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FDD Talk 2015: The Capriotti’s Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on July 22, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Sandwich Franchise, Sub Sandwich Franchise



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Capriotti's Sandwich Shop Photo by TheHungryHungryHungryHippo

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Capriotti’s franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Capriotti’s franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Capriotti’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average gross sales for all Capriotti’s restaurants in operation for 12 months or more that reported information for the entire period to the franchisor
  • 2014 average gross sales for all Capriotti’s restaurants in operation for 24 months or more that reported information for the entire period to the franchisor
  • 2014 average gross sales for all Capriotti’s restaurants in operation for 60 months or more that reported information for the entire period to the franchisor
  • 2014 average gross sales for all Capriotti’s restaurants in operation for 120 months or more that reported information for the entire period to the franchisor
  • 2014 sales, cost of goods sold, labor costs, paper and packaging costs, and gross profit for 6 affiliate-owned restaurants (the Horizon restaurant in Henderson, Nevada; the Sahara Restaurant in Las Vegas, Nevada; the Dana Park restaurant in Mesa, Arizona; the Chandler Restaurant in Phoenix, Arizona; the Boulder Highway Restaurant in Henderson, Nevada; and the Middletown Restaurant in Middletown, Delaware)

Section I – Background Information

Expansion appears to be the focus at Capriotti’s Sandwich Shop, which is focusing on expanding markets in Baltimore/Annapolis, Maryland, and Austin, Texas, among others. The chain intends to move from just over 100 locations to 400 to 500 by the end of the decade.

Along the way, Capriotti’s is getting high marks.

Forbes placed Capriotti’s fourth on its list of the 10 Best Food Franchises for Your Buck in May 2014. Forbes also named Capriotti’s as No. 8 on its list of The Best Franchises in America. The company was ranked No. 283 in Entrepreneur’s Franchise 500 in 2014 and No. 278 in 2015.

Playboy listed Capriotti’s as No. 1 on its list of the 20 best chain sandwich restaurants in the U.S.

Nation’s Restaurant News listed Capriotti’s in its 2014 Next 20 in August 2014. The list recognizes companies that are well-positioned to make it into the NRN Top 200. Cited were Capriotti’s leadership style, menu approach, and plans for growth.

Brother, Sister Named Store After Grandfather

Capriotti’s was founded by the sister-and-brother team of Lois and Alan Margolet in 1976 in Wilmington, Delaware. The restaurant, still a Capriotti’s store, was named after their grandfather, Philip Capriotti.

The chain is a favorite of Vice President Joe Biden, a native of Wilmington and a longtime fan of Capriotti’s. The Washington Post noted in November 2013 that Biden was the first customer in the company’s new Washington location, where he picked up lunch for the President to treat him to the best sandwich.

The Margolets were joined by their cousin Diane Rizzo, with whom they opened a second restaurant in New Castle, Delaware, in 1988, followed by a store in Newark, Delaware. The company started franchising in 1991.

In 2007, Las Vegas franchisees Ashley Morris and Jason Smylie, joined by a group of investors, bought the company. The headquarters were moved to Las Vegas, which has the largest concentration of shops. Morris became the CEO, and Smylie, No. 2 on Forbes’ list of Top 20 Social CIOs in April 2015, is the chief information officer.

Slow-Roasted Turkey

Capriotti’s has more than 100 stores, serving cold, grilled and vegetarian subs. Each restaurant continues the tradition of roasting whole turkeys for 12 hours; the shops also hand-pull meats and make their own meatballs and coleslaw. While the main focus of the chain has been slow-roasted turkey since the beginning, the menu has expanded to add more variety and more menu categories such as soups and salads.

One of the chain’s most popular sandwiches, the Bobbie, is named after the original owners’ aunt. It is crafted with pulled turkey, stuffing, cranberry sauce and mayonnaise.

Wearable Tech Creates Learning Opportunities

Capriotti’s has attracted attention for using Google Glass during food-service training. Management staff members wear the glasses to film peak-period activity from the front line, creating footage that can be reviewed and critiqued.

CAPAddicts Rewards App

Capriotti’s partnered with Mobil CRM platform Punchh to put together the CAPAddicts Rewards app, which helps customers earn points and reap rewards. The app, available on both Android and Apple devices, was announced in April 2014.

Section II – Estimated Costs

  • Please click here for detailed estimates of Capriotti’s franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis



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