Newcomer finds niche in sub shop

Newcomer finds niche in sub shop

January 6th, 2011 by Ellis Smith in Businesstopstory

Staff Photo by Angela Lewis/Chattanooga Times Free Press Kuntal "Kevin" Patel works Wednesday at Lenny's Subs on Gunbarrel Road. The parent company plans to build up to seven shops in the Chattanooga Area

Staff Photo by Angela Lewis/Chattanooga Times Free Press...

When Kuntal "Kevin" Patel, an immigrant from India working at his cousin's gas station in Chattanooga, heard in 2009 that the Lenny's Sub Shop on Gunbarrel Road was for sale, he decided the time was ripe to enter the food business.

Patel had saved nearly every penny he earned from his gas station job after coming to the United States in 2005, and with a little help from his cousin, he had enough cash to buy the franchise.

He saved so much, that "when I moved into my own apartment, I had nothing except furniture," he said.

Now with the dawn of a new year, Patel is talking about opening up two more locations and tripling his five-person staff.

His success, to the tune of between $80,000 and $100,000 in yearly profits out of $600,000 to $700,000 in sales, has prompted the chain to consider up to seven locations in the area in coming years, officials say.

But it won't be as simple as picking locations, hiring managers and slapping down a few stores, said Brent Alvord, president of Lenny's.

Lenny's, a southeastern sandwich chain with 150 locations across 19 states, is primarily dependent on entrepreneurs who must literally buy into the promise of being his own boss.

Including construction costs and a $25,000 franchise fee, a potential Lenny's owner will typically kick in $250,000 to get a restaurant off the ground, with the idea that they could make that back in just a few years with the right site selection, Alvord said.

This compares favorably, he said, with typical fast food restaurants, which can cost $1 million each to launch.

The ideal Lenny's franchise owner is often "someone who's coming out of corporate America, worried about layoffs, and they're wondering how to jump into business on their own," Alvord said.

Potential franchisees go through weeks of training at Lenny's headquarters in Memphis, and with $70,000 to $80,000 in liquidity can obtain Small Business Administration loans to cover the cost of starting a franchise, he said.

"People may think, ahh, it's just a sandwich shop," Alvord said. "But it's an investment and a way to build a legacy of wealth."

Patel plans to do just that, running a franchise where employees slice half a pound of meat and cheese for each sandwich, and hot Philly cheesesteaks are prepared on a grill instead of in a microwave.

Fresh, rather than prepackaged food, keeps customers coming back, he said.

On the other hand, Patel has had trouble keeping employees, which is surprising with joblessness hovering close to 10 percent, he said.

"Today, a guy quit without notice because he got a job closer to where he lives," he said, which forced Patel to work in place of the employee until he could hire another person.

Still, for a man who came from India to live with his cousin less than six full years ago, he's proud of what he's done and said he wouldn't change a thing.

Thumbing through a book titled "The Great Philly Cheesesteak Book," he points proudly to the entry for Lenny's, one of only three businesses that serve "authentic" Philly Cheesesteaks in Tennessee, he said.

"I'd do the same thing again," he said. "Now if the economy would get better, we would have a lot more business."