Old Chicago Restaurants Plans for 125 Franchise Locations by 2007 (12/02)

Old Chicago's visionary leaders have proved that there is more than a slice of truth to the age-old saying, "you have to walk before you can run."

The 26-year-old "friendly neighborhood establishment," that specializes in imported beer and deep-dish pizza, opened just six Franchise locations over the last two years, while adding to its already established brand and business model, a growth platform specific for the Franchising industry.

Old Chicago chose to gradually expand through corporate-owned locations before starting to franchise, offering potential franchisees the benefits of a solid infrastructure. In fact, with 49 existing corporate and six franchised locations, Old Chicago is sticking to a conservative growth strategy, projecting to double its size over the next five years through multi-unit franchising.

"The Old Chicago concept has a wide open marketplace for expansion as well as a distinctive menu and atmosphere that has been strategically created to fit into most communities," said BuckWarfield, Vice President of Old Chicago Franchising Corporation. "Because of the flexibility of the concept, restaurants can take on the life of the neighborhoods around them. Not only can our restaurants be built in a wide variety of spaces, ranging from a prototype on a traditional pad site to an end-cap of a strip mall to the skeleton of a failed restaurant, our franchisees can combine our customized marketing techniques with the nationally recognized Old Chicago brand to create the an ideal dining experience for their community."

Old Chicago was founded in 1976 in Boulder, Colo. by Frank Day, who found his recipe for success in a concept that combines the taste of deep dish pizza with an imported beer list that lets customers tour the world from the comfort of their bar stools. With an uncommon ambiance that meshes the friendliness of a local bar with the family style atmosphere of a casual dining establishment, Old Chicago takes on the role of "neighborhood hangout" for families, couples and singles alike. The menu features deep-dish pizza, pasta and calzones, as well as burgers and sandwiches. Its signature 110-brew "World Beer Tour" lets customers taste beers from around the world, and the beverage menu also includes a "Root Beer Tour" for younger clientele.

"Old Chicago caters to a diverse range of age groups like few other concepts in the Restaurant industry," Warfield said. "We combine a restaurant and bar atmosphere and customize it to fit into most neighborhoods nationwide. In addition to creating a one-of-a-kind dining experience for our customers, this adaptability allows our restaurants - and our restaurant owners - to become an integral part of their communities."

Catering to Franchisees

It is the morphing ability of the Old Chicago concept in combination with current market availability that make it an appetizing Business Opportunity for potential franchisees, Warfield said.

Much like the hermit crab, an animal that can survive living in the shells of various other sea creatures, the Old Chicago concept takes on the life of the community around it. For example, if a location is built near a business park or office building, Old Chicago offers the tools needed for a franchisee to adjust the location?s hours, menu specials and marketing programs to meet the needs of a lunch-time and happy hour crowd.

Positioned as a competitor to casual dining restaurants such as Chili's and Applebee's, Old Chicago is poised for growth, with plans to expand its number of franchise units from six to almost 20 by the end of 2003. However, unlike many of its casual dining competitors who no longer offer franchise agreements in major markets, Old Chicago?s franchising plans are still in their infancy. Old Chicago currently has franchising opportunities available in most major markets nationwide including Florida, Minnesota, Ohio and Texas.

"We have a positive track record in the restaurant industry," Warfield said. "We have developed a concept that has proved successful over the last 26 years, and laid the groundwork for a slow-and-steady growth plan that promises to make Old Chicago a key player in the franchising community."

A Growth Spurt

With six current franchise locations and 22 in development, expansion plans call for locations in more than ten markets by the end of 2003.

"We are set to grow at a healthy pace for the next several years. With excellent ROI potential and a virtually untapped marketplace, we offer an ideal Franchise Opportunity for Multi-unit franchise owners looking to expand their portfolios with a non-competing concept." said Warfield. "Additionally, Old Chicago is a good opportunity for investors looking to work with an experienced restaurant management team."

Old Chicago's initial franchise fee is $35,000 per unit, along with an individual store development fee of $15,000 per unit, and four percent royalty fees. However, multi-unit costs may vary depending on the scope of the project.

A Trip Around the World

In the mid 1980's, Old Chicago developed the World Beer Tour, one of the earliest loyalty programs used in restaurant marketing. The World Beer Tour, which features more than 110 beers from around the world, gives customers the opportunity to taste beer from places as far away as Japan and Ireland. They receive prizes such as sweatshirts and glassware as they reach certain milestones along the tour. At the completion of the tour, they are elected to the local "Hall of Foam."

For franchisees, the World Beer Tour is not only a way to draw regular customers, but also a method of keeping in touch with them. The program, which employs a completely electronic process since its development, allows franchisees to send customers promotional materials ? or even birthday cards - via e-mail with just the touch of a button.

"These programs are a big draw for potential franchisees," Warfield said, noting that there are currently more than 260,000 active World Beer Tour participants in the United States. "The World Beer Tour gives them instant access to a customer base that they would not otherwise have. It is a highly effective marketing tool that franchisees have found to be extremely helpful in developing a presence in their local communities."

In addition to its marketing purposes, the World Beer Tour also allows franchisees to experience a high volume of beverage sales. Currently, beer sales account for more than 60 percent of Old Chicago?s beverage sales, which are in turn between 38 and 45 percent of total store sales.

About Old Chicago

Founded in 1976, Old Chicago is a part of Rock Bottom Restaurants, Inc., which currently owns and operates 89 restaurants across the United States - 49 Old Chicago restaurants and 39 brewery concepts operating under the names Rock Bottom Restaurant and Brewery, Chop House and Brewery and Walnut Brewery, and Sing Sing.