Lenny's Subs Shakes Things Up, Sees New Interest from Franchisees

Bob Ritter, vice president of franchise and market development at Lenny's Subs, has growth on his mind. Not abstract concepts with visions of dollar signs dancing in his head, but a detailed blueprint for his brand.

“Our goal is to add five locations in 2015, but I think it will probably end up being closer to 10,” he said. “Then 20 in 2016. Thirty in 2017. And from there, 30 to 40 each year after.”

Ambitious numbers for any brand, especially one such as Lenny’s. The company actually put a hold on appealing to new franchisees in recent months in order to implement new operational strategies intended to boost sales. This was just one of many changes enacted by Rick Johnson and Kevin Martin, Lenny’s’ new CEO and CFO, respectively.

“After talking with our franchisees, we decided to focus on three key initiatives,” Martin said. “No. 1, we wanted to improve guest count. No. 2 was improving unit economics. And No. 3 was systematizing our processes, making sure best practices were consistent across the board for all our franchisees. These three initiatives work together and as one improves, so do the rest. It’s a win-win for both franchisees and the brand as a whole.”

Since then, Ritter has noticed a strange phenomenon. The very fact that Lenny’s is a smaller player in the sandwich world when compared to franchise behemoths like Subway has led to a strong show of interest from potential franchisees. In short, because the brand is not oversaturated in the market, prospective business owners have begun to view it as a prime opportunity for expansion.

“Lenny’s is not the ‘big guy,’” Ritter said. “We’re not on every street corner, and that creates a curiosity for people. They want to know what we’re all about.”

And what is the brand all about? The product, of course.

“The quality of our product is why we have 112 locations open today,” Ritter continued. “There has been growth and success for different sandwich brands, but I think people are looking for that quality – the fresh-sliced meats, the fresh-baked bread. We just started advertising for franchisees two weeks ago and we already have a huge response. We’re getting a lot of traction with very little effort; people are very receptive to the brand.”

Lenny’s Subs has been a mainstay in Memphis for years, and now that the company is taking steps to widen its net, it’s also seeing unprecedented growth in sales.

“We’ve got stores that have been open since day one that are now hitting sales records,” Ritter said. “We’re going on 20 weeks of same-store sales growth. There’s something in the air, people are very excited about the changes we’re making and what it means for franchisee’s bottom lines.”

As Ritter explained it, franchisee support, from bottom lines to beyond, is something that kicks in from day one.

“The day they sign, we get to work finding the perfect location,” Ritter said. “We immediately start working with local real estate brokers to find the best locations. We don’t settle, either. We wait for the best, we take our time.”

It all boils down to a simple philosophy Ritter and the rest of the Lenny’s team live by: The only way to be successful as franchisors is to first make sure franchisees are successful.

“We aim to put people in a position to succeed,” Ritter continued. “Before they open, after they open, support is something Lenny’s franchisees can count on.”