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From One Small Shop to Franchises from Shore to Shore

Originally Published at The Alternative Press by Franco Libunao

Read the Article at The Alternative Press

Jersey Mike's Subs started in 1956 as one small shop originally called Mike's Subs in Point Pleasant, New Jersey. From day one, Jersey Mike's combined two key ingredients: exceptional quality products and unparalleled service. Because of this combination, it became a Jersey Shore legend attracting people from all over the east coast.

From those humble beginnings, Jersey Mike's has grown to more than 450 stores open and under development. The franchises are located in 27 states, up and down the east coast and as far as California and Washington.

Regardless of the location, each Jersey Mike's still makes each sub fresh to order with fresh products and customer service that made it a staple for visitors of the Jersey Shore.

Peter Cancro, founder and CEO, started out working at Mike's Subs when he was 14. He loved the atmosphere at the shop, where the employees not only recognize customers, but knew their names and regular orders. When the original owner decided to sell the business, Peter worked with his football coach, who was also a banker, to buy the business. He was only 17 years old. In 1987, Peter changed the name officially to Jersey Mike's and started franchising. In 2007, Hoyt Jones joined Peter and his team as president. With broad expertise in franchising and national consumer brands such as Domino's Pizza, Hoyt has worked closely with Peter to develop Jersey Mike's into a well-loved national brand.

I sat down with Hoyt and Josie Capozzi, VP of Franchise Relations, at their Point Pleasant Beach store to discuss the rapid expansion, the company's philosophy of giving back to each community franchises are in and what is planned for the future.

Franco Libunao (FL): Tell us briefly how one small sub shop grew into a national franchise.

Hoyt Jones (HJ): Any franchise, big or small, starts with the vision of the founder. In our case, the founder is Peter Cancro and I think it's a combination of his drive, energy, perseverance and his vision that people around the country, maybe some day around the world, would really truly enjoy an authentic Jersey Shore sub and the service we provide. He's been singularly focused on building the brand around the US.

FL: Jersey Mike's started in New Jersey and is still headquartered here. What has its history in New Jersey meant to the franchise throughout the years?

HJ: I think it is the essence of New Jersey and being close to the shore. Way back when, people looked forward to coming to the Jersey Shore and looked forward to coming to Jersey Mike's. We bring anyone who is interested in the brand to New Jersey. We require every new franchisee to come to New Jersey for training and hope to get their managers to visit at some point too. The more people that we can get back here, the more it gets into their blood, so when they see the mural that says "Greetings from Point Pleasant", they can actually say "I was in Point Pleasant, I get it."

Josie Capozzi (JC): The New Jersey connection is very important to our customers. We have a franchisee in California who remembers her grandfather bringing subs in his suitcase from New Jersey to California. That fond memory helped her decide to join our team. Now she's a franchisee and she's growing. That stained suitcase is proudly displayed in her store. We hear, "Thank God you finally opened up in Chicago. The guy behind the counter reminds me of Peter who I met when he was a little kid." Our customers have come to expect a certain level of service with the brand and they love it, they embrace it. They like the Jersey part and they joke about it a lot.

FL: When people think of Jersey Mike's, people think fresh products and true customer service. Why have these two things become part of the Jersey Mike's culture?

HJ: That goes back to Peter once again. He has been focused on keeping true to the first subs that he made when he was 14 years old. I think that his belief is, as long as we keep true to the original store and that experience, customers will come. Peter refuses to cut quality or quantity, and that's why people have such a high perceived value for the product.

JC: When we look at value, we include the customer experience. When Peter started this, he was having fun and he wants every franchisee to have fun and also get a good return on their investment. Our customers are very loyal. Our satisfaction rating for the third quarter was 89.6% satisfied. That's incredibly high and it's because we deliver on our promise of value and experience.

HJ: Peter always says "Share your life with the customer". When we're behind the counter, making somebody's order, we're really trying to get to know that person. We're trying to make their half an hour, 45 minutes, an hour here a pleasant one, a fun one. We're not just processing an order, we're making somebody's lunch or dinner and we take it seriously.

JC: A lot of our owners know their customers by name. They come in and it's like welcoming back a friend.

FL: In economic times where most businesses are struggling, Jersey Mike's has seen steady expansion. How has your business continued to grow in such tough times?

