Five Guys Plans 10 Louisville, Ky., Locations

(Saturday, July 18, 2009) - The restaurant industry may be suffering from the recession, but Kevin Kynerd is bullish about expanding in Louisville.
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In August, he and his partners plan to open a Five Guys Burgers and Fries restaurant at The Summit in northeastern Jefferson County. They've already opened two other stores in New Albany, Ind., in the past year, and they plan to build 10 more in the Louisville area between now and 2015.

Kynerd, from Birmingham, Ala., navigated the credit crunch by finding a partner who covered the up-front costs for the first two Five Guys franchised locations. The equity in those restaurants will be put up as collateral for future expansions.

"Cash is king," Kynerd said in an interview. "We're actively looking for more locations."

Other restaurant operators are using their own strategies to expand and grow, even as the industry faces stiff challenges.

"Everybody's feeling it to some degree," said Stacy Roof, president and CEO of the Kentucky Restaurant Association. "Consumers are dining out less, and it ultimately affects restaurants."

Smart operators always look for ways to change to fit what their customers want, Roof said. In some cases, that means lower-priced menu items, smaller meals or targeting different times of the day.

Billy Fox Jr., owner of the J. Gumbo's chain, said he recently shifted away from a franchise model because it was tough for some investors to come up with more than $200,000 to open a location. He's now focusing on a licensing plan that allows a new investor to open the doors for less than $45,000, including the license and other start-up costs.

In addition to more than half a dozen restaurants in the Louisville area, there's a new J. Gumbo's in Columbus, Ohio, another in Cincinnati and plans to expand in St. Louis and Atlanta. Fox, a former jockey, charges $5,000 a year for each license, and he gets to focus on what he enjoys — cooking Cajun food for the restaurants.

Other chains that are expanding in Louisville include Jimmy John's sandwich shops, which has opened two of its seven area stores in the past year under local franchisees Tom Bryan and Ralph Cole, and Jason's Deli, which has opened two of its three area stores in the past year.

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