Sandwich chains, including Capriotti’s, Jersey Mike’s, Firehouse Subs, PrimoHoagies, McAlister’s Deli, Schlotzsky’s, Penn Station, la Madeleine French Bakery & Café, CAO Bakery & Café and Goodcents, have successfully pivoted to appeal to the new work-from-home customer who is wary of face-to-face contact. Consequently, drive thrus, grab-and-go offerings and breakfast/dinner options are now the new normal for sandwich establishments, trends which all thankfully offset the sandwich shops’ reduced office worker lunch crowd and catering orders. Units are also trending smaller, as many of these chains are opening with limited or no dine-in seating, not only to account for the reduced number of dine-in customers as a result of COVID-19 restrictions, but also for the potentially higher national minimum wage, which might result in less waitstaff. Look for suburban areas with heavy mixed-use developments and sites near retail and office buildings to be top real estate choices for sandwich establishments. The most sought after spaces now include drive-thru configurations in end caps and standalone pads, usually in power centers with high-traffic tenants such as grocers and office supply stores.
Capriotti’s Sandwich Shop is in aggressive expansion mode, hoping to open approximately 75 new units per year until 2025. Markets targeted for immediate growth include regions in and around Miami, New York City, Philadelphia and Denver, as a result of signed multi-franchise agreements. Capriotti’s seeks end cap or standalone space at approximately 1,500 s.f. in power centers with anchors such as home improvement stores, including Lowe’s and Costco, as well as office supply stores such as Staples. Like-minded fast-casual restaurant brands, such as Chipotle or MOD Pizza, are also desired. The average population should be 50,000 daytime workers within a three-mile radius, with approximately 35,000+ vehicles per day. The sandwich chain is known for the freshness of its sandwiches through slow roasting its meats and making its meatballs from scratch.
Jersey Mike’s plans to open approximately 150 to 200 new units per year until the end of 2022. Growth is expected in the Midwest and the South, notably Colorado, Mississippi, Indiana, Alabama and Florida, as well as New Hampshire. Jersey Mike’s looks for spaces between 1,200 and 1,800 s.f., preferably shared pads or outparcels with end caps and patio space. The brand will also consider inline space if excellent visibility is an option. Targeted regions include first and second ring grocery-anchored suburban power centers with a strong mix of nearby office and residential, as well as street-front and shopping center space in urban neighborhoods. Median income should be $50K, with a population age range between 25 and 54 years, and 10,000+ daytime population in the trade area. Preferred co-tenants are major grocery store chains such as Sprouts, office supply retailers like Office Depot and quick-service restaurants such as McDonald’s. Jersey Mike’s is famous for its “Mike’s Way” special seasonings on its sandwiches.
Firehouse Subs is on track to open approximately 60 new units per year over the next two to three years. Markets the brand is keen to penetrate include all regions in Pennsylvania, New Jersey, Minnesota, Delaware and Rhode Island. Firehouse Subs also wants to expand its presence in California, Michigan, Maryland, Connecticut, Utah, Vermont, Indiana, Maryland and Idaho. Firehouse Subs looks for inline or end cap space between 1,500 and 2,200 s.f. in dense suburban communities near office buildings and multifamily developments. Sites within busy retail districts or in downtown urban centers in ground-floor mixed-use inline spaces will also be desired. Non-urban units are in power centers, including shared standalone pads, with other restaurant co-tenants such as Pizza Hut or Dunkin’. Power centers should have major traffic anchors, such as Marshalls, Target or a grocery store such as Sprouts. Known for their hot sandwiches, Firehouse Subs introduced a new custom steamer kitchen configuration last year that reduced its needed overall square footage, opening the restaurant up to smaller inline spaces that other fast-food tenants cannot use.
PrimoHoagies plans on opening 10 new units this year, followed by 25 new units in 2022 and 40 new units in 2023. The franchise chain is targeting Georgia, Texas, Utah and Nevada, all states where the brand does not yet have a presence. The chain will also continue expanding throughout the Northeast, especially central and northern New Jersey and within Pittsburgh, but is also scouting out regions in Connecticut and Massachusetts. PrimoHoagies also expects to open more units in Florida and is eyeing deals in Indiana. PrimoHoagies will target inline or standalone pads between 1,400 and 2,000 s.f., ideally in power centers with destination anchors such as Planet Fitness, as well as other quick service restaurants, such as Chick-il-A. Sites should be in suburban districts with an average traffic count of 30,000+ cars a day with a healthy mix of both residential and commercial nearby, including near universities. In the future, the chain is planning to roll out drive-thru units, as well as smaller airport units under 1,500 s.f. The chain is known for its Philadelphian-style Italian gourmet sandwiches featuring fresh-baked bread throughout the day.
McAlister’s Deli is hoping to open approximately 25 to 30 new units per year over next two to three years. The brand, benefitting off Focus Brands’ purchase two years ago, is looking to expand into growing regions, usually in suburban markets with young families and college towns, in Pennsylvania, Michigan, Wisconsin, Iowa, Arizona, Florida, Texas, Louisiana and Ohio. McAlister’s seeks end cap or standalone spaces, with an area for a pick-up window, in the 3,000- to 4,000-s.f. range. The brand hopes to open future units closer to 3,000 to 3,200 s.f. to factor in less dine-in customers, with walk-up windows for app-ordered meals. The brand, which traditionally has been popular with office catering orders, has reworked orders for its new stay-at-home customers by now providing family packs and deli kits. McAlister’s has also rolled out its own app loyalty program, allowing customers to order their meal and pay for it after sitting down, without having to stand in line to order. McAlister’s Deli is famous for wide array of unique sandwich choices, as well as its salads and desserts.
