What is in this article?:
- CMO Perspectives: Doug Reifschneider of Firehouse Subs
- What's ahead in 2014
This interview is part of CMO Perspectives, presented by NRN in partnership with the National Restaurant Association’s Marketing Executives Group. The monthly feature explores how leading executives are navigating the ever-changing restaurant marketing landscape.
By positioning itself as a gourmet sandwich chain in the rapidly expanding fast-casual segment, Firehouse Subs has no shortage of competition trying to match its supercharged growth rate. That kind of ramp-up in unit count raises the degree of difficulty for Doug Reifschneider, the Jacksonville, Fla.-based chain’s vice president of marketing, but it is a challenge he welcomes.
According to the latest report from Nation’s Restaurant News, Firehouse Subs grew its U.S. systemwide sales at the eighth-fastest rate, a 14.8-percent increase to $436.1 million, in its latest fiscal year. At the end of the latest year, Firehouse Subs also increased its unit count by 25 percent, to 712 locations.
“We’ve had a great run since late 2009,” Reifschneider said. “As we’ve grown, we’ve added new franchisees. The new guys who have been added the last several years think 5 percent to 10 percent growth in comparable sales is normal. So we’re tasked with trying to meet that expectation, which is neither easy nor usually sustainable.”
But that does not stop Reifschneider from trying. He spoke with Raising Cane’s chief marketing officer Clay Dover, a board member of the NRA Marketing Executives Group, about how Firehouse evolves its marketing to support rapid growth.
What is the biggest challenge of operating in a highly competitive segment like sandwiches?
The biggest challenge is the drive to constantly be better. We’re in a share-of-stomach battle and we compete with more than other sub shops. The quality of the meats and cheeses we use, coupled with our décor and our operations model of taking the order at the counter and delivering food to the table puts Firehouse squarely in the fast-casual segment of the business. But we are a sub shop too, so we compete against Panera Bread, Chipotle Mexican Grill, and Five Guys Burgers and Fries as much as we do against our sandwich brethren. We constantly strive to improve in order to be perceived better than the competition.
How does Firehouse stand out?
We stand out in three ways. First [is] our name and longstanding tagline, “Founded by firemen.” Chris and Robin Sorensen founded the business almost 20 years ago. They were both firefighters, and their dad, Captain Rob Sorensen, was on the Jacksonville Fire Department for 43 years.
Second, we use the highest quality meats and ingredients. All of our beef products — brisket, pastrami, corned beef and roast beef — are USDA Choice beef. We use whole-muscle turkey and ham. As a matter of fact, the secret ingredient in our honey ham is … honey.
Third, our franchisees live our mission statement every day. They carry on our commitment to and passion for hearty and flavorful food, heartfelt service and public safety.
How does Firehouse uphold the commitment to its communities through the Firehouse Subs Public Safety Foundation?
The foundation is the heart of Firehouse Subs. Chris and Robin, the founders, started the Public Safety Foundation in 2005 after taking a team to Mississippi to help Hurricane Katrina victims. We raise money in three primary ways for the foundation: by selling pickle buckets, placing coin canisters by the point of sale and asking guests to round up their bill.
We do other special events too. The money raised goes to public safety entities like fire, police and emergency departments for things like defibrillators, the Jaws of Life, thermal-imaging cameras or body armor. To date, we’ve made donations to 790 public safety entities in 41 states and Puerto Rico to the tune of more than $10 million.
What led to the brand’s “under 500 calories” menu, and how has it performed so far?
The leadership team at Firehouse Subs watches a lot of industry data. We’re very data-driven, and we saw comments as well as trends that consumers were starting to finally walk the talk of eating healthfully. What I mean by that is something Herman Cain said more than 25 years ago, but it still is true today: “Americans talk lean, but they eat fat.” We saw the tide shifting, so our founders developed the Hearty and Flavorful menu of six new subs and four new salads, all under 500 calories.
Velocity of sales for the menu started out slowly but has steadily gained traction. The new Hearty and Flavorful menu is less than 8 percent of sales … but it is growing. Part of our strategy was to use the new menu to gain the “veto vote.” As we advertised the menu, we didn’t really care if a guest ordered the new menu or one of our other hearty subs.