Community members will influence franchise success

By Eleanor Blick

If you order a Subway Cold Cut Combo in Pensacola, Fla., you expect it to taste the same as a Subway Cold Cut Combo in Palo Alto, Calif. You expect the ham and salami to be sliced and salted similarly, the same options for breads and dressings and  familiar  vegetable toppings to choose from. This consistency is one of the fast food industry’s main missions, even with cities 2,000 miles apart.

You also expect the same environment and service from both stores. Admittedly, only a fool would expect more than a rushed smile when it comes to the faces behind those Subway hats, but some chains advertise high customer service standards, which customers expect will cross state lines.

This consistency in customer service was Potbelly Sandwich Works founder Bryant Keil’s dilemma in deciding to pursue the thousands of inquiries he received throughout the years about franchising opportunities.

Keil had reservations about franchising the Chicago-based sandwich shop, which currently keeps close control of more than 200 stores in 15 states. In interviews, he said he worried the quality of food and service would be at risk with too much expansion.

When the decision to franchise was made last year, Potbelly established some unusual qualifications it would look for in franchisees. The unorthodox approach to franchising and company growth is refreshing for a business to try and one that should prove successful for the sandwich chain.

Press releases stated “qualified married couples and life-partners who are sincere about integrating Potbelly into the fabric of their communities” are ideal candidates for franchising opportunities.

The company said it does not want to choose candidates based solely on restaurant experience as its competitors do, but on the length and quality of the relationship people have with their communities as well as business experience. Potbelly will more closely pursue applicants who indicate they want to franchise with their spouse, especially those intending to have children and family teams like fathers and sons.

To prepare for the move, Potbelly brought in current CEO Aylwin Lewis, former chief executive of Sears Holdings Corp. and chief operating officer of YUM! Brands Inc., where he oversaw 32,000 Pizza Huts, Taco Bells and KFCs. Lewis designed the plan that will expand Potbelly to more than 40 cities.

It’s been speculated that the move is designed to work in the company’s favor by selecting franchisees with a certain type of community connection. Skeptics said “connections” that enable franchises to open more quickly, through permits and locations, are what the company is really looking for. Others suspect it’s a publicity stunt, and some find it ironic that Keil was recently divorced, as reported by Michigan Avenue Magazine.

But considering it took Potbelly more than 30 years to start franchising, it is unlikely such a sneaky motive is buried within the company’s desired set of qualifications. Potbelly’s main competitors, Subway and Jimmy John’s, were ranked No. 1 and No. 53, respectively, in Entrepreneur Magazine’s 2009 “Franchise 500” issue. Potbelly, however, does not plan to prioritize opening new locations over choosing candidates who fit their specific requirements.

The financial commitment level a potential Potbelly franchisee would need also raises the bar against its competition. The initial investment needed to open a Potbelly franchise is estimated between $456,000 and $767,000. Comparatively, it takes an estimated $114,800 to $258,300 to open a Subway franchise and $305,500 to $460,500 is needed to start a Jimmy John’s. This additional move increases the level of commitment Potbelly will ensure from its franchisees.

And the company is following through on its vision. The first signed franchise is set to open by the end of the year in El Paso, Texas, operated by husband and wife Arturo Daly and Danytsia Enriquez, who previously ran two seafood restaurants. Jeff and Susan Gibbs, who have business experience but no restaurant background, will also be opening a Potbelly location in Toledo, Ohio.

Only time will tell if this unique strategy will work in the company’s favor, but considering customers and community alongside numbers and profits is a model more businesses should consider adopting. In a society dominated by big companies, a franchise owned by a member of the community is the closest comparison some areas have to the tight-knit feeling of an independently owned, neighborhood business. Including the community in the growth of a business is the best way to ensure its success.