5 Black-Owned Businesses Making a Buzz

Schlotzsky’s Franchise Partner Charles Reed was recently recognized by The Street as one of five black-owned business owners who have found success. This clip features Charles. For the complete list of business owners, click here.

By Laurie Kulikowski

NEW YORK (MainStreet) — Along with Martin Luther King Jr.’s fight for social justice came goals of economic justice, and the famed civil rights leader would be pleased to learn that
today black-owned small businesses are one of the fastest-growing segments in the small business sector.

From 2002 to 2007, the number of black-owned businesses rose by 60%, to 1.9 million – more than tripling the national rate of 18% to become approximately 7% of all small businesses, according to the most recent data available by the U.S. Census Bureau’s Survey of Business Owners.

In 2007, nearly four in 10 black-owned businesses operated in health care and social assistance as well as in the repair, maintenance, personal and laundry services sectors.

Black-owned businesses, like the rest, took a hit as a result of the recession. But while obtaining capital is still hard for all small businesses, blacks have an even tougher time gaining financing.

Data from 2009 research by the Kauffman Foundation reveal “dramatic” differences in the capital injections of black-owned start-ups compared with white-owned new businesses.

The median personal wealth for whites is 11 times higher than that of blacks, according to the survey, which cited census data. Since personal savings are typically used as collateral or to be invested directly into the business, “low levels of black personal wealth may be detrimental to securing capital,” the research found, adding that black-owned start-ups “experience higher loan denial probabilities, pay higher interest rates than white-owned businesses and have low levels of start-up capital.”

The survey tracked nearly 5,000 businesses founded in 2004 over their early years of operation.

“Having less access to capital not just at start-up, but also in subsequent years, could have a detrimental effect on black-owned firms’ long-term performance,” says Robert Litan, vice president of Research and Policy at the foundation.

“Anything that you deal with in business … is exacerbated for the minority community,” says Daryl Williams, CEO of the Urban Entrepreneur Partnership, a Kauffman affiliate. “If there is a lack of access to capital for general population, it’s exponentially higher for the minority population.”

As we celebrate King and his work, it’s good to know there are plenty of black entrepreneurs who have bucked the trend. Here are five business owners who had a dream and made it come true:

2. Charles Reed 
Owner of five Schlotzsky’s in Texas
Lesson: Listen to your gut.
Charles Reed got his entrepreneurial kick-start in 1993 when he decided to leave his job in HR at a large oil company and buy with his wife a Schlotzsky’ssandwich shop in Plano, Texas.

Nearly 20 years later, the couple owns five Schlotzsky’s, all in Texas.

“I was working for a major corporation and I was just looking for a change,” Reed says. He decided on franchising; he wanted something that was local, but had opportunity for expansion.

But being your own boss comes with pros and cons. “I have a lot of responsibility,” Reed says. “That being said, I do have a fair amount of opportunity to arrange my day in a way that fits the things that I am doing.”

“The most important thing is it allowed me to provide appropriate jobs for people, and that’s important to me,” he adds.

As a minority, though, Reed acknowledges that finding capital has been a challenge. “For me the challenge has always been, where do you get the cash to grow and [to be able to] build the appropriate banking relationships — that’s always been an issue for a small business, and blacks in particular,” he says.

“If you have the appropriate training, the appropriate amount of capital and the understanding of how much time and work is involved in it, then I think that the opportunity will be there,” he says. “Learn as much as you can about the endeavor you are going into and recognize that whatever you think the cost is, add another 15% to 20% to it and more time. In addition, never eat your seed money, and spend a whole lot less than you make.”

But probably the biggest lesson Reed has learned is to follow your instincts, even when others contradict you. “Instincts are all of your experiences and training. If it tells you contrary to what someone is trying to tell you to do — stick by your guns and be willing go down the path that others may not,” he says.

For instance, two years after Reed bought his first store, he saw an opportunity to build a location on a busy highway in Plano. At the time, it didn’t have much else going on around it. Schlotzsky’s corporate didn’t think the site he had chosen would be very successful. Reed went ahead with the store opening anyway. Today, he says, the area surrounding the location is fully developed, with more than 150,000 cars that pass by on a daily basis. And his Schlotzsky’s gets to reap those customer benefits.

“I’m local and I believe I have better local knowledge,” he says. “I did it anyway and it did fine.”

