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® 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.

Under the Toque: Jim Villemaire

Chef turns supplier experience into innovation

September 2010 – Jim Villemaire says he got a lucky break. The former Bennigan’s cook was making copies at the parent company’s corporate headquarters when S&A’s head of research and development invited him to come work for him. At the time, Villemaire was a training at Bennigan’s and had no R&D experience. While working at Bennigan’s, he also met his future wife – which he ranks as one of his career highlights.

He then took a job at a giant supplier Cargill, where he continued to learn about R&D in the restaurant business.

Now, as director of R&D for the 39-year-old, 350-unit Schlotzsky’s, Villemaire incorporate lessons learned while working at restaurants and Cargill – a job that allowed him to gain insight into many large restaurant companies.

In addition so sharing some of his best practices, Villemaire reveals news on yet-to-be-released menu items.

What was your first foodservice job? I was a cook at Cheddar’s in Arlington, Texas.

How did you transition from cooking into research and development? I worked my way through the cooking ranks at Bennigan’s and got into kitchen management and was tapped to be a trainer. One day I was standing by the copier and them man who took over for director of R&D at S&A restaurants [Bennigan's parent company] at the time, David Groll, said he had a team of chefs, but didn’t have anyone who had any experience working [in the kitchen] at Bennigan’s. He asked, “Do you have any interest in doing research and development?” I jumped at the chance.  He gave me the opportunity of a lifetime.

After S&A, you took a job with supplier Cargill. Did your experience there give you insights into how other chains operate their R&D departments? I got to see the best practices of some amazing chains. I took the best pieces of how they do things. One of the most important things I’ve integrated is that I want anyone who does anything for me to feel appreciated. People who sit on my side of the desk can get aggressive and feel so important. But we’re all just people.

Was it difficult to make the switch from supplier back to a chain? For a while I feared that I’d never be able to get back [into a restaurant company.] Once I left, [some people] didn’t consider me a real restaurant chef. You learn about how people like to categorize. Some of the sales folks who used to be your best buddies didn’t have any time for you when you didn’t anything to give them. And that in itself was eye opening.

Describe Schlotzsky’s for anyone who’s never been to one. What are they most known for? They are all sit down. Probably 65-percent have drive-thru. It’s a fast-casual type set up. Really the entire heartbeat of our brand is the bread. It is that homemade quality. We had a lot of people come through and say we could grow faster if we use a pre-made bread. But we haven’t found anything that meets our benchmark.

Are you planning to add more healthful dishes? We’re exploring all of our options there. But it’s not the over-arching focus. I was told to work on healthy items, and I was working with a lot of panels of females, and one of the items they all loved best was the chicken sandwich with a fat-free spicy ranch dressing, jalapeno cheese sourdough bun, alfalfa sprouts, shaved chicken breast, lettuce, tomato, a little bit of onion and guacamole. But at the end of each session, they said you should add bacon and cheese to it. It is now served with the bacon and cheese as the California Chick promotion. I understand. At home, I eat  healthfully. When I go to a restaurant, I am going to get something that really floats my boat. I’m trying to drive sales, and something that is indulgent and decadent is what moves people. We have become increasingly aware of people’s allergies and diets. To reduce sodium content is a major goal for us. We’re always looking for ways to try to address things like gluten. But so much of the [health talk] is buzzwords that are usually wielded by people who have very little connection to the foodservice world. They’re usually politicians.

So if healthful food isn’t Schlotzsky’s major focus right now, what is the company’s priority? We’re trying to grow with strategic partners in some of the areas where we’re already present, to flush out these markets and take them from open markets to closed markets.

What are the big food trends that you’re watching right now? We’re seeing fresh and local. Organic. We’re seeing people expect more ethnic authenticity – Thai, Mediterranean, Greek, Korean and Southwestern.

How does your guest define value? The guest doesn’t always define value in how much something costs. They define value in terms of what they get. They are willing to spend money if they feel they’re getting good value. An example I can give you is for years we have been testing steak sandwiches and salads. I’d try to engineer both of them based on what our current prices are, but I wasn’t hitting the mark. Finally, we decided that we were going to sell the best steak. We went out and found a slice Angus rib-eye steak. And we put it out there for $6.99 and $7.99 a piece, and [those items] came back with better value ratings than when we were testing it at $4.99.

When might we see that promotion? The steak sandwiches are going to be a holiday focus this year.

How do you cook the steak? The product comes in already seasoned, sliced and cooked, and we heat it in a conveyor oven.

What do you add to it? We have several varieties. We’re still working on which ones will be the finalists. But one [that might be available] is the Steak and Bacon Smokecheezy with smoked cheddar. It has roasted red bell peppers, crisp bacon and a touch of lightly spicy chipotle mayo. One of the others is served on a jalapeno cheese bun. It has pepper jack cheese, lettuce, tomato, onion, guacamole and chipotle pesto. We’ll be doing there. The other one we’re still toying with.

Source: Nation’s Restaurant News