Dallas Business Journal - Genghis Grill wants 100 locations by 2011

After Dallas entrepreneur Jeff Sinelli started franchising his Genghis Grill restaurant concept in 2001, Al Bhakta and the Chalak Group saw opportunity. They bought a franchise and, in 2004, when the chain had just six locations, they bought the whole company.

“We knew we had potential,” said Bhakta, CEO of Genghis Grill Franchise Concepts LP, which is under the umbrella of the Dallas-based Chalak Group. “We knew we’d have to take some baby steps.”

Now, after developing operations and food manuals and working on customer service in its more than 30 restaurants nationwide, the company is ready to run.

Genghis Grill has leases in place or has started construction on 15 more stores that will come online in the next 18 months. The five scheduled for North Texas will all be corporate-owned.

Others, in Oklahoma, Kansas, Missouri, Tennessee, New Mexico, North Carolina, Georgia, Nevada and other cities in Texas, will be franchises.

“We want to be the largest and the best Mongolian concept out there,” Bhakta said. “We’re the second-largest. In a few months, we will be the largest.”

Genghis Grill is competing with national chains HuHot Mongolian Grill, which only has one Texas location, and BD’s Mongolian Grill, which has no Texas restaurants.

Bhakta has what in the current recession could be a lofty goal: to reach 100 locations by the middle of 2011.

Genghis Grill’s 2009 sales have been up 12% year-over-year from 2008, and the private company is debt-free at the corporate level, Bhakta said.

“We’ve had a lot of successes because of our fundamental financials,” Bhakta said. “Two years ago, landlords didn’t talk to us because everybody was willing to pay the types of rents we wouldn’t pay. Now, they’re begging us.”

It costs between $450,000 and $550,000 to start a Genghis Grill franchise, Bhakta said.

As a privately owned company, Bhakta wouldn’t release specific sales figures. But to be profitable, each franchise location would have to make at least $1 million annually, said Jeffrey Yarbrough, Dallas-based hospitality guru and CEO of bigInk PR and Marketing.

“Right now, there seems to be a lot of money sitting on the bench, money that’s been taken out of the market,” Yarbrough said, referring to investors who have pulled their money out of the stock market and are looking for new investment opportunities.

“Now is a good time for franchisors to try and pull some of that money off the bench, and someone like Genghis Grill will probably have some luck getting that money off the bench. They can show track record, they can show proof of their concept, versus a start-up concept.”