Schlotzsky’s will take a bigger bite in Denver

By Mark Harden, News Director – Denver Business Journal

Schlotzsky’s, a sandwich chain with 10 Colorado locations, says it plans to add dozens more by the end of the year in metro Denver.

Austin, Texas-based Schlotzsky’s — a unit of Atlanta-based Focus Brands Inc. — says it has plans for 15 franchise deals in the city of Denver and another 30 deals in the Denver metro area by the end of 2014.

“The Denver market has already cultivated a loyal fan following and a strong brand reputation as consumers demand more convenient, fresh food options,” said David Wheeler, the chain’s vice president of franchise development. “We anticipate the same great success we’ve seen across Colorado in this targeted region of the state.”

Wheeler signaled that the company seeks “qualified franchise partners” in Denver.

The company said the new stores will offer franchisees “co-branding opportunities” with other Focus brands, Cinnabon and Carvel, “to offer franchise partners multiple streams of revenue under one roof.”

The move comes as homegrown sandwich chain Quiznos has faced challenges, shuttering thousands of stores in recent years and going through a pre-packaged Chapter 11 process.

Schlotzsky’s also is targeting markets in Texas as well as Oklahoma City, Tulsa, St. Louis and Kansas City for further expansion.

The chain says it currently has 350 locations in 37 states and three other nations.

Source: Denver Business Journal

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

Schlotzsky’s-Cinnabon opens in Peachtree City, GA

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

Come see us at 2771 W. Highway 54!

Schlotzsky’s® Launches Bold Reimaging Initiative in Atlanta


Fast Casual Brand to Reimage Entire Franchise System by End of 2011

ATLANTA, Ga., (April 8, 2011) – Schlotzsky’s, the home of The Original® round toasted sandwich, is unveiling 10 “Lotz Better” reimaged restaurants in Atlanta on March 30, launching a nationwide initiative to reimage the entire franchise system by the end of 2011. The reimage, which includes more than 350 Schlotzsky’s restaurants worldwide, includes a refreshed color scheme and a circle theme reflecting the unique round sandwiches offered by the restaurant.

“It is an exciting time for Atlanta area Schlotzsky’s locations as we create an even better in-store experience for our guests,” said Jan Carmean, owner of Schlotzsky’s in Athens. “The ‘Lotz Better’ look appeals to everyone, from adult to child, and provides a fun, fresh dining experience for the entire family. I’m thrilled to introduce our fans to the reimaged restaurant and attract new customers with our new look.”

The reimaged Schlotzsky’s features vibrant colors, playful slogans, contemporary furniture and artwork. Schlotzsky’s also introduced a new service model where crew members hand-deliver food to the tables. Everything, from tables and chairs to circular-themed local photography featuring tongue-in-cheek phrases, is contemporary and … round. Four Schlotzsky’s locations situated throughout Atlanta, Athens and Gainesville 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, and the company plans to have all existing restaurants re-imaged by the end of 2011.

Schlotzsky’s continues its growth momentum by aggressively targeting markets in Texas and in untapped markets around the country such as Atlanta, Charlotte, Denver, Florida, Kansas City, Nashville, Phoenix, Raleigh and St. Louis for multi-unit developers. Roddy added that, ideally, Schlotzsky’s plans to have between 600 and 700 locations by 2015.

Source: The Weekly

Carvel to Give Away FREE Ice Cream September 23rd!

Come by any time on Thursday for a Junior cup or cone of soft-serve ice cream

AUSTIN, TEXAS  – Schlotzsky’s-Carvel cobrand locations are celebrating you – our wonderful fans – with FREE ice cream September 23rd!  Come celebrate fall with a Junior cup or cone of our delicious soft-serve ice cream at no charge.  Consider it a scoop of thanks for your year-round support!

EVENT: FREE Junior cup or cone of soft-serve ice cream*

DATE: All day, Thursday, September 23

LOCATIONS: Schlotzsky’s – Carvel cobrand locations in the following cities-

Athens, GA;  Atlanta, GA;  Austin, TX;  Brea, CA;  Cedar Park, TX;  Fort Worth, TX;   Granbury, TX;  Lexington, SC;  Mesa, AZ;  San Antonio, TX;  Tulsa, OK;  Tuscaloosa, AL

*Free Junior cup or cone is 3 oz. size. Not valid with any other offer. Offer good  only on September 23, 2010 at participating Schlotzsky’s-Carvel cobrand locations.