Climb Aboard The Greek Express

Stars can align in little time when a good idea is on the table. Or, they can take years.

No one knows this better than Daphne's Greek Caf� founder and CEO George Katakalidis, who sees his nearly 20-year-old concept hitting a second spring of bloom through a growing national enthusiasm for Mediterranean cuisine and new franchising opportunities.

Katakalidis' notion in the early 1990s was simple: feed fresh, healthy Greek food to America.

Katakalidis, a former professional soccer player with the San Diego Sockers, discovered a dearth of options for reasonably priced, fresh and delicious Greek fare while recovering from a soccer injury, and in 1991 he opened his first Ameri-Greek fast-casual outlet in San Diego. Seventeen years later, Daphne's has expanded locations throughout California, Arizona and Colorado, and soon Oregon and Washington state, for a total 83 units � the largest fast casual Greek-restaurant chain in the United States.

"George is passionate about the fact there were no healthy Greek alternatives out there," said Daphne's president, Steve Fricker. "He saw an opportunity to develop a great product rolled out in a comfortable setting. We try to ride the middle of the road (with the menu) because Greek food is growing but a lot of people still don't know what Greek food is like they do with Chinese or Japanese." America is learning, though, said Suzy Badaracco, president and founder of Culinary Tides, a Portland, Ore.-based food and wine trend-analysis firm.

"New studies on the Mediterranean diet show it kind of mirrors the American (food) pyramid so it's pretty easy to market to consumers because it's similar. There's a familiarity there," Badaracco said. "Plus, (food trends) are cyclical. The last time Mediterranean food reared its head was because of the Sonoma diet in California, a Mediterranean diet that included wine. It's a perfect time for (Daphne's) to step out of the shadows." Making strides Building a loyal following for Daphne's certainly wasn't an easy task, Fricker said.

"It was tough in the early years," said Fricker. "Development was slow in the early-'90s. It wasn't until 1999 and 2000 when development started to pick up and the brand really took off." One of the most challenging aspects in the early 1990s, Fricker said, was convincing developers to lease real estate space not only to an unknown chain, but a less traditional concept as well.

"The challenge for George, and with any new concept, � is why choose George over the well-known Mexican or burger restaurant," Fricker said.

Having blazed a trail for the newest exploding trend, Daphne's most recent expansion included 17 units in 2004; eight in 2005; 13 in 2006; 10 in 2007; and up to 12 by year's end. That first-peak expansion period resulted from all the years leading up to it when Daphne's built "enough customers to create a synergy and enough loyalty," Fricker said.

Now Daphne's executives are looking to branch across the country with the announcement in February it will qualify interested parties for premium franchise opportunities through the launch of Daphne's International, the franchising arm of the company. The restaurant chain filed uniform franchise offer circulars in Arizona, Colorado, Connecticut, Delaware, Washington, D.C., Georgia, Kansas, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, North Carolina, Ohio, Oregon, Texas and West Virginia.

"When rolling out the concept, it's not hard to get the money, and we can get real estate," Fricker said. "It's the people factor and local knowledge of the market that can be the most puzzling. That's the benefit of bringing franchisees to the market. They have knowledge of the market." Daphne's also has largely escaped current concerns over the economy because it doesn't have the commodity pressures of other similar concepts. Daphne's doesn't use a lot of wheat and dairy, doesn't have price point issues and hasn't seen an increase in the cost of the proteins the chain uses, specifically chicken and gyro meat.

"We're fortunate. I hear all my friends talk about profit margins eroding and our margins aren't eroding, they're actually going up," Fricker said. "We have additional fuel surcharges� but that's being more than offset with the commodity side." Those added profits are allowing Daphne's to start purchasing radio advertising, which will help alert many people to Daphne's strong Greek brand.

"Awareness of the brand is increasing dramatically," Fricker said. "George had a great idea, and as it turns out the concept is seen as a shining star."

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