Outback Goes International

Essay by PaperNerd ContributorUniversity, Bachelor's November 2001

download word file, 1 pages 1.0

In 1987, three college buddies, Chris Sullivan, Bob Basham, and Tim Gannon, each with over 20 years of the restaurant industry experience, decided to open a start-from-scratch entrepreneurial venture. Sullivan and Basham had already become successful franchisees, with 17 Chilies restaurants in Florida and Georgia, while Gannon played significant roles in several New Orleans restaurants chains. Sullivan and Basham sold their franchises and Gannon quit his current position. They used the proceeds from the sale of the franchises to fund the opening of two Outback Steakhouse restaurants, using an Australian theme associated with outdoors and adventure. Early financing for growth came from limited partnerships from family, friends and associates. They had not intended to expand or create a chain of franchise stores, but in 1990 friends approached the three entreprenuanurs and asked for a franchise of the Outback Australian theme concept. With the success of these franchises they decided to expand and organized a joint venture with Carrabias, which lead them into the lucrative Italian dining segment of the restaurant industry.

Additional opportunities with other individuals arose and by 1994, just six years later, Outback had 214 stores, 50 of which were franchises. They were growing at a rate of 70 stores annually. Outback was also gaining an excellent reputation with it's customers and in the restaurant industry, earning awards such as America's Favorite Restaurant and Inc's Entrepreneur of the Year award in 1994. Outback lists its primary reason for success as being Quality. At about 40% of its total cost, Outback has the highest food cost in the industry, which pays off, because on weekends customers are willing to wait for up to 2 hours for a table. Outback attributes this to its exceptional food quality at budget prices.

The Challenge faced by Outback and outlined in this...