AmericanFast FoodOther

***** GRILLED CHEESE—NEXT CRAZE? *****

Posted on March 25th, 2013 · American Fast Food Other

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***** GRILLED CHEESE—NEXT CRAZE? *****

During the past 90-days or so, Jeff Eats has been to several large-Florida malls…low and behold, a new fast food concept seems to be spreading into the food courts, namely “gourmet” GRILLED CHEESE. I did some checking and it appears that there are now-a handful of companies “selling” grilled-cheese franchises. The concept is “easy”—all types of bread/all types of cheeses/all types of fillings.

For what it’s worth…the grilled cheese business seems kinda “narrow” for this Brooklyn Boy’s business concept mind. Cute idea, but “anybody” can make a grilled cheese sandwich, so there really is no-financial bar to entering this business. Too many guys are gonna try this “business” out and it’s going to be a real ugly game of grilled cheese musical chairs.

Now let me see…we “did” the gourmet burger thing, we “did” the make your own pizza thing, we “did” the yogurt by the ounce thing—and now we got, the gourmet grilled cheese thing.

Nothing for nothing…but Jeff Eats thinks that the Grilled Cheese “fast food” concept is what’s called “a pig in a poke.” Just a guess, but the guys buying these franchises- down the road aren’t going to be happy campers.

Your thoughts.

70 Comments to “***** GRILLED CHEESE—NEXT CRAZE? *****”

  1. RRRE12 says...

    Jeff,
    saw one in Coral Springs mall.
    was thinking the samething as you, very limited concept.
    we’ll see, but i’ll bet we are right.

  2. VF says...

    mlt in s. beach which was a grilled cheese place which also had other food already closed.
    you did a story on it a few months ago.
    as you point out although the food could be terrific its a very limited concept.

  3. Costello R. says...

    VERY LIMITED IDEA.

  4. fadsallofthem says...

    yogurt is over.
    gourmet make your own pizza didn’t really get here to s fl yet so maybe we’ll see some of those,
    the burgers shot their load,
    as for grilled cheese, we’ll see a few and they’ll then bust out.

  5. Dr Larry Palm says...

    Ok Jeff, what is your fantastic new food idea??

  6. JeffEats says...

    Dr Larry Palm:

    Just had a chance to read your comments.

    You are obviously not a long time Jeff Eats’ reader–because if you were, you would know that the two things I know for sure about the restaurant business are…

    You want to eat in them but not own them.

    Thanks for reading…

    • Jon g says...

      And sometimes you don’t even want to eat in them!!

    • Dr Larry Palm says...

      Jeff, where in my comments did you believe I referenced anything about ownership?? Just wanted to see what you thought about a “new trend” you thought was viable, if you are going to bash every new concept: yogurt, grilled cheese, make your own pizza, burgers etc…….

      • JeffEats says...

        Dr Larry Palm:

        Just had a chance to read your comments.

        The point of my last post to you was that I eat in restaurants…and don’t feel that owning one is a good financial move (most of the time). I think if you check, you’ll find that the restaurant failure rate is off-the-chart.

        Having been in the Discovery Zone Business, Johnny Rocket’s Business, Hardees Business and many others—I have a pretty decent business/legal background in the franchise arena.

        In any event, here’s one for you. I think that a hot dog/papaya stand in South Beach with business hours of noon-5am would have a decent shot of success assuming a decent location.

        Thanks for reading…

        • Dr Larry Palm says...

          Jeff, I see that all the restaurant chains you mention have had their day with bankruptcy; Discovery Zone, Johnny Rocket’s and Hardees; nice track record!!

          • Dr Larry Palm says...

            Jeffff, no one is questioning your clearly fantastic track record of being restaurant manager of the millennium. I am just stating that the companies you referenced all filed for bankruptcy and that you seem quick to criticize most of the “new” restaurant business ideas. Many of the shareholders that trusted the management in many of these businesses you were associated with lost their life savings (worse than in a Cyprus bank)….I am not saying you had anything to do with these equity holders losing; just that you were apart of chains that eventually filed for bankruptcy…… Smile my friend and be happy!

          • Cosmotopper says...

            larry, I don’t think hardees or johnnys ever went bk. I know that dz went bk after it was acquired by viacom.
            just something you don’t know, I believe jeff some 18 years ago owned 5% of a restaurant reit that owned over 1,100 restaurant buildings. the company was acquired for close to $800 million.
            if you only knew who’s who here.

