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Ones to Watch | By Judy Kneiszel

Capriotti’s Sandwich Shop
Capriotti’s Sandwich Shop is a growing sandwich franchise in the Northeast and Southwest.

For those who enjoy the leftovers as much as Thanksgiving dinner itself, Capriotti’s Sandwich Shop has a sandwich for you.

It’s not that the Las Vegas–based concept serves leftovers. It just takes the flavor of a Thanksgiving-night refrigerator raid and makes it available all year long on a sandwich called the Bobbie.

In November 2009, the Bobbie, made with fresh-roasted pulled turkey, cranberry sauce, stuffing, and mayo, was voted “The Greatest Sandwich in America” by AOL.com. It was also the Bobbie that hooked president and CEO Ashley Morris on the Capriotti’s concept in the first place.

Morris says Jason Smylie—his former University of Nevada, Las Vegas, college roommate who now serves as chief information officer for Capriotti’s—discovered the sandwich shop while the two were students and started eating there daily.

“I wasn’t even a big sub fan, but he dragged me there, and I ate a Bobbie and it was the greatest thing I had ever eaten,” Morris says. “Then I started eating there every day. I even broke my lease to move closer to a Capriotti’s.”

Fast-forward five years to 2003: Morris was working as a corporate finance money manager for Wells Fargo in Las Vegas. He had built up what he calls “a decent stock portfolio” and was still eating at Capriotti’s every day, where, he says, with sandwiches starting at around $6, a hungry businessman could get a real lunch including a beverage for about $9.

Capriotti's Sandwich Shop

President/ceo: Ashley Morris
HQ: Las Vegas
Year Started: 1976
Annual Sales: $40­­–$42 million
Total units: 60
Franchise units: 58
www.capriottis.com

“I was in there every day watching the customers and realizing what a fantastic business model it was,” he says. “So I bought my first franchise.”

Morris began as a franchisee in 2004 and acquired the company in 2008. The history of Capriotti’s, however, goes back to 1976, when brother-and-sister team Alan and Lois Margolet converted the first floor of a two-story house in Wilmington, Delaware, into a sandwich shop. It was their vision to roast whole turkeys every night to serve in sandwiches every day, rather than the processed luncheon meats used by competing local delis. They named the business after their grandfather, Philip Capriotti, who loved to cook for them. The Bobbie was named after an aunt.

One store eventually turned into two for the Margolets, and then in the 1980s they started franchising in the Northeast. About a decade later, one franchisee who frequently traveled to Las Vegas decided to move there. Within a year, the company started franchising in Las Vegas, too.

The original owners are still franchisees and operate two locations in Delaware.

“Basically, we are in the Southwest and Northeast,” Morris says. “But we recently started a third geographic region, the Midwest, and we have the capability to grow throughout the country.”

Morris says that since taking control of the company in 2008, many changes were made to the Capriotti’s infrastructure, but the product did not change.

“We have very unique and creative sandwiches,” he says. “The turkey and beef are slow roasted in house daily; the meatballs, hamburger, and sausages are all cooked inside the store from fresh, not frozen, product. The coleslaw and stuffing is all homemade inside the restaurants as well. It’s all fantastic. So, no, we didn’t change the food.”

While the Bobbie, priced at $6.75 for the six-inch sandwich depending on location, is Capriotti’s claim to fame, the Cheese Steak is the best-selling sandwich.

“It’s a Delawarean Cheese Steak, which means we use white American cheese rather than Cheez Whiz like they do in Philadelphia,” Morris says. “But we have 10 stores in Pennsylvania, and it wins awards there because our peppers and mushrooms are fresh and our steak is top round and rib eye—the highest quality you can get for a cheese steak, not some frozen product.”

A Chicken Cheese Steak—Morris’ personal favorite sandwich—was also added to the menu, and the Capastrami, made with hot pastrami, Swiss cheese, Russian dressing, and coleslaw, is another popular seller.

Ambitious plans are underway for the chain to grow to 500 operating and profitable stores by the end of 2015, which Morris says the company has prepared for with updated technology, improved customer-satisfaction tracking, and kitchen efficiency. Improvements were also made to the Web site, and the company started using social media.

Ambitious plans are under way
for the chain to grow to 500
operating and profitable stores
by the end of 2015.

“We brought in directors of real estate and development,” Morris says. “And we put in place national pricing and distribution capable of supporting every region of the country. We also brought on Patrick Walls, who was with McAlister’s Deli, to be our chief operating officer. All of this has really taken us to the next level.”

The new model for Capriotti’s build outs puts restaurants between 1,300 and 1,500 square feet with 35–50 seats, which is larger than many existing locations. Historically, Capriotti’s have been 90–100 percent takeout, but Morris says the company has determined it would be advantageous to increase seating.

“Ultimately that will help our unit volume,” he says. “While take-out is a very helpful booster of volume, 90 percent is a little high. We intend to be at about 70 percent takeout.”