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Maoz moves to capture U.S. vegetarian market

Maoz moves to capture U.S. vegetarian market

First the world, then the United States?

That trajectory for quick-service chain Maoz Vegetarian may sound a bit backwards, but company officials say the concept is ready to capitalize on Americans’ strong demand for vegetarian meals and other healthful fare. Maoz, founded in 1991 in Amsterdam, Netherlands, debuted in the United States in 2004, and now has about 15 restaurants in Europe, India and Australia. The company most recently opened three stores in New York and plans to expand to other major American cities soon.

Americans are drawn to the vegetarian menu, including falafel sandwiches and an unlimited complimentary salad bar, said Yair Marinov, chief operating officer of Maoz Vegetarian USA.

“People are looking for health-conscious concepts and vegetarian restaurants,” Marinov said. “There are hundreds of falafel stores in the U.S., but this is more of an upscale version.”

The Maoz Sandwich, a pita stuffed with falafel balls and vegetables and priced at $4.95, anchors the menu. Customers may add hummus, eggplant, feta, avocado or a hardboiled egg for between 50 cents and $1. A major draw, however, is the free toppings and sauce bar that features fresh tomato salad, pickled baby eggplant, coleslaw, a broccoli and cauliflower blend, carrot salad, and tabbouleh salad. Sauces include tahini, garlic, yogurt, cilantro and green-chile varieties.

With the recent opening of the second corporate store in New York—the first Maoz there, an 850-square-foot unit in Manhattan’s Union Square, is franchised—the chain now has three locations in that city and two franchised stores in Philadelphia. A franchise in Boca Raton, Fla., opened in October, and the company plans to open more franchised units in San Francisco and Washington, D.C., early next year, Marinov said. In addition, Maoz hopes to open soon in Boston and Chicago and still is looking for franchisees for Brooklyn, N.Y., and Hoboken, N.J.

Maoz will target growth toward large urban centers and college campuses, Marinov said.

“It’s always successful with students,” he said from the Maoz company store in New York’s East Village, near New York University. He added that Maoz also attracts tourists and young customers who enjoy the nightlife in its urban markets. For example, the East Village unit is open till 11 every night and midnight on the weekends, and the Union Square unit is open until 1 a.m. on the weekends.

The company wants to expand mostly with multiunit franchisees.

“We’re a young, small company, and it’s better for us to deal with a few groups that will open multiple locations and grow with the company,” Marinov said.

CHAIN FACTS

NAME: Maoz VegetarianHEADQUARTERS: New YorkMARKET SEGMENT: quick serviceMENU: falafel, saladsNUMBER OF U.S. UNITS: 5AVERAGE CHECK: $7.60LEADERSHIP: Yair Marinov, chief operating officer for U.S. division

So far, Maoz has not advertised heavily in the franchise community, but operators have sought out the company after seeing it abroad.

“What’s interesting about the franchisees we have is that they’re people who have been to one of our stores in Europe,” Marinov said.

Those operators have been able to translate their favorable impressions of Maoz into successful stores here because of the simple business model, Marinov added.

“It’s an easy operation,” he said. “That’s what people like about it. We don’t have 80 items in our menu.”

In fact, he said, some franchisees didn’t have prior restaurant experience but have run their stores successfully with training and support from the franchisor. New franchisees are required to spend two weeks working in a corporate store. Maoz’s simplicity cuts down on time needed to learn the chain’s recipes and kitchen procedures. There are only fryers in the kitchen and no grills.

“The most complicated thing is probably the salad bar,” Marinov said, noting that Maoz’s stripped-down equipment specs keep initial investment costs low. “Even though we have to do everything fresh every morning, we still don’t have so many items to deal with.”

The company requires franchisees to spend 1 percent of sales on local marketing, but so far there are no national ad campaigns.

Going forward, units will range in size from 800 square feet to 1,500 square feet. The Boca Raton unit is a smaller version in a mall food court, and Maoz hopes to develop at nontraditional sites like airports. New York’s Union Square location is about 850 square feet with four chairs, but that store’s franchise owners report that it does about 600 covers per day, mostly carryout.

The per-person average check is about $7.60, Marinov said. The chain is testing breakfast at the Union Square unit as a possible way to grow sales in other dayparts. To accommodate the heavy foot traffic from morning commuters, the store opens at 7 a.m. and offers a create-your-own breakfast bar of granola, yogurt, fruit, nuts and fresh-squeezed juices.

Still, Marinov is pleasantly surprised by the main falafel-driven menu’s mass appeal.

“I thought in the beginning that people who are not vegetarian are not going to come to the restaurant,” Marinov said. “But then they realize it’s just like having any other kind of meal, and the fun part is having all these vegetables and sauces and choices. People that aren’t vegetarian … appreciate the fact that there are so many options.”

Franchisees may appreciate the concept for an entirely different reason: lower food and labor costs. Because the chain doesn’t buy big-ticket proteins, and because fewer staffers are needed to run the stores, food and labor costs both hover around 25 percent.

Still, prices for ingredients have gone up, Marinov said. Prices for tahini, which Maoz gets from Turkey, doubled in the past year.

“I wouldn’t say there’s pressure, but I would want to be in a situation where we’re getting better prices,” Marinov said, adding that the more Maoz builds out the system, the more they can leverage better economies of scale with everything from purchasing to building new stores. “Once you have stores up and running, it’s a lot easier to get everything in.”

Marinov noted that Maoz’s New York stores don’t have to post calorie information on their menu boards yet because they have fewer than 15 units in the city.

“Hopefully that will be a problem for us soon,” he said.

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