Big Bet

Schlotzsky’s mega-deal puts SoCal in hands of neophyte ‘zee

By Beth Ewen

Schlotzsky’s is betting everything in its new Southern California market on one man: Moe Vazin, who owns two American Maid manufacturing plants and six Buy Low grocery stores that do a brisk deli business—but who has never operated a restaurant.

The Austin, Texas-based franchisor has inked a deal for 170 restaurants—yes, 170— with Vazin, who actually was pushing for up to 300 stores. “This one is by far the largest,” says Schlotzsky’s President Kelly Roddy about the deal. “We try to keep them under 30, and we actually try to keep them in the range of 10.”

But Roddy decided to end discussions with multiple prospects, each of whom wanted to open 25 or so restaurants, and put them all in Vazin’s hands, for a territory that includes Ventura, Los Angeles and Riverside counties, stretching from just south of Santa Barbara all the way to the Nevada/Arizona borders.

“There are very few people who have the business background to handle the volume of 170 restaurants, that have that capital to build out that quickly. It takes a very unique person to do a deal that large,” Roddy says.

Vazin says he likes Schlotzsky’s new format, which includes Cinnabon cinnamon rolls and Carvel ice cream, along with the flat round buns that define a Schlotzsky’s sandwich. All three are owned by Focus Brands in Atlanta, in turn owned by private equity firm Roark Capital, and Schlotzsky’s is the first Focus company to sell all three products under one roof.

“The new format is gorgeous,” Vazin says, adding he found Roddy and his management team to be “very, very receptive” and “very open-minded. We hit it off really well.”

Vazin says he’ll use funds from his operating companies to get the first five or so stores opened, and will seek bank loans and perhaps financial partners down the road. He’s working now to sign letters of intent for locations, and wants to get five to seven opened this year.

“They were looking for operators who were aggressive and had a long-term plan. I told them I’m not going to dabble in it,” he says, adding he’s downsizing his grocery store operation in order to focus on the restaurants. He’ll continue operating his American Maid plants in the Los Angeles area, which make small housewares such as plastic pitchers and storage tubs.

Vazin also sells imported goods through a related company, VMI International, and has real estate holdings tied to his family’s dealings in the supermarket business.

Many franchisors avoid cutting mega-deals with a single operator, especially someone new to the brand, and some scoff at the idea that all the stores will ever be built out. Roddy, too, acknowledges the risk in turning away seven or so operators who would all start building at the same time.

But Roddy is convinced. “Trust me, we had a lot of conversations about that,” Roddy says. “They’re used to running a large business, a multi-unit business, and they’re well capitalized.” That last point may have been most convincing, given the difficult times most franchisees face in raising money.

How long will it take to get those 170 stores open? “We are saying nine or 10 years. Moe is saying five years. I wouldn’t be shocked to see Moe get them open in five,” Roddy says.

Source: Franchise Times

Let Schlotzsky’s Take the Bite out of Tax Day with a FREE Sandwich

Join participating Schlotzsky’s restaurant on Tax Day – Monday, April 15 – for a FREE small The Original^® osandwich with the purchase of a 32oz. drink and chips. NO coupon necessary! Offer is good ALL DAY on Monday, April 15.

So make plans to visit Schlotzsky’s on Tax Day and snag your free Original.

*Valid only at participating Schlotzsky’s restaurants. Limit on small The Original sandwich per person, per visit. Not valid with any other offer, coupon or kid’s meal. Valid ONLY on April 15, 2013. 

Schlotzsky’s Shatters Company Record With Agreement for 170 New Restaurants

Fast-Casual Chain Inks Game-Changing Partnership to Build Huge Presence in Southern California

In a historic deal with far-reaching impact in the fast-casual segment, Schlotzsky’s^®, the home of The Original^® round-toasted sandwich and famous Fresh-from-Scratch^® buns, announced today it has signed the brand’s largest franchise agreement in more than 40 years. Anchored by its new Lotz Better^® model and consistent positive sales, the partnership calls for 170 Schlotzsky’s locations throughout California, including Los Angeles, Riverside, Ventura and San Bernardino counties.

Each of the new restaurants will feature a new, contemporary design and an upgraded service model in which crew members hand-deliver food to the tables. In addition, as part of a co-branding deal with Cinnabon^® and Carvel^®, the locations will include counters offering signature treats from the iconic dessert brands.

