News

Top 100: Firehouse Subs No. 1

February 20, 2012

1.Firehouse Subs

Jacksonville, Fla. / No. of units: 402

2010 will go down in the Firehouse Subs record book as the company’s best year ever.

At 402 locations, the Jacksonville, Fla.-based chain will post revenue of $233 million for the year, an 11 percent increase over the $209 million in revenue the company reported in 2009. The company also posted a 4.34 percent same-store sales increase for the year and year-end average unit volumes of $604,240, handily beating the company’s goal of $590,000 in AUVs by year-end.

Don Fox, CEO, credits the company’s 2010 success to “positive leadership, a strong operational culture and a new advertising campaign that was successfully executed at the start of last year.”

Additionally, the company’s director of operations, Meg Rose, and the Firehouse team have worked hard since mid-2009 to reduce food and labor costs, going from a food cost of 35.8 percent in 2008 and 34 percent in 2009 to an all-time low of 32.3 percent for the first four weeks of period six. Labor also has been reduced to 22.8 percent, down from 24.9 percent in 2008 and 23.8 percent in 2009.

“Looking back on it, without a doubt the most critical thing was our franchisees embracing our marketing strategy and having two-thirds of our system make the incremental investment in advertising,” Fox said. “Most companies, as I look back, bunker down, take less risks and conserve, while we continued on the road we embarked on at the start of the recession in 2008. We were going to stay the course.”

Part of that course included an investment in advertising in select markets. The campaign was launched in 2009 and had displayed enough signs of success that it also was launched in 2010. “It would have been easy to take those short-term gains, but franchisees continued to say we had more to gain,” Fox said.

In 2010, the company had its largest increase in average unit volumes than in any year other than 1998, when the company had only about 30 restaurant locations.

Another contributor to the chain’s success was the emphasis of its Public Safety Foundation. This year, the foundation’s goal was to raise $1 million; instead, it received approximately $1.1 million in funds.

“Our key focus in 2011, we expect our sales success to continue, that we’ll set a record for AUVs for the year and that’s going to come about in large part from franchisees in investment spending on marketing and advertising,” Fox said. “We are investing $1 million ourselves in incremental radio to help match the markets we are in. With the improvements in financing, we expect that we’ll open a record number of restaurants this year – 80 to 100 – and we set a higher goal for Public Safety Foundation. We also think it will be a record year for bringing franchisees into the system. It will be a record year for us on all fronts.”