Source: The Street (Click for the list of all five business owners)

Settle in with Schlotzsky’s Premium Ribeye Steak Sandwiches

Schlotzsky’s brings back trio of mouth-watering, crowd-pleasing ribeye favorites

Schlotzsky’s^® heads into the holiday season with the return of its popular premium ribeye steak sandwiches. From now until February 26, the home of The Original^® round toasted sandwich will feature three new, limited-time-only signature sandwiches made with premium ribeye steak—the bacon & smoked cheddar ribeye, the mushrooms & grilled onions ribeye, and the guacamole & red peppers ribeye.

“Our guests fell in love with these tasty sensations last year, so we knew we had to bring them back for an encore,” said Kelly Roddy, president of Schlotzsky’s, expressing his enthusiasm for the company’s second For Goodness Steak winter promotion. “These premium sandwiches reflect our Lotz Better^® brand promise. Plus, they are super hearty for the winter season and give our guests a steak-loving reason to return.”

The three new signature sandwiches include:

Bacon & Smoked Cheddar Ribeye: featuring strips of juicy ribeye steak, crispy bacon, red bell peppers and smoked cheddar cheese with chipotle mayonnaise, served on Schlotzsky’s signature, Fresh-from-Scratch^® toasted sourdough bun.

 

 

 

 

Mushrooms & Grilled Onions Ribeye: made with strips of hearty ribeye steak, caramelized onions, portobello mushrooms, provolone and swiss cheese with garlic pesto and creamy horseradish dressing, served on Schlotzsky’s toasted sourdough bun.

 

 

 

Guacamole & Red Peppers Ribeye: thick strips of ribeye steak paired with fire-roasted vegetables, pepper jack cheese, guacamole and chipotle pesto, served on Schlotzsky’s toasted sourdough bun.

For more information or to find the nearest location, visit www.Schlotzskys.com.

The Schlotzsky’s-Cinnabon in Willis, TX at 12709 I-45 South is OPEN TODAY! The first 50 people to buy a 6-Pack of Cinnabon Classic Rolls will get free Cinnabon for a year! That’s one free Cinnabon Classic Roll every week for 52 weeks! And on Friday, November 18, the first 50 people to buy any Schlotzsky’s sandwich will get a free Schlotzsky’s sandwich each week for a year! You can also stop by early on Thursday for the Chamber Ribbon Cutting at 8:15 a.m. See you in Willis!

Schlotzsky’s Makes Huge Entrance into Philly with Record-Breaking 30-Unit Deal

Local Multi-Unit Franchise Group Commits to Opening Iconic Fast Casual Sandwich Restaurants; Separate Agreements Call for Cinnabon and Carvel Concepts inside Each Location

Schlotzsky’s^® announced today that it has signed a history-making franchise deal to bring 30 new restaurants throughout the Philadelphia metro area that would also house Cinnabon^® and Carvel^® franchises inside the buildings.

Schlotzsky’s, Carvel, and Cinnabon are all part of the parent company FOCUS Brands Inc.^®. The three iconic food franchises began partnering early last year to open tri-branded locations and have seen robust sales due to this strategy. In total, the new tri-branded restaurants resulted in a total of 90 franchise agreements to be signed—the largest in Schlotzsky’s 40-year history.

Company executives said the first restaurant is set to open during the first quarter of 2012, with several scheduled to open throughout the remainder of the year. Signed with Philadelphia-based multi-unit franchise group Prayosha Philly, LLC, this major development agreement includes growth into Philadelphia, Bucks, Mercer, Montgomery, Chester, Burlington, Gloucester, Camden and Delaware counties. No stranger to the franchising industry, the Prayosha Philly group owns many hotel franchise concepts throughout the tri-state area, as well as several Dunkin Donuts^® and Moe’s Southwest Grill^® locations, which is also part of FOCUS Brands.

“This is by far the largest franchise deal in our company history,” said Schlotzsky’s President Kelly Roddy. “Demand for our brand has been growing in the Philadelphia area, and we’re thrilled to enter the market with such a talented group of business savvy entrepreneurs.”

The Philadelphia deal marks the third major development agreement for the company in the past five months alone. In June 2011, Schlotzsky’s announced it had struck deals to open 25 tri-branded locations throughout New Jersey and Texas.

