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.

Entrepreneur of the Month: Kelly Roddy


Establishments: More than 350 sandwich shops in 35 states and four foreign countries

Headquarters: Austin, Texas

What He’s Done: Veteran of another Austin legend—H-E-B Grocery Company—Kelly Roddy has helped orchestrate Schlotzsky’s return from the brink since being named the chain’s president in 2007. Started as a college-town deli in 1971, Schlotzsky’s had changed hands several times in the 1980s, rocketing to more than 750 units before filing for bankruptcy in 2004. Now, in its 40th-anniversary year, the chain is on track for its sixth straight year of positive comp sales.

Why We Like Him: “A new brand position allows us to filter and evaluate everything we do: ’Lotz better,” says Roddy, 46. “It means that everything we do has to be significantly better than anything else in the category.” Deceptively simple, but effective.

How It’s Worked: Over the course of the past two years, management has strengthened the culture; improved the business model and unit economics; ramped up marketing; and introduced a remodel that has spurred 28 percent sales increases. The chain is also co-branding with sister-company Cinnabon, a move that has improved check averages and brought in new business.

Source: Monkey Dish

Keys to Success: How to Effectively Rebrand During a Recession

A rebranding initiative will cost a good amount of money, but there can be a huge payoff in the end.

BY KELLY RODDY

A poor economy can affect just about every business—from the local mom and pop shop to the franchising juggernaut. During a recession, most companies cut budgets and slash prices to accommodate the shifting needs of consumers. While this may help in the short term, this strategy can actually negatively affect both the franchise and its franchisees.

One successful strategy that carried Schlotzsky’s through the recession is rebranding. Instead of sitting back and holding on tight, the company decided to completely reinvent its brand in the midst of a recession. After developing a new prototype, service model and signing a co-branding deal with Cinnabon Express, the Schlotzsky’s brand is now stronger than ever.

There is a lot that goes into a brand makeover, but it all starts with a strong strategy. When rebranding, remember the “make new friends, but keep the old” rule. Never stray too far from your roots. Remember the product that brought you your original success. While your loyal base of customers will recognize and appreciate that you listened and acted on their needs, a steady stream of new customers will follow.

Three Steps to a Successful Rebrand

Many brands will become causalities of the recession, while the remaining brands will gain a larger audience and attract consumers looking for a change. Rebranding may not seem like the best choice during a recession because it can take a significant amount of time, cost a lot of money and there is no guarantee that it will be a success. However, studies have shown that the best time to steal the spotlight from your competitors is during a recession. To be effective, your company needs to conduct research, have a strategic plan in place and understand that a rebranding initiative will cost a good amount of money, but there can be a huge payoff in the end.

1 Pay attention to consumer trends. Consumer confidence diminishes during a recession, leaving many brands struggling to stay above water. It is crucial to understand consumer needs and consumer trends and be willing to make changes as needed. Companies have got to stay ahead of the trends by remaining proactive and thoroughly researching the existing customer base and new audiences the franchise seeing to attract to help it decide what to change and what to keep the same.

Often the relationships built with consumers during times of crisis are stronger and last longer than those built during times of economic prosperity. Look for new opportunities where other brands have failed and capitalize.

Consumers are facing the same challenges business owners are facing—everyone’s budgets are tighter. Consumers want to know that your franchise understands this, and they want to see the brand do something about it. Now is the time to build a strong bond with consumers. Businesses will find more value in viewing the recession as an opportunity to build their brands as opposed to sitting back and waiting for the recession to end. Consumers want to believe that your brand is in it for them. If the franchise is proactive and follows consumer trends, rebranding can have a huge payoff and be the single most important thing to do for the franchise.

2 Develop a clear brand strategy. When rebranding, it is important to maintain the core of your business, but change enough for consumers to take notice. A rebrand is about updating and keeping current with consumer trends. Researching consumer trends can play a huge part in your brand strategy. If the company focuses on consumer trends and looks at how the brand is different and how that difference creates value for the consumer, it will increase consumers’ confidence in the brand. The necessity for a clear message is more important than ever during a recession.

