Cobranding Part 1: Will it work for fast casuals?

Cobranding in the restaurant industry may have started in the ’90s with “KenTacoHut” — Pizza Hut, Taco Bell and KFC — but fast casuals are starting to embrace the idea. Bruegger’s Bagels and Caribou Coffee, for example,  expanded their cobranded concept last year to North Carolina, marking the third cobranded unit for the two brands, and Bruegger’s recently announced a deal to pair up with Jamba Juice in South Florida. Another smoothie concept, Smoothie Factory, is now testing cobranded units with Red Mango, and Fatburger has combined with Buffalo’s Café to offer chicken with its burgers in California.

While developing the right partnership and operations formula can be tricky, cobranding is a great way to add an additional revenue stream for franchisees, said Kelly Roddy, CEO of Schlotzsky’s, which has been cobranding since 2007 with Carvel Ice Cream and Cinnabon. He said the key to a solid cobranding partnership is ensuring that both brands benefit. The Schlotzsky’s/Cinnabon cobrand, for example, gave Cinnabon the opportunity to expand beyond malls and travel centers but also allowed Schlotzsky’s to offer menu variety to guests.

“It’s a great partnership for us and contributes to dayparts beyond lunchtime, including breakfast for those restaurants that open early as well as snack/evening options,” Roddy said. “Cinnabon also offers an additional catering option for our guests.”

The benefits

Those are just a couple benefits that cobranding can provide, said Steve Beagelman, president and CEO of SMB Franchise Advisors. Cost savings and risk aversion are two others.

“When you want to keep costs down, cobranding makes a lot of sense. When you’re going through the real estate process, you can save a lot of money up front since you’re utilizing two business to pay the rent for one location,” he said. “So, a lot of brands look at cobranding because it saves the front-end costs. The best benefit is utilizing and cross-training the labor. So you’re saving on your rent, your build out, your employees. There are a lot of economic reasons why cross-branding makes sense.”

Risk aversion is another benefit of cobranding, said Catherine Kearns, general manager of CHD Expert North America.

“Cobranding affords restaurants an opportunity to introduce their products to new markets, while mitigating cost and risk,” she said. “A significant capital investment is required to open a restaurant, especially costs associated with making a brick and mortar location service ready, and cobranding allows for brands to test new territories, while requiring less money for initial overhead costs.”

The challenges

While the benefits of cobranding are numerous, there are also challenges, including the possibility of complicating operating procedures and brand dilution, especially when one brand’s word-of-mouth, marketing and history are stronger than the other, said No Limit Agency’s Chief Brand Strategist Nick Powills.

“You are dealing with two brands and, in many scenarios, two different customers. Even if you sell cookies and ice cream, the cookie customer may not have the same taste as the ice cream customer at that exact moment,” he said.

Beagelman agreed but also said some franchisors will risk brand dilution to score faster distribution, so it’s often a trade off they are willing to make.

The possibility of complicating operating procedures stems from the fact that franchises abide by corporate-mandated guidelines, so combining operations from two entities can create challenges, Kearns said. For example, if two brands come together and they both have exclusive contracts with their own paper goods supplier, someone may have to break a contract.

“In addition to contracts and sourcing of products, melding two different restaurant cultures can also be a challenge,” she said. “Many chain restaurants have a pre-established operations manual and different standard to which they hold their team accountable. This includes processes for food preparation, customer service, and employee culture. Introducing two company cultures with different standards is not a seamless process. Camaraderie and synergy will take time to develop.”

These reasons, Kearns said, are why it is more common for cobranding to occur among companies who share a parent company — Yum! Brands, for example. Even then, however, it’s not a sure thing.

“You are mixing two brands with two different missions — even when run by the same franchisor,” Powills said. “Cobranding certainly can make sense when you are not experiencing a strong ROI from every square foot of your restaurant, however, it is a tricky balancing act, no matter how you look at it — so, being an effective operator will be critical.”

Should you cobrand?

Before hopping on the cobranding wagon, operators should ask themselves a few questions. They include:

  • Am I comfortable with employees being cross-trained?
  • Am I comfortable with potentially sharing revenue streams?
  • Do I really need two concepts under the same roof?
  • How will my brand benefit?
  • What negative effects will it have on my brand?
  • How is my brand perceived in comparison with the brand I am cobranding with?
  • How will my core consumer base react to this cobranding?
  • What is the cost benefit analysis on customer acquisition?
  • How will marketing efforts be affected?
  • How are joint decisions going to be made between the two separate corporate entities?
  • How will vendor relationships be affected?
  • And how will my internal employee culture be affected?

