Milling & Baking News - April 6, 2004 - 26

N E W S F E AT U R E
franchises, to really getting people who are
committed to doing this right.
"I would have liked to have done this in
1995. But our franchise system wasn't willing to make dramatic change until it got
(financially) painful."

Recasting an image
For most franchisees, the three-phase
plan consists first of what Mr. Wooley calls
"front-of-the-house" improvements, mostly
centering on interior redesigns of the restaurants to give them a cozier look and feel.
Joyce Cates, Schlotzsky's senior vice-president of franchise operations, said those initial
improvements entail new menu boards, banners, framed art and softer tones of paint.
"What we're encouraging every franchisee in the first phase is to repaint their store,
paint all the art and banners, take the old
stuff down, and then there will be a whole
new look to the restaurant," Ms. Cates said.
Mr. Wooley said the initial improvements
will cost a typical franchisee anywhere from
$2,000 to $7,000.
Phase Two of the program centers on redoing counters and display cases, changing
furniture and fixtures and adjusting menu
options.
That includes the new "Pick Any Two"
menu that already has surfaced at many

Schlotzsky's outlets. The menu allows consumers to combine two halves of most items.
Franchisees, Ms. Cates said, "can start
with what's called the 'Your Choice' menu,
which is just a different way of bundling
items together, and then move to the 'Pick
Any Two' menu, which offers halves of
things and adds some new categories like
panini (sandwiches), baked potatoes and
fresh-tossed salads."
The final phase of the new concept, she
said, consists of adding cafe sandwiches,
cold sandwiches, a breakfast program and
gourmet dessert programs.
"The menu develops in three stages,
and the facility develops in three stages,
so (franchisees) have a choice in how they
want to mitigate costs," she said. "They really can progress any way they want to over
the three-year period, just so long as by the
end of the three years, they've completed
and finished their work."
Franchisees must pay for the changes
themselves. But Mr. Wooley said the company has instituted a financing program
through which they can borrow money to
institute the new concept.
"Worst-case, the pretty old stores, over
the three years, they might spend $50,000,"
he said.
An important component of the three-

tiered plan involves offering artisan bread
(see story below). Mr. Wooley said offering
freshly baked bread accomplishes two things.
"It lets us diversify our product line,"
he said. "It lets us have breakfast day parts
and espresso, coffee and things, it all fits
together."
Indeed, pastry and coffee sales at the
chain's spacious south Lamar Boulevard
outlet in Austin - sort of a laboratory
for new Schlotzsky's ideas and a training
ground for the chain's personnel - now account for 30% of that location's sales.
"But the bread also is literally part of the
trade dress," Mr. Wooley said, noticing how
much it appeals to, for instance, upwardly
mobile workers from Austin's technology
sector, including Dell Inc.'s headquarters.
"People love to see that bread," he said.
"When all the breads are out there and it's
just a wall of bread and cases with pastries ...
the visual experience is better. The front of the
house does so much for the experience, and
people just want to be there. The computers
that we put in there do the same thing: It just
makes it a rich, interesting experience.
"But the artisan bread and the pastries
is what really gives some texture to it. It's
authentic. High-tech people who can do all
that amazing stuff with computers, they
come in here, and they look at a loaf of

An Artisan Approach

or years, Darrell Kolinek cringed
at the waste involved with baking bread, sandwich buns and other
grain-based products at Schlotzsky's
restaurants.
"We used to do all this baking by
scratch and had so much inefficiency,"
said Mr. Kolinek, senior vice-president of the chain's restaurant operations. "We'd bake a bread, and if it
didn't sell, at the end of the day, you'd
throw it away."
Enter La Brea Bakery, Inc., a division of Ireland's IAWS Group and one
of the leading artisan bread makers in
North America.
With La Brea now shipping parbaked artisan bread to Schlotzsky's
outlets around the country via Denver-based food distributor Vistar/
VSA, rarely do more than a few
unsold crumbs see the inside of a
Schlotzsky's dumpster.
"It's very simple," Mr. Kolinek said.
"We can go right to the freezer, pull it, and
20 minutes later have it ready to serve. So
operationally, it became much easier."
It also has allowed Schlotzsky's to
expand its product offerings - which

26 / Milling & Baking News, April 6, 2004

30 years ago consisted of a single sandwich
called "The Original" - to include bakery-style loaves of fresh bread; hence, the
chain's new Fresh in 20 program.
"You can have any La Brea bread fresh in
20 minutes," Mr. Kolinek said. "Come in,
order your dinner, go over and order a fresh

loaf of bread, we'll put it in the oven, we'll
bake it off for you."
It's easy to see why Schlotzsky's relationship with La Brea constitutes a key facet of
the chain's reimaging program, which aims
to change most interior store designs and
menus by 2006.

Mr. Kolinek credits La Brea with
helping Schlotzsky's work out the early
kinks in that relationship. Almost half
the chain's stores have begun at least the
first phase of a three-tiered remodeling
that eventually will place La Brea products on the menu at most outlets.
"It took us a while to get there; we
were having it shipped directly in the
beginning," he said. "La Brea has given
us quite a bit of support. I spent some
time in one of the manufacturing facilities, getting to know their people better, how they handle bread, and I was
able to watch the processes."
It didn't take that experience,
though, to impress Mr. Kolinek. He
was sold the first time Nancy Silverton, one of La Brea's founders, visited
the company's Austin, Texas, training
site to teach the chain the proper steps
in making a panini sandwich.
Now,
panini
sandwiches
on
Schlotzsky's revamped menu include
bread sliced from La Brea loaves. Mr.
Kolinek calls them "a tremendous hit"
with customers.
"It was just a natural," he said of La
Brea and Schlotzsky's, "to put the two

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