Schlotzsky’s franchisee tops new restaurant with upper crust apartments

The 800-square-foot apartments feature crown molding, patios, microwaves and 50-inch flat screen TVs. Schlotzsky’s franchisee David Jones says the project has a Bricktown feel but is in Midwest City’s “Original Mile.”

By Jennifer Palmer

MIDWEST CITY — Schlotzsky’s franchisee David Jones took the company’s motto of “Lotz Better” to heart, adding posh extras to his new location here, including upscale apartments above the restaurant.

The $1.5 million project less than a mile from Tinker Air Force Base’s main gate is part of the city’s effort to revitalize the area known as the “Original Mile,” by providing attractive, mixed-use housing within walking distance to the Town Center Plaza shopping center, the city’s major retail development. It’s the first Schlotzsky’s restaurant to feature housing above.

The restaurant opened in December and construction on the four upstairs apartments should be complete this month, Jones said. The 800-square-foot apartments have a private entrance and will feature crown molding, granite countertops and appliances including microwaves, stackable washer and dryer and 50-inch flat screen TVs. Jones’ son, David, who manages the Midwest City restaurant, will live in one unit and the other three will be rented for $1,000 a month.

“It’s just like downtown Bricktown — in Midwest City,” Jones said.

Amenities continue throughout the restaurant, with a water fountain in the patio area, a media wall with flat-screen TVs and space for laptops in the dining room, tall booths, a cozy fireplace, baby changing tables in both men’s and women’s restrooms and plates to serve the sandwiches on. Jones said he didn’t want his guests eating out of baskets.

Most stores go above and beyond the Schlotzsky’s corporate model, but each was made to give the restaurant a homey feel because to Jones, Midwest City is home. His father, Kenneth Jones, worked for Tinker for 30 years and David Jones grew up in Midwest City.

Though a career with Pepsi Co. took him to California and Texas, when he decided to open a business his family could be involved in, it was time to come home, he said.

Jones opened his first Schlotzsky’s in Moore in the summer of 2011, which his daughter, Sarah, manages.

“When I was looking for a place to put our second franchise, Midwest City was at the top of the list because it had sentimental value,” David Jones said.

For Schlotzsky’s, it was an opportunity to re-enter Midwest City with an established franchisee, said Amanda Palm, a spokeswoman for Schlotzsky’s, which is based in Austin, Texas.

She said the company allowed Jones some flexibility in designing his restaurant and building, which he owns.

“We knew in looking for sites this was simply a good place for our brand. We wanted to be a part of the redevelopment efforts the city was putting into this particular area,” she said.

In December 2011, Midwest City published its revitalization plan for the Original Mile, a one-square-mile neighborhood defined by SE 15 on the north, SE 29 on the south, Air Depot Boulevard on the west and Midwest Boulevard on the east. Much of the classic, 1940s wartime housing built there was becoming dilapidated and was in desperate need of a face-lift.

Midwest City Mayor Jack Fry said when Jones approached the city with plans for a new Schlotzsky’s restaurant, he pitched the idea of adding a housing element. Jones, who has no experience being a landlord, was the first business owner to take a chance on the city’s vision.

The apartments are within walking or biking distance to the many stores and restaurants at Town Center Plaza and are perfect for somebody looking to live an urban lifestyle, the mayor added.

“It is a bold step for the city. We’re changing a little from suburban America to urban America. It’s time for Midwest City to adopt some of the architectural things going on around the country,” Fry said. “Sometimes, I think we need to think outside the box … and this was a place we could do that.”

Source: The Oklahoman

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

Richer Fillings

For sandwich sellers, more is better as premium products rule

By Jonathan Maze
As published in: Franchise Times – June-July 2012

Like many sandwich chains, Wisconsin-based Cousins discounted its way through the recession—a year ago, its restaurants were selling sandwiches for $2.99. This year, the company stopped discounting, and started making its sandwiches better, adding 50 percent more steak to its Cheesesteak line.

