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A Bite of the Big
Apple
Provo deli chain aims to add more than 400
franchise stores nationwide by year’s-end
By Grace Leong
Daily Herald
Gandolfo’s New
York Delicatessen LLC of Provo is positioning itself to take on the big
boys of casual dining.
Founded in 1989,
the small New York-style deli chain, which currently has 45 locations
nationwide including 13 in Utah County, aims to sell more than 400 stores
in Arizona, Florida, Hawaii, Massachusetts, Montana, Nevada and Washington
through its franchise program by year’s-end. To date Gandolfo’s
has sold 298 stores in states including Colorado, Georgia, Idaho, North
and South Carolina and is adding 61 new locations by the end of the year.
Fueling the company’s
explosive growth in part is the chemistry between Gandolfo’s founder
Craig Gandolph and co-owner Dan Pool, former president of the Golden Corral
restaurant chain in Riley, N.C. and their firm belief in their sandwich
concept.
That means serving
up fresh-made hot and cold New York style deli sandwiches, pasta salads
and desserts with a huge dose of Frank Sinatra music and New York Mets
memorabilia.
“When you have
a Gandolfo’s sandwich, you should feel as though you are standing
in Times Square,” Pool said.
“There’s
a large number of sandwich concepts out there. But we’re in a niche
of our own,” he said. “Quizno’s and Firehouse Subs offer
toasted breads. Subway and Hogi Yogi offer cold sandwiches. But Gandolfo’s
has both fresh-made hot and cold sandwiches.”
By making its sandwiches
and salads fresh instead of buying pre-made products, the company has
managed to keep its food costs steady amid higher freight shipping costs
due to high gas prices, Pool said.
“We slice our
own meats, cheeses and make our own salads, which is cheaper than getting
prepared products,” he said.
To evoke that New
York state of mind, the company remodeled 31 of its 45 stores, adding
New York City cab doors, manhole covers and 6-feet tall Statues of Liberty
holding Gandolfo’s sandwiches.
But Pool’s experience
in food franchising was the key factor behind the company’s rapid
expansion. “He was the peanut butter to my chocolate Reese’s
cup,” Gandolph said. “He had experience in growing companies
and in administration.”
Pool became acquainted
with Gandolfo’s through Gandolph’s two brothers, who were
both working at the Golden Corral in North Carolina. Pool left the Golden
Corral chain in 1999 and dabbled in another restaurant business, Sonny
Barbecue in Atlanta, Ga., before joining Gandolfo’s in 2002.
“When Craig
made the decision to grow, he didn’t know how to. But I did because
I’ve been with Bennigan’s Steak & Grill, Chili’s,
Golden Corral and Sonny’s Barbecue.” Pool said. “But
he had the product.”
Managing Gandolfo’s
rapid growth and maintaining consistency in operations and food quality
are challenges that the company tried to overcome through its master franchise
program, he said.
“Instead of
building our own corporate stores, we have a master franchise program
where a partner buys rights to a certain market, for instance, Phoenix,
and helps us train our franchises there and help them get opened,”
Pool said. “The master franchisor has to have a proven success record
with other businesses.”
To cope with the company’s
projected growth to 400 franchises by year end, Gandolfo’s would
need to bolster its current team of seven master franchisors with an additional
20 master franchisors. The company’s 27 franchise stores in Utah
are managed by Tom Gandolph, Craig’s father, and Steve Shova, its
director of operations.
Gandolph said he sells
stores averaging between 1,500 square feet and 1,700 square feet each
for an initial fee of about $15,000, plus a monthly royalty fee averaging
6 percent of gross sales.
According to a 2002
report by franchising industry data provider, Uniform Franchise Offer
Circular, the number of domestic franchise units grew 12.6 percent to
31,933 between 1999 and 2001 despite recent weakness in the economy. Of
that total, 19,275 came from the business-related and fast food restaurant
sectors.
Business format franchisors
like Gandolfo’s, which offer their franchises the license or rights
to sell its goods or services and use its business techniques, grew by
about 50 percent between 1999 and 2001, the report said.
“Since the Sept.
11 terrorist attacks, people have become more cost conscious. While interest
in upscale dining has dropped, the fast casual dining concept, which is
cheaper, either stayed flat or had an increase in the past three years,”
Pool said.
About Gandolfo's
Gandolfo’s is one of the fastest growing franchises in America,
with over 300 stores sold in the last two years. Part of this phenomenal
growth can be attributed to strategic marketing, but majority credit must
be given to the food. Voted best sandwich every year for the past decade
in the state of Utah, where the company is headquartered, Gandolfo’s
is that rare combination of taste, value, and ambiance. With stores opening
from Orlando to Seattle and many places in between, thousands of loyal
customers would agree.
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