When I first heard of a chili franchises 10 years ago, I thought it was a stupid idea. How often are people really going to each chili? Then I spent time in Cincinnati, OH, home of Skyline Chili and Goldstar Chili. I soon became a loyal fan, endulging in 4-ways (spaghetti noodles, chili, mustard, onions and cheese) and Cheese Coneys (hot dog, chili, cheese) like I never imagined. Apparently, the chili has a hint of chocolate and licorice that adds to the uniquely smooth flavor and addiction.
Skyline Chili is the champion in Cincinnati and the surrounding markets. It’s so popular that fans often try to duplicate the secret Skyline Chili recipe at home. Of course, a small minority of people hate the chili with equal passion.
Each restaurant has a drive through and inside seating resembling a 1960′s diner. Skyline is open late for the night crowd coming home from the bars. The business lunch crowd is big, and so is the early evening with families and college students.
Fransmart’s Red Rock Chili Company looks similar, but I have no experience with it.
Skyline Chili, Inc. is currently franchising in the states of Ohio, Indiana, Kentucky, Michigan, Pennsylvania (western), West Virginia and Florida. Residents of the following states may not purchase a franchise: California, Hawaii, Illinois, Maryland, Minnesota, New York, North Dakota, South Dakota, Oregon, Rhode Island, Virginia, Washington or Wisconsin.
Background Skyline Chili Research:
Pros:
- Proven successful concept in Cincinnati
- Fast preparation times
- Fun food and atmosphere
- Reasonable franchise fee ($20,000), royalty (4%), and advertising (4%)
- Small space needs: 2,800 square feet; free standing, store front, strip center, end cap
Cons:
- Chili must be purchased from franchisor
- Franchise popularity may take extra time to build if no other chili franchises are in the market
- High Average net worth and total investment is $650,000
- High Average Number of Employees: 15 FT, 20 PT
From a concept standpoint, this niche QSR play is a winner. From a profitability standpoint, I do not have enough data to comment.
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Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
I’ve eaten at Skyline Chili before. I love it. I’m not sure if it fits the southern quisine, but it sure is tasty. I think it’d be a hit anywhere in the US if you hit a minimal critical saturation in a geographic area (probably at least 3 units in a city with a modest marketing campaign).
I’ve eaten Goldstar in Cincinnati’s airport (Delta hub). It was between Burger King and Goldstar, and I picked Goldstar. I ordered a 4 way (noodles, cheese, chili, onions, mustard…I think) and I loved it! I didn’t think I’d like it and I expected to get the runs on next flight, but everything turned out fine. I am a fan of this type of chili…I may look into the franchises. I haven’t seen Goldstar outside of Cincinnati though.
I live in Cincinnati and I love Skyline But do not like goldstar.
But I Do think either of these would work just about anywhere
I almost hate to learn the answer, but is this chili stuff have more calories and saturated fats than burgers and fries?
I am looking at purchasing a Skyline Franchise, anyone have a good guess at profit margin. I saw a breakdown for Quiznos on this site, is that pretty typical for a food franchise?
Thanks!
I am actually looking for info in Goldstar A franchise. Does anyone have any insight into Goldstar? Are the franchise regulations fair? what kind of relations do the franchisee’s have with corporate? Great product though I am curious what kind of business opportunity it may be.
Thanks for any input you can provide