The result: Same-store sales are up 5 percent this year, and customers are switching from the cheaper sandwiches to the bigger ones. “Instead of discounting, we increased the product in our sandwiches, made it more premium,” said Joe Ferguson, vice president of development for Cousins. “They’re trading off to more premium products.”

Cousins isn’t the only chain beefing things up right now. In the midst of a highly competitive sandwich market, concepts are improving their menus, redesigning their restaurants and developing new financing options in an effort to break through the crowded field.

Thanks to their portability and flexibility, sandwiches are perhaps the most popular menu item in the restaurant industry. According to market-research firm NPD Group, the number of sandwich-chain units—a number that includes burger concepts—has grown 26 percent since 2011, an annual growth rate of about 2.4 percent.

Yet that growth has slowed since the onset of the recession, to less than 1 percent in each of the past two years. Some prominent sandwich concepts have struggled more recently, such as Denver-based Quiznos and Scottsdale, Arizona-based Blimpie.

Meanwhile, concept leader Subway keeps finding places for new restaurants—it had 24,449 U.S. restaurants at the end of 2011. St. Louis-based Panera Bread, the leader of the bakery-café sub-sector, also keeps growing, with 1,541 restaurants. Chains such as Champaign, Illinois-based Jimmy John’s and Jacksonville, Florida-based Firehouse Subs have also been adding units at a nice clip.

As they try to play catch-up, smaller and mid-sized concepts such as Cousins, McAlister’s Deli, Schlotzsky’s and DeSoto, Kansas-based Mr. Goodcents Deli Fresh Subs are making improvements to get more customers in the door. Some are even experimenting with drive-thrus, which aren’t common outside of burger chains and Arby’s. Based on their sales results, the efforts appear to be working thus far.

Remake for Schlotzsky’s Deli

Reimages are a challenge in the restaurant industry, because in many cases operators are being asked to spend tens of thousands of dollars to remodel a restaurant that is financially weak after years of falling sales. Last year, Schlotzsky’s found a solution—using franchisees’ ad dollars.

Eager to update its stores, the Austin, Texas-based chain handled the full remodeling for more than 300 restaurants. The company went market to market, giving each restaurant a facelift, with new signs, menu boards and paint. The entire-market approach cut the per-store cost of a reimage to roughly $18,000 to $25,000 per unit. “When you paint 300 stores at one time, you get a much better deal on paint,” said Kelly Roddy, president.

When all the stores within a market completed the remodel, the company used ad fund dollars from that market to pay the vendor. The lack of marketing did bring down sales for a time, but Roddy said a post-remodel sales bump more than made up for the loss. “We felt that really helped us drive sales without advertising,” Roddy said. The company is back on the airwaves this year, and same-store sales are up 7 percent.

Schlotzsky’s is also working to add sales to restaurants in two other ways: through multi-branding and a drive-thru.

The concept is part of Focus Brands’ portfolio, the Atlanta-based franchise company owned by the private equity group Roark Capital. Fellow Focus-owned concepts Cinnabon and Carvel are being added to many of its locations. The company’s ultimate goal is to add at least a Cinnabon to each of its locations, while new units will have all three.

Multi-branding has been a hit-or-miss franchising plan, but Roddy said the addition of dessert concepts works in Schlotzsky’s case because Cinnabon and Carvel are snack concepts that don’t compete with Schlotzsky’s sandwiches. “From what I’ve seen in cobranding, in most cases you’re selling the same share of stomachs,” Roddy said. “You’re competing lunch against lunch. For us, it’s other dayparts. The same person who orders a Cinnabon may not come in to get a sandwich.”

The other improvement is a drive-thru. Schlotzsky’s developed a new prototype with all three brands, plus a drive-thru, and early tests have been strong. A company test saw a 45 percent sales increase, with the biggest share coming from young women. It is attracting more 18- to 32-year-olds, and women represent 52 percent of the customers at new stores, versus 42 percent in the old ones.

