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Subway tests prototype of a more upscale-cafe concept for possible growth beyond D.C. market

Subway tests prototype of a more upscale-cafe concept for possible growth beyond D.C. market

ALEXANDRIA VA. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

A regional developer for the Subway chain in the Washington, D.C., area will debut in Alexandria, Va., later this month Subway Café, an upscale cafe version of the quick-service sandwich concept that could grow beyond the D.C. market if it is successful, a corporate spokesman said. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

The first Subway Café will feature panini sandwiches, gelato, fresh baked goods and coffee beverages, in addition to the traditional submarine sandwiches for which the chain is known. The cafe, owned by franchisee Hee Lee of Crystal Lake, Md., is the first of five planned for the greater Washington, D.C., area. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

Les Winograd, spokesman for Milford, Conn.-based Subway, said the cafe concept is “a test that our people in the D.C. area are doing, and it’s something that is still in its early stages.” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

The test is “particular to the D.C. market for right now,” Winograd said. “We’re constantly running tests. We have 36,000 stores around the world, so that’s a very large test base.” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

The new cafes, which are the brainchild of McLean, Va.-based Subway Development of Washington, will have brick and wood-paneled walls and will feature upholstered chairs, said Alan Warmund, president of the company, which oversees 1,019 franchised Subway units in the mid-Atlantic states. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

“A typical Subway in the D.C. area costs between $200,000 and $220,000, turnkey,” Warmund said. “To open a [cafe], I think this will add another 50-plus. Just think about the coffee and espresso equipment—that’s about $10,000 to $12,000—and the gelato machines as well.” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

Subway’s traditional U.S. units have estimated annual sales of about $392,000, according to Nation’s Restaurant News’ most recent Top 100 report. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

Warmund said the idea for the cafe grew out of requests from customers from a nearby office park who said they wanted the option of choosing between Subway’s core menu and more upscale items. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

“We’d been testing individual items here and there probably for well over a year,” he said, “but we kind of just decided to put everything together at this [first] location. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

“It won’t look anything like a Subway [store]. Even the menu boards are upgraded, snazzier, not plastic. We’ve added an espressocappuccino coffee bar area and a gelato station, and we’re going to use our ovens to bake a wide variety of gourmet pastries.” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

Prices for core items will remain the same as at traditional units, and the more upscale items will be competitive with such market players as Panera Bread and Starbucks, Warmund said. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

The hours of the new cafe will differ slightly from those of traditional units, Warmund said. The cafe will open early to serve breakfast and will offer lunch and snacks during the day. It will close between 7 p.m. and 8 p.m., rather than 10 p.m., since most office park employees have left the work-place by then. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

“They might take sandwiches home for dinner,” he said, “but this certainly would not be a nighttime [destination].” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

Harry Balzer, vice president of the NPD Group market research firm, thinks the cafe concept could have legs. —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

“It’s good for all restaurants to explore how to remain contemporary, and I like the fact that the idea stays within the quick-service format,” he said. “Right now, more than 70 percent of all meals occur at quick-service restaurants, and I believe that will be the case five and even 10 years from now.” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

People are always “looking to make the food process easier,” he added. “New will get them in the door, but what [a concept] needs to survive is to save [the customer] time and money. ” —Subway is not known for espresso, gelato and Wi-Fi, but if an upscale prototype in this city proves successful, that could change.

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