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Baker Bros American Deli

Baker Bros American Deli strives for service.

March 10, 2008

While the counter-service nature of fast casual doesn't lend itself to much interaction, Baker Bros American Deli seeks ways for its employees to serve customers better. For example, each meal is seen by two managers to ensure accuracy and cashiers do not upsell, said founder and CEO Ken Reimer.

"We let the guest decide, so they always feel like they're treated fairly," he said. "We're not trying to stuff them with more stuff."

The Dallas-based fast casual believes service is more than doling out sandwiches, salads, gourmet pizzas and baked potatoes.

"Everybody talks service — not many people deliver it to an extreme degree," Reimersaid. "From the first person who steps into our door, we tell them, we serve. And what we serve at Baker Bros is the highest-qualityproduct available in the marketplace with the freshest ingredients in a manner and at a price that gives our guests a very satisfied feeling when they leave."

That service-based philosophy extends to franchisees and includes a dedication to return on investment and no additional marketing fees.

"We're partners, but we're here to help (franchisees) be successful," Reimer said. "That's what our life is about."

Reimer, former CEO of Tony Roma's who has a history of salvaging and revitalizing companies, came up with the idea for Baker Bros after noticing a hole in the restaurant industry between quick serve and casual dining — the space that now is known as fast casual.

When developing a business plan for a concept to fill consumer demand in that space, Reimer decided it would have to feature high-quality product and environment, moderate prices and speed. "Then do it with product that could work well nationwide, that had lots of legs, that would last for a long time and be appropriate for each and every market," he added.

Unlike many other concepts, Baker Bros was designed as a franchise vehicle from day one. As such, sophisticated systems wouldbe needed for product replication, as well as an economic model that would be beneficial to franchisees. After an investor signed onin Southeast Asia and Tom Dahl — former vice president of operations at Tony Roma's — stepped in as president and COO, BakerBros opened the first four company restaurants in 2000.

Those test restaurants have benefited from refined systems and minimized labor, all of which Reimer attributes to Dahl's expertise, and have outperformed the original business plan. Revenues for the past three years have increased 32 percent.

After franchising roughly one-and-a-half years ago, the chain has grown to 15 units, including seven franchises. Mostly concentrated in Texas, locations also are found in Arkansas, Nevada and South Carolina, with at least 26 more in the works across the United States. Reimer expects to sign 40 to 50 more units in 2008, with a total of 200 in the next three years.

The concept is set up to thrive in modest-sized towns to major suburban markets, relying on flavor profiles that will work anywhere in the country, Reimer said. All franchisees are required to open a minimum of three locations, excluding those in Dallas, which already has a number of units.

A concept set apart

Joe Lewis, a franchisee with three units open in West Texas and a commitment for a total of nine, decided to expand with a new concept after saturating the Amarillo and Lubbock markets with fast-food operations.

When researching potential concepts, Lewis said he was impressed by the total package Baker Bros presented: products, store-level economics and track record.

"They're set in Dallas, which is a very, very competitive restaurant market and they've grown their sales the last three years consistently," he said. "And that's been done without any advertising; it's been pretty much word of mouth and building customer loyalty."

Lewis, who has 35 years of fast-food experience, said Baker Bros is set apart from other operations by the degree of one-on-one,in-depth training provided.

"They really look at you and your management team and ensure that you have the proper people in place that you have the necessary tools and skills to really take care of the concept," he said, adding that the company has an honest business approach and maintains high standards.

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As a franchisee, Lewis said one issue he watches out for is a corporate office that adds products solely to increase sales to boost royalties. However, if the item hasn't been tested properly or long enough, then franchisees are forced to commit capital to equipment, training and labor that doesn't generate much excitement.

Baker Bros is sensitive to that issue, as well, Lewis said.

"They don't try to add something just to add something," he said. "They try to keep the operation relatively simple, just takinga common thing and doing it uncommonly well."

A place like home

Customer response is a testament to the chain's ability to rise to take a simple operation to new heights.

When a customer visits Baker Bros for the first time, the response can be described only as "wow," Lewis said.

Sandwiches are served on preservative-free, hand-formed rolls baked fresh daily. Customers can choose from EggSpun, Farm Bread, Whole Wheat, Rye and special hoagie rolls. Pizzas are made on proprietary focaccia crust with Italian seasoning. What customers often find most impressive are the full-size salads, which Reimer said can be split among four people.

"You can just see their eyes light up and get really big and they're astounded at the quantity of the product that's presented tothem for the price," Lewis said. And that response seems to breed others just like it. Sales at Lewis' units have increased each week with no official advertising, relying solely on word of mouth and trial.

The average Baker Bros customer visits the chain more than twice each week, and many dine there even more frequently. Reimer said one customer eats nine meals a week at Baker Bros — at least once each day, plus twice a week with his wife.