Chirag K. Patel, principle of Prayosha Philly said, “With the success we were experiencing with Moe’s Southwest Grill, our team began researching its sister brands and ways we could expand our portfolio with tri-branded locations. Through conversations with Schlotzsky’s executives and franchisees, we felt their principles mirrored our own. Everything from their culture to their partnership approach with franchisees exceeded our expectations. This is an iconic brand that has clearly stood the test of time, and we look forward to introducing it to Philadelphians.”

To be situated in both traditional and non-traditional venues such as train stations, these new locations will feature the brand’s refreshed ‘Lotz Better^®’ look. The contemporary design incorporates a bright, vibrant color scheme, tongue-in-cheek phrases, circular-themed photography as well as a newly implemented service model where crew members hand-deliver food to the tables.

With more than 350 locations worldwide, Schlotzsky’s continues its growth momentum by aggressively targeting markets in Texas and in untapped markets around the country including  Atlanta, Charlotte, Denver, Orlando, Tampa, Kansas City, Nashville, Phoenix, Raleigh and St. Louis for multi-unit developers. Roddy added that, ideally, Schlotzsky’s plans to have upwards of 700 locations by 2015.

For more information regarding the Schlotzsky’s franchise opportunity, visit http://www.schlotzskys.com/cms/franchise.

 

 

Schlotzsky’s talks tri-branding, menu revamps

 

A Q&A with Kelly Roddy, president of Schlotzsky’s

 

November 11, 2011 | By Ron Ruggless

 

With a reimaging effort completed in half of its restaurants, Schlotzsky’s continues to expand its menu, with pizza and salads among the traditional sandwich offerings, and grow its tri-branded locations with sibling brands Carvel and Cinnabon.

 

As a result of these efforts, the 356-unit Schlotzsky’s has seen its customer demographics skewing younger and more female, and same-store sales increases continuing for a sixth year, said Kelly Roddy, president of the Austin, Texas-based Schlotzsky’s division of Focus Brands, which also owns Carvel and Cinnabon.

 

A company spokeswoman said the results have boosted revenue at the remodeled locations for the 40-year-old brand and resulted in new franchise agreements, including 25 for the tri-brand stores in central Texas and New Jersey.

 

EARLIER: Focus Brands grows tri-branded locations

 

Roddy spoke with Nation’s Restaurant News about Schlotzsky’s initiatives.

 

Of your 356 units, how many are the new prototype and how many are reimaged?
We will have 35 of the new prototype and new look open by the end of the year. The entire system will be 100 percent reimaged — having painted all the new colors, all the new graphics, all the new signage, all the new menu boards.

 

How many are co-branded and tri-branded units?
By the end of December, 165 of the restaurants will have Cinnabon and around 30 will have Cinnabon and Carvel in the tri-brands. Everything that opens starting next year will be a tri-brand. We’re targeting somewhere between 40 and 60 openings next year.

 

What are the major changes of the reimaging?
We’ve changed the prototype to the more vibrant, hip new colors. We’ve changed the wall coverings from Old World deli style to a new, hip, more relevant art and design with quirky and unique sayings on the wall like “No Shirtzsky’s, No Shoezsky’s, No Schlotzsky’s.” It makes the restaurant more fun. We’ve gone to softer seating with some booths in the restaurants.

 

Have you made any changes to menu offerings?
All our salads, instead of being packaged, are made to order and served on plateware. All of our soups are served on plateware. We’re also doing “Pick 2” offers in all our restaurants, so you can order a half a sandwich and soup or half a sandwich and salad or soup and salad.

 

What changes have you seen in customer demographics?
It has brought in a younger demographic and also increased our female customer count. Prior to the new prototype, we were at 52 percent male and 48 percent female. And now we are 52 percent female and 48 percent male. We believe we’ve kept all the male customers and we’ve just increased our customers. Our frequency of 18- to 25-year-olds was our biggest increase. Of the new customers we are seeing in the restaurants, it is mostly 18- to 25-year-olds that increased. The second biggest increase was 25- to 35-year-olds. That’s obviously good for us. Before we were doing anything, we had a 45- to 55-year-old consumer that was pretty much pretty higher income, predominantly male and aging. We needed to attract a younger customer. I think we’ve been able to accomplish that with the healthier menu options and the new, more relevant design.

 

Do the tri-brands require a larger footprint?
They are the exact same square footage: anywhere from 2,800 to 3,200 square feet. We were at 72 seats before and our newest store here in Austin is going to have 85 seats.