The 360-unit chain is opening 35 restaurants this year. Next year, it expects to open 60 units “on the low side,” Roddy said. “We’re going crazy. We’re growing. Things are changing. Things are rolling.”

Source: Franchise Times

3 profitable restaurant models

Schlotzsky’s Deli, Moe’s Southwest Grill and Sizzler discuss the payoffs of their recent remodeling projects

June 7, 2012 – Mark Brandau

Restaurant brands are getting more than just a fresh coat of paint with their latest efforts to refresh and remodel.

In addition to looking modern and relevant, now a necessity in a highly competitive restaurant landscape, chains are repositioning themselves, expanding into new dayparts and sales layers, and motivating their franchisees and staff through large investments for reimaging.

While major public companies like McDonald’s, Wendy’s and Bob Evans have identified remodeling as a major growth strategy, smaller brands also are targeting significant returns on reimaging investments and renewed growth. Schlotzsky’s Deli, Moe’s Southwest Grill and Sizzler spoke with Nation’s Restaurant News about how their recent remodels have begun to pay off.

Schlotzsky’s Deli: Tripling down on new positioning

In order to complete the reimaging of its more than 375 restaurants in 2011, Schlotzsky’s Deli invested $40 million in not only refreshing the chain’s décor but also in adding service elements to solidify its positioning as a fast-casual brand.

“Schlotzsky’s had gone through many years of being in between quick service and fast casual, so we repositioned from our marketing, service, and look and feel,” president Kelly Roddy said. “We changed it to ‘Lotz better,’ with new packaging and colors, new signage, and with food runners bringing food to the table. … We saw a significant improvement in customer counts and sales as soon as we finished the reimages.”

The Austin, Texas-based chain, which is a division of Atlanta-based Focus Brands, steadily grew average unit volumes after accelerating the rebrand process in 2011, going from average sales of about $660,000 in fiscal 2007 to about $780,000 by the end of 2011. Year-to-date, average unit volumes are tracking at about $800,000, Roddy said.

Some units even co-branded with other Focus properties, including Cinnabon and Carvel, to expand into dayparts beyond the typical lunch rush, he added. Units co-branded with a Cinnabon are on pace to pay back the remodel investment within nine months, while other Schlotzsky’s locations that simply updated the décor would reach their return in about 16 months.

“We now have a brand that’s more relevant and seated more strongly in the fast-casual position,” Roddy said. “We’re very much a lunch business, so our goal now is to reach beyond lunchtime. We can take some items we currently sell, such as our pizzas, which we’re starting to promote past 3:00 now, and introduce ourselves as a dinner player.”

The ability to fill the restaurant with customers at all points of the day — including for Cinnabon treats in the morning or at snack time and for Carvel ice cream at night — has increased productivity without adding much incremental labor, according to Roddy. He added that franchisees are bullish on the potential of Schlotzsky’s units tri-branded with Cinnabon and Carvel.

“It has re-energized the franchise base,” he said. “They’re starting to grow now, and people who haven’t built stores in a decade are out there expanding. We’re selling a lot of franchises, but we can be particular about who we let into the brand because it’s in such high demand.”

There currently are about 20 tri-branded locations, and Schlotzsky’s plans to open 35 more in 2012, Roddy said.

Source: Nation’s Restaurant News

Schlotzsky’s ownership a blessing in many ways

By Laura Elder

The Daily News

Published April 22, 2012

Cynde Whitson has a lot on her plate. She owns two Schlotzsky’s restaurants in Galveston County and is working on a third.

But the fast pace and constant challenges are what Whitson sought when she left a medical sales jobs to become her own boss.

“I can’t do the nine-to-five thing,” Whitson said.

Whitson owns a Schlotzsky’s at 221 S. FM 270 in League City. Last year, she opened a Schlotzsky’s and Cinnabon Express, 3325 Palmer Highway, in Texas City. As of press time, she was searching for site on Seawall Boulevard in Galveston to open a Schlotzsky’s, Cinnabon and Carvel Ice Cream store.