“The magnitude of this franchise agreement is a testament to the growing strength of our brand in the marketplace,” said Kelly Roddy, president of Schlotzsky’s. “Between this agreement in California and multiple others we’ve signed in the past year alone, the momentum is incredible. On top of the obvious benefits the expansion is having on our brand, it’s also creating job growth in communities around the country,” noting that the new locations in Southern California will create nearly 7,000 jobs in the next five years.

After successfully completing its initiative to reimage its 350-plus unit franchise system, executives of Schlotzsky’s are focusing on growing in markets where there is a demand for a high-quality franchise brand. In this newest deal, Moe Vazin is responsible for opening the 170 locations throughout the market. Prior to joining the Schlotzsky’s family, Vazin experienced much success with his extensive management experience, accumulating a portfolio of supermarkets, manufacturing and distribution in the retail industry.

“Obviously, we look very carefully at brands before making a significant investment like this,” Vazin said. “We had many reasons for choosing Schlotzsky’s, but the key factors were its high-quality, fresh sandwiches, pizzas, salads and soups, the fact that we can offer Cinnabon and Carvel under the same roof, and an incredible management team that shares our vision of the brand in Southern California.”

Roddy added that Vazin perfectly fits the profile for a Schlotzsky’s multi-unit franchisee. “He’s a top-notch operator, and we’re confident he will not only uphold our brand standards and reputation, but knock it out of the park by making us the top fast-casual destination in Southern California,” he said.

This partnership comes on the heels of Schlotzsky’s signing a multi-unit franchise agreement in May 2012 with regional developers John Fehmer and Anastasia Rusakov to open 25 new Schlotzsky’s locations throughout Orange County, Calif.

With more than 350 locations worldwide, Schlotzsky’s continues its growth momentum by aggressively targeting markets in Texas and untapped markets around the country for multi-unit developers. These markets include: Atlanta, Charlotte, Denver, Kansas City, Miami, Nashville, Raleigh, St. Louis and Tampa, as well as other underdeveloped markets through the United States. Roddy added that, ideally, Schlotzsky’s plans to have upwards of 700 locations by 2016.

For more information regarding the Schlotzsky’s franchise opportunity, visit http://www.schlotzskysfranchising.com/or call 800-846-BUNS.

 

Schlotzsky’s comeback story: The days of bankruptcy are long gone

 

February 4, 2013 - Cherryh Butler

Everybody loves a good comeback story, and if Hollywood were to feature one about a restaurant as opposed to an underdog sports team, Schlotzsky’s would be the star. After all, what’s more inspiring than a brand reclaiming a top spot in the industry less than a decade after filing bankruptcy? That story belongs to Schlotzsky’s President Kelly Roddy, the man who took over in 2007, and helped the nearly extinct chain to accomplish seven years in a row of positive comps. It’s also enjoying a huge growth spurt, opening 30 units in the past two years with plans to open at least 50 more this year.

“All round, Lotz better”

While most brands struggling to regain relevancy tend to overhaul their entire menu, Schlotzsky’s left it alone for the most part except for changing the salads — they’re fresh now — and a few other menu additions. Instead of changing the food, Roddy decided to concentrate on updating the look and feel of the brand. What sets Schlotzsky’s apart from competitors, he said, is serving sandwiches on made-from-scratch, round buns, as opposed to the subs served in most restaurants. Those round buns inspired the chain’s design element and new tagline, “All round, Lotz better.” (Click here to see photos of the new design.)

“It’s our brand filter, our promise to do everything better,” Roddy said.

The first unit to get the redesign was in Waco, Texas, in 2009, because if it worked there, “We knew it would work anywhere. Circles are just a cool design and you see them everywhere from on the walls to the lamp shades to our cups and bags,” Roddy said. “When you see a circle, we want you to think Schlotzsky’s.”

The design also incorporated fresh, modern colors, including apple green, sky blue and bright red mixed with some earth tones.

“It’s just a cool, hip look,” he said.

When sales increased at the Waco unit by 45 percent, Roddy and his team knew they were onto something and began building all the new units with the new look. They still had 350 “old” stores, however, that needed updated. They went to work planning how to use their marketing dollars to retrofit the other stores. It took a few years, but now nearly every unit has new paint inside and out, new signage, packaging and road signs.

