When multi-unit pizza restaurant owners start thinking about expanding their business franchising operations beyond pizza, many look into sandwich concepts first. It makes sense: sandwich concepts allow pizza franchisees to use their restaurant experience while leaving some of the operational complexities of the pizza industry behind.

Becoming a multi-concept franchisee allows pizza franchisees to diversify their businesses. Sandwiches are one of the top fast casual segments, and because pizza operations and sandwich operations are often very similar, these two different concepts can actually complement each other, and the sandwich concept becomes a great second investment option.

Use your existing restaurant experience.

Often the most successful restaurant franchisees have worked in restaurants and come into a concept with previous restaurant experience and knowledge. If you simply have to learn the specifics of that system rather than learning the inner workings and nuances of the entire restaurant industry, you should have a smoother entry into your new franchising concept.

Pizza franchisees already understand the basics of running a restaurant: hiring, training, P&L statements, inventory management, choosing a great location and lease negotiations. They also are familiar with running a fast casual concept with a smaller kitchen and dining room than a full-service restaurant with a bigger staff and footprint. Sandwich franchises are similar to pizza concepts in that both usually have small, simple menus. Neither have waitstaffs, and neither usually sells alcohol. These parallels make sandwich restaurants a logical addition for pizza franchisees that want to become multi-concept franchisees.

Leave the complexity.

While there are many similarities between sandwich and pizza concepts, sandwich franchises offer franchisees a chance to simplify operations. For example, sandwich concepts don’t require operators to manage in-house delivery, which can be a time consuming and difficult process. Non-auto insurance, IRS complexities with tips and employees driving during busy periods are just a few examples. The hours are also often better for operators, with sandwich restaurants usually closing much earlier than pizza restaurants that are sometimes open late evening and often past midnight on the weekends.

As an added bonus, a good sandwich franchise should have a streamlined, easy-to-follow operations manual, especially for a franchisee with restaurant experience. That makes it easier for existing franchisees to manage their new concept along with their other restaurants, allowing them to grow as a multi-concept franchisee.

Focus on the product.

As pizza operators know, the pizza segment is extremely saturated with competition, leaving pricing and discounting to be the lead point of differentiation. Quality and service will always be important to the consumer, but in the pizza business, the brand that gets the order is often times the brand with the best deal. Although the sandwich segment is competitive, there hasn’t been a culture of price wars between top brands—instead focusing on brand equity, product mix, quality and service. Substantially lower discount rates typically translate to higher profitability, allowing the franchisees to re-invest into brand marketing and customer service.

Pizza and sandwich franchises are similar in many ways, making sandwich concepts a great way for pizza franchisees to diversify their business. This allows pizza franchisees to use their restaurant experience and run two types of fast casual operations.

Craig Dunaway is president of Cincinnati, Ohio-based Penn Station East Coast Subs, a fast casual sandwich franchise with more than 310 locations. He is also a former multi-unit Papa John’s Pizza franchisee.
Outside Insights, Story, Penn Station East Coast Subs