Knowing how unpredictable the economy can be and how downturns impact consumer spending, it is important to take proactive steps to enhance the brand and stay relevant. Generally speaking, the product is probably not the issue—it’s the perception of the product. Freshen up, make the appropriate changes and the consumer demand will follow.

3 Spend wisely. Rebranding is one of the single most important decisions a company can make. It can provide the boost needed to grab a larger market share, but it can also cost a pretty penny. Big decisions like these should be focused on spending wisely, but too often companies opt to do nothing at all. The typical reaction to a slow economy is to cut back and it things out. Ironically, if your brand decides to stand back and wait things out, he can end up damaging the brand. Many of the weaker brands, and in some cases stronger brands, will die off by the time the economy resurges.

There are tremendous lessons to be learned during a recession. A franchise does not have to become a causality of the recession. Historically, companies that invested in their brands during economic hardships retained their core audience, attracted new consumers and emerged stronger in the end. Rebranding can drive growth in an up market or protect the company’s value in a down market. Consumers tend to spend less overall and become far more selective about where they spend the little money they have. This can expose and amplify brand weaknesses, and highlight brand triumphs. As consumers become more price-conscious and less forgiving, they disregard brands that fail to provide relevant value. Companies that form a strategic plan and invest in their brand will ultimately come out of the recession unscathed, and often ahead of the competition.

Source: Franchising World Magazine

Schlotzsky’s rolls back into Brenham with “Lotz Better” look

By Miranda Omer, Houston Lunch Examiner

Area diners can expect quirky and fun quick-casual experience at new location in Brenham, Texas.

Schlotzsky’s, home of The Original round toasted sandwich and famous Fresh-from-Scratch buns, is back in Brenham and here to stay with its newest “Lotz Better” location at 2606 Highway 36 South, adding nearly 45 jobs to the local economy and bringing smiles to diners with its quirky brand personality.

“We are excited to be back and Brenham and we can’t wait to share our new ‘Lotz Better’ look, complete with addictive recipes, upbeat surroundings and funny sayings,” said Kim Pham, owner of the Brenham Schlotzsky’s location. “It’s hard not to smile when you walk into our bright new restaurant, smell the bread baking and see how much fun we have with our unique ‘bun humor.’ Brenham is in for a real treat.”

The new restaurant was built with Schlotzsky’s rebranding efforts in mind, which include a newly designed restaurant, a co-branding deal with Cinnabon and a new service model where crew members hand-deliver food to the tables, all intended to maximize the customers experience.Schlotzsky’s of Brenham offers 15 different sandwiches on their famous unique round freshly baked buns, as well as wraps, gourmet pizzas made with Fresh-from-Scratch crusts, freshly tossed salads, a variety of soups and delectable desserts, including a Cinnabon Express station where guests can enjoy a number of Cinnabon’s warm, homemade treats.

“With all of the new elements that enhance the Schlotzsky’s experience, we stay true to our roots by offering only the highest quality fresh ingredients and baking our sourdough breadfrom scratch every day,” said Schlotzsky’s President, Kelly Roddy. “We are truly excited to be back in Brenham with a taste of the ‘Lotz Better’ Schlotzsky’s.”

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 such as Kansas City, St. Louis, Raleigh, Charlotte, Atlanta and Florida for multi-unit developers. Roddy added that, ideally, Schlotzsky’s plans to have between 600 and 700 locations by 2015.

For more information, visit the beloved sandwich franchise online, or visit Schlotzsky’s newest Brenham location.

Source: The Houston Examiner

New look and locations are in store for Schlotzsky’s in San Antonio

by Tricia Lynn Silva

Friday, December 17, 2010, 5:00am CST

An Austin-based franchise is putting two sets of buns under one roof. The new look for long-time sandwich chain Schlotzsky’s has made its local debut — with a new store at 1110 Culebra Road in Northwest San Antonio.

Key to the new look is a co-branding deal between Schlotzsky’s and Cinnabon. Now, in addition to sandwiches, wraps and pizzas, patrons can also order tasty treats from a Cinnabon Express station — including the Cinnabon Classic Roll and CinnaPacks.

