Jersey Mike's continues with aggressive expansion in Bradenton, Sarasota

Chain honed franchise model to have owners commit to operate multiple units

cschelle@bradenton.comMay 20, 2014 

LAS VEGAS -- Jersey Mike's Subs feels good about its prospects in Manatee and Sarasota.

The sub shop known for its loaded sandwiches and friendly atmosphere believes 10 to 12 sub shops could thrive in the area. They're on their way to adding to that this summer when the fifth and sixth Jersey Mike's locations open in the area.

It's as if the chain's expansion is having it "Mike's Way" -- loading up on stores -- both in the region and nationwide. The chain opened 140 stores last year and wants to open 175 to 180 more sub shops this year, said Michael Parkhill, senior vice president of real estate for Jersey Mike's during the International Council of Shopping Centers Global Retail Real Estate Convention in Las Vegas. The Point Pleasant, N.J., chain has 761 stores in 38 states and saw sales increase 22 percent companywide last year to $406 million.

"All these other markets we're just attacking," Parkhill said. "Basically, there's no market that we're not looking at now. If we don't have a store in a market, whether it's Boston or Boise, I can tell you we've already analyzed it and we know exactly what we want for the stores and have talked to people about opening units there."

An East Manatee location is expected to open by the end of June at the River Club Plaza, 5820 Ranch Lake Blvd. The location will be opened by father and son, Patrick J. George and Patrick S. George, who also operate the 14th Street West location.

Beth Kariofyllis operates a store at 5867 Fruitville Road in Sarasota with her son, Matthew Kariofyllis, and will add to her territory at 2031 Bahia Vista St., in a strip mall with Roadside Rib Shack in mid-June.

Bill and Kathleen Schulte operate 8220 Tourist Center Drive in University

Park and 3820 S. Tuttle Ave., Sarasota.

"Those are going to be my three groups that will build out the entire Siesta Key, Sarasota and Lakewood Ranch market," said Brian "BK" Kenny, Florida area director for Jersey Mike's.

While the market could handle a dozen stores that would be grown over time, the company has to make sure the franchisees won't dilute their profits, Kenny added. The shops are typically 1,200 to 1,800 square feet. They like to locate beside a major grocery store or office supply retailer. They tend to see a high concentration of 25- to 54-year-olds at their restaurants.

The one place you'll probably not find Jersey Mike's is a mall food court, where lunch traffic would thrive but dinner would not, Parkhill said. The successful non-traditional Jersey Mike's are in airports and universities, Parkhill said.

"Our studies have shown that when you have that much square footage of retail in a tight area, it actually works against your store sales," he said. "We would prefer to be on the fringe of that major retail center instead of being in the dead center of the mall across the street."

Jersey Mike's is able to grow fast because it changed its franchise model before the throes of the Great Recession, Parkhill said. Like Subway and Quizno's, Jersey Mike's once allowed one owner to buy one store and go from there, but now franchisees have to commit to operating multiple shops.

"We found it was easier to manage markets and train people," Parkhill said.

A 20-store market could go from 20 individual owners to four, for example, and the chain found people who had enough capital to operate multiple stores before the recession were able to weather the downturn.

"It's not like we knew the recession was going to hit," Parkhill said. "We just changed our business model at the right time."

Building a better sub

The company learned from competitor's mistakes, allowing owners who could finance but didn't have that drive to promote and be in the community. It is trying to distance itself from competitors with a new slogan, "a sub above."

"We are trying to make sure we are positioned correctly and the brand message is clear," Parkhill said. "We're a better sandwich, and we're trying to communicate it better."

Now, the steps to be a franchisee are nearly like a college admissions process: It's not enough to have the financing and the smarts -- you have to have character.

"We turn down a lot more people than we accept," Kenny said. "We come across plenty of people that have the money and want to come into our business, but we're more interested in having an operator that is going to follow our model."

That model includes having a charitable focus. Jersey Mike's held its fourth annual Month of Giving in March where stores across the company raised a combined $2.1 million for local charities.

The Bradenton location raised $1,020 for Manatee County Y and now that the Sarasota-Bradenton market is growing, it's likely the Month of Giving will have a greater impact as the franchise owners co-op on the charitable drive, Kenny said.

The Tampa area operators were able to raise more than $60,000 for Tampa General Hospital's burn unit.

"If it's not in your being to give back, Jersey Mike's is not for you," Kenny said. "This is not just about can I open a store and make money. You have to be a part of that culture."

Charles Schelle, Herald business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.

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