Better service

Although customers still order at the counter, Schlotzsky’s staff bring their food to their tables. In the past, guests waited for their numbers to be called and had to fetch their orders.

“It’s now more of a sit down and relax atmosphere, and we’ve removed the clutter with the numbers,” Roddy said. “We also added more soft seating instead of mainly just hard chairs. There’s more booths and nice lighting. It feels more like a casual dining experience.”

The food comes on china as opposed to paper products, which also upgrades the experience.

Branding together

The chain also found another way to increase sales; it added a Cinnabon Express to about 200 of its locations, and 30 units now house Carvel Ice Cream units.

“When we add these brands, we are more of a complete package,” Roddy said. “We may be selling ice cream to one out of 10 customers during the day, but it’s more about creating family events at night. It helps bring in more families. We’ve seen a nice little bump in the Carvel stores at dinner.”

Cinnabon, which sees half its sales as take out, also encourages guests to spend more money.

“They’ll stop in for lunch and then grab Cinnabon to go,” Roddy said. “It’s a very inexpensive way to put in another national brand and bring in customers.”

Looking ahead

Schlotzsky’s is in full growth mode, said Roddy, who predicts the spurt won’t stall anytime soon. The chain, which has a presence throughout the States, has sold more agreements in Texas and Oklahoma and has also targeted Phoenix and California. Franchises will also soon open in Philadelphia, North and South Carolina, New Jersey, Kentucky, Tennessee and Florida. An announcement about an international deal is also just weeks away, Roddy said.

“We’re not only financially strong; we are growing and will be for years to come,” he said. “It’s just been a great ride.”

Source: Fast Casual

Schlotzsky’s sees growth with reimaged units

President Kelly Roddy shares results of reimaging with NRN and details 2013 plans

By Ron Ruggless

Schlotzsky’s Franchise LLC this past year completed the reimaging of older stores in the 350-unit chain and this year plans to amp up expansion of its tri-brand units and catering.

Over the past several years, the company has packaged new stores with sibling brands Cinnabon and Carvel, all owned by Atlanta-based Focus Brands Inc.

Schlotzsky’s unveils new look – Check out the slide show!

Kelly Roddy, president of the Austin, Texas-based Schlotzsky’s division, said in a phone interview earlier this week that the company is set to open tri-brand stores in the new markets this year. Those markets include Kentucky, New Jersey and North Carolina as well as: Minneapolis, Minn.; New Orleans, La.; Orange County, Calif., Philadelphia; and Sacramento, Calif. Schlotzsky’s currently operates in 37 states.

The privately held company said reimaged restaurants are seeing a 20-percent increase in sales on average. In addition, Roddy said Schlotzsky’s has seen seven years of positive same-store sales increases “even through the tough economy.”

Roddy recently discussed the reimaging of Schlotzsky’s with Nation’s Restaurant News.

What have been Schlotzsky’s highlights in the past year?

We’ve reimaged the restaurants over 2011. We launched new menu boards with new soups, new fresh, made-to-order salads. All the stores are now on table service. Our new prototype rolled out. All the new stores we’re opening will have tri-brands with Cinnabon, Carvel and Schlotzsky’s. All this has been evolving over say the last five years to relaunch the brand. The result has been a lot of growth.

What has reimaging done for franchise sales?

We sold 110 new Schlotzsky’s tri-brand agreements this past year. We’re on trend to get 40 or 50 open this year. We have 27 under construction right now with other leases being negotiated.

Are you including drive-thrus with the new units?

They pretty much all have drive-thrus. There will maybe be one or two that will not. The average store that is opening right now is about 3,000 square feet with a drive-thru and a tri-brand. It has soft seating, so you have booths and lots of bright colors and new modern look.

How did you change the food-delivery model?

We put [food runners] in the new stores and went back and retrofit the other stores. [The table-runner model] is now in place everywhere. It eliminates all the clutter from the paging [system]. It allows the guest to go sit down, relax and start the conversation with whomever they are there with. It’s just more enjoyable. It allows us to engage with the customer. It allows us to monitor the dining room to make sure that it’s clean. If someone needs napkins or whatever, we can bring that to them. It gives it a little more of a casual-dining feels rather than a fast-food feel.

