Gray Brothers Cafeteria seeking franchisees for carry-out locations

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Gray Brothers Cafeteria at 555 S. Indiana St. in Mooresville. (IBJ photo)

Central Indiana dining staple Gray Brothers Cafeteria has launched a franchise program for carry-out dining service.

The Mooresville restaurant is seeking franchisees for locations across Indiana and other parts of the United States that would carry a $35,000 initial licensing fee, and hundreds of thousands more in other startup costs, with promises of significant financial returns.

Gray Brothers would provide recipes, about 160 hours of initial training and other pertinent materials for franchisees. The locations would operate independently of the cafeteria, which has operated as a family-owned business since 1944. Gray Brothers would collect 5% in royalties based on gross sales every month.

“We feel like we could really grow our brand and build off what [our family] has done over the years,” said Jason Gray, a co-owner of the cafeteria. “It’s really about us trying to expand and broaden our horizons. We’ve been doing this for a long time, so we’re excited about the idea of having somebody coming in, where we’re going to partner with them and give good training and work with them.”

Gray said while there’s not a set geographical boundary for where the nearest franchises might open in relation to the original restaurant, Indianapolis and the northern suburbs likely will be prime targets for the first carry-out locations.

Gray said there could be multiple venues within those areas, each located at least five to eight miles from each other, but the company has not yet determined whether each could be operated independently or would have a single franchisee.

In many cases, franchised restaurants operated in a specific geographic area have a single operator, but the standard varies by company.

According to promotional materials for prospective franchisees, Gray Brothers estimates that startup costs for a carry-out location would range from $391,000 to $738,000, including the initial $35,000 franchise fee. The figures also include construction costs, equipment and supplies, signage, attorney fees, fixtures, real estate costs and travel expenses for training.

Gray Brothers, which has annual carry-out revenue of $2.5 million, will require every franchise location to have at least 3,000 square feet of space, but that space could be in a standalone building, within a shopping centers or leveraging other real estate.

In addition to training and recipes, Gray Brothers also would provide templates for social media, advertising and signage design.

Gray Brothers has been featured on numerous TV shows, including Travel Channel’s “Man v. Food,” as a bastion of Midwestern comfort food. Many of its offerings, such as its fried chicken and pies, are regularly considered among the best to be found in central Indiana, based on consumer surveys and media reviews.

Jason Gray said while the family is open to larger, restaurant or cafeteria-style franchises, those are also more expensive to operate.

The cafeteria “costs us a fortune” to operate, he said, and thus is not viewed as an ideal starting point for putting the concept to the market. Even so, each franchise location is expected to have a limited amount of seating, albeit for those waiting for their orders.

“I don’t know that we’re necessarily against [sit-down concepts], but obviously I wouldn’t want somebody in Greenwood opening up, with them being such a short drive away,” he said. “But if somebody in Noblesville wanted an open one, I think that we’re far enough away from there, that it’s not going to hurt our business. So, I think that could certainly be on the table.”

“In a perfect world, we’d be able to open up these things all over the place,” Gray said. “I feel like we’re just a little bit different than everybody else. We’re old school. So we’re excited to see what this does and see where it can go. I feel like we’ve kind of got a good idea, as far as where it can go, but will be an interesting journey to see how well we ultimately do.”

For more information about franchising, visit GrayBros2Go.com.

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