Entrepreneurs navigate small-business waters after buying restaurants

When Ken Riddle and Chuck Doran purchased their first restaurant — a combination Arby’s and Lee’s Famous Recipe Fried Chicken in Washington Twp. — in 2009, they fully expected the Arby’s portion of the business to flourish.

To their surprise, it was the fried-chicken restaurant that “took off,” Riddle said. And that got both business partners thinking. Might there be an opportunity for the dozen or so Lee’s Famous Recipe restaurants in the Dayton area to do better under new ownership focused solely on that brand?

The entrepreneurs thought so. It took nearly five years to close the deal — which survived the Lee’s parent company’s reorganization bankruptcy filing in 2011 — but in May 2014, Riddle and Doran, through their Riverside-based company, Far Hills Development LLC, increased their restaurants holdings from one to 13 overnight by buying 12 more Dayton-area restaurants from GZK Inc.

GZK continues to own and operate 30 Arby’s restaurants in the greater Dayton region. A separate franchise company, FRFC Springfield Inc., operates seven Lee’s Famous Recipe Chicken locations in Springfield, Piqua, Sidney, New Carlisle and Bellefontaine.

Riddle and Doran — both of whom had worked in middle management for GZK — acknowledge that the learning curve has been steep. But the results have been impressive so far.

The entrepreneurs are seeing double-digit year-over-year sales increases in recent months (the privately held company does not release sales figures); overall employment has risen from about 230 to 250; much-needed renovations and technology upgrades are underway inside and outside the restaurants; a catering manager was hired to accommodate rising demand; and the company’s business plan calls for opening a new Lee’s Famous Recipe location in 2017.

“That should be the start of an expansion,” Riddle said.

Lee’s Famous Recipe Chicken was founded in 1966 in Lima, Ohio, by Lee Cummings, the nephew of KFC founder Col. Harlan Sanders. The company is now headquartered in Fort Walton Beach, Fla., and has more than 140 locations in the U.S. In its heyday in the late 1980s and early 1990s, Lee’s operated nearly two dozen restaurants in the Dayton area. That number fell by nearly half by 2014, but Riddle and Doran say they have no plans to close any existing locations.

The Lee’s restaurants are boosting sales in part because they offer comfort food that never goes out of fashion, Riddle said. Americans are busier than ever, and they’re searching for convenient take-home and quick-service meals to replace the comfort meals they don’t have time to make in their own kitchens, he said.

For more about Lee’s success, check out the latest Dayton B2B Magazine by calling (888) 397-6397 to pick up an issue.

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