Emerging Concepts | July 2012 | By Judy Kneiszel

One to Watch: Milio’s Sandwiches

A combination of “legendary” customer service and top-notch products help this sandwich joint stand out in the crowd.

Mike Liautaud, president and founder of Milio’s Sandwiches, says when it comes down to it, he and his sandwich competitors are all “just putting lunch meat on bread.” But something else helped grow his concept from a single sandwich shop near the University of Wisconsin campus in 1989 into a 47-unit chain with locations throughout the Midwest.

Liautaud says that while Jimmy John’s is focused on being “edgy and quick,” and Subway’s message is price driven, Milio’s was built on “legendary customer service and the quality of our product.”

He says Milio’s uses the best products available and handles products differently, too. For example, bread at Milio’s is considered “day old” and is no longer used when it is four hours old. All vegetables are brought into each store whole and cut in front of the customers. Meat is also sliced to order.

Milio’s top-selling sandwich is The Godfather, with Italian Capicola ham, Genoa salami, and provolone cheese topped with thinly sliced onions, lettuce, tomato, and Italian dressing. The eight-inch sandwich is about $4.65, depending on the location. Other menu staples include the American Favorite, with smoked ham, provolone cheese, lettuce, tomato, and mayo; and the Turkey Classic, with roast turkey breast, provolone cheese, fresh lettuce, tomatoes, and mayo.

Milio’s sandwiches can be ordered on eight-inch wheat or French bread, in a wrap, or on sliced sandwich bread. For customers who are picky eaters or extremely budget conscious, Milio’s offers the option of ordering any sandwich without veggies or sauces and taking $1 off the price. Party subs are available in any length, and Liautaud says catering and delivery make up about 35 percent of the concept’s sales.

Liautaud has been in the restaurant business his whole life, from waiting tables at local independent restaurants as a teen to owning hot dog stands in Chicago. While he grew up in suburban Chicago, he spent his summers in northern Wisconsin, sitting around campfires talking about the future with his cousins. One of those cousins, Jimmy John Liautaud, launched Jimmy John’s Gourmet Sandwiches in 1983. Another cousin, Kevin Schippers, founded Erbert & Gerbert’s Sandwich Shop in 1988.

Milio's Sandwiches

Founder/President: Mike Liautaud

HQ: Madison, Wisconsin

Year Started: 1989

Annual Sales: $19 million

Total Units: 47

Franchise Units: 14

www.milios.com

“At one time, we intended to work together, but it never materialized,”
Liautaud says. “We all went our own ways. We’re competitors, but we’re cordial with each other. I’m impressed with how successful all three of us have been.”

In 1989, Liautaud sold his Chicago hot dog stands and moved to Madison, Wisconsin, a town he thought would be a great place to open a sandwich shop because of the “40,000 geniuses that would work for minimum wage.”

“I saw the college campus as being a really vibrant place where I could stay open long hours,” he says. “I built up the Madison market and liked the success of the college campus stores. I eventually went into other college areas in
Minneapolis and Iowa City/Cedar Rapids.”

Liautaud named his original sandwich shop Big Mike’s Super Subs, and by 2001, there were 33 units.

“All through the ’90s, it was a fabulous time to own a business because there was such a bubble in the stock market and so much money available, banks were throwing money at us,” he says. “If you had enough cash flow, you could get $1 million in credit.”

When the money dried up, Liautaud says, he “woke up to the value of a balance sheet and made a commitment to pay back debt.”

He says in the past 10 years he’s worked to improve operations, working with every vendor to cut expenses and be more efficient. “In the ’90s, I was that entitled kid you hear about,” he says. “What I did was leverage everything, and I borrowed too much money.”

This debt, Liautaud says, forced him to look into franchising to help the financing. “Franchising was a real learning curve for us,” he says. “It’s a whole different business from selling a sandwich.

“For the first three years of franchising, the money was good and we were getting clients,” he says. “Then the banking systems failed and everything halted. So while I made the decision to franchise in 2001, it took eight years until it really took off for us, but now we have 14 franchise stores.”

In order to franchise, Liautaud had to trademark the name of the business, and Big Mike’s Super Subs was deemed too generic. He says that even though it was expensive to rename the concept, the name Milio’s gave the company a strong Internet presence.

Liautaud says in the past decade he’s solidified his operations and put together a good sales and marketing team.

“From 1989 to 2001, we got up to 33 locations with all that money I borrowed,” he says. “Now we’ve added 14 with franchising, and next year I’ll be debt free.”

But the Milio’s story doesn’t end there. Liautaud says growth plans are to reach 200 stores in five years. He says he’s got a “pretty aggressive franchise sales team looking for investment partners to open at least three to five, and up to 40, stores.”

Our client has changed,” he says. “It’s crucial to go into an area and take it by storm. We can’t afford to promote one store in a market.”