What strengths are you finding in the menu changes?

Our soup and salad business has grown. We’ve seen an increase in the female customer count since we introduced the fresh, made-to-order salads.

Any shift in dayparts?

In 2012, we saw a small bump in our dinner daypart. We think it’s because of the upgraded salads and serving everything on plate ware. We went from Styrofoam bowls, basically, to serving everything on china. That and the booths give us a little more credibility at dinner. This year, we’re looking at how to strengthen that with better offerings around our pizza, etc.

What are the advantages of the tri-branding?

It helps you capture different dayparts. The Cinnabon gives you a nice snack daypart fill-in. You’ll see a lift in the 2-4 [p.m.] range. We’re seeing quite a bit of ice cream sold in the evenings. We think it’s helping bring in families.

What’s the focus in the year ahead?

Catering. We added about 60 new catering vehicles this past year to the fleet. We will continue to do that. Most stores are getting catering vehicles. We’re also partnering with online catering vendors. We’ll also be working on a dinner daypart strategy as well, which will probably roll out at the end of the year.

You started the year with about 30 catering vehicles, so it’s now in about a third of your stores. What are you seeing in catering sales?

It was small to begin with. Catering sales were probably in the 30 to 40 percent increase off a small base. Our goal would be to double our catering sales within the next 12 months.

What kind of customers are you targeting with the catering sales?

It’s pretty much lunch business meetings for Monday-Friday lunch.

What challenges do you see on the horizon?

Commodity costs look to be a challenge, but everybody is in the same boat. We haven’t taken any price, and we’re doing everything we can to not to take price. We have pretty good food costs. We’re going to watch and see what happens.

Source: Nation’s Restaurant News

FOCUS Brands Now 1,000 International Units Strong

 

FOCUS Brands Inc., the fast-growing company responsible for overseas expansion of Cinnabon, Auntie Anne’s Pretzels, Carvel Ice Cream, Moe’s Southwest Grill, Schlotzsky’s, and Seattle’s Best Coffee, has opened its 1,000^th international location—a milestone capitalizing on the vast global opportunities for U.S. food brands.

The 1,000^th location is a cobranded Cinnabon and Auntie Anne’s store, which debuted November 29 in Port of Spain, Trinidad, at The Fall of Westmall. It is operated by Cinnaworld Ltd., a franchise group consisting of a husband-and-wife team from Trinidad. Naveed Mohammed and Renee Peterson are entrepreneurs by trade and have opened a total of five Auntie Anne’s and Cinnabon stores in the Trinidad and Tobago area. The duo recently expanded their territory rights to include Jamaica, Guyana, Barbados, Antigua, Barbuda, St. Lucia, and Grenada and have committed to opening an additional 15 locations over the next seven years. The group, Cinnaworld Ltd., also received the award for “International New Franchise Partner of the Year” for 2011 at the FOCUS Brands Worldwide Convention in January 2012.

“This opening is a landmark in our international expansion plan, which is crucial for our growth,” says Mike Shattuck,president of FOCUS Brands International. “Building our global brand presence has substantial value for us, especially when we can increase our visibility and brand presence by opening in high-traffic venues in new markets.”

In 2012, FOCUS Brands opened 205 locations in international markets, and a projected 260 will open this year. This growth comes while FOCUS Brands continues to increase its domestic footprint in the U.S. through franchise expansion of all brands.

Earlier this year, Cinnabon and Carvel became the first American brands to open in Libya, with nine additional Cinnabon bakeries and new Carvel and Moe’s Southwest Grill locations on the way. Moe’s Southwest Grill and Schlotzsky’s recently expanded to Russia.

More than 80 new Auntie Anne’s bakeries have opened in 2012 internationally and plans call for more than 118 to open overseas in 2013 in countries such as Vietnam, Bahamas, India, and Aruba, as well as Ukraine, Kazakhstan, Estonia, Latvia, Lithuania, Georgia, Moldova, Uzbekistan, Kyrgyzstan, and Tajikistan.

Cinnabon bakeries operate in more than 51 countries and will launch in Iraq, Mongolia, and Ukraine in the coming year.

