely high standards. We can’t pass on all those costs to the customers. We’re probably at the higher end of the pricing range for the market we’re in. We aren’t able to charge restaurant prices, but we are supplying restaurant-quality food.”

When the first store opened more than 25 years ago, Sher’s father set the mantra: “Look after the customer and everything else will take care of itself.”

The same ethos is still in place today, with Sher admitting costs remain last on the list of considerations. In an effort to ensure freshness, for example, any meals left at the end of each day are given to a number of charities around Sydney, rather than stored for reuse the next day.

“It’s a very easy thing for us to give back,” says Sher. “We don’t want to reuse the food. If we haven’t sold it I’m more than happy to give it away.

“We look after our customers and the quality of the food first. We worry about money as a secondary thing that will fall into place if you do everything else right. That’s the mentality of our business.

“The customers understand and appreciate that. Plus, I’m satisfied, and that attitude filters down through me to the staff. It might take time and you might not have success straight away in terms of making money, but you’re building a healthy business for the future.”

At a glance

When was the business established? 1989.

Number of locations? Ten (Mosman, Neutral Bay, Willoughby, Wahroonga, Lane Cove, Woollahra, St Ives, Mona Vale, Rose Bay, and Annandale).

Number of staff? 250-plus.

Best-selling menu items? BBQ chicken & DIY dinner packs (customers have two size options and can fill with a mix of meat, salads, chips and vegetables).

Biggest challenge facing the business in 2017? Integrating new technology into the business and staying ahead of the game by constantly creating new dishes.

Growth plans for the year ahead? Chargrill Charlie’s will be launching a new store in Annandale in August 2017.

Image: Dominic Lonergan