“The best time to co-brand is when it will help both perspective franchises and customers,” Powills said. “Many brands have mastered the art of this concept, hoping that franchise operators will be happier with a mixed portfolio and that customers will frequent the business more with more options.”

A mutual benefit is what inspired the partnership between Bruegger’s and Jamba Juice, said Arturo Zindel, the developer of the five cobranded Bruegger’s and Jamba Juice units in South Florida.

“We believe there are synergies with the brands plus additional operational efficiencies and economies of scale when you build stores that offer the two brands together,” he said. “Additionally, in the case of Bruegger’s Bagels and Jamba Juice, the dayparts are different plus both brands stand for high quality products and a top end customer experience in the stores, so we believe they will be a great fit offered under one roof.”

The same can be said for Schlotzsky’s, which has been so happy with its partnerships with Carvel and Cinnabon, that it’s launching a five-restaurant test with TCBY this April in the Austin area. Through the express format, the chains will offer six yogurt flavors and more than 15 types of toppings, Roddy said.

“We are excited about this opportunity and the potential daypart expansion,” he said.

Editor’s note: This is part 1 in a two-part series about cobranding. The next installment will feature Q and A interviews with three restaurant operators who have found success in cobranding.

Source: Fast Casual

Get Your Kicks with Route 66 Sandwiches

Route 66, also known as the Main Street of America, is the inspiration behind Schlotzsky’s latest menu additions. Running from Chicago to California, the historic stretch of highway winds its way through numerous states, incorporating a variety of different cultures, tastes, and flavors. From now until August 25, the home of The Original round-toasted sandwich will feature these flavors in three signature sandwiches.

After the initial leg in 2010, which was the most successful summer promotion in company history, Schlotzsky’s extended its journey down Route 66 to the fall season. Gearing up for another trip, which combines the flavors of the last two promotions, Schlotzsky’s has brought back the Windy City Pastrami & Swiss, California Chick, and Albuquerque Turkey.

“Back in 2010, our guests fell in love with the bold, regional flavors of the Route 66 promotion,” says Kelly Roddy, president of Schlotzsky’s. “We could not be more excited to bring back these crowd-favorite sandwiches and celebrate this historic stretch of highway again this summer.”

The three signature sandwiches include:

· Windy City Pastrami & Swiss: sliced pastrami and melted Swiss cheese with Dijon mustard and our signature dressing on toasted Dark Rye bread.

· California Chick: thinly sliced, roasted chicken breast, pepper jack cheese, bacon, guacamole, red onion, tomatoes, lettuce and fat free spicy ranch dressing on toasted Jalapeño Cheese bread.

· Albuquerque Turkey: smoked turkey breast and crispy bacon with cheddar, mozzarella, and parmesan cheeses layered with fire-roasted vegetables, chipotle mayonnaise, shredded lettuce, tomato and our signature dressing on toasted Jalapeño Cheese bread.

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

Serving sandwiches for a quarter century

Schlotzsky’s Deli celebrates 25 years in Battle Creek

Written by
Jennifer Bowman
The Enquirer

Schlotzsky’s celebrates 25 years in Battle Creek

Eric Kitchen said he hears it at least three times a week.

“So many people pull off the highway and come here to eat and say, ‘I cannot believe I found a Schlotzsky’s. This is the best sandwich on the planet. Do people in Battle Creek know how lucky they are?’” said the 48-year-old. “We get that a lot.”

This month marks 25 years since Kitchen moved back to his hometown from Oklahoma City to open Schlotzsky’s Deli, a Texas-based sandwich shop. He now operates three locations in Battle Creek — on B Drive North, West Michigan Avenue and South 20th Street — and one in Portage on South Westnedge Avenue.

Not bad for a guy who brought a national franchise restaurant to Michigan for the first time when he was just 23 years old.

“I determined that from the restaurant business,” he said, “to be 100 percent committed, the only way to do it is to start something yourself.”

That commitment is clear through his customer service. Kitchen said it’s difficult to choose what has been most rewarding for him since he began the business. It could be the young locals he employed throughout the years, he said, or catering a funeral to fulfill a man’s request. Once, he said, they hustled all night to prepare to cater a 1,500-person event before realizing they hadn’t figured out a way to transport all the food.

