"With those two industries really being decimated unfortunately, the reality is people could not get a really fantastic steak meal easily,” Morris says. “So we thought, this would even be possibly a more appropriate time to follow through with our nationwide launch. Because we could offer a really, really premium product—the best quality beef in America—to people who were accustomed to going to fine-dining steakhouses to get this product.”
When it comes to expansion, off-premises continues to be a major factor.
Capriotti’s has two ghost kitchens in operation, and by the end of 2020, there will be six—four franchises and two company-owned. Morris notes that the two open virtual kitchens are already meeting sales expectations.
The restaurant is also experimenting with delivery-only brands that comprise segments within the sandwich space. Capriotti’s is currently testing a fully vegetarian concept, one that’s solely high-quality beef, another for turkey lovers, and one based in the cannabis arena.
“So they’re appealing to probably a narrow part of the market, but it’s really hyper-focused,” Morris says. “So the idea being can we generate additional sales by delivering these concepts with an ultra-delicious high quality product. A lot of our secret menu, and a lot of things that have evolved at Capriotti’s, they wind up making it on to these [virtual] menus where they have been historically on the Capriotti’s menu.”
The sandwich company, which is composed of 92 franchises and 13 company-run stores, is based in Las Vegas, an area that was recently labeled as having an increased risk for COVID spread.
In response, Morris says the company has taken a slow, meticulous approach to reopening stores—an easier task for brands in the fast-casual segment. The restaurants are taking all the common precautionary steps—handwashing, wearing masks, washing tables, social distancing, and checking workers daily—to maintain the safety of customers and employees.
“We’re taking this very seriously. As a company, we don’t want to participate in part of the problem. We want to be part of the solution,” Morris says. “… Obviously most of our system is franchised, so we put the rules out and do our best to enforce the rules. And our hope is that all of our franchise partners are also taking this very seriously and following the rules themselves. And we believe they are.”
Overall, Capriotti’s has opened more than a dozen restaurants this year, and plans to open seven more by the end of the year. More than 165 are in the development pipeline.
Morris prefaces Capriotti’s attractiveness as a brand by explaining that getting into business is by nature a risk. And so for a person to take that risk—especially in an industry that experiences ebbs and flows—he or she must perceive the reward to be greater than the risk.
He says this because Capriotti’s was founded more than 40 years ago, and has survived wars, recessions, and now a COVID pandemic. It’s thrived in all situations and all macro environments.
Morris says investors know that this sandwich shop has the future in its hands.
“That’s really a testament to the safety of the company, and I think that really resonates with people who are wanting to invest $300,000-plus into a business,” Morris says. “They want to feel safe. They want to know there isn’t something where they wake up one day and the company is not positioned to survive the environment.”