Masala   |   Submarina   |   Delicatézza

 

Masala
By Sherri Daye

Why it Bears Watching A new study out of the University of North Texas indicates that Indian restaurants should see a rise in popularity over the next 10 years. With all the talk of aging baby boomers and their dulled taste buds and the way the public has embraced ethnic cuisine, that news should come as no surprise. With average checks of $8 and entrees that range from $6.25 (vegetarian) to $8.75 (shrimp), Masala’s two units are expected to bring $1.75 to $2 million this year, proving there is a market for fast-casual Indian.

The word masala is a Hindi term for the mix of ground spices used in curries and the name of a Dallas-based, Indian fast-casual concept—the first of its kind, say its creators, Pramod Prodduturi and Bhoopal Reddy.

“We noticed that the fast-casual segment was growing rapidly without an Indian presence,” says Prodduturi. “We thought to ourselves, ‘Why can’t we do [a restaurant] that fills that gap?’”

Ten months after that epiphany struck, Prodduturi and Rheddy opened Masala Wok in the Dallas suburb of Richardson. Eight months later in August 2003, they opened a second prototype in Las Colinas, just north of Dallas. They dubbed it Masala—A Casual Indian Diner. Though only one has wok in its name, both Masalas share the same menu of Indo-Chinese cuisine, a popular Indian style that relies heavily on wok-cooking and spices like cinnamon and clove.

By dropping “Wok,” Prodduturi hopes to distinguish Masala from the wave of Chinese eateries that have flooded the marketplace over the last 20 years. “We want to attract customers as an Indian restaurant,” he says. “A pure, plain Indian restaurant.”

While they might recognize dishes like the chicken tikka and lamb curry, the average non-Indian diner—in all likelihood—has never tasted a plate of pepper masala or tried anything like Masala’s Veggie Manchuria. The average Southeast Asian has. And, it is that group that currently makes up approximately 60 percent of both locations’ clientele.

But that is changing, says Prodduturi. Already 70 percent of the lunchtime crowd systemwide is made up of what Prodduturi terms “mainstream” or “non-ethnic” customers. “We have a diverse mix,” he says.

Future plans include developing a franchise model to grow the chain, with an initial focus on urban, high-income areas in three major Texas markets—Dallas, Houston, and Austin. In anticipation of growth, Prodduturi and his partner are in the process of creating a training program that will ensure, even with non-Indians running the show, the food and ambience at future Masala units will translate into an authentic, while “non-ethnic”–friendly, Southeast Asian experience.

 

Submarina
By Sherri Daye

Why it Bears Watching It seems like everyone in quick-service sandwiches is moving to upgrade their brand to “fast-casual” these days. With its average ticket in the $7 to $8 range and longtime emphasis on freshness, Submarina is already there—without striving. With an operating system that mimics Chick-fil-A’s—careful growth, an emphasis on customer service, and quality ingredients—Submarina’s 44 units are doing per unit numbers $200,000 to $300,000 higher than its national competition. There might never be a Submarina any further east than Vegas, but like another So Cal favorite, In-N-Out, it should be able to compete with the big dogs on its home turf.

Though it cannot compete with their marketing might, San Diego–based Submarina is hardly shaking in its boots at the thought of Quiznos and Subway moving in on its home territory. There’s no talk of “sandwich wars” at corporate headquarters; the chain intends to simply continue as it has since 1977—with a few modifications to the system here and there.

The first major change occurred in November when CEO Jeff Warfield sold the last three company-owned units. “I want to put my focus on improving the system,” explains  Warfield, “We want to put more emphasis on our infrastructure.”

A strong infrastructure is especially important these days, he says, because Submarina is experiencing a growth spurt of its own, driven by lines that snake out the door and endorsements from existing franchisees.

By March 2004 six new units will open. But where its competition is growing aggressively in the region, Submarina is adhering to a growth strategy that requires a bit of finesse. It’s not Warfield’s intention to have a Submarina on every corner; he wants them on the right corners—those near high-traffic centers like Wal-Mart or Target.

On the marketing end, a new commercial rolled out this fall. The takeoff on the Food Network’s Iron Chef pits the fresh ingredients at Submarina against the pre-sliced and processed products of a nameless competitor. It ends with the tag: Fresh is Better. The sandwich featured in the spot looks like something Cliff Huxtable might have eaten on The Cosby Show.

And, that’s the other big tweak in Submarina’s game plan—self-promotion. In the past, the chain relied on its customers to spread the word. With limited advertising and marketing, it made its way to number two among quick-serves in San Diego. Without outside capital or a formal recruiting program, it’s grown from 12 to 33 units in three years. Still, as the sandwich

market in Southern California moves towards saturation, it can’t hurt to remind people what sets Submarina apart. In Warfield’s words, what distinguishes the chain is not just the quality of its food, but its quality customer service, too.

 

Delicatézza By Sherri Daye Why it Bears Watching Since it opened, three competitors have moved within walking distance of Delicatézza—Jimmy John’s, Corner Bakery, and Potbelly. Yet, sales numbers remain strong, and the eatery’s catering business is exploding, accounting for 40 to 50 percent of sales, according to Velasco. Obviously the professional crowd has embraced the concept. Velasco’s desire to bring on a consultant says he’s serious about growing his brand—and growing it well. It will be interesting to see if he can emulate the success he has already found.   With 17 consecutive months of sales growth behind him, Ralph Velasco is ready to expand his Delicatézza brand beyond its lone Chicago storefront. In the 2-1/2 years since Velasco opened the fast-casual deli, the concept has flourished. It’s developed a following among the downtown professional crowd, its Frequent Sub Club program is a success, and real estate agents approach Velasco all the time, he says. Would-be landlords, it seems, like the way he does business. All signs say the time is ripe to expand the brand. Yet, Velasco is still cautious. “I want to do it right,” he says. Doing it right in Velasco’s mind means bringing in someone experienced in growing a chain. Franchising is a consideration, as is co-branding with a breakfast-driven concept. But, for now, Velasco is merely looking for guidance. “I don’t want to expand just to expand.”