 

Have sales of any menu items increased?
We’ve doubled our salad sales and our soup sales have increased significantly. This is our sixth year in a row of positive comps.

 

What’s on the horizon?
We are really going to be going after pizza sales. It’s a smaller percentage of our sales now. We don’t serve it on traditional pizza dough. We use our sourdough bread as the crust. We use pesto and put it through our cheese-melter oven. Rather than being a 20- to 30-minute pizza that you would get from the pizza chains, you can have a made-to-order pizza through the drive-thru in three to five minutes. … We’ve done some tests and doubled the pizza sales.

 

Have you changed the pizza offerings?
We introduced an entire new assortment of flavors in September. The initiative to drive sales is a marketing campaign that will launch next year. We’ll offer the personal size eight-inch and also a 10-inch. … Right now, less than 10 percent of our sales are pizzas. In the test stores where we’ve put marketing behind it, it’s nearly 20 percent of sales.

 

Focus Brands is an affiliate of Roark Capital Croup, the private-equity firm in Atlanta, and also owns the Moe’s Southwest Grill restaurant brand.

Source: Nation’s Restaurant News

 

 

Schlotzsky’s Bringing Food and Jobs to El Paso

Schlotzsky’s Bringing Food and Jobs to El Paso

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Franchise Partner Danny Quintana opens a new Schlotzsky’s-Cinnabon-Carvel in West El Paso at 7040 N. Mesa.

Schlotzsky’s-Cinnabon opens in El Paso

The Schlotzsky’s-Cinnabon in El Paso at 7040 N. Mesa Street is OPEN TODAY! The first 50 people to buy a 6-Pack of Cinnabons will get free Cinnabon for a year! That’s one free Cinnabon Classic Roll every week for 52 weeks! Stop by at 10am for the Chamber ribbon cutting and celebrate with us!

 

Schlotzsky’s-Cinnabon opens in Peachtree City, GA

We are officially OPEN in Peachtree City!  The first 50 people to buy a 6-Pack of Cinnabons will get FREE Cinnabon for a year and the first 50 people to buy a Schlotzsky’s combo meal will get FREE Schlotzsky’s for a year!

Come see us at 2771 W. Highway 54!

Chain Profile: Schlotzsky’s

This restaurant chain used its signature round sandwiches to inspire an updated interior design while leveraging a custom-made equipment package to rejuvenate operations.

By:  Dana Tanyeri

Like many in middle age — people and restaurants alike — Schlotzsky’s had become frumpy. The Austin, Texas-based sandwich chain, which turned 40 this year, still had a popular signature toasted sandwich to tout, but just about everything else about the concept had become tired, inconsistent and borderline irrelevant in today’s competitive fast-casual arena. With growth stalled and unit closures on the horizon, some serious “nipping and tucking” was necessary.

Enter FOCUS Brands, the multiconcept operator that acquired Schlotzsky’s in November of 2006. At that time Schlotzsky’s had about 365 units nationwide and systemwide sales of $210 million. Initially focused more on fundamentals such as customer service and making simple cosmetic improvements than on mapping out a growth strategy, FOCUS Brands brought on Kelly Roddy as Schlotzsky’s new brand president in 2007. Since then, Roddy and his team have systematically sized up and reimaged Schlotzsky’s, giving it a new look, a new style of service, new ways to boost unit profitability, and a whole new brand promise, through which every Schlotzsky’s move is now filtered. That promise is simply stated: “Lotz Better.”

“We knew we had to grow the company, but we also knew we weren’t going to grow until some things were fixed,” Roddy says. “We weren’t relevant. Being a 40-year-old system, we were inconsistent across the country, with a few different prototypes out there. We ended up reimaging the entire system and put together this brand filter that says anything we do is going to be ‘Lotz Better’ than what the competition is doing. If it’s not, we’re not going to roll it out. We consumer panel it. We run it through our franchise advisory group. We test it, tweak it, go back and test it again. It’s a time-consuming process, but we’re really excited about the results we’re getting.”

That process applied to the chain’s contemporary new look, as well. Teaming up with Atlanta-based Back Lot Productions, a brand development and design firm, Schlotzsky’s spent about two years doing consumer research to understand the brand’s strengths (its food) and weaknesses (tired look and feel, inconsistency, spotty geographical coverage) and what its customers wanted. Designs were drawn up and put before consumer panels.

