But to really push beyond the borders of its Boulder, Colo., base, the 52-unit quick-service chain has devised a three-pronged strategy. The plan, executives say, will seed new markets, mainly midsize Midwestern cities, without overly taxing the company's resources.

Good Times will continue to open company stores, an additional 12 to 15 by 2010, in Colorado, eventually owning about 30 percent of the system. It will franchise, not to big developers but to smaller operators with only several stores each. Good Times also has signed a 25-store development agreement with a joint-venture partner, led by Dave Grissen, a member of Good Times' corporate board.

The joint-venture group will fund the restaurants, while Good Times will manage them, taking a 5 percent management fee and percentage of sales in exchange. The arrangement will enable the chain to establish a presence in new markets quickly, “and then we can franchise around that base,” says Good Times President and CEO Boyd Hoback.

Good Times' prototype seats 70 and takes up 2,700 square feet. The $1 million building features one drive-thru, not two.

Good Times will open eight units this year, with a goal of 100 by 2010 in new markets such as Nebraska, Kansas, Missouri, Iowa, South Dakota and western Illinois.

“It's the smartest thing they've done in a long time,” says franchisee John Felton, who owns two stores in the Colorado Springs, Colo., area. “Denver is tapped out…to go into other markets now is the best move they can do.”

To prepare to expand, the chain has designed a 2,700-square-foot, 70-seat prototype that has a single, rather than a double, drive-thru. The configuration will make it easier to find sites, lets staff focus on dine-in customers, and looks and feels more upscale than a double drive-thru. Excluding land, the building costs about $1 million to build. A smaller prototype, at 2,000 square feet and 40 seats, costs about $850,000 to build.

What Good Times has not done, though, is roll out a value menu or “light” menu offering. However, last year the chain rolled out Bambinos, a line of 89-cent chicken sandwiches and 75-cent hamburgers. The sandwiches, with about 1.5 ounces of protein each, are sold in three and five packs and are meant to court a smaller appetite, not necessarily a price-conscious customer.

Good Times' limited menu focuses on burgers and fountain drinks. Its marketing slogan, “We're Gonna Be Big,” emphasizes its “boutique” nature.

Bambinos account for approximately 15 percent of the sales mix. That's good news for Felton, who applauds Good Times' strategy to stay out of the value-menu fray.

“We don't want to be a dollar place,” Felton says, though at his stores, Bambinos do reach customers “who are absolutely value-driven.”

Nor does Good Times reach health-minded customers. “We are a fairly indulgent occasion,” Hoback says. “We are burgers and frozen custard.” The chain has tested healthful items including side salads with lackluster results, and will continue to try to develop such products, Hoback adds.

Felton believes the smaller sandwiches serve the same purpose as a designated lower-calorie menu item. “I believe we're on the right track for what the consumer really wants,” he says.

The timing is right for a relatively high-end, quick-service burger concept, according to Hoback. “We have the brand really figured out,” he says, noting that the all-natural beef and focus on handmade fountain drinks separate Good Times from the major burger chains.

The natural beef, introduced three years ago, appeals to younger people and women, who account for almost half of the chain's customers. The ideal location is suburban, high-growth areas near big-box retailers, with a median income of $55,000 or higher. “Soccer moms are a good profile for us,” Hoback says.

Unit economics, he adds, are strong: The company has enjoyed 17 consecutive quarters of positive growth, and last year saw single- and sometimes double-digit same-store sales.

Felton says his restaurant in Parker, Colo., which opened four years ago, has a unit volume of $1.4 million, up from $1.1 million its first year. “There's sales growth and market share I've been able to pick up,” he says, adding that several quick-service burger concepts near his restaurant have recently closed.

Good Times President and CEO Boyd Hoback inked a 25-unit agreement with a joint-venture partner. The agreement, under which Good Times manages the restaurants in return for a management fee, “is no different than had we gone to the bank,” Hoback says.

A steady management team—top executives, including Hoback and Vice President of Marketing Robert Turrill, have been on board since the chain's inception in 1987—is a point in the chain's favor, says Felton, a former Burger King franchisee. “When I was at Burger King, I saw three CEOs in a year,” he says.

Felton adds that communication between headquarters and franchisees is stellar: “I have Boyd's cell number—I can call them day or night without a problem.” His last conversation with his franchise manager, Kit Mitchell, wasn't even about business: Felton called Mitchell to ask how his hip-replacement surgery had gone.

Hoback admits there are clouds on Good Times' horizon. Commodities prices are sky-high, no small worry for a chain whose menu relies on meat and dairy products. The volatile debt and capital markets also concern Hoback, as they're a potential source of funding for company growth.

And one expert cautions that the joint-venture partnership could backfire on Good Times. “I think franchisors should have a strong model” of a group of company-owned restaurants, “but they should focus on growing and developing the system,” explains Nick Bibby, a Shreveport, La.-based franchise consultant.

In Bibby's opinion, the joint-venture arrangement, in which others own the restaurants under Good Times' management, sets up a conflict of interest. “In my point of view, a franchisor should lead franchisees,” not manage their stores, Bibby says. “I've seen this kind of thing fail in the past.”

Hoback disagrees, calling the joint-venture partnership a financial agreement as much as a growth strategy. “There's no liability in it for us,” he says. The arrangement is the same as some hotel companies use, he explains, not surprising since several of Good Times' joint-venture partners are Marriott executives. (They declined to be interviewed for this story.)

“There's no liability we're taking on,” Hoback says. “It's no different for us than had we gone to the bank.”