Family-Owned Cousins Subs Sets Sights on Midwest Growth
Family-Owned Cousins Subs Sets Sights on Midwest Growth

Wisconsin-based fast casual sub shop seeks multi-unit restaurant operators for expansion in Indiana, Missouri, Ohio and Iowa

Cousins Subs’ legacy began more than 45 years ago when founder Bill Specht moved from the East Coast to Milwaukee, Wisconsin during the late 1960s—bringing with him a love for the subs served back home. Specht sought to fill a gap in the sandwich segment and invited his cousin Jim Sheppard to join him in his mission to open a sub sandwich shop in the Milwaukee area that rivaled those back east. Driven by a belief that “there is no substitute for quality,” they set out to create a legacy of crafting the finest sandwiches possible using bread baked daily, ingredients sliced deli-fresh, grilled subs made to order and locally-sourced products whenever possible—a legacy that continues today.

Over the next 40 years, the brand grew organically to more than 100 units by partnering with franchise partners who shared a common passion for quality. In 2015, after more than four decades in the sandwich business, Bill Specht retired and his daughter Christine took over as President and CEO. Her first order of business was to surround herself with a hungry and experienced executive team to help pave the way to the Cousins that is known today. Together, they took a hard look at the franchise system. They began identifying areas of improvement, closing underperforming and noncompliant locations, securing the commitment of franchise partners to reinvest, and honing in on strengths to further align the brand with Specht and her team’s strategic vision for growth.

“What sets Cousins apart from other sandwich concepts is the passion for the brand that resonates throughout our system.  Our franchise owners and team members are as invested in our brand as my father was and feel like members of our extended family,” said Christine Specht, who worked in human resources for seven years before serving as President and Chief Operating Officer from 2008 to 2015. “We know in our hearts that now is the time for major growth, and we are peeling back the layers of the onion and asking ourselves honestly, ‘what do we need to do to grow this brand?’”

Specht added, “Today, we are a $60 million company, but we had the same system sales in 2011 with one-third more restaurants. We’re now doing the same volume across a smaller company, which speaks to increased AUVs and higher quality products, proving that our strategic changes are paying off,” said Specht.

The brand has managed to maintain sales with a smaller, more committed system by upgrading franchise locations and developing a pricing strategy that gives the food the credit it deserves.

“We are providing guests with high-quality products that match the price point. And, we continue to stay true to our belief in better by serving freshly baked bread, one of the key differentiators of our brand, as well as deli-fresh ingredients that we source locally in Wisconsin. We plan to continue this local at heart mentality as we grow across the Midwest,” said Jason Westhoff, former CFO for a large multi-unit franchisee of Applebee’s and Pizza Hut, turned Cousins Subs corporate CFO, who brings a unique franchisee perspective to his role. “Our value-driven guests still have many options, but our premium subs are bringing in customers that don’t mind paying more for a truly better product.”

Cousins Subs’ corporate team stayed true to the company’s mission to believe in better when in 2015 they implemented a grill incentive program to its franchise partners to ensure that the system was uniform in the experience and quality provided to guests. Now, all guests can enjoy subs hot off the grill no matter where they choose to dine.

“Upgrading our grills was a turning point for me as the leader of this company. I was forging a path and showing our franchise community that we believe in the quality of the product, and we know that investments like these will pay off for our franchisees,” said Specht. “We’re doing what’s good for the brand and the entire franchise community. This was just the first step on our path to growth.”

Her instincts proved to be spot-on. After 80 percent of the system upgraded to the new grill system, sales for those stores were up 12 percent during the 52 weeks following the grill installation. Plus, Cousins Subs is in process of rolling out a restaurant remodel featuring an industrial and modern fast casual design, new menu boards and a new franchisor-funded point-of-sale system. The brand anticipates the entire system to feature up-to-date branding within five years.

“Our remodeled stores are out-performing non-remodeled stores by nine percent,” said Westhoff. “At Cousins, we believe in proving the success of our programs first to show why they’re beneficial for the growth of the business, and then encouraging our franchisees to buy in. By upgrading the menu and the restaurants themselves, we’re building better unit-level economics and increasing AUVs. When we say we believe Cousins Subs is a good investment, we mean it and have the numbers to back it up.”

As the brand looks ahead to growth throughout the Midwest in Illinois, Indiana, Minnesota, Missouri, Iowa, Michigan, Ohio and Kentucky, the executive team is particular about the types of franchisees and locations that they will allow into its franchise family.

“We are committed to helping our franchise partners be successful by providing support and transparency about where we’re going as a brand. Our goal is to continue making a difference in the communities we serve, and to do that, we have to find the right franchise partners,” said Joe Ferguson, Vice President of Development of Cousins Subs. “As we move into new markets outside of Wisconsin, we are looking for franchise owners with restaurant experience who are interested in buying multiple units and want to grow quickly. Franchise owners that operate pizza, coffee or other similar businesses would be great Cousins Subs franchisees.”

Potential franchisees can expect startup costs to range from $182,200 to $632,000 for a single unit, with multi-unit development agreements ranging $17,500 to $78,750 plus the initial $25,000 franchise fee for the first Cousins Subs location. For more information on Cousins Subs franchising opportunities, please visit cousinssubsfranchise.com.

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