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2014 Next 20: Capriotti’s Sandwich Shop

NRN takes a look at 20 restaurant chains best positioned to crack the Top 200 — and what they’re doing to get there. RELATED: • Spotlight on the 2014 Next 20 • Overview: Meet the NRN 2014 Next 20 • Infographic: The Next 20 at a glance • 2014 Next 20: Sales and Unit Trends

In 1976, long before “fresh,” “scratch-cooked” and “house-made” were restaurant catchphrases, Capriotti’s Sandwich Shop was roasting whole turkeys, rolling meatballs and making stuffing in-house each day.

Today, chief executive Ashley Morris and chief information officer and chief marketing officer Jason Smylie remain faithful to the scratch-cooking ideal, while selectively updating the brand. Morris and Smylie purchased the brand in 2008, before either had reached the age of 30, after several years as franchisees for Capriotti’s. Having hired veteran chain restaurant executives for day-to-day management, the duo is now grooming the Las Vegas-based chain, which, as of December 2013, boasted 100 U.S. units and $58.4 million in sales, a 14-percent increase from the year earlier. Today, Capriotti’s has 105 units, and is looking to transition from a quick-service business model to fast-casual branding.

“Our vision is to be the first brand inside the sandwich-only space with a $1 million-plus [average unit volume], and we are on our way to doing that,” Morris said. With Capriotti’s five-year stores flirting with an $800,000 average per-unit volume, and one- and two-year stores around $700,000, the goal of $1 million may indeed be achievable in the next five to 10 years, Morris added.  

Capriotti’s Sandwich Shop Night Exterior

Keys to success:

Leadership: As former Capriotti’s franchisees, the owners have a rapport with current franchisees — a group that Morris describes as “passionate fans” and “policers of the concept.” Along with setting brand strategy and leveraging their own career skill sets — Morris has a background in finance; Smylie in information technology — they have hired veterans, like former McAlister’s Deli executive Patrick Walls as president. He oversees a suite of seasoned managers with experience at brands such as Wingstop, Arby’s, Ruth’s Chris Steak House and Marriott.

Menu moves: Capriotti’s operators roast 24-pound turkeys daily and they pull, not slice, the poultry for optimum yield. They also make meatballs, stuffing and coleslaw from scratch. The current owners have introduced a Chicken Cheesesteak Sub, salads and soups for menu variety, and instituted a catering menu. As Capriotti’s moves toward a fast-casual model, the soup and salad lines will be expanded.

Capriotti's Capastrami

Nationwide growth plans: The chain ended the last fiscal year with $58.4 million in U.S. systemwide sales, a 14-percent growth rate from the year earlier, and with 100 locations, a 28-percent growth rate. Area franchising is the preferred growth model, Morris said. Currently, development agreements have been signed to open more than 200 additional restaurants. Projections call for between 400 and 500 restaurants to be open by the end of the decade and ultimately the chain could reach 2,500 to 3,000 restaurants nationwide, he said.

Fast-casual ambitions: The food is fast-casual quality, but changes in menu, ambience, decor and service must be made for Capriotti’s to step up from a quick-service concept, Morris noted. New stores feature a “turn-of-the-century coffee house” look with brick finishes and hardwood floors. The company is working on a fast-casual service system.

View the other Next 20 standout brands:

Del Frisco’s Grille
Burger Fi
Zoës Kitchen
Black Bear Diner

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