Atlanta-based Focus Brand Inc. is the franchiser and operator of Carvel, Cinnabon and Schlotzsky’s.

In 1994, Whitson, who grew up in Springfield, Mo., where the winters were long and cold, learned of a medical sales job in Texas. The warm climate was appealing, so she got in her car and drove to Dallas.

The job just wasn’t it, though.

“I felt like being an outside sales rep would be similar to owning my own business … managing my own territory, setting up my own appointments.

“I loved it, but working out of my home and long hours in the car — before cellphones — was very lonely.”

The idea of working in an office didn’t appeal to her either, she said.

“I had actually worked in an office for four years and it was a miserable experience,” she said. “Slow paced, routine … I felt like I was working my life away, living for Friday and dreading Monday.”

Whitson always dreamed of opening a business. When she was growing up, her father owned a small clothing store. As a child, she sometimes would go to work with him early in the morning and watch him take care of customers.

Whitson wanted that for herself. She earned a degree in business administration and marketing at Rockhurst University in Kansas City, Mo., and wrote a term paper on franchises.

She considered buying a postal-related franchise or Diet Center but was drawn to food franchises. One of her first jobs was waitressing, and she loved its fast pace and that it involved constant contact with people.

So, Whitson did her research and decided on a Schlotzsky’s, an Austin-based purveyor of pizzas, salads and soups founded in 1971, which bills itself as the home of the original toasted sandwich.

The initial franchise fee today to become a Schlotzsky’s franchisee is $30,000. Franchisees also should possess cash liquidity of about $600,000.

She opened a League City store in 1999 and immediately was presented with challenges and the pace she sought. Whitson was general manager of the new store. Anyone considering buying a restaurant franchise should remember there’s a lot more to owning a restaurant than selling food.

“It’s a lot harder than you think it’s going to be,” she said. “You have to wear a lot of different hats.”

Whitson was the accountant, operations manager, marketing manager and repairwoman for the League City Schlotzsky’s. She had to hire employees — each Schlotzsky’s employs about 25 people — and handle catering.

If the sandwich oven stopped working, she fixed it. If there was a problem with the building, she fixed that, too.

“I’ve been on top of the roof more times than I can count,” she said. “When it costs $200 every time you call a repairman, you try to fix things yourself.”

When she opened the League City store, it was a particularly rainy year. Rain during lunch hour rush isn’t good for crowds. Then road construction in front of her store made access difficult. Having a known and well-liked brand name is only part of the equation, she said.

But she hired a good group of employees and worked hard to market the eatery and to build a reputation for customer service. Also, League City’s population boom in the past decade was good for business.

Catering to businesses is a big part of sales.

“You have to get out there and fight for it,” she said.

The League City Schlotzsky’s did well enough to capture the attention of Jimmy Hayley, president of the Texas City-La Marque Chamber of Commerce. Hayley was persistent in his efforts to persuade Whitson to open a franchise in Texas City.

Whitson looked at the demographics and was skeptical at first. But Hayley gave Whitson and officials with Schlotzsky’s corporate offices a tour of the mainland city known for refineries and petrochemical plants.

Early last year, in an investment of about $500,000, Whitson open the Texas City Schlotzsky’s to big crowds. The Texas City eatery was built to reflect Schlotzsky’s re-branding efforts, which include a new design, a co-branding deal with Cinnabon and a new service model in which employees deliver food to the tables.

“There was some pent-up demand,” she said.

Right away, Whitson noticed a difference in the League City and Texas City eateries. Refinery and plant workers, because of their shifts, start lunch about 10 a.m., Whitson said. Lunch in League City begins about 11:30 a.m.

Whitson also expects the clientele on the island, which is seasonal, to be much different from the other stores.

