Cooking up success Featured

8:00pm EDT September 18, 2006
 When John Sullivan joined Gold Star Chili in 1990, he had a tough row to hoe, following in the footsteps of the company’s four founders. Although the Daoud brothers had created quite a following in Cincinnati, Sullivan came in to take Gold Star one step further.

He added more structure to the company and implemented a plan to continue its growth, and today, Gold Star has annual systemwide sales of about $60 million, an increase of about 200 percent since Sullivan took over 16 years ago.

“It’s a combination of the family, the franchisees and associates of the company that has been the key to our success,” says Sullivan, CEO.

Smart Business spoke with Sullivan about how he maintains quality and builds a brand for Gold Star.

How do you maintain quality as you grow?
We have a balance scorecard, and we measure certain things to make sure we stay on track. Obviously, you track the normal things, which are the sales and the profits, but the thing we spend a great deal of energy on is being able to track our customers.

Not only the consumers that come in our restaurant, but twice a year we survey our franchisees and get their input on how the company is doing.

Also, twice a year we survey every associate that works for the company and make sure that the company is doing the right things. If things come up on that survey ... then we take action to solve the problem.

Sometimes it may be a matter of communication. Maybe they don’t understand the complete story. But other times, maybe someone in the organization isn’t communicating properly with the associates.

Every once in awhile, a restaurant will get a bad report card from our survey. When that happens, we have our people go into that store and interview everybody and find out what the problems are and put plans in place to correct them. We learn a lot of things, and we have to make adjustments as we move forward from those.

We also do a benchmark study that tells us how we’re doing in the overall marketplace as far as consumer reactions to our promotions, to our products, to our values.

How do you stay competitive?
(In) the restaurant industry, every week it seems like there is a new concept opening up. When you have existing units and you’re in kind of a mature market, it’s very difficult to continue to hold your share.

We’ve concentrated on really taking (care of) our existing stores, and in some cases, we’ve relocated them in the same market and built a new facility. We’ve remodeled restaurants.

We’ve implemented new products. We implemented a gift card program. We’re introducing a customer feedback program.

On every one of our receipts ... it says we’ll give you a reward if you call in and take the survey. By gaining that information, we are in a better position to find out how we stand. We feel that as we can continue to serve our customers and our customers are happy with us, we’ll be successful.

How did you create a brand for Gold Star?
We’ve tried to make it very consistent. We try to standardize most of the operations between our restaurants, so that one customer that goes into one restaurant will get the same experience if they went into any one of our restaurants.

When things aren’t going well, a lot of chains are forced into doing discounting. When you’re doing that, all you’re doing is buying that customer for a visit or two. As soon as you don’t give them 50 cents off, they go to the other competitor where they do get the 50 cents off.

A customer called me yesterday ... to give us a compliment. We have a program that is called Serving Our Troops where if anyone has a relative or friend coming back from overseas who was serving in the military, we’ll put on a party for them in a Gold Star restaurant.

We invite all the family to come in and put up banners and buy a cake and decorate. This man had just called to say that he attended one of those (parties) and he was extremely impressed.

We really realize that what we want to do is build relationships. If you do things for the community, and they understand that you are part of the community, then you can build your business easier than discounting, where you are just buying your business for a short-term period.

HOW TO REACH: Gold Star Chili,