Lean and Mean / In the past six months, Ed Frechette has noticed a trend. “People on Wall Street are coming to Au Bon Pain for meetings and interviews,” says Frechette, senior vice president of marketing for the Boston-based chain, which has locations in New York City.
Financial executives are not the only ones looking to save money. Customers across the board are watching their wallets—yet at the same time, they don’t want to sacrifice flavor. And that is where small quick-service chains like Au Bon Pain stand to benefit in a cutthroat market.
Lean and mean, many small chains focused on managed growth and customer satisfaction long before the economy hit the skids. Being small also helps keep you close to your staff, says Reggie Orchid, chief support officer of Beaumont, Texas-based Jason’s Deli. “The closer you are to your people the closer you are to your business,” he says. “We have an obligation to our people to stay financially solvent.”
That’s not to say there’s no work to do. To stay on top, many of the top 10 chains with fewer than 300 units are upping healthy alternatives—there is practically a race to eliminate high fructose corn syrup and promote lighter fare. They’re also offering smaller, more affordable portions. (The exception to the trend is In-N-Out, which continues to stick to the tried-and-true.) Many restaurants are also focusing on customer satisfaction and improving operational efficiencies.
The chains’ ability to hold their own against the powerhouses in a thriving economy could put them in a good position to weather the storm. Here are the top 10 chains with fewer than 300 units listed by fiscal 2007’s annual sales.
*Annual sales figures are from Fiscal 2007.
1 Jason’s Deli
In 2008, Jason’s Deli opened three Chicago locations. More are on the way. As with Houston and Dallas—successful markets for Jason’s Deli—Chicago boasts a thriving downtown and a cluster of towns on the city’s fringe. The chain also opened locations in Washington, D.C., south Florida, Phoenix, and Philadelphia. Expected revenue for fiscal 2008 is $500 million.
“We built more stores in 2008 than we ever have,” says Reggie Orchid, the brand’s chief support officer. Twenty more are expected to open in 2009.
But, if expansion is not economically feasible for franchisees, Jason’s understands. “We let our franchisees decide what’s best for the life of their business,” Orchid says.
In addition to a 4,800-square-foot prototype, Jason’s Deli introduced a newer, delivery-friendly 3,200-square-foot model.
The big news, however, is on the chain’s menu. High fructose corn syrup is gone—except in some carbonated beverages. And a yet to be named line of smaller sandwiches is rolling out this year.
“In 2009, there will be a shakeout between those claiming to offer healthy food and those who really do,” Orchid says. “There’s nothing better you can do for yourself than to get as close to the food source as possible.”