Foodservice operators might not be able to control outside forces, such as escalating commodity and energy prices or wavering consumer spending, but they can control what goes on in the four walls of their restaurants, said Tony Walker, chief operating officer and co-founder of the 37-unit Spicy Pickle sandwich chain. Strong local-store marketing, modest menu price increases and a new, more efficient point-of-sale system are among the steps the Denver-based chain has been taking to weather the current economic slowdown.
Being a fast-casual chain, where the average sandwich price is $6.50, doesn’t hurt either, Walker said. The segment can fill a need for consumers who may be trading down from more expensive full-service restaurants and for quick-service customers who may be eating out less often but then are more willing to splurge a bit.
Walker and co-founder Kevin Morrison in 1999 left their jobs as chefs at an upscale Italian eatery in Denver to start the Spicy Pickle. At first, the plan was to open just one store that offered high-quality meats and cheeses and gourmet sandwiches such as paninis, as well as soups and salads.
Within three years they started franchising the chain and last September they entered the public market, raising $1.7 million in the first day of over-the-counter trading.
The average Spicy Pickle unit posts about $600,000 in annual sales, and the chain, now operating in 12 states, is opening a unit in Brooklyn, N.Y., this summer.
Is it difficult to find franchisees in today’s market?
Even with rising costs and consumer sentiment low, we’re still getting a lot of inquires, and that’s good.
The competition for sites has improved, too.
So the slowed economy has eased competition for prime real estate locations?
It used to be you’d call on a landlord and there would be 10 people standing in line for that spot.
But the real estate market has softened. What was going for $45 or $50 a square foot is now going for $25 or $30. We’re getting a quicker response from landlords.
We [also] have some brand awareness now. That has helped. We’re now in multiple states.
Did you ever think the Spicy Pickle would grow like this when you opened that first location, the one that didn’t have any heat or air conditioning?
When we started it, we meant it for it to be a local place, to have a local feel with great customer service. We wanted that one-on-one community feel.
FAST FACTS BIRTHPLACE: La Paz, Bolivia AGE: 37 EXPERIENCE: chef at the Barolo Grill, Denver PERSONAL: married, two children
How are you maintaining that sense of community involvement as you expand beyond your core market?
We struggled with that for a while. With anything in life, things change when you get off track, and you have to find your way back. We went into franchising because it was a good way to get the brand out and for people to enjoy our food. We had to come back to that local feel.
We do a lot of local-store marketing, which really helps engage the community. It helps if they know the store is owned by that franchisee who is part of the community, and that it’s not just another Spicy Pickle.
