Sandwich generation Can Quizno’s, Togo’s cut the mustard here?

AMarch 11, 2002
By ALEX PHILIPPIDIS
Westchester County Business Journal

A pair of growing national sandwich chains will learn over the next few months if they can truly cut the mustard by expanding into Westchester and surviving entrenched competition from the county’s 15 Subway Restaurants and dozens of local delicatessens.

The Quizno’s Corp. and Togo’s Eateries Inc. are searching for sites where they can open their first Westchester stores as soon as they find them. Both chains are betting that patrons here are as hungry as elsewhere in America for alternatives to burgers, pizza and fried chicken.

“There are a lot of people looking for healthier choices to hamburgers and french fries,” said Mary E. Tomzack, publisher of FranchiseHelp Inc., an Elmsford research firm and consultancy on the franchise food industry (www.franchisehelp.com).

“We have a lot of mom-and-pop independent delis, but we don’t have the variety of the franchise stores you have in other parts of the country,” Tomzack said. “What the franchise chains hope to do is bring a better atmosphere and a greater variety of food. It’s about the eating experience.”

One sign of the nation’s changing taste buds, Subway overtook McDonald’s last year as the nation’s largest restaurant chain with a 904-store expansion drive that elevated the sandwich chain to 13,268 eateries nationwide as of Feb. 22, compared to about 13,100 for the burger behemoth.

Quizno’s goes East

One chain convinced it can grow in Westchester is Quizno’s. The Denver-based chain specializes in oven-toasted sandwiches like its special Chicken Carbonara available through March 17. It consists of marinated all-white chicken strips, mozzarella cheese, bacon, sautéed mushrooms and a creamy parmesan alfredo sauce.

Quizno’s signaled its Westchester plans on Feb. 27, when it announced the selection of Fairfield Retail Partners L.L.C. of Ridgefield, Conn., as exclusive agent to oversee its expansion in the county as well as the rest of the Hudson Valley, plus Connecticut and northern New Jersey.

Fairfield Retail Partners is seeking freestanding or attached sites of 1,200 to 1,800 square feet.

“Right now, our focus is on shopping centers, freestanding sites and downtowns that have a strong concentration of people working nearby. We’re not focusing on malls,” said David Livshin, president and chief executive officer of The Dagar Group, the Fishkill real estate firm affiliated with Fairfield Retail Partners.

Sue Hoover, executive vice president-corporate communications for Quizno’s, said the chain is expanding, and has already made its first foray into the region with restaurants in Manhattan and Brooklyn.

“We think we can compete on the East Coast,” Hoover said. “A lot of East Coasters have a favorite deli, but have also come to love our sandwiches.”

The franchising industry news web site Bison.com reported Jan. 18 that Togo’s will seek Westchester sites as part of a regional push for franchisees by the chain’s corporate parent, Allied Domecq Quick Service Restaurants.

The unit of British-owned Allied Domecq PLC, which has U.S. offices in Randolph, Mass., plans to open “trombo” or triple-combo restaurants that combine Togo’s with two other food chains owned by the company, Dunkin’ Donuts and Baskin-Robbins ice cream, Bison.com reported.

Allied Domecq referred calls seeking information about the expansion to a spokeswoman who did not return calls by press time.

As they expand into Westchester, Togo’s and Quizno’s will also try to avoid the mistakes that torpedoed another national sandwich chain that entered the county.

Schlotzky’s Deli envisioned several units in the county when it opened a White Plains store in 1995. That store turned out to be Schlotzky’s only Westchester store. It racked up less than half its projected sales for 1995, in part due to a location three blocks south of the city’s busiest downtown streets. The franchisees converted the store to a New York-style deli that lasted a couple of additional years, and is now an Irish restaurant-pub.

Diet pays off

Togo’s and Quizno’s sell only a fraction of the $5.2 billion recorded last year by Milford, Conn.-based Subway worldwide — $4.5 billion of that domestically.

The chain has benefited from repositioning itself as a healthier alternative to other fast foods. Its recent advertising featured Jared Fogle, who lost 245 pounds on a 1,000-calorie diet that included eating Subway’s 6-inch turkey sub sandwich for lunch and foot-long veggie sub for dinner daily.

The newest ads feature Clay Henry, a firefighter who claims Fogle inspired him to lose 130 pounds.

Tomzack said Subway’s recent growth also reflects improved relations with franchisees. The chain angered franchisees a few years back by increasing the number of franchises it sold in some cities and sub-markets where it wanted to boost market share.

This year, Subway will step up a chain-wide redesign of restaurants now in 57 sites. The new look jettisons city scenes for brick wall coverings and softer lighting.

“We’re ready to go into almost any area a franchisee wants to open a restaurant,” said Annie Smith, manager of public relations for Subway. “We still believe there’s lots of room for expansion out there.”

Quizno’s and Togo’s are two sandwich chains eager to compete in Westchester with Subway and a host of local delis. How do the chains stack up?

Subway
16,059 sites in 74 countries, including more than 13,000 in the United States as of Feb. 22.

15 Westchester stores: Three in Yonkers; two each in New Rochelle, White Plains and Yorktown Heights; and one each in Bronxville, Greenburgh, Mamaroneck, Mount Kisco, Ossining and Port Chester.

2001 Financial: Sales of $5.17 billion globally, including $4.5 billion generated in the United States.

Franchise contact: 800-888-4848.

Quizno’s

About 1,500 sites worldwide, all of them in the United States

No Westchester sites. Searching for sites through Fairfield Retail Partners L.L.C.

2001 Financial: Company went private late last year. In its last public filing Aug. 21, it reported a $1.2 million loss for the nine months ended June 30, despite a 30 percent jump in revenue to $38.7 million.

Franchise contact: 800-335-4782.

Togo’s

385 sites, all in the United States.

No Westchester sites. Corporate parent Allied Domecq Quick Service Restaurants (QSR) wants to open 320 in a region consisting of Westchester, New York City and Long Island.

2001 Financial: Company only furnishes selected statistics for Allied Domecq Quick Service Restaurants, which includes Togo’s — such as a 6 percent rise in trading profits for year ended Aug. 31, to $102 million. Parent Allied Domecq PLC saw net income rise 8.4 percent over 2000, to $501.2 million on sales of $4.2 billion, up 9.7 percent.

Franchise contact: 800-777-9983.