But what comes easy for Kitchen is revealing how he has managed to keep his doors open for decades.

“Business isn’t that complicated,” Kitchen said. “If a customer leaves with a smile on their face, telling themselves they’re going to be back soon, then we’ve done our job.”

General Manager Jim Keating — who Kitchen said has been on the team since day one and also acts as a minority owner — agreed.

“It comes down to taking care of your customer,” he said. “If you take care of your customer — give them great service, give them a great product at a reasonable price — they’re going to come back. It all comes down to customer service. That’s the most important thing, is taking care of the customer and treating them like family. And we do that everyday.”

Schlotzsky’s opened in 1971 in Austin, Texas. It was home to a “single, one-of-a-kind sandwich,” according to its website, and now is an international franchise with locations in 35 states and four countries. Its menu has been expanded to offer salads, soups and pizzas.

Kitchen said being in business in 25 years has made it impossible to escape any economic downturn. A company that once boasted dozens of locations throughout the state, Kitchen is now the only remaining franchise operator. He closed his Marshall location about a year ago when it was decided that the cost of revamping the store and taking care of small children at home was too much.

While they used to have a heavy focus on growth, Kitchen said they’re now looking to provide the best quality of customer service at their current locations.

“I think if you do a darn good job, there’s room in the economy for a business,” he said. “There’s much more competition in town than there was when we first started. But I think more people dine out. I think that’s always skewing upward.”

But what has helped, Keating said, is the duo’s close connection to the community. Both are Lakeview High School graduates and work to help with community and school events on behalf of the business.

“Seeing those kids coming in everyday and supporting them, as well as them supporting us, I think is very important,” he said. “The parents and the families appreciate that as much as we appreciate their business. So you try to help out everybody as much as you can and give back as much as you can, and that’s what helped us grow.”

And there are no plans to stop now.

“We probably have 25 more years in us,” Kitchen said.

Source: Battle Creek Enquirer

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

Schlotz2011_GreenCircle_logo

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

Fast Casual

 

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

NRN_Banner

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

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

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.

QSR 50 Contenders

August 2012 | By Sonya Chudgar

These quick-service and fast-casual companies just missed the QSR 50.

Want to know which 15 brands are knocking on the QSR 50′s door? Some are old favorites, others are new to the list, but they’re all trying their hardest to climb their way into the Top 50 ranks.

51 McAlister’s Deli RANK LAST YEAR: 52

While McAlister’s grew by only two units in 2011, its sales increased by more than $25 million over 2010. In April, the company announced a brand-wide redesign that will add bar stools and booths, WiFi, and a Tea Bar to stores. Customer loyalty appears solid, meanwhile, as a Technomic study revealed consumers aged 19–34 ranked McAlister’s the top fast-casual brand in terms of social responsibility and food quality.

52 Auntie Anne’s ( 51 )

Auntie Anne’s added 120 stores last year, almost half of them abroad, and celebrated its 23rd year of positive sales growth. The pretzel company also signed a $25,000 check to jumpstart its charitable partnership with pediatric cancer nonprofit Alex’s Lemonade Stand Foundation, and in January began testing whole-grain pretzels.

53 Moe’s Southwest Grill ( 53 )

Moe’s was seeing green in 2011, between its first LEED-certified store in Williston, Vermont, and $381 million in sales. In fact, since unleashing its Food Mission in January 2011, Moe’s AUV increased by a whopping $114,000. The brand also inked a licensing deal with BJ’s Wholesale Club and shows no signs of slowing down, with a strategic plan to grow to 800 locations by the end of 2015.

54 Wingstop ( 54 )

In the 12 months leading up to this summer, Wingstop signed agreements to add more than 325 units, including 120 in Mexico, and celebrated its 500th location in Brooklyn. October ushered in the brand’s 10th flavor, Louisiana Rub, and the opening of rapper Rick Ross’ first unit. Super Bowl Sunday, meanwhile, resulted in monster sales of 5.6 million wings—a 12 percent boost over 2011’s Super Sunday—and helped Q1 sales soar 10.5 percent over Q1 2011.

55 Cold Stone Creamery ( 49 )

No. 49 on last year’s QSR 50, Cold Stone lost 36 net units last year and suffered a loss of nearly $20 million in year-over-year sales. Still, the chain remains in the game. It debuted frozen yogurt in stores nationwide last summer, rolled out a line of plated desserts, and signed franchise partners in Singapore, Greece, and Brazil.