“We are thrilled by the consumer response we’re seeing when our brands enter a new market,” Shattuck says. “We’re always looking for opportunities to grow with individuals who possess a strong entrepreneurial spirit and the right industry experience.”

Source: QSR Magazine

Happy Birthday to Schlotzsky’s!

Join us on Tuesday, October 9th for our 41st birthday! We’re celebrating with $1.99 small The Original sandwiches all day long at participating Schlotzsky’s restaurants nationwide. Stop by anytime on October 9 and enjoy our famous sandwich. No coupon required. And don’t forget to sign up for our Bun & Fun eClub now or while you’re at the restaurant – you’ll receive birthday specials and other coupons and discounts as a member.

It’s our birthday and you get the gift! Happy birthday to us!

PS – No coupon necessary. There’s no official limit on the number of sandwiches you can get, though some restaurants may set limits depending on demand. If you’re curious, contact them before you go. Vegetarian options may be available – again, depends on the location so ask in advance. Most options include Cheese Original or The Original with no meat. 

Schlotzsky’s Steps Up to Support JDRF

 

From October 1 through November 3, Schlotzsky’s wants you to Step Up! to help us support JDRF so we can find a cure for type 1 diabetes (T1D). Drop by any Schlotzsky’s restaurant during this time and donate just one dollar to JDRF and you’ll get a coupon for a dollar off your next purchase at Schlotzsky’s. It’s that simple! Help us raise funds for JDRF, get a coupon and walk away feeling good!

Founded in 1970, JDRF (formally Juvenile Diabetes Research Foundation) is the world’s largest charitable funder of type 1 diabetes research, having raised more than $1.6 billion in research funds since its inception. T1D is an autoimmune disease that can strike at any age, and can be fatal. Until a cure is found, people with T1D have to test their blood sugar and give themselves insulin injections multiple times or use a pump – each day, every day of their lives.

“We were extremely selective when identifying a national charitable cause that our brand could support system wide. Our organization is happy to be working with JDRF to fund essential research toward type 1 diabetes,” said Kelly Roddy, president of Schlotzsky’s. “This decision was more than an act of corporate philanthropy; this was the alignment of two organizations that are passionate about helping those with this disease. As a supporting partner, our goal is to raise $250,000 that will help efforts in finding better treatments and a cure for T1D.”

Schlotzsky’s President Kelly Roddy on FOX Business News

FBN_08-31-2012_12.46.31

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Kelly Roddy talks to FOX Business News about Schlotzsky’s expansion plans and the success we found with co-branding with Cinnabon and Carvel Ice Cream.

Schlotzsky’s® Unveils First-Ever Chipotle Honey Sandwiches

The new mouth-watering sandwich trio will be layered with the hot and sweet honey chipotle sauce

Schlotzsky’s^® falls into autumn with the announcement of a completely new line of limited-time-only Chipotle Honey Sandwiches. From now until November 25, the home of The Original^® round-toasted sandwich will feature three new, signature Chipotle Honey Sandwiches – the Turkey and Bacon Chipotle Honey, the Roast Beef and Bacon Chipotle Honey, and the Chicken and Bacon Chipotle Honey.

“We have been looking to bring something hot and sweet to our customers and this trio of delicious sandwiches is the perfect menu option,” said Kelly Roddy, president of Schlotzsky’s. “When the chipotle honey tops our high-quality meats and cheese, it creates an irresistible taste. We look forward to hearing our customers’ feedback.”

The three new, signature sandwiches include:

Turkey & Bacon Chipotle Honey 

Smoked turkey breast and crispy bacon with smoked cheddar cheese, lettuce and tomato with chipotle mayonnaise and hot and sweet honey chipotle sauce on a toasted Sourdough bun;

Roast Beef & Bacon Chipotle Honey

Tender slices of Angus roast beef and crispy bacon with smoked cheddar cheese, lettuce and tomato with chipotle mayonnaise and hot and sweet honey chipotle sauce on a toasted Sourdough bun; and

Chicken & Bacon Chipotle Honey

Tender, shaved chicken and crispy bacon with smoked cheddar cheese, lettuce and tomato with chipotle mayonnaise and hot and sweet honey chipotle sauce on a toasted Sourdough bun.

Schlotzsky’s restaurants offer guests more than 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.

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