          • Dr Larry Palm says...

            Many of the franchisees of Hardees and Johnny Rockets have filed for some form of bankruptcy Cosmotopper. They are two failed and severely struggling food chains that are unable to make it. Many of the current issues stem from the obama administrations anti small business policies i.e. obamacare, increases in the minumum wage, high raw food costs, higher transporatation costs etc. Initially, I was just curious to see what “new” food concept Jeff Eats believed would be successful, but this line of questioning is much more interesting……

      • HerbK says...

        Larry….I see that your comments have to be filtered through your serious case of Obama Derangement Syndrome. A couple of facts for you:

        Obamacare hasn’t taken effect yet but when it does it won’t do much to hurt small businesses, especially franchised fat food joints, because each location is a separate entity, and none will have 50 full time employees.

        I have been a business owner since 1971 and i never had negative effects from minimum wage increases. I know the right wing ignorati think minimum wage increases cause people to lose their jobs but there is no empirical evidence to back tha\at up. In fact, there were four minimum wage increases while President Clinton was in office but the unemployment rate went down steadily until it hit 4% when he left office

        Food prices are up mostly because of the droughts we’ve been having

        Transportation costs are up because the international price for oil went up and not because of the hallucinations you have about Obama intentionally having an anti-small business policy.

        Corporate profits are at record highs and the stock markets are up about 80% since he took office. Chains like Starbucks and McDonald’s have been rocking out even with the black man in the White House proving your conspiracy theories to be baseless

    • FVG says...

      Jeff, I got to agree with you that a Papaya/Hot Dog business in South Beach would be a great business. Remember Papaya King and Grey’s Papaya in NYC? Both businesses were amazing.

      • gary says...

        I could never understand why there are not any Hot Dog operations with the volume of stores such as McDonalds-Burger King-Wendy’s-Subway. American’s consume more Hot Dogs than Burgers, Hot dogs can be produced in sizes up to 10 to a lb.-low food cost-quick delivery from griddle, open grill, deep fryer,or boiling water to the customer. Jeff and others, what are your thoughts?

        • JeffEats says...

          gary:

          Just had a chance to read your comments.

          My guess on the “lack” of hot dog chains is because the hot dog is considered by many as the lowest-cheapest fast food going. The big guys like BK, Wendy’s and McDonald’s stayed away from the hot dog arena for that reason.

          Thanks for reading…

          • Steven St James says...

            Burger King use to sell hot dogs many years ago. Burger King has recently copied McDonald’s menu and is seeing a resurgence in sales (the stock has done well too). They even bannounced a deal for higher end coffee. What do you think of it Jeff Eats?? BTW what do you think about the longer term for Starbucks??

          • JeffEats says...

            Steven St James:

            Just had a chance to read your comments.

            On Starbucks…to this very day I can’t get my head around how big this company got and how huge the coffee market is. Can’t figure out how people are willing to pay such high prices for coffee. Haven’t got a clue as to Starbuck’s future, but it would seem to me that the USA is probably oversaturated with stores, so growth has to come internationally.

            On Burger King, it seems McDonald’s is doing well with coffee, so I would expect BK to do the same. Both chains will “bargain” price the coffee…which will hurt Starbuck’s but not too badly.

            Thanks for reading…

  7. shelly says...

    Wow! Maybe we can Franchise my Peanut Butter & Jelly French Toast?

  8. Sobe says...

    this one in Louisville is taking off

    http://tomandchee.com/

    • OPLOP says...

      Doesn’t hurt that Adam Richman showed up. If you do some research you will find that seemingly wherever Richman or for that matter Guy Fieri show up the restaurant gets a huge “tourist” following after the appearance.
      Im with Jeff, very limited business.
      I see these cheese sandwich places dying out after a small run.

  9. Not a very strong concept.

  10. ken w says...

    The Hot Dog business in Chicago is huge. a mom and pop place every corner . Portillos is a chain there and opened in CA and just recently AZ which had 1 hour waits to get in the door during the grand opening. The concept is to make sure it’s more then dogs. Italian beef, gyros,chicken, ribs, salads… all fast food.

    • gary says...