“We got a lot of feedback about what our consumers would consider a very relevant, hip, cool design, and ultimately we built one new prototype unit,” Roddy says. “We basically took an old store in Waco, Texas, across the street from the new prototype. The type of location was the same — a freestanding drive-thru — and the menu was identical. Only the look and feel was different, but we saw phenomenal impact. Before and after research showed that customers at the new prototype thought we were hipper and more relevant. There was a perceived improvement in food quality. We started skewing more female than male, which was a change for us. Our consumers even perceived us to be more environmentally friendly, though we really hadn’t taken any steps in that direction.”

The best impact, however, was on revenues. Sales at the new prototype, which opened in the fall of 2009, were 40 percent higher than in the old unit that it replaced. Roddy and company were now armed with solid confirmation that they were on the right track.

As he puts it, “It was an overall home run our first time at bat.”

All new stores have the new look, and the company is in the process of reimaging or doing full remodels on all existing Schlotzsky’s units nationwide; the company intends to complete all basic reimaging by the end of 2011. Roddy says that new-store success has been strong, but he’s even more excited about the results being achieved by remodeled units — an average 28 percent increase in sales.

Signature Sandwich Inspires New Design
The inspiration for a key element in Schlotzsky’s new look came from its signature sandwich. “There are dozens of sandwich chains in the U.S. Most are subs or square, but there really is nobody who does a round bun baked fresh from scratch in the stores every day,” Roddy says. “It differentiates us, and it’s our signature shape; so everything in the new design is based on the round shape.”

To that end, order and drink counters are now rounded.

Tables are round, patterns on the tables are round, and lampshades are round with round patterns on them. The shape is used as a design element in all merchandising materials and signage, on the company’s website, in its packaging and new logo, which features the brand promise “Every Bite Lotz Better” inside a circle with the “o” in Schlotzsky’s highlighted in bright red to draw attention to the shape. Colorful circles are even painted on building exteriors to carry the theme.

While the company kept its heritage color scheme of red and green, it introduced more contemporary shades of those colors and ditched its original Italian flag and wheat sheaves imagery. Higher-quality furniture, including soft seating, was added as part of the company’s commitment to offering a dining experience that’s “Lotz Better” than what customers would find at competitive restaurants.

The new Schlotzsky’s also features a new style of service. Previously, guests placed orders at the counter and were given a number. When guests’ food was ready, staff announced the number via microphone, and guests returned to the counter to pick up their orders. Now, after orders are placed at the counter, servers deliver them to the tables, eliminating the noise of microphones and the extra hassle for guests. “It’s taken about three years to get that change implemented through the entire system, and we’re pretty much there now,” Roddy says. “It came down to value at the restaurant. As the economy got worse, we had to improve our value. Everyone else started doing dollar menus, but that’s not the realm we play in. We had to increase the value, so we started delivering the meals to the tables. It’s another part of our brand filter: our service and our environment need to be ‘Lotz Better.’”

Along those same lines, minimal but impactful changes were made to the food itself. The Schlotzsky’s menu touts its original round toasted sandwiches on fresh-baked sourdough buns, as well as wraps, salads, gourmet pizzas and soups. Specifically, a new program featuring salads freshly made to order and plated on china replaced the company’s previous prepackaged grab-and-go options. “This was our biggest change from an operations standpoint,” Roddy says. “We had to tweak the recipes to be able to prepare them fast enough to order and added a salad table in the kitchen. We also expanded our pizza offering to include a 14-inch version in addition to our traditional eight-inch pizza.”

Co-Branding Delivers New Revenue Streams
Another major change at Schlotzsky’s since its acquisition by FOCUS Brands is the introduction of co-branding. All new units going forward as well as many existing units will feature not only the Schlotzsky’s regular menu, but also Cinnabon and Carvel branded products. Those concepts, also owned by FOCUS Brands, are seen as complementary to rather than competitive with Schlotzsky’s and so far have proven profitable additions to the mix, according to Roddy.

Initially adding them as separate “restaurants-within-a-restaurant,” the company has since switched to a fully integrated co-branding strategy. “It took us a few years to get it right, but the concepts are branded into the restaurants front and center. We tested separate kiosks to the side of the main order counter in some units, and in some we tested integrating them into the main counter,” he says. “We found that they did just as well if not better when integrated. It takes up a lot less space and doesn’t require any additional labor or supervision, so that’s the model we’re using going forward.”

