Article

Capriotti's CEO: Franchising an attractive option for those burned in the Great Recession

Morris' passion for Capriotti's food and proven concept took him from franchisee to top exec.

July 1, 2014 by Brenda Rick Smith — Editor, Networld Media Group

In an economy still climbing its way out of the most significant downturn in decades, it seems almost counterintuitive to suggest that many people are eager to take on the risk of owning their own businesses.

But that's exactly what Ashley Morris believes.

"That was the greatest lesson learned from the Great Recession by my generation and younger," said Morris, Capriotti's Sandwich Shop CEO. "Seeing promises made and not kept. Seeing your parents get downsized. It's given the younger generation the incentive to be in charge of their own destiny."

Morris and childhood friend Jason Smylie took that path themselves in their early 20s, when they bought their first Capriotti's franchise in 2004. Four years later, they bought the entire company.

Morris now serves as CEO of Capriotti's, and Smylie serves at CMO/CIO.

Morris credits Smylie with introducing him to Capriotti's while they were both students at the University of Nevada-Las Vegas. They both became raving fans of the sub shop, even breaking an apartment lease to move closer to one.

"It just changed my life in terms of the taste and quality of the food," Morris said.

Morris credits his and Smylie's passion for the product as key to their success, and also credits Capriotti's proven concept.

"What's great about franchising is that it takes a lot of guesswork out," said Morris. "We bought into a concept that was 30 years old, had grown into 30 units across the country. It had gone through multiple business cycles, multiple recessions. If the concept is successful, we have a higher likelihood of being successful."

Morris' and Smylie's families and backgrounds also played a role, he said. They were both brought up to be hardworking and diligent, and their families made sure they had a good college education.

"We don't see the hurdles and the how, we see the what and the why. The hurdles then just work out," said Morris. "That's typical in most successful entrepreneurs."

Four keys to success

Drawing from his experience as both a franchisee and now a franchisor, Morris identifies four keys to being a successful franchisee:

First, successful franchisees must follow the system completely. The system has been tried and tested by an experienced team, said Morris.

Second, put a face on your business in the community. "Too many restaurants out there are like a machine. In our business, we look at it from 'How can we deliver extraordinary customer service and not worry about turning tables?'" said Morris.

Getting outside the four walls goes a long way toward telling customers you care about them and they are more than just a number, he added.

Third, take full advantage of the technology and reporting tools available to you as a franchisee.

"The most successful franchisees embrace these tools, and that really helps generate margin," Morris said. "The difference may be just 3 or 4 percent, but that's a lot of money. Don't just be happy with making money, be happy with making the right amount of money."

Finally, stay involved with the franchisor. Participate in advisory committees, read company newsletters. "You generally get out of it what you put into it," said Morris.

Franchisee involvement is key to Morris' approach. He relies on meetings, testing and focus groups with franchisees to gain insights and buy-in. He used that approach recently when making changes to is cheesesteak, one of Capriotti's signature menu items. With a preparation time of around 10 minutes, the sandwich was slowing down service.

Changing a core product could have been a tough sell, but Morris said he kept in close touch with franchisees, and because he had their buy-in, the change was a great success: Quality of the product has actually improved, and the preparation time has been cut in half.

"Franchisees are raving fans," said Morris. "They are the policemen of the quality of our brand. We love that our franchisees care so much about the product."

Morris is hoping to add to the ranks of Capriotti's franchisees. Currently, the brand has 105 units with 200 more in the pipeline. Morris hopes to have 500 units open by the end of the decade. After seeing qualified franchising candidates dry up after 2007, Morris is seeing a small turnaround.

"We've turned the corner. There's access to capital markets now," said Morris. "You can go into a bank and borrow to open and run a business. For a long time you couldn't do that."

He's confident Capriotti's will differentiate itself from the crowded sandwich market with the very thing that he fell in love with in the first place: the food.

"The food is the difference," Morris said. "It's what we do with our product. We operate in a niche. We are the better sub sandwich."

About Brenda Rick Smith

Brenda has more than 20 years of experience as a marketing and public relations professional. She invested most of her career telling the story of entrepreneurial non-profit organizations, particularly through social media.

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