The restaurants are also heavy on tongue-in-cheek phrases — which have been incorporated into the tables and chairs and the circular-themed photography.

Source: San Antonio Business Journal

 

Saudi Arabia-based development group to add 40 restaurants in Egypt

September 28, 2010 // Franchising.com // AUSTIN, TX – Schlotzsky’s, home of The Original® round toasted sandwich and famous Fresh-from-Scratch® buns, took a giant step in their overseas development with a 40 store agreement in Egypt, a move that will nearly quadruple their current international presence in years to come.

Food & Entertainment, a Middle East developer representing 11 brands including sister companies Carvel, Cinnabon and Seattle’s Best Coffee, plan to open the first location in Egypt in the first half of 2011.

“I am excited to bring this thriving restaurant to a new market and introduce a fun new concept to Egypt,” says Kamal Abu Sara, representative of Food & Entertainment. “Schlotzsky’s wide range of options and flavors will appeal to consumers in Egypt, and the restaurant’s value, customization and health conscious options will make Schlotzsky’s a huge success.”

Schlotzsky’s parent company FOCUS Brands Inc. ®, the franchisor and operator of 2,200 Carvel®, Cinnabon®, Schlotzsky’s®, Moe’s Southwest Grill® locations and Seattle’s Best Coffee® in international markets, has a robust international infrastructure that currently supports over 530 locations in 34 countries, and is poised to support significant international growth for Schlotzsky’s. Schlotzsky’s international development has seen a huge boost in the recent year, and expects to open 7 to 9 additional international locations by the end of 2010 in Kuwait, Saudi Arabia and Turkey. Currently, Schlotzsky’s has 17 international locations.

Schlotzsky’s domestic development has seen an influx in the recent year and is set to support 50+ openings in 2010. Schlotzsky’s attributes the surge to a recent brand reinvention, in which they unveiled a new prototype restaurant featuring vibrant colors, playful slogans, contemporary furniture and artwork, and a partnership with sister company Cinnabon that offers franchisees two brands under one roof. Schlotzsky’s also introduced a new service model where crew members hand-deliver food to the tables.

“This is an exciting time for the Schlotzsky’s brand,” says Kelly Roddy, president of Schlotzsky’s. “In addition to this great partner bringing our brand to Egypt, Schlotzsky’s has continued domestic success. As we celebrate hit our 40th year of business, I believe the brand is stronger than it has ever been.”

Source: Franchising.com

Q&A with Kelly Roddy of Schlotzsky’s

September 21, 2010 – Kelly Roddy was named president of Schlotzsky’s in December of 2007, the same month the “great recession” began. Since taking the helm of the sandwich chain, Roddy has led the company to strong financial results through strategic changes and strong marketing. Prior to Schlotzsky’s, Roddy was with H-E-B Grocery Company, a 102-year old retailer with more than 300 locations throughout Texas and Mexico. Roddy also worked in business development for Scholastic Corporation, the national book publisher and he also spent eight years with Wal-Mart stores. He currently serves on several boards including Baylor University’s Marketing board, Hankamer School of Business board and the Caritas board.

You joined Schlotzsky’s in December of 2007, just as the “great recession” started. How did you deal with the poor economic conditions as you tried to move the concept forward?
We made the decision to Zig when everyone else Zagged. At that time, many companies were setting up a defensive position, trying to brace themselves for the recession. We have charged full speed ahead on a major brand reinvention. We worked on our company culture, strengthened our business model with the advent of Cinnabon Express, we launched a new brand position, “Lotz Better”, and redesigned all of our packaging and launched more aggressive marketing. We also developed a new prototype and we put in place a very aggressive development plan to grow the company. Instead of focusing on the poor economy, we focused on what we could do to provide more value to our guests by moving to a table delivery model. We have done all of this and had positive comps for 2007 through 2010 so far. Some have said to me that I should walk before I run. I say to them, see you in the rearview mirror.

What have been the biggest challenges that you have faced during your time with the brand?
We have been in a constant state of change since 2007. Change is difficult for some but we have made it part of our culture. Everyone now understands that if we are not in a constant state of evolution then we will become extinct. Read more.

Source: The Food Channel