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:
- 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
- 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.