Quiznos courts C-stores with breakfast, growth plans

Quiznos courts C-stores with breakfast, growth plans

DENVER Sandwich chain Quiznos is focusing on its convenience store locations with a new national breakfast program debuting Monday and plans to double the number of C-store outlets within the next two years.

The morning menu debuting this week at all 175 Quiznos outlets adjacent to or inside C-stores is anchored by egg-and-breakfast-meat versions of the Denver-based chain’s signature Toasted Subs and flatbread Sammies. New to the menu are a Country Sausage and Egg Biscuit and a Giant Cinnamon Roll.

Click here to view a slideshow of Quiznos' different C-store initiatives. [3]

Breakfast items have been sold for some time in selected conventional Quiznos locations, based on site-specific demand, but in the C-store space those foods “represented a giant organic growth opportunity,” said Shultz Hartgrove, the chain’s senior vice president of convenience development.

“According to a Technomic Breakfast Report, breakfast is projected to be a $93 billion business and is absolutely crucial in the 24-hour convenience store environment, as more than 35 percent of convenience store food business is in breakfast,” Hartgrove said. “Our [C-store-owner] partners told us they needed us to address this daypart and we’re doing it with a breakfast menu developed to deliver on the quality, chef-inspired tastes for which Quiznos is known.”

Hartgrove joined Quiznos about six months ago to help “deconstruct and rebuild” the chain’s convenience-store strategy based, in large part, on consumer and C-store owner feedback. The work has led to sweeping changes, which, apart from the breakfast rollout, include:

  • The tabling of Quiznos’ previous requirement that franchisees at convenience-store locations develop 1,100-square-foot, end-cap restaurants with an entrance separate from the C-store, in favor of now having them build in-line facilities that nestle within the store. Hartgrove said the new 400-square-foot in-line prototype is about leveraging assets – C-store operators “already have a building,” he noted – and eliminating the need for consumers to pay for prepared food at one register and settle the tab for other goods, at another.
  • Streamlining the full-day menu to reflect the C-store environment’s need for quick service, greater portability in foods and user demographics. “Convenience store demographics are really young male dominated, so instead of six salads, we have three, and instead of four soups, we have two,” Hartgrove explained. He added that the traditional Quiznos menu was a bit cumbersome for C-store purposes so it was paired back to 80 percent of the chain’s top-selling items and enhanced with a Deli Favorites section that lets customers quickly dictate their own favorite combinations of turkey, ham or roast beef and produce.
  • Accelerated expansion within the C-store segment that Quiznos first entered more than five years ago. “We have not grown that [C-store] space,” Hartgrove said. “Going forward, we will double the store count in the next 18 to 24 months and then [work to] double it again.”

Quiznos will have to keep up that pace for some time to catch sandwich segment leader Subway, which spokesman Les Winograd said currently has about 3,200 locations in convenience stores worldwide, including some 2,700 in the United States. The franchisees of Milford, Conn.-based Subway who operate in C-stores serve all dayparts, he said, as many of those sites are open 24 hours.

Though some Quiznos franchisees lease C-store space or are in joint ventures with C-store owners, the chain’s preferred business model calls for dealing directly with the C-store operator, Hartgrove indicated. He said that apart from a different initial fee, C-store franchisees pay the same royalties and advertising fees as franchisees operating in conventional stores.

Of all the changes to Quiznos’ C-store platform intended to benefit store owners, the move from end cap buildings to in-line facilities is, perhaps, the most dramatic.

According to Hartgrove, the new prototype, which dedicates about 200 square feet of service and production line space in the public area of a store and another 200 square feet in the back of the house for storage and prep work, roughly costs between $45,000 and $75,000 to develop. That compares with a price tag of up to $250,000 for the nearly three-times larger end cap design and an even higher tab for a conventional Quiznos restaurant, he said.

The sales volumes for a C-store unit are very similar to those of conventional Quiznos units, Hartgrove said, “so our return on investment per square foot at a convenience location is almost double that of a traditional location,” he noted.

Currently, about 150 of the 175 Quiznos C-store outlets are of the end cap design, with the other 25 using the new in-line prototype. That ratio will be reversed in future development, chain officials said.

Hartgrove said that Quiznos’ C-store prices are in line with those at conventional stores in each market, but he added that breakfast fare has been priced with “even more of a value proposition.” Research has indicated that 50 percent of breakfast consumers spend between $3 and $5, Hartgrove explained, “so we want to get them food and a cup of coffee and get them out of there for under $5 bucks,” he said.

Quiznos founder and chief executive Rick Schaden is high on the upside potential for C-store development. “The strength of our brand combined with the convenience of these nontraditional locations creates a compelling offering for our customers and a significant growth opportunity for our brand,” he said.

Contact Alan Liddle at [email protected] [4].