Whitson still enjoys the pace of the business. But these days, the mother of a 6-year-old daughter has the help of her family. Her retired parents, who moved to Texas from Springfield, help out at the Texas City store. Her husband, Mike, also has begun working in the franchise business full time.

Whitson still is involved in every part of the business and is happy with her decision to buy a Schlotzsky’s franchise.

“I take out food, clean tables, make sandwiches,” she said. “It really has been a blessing in so many ways.”

Source: Galveston Daily News

S.A. proves to have drawing power on retail-franchise front

Tricia Lynn Silva

Reporter - San Antonio Business Journal

The country’s uncertain business climate isn’t slowing the pace of retail franchise growth in the Alamo City, as evidenced by the continuing flow of new concepts entering the market.

Some of the latest arrivals include clothing stores like Plato’s Closet and Once Upon a Child.

The city is also seeing a growing menu of new food-entertainment concepts. One of the most recent entries: New Orleans-based Copeland’s of New Orleans, an upscale restaurant working to bring the flavor and hospitality of the Big Easy to the Alamo City.

Copeland’s joins an ever-growing list of restaurants opening their doors in San Antonio; others include Beef ‘O’ Brady’s, Wing Zone, Urban Taco and Corner Bakery.

Some familiar names also have sought out San Antonio for their latest evolutions. Case in point is Austin-based Schlotzsky’s, which will be rolling out a new tri-brand store — bringing the sandwich shop, Carvel Ice Cream and Cinnabon under one roof.

“We want to make our business model as efficient as we can,” explains Schlotzsky’s president Kelly Roddy of the tri-branded stores. With its ability to target different tastes on different occasions “it makes for a really profitable franchise model.”

Schlotzsky’s plans to open upward of 10 new stores in the San Antonio area over the next three to five years.

While these businesses have brought some new concepts to local consumers, these franchises also offer budding entrepreneurs a chance to control their own destiny — at a time when that control has been hard to find in the job market.

“A significant number of people — whether it was their dream to open a business or not — are finding themselves unemployed,” says Bob Tierno, the Texas area developer for The Entrepreneur’s Source, a consulting firm that has worked with several franchise businesses over the last 25 years. “Now, they figure it’s time to take charge of their own destiny.”

Texas’ business-friendly environment has made it a hub for new companies. As for the attraction of San Antonio, Tierno says that the city’s diverse and growing population, makes it a hot spot for these franchises.

And given the latest national statistics, San Antonio could remain a key market for franchises for a while.

In its 2011 Economic Outlook, theInternational Franchise Association   reports that in 2010, there were more than 760,000 franchised businesses in the U.S. By the end of 2011, that number is expected to grow to more than 780,000, according to IFA — which uses data compiled by Pricewaterhouse Coopers LLP.

In 2010, the franchise industry generated about $706 billion in revenue. That number is expected to grow to $740 billion by the end of this year, IFA reports.

Infrastructure

The franchise model also offers the support system that can be crucial to new small-business owners like Melanie VanDyke, a former teacher and now the owner of two clothing stores here under the Plato’s Closet brand banner.

Van Dyke opened San Antonio’s first Plato’s Closet — one of four bargain-based lines owned by Minneapolis-based Winmark    . Her store was until recently located at 754 NW Loop 410 — at North Central Side retail center Park North.

Plato’s Closet buys and sells gently used clothes geared to the teen and 20-something shopper, says Van Dyke, who recently signed an agreement with Winmark to bring the Plato’s Closet concept to the Northwest Side. The actual site for that planned outlet is still being determined, she says.

Van Dyke has also moved her original store at Park North to a nearby shopping center at 603 NW Loop 410. She more than doubled her space in the process — going from a space of 3,000 square feet to a site spanning 8,000 square feet.

“We spent money to market ourselves, but the customers did a better job than we did,” says Van Dyke of the success of Plato’s Closet.

She also gives much credit to Winmark.

“Winmark does a fantastic job of setting you up to be a successful business owner,” Van Dyke says. “They provide you with the support that you need.”