With Schlotzsky’s own dessert menu already in place —cookies, cheesecake and carrot cake — company officials had some concerns that the new sweet additions might cannibalize sales. They didn’t. Rather, the addition of Cinnabon and Carvel sparked average check increases from about $7 for a standard sandwich-chips-and-drink order to $9.85 on average including the additional branded products. Overall, the move led to an increase in total sales of what Roddy calls the treat category from the previous 1.5 percent to 2 percent of sales to an average of 10 percent to 12 percent. To date, Cinnabon drives most of the incremental volume.

“What we saw was that Cinnabon wasn’t seen as a dessert but more as a treat and that our regular desserts were still ordered as desserts,” Roddy says. “About half of the Cinnabon sales are to people just coming in for a personal treat. A lot also go out as multipacks purchased to take home or back to the office to share. We’ve seen improvement in sales in midafternoons and evenings when people stop in for a Carvel ice cream treat.”

Roddy notes that no major equipment or layout changes were needed to facilitate the co-branding effort. “We just had to get creative. Some of the products took additional refrigeration and/or freezer space, but at the end of the day we had it.”

He adds that this year the company is opening up a Cinnabon inside of an existing Schlotzsky’s at the rate of one every four days. Existing franchisees also have the option to purchase Carvel licenses. All new Schlotzsky’s units going forward, however, will incorporate both Cinnabon and Carvel brands.

Equipment Ensures Speed of Service
Although Schlotzsky’s added value and a service element with table runners, the company also keeps the “fast” part of fast casual as an operational mandate. In particular, drive-thru service times must be three minutes or less. Equipment made to spec, with an emphasis on speed, enables that to happen. The company has partnered with key manufacturers for its ovens, in particular, and requires its franchise partners to install specified brands only.

“We’re looking at speed. The sandwich has to get to a certain temperature in a certain amount of time. There are only so many pieces of equipment that will work for us. Our vendors worked with our chef to get the specs just right, and we hold very tightly to those specs to ensure product consistency,” Roddy says.

Schlotzsky’s ovens include proofers and bakers for its signature round sourdough bread, as well as belted cheese-melting ovens that toast the sandwiches. Employees use a two-sided prep line, with one side used for preparing in-restaurant orders and the other side for drive-thru orders. At the start of the line, an employee assembles meats and cheeses from a refrigerated table onto the customer’s choice of bread and places it onto the melting oven’s conveyor belt. As the warm sandwich comes out the other end, another employee finishes it with the appropriate cold toppings and garnishes from another refrigerated table.

Other key pieces of equipment include slicers, refrigerated tables for salad prep, and other general prep tables, as well as refrigerators and freezers.

Roddy says the company’s new prototype brought no significant changes to the size, layout or flow of the back of the house. It also won’t impact overall unit opening costs.

In terms of equipment, Roddy notes that the company has taken out as much as it has added in most areas, so no big changes have been made. One exception, however, is ventilation hoods. Since Schlotzsky’s changed several years ago from gas ovens to electric, ventilation hoods are no longer required in most units, unless they’re required by a specific municipality.

New Growth Strategies Set in Motion
With its new prototype being rolled out systemwide, co-branding paying off and franchise activity heating up, Schlotzsky’s is poised for significant growth in the years ahead. The company’s goal is to nearly double to 600 units by 2015. It intends to get there by leaving another aspect of the old Schlotzsky’s behind: its approach to franchising. Namely, it is turning away from its legacy model of one- or two-unit, hands-on owner-operators.

“There are a lot of those folks still out there who we’re supporting,” Roddy says, “but that’s not the franchise partner that we’re doing agreements with today. We’re going after larger, well-capitalized partners that can develop multiple stores in a market. And unlike some chains, we require our partners to have industry experience.”

In addition to reimaging or remodeling all existing stores, the company expects to have 20 new stores open before the end of this year. Another 40 to 50 are in the pipeline for 2012, and even more momentum is building for 2013. While most of these new stores will be franchised, the company plans to add corporate stores at a rate of 10 percent to 15 percent of the franchise system’s growth.

Geographically, the company’s target markets are many and varied, but its growth strategy starts with filling in markets where it already has a presence. “In the past, there was a real shotgun approach to growth,” Roddy says. “Today, our strategy is to fill out the markets that we’re already in and grow contiguously from there. We’ve got the design right, our average unit volumes are right, and we’re ready to roll.”

