Lenny's, which was founded in 1998 by Len Moore, a father looking for a way to pay for his daughter's college tuition, is in an explosive growth mode after being sold to Lenny's Franchisor, LLC two years ago. Heavily concentrated in the south and southeast with 84 stores, the chain has nailed down franchisee commitments for 600 new restaurants over the next five years, Knight says. He expects to have commitments signed by the end of the year for 1,000 new units in more than 14 states.

"We wanted to take this concept national, and we think we've done it in a smart way," Knight tells GSR. The chain has been selective in choosing its franchisees, assigning market developers to specific regions with the expectation that each one will develop at least five stores. "We're going about our growth differently from Subway or Quizno's, which typically have franchisees with only one or two stores," he says. "Our ideal franchisee is a more sophisticated operator who is well capitalized."

The chain, whose claim to fame is service and personality along with oversized sandwiches (the regular-size sub is 7½ inches with a half pound of meat and cheese) that are made from hand-sliced ingredients and doused with a secret sauce containing hot pepper relish, recently opened its first stores in Las Vegas through its market developer LVNR. The new franchisee plans to build 25 restaurants in the Las Vegas Valley, Knight says, opening up a new region for Lenny's. "Vegas is a big growth area and sets the stage for our expansion in the West," he says. The chain has recently signed agreements for several new stores in Sacramento, Reno and Lake Tahoe.