Forbes Profile Story
By: Karsten Strauss
For nearly 40 years, nighttime carousers ambling out of bars and nightclubs in New York City’s famous West Village neighborhood have had a stalwart option for their post-cocktail snack attacks. Founded in 1971 by Syrian immigrant Mamoun Chater, Mamoun’s Falafel has achieved almost cult status as it churned out Middle Eastern fare from its 200-square-foot shop for daytime shoppers, tourists, students on a budget and late-night party-goers. Now the operation is in the fourth year of its play to branch out through franchising, and has 10 shops up and running, with more on the way.
The story of Mamoun’s is a typical immigrant tale of family and hard work, says the founder’s youngest son Hussam Chater, a former lawyer who is a part owner and acts as the brand’s CEO. Chater’s three brothers—Nedal, Galal and Kinan—are equal part-owners and, because they are older, have greater clout within the organization. “I’m the CEO because of my skill set, but for all intents and purposes my brothers are my boss.”
The original Mamoun arrived from Damascus on U.S. soil in the late 1960s. “He was very poor,” says Chater. “He started the business after working all of these different odd jobs.”
Mamoun’s work ethic was considerable, and it was not unheard of for him to work all night and on into the lunch shift the following day. Over the years the restaurant gained a reputation as a great place for late-night eats, as Mamoun’s would sometimes stay open until 5 a.m. if there were customers to be served.
The shop was known to have celebrity sightings due its close proximity to hip music and comedy clubs, though the family remains mum about which celebs have graced their doorway. “We never called out musicians or actors because they like us to be low-key about it,” says Chater.
Mamoun’s has always been a family affair, and Mamoun, his wife Maria and their children lived on the same street as the restaurant, and everyone pitched in to run the business. “My mom made pastries in our kitchen in our apartment.” says Chater. The four brothers would help out in small ways, eventually taking on full shift responsibilities. According to their father, there always had to be a family member working at the restaurant. “If you weren’t there you had to be in school, and that was it.”
Hussam and Galal Chater eventually went in to become lawyers, but returned to the business when father Mamoun’s health began to deteriorate. He passed on in 2015, around about the time the four brothers began contemplating a jump to franchise.
Franchising seemed the obvious choice to grow the operation: ˆt was less expensive than spending capital to open new shops, and there seemed to be an awareness of Mamoun’s Falafel in other markets through word of mouth. “Any time we traveled everyone always knew about this business, our brand,” explained Chater.
The four brothers wrote a manual, incorporating their recipes and processes, and in 2016 began selling franchises, using franchise broker and developer FranSmart to help vet potential franchisees. Other brands that have employed FranSmart include Five Guys, The Halal Guys, The Hummus & Pita Co. and Qdoba Mexican Grill.
As of this report, Mamoun’s has ten locations in operation—four run by franchisees and the remainder owned by the company—in New York, New Jersey, Philadelphia and Connecticut. The brand has signed franchise deals to open more shops in Atlanta, Chicago and Los Angeles. Though the organization began selling franchises in 2016, it first turned a profit last year, reporting $27,777 in net income—a welcome financial change from its 2017 figures, which showed a $206,000 loss.
According to its Franchise Disclosure Document, Mamouns estimates that it costs about $800,000 to start a single new location, on the low end, including leasehold improvements, furniture and equipment, the initial franchise fee of $40,000, plus other fees. On the higher end, that estimate stands at more than $1.4 million. Once in operation, franchisees pay 6% of gross sales in royalty payments and an additional 2% of the gross to contribute to advertising, marketing and other brand development costs.
Making money is important to the four Chater brothers—as it is for every business owner—but Hussam Chater says he and his siblings feel additional pressures to succeed, given the hard work their father put into establishing the brand in the first place. “If we can take our father’s name and make it synonymous with a commitment to excellence and have it become part of the conversation with any national fast-casual brand—that’s’ what drives me and my brothers, and that’s what we’re working towards.”
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