Quiznos sandwich chain has plans to increase its presence within convenience stores in 2010.
In the recession, customers are busier and thriftier and have been increasing their visits to convenience stores while reducing their visits to restaurants. Restaurant visits began slowing in 2007 and then fell 3% last year while trips to convenience stores to buy food have been increasing at a year-over-year rate of 1% since 2007, according to the NPD Group, the Wall Street Journal reported.
“A lot of people are working two jobs in this economy and are busier and busier, and convenience is becoming more and more important,” said Quiznos Chief Executive Rick Schaden.
Quiznos, which has more than 4,000 restaurants in North America, began opening mini restaurants inside filling stations and convenience stores as BP, including Chevron and Circle K last year and now has 175. The Denver-based company plans to double that number next year and then double it again by the end of 2012, for a total of about 700 locations, while also opening about the same number of traditional Quiznos restaurants.
This March, Quiznos will serve breakfast-cinnamon rolls and biscuit-and-egg sandwiches, among other things-at its convenience-store locations to capture sales from customers who stop in for their morning coffee.
Increasing its presence at convenience stores enables the company to insert itself “in places that normally wouldn’t support a traditional Quiznos, like service plazas, truck stops and urban areas,” Schaden said.
The store operators, which become Quiznos franchisees, must pay the fees associated with remodeling their buildings to accommodate the restaurant, with its ovens and, in some cases, small seating areas. Franchisees pay privately held Quiznos an annual royalty fee of 7% of the restaurant’s sales and make a yearly advertising-fund contribution amounting to an additional 4% of sales, the Wall Street Journal reported.
Quiznos noted its convenience-store locations generate almost double the sales per square foot of traditional Quzinos. The company projects that all of its convenience-store restaurants will generate a total of $250 million in sales by the end of 2012.
“We previously had our own deli, but it’s a name-brand world and people want to know what to expect when they walk in the door,” John Shambo, owner of Main Street Exxon in Northampton, Pa., who sought out Quiznos told the Wall Street Journal. Since he opened a Quiznos in his store a year ago his foodservice sales have almost quadrupled. One of his potato-chip vendors has seen sales rise 25%. Plus, increased foot traffic has lead to more sales on lottery tickets and other items, resulting in a 15% increase in store sales.