Oh, to be the Cheesecake Factory. Thirty-six quarters nine years of consecutive same-store sales increases. Landlords knocking down the door to help pay for new locations. Average sales of close to $1,000 per square foot nearly twice the numbers put up by competitors. And spectacular stock performance; an investor who put $1,000 into the business at the end of its first day of trading in 1992 would have been sitting on $305,880 worth of stock last week.

All that with virtually no advertising costs to speak of.

Now, the 23-year-old Calabasas Hills company, darling of diners looking for a big meal for less than 20 bucks, is preparing for an aggressive expansion campaign that could boost it to four times its current size.

Utilizing its massive cash flow, the company plans to expand from its current 44 restaurants to as many as 200 over the next several years.

Plans are also underway to make its upscale cousin, the Grand Lux Caf & #233;, a major player in the casual-dining market by adding as many as 20 outlets. In keeping with the company's desire to grow operations by at least 24 percent per year for the next several years, it has signed leases to open seven new Cheesecake Factory restaurants and three Grand Lux operations in the next two years at a cost of $4.5 million each.

Aggressive, perhaps, but with $78 million in cash and marketable securities on hand, company officials are undaunted by a slowing economy and said they will continue to invest in expansion.

The company has not made a stock offering or dug into its $25 million line of bank credit since 1997. Why bother? Based on average revenues of $976 per square foot in 2000 and $946 per foot in 1999, Cheesecake executives estimate it will take only two years for new operations to become profitable.

Piece of the action

It's that promise that has allowed the company to dictate lease terms calling for landlords to kick in between one third and one half of the tenant improvement costs of each restaurant in exchange for a percentage of income. With an average restaurant size of 10,000 square feet and build-out costs of around $450 per foot, landlords are willing to lay out significant sums to land the chain.

"Its the most differentiated and proprietary casual dining concept out there," said Richard Fradin, an analyst at William Blair & Co. in Chicago.

"Cheesecake Factory is going to be one of (a developer's) the first choices," agreed Michael Smith, a restaurant analyst with Kansas City, Mo.-based Fahnestock & Co.

Cheesecake Factory has stuck to a basic premise: that heaping portions at affordable prices will create a large base of repeat customers.

The formula has been in place since Evelyn and Oscar Overton and their son David, now the chairman and chief executive, opened the first Cheesecake Factory in Beverly Hills 23 years ago to leverage the dessert making operation the family moved from Detroit to L.A. in 1972.

"There are no clones of the Cheesecake Factory concept after 23 years," said Jerry Deitchle, the company's chief financial officer. "We have a unique brand identity and a very complex operation with a high investment cost."

Creeping upscale

The track record paves the way for the Grand Lux Caf & #233;s, the second of which will open in the Beverly Center this fall. The company has been encouraged by the performance of its initial Grand Lux, which opened in Las Vegas in 1999. That operation is expected to hit $20 million in revenues this year, up from $18.5 million last year.

Expansion during tough fiscal times is nothing new for Cheesecake Factory, which had only five restaurants when it went public during a recession in September 1992.

As a result, investors have been reaping the rewards of a stock that closed Aug. 1 at $30.21 a share, near its 52-week high of $32.96 and up from a split-adjusted 52-week low of $20.04.

The company reported a net income of $10.2 million (21 cents per diluted share) for the second quarter ended July 3, up from $8.2 million (16 cents) for the same period in 2000. Second quarter revenues were $132.2 million, compared to $105.2 million in the second quarter of 2000.

"Our growth is controlled," said Howard Gordon, company spokesman. "Every restaurant we have is under our ownership and management. We know what our limitations are. We know how many restaurants we can effectively open a year."

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