Celebrating its 40th anniversary this year, Togo’s Eateries Inc. is ramping up openings of restaurants using the chain’s new prototype, and in September will roll out remodel options for franchisees to refresh existing units.
The 245-unit sandwich chain opened the first redesigned unit last year in Valencia, Calif. Currently, about five new rebranded stores have opened within the nearly fully-franchised chain. The redesign includes new interiors that aim to highlight the San Jose, Calif.-based chain’s history as a “West Coast original,” as well as showing off ingredients and the sandwich-making process.
The rebranded units are “hitting home runs,” said Tony Gioia, Togo’s chair and chief executive, who bought the chain along with private-equity firm Mainsail Partners in 2007, after it was divested by Canton, Mass.-based Dunkin’ Brands.
Ten more new, refreshed Togo’s units are scheduled to open this year, and another 25 are projected for 2012, mostly in California and surrounding states, he said.
“Operators are seeing the value of the new format,” he said, noting that sales are trending “significantly higher” among the rebranded units.
“It’s easier to operate,” he added. “It shows off the food and offers visibility for customers and the one-to-one sandwich making.”
Over the past nine months, the chain has also been testing the remodel of existing units with elements of the new design, Gioia said.
In September, the company will offer remodel options in three tiers at varying costs for the older locations — many of which need a facelift, he added.
Franchisees can choose a base remodel, estimated to cost between $25,000 and $30,000. A somewhat more comprehensive second tier is about $50,000, and a complete overhaul ranges from $80,000 and $90,000.
Gioia said Togo’s has recorded 13 consecutive months of positive same-store sales, mostly as a result of increased traffic.
The chain has competed successfully with the $5 Footlong of Subway by offering its own $5 sandwich — rotating the selection daily — and including chips and a drink.
The $5 value deal accounts for between 20 percent and 25 percent of sales, Gioia said.
The chain’s toasted sandwiches and wraps, introduced last year, now account for about 10 percent of sales, he added.
Over the past year, food costs have increased between 3 percent and 4 percent for the chain, and Togo’s took a 1-percent menu price increase earlier this year to mitigate the impact.
In July, Togo’s introduced two new toasted wraps: the Viva Veggie with hummus, roasted red pepper, feta, red onion, lettuce and tomato in a balsamic vinaigrette and wrapped in a toasted spinach tortilla; and the Cha Chi Chicken, including all-natural chicken breast meat in a spicy pepitas dressing with black beans, corn salsa, lettuce, tomato and cheddar wrapped in a toasted sun-dried tomato tortilla.
Gioia hinted that the chain will soon announce the addition of a new “craveable” protein.
“I can’t say what it is yet, but it’s very on trend,” he said.
Anniversary promotions for the chain will continue into the fall, said Gioia, including a Facebook promotion in which guests can earn prizes by helping to build a “40-mile sandwich.”
Contact Lisa Jennings at [email protected].
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