      Ken,
      Went to Chicago, 1st time, 10 years ago. My son and I ate at Portillos, once we realized that we loved Chicago hot dogs we tried practically every corner hot dog place we saw (even at the airport)
      I’m baffled as to why there is not the same presence of hot dogs in Fl. and N.Y..
      B.T.W. we tried Lou Malnati’s pizza and switched our obsession from Chicago Hot Dogs to Chicago Pan Pizza

      • ken w says...

        Gary

        Hot dog opolis in Boca very good. You can get Malnatis shipped from taste of Chicao which they own. The frozen pizzas come with own tin and are spot on

        Ken

  11. Bob B says...

    Jeff,
    Have to agree with you, Grilled Cheese is a no go.
    Love your idea for a Papaya/Hot Dog business in South Beach.
    Actually I think you could roll out this concept in college towns and wherever there is a large late night drinking population.
    Once again, great hot dog idea.
    Bob B

  12. Hugh Janus says...

    These Grilled Cheese places have as much chance of succeeeding as a Five Guys or Lindbergers or Charm City. Substitute grilled chesse for burger and let people choose their “toppings”. There are lots of people that don’t eat meat, also. I don’t think the idea is any more wacky than a store that only sells donuts or gyros or tacos. Time will tell.

    As far as Hot Dog places, while there are no Papaya Kings, Greys or even Wienerschnitzels ( a hot dog -specific fast food place), there are, however, lots of Columbian/Peruvian “perritos” places all over S. Fla. where you get a hot dog and choose from lots of toppings. They are all over the place. In fact there is at least one in Boca Raton in a shopping center at 441 and Marina (18th Street).

    • Georger F. says...

      hugh,
      the problem with a grilled cheese business is that anyone can get into for virtually no money.
      just take what you wrote. all five guys, lindbergers or charm city has to do is offer gourmet grilled cheese sandwiches in addition to what they already have. all they need is some bread and they are in business.
      to base a whole business on grilled cheese is dumb.
      if you don’t believe me, then explain why mcdonalds now has all kinds of food in addition to hamburgers.
      this grilled cheese concept is a FAD that will have a very short life.

      • John Holmes says...

        George, McDonald’s was founded in 1940 by the McDonald brothers in California and they were just paying bill and not making very much for many years. The original mascot was called Speedy (not Ronald) and most of the McDonald brothers ideas were changed when Ray kroc purchased a franchise in 1955. Kroc forced the McDonald brohers out of the business. The rest they say is history. Just how many of you on the blog would say that McDonald’s would never succeed?? MAYBE the grill cheese business will do fine, but it is too soon to tell. There are just too many negative people on Jeff’s Blog that are quick to criticize all these entrepreneurs in the food business….. be positive and give these guys some time!!

        • Meatman says...

          You are right it maybe too soon to know about the GRILLED CHEESE business. Let me ask you this, if you were going to go into the fast food business right now and had $400,000 would you bet that money on a grilled cheese store in either a mall or other location?
          Now be truthful!

          • DiscoDanny says...

            Meatman, great post.
            I for one wouldn’t bet that kind of money on this concept.

          • KKKIOU says...

            The guys who are thinking of investing in a grilled cheese business should listen to Jeff. ANYBODY who wants to can get into this business can. Any restaurant can start making gourmet grilled cheese sandwiches with no additional capital expenditures.

          • John Holmes says...

            Meatman, I have $400K and am buying silver right now. I have an interest in a couple Poyo Tropical’s in South Florida and am quite happy with my return on equity. I am looking to buy silver because I am trying to hedge my US dollars which are becoming worthless……..BTW, I am eating a quality grilled cheese right now!

          • Meatman says...

            you answered the question by beating around the bush. you wouldn’t buy into a grilled cheese store. told you so!

          • Jon g says...

            If I had interest in a company I’d learn how to spell it….

      • Hugh Janus says...

        A low cost of entry is not a determiner of success. If that were the case, franchisers should charge outrageous sums since it will assure success.

        Calling an idea dumb is only an opinion. Your opinion. What is YOUR track record? Remember, this is America and a guy made a fortune in the ’80s selling rocks in boxes that he called “Pet Rocks”. I’m sure that cost virtually nothing to get into. Remember, the only thing that will determine success is success. Come up with an idea people will like/use and you’re halfway there (the other half being execution).

        • WolfieCohen says...

          I don’t think you understand how this franchising works.
          If you go to build a McDonald’s for example it probably costs a 1,000,000 bucks just to open the store. Not too many guys can spend a million to get in. So the bar to entry is very high.
          Now any tom dick and harry can make grill cheese. So anybody with a restaurant can do it. Low bar to entry

          • Jack Emfar says...

