Togo's CEO boasts big growth plans for 2013

March 15, 2013

Togo's CEO Tony Gioia expects 2013 to be a big year for the California-based sandwich chain. On a role from posting 10 consecutive quarters of positive same-store-sales increases, the brand is actively recruiting franchisees to help expand its 250 units into new western markets. His ultimate goal is to reach 400 units by 2015.

Gioia discussed with his growth strategy, the fast casual brand he admires most and what trends he thinks the industry will embrace this year.

Q: What's your growth plan for the next few years?
: Togo's had an unprecedented year of growth in 2012, signing 38 agreements for new restaurants and opening 11 new restaurants in California and Oregon. As part of our strategic plan for expansion, we have given our existing franchisees the option to refresh existing units with Togo's newest prototype, while continuing to grow the brand in our key growth states. This year, we plan to open 30 new restaurants and remodel approximately 80 existing units.

Q: What are the top two things that have led to your success?
Gioia:Togo's has developed tremendous brand loyalty from our guests for over the past 30 years. Unlike the national mega-chains, at Togo's each guest enjoys a deli-inspired, one-on-one style of service in a fun, friendly environment. This ultimate sandwich making experience, combined with great, fresh food, keeps customers coming back for more. In addition to these selling points, franchisees benefit from our simple restaurant operations, low start-up costs and high average unit volumes.

What are some tips you give to franchisees about hiring/training?
Hiring for the "right" personality trumps everything else, especially for the consumer-facing job positions in a fast casual environment. When interviewing a candidate, have the person walk in the dining room to introduce themselves to the guests. It will provide valuable insights on their comfort zone and ability towards relating to guests in a positive and engaging way. Training is all about "simplify and magnify." Train crew members on the most important elements of your brand and operating format and then repeat... repeat... repeat.

What other fast casual brand do you most admire?
Gioia: I find the Pei Wei concept offers one of the best values from a guest experience perspective. Their restaurant design is on trend, efficient and inviting. Their table service format is quick and efficient. Their open kitchen exhibits a high-energy "woking theater" which is best in class. Finally, their menu variety, Asian flavors, portion size and price points offer an overall compelling value.

Q: What will be the biggest trend to shape the fast casual industry in 2013?
Gioia: The fast casual segment has obviously taken strategic hold within the restaurant industry and will continue to grow in market share. It has morphed into a "compelling bridge" between casual dining and QSR. I say compelling from both the guest experience (value) and financial perspectives (unit economics). The two biggest trends I see in 2013 are:

  • That more casual and family dining concepts will begin testing their offering in a fast casual format (trade-down, price-point opportunity). IHOP is an example of this. We will also begin to see some QSR concepts testing their offering in a fast casual format (trade-up, price-point opportunity).
  • The fast casual segment will continue to optimize the box from a consumer and unit economics perspective. Real estate site criteria (end-cap; separate pad; etc.), box size (seating capacity), ordering system (register first; food first; batch; assembly line), table service (deliver to table; pick-up at counter); menu (variety; portion size; price points) will all be further scrutinized.

Q: You launched a new prototype last year? How is it different from the old units and how has it been received by customers?
Gioia: In November 2011, Togo's launched a new store prototype in honor of our 40-year anniversary celebration that highlights the deli-inspired one-on-one style service the brand prides itself on. The new prototype showcases fresh food with reach-in glass refrigerators, see-through counters, and vibrant new décor. The new design has been well received by both our franchisees and our customers.

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