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After posting a successful 2011, Madison, Wisc.-based Milio's Sandwiches is ready to grow exponentially within the next five years. The chain currently has almost 50 locations in Wisconsin, Minnesota, Iowa and Nebraska.
Founder/president Mike Liautaud expects to sell 200 franchisees by 2016. Along the way, he'll add units in existing markets, as well as in Missouri, Illinois, Indiana, Michigan and Ohio.
The impetus behind these ambitious plans is, perhaps ironically, the recent economic downturn. Liautaud said the chain is now doing better than ever and that the recession "sharpened him up." Namely, he cut debt and expenses, tightened operations and strengthened marketing to increase sales.
"When the recession hit, the buyer became very cautious and the banks were not lending money. Sales were flat and expenses were going up. We spent that time fine tuning our business, instead of actively pursuing franchisees," Liautaud said.
The company worked on basic fundamentals, such as training staff for stronger execution, cutting non-performing operators and corporate stores, strengthening the brand image, working on marketing initiatives and eliminating debt.
Since, Milio's has experienced seven consecutive quarters of increased average unit volumes over the previous year for stores open more than one year. In 2011, systemwide sales were around $19 million.
"We are much stronger today and I feel we have more to offer potential franchisees. For the first time, we have partnered with an outside sales team and I believe that team and our stronger model will help us recruit top franchisees," Liautaud said.
As the company grows, it is targeting multi-unit developers with the resources to open at least three to five stores in a market.
"We are willing to take a look at any kind of site and are willing to go into institutional sites or quirky buildings. We are most interested in figuring out where the customers are and setting up there. We have opportunity," Liautaud said.
Products, operations and marketing strategies
Of course, good execution means nothing if you don't have the products to back it up, and Liautaud believes Milio's Dagwood is the best in the fast-growing sandwich segment, a space that includes his first cousins' businesses Jimmy John's (founded by Jimmy John Liautaud) and Erbert & Gerbert Sandwhich Shop (founded by Kevin Schippers).
Milio's offers several bread choices, including French, wheat sub roll, sandwich-style wheat, garlic herb flour tortilla, jalapeno cheese flour tortilla, low-carb flour tortilla and lettuce wrap.
The chain also offers soup and a variety of sides highlighted by the marketing tagline "Mighty Tasty."
This year, Milio's plans to introduce a new value menu system that will further differentiate the chain from other sandwich brands.
"We have been testing value menu bundles in some of our markets and they've shown to successfully increase sale for our side items and drive up ticket averages," Liautaud said. "It is a streamlined menu that will drive customers to a bundle package."
The value menu will rollout systemwide in the second quarter.
Another point of differentiation for Milio's, according to Liautaud, is its focus on mentoring and training programs for operators.
"Operations are the key to success. We have a culture that is quite different from Jimmy John's and Subway," he said. "We're a humble group of people that is very connected to our customers, which makes us different from our competitors."
Jimmy John's hangs its hat on quality, he said, but at a higher price point, while Subway is a value-driven concept backed by "huge marketing dollars."
Milio's will step up its own marketing strategy to complement its growth, including a new website with online ordering capabilities. The chain also will continue to offer popular limited-time offerings and enhance its social media presence, and will offer catering opportunities and, at some units, drive-thrus.
Liautaud said Milio's has two core customer bases – the 18-to-25-year-olds and the busy families – and as the company continues to polish its operational execution, putting those patrons first will be top of mind. The rest, he said, should fall into place from there.
"We all say to put the customer first, but do we all practice it? This is truly a case of whether you're executing what you're preaching and making it a true belief within your business," Liautaud said. "If you get everybody aligned with your goals, you're unstoppable."
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