            Wolfie Cohen lost Pumpernicks to Charlie Bookbinder in a poker game….the picture for the Pumpernicks sign is/was Charlie…..

  13. Those of you who think that grilled cheese makes sense are silly. The concept is so limited that it’s not even funny.

    • gary says...

      The product is not necessarily what is going to make or break you, it is the execution of a well thought out concept and constant focus on the market and the consumer and a willingness to adapt and change.

      The Grilled Cheese concept is Sooo far from limited, creative minds can do the most amazing things..
      Breaded Cheese sticks– offered w/ different types of cheese/different coatings and different dips
      Cheese Puffs–same as above
      Cheese Burgers–offered w/ several types of cheese
      Cheese Fries– same as above
      Anything Parmesan
      Salad with crumbled/ chunked/ shredded or diced cheese
      Macaroni with Cheese–several varieties
      Pizza’s-Calzones etc
      Quiches
      Cheese Cake
      Soups
      Chips w/ Cheese dip
      Veggies w/ Blue Cheese–parmesan ranch or any cheese based dressing
      Cheese Plates w/ crackers and fruit
      Philly Cheese Steaks

      These are just a few items that can be offered as secondary items to a fully detailed Grilled Cheese Sandwich menu

      There are Starbuck’s stores with lines out the door and there are some that have closed, There are McDonalds franchise owners who average 2 million yearly in sales and there are some who average 10 million in sales and some that didn’t make it at all.

      It’s not just the product, there are many other factors that make or break a business.

      30 years ago I would have never guessed that Raw Fish on a ball of rice would become available on every corner, or that I would spend $50 a week and have to wait on long lines for a coffee

      • FlopperJones says...

        Nice lists. But the Grilled Cheese business is going to flop like crazy.

        • Dondiego says...

          I was just thinking the same thing. Gary beautiful list but core business concept sucks.

          • gary says...

            I love a good grilled cheese sandwich.
            The sandwich needs to have added value, so that it would be worthwhile for a consumer to buy it rather than make it at home.
            Maybe amazing breads with a unique grilling apparatus.

          • zace says...

            I agree with Gary and I think you need something more substantial along with it for grilled cheese sandwich shop to work. Think about it you go to a deli which most of them serve grilled cheese and you order one and after you’re finished you’re still hungry because it’s a very small sandwich unlike a corned beef or pastrami sandwich which is huge and you’re stuffed when you finish it. It could work but it had to be done with much thought and be original.

      • Manny Moto says...

        Gary
        You got the guy opening a full diner with your list. In addition a full court won’t let you sell all that crap.
        The cheese idea sucks that’s the end of the story.

        • Andrew Z says...

          The idea stinks just like the pizza guy who was going to deliver burgers.

  14. TGS says...

    When the grilled cheese stores start closing we’ll know we were right.

    • gary says...

      Within the 1st 3 years of business 60% of restaurants fail, both independent and chain restaurants. It’s an extremely hard business and regardless of concept the cards are stacked against you from the day you open.
      Many Grill Cheese restaurants will fail but there is no doubt that a handful will go on to live the American dream.

      • Jim Kramer says...

        and that’s exactly what jeff is saying.
        not a franchise concept.
        see, you agree with jeff and don’t even know it.

        • gary says...

          Jim,
          In each and every food category, there are only a handful that succeed and most fail regardless of what they are selling .
          How many franchise able concepts Pizza,Burger,Hot Dog,Donut,Ice Cream,Burrito,Coffee,Sandwich Shop, Liquor Store etc, operations have opened, franchised and failed.

  15. Breadman says...

    Grilled Cheese
    Ho
    Ho
    Ha
    Ha
    No chance.

  16. robertw says...

    Its the keep it simple strategy. In NY there is a hole in the wall place I went to for grilled cheese and it was amazing. The company has a few places in NY and they care cleaning up. When I say a hole in the wall it literally was near subway- a hole in a wall. Tomato soup and grilled cheese.
    FYI – Woolfie. I am pretty sure it costs well more than a million for a Mcdonalds and they wont be selling any unless you have an amazing connection,

  17. robertw says...