Schlotzsky’s wants to open approximately 20 to 25 new units per year over the next three years, focusing on the Southwest, Southeast and Midwest markets. Look for Kansas, Missouri and Arkansas, especially, to see immediate growth. For 2021 onward, the brand will be rolling out two smaller prototypes of its restaurants. One is a 1,000-s.f. concept in which two sides provide pick-up windows: one for a drive thru and the other for a second drive thru or a walk-up window.
Its other prototype is 1,800 s.f. with a drive thru and dine-in seating for 35 customers. Schlotzsky’s anticipates all of its future restaurants to have drive thrus and expects these new prototypes to accommodate more available real estate spaces, including second generation end cap units and standalone pads. Prior to this year, its units were in the 2,300- to 3,000-s.f. range. The chain prefers power centers within secondary and tertiary suburban markets, with co-tenants such as Target or Ross, and other drive-thru restaurants such as KFC or Raising Cane’s. Schlotzsky’s sandwiches are known for their unique flavors on fresh-baked homemade sourdough buns and in 2019 the chain also introduced pizza.
Penn Station East Coast Subs expects to open between 15 and 20 new units per year over the next three years, focusing on immediate growth in Nashville, Tenn., and Omaha, Neb., followed by further growth into Raleigh and Charlotte, N.C., Kansas City, Mo., Richmond, Va., Detroit and Pittsburgh. The brand looks for space that averages 1,600 s.f., preferably end cap in first generation units, in a market with a median income of $40K. Sites can be in power centers, street-front or strip mall spaces. Co-tenants should be other quick-service restaurant brands, such as Chick-fil-A or Panda Express. The chain is known for its hot grilled, made-to-order submarine sandwiches prepared with hearth-baked bread.
The la Madeleine French Bakery & Cafe hopes to open approximately 10 to 15 new units per year over the next five years. Though the brand is saturated throughout the South, la Madeleine is hopeful it will sign new leases in metropolitan markets throughout Florida, Arkansas, Virginia, Maryland, Kansas, Kentucky, Missouri, Utah and Nevada. la Madeleine tends to prefer space in retail corridors near business districts and apartment developments, including ground-floor spaces in mixed-use buildings. The brand seeks second generation drive-thru spaces, between 2,500 and 4,500 s.f., in both end cap and freestanding units. Preferred co-tenants include high-traffic retailers such as drug stores like Walgreens and banks such as Chase Bank. The sandwich/bakery chain is hopeful that its very first drive-thru prototype, which will make its debut by late February in a 4,180-s.f. former Steak ‘n Shake standalone space in Montfort, Texas, will increase interest from potential multi-unit franchise operators to open in new markets in the future. This will be the brand’s second version of its newly named “La Madeleine Petite Market and Bakery,” the first of which debuted in July of 2020 in a 2,500-s.f. ground-floor unit of a Class A mixed-use apartment development in Dallas. This new version of its bakery/café aims to prioritize the grab-and-go customer with more pre-made sandwiches and salads, as well as coffee options, while also providing fresh-baked bread throughout the day.
CAO Bakery & Café expects to open eight to 10 new units per year over next four years through franchising efforts. CAO, which stands for Cuban American Original, prefers to be in retail centers with high-traffic counts, within college towns, business communities and residential areas. Immediate growth is expected in central and northern Florida regions, including Tampa, Lake Worth, Tallahassee and Gainesville. Markets targeted outside of its home state of Florida include Louisville, Ky., Los Angeles and areas within Texas, Tennessee, New Jersey and North Carolina. Neighborhoods with a large Hispanic population, preferably Cubans, are sought after. Space should be second generation units between 2,500 and 4,500 s.f., either inline, end cap or standalone, in strip centers or grocery-anchored power centers. Co-tenants should be major restaurant chains, such as Domino’s, as well as ethnic dining establishments and other high-traffic tenants such as the Kumon learning centers. The brand’s restaurants currently have pick-up windows and the company will unveil its first drive-thru prototype in Hallandale Beach, Fla., within the first quarter of 2021 in a former 2,422-s.f. standalone Miami Grill. The prototype features less interior seating and more of an express concept. CAO is known for Cuban pastries, coffees and sandwiches that feature unique flavors on Cuban bread.
Goodcents Deli Fresh Subs, which currently has 63 units throughout the Midwest, hopes to open at least five new units per year over the next three years by expanding further into St. Louis, Phoenix, Tulsa and Oklahoma City, Okla. From 2024 onward, Goodcents hopes to expand even further South, entering the Dallas/Fort Worth market. The sandwich shop seeks space between 1,500 and 1,750 s.f. in strip centers with high daytime traffic and co-anchors such as Walmart and grocery stores. Sites should be in major retail areas near office buildings. Though Goodcents currently only has seven units with a drive thru, the restaurant chain expects to seek more end cap spaces in order to open more drive-thru units. The brand is also open to reducing to 1,200 s.f. for an inline unit that offers limited seating, provided the space can accommodate a pick-up window. Its clientele is middle- to upper-middle class, whether suburban families, single millennials or baby boomer empty nesters, as its products feature an elevated quality of fresh bread baked twice a day. Goodcents has also benefitted from its grab-and-go menu offerings that were first introduced back in 2018.
