Gray Brothers plans to close Mooresville cafeteria, sell building for $10M

Gray Brothers Cafeteria at 555 S. Indiana St. in Mooresville. (IBJ photo)

The owners of Central Indiana dining staple Gray Brothers Cafeteria plan to close the Mooresville restaurant and sell the building, part of an effort to cut costs and reorient the family-owned company’s business model.

The property at 555 S. Indiana St. is listed for $10 million by Greenwood-based brokerage Your Home Team. Constructed in 1979, the building spans 22,647 square feet and includes a kitchen, food service line and large dining room.

Jason Gray, a third-generation owner of Gray Brothers, said the cafeteria will continue to operate until the property is sold. The owners plan to reopen the cafeteria concept elsewhere but haven’t finalized details about where or when. The cafeteria has been operated by the Gray family since 1944.

“We do know that we will be reopening, and obviously relocating, because we won’t be at that Mooresville site,” he said. “But where and what exactly that looks like—right now, it’s still too early in the game, other than knowing that we will be doing something else.”

Gray clarified that while he doesn’t expect the cafeteria concept to fully go away, the family is “still trying to put all the pieces together and visualize what that looks like somewhere else.”

Gray Brothers, which has annual carry-out revenue of $2.5 million, has been featured on numerous television shows, including Travel Channel’s “Man v. Food,” as a bastion of Midwestern comfort food. Many of its offerings, such as its fried chicken and pies, are regularly considered among the best to be found in central Indiana based on consumer surveys and media reviews.

In October 2023, Gray Brothers announced it planned to begin offering franchise licenses for new carry-out locations in Indiana and other parts of the Midwest. At the time, Jason Gray told IBJ that the “cafeteria costs us a fortune” to operate, indicating at the time that changes could be coming to the company’s business model.

On Monday, he said the continued price hikes the restaurant industry continues to face have only compounded the issue over the past year, both in terms of food and health costs. He said the future could include the company leasing a smaller property or buying another site to build a new structure to house Gray Brothers Cafeteria.

“We’ve got a good brand and everything that was taught to me was from my grandfather, who built a great business,” Gray said. “So, it’s definitely heavy-hearted, but I don’t feel like we’ll be able to really focus on our future in this environment. I think that we can do good with it, and I’ve got confidence in what we do and what we’ve tried to be about for the last 80 years. I feel we’ll be able to to be able to make something of it and get this to where we want it to go.”

He also believes the franchise model can still work, as the company has received “super-positive feedback” from hundreds of potential franchisees since it began offering licenses. But he said the cost of starting up a franchise often seems more than most can take on—anywhere from $391,000 to $738,000, including the initial $35,000 franchise fee. That estimate from the company also includes construction costs, equipment and supplies, signage, attorney fees, fixtures, real estate costs and travel expenses for training.

Gray Brothers launched its own franchise carry-out location in Avon last year, ahead of Thanksgiving.

“Our biggest downfall with the franchise model is in taking that leap and spending that kind of money to be able to open up a franchise, we didn’t have one of our own [ancillary locations] going other than what we have in Mooresville,” he said. “So this also gives us a little more confidence that if we throw something new into the mix, we probably do pretty well with it.”

Editor’s note: This story has been updated to correct the brokerage firm managing the real estate listing.