Facts of Note:

• Founded: 1971, part of FOCUS Brands since 2007
• Headquarters: Austin, Texas
• Menu signature: The Original® Sandwich
• Service model: Fast casual
• Services: Dine-in, drive-thru, takeout, catering, delivery
• No. of units: 350+
• Annual sales: $241 million
• Typical locations: End cap or freestanding with drive-thru, some nontraditional (e.g., airports)
• Key expansion markets: Dallas-Fort Worth, Denver, Phoenix, Atlanta, Orlando, Miami, Philadelphia, Nashville, Kansas City, Raleigh, Charlotte
• Hours of operation: 10 a.m. to 10 p.m. daily
• Average check: $9.85
• Average unit size: 2,800 to 2,300 square feet
• Total unit cost: $390,000 to $625,000
• Average kitchen space: 1,400 square feet, or one-third of restaurant size
• Total equipment investment/unit: $210,000 to $225,000 (with Cinnabon and Carvel)

Key Players

• President: Kelly Roddy
• Chief Marketing Officer: Greg Regian
• VP Purchasing: Matt Diana
• VP Restaurant Development: Jay Allen
• VP Company Operations and Training: George Schaefer
• VP Franchise Development/Sales: David Wheeler
• VP Research and Development: Paul Freeman
• Food Distributors: SYGMA, Gordon Food Service
• Smallwares and Equipment: The Wasserstrom Company, Columbus, Ohio; Concept Services, Austin, Texas
• Architect: The Roberts Group, Lexington, Ky.
• Design: Back Lot Productions, Atlanta, Ga.

Source: FES Magazine

Four Decades of Schlotzsky’s: It’s Time to Celebrate!!

National Promotion Gives Lucky 40 Fans Free Schlotzsky’s for a Year; Shops Nationwide Offer Special Promotion Oct. 4 for Legendary Sandwich

From a small mom-and-pop shop in South Austin to more than 350 locations worldwide, Schlotzsky’s has been satisfying taste buds with its round, freshly-baked buns for the past 40 years.

Celebrating its anniversary on Tuesday, Oct. 4, 2011, Schlotzsky’s invites consumers to enjoy the sandwich that launched the brand’s success…The Original^®. Offered all day long, guests can purchase The Original (small) for a special promotional price of $1.99, with no coupon necessary.** Plus, throughout October, 40 lucky fans will win free Schlotzsky’s for a year by signing up on the Schlotzsky’s Facebook page or at any Dallas/Fort Worth area location.

“This October, we are celebrating where it all began with the sandwich that put Schlotzsky’s on the map—The Original,” said Kelly Roddy, president of Schlotzsky’s. “With a taste of the long-standing Schlotzsky’s tradition, The Original reinforces why our brand has stood the test of time and 40 years later we’re still enjoying them. We are sincerely grateful for our fans’ ongoing dedication and support during the past four decades.”

Launched in 1971 in a small shop on South Congress Ave. in Austin, Texas, Schlotzsky’s was home to only one menu item: an one-of-a-kind sandwich called The Original—an 8-inch freshly-baked sourdough bun stuffed with three meats, cheeses, lettuce, tomato, olives, and dressing. Inspired by muffulettas in an Italian grocery store in New Orleans’ French Quarter, The Original was an instant hit in South Austin.

Fast forward to today, and the brand has more than 350 corporate and franchise locations worldwide and a menu that offers guests 15 different sandwiches on its famous, unique and round freshly-baked buns, as well as gourmet pizzas made with Fresh-from-Scratch^® crusts, freshly made-to-order tossed salads, and a variety of soups and delectable desserts.

Embracing its past and looking towards the next 40 years, Schlotzsky’s recently launched a bold nationwide reimage campaign to make all locations Lotz Better^® with a refreshed color scheme and a circle theme that reflects the unique round sandwiches offered by the restaurant. The new contemporary design incorporates a fresh, vibrant color scheme, tongue-in-cheek phrases, circular-themed photography as well as a newly implemented service model where crew members hand-deliver food to the tables. Additionally, each new Lotz Better location features a partnership with its sister company, Cinnabon^®. With nearly two-thirds of the franchise system already reimaged, company plans call for all locations to have the Lotz Better look by the end of 2011.

For more information or to find the nearest Schlotzsky’s location, visit www.schlotzskys.com.

** Offer valid at participating Schlotzsky’s locations.