By Randy Tucker
The Cincinnati Enquirer

BUYING A FRANCHISE

To become a Great Steak & Potato Co. franchisee requires:  $180,000-$250,000 total capital investment  $100,000-$125,000 liquid capital investment  $250,000 net worth Source: www.franchisegator.com

Hamilton-based Great Steak & Potato Co., which opened its first restaurant in Dayton in 1982 and has become a fixture in shopping center food courts across the country, has been sold to a Scottsdale, Ariz.-based restaurant operator, the company said Friday.

New owner Kahala Corp. is the franchisor of several quick-service restaurant chains, including Frullati Cafe and Bakery, Rollerz, Samurai Sam's, and Surf City Squeeze. With the addition of Great Steak, Kahala will operate 960 franchised outlets with annual sales of more than $850 million.

Terms of the sale were not disclosed.

Nicola Lanni, Great Steak's founder and CEO, said selling the franchise to Kahala will benefit franchisees in the long run. "It's always good to align yourself with a larger organization," said Lanni, who will join Kahala's board of directors. "It gives you better leverage in negotiating deals with shopping center developers and suppliers.

"My main responsibility is to make sure franchisees who have invested their money in the system fare better in the future."

Although he's selling the franchise, Lanni said he will maintain ownership of nine corporate-owned stores in Greater Cincinnati and development rights in the area. "The stores we're keeping are in major regional shopping center locations, and we're going to start developing in strip centers, too," Lanni said.

The Great Steak & Potato Co. is one of the nation's leading franchises, with 251 franchised outlets in the United States and selected foreign markets, including Canada and the Middle East.

The restaurants, located mainly in malls, airports, and other high-traffic areas, feature Philadelphia-style cheesesteak sandwiches, fries, lemonade and baked potatoes.

The chain was recently ranked the No. 1 Philadelphia cheesesteak concept in the "Franchise 500" edition of Entrepreneur magazine.

E-mail rtucker@enquirer.com