Sbarro CEO David Karam knows how to capture an impulse occasion. It starts with igniting the senses and creating a craving, then satisfying it with a slice of New York-style pizza. That’s how the chain became the quintessential food court operator synonymous with mall culture back in the early 2000s.
“The best way to think about it is that we’re equal parts retailer and restaurant company,” he says. “We have big, abundant displays that stimulate customers’ pizza cravings when they walk by.”
The company’s nearly exclusive reliance on malls was a vulnerability by the time Karam joined the business a decade ago. The growth potential was limited and Sbarro needed to think beyond those confines. It started pushing into new nontraditional channels without completely cutting its ties to malls.
The expansion has only accelerated since then, with unit growth increasing from the mid-30s in 2018 and 2019 to 103 new units last year, the most in Sbarro’s history thus far. It expects to reach 120 debuts this year. Convenience stores and travel centers are among the primary growth drivers, but the brand also sees immense potential to expand its footprint in universities, hospitals, casinos, theme parks, military bases, and more.
“I’d challenge any other brand to describe venue expansion like we’ve experienced within four years,” Karam says. “We can go into sites as small as 400 square feet or as large as 3,000 square feet.”
That level of flexibility extends to the menu, too. Sbarro relies on its presence in high foot traffic locations as its primary marketing tool, so it doesn’t feel constrained to have the same menu at every location. It encourages operators to curate a customized product mix that fits the specific needs of their unit.
With an expanded total accessible market and dedicated franchise sales teams for each of its target venue categories, site selection hasn’t been much of a challenge for the quick-serve pizza chain. The real wildcard when it comes to growing in new categories is operational execution.
“We’re constantly working to develop more efficient procedures, but at the same time, we want to make sure that the brand is properly represented,” Karam says. “That’s the biggest challenge we have relative to the traditional freestanding quick-service sector.”
Sbarro is tackling that challenge with heavy investments in field visits and training as well as a focus on monitoring operational performance, food quality, and those all-important displays designed to spark an impulse occasion. The company also has resisted an industry-wide trend to move toward an asset-light model. Roughly 20 percent of its 700 units are company-owned, something Karam believes is crucial for providing impactful support.
Some channels are generating more interest from traditional quick-service restaurant brands than others. Karam points to travel stations as an example of the former and malls as an example of the latter. Overall, he believes competition across nontraditional venues is heating up.
“Everybody is looking at return on invested capital,” he says. “As land costs go up and as building costs go up, they’re looking at more convenient ways to adjust their concept and deliver new points of distribution to the consumer.”
With 1,200 units located primarily in convenience stores and truck stops, Chester’s Chicken has seen a growing number of brands enter its primary domain over the years. The mounting pressure sparked a brand refresh in 2021 that included elevated menu items and new prototypes designed to emphasize the freshness of its namesake product. From flour-dusted aprons and the sound of sizzling oil to upgraded menu boards and a modernized visual identity, the redesign leaned into the fact that the chicken is hand-breaded and fried fresh each day, something the brand views as a key differentiator.
“The brand refresh was around the consumer-facing aspect with the demand for quality products and the evolution of food service in convenience stores,” says VP of marketing William Culpepper. “One thing we’re continuing to look at is evolving the kitchen and making things easier for the operator.”
Chester’s works directly with convenience store and truck stop owners to customize its footprint in each location. It can go as small as a 6-foot counter with a 4-foot warmer or as large as a full dining room model for an immersive guest experience.
“Being in nontraditional spaces means you have to be highly adaptable because no two stores are created equal,” Culpepper says. “We have requirements in the kitchen in terms of your refrigeration and freezer space to make sure you can support the product and do the volume, but there’s a lot of flexibility in terms of how the store is laid out.”
Chester’s has a goal of putting in 100 or more partners every year. It’s well on its way to adding 125 units in 2023. Business development director Levi Heimer attributes the growth to low startup costs, minimal labor requirements, and a return on investment “that is measured in months instead of years.” Along with inside sales, monthly gallons pumped, and the number of rooftops within a given radius, the level of commitment and engagement from operators is a key piece of the site selection equation.
“We’re really focused on finding locations with strong operator and manager buy-in,” Heimer says. “Operating through a convenience store model, you may not have as direct of a point of contact between Chester’s as an organization and the consumer, so we have to depend on our operators to make sure those relationships and the brand representation is strong.”
With an updated approach that puts its key strengths at the forefront—and a positive response from consumers and operators—additional venues like airports, college campuses, and stadiums could be on the horizon. But for now, Chester’s is focused on expanding its reach in existing channels.
“We’re starting to see this as a growth channel for a lot of major quick-service restaurants, so it was imperative for us to do this brand refresh,” Culpepper says. “We’ve been stepping up our game because we’re competing with a different level of competitor. You’ve got to stay sharp and keep evolving to keep winning.”