That support, of course, is not free. Total development costs for a Plato’s Closet store, for example, range from $180,000 to $354,000, according to Steve Murphy, president of franchising for Winmark. Included in that estimate is the initial $50,000 worth of merchandise that a franchisee needs to open a store, the franchise fee, and other expenses associated with operating a store — including lease agreements and interior finish-out costs for a space.

Learning from mistakes

What franchisees can get for their investment, however, is a market-tested product.

“You can learn from someone else’s mistakes,” says Wayne Brewer, a franchisee for Schlotzsky’s.

Working in partnership with his wife, Brewer is one of several franchisees rolling out a new tri-brand model in the San Antonio area.

By the time Brewer and his wife opted to get into the Schlotzsky’s business, they had seen the company go through “the good, the bad and the ugly,” says Brewer.

That history includes the chain’s modest beginnings in Austin in 1971, bankruptcy reorganization in 2004 and its re-birth, courtesy of FOCUS Brands, franchisor of such concepts as Moe’s Southwest Grill, Auntie Anne’s pretzels, and of course, Carvel and Cinnabon. “We followed them through that period, and now, we’re ready,” says Wayne Brewer.

San Antonio has seen a lot of growth and “there are several new restaurants coming in,” says Roddy, who plans to make Schlotzsky’s a well-branded name among the new entrants.

Source: San Antonio Business Journal

 

 

 

Schlotzsky’s featured on CNBC’s Worldwide Exchange

Schlotzsky’s president Kelly Roddy talks to Nicole Lapin on CNBC’s Worldwide Exchange, where he addresses Schlotzsky’s reimage efforts and future growth plans.

Schlotzsky’s to open six new locations around Denver

Schlotzsky’s announced that in addition to its new Greenwood Village location, the company will unveil six “Lotz Better” reimaged restaurants throughout Denver. As part of its nationwide initiative to reimage the entire franchise system by the end of 2011, the reimage, which includes more than 350 Schlotzsky’s restaurants worldwide, features a refreshed color scheme and a circle theme that reflects the unique round sandwiches offered by the restaurant.

“It is an exciting time for the Denver Schlotzsky’s locations as we create an even better in-store experience for our guests,” said Brandon Poarch, owner of the Schlotzsky’s in Longmont. “The ‘Lotz Better’ look appeals to everyone, from adult to child, and provides a fun, fresh dining experience for the entire family. We’re thrilled to introduce our fans to the reimaged restaurants and attract new customers with our fresh look.”

 The reimaged Schlotzsky’s feature vibrant colors, playful slogans, and new artwork topped off with a new service model where crew members hand-deliver food to the tables. In addition, the Schlotzsky’s located in Longmont, Highlands Ranch, Denver and Greenwood Village also feature a partnership with sister company Cinnabon that offers two brands under one roof.

“Part of our growth strategy is to reinvigorate the brand with a fresh, new look while still maintaining the core of our business-our food,” said Kelly Roddy, President of Schlotzsky’s. “We have already signed a number of multi-unit deals with new and current franchisees since unveiling the new prototype and co-branding deal with Cinnabon.” Roddy added that the ‘Lotz Better’ look will be applied to all new construction.

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 between 600-700 locations by 2015.

For information on menu offerings, participating locations, or to find the nearest location, visit www.Schlotzskys.com.

Source: Castle Rock News Press

Get The Original for just $1.99 in Dallas-Fort Worth on Wednesday, July 20

We have 53 newly remodeled restaurants in the Dallas-Fort Worth area and we want to show them off! Come visit any of our DFW-area restaurants tomorrow, July 20, and treat yourself to a small The Original sandwich for just $1.99! You’ll love our new Lotz Better look and feel, not to mention the 27 restaurants that have added Cinnabon! Come enjoy a sandwich and enter to win free Schlotzsky’s for a year! More than 50 people will win the prize.

Click here to find the Schlotzsky’s location near you. See you tomorrow! 

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