56 Au Bon Pain ( 55 )

First, Au Bon Pain shelled out $500,000–$1 million per store to remodel flagship locations in Boston, installing snappy iPad ordering and sandwich and salad stations. The brand also boosted its menu by adhering to the cupcake craze and adding the frosted handhelds along with enhanced beverage options. Then, in New York City, remodeled stores began generating double-digit sales increases. Now, given the enthusiastic customer response, Au Bon Pain plans to take the makeover nationwide and expedite store openings this year.

57 Taco John’s ( 56 )

Taco John’s winged it last fall, to extremely positive results. The West-Mex chain enjoyed a $15 million boost in sales over 2010, thanks primarily to three varieties of wings that joined the menu in late October. Though originally intended to be a limited-time offer, wings increased sales so significantly, they may earn a permanent spot in the chain’s starting line-up.

58 Souplantation and Sweet Tomatoes ( 57 )

The sustainable, healthy approach continues to pay off for Souplantation/Sweet Tomatoes, whose 192 restaurants boast the same AUV as McDonald’s. In February, the brand joined Kids LiveWell and in September, parent company Garden Fresh Restaurant Corp. became the largest restaurant chain in the nation to be certified by the Green Restaurant Association.

59 Firehouse Subs ( 60 )

Last year, the brand founded by firefighting brothers became the first national chain to host the Coca-Cola Freestyle machines in all its restaurants. Along the way, it added 79 stores and 80 new franchisees and entered 13 new markets, including its first international market. The Firehouse Subs Public Safety Foundation, which puts a local face on the restaurant, also raised $1.8 million to donate to local fire and police departments and emergency medical services. This is one fire you don’t want to put out.

60 Baja Fresh ( 58 )

Get fresh, save the earth. That was Baja Fresh’s message in 2011, when the Mexican brand rolled out its Earth Fresh Initiative, which features recycled bags, unbleached recyclable burrito wrapping paper, and biodegradable plates. Though sales declined by $12 million from the previous year, the company is continuing its international expansion, announcing its first Singapore location.

61 Fuddruckers ( 59 )

A tough 2010—Fuddruckers filed for Chapter 11, closed nearly 50 units, and was purchased by Luby’s—set 2011 up as a recovery year. Sales dropped by $12 million, but Luby’s has lofty goals in mind for the burger company, including the first combined cafeteria-Fuddruckers unit, a Fuddruckers drive thru, and expansion into Mexico.

62 Corner Bakery Café ( 62 )

Corner Bakery Café retained its No. 62 spot following the acquisition of parent group Il Fornaio Corporation by Roark Capital Group in June 2011. System-wide sales grew to $261 million, up $14 million from 2010, and community work remained strong as the brand raised $268,000 during the 2011 Dine Out for No Kid Hungry. Millennial consumers, in fact, gave top marks to Corner Bakery Café for its charitable efforts and support of community organizations.

63 Charley’s Grilled Subs ( N/A )

A newcomer to the contenders list, Charley’s hired Bob Wright as the company’s first COO last April. Wright grew the brand by 30 units, emphasized international expansion, and received a promotion to president in January. Charley’s announced a play in the fast-casual category in December, unveiling Charley’s Philly Steaks, an upscale version that may have up to 10 locations open this year.

64 Schlotzsky’s ( 63 )

Turning 40 last year, Schlotzsky’s had much to celebrate. Things got “Lotz Better” when the rebranding project, which refreshed the menu and splattered store interiors with vibrant colors, boosted visits by 18–25-year-olds and doubled salad sales. All locations that open going forward will be tri-branded with Cinnabon and Carvel, an idea that began in 2009 and has increased AUV by $9,000. As the brand eyes its goal of 600–700 units by 2015, upping pizza sales will be the next target.

65 Jamba Juice ( 61 )

The company sold 173 units in 2011, refranchising to shift to an asset-light model, and signed Venus Williams as a franchisee. In January, Jamba launched BLEND Plan 2.0, which hopes to grow Jamba’s licensing category from 30,000 to 50,000 touch points and debut JambaGo, a new platform for nontraditional venues. A move in the tea category may be on the horizon, too, as Jamba acquired burgeoning tea company Talbott Teas in February.

Source: QSR Magazine

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