    Hugh Janus- I wish there was a Papaya KING down here! I would go nuts. Actually those wieners are pretty good with a nice snap. There is a plac ein NY called Stickies Finger joint. They only sell chicken fingers with fancy sauces etc. That place is also a gold mine. You figure one thing, and you do it. You sell a bunch of locations and you get out.

  18. robertw says...

    And Pollo Tropical is a GOLD MINE!!! Prices are reasonable and they sell like crazy over there.

  19. robertw says...

    Papaya King is still all over NY city. Those drinks are so SWEET they make you teeth chatter.

  20. Jim Kramer says...

    Personally I don’t like the business.
    Very limited idea.
    Don’t see it gaining too many players.
    Only time will tell.
    I’m with Jeff on this one.

  21. gary says...

    Many years ago in Brooklyn there were 2 brothers that bought many depressed bagel stores and corner delis that were ready to close or already closed. One brother was a contractor and he gave the place a modest face lift, the other was an experienced entrepreneur and worked and promoted the operation. Within the 1st 6 months they had the places jumping and sold for several $100k over their maybe $50k investment, they bought and sold 2-4 units per year. Within the 1st 3 years they got more than 50% of their units back and did the same thing all over again. These brothers made Millions. My point is that they knew how to make these places work, while many others didn’t stand a chance.
    20 years ago I did extensive research on a Steak Co. which was doing $150 million a year selling steaks through the mail (no internet sales at that time) They were selling CHOICE beef at upwards of $60lb (the same quality you can buy in your local supermarket for under $12lb) When I met with management they told me “It’s all about our marketing-if we were selling pencils, our sales would be the same”

  22. Larry Kudlows says...

    Many suckers will buy franchises and many suckers will go broke with their franchised stores.
    The concept is no good and way too limited in scope.
    There is no financial bar to entry and I could go on and on but I won’t.
    This is a non starter.
    Beware!

  23. Ed Stephens says...

    I give this concept no chance whatsoever.
    If grilled cheese is viable McDonalds, Burger King and other biggies will make the sandwiches and good bye little fellow.

  24. TH21234 says...

    One dumb idea. Those thinking of opening one think again.

  25. mark says...

    If your ever on London go here there is a place that make the best grilled Cheese in the world and yes they have been there for years. http://www.boroughmarket.org.uk/

  26. gary says...

    Was just thinking about all that say the grilled cheese franchise is to limited in scope– what do you think of the chicken wing —the McDonalds, Burger King’s and Wendy’s have not put a dent in any of these operations– the demand for chicken wings has grown to such levels that they are now wholesale and retail 50% higher than boneless skinless chicken breasts—10-20 years ago NOBODY would ever believe this could happen. It’s not only about the product,
    It’s all about MARKETING…….

    • JimmyHouse says...

      Gary
      Got an idea, why don’t you buy a grilled cheese franchise or just open an independent store and stop trying to bait some poor sucker into opening his own?
      The idea sucks.
      The economics make no sense.
      This is a dumb concept and will prove to be the disaster de jure.

      • Steven Cohen says...

        Got to agree with Jimmy the concept stinks.
        If grilled cheese works, McDonald’s will add it to its menu.
        Also agree that Gary is trying way too hard to give this dumb idea credibility.

        • gary says...

          I haven’t seen McDonalds add Pizza, Burrito’s, Sushi, Chicken Wings, Subs to their menu.
          If Grilled Cheese works, McDonalds won’t add it to their menu, they will most likely try to buy or invest in the operation that they consider most viable.

          I’m not trying to bait anyone, just making a point.

          Many have made a lot of money with what others have thought were dumb ideas.

          Steve Jobs had an impossible time trying to get money to start Apple, he was told by many that his concept would never work….

          The owner of Chipotle couldn’t get outside funding and had to borrow money from his father, Almost instantly his 1st store was selling over 1000 Burrito’s a day. Within a couple of years McDonalds became a major investor and the chain grew to over 500 units.

          If you really know what will work and what won’t, your stock portfolio must be quite impressive.

  27. Rader says...

    This restaurant concept sucks big time.

  28. Eddie Sasser says...

    Stupid restaurant idea.

  29. FFG says...

    Big story in Sun Sentinel today 5/3/13 about how great this grilled cheese business is.
    Amazing it took this long for them to discuss something that Jeff was into months ago.

  30. roy heriges says...

    what about the two guys on shark tank in cin. ohio they had over 1.2 million in sales the first year?and also got mark to buy into them.

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