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PORT CHARLOTTE, FL-To spur its aggressiveexpansion plans, Obee’s Franchise Systems Inc. wentpublic last week. The decision to become a publiclytraded company–OBFC in the Pink Sheets–was made byObee’s parent company, Ultimate Franchise SystemsInc., which acquired Obee’s in June 2004.

“The discipline that being a public company demands isa good thing for Obee’s,” says Peter Brown, presidentof Obee’s.

Obee’s, which offers soups, salads and subs, waslaunched nine years ago Jim Patrick in the sleepyretirement community of Port Charlotte, FL. It foundimmediate success and little competition. Today,Patrick is Obee’s CEO and oversees 78 Obee’sacross the nation. Another 70 locations are in theplanning stages or under construction.

“We’ve grown very rapidly since we decided tofranchise in 2002,” Brown says. Following an areadeveloper format, the fast-casual restaurant hopes toopen 1,500 stores over the next decade. Obee’sexpansion is focused on five distinct areas: Florida,California, Chicagoland, the Washington, DC, metro areaand the group of Texas, New Mexico and Oklahoma.

Brown tells GSR that Obee’s is facing significantcompetition in these markets from larger chains such as Subway and Quizno’s, and smaller chains like FirehouseSubs, Jimmy Johns and Schlotzsky’s. “We’re going rightinto the lion’s den in these areas. We certainly don’tlack for competition,” he says.

But Obee’s, which has stores ranging from 1,200 sf to1,400 sf, is facing that competition head on. “We’reconfident in the quality of our product,” Brown says.”My war cry is that if you think Subway is fresh, thencome try Obee’s.”

Obee’s decision to step into the so-called lion’s denis pretty smart, experts say. “Most chains wouldrather go to markets that are busy and try to getpeople to try their product rather than go to a marketand have to create the demand,” says Ron Paul,president of Chicago-based Technomic Inc., a retailand restaurant research firm.

Moreover, consumer demand for Obee’s (and itscompetitor’s) product continues to grow. “There’s apretty large market,” Paul says. Sales in the sandwichsegment of the restaurant market, which does notinclude burgers, are expected to reach more than $15billion by 2007.

With the IPO, Obee’s executive team hopes push thechain into a leadership position–a chain that takesa bite out of competition and eats other companies. “Ispent time in the pizza business, and I think thesandwich business is going the same way–we will seeconsolidation,” Brown says.

For Obee’s, however, the biggest challenge may not becompetition. “The challenge now is to keep up with ourown growth,” Brown explains.

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