Since 1971, Schlotzsky’s has been the home of The Original toasted sandwich. The menu has evolved with customers’ tastes to include other sandwiches, pizzas, salads and soups. Schlotzsky’s has more than 350 locations worldwide, with restaurants in Turkey, China, Saudi Arabia, South Africa, Costa Rica, Jordan and Kuwait. Schlotzsky’s is owned by FOCUS Brands Inc., the franchisor and operator of over 3,300 Carvel, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, and Auntie Anne’s locations and Seattle’s Best Coffee on certain military bases and in international markets.
Kelly Roddy came to Schlotzsky’s in 2007 as president, having served as director of sales and marketing and later director of retail operations for H-E-B Grocery Company, a 106-year-old retailer with more than 315 locations throughout Texas and Mexico. Before his time with H-E-B, he was vice president and executive director of new business development for Scholastic Corporation and prior to that, he spent eight years with Walmart Stores, Inc. in a variety of positions. In 2011, Kelly received his Certified Franchise Executive (CFE) designation from the Institute of Certified Franchise Executives and is also a member of the International Franchise Association (IFA).
Franchise Chatter (FC): Can you share with us the story of how Schlotzsky’s got its start?
Kelly Roddy (KR): In 1971, a small shop on South Congress Avenue in Austin, Texas was home to a single, one-of-a-kind sandwich. Don and Dolores Dissman opened the first Schlotzsky’s with only one product – an 8-inch muffaletta stuffed with three meats, cheeses, lettuce, tomato, olives and dressing, served on hot, freshly-made sourdough bread. Modeled after the muffalettas they discovered in an Italian grocery store in New Orleans’ French Quarter, The Original toasted sandwich was an instant hit.
FC: For those unfamiliar, please tell us about your food? What is unique about your menu compared to other fast food franchises specializing in sandwiches?
KR: The main thing that sets us apart is our bread – our buns are round and are baked fresh-from-scratch in the stores every day. It differentiates us and it’s our signature shape. Our sandwiches are served warm and are made to order. In addition to our great-tasting sandwiches, we have fresh-tossed salads, soups and pizzas.
FC: Can you describe the ideal franchisee for a Schlotzsky’s restaurant?
KR: Our ideal franchise partner is a well-capitalized, savvy business professional. He or she is a passionate, high-energy individual with a true entrepreneurial spirit. In addition, they should have previous restaurant experience and are willing to be a multi-unit operator.
FC: What is the ideal neighborhood and territory for a Schlotzsky’s restaurant? In what regions of the country do you see the strongest demand for your restaurants?
KR: We have a strong presence in middle America and appeal to a wide customer base. Our guests have a distinct appreciation for top-quality food and great customer service. Schlotzsky’s is in strong demand, with locations in 37 states across the U.S., but our highest concentration of restaurants is in the central and southern parts of the country. From there, we are growing out concentrically as our distribution system allows and have recently signed agreements for areas in the northeast.
FC: What specific steps do your most successful franchisees take in order to build and grow their respective businesses?
KR: The most important thing is to be an active owner willing to follow a proven system that works. Our most successful franchise partners are active in their restaurants, are involved with the brand and are quick to embrace and promote change and innovation.
FC: What are some of the things you are doing to help your franchisees become profitable?
KR: As of the end of 2011, our entire system has been reimaged, which reflects a circle-themed design and includes new colors, new graphics, new signage and new menuboards. We’ve also revamped our menu, adding fresh-tossed salads along with sandwich meals, which appeals to our current customers and brings in a new age group. In addition, 165 of our restaurants now have Cinnabon as part of their operations and 30 will have both Cinnabon and Carvel Ice Cream.
FC: What are your goals for Schlotzsky’s in the next few years and how do you plan to grow your business?
KR: Now that we’ve completed our rebranding, it’s time to focus on growth and continued improvement of our operations and our menu. Moving forward, most of our new restaurants will be tri-brand locations (Schlotzsky’s, Cinnabon and Carvel). Growth is a big focus for us and we’re looking for franchise partners who are ready to come into our system and operate multiple units. Increasing pizza sales and different day parts are high potential opportunities. Our pizza is unique because we use our sourdough bread mix. Another major goal is to expand our catering services across our brand in order to provide cohesive, systemized catering to our guests.
FC: What advice can you give prospective franchisees on how to evaluate the overwhelming number of franchise opportunities available to them?
KR: Do your research. Find a brand that is relevant and growing. Every brand has its own culture and distinctive characteristics, so find one you are passionate about and that you believe in. And definitely reach out to other franchise partners to learn from their experiences and find out what they like and don’t like about the brand.
FC: What advice can you offer new franchisees on how to increase their chances for success in the restaurant business?
KR: Your franchisor will present you with a business model to guide you to success. The best thing you can do as a franchisee is embrace the business model and make it work for you. That’s the advantage of being a part of a franchise system, because processes and products are tested and perfected before they are implemented in restaurants.
FC: Is there anything else you wish to share about Schlotzsky’s?
KR: After 40 years in the restaurant business, we’ve worked hard to develop strong, positive relationships with our franchise partners. We have a clear line of communication within our franchise system and include individual franchise partners in our decision making through our franchise advisory council. We’ve also used our time and experience to create a brand culture that is relevant, quirky and fun. With our sister companies, Cinnabon and Carvel, we offer the unique opportunity to operate three complementary brands under one roof.