HJ: It's the business model - it is very strong right now. Purchasing is a good example. Mike Manzo (COO) and his team have done an exceptional job with our commodities and keeping the products that we're sending out to our franchisees and our company owned stores cost-effective and fresh. We're running some of the best costs that we've ever run. One of the things that Peter's done is not cut back during tough economic times. We've reinvested in the stores, in training and marketing. We've actually increased our marketing. Companies that do that in downturned economies are the ones that thrive when the economy ticks back up. Besides that we're picking strong franchisees to join the company. We're very selective. They are well capitalized, with strong experience and it goes back to not just selling franchises, we're bringing someone into our family. We're doing as much as we possibly can for franchisees to succeed.

JC: Our business model has never been growth for the sake of growth. It's always been smart growth with franchisees who share our same values. It's an important process for us to bring in the right franchisee at the right time in their life as well as in the life of company.

HJ: But it is pretty interesting to be growing right now. We are in 27 states, soon to be 28 with Maryland and 29 when we go into Wisconsin. There's strong success everywhere. It's not just in LA, Dallas, and New Jersey. It's in every market we serve. We're really blessed to be involved with this company right now and the model that Peter has built and developed. It's unique.

FL: As a business franchise, one of the biggest concerns is that the newer restaurants will lose the authenticity of the original. Because the Jersey Mike's culture of fresh products and true customer service is a key part of the business, how have you been able to ensure the new locations stay true to the Jersey Mike's culture?

HJ: The big piece of that is bringing people back to New Jersey. We start training in the field at certified training stores and we bring every franchisee to New Jersey for at least a week, then they continue to do training back in the field. Our VP of Training, John Hughes, is training in the field constantly teaching product and service focused classes.

JC: We have included a training component into our current regional meetings.

HJ: We're also bringing those same managers back here. As you go through time and have new managers on board, you want to bring those managers right here to New Jersey to get reinvigorated by the brand and smell the salt air. That's a tough thing to do because if you don't bring those people back and they don't hear from Peter, the founder, and they don't hear from John Hughes, to get the culture into their bloodstream, we're just going to be another sub shop and that's not what we want. We want everybody to have a little piece of Point Pleasant in them. Right now, we can touch everybody in over 400 stores. We need to keep cultivating team members so the next generation of franchisees has oil and vinegar in their blood too. That's why the stores in LA operate just like this store here. The same feel, the same conversations between the customer and the slicer. The product is identical. When you walk into the store, you could be walking into Point Pleasant, but no, you're in Oxnard, California or Huntington Beach.

FL: In times like these, everyone thinks cut back. Having all your managers come to New Jersey and doing back to basics training adds costs. Do you look at it as part of your reinvesting in the company?

JC: Absolutely. We also have a robust operations department, field teams and area directors. So there's a lot of training happening at the store level. We have regional training stores in almost every market. Our operations team has a strong audit process and all owners are accountable. Also, we listen to our customers. If we hear about or see inconsistencies with the brand, we act immediately. We start with the franchisee and manager, include the area director and then come full circle back to the customer to connect the dots on the experience.

HJ: To refresh from a consistency standpoint, right now we are bringing managers and franchisees back for training at the company's expense. We were just down in Atlanta and the Atlanta franchisees and managers are coming up here in December. We pay for everything, the flights, the hotels and we eat a lot of subs. It's highly unusual but that's Jersey Mike's philosophy. It's a reinvestment in that group of franchisees and managers to say "Don't forget what made us successful in the first place." It gives them a chance to come back here. John Hughes, our VP of Training, has incredible passion. He's been with Peter since he was a teenager. He went away to school, was going to be a teacher but he came back so we have a person who has oil & vinegar in his blood.

FL: Part of what makes business so tough is the onslaught of competition. That's certainly the case with quick service restaurants. You've won awards in many of your locations, including New Jersey, California, North Carolina, Ohio and many more. How has Jersey Mike's been able to stand out from not just other sandwich shops, but also the burger joints, pizza shops and others?

HJ: I think we are the only company that is doing what we do. We shred our lettuce every morning, we hand cut our tomatoes, we hand cut our onions, we slice every cold sub to order, and we grill our cheese steaks. We're staying true to the original. We are the only company that is doing what we do -- because it's tough. It's all the little details of what Peter was taught when he was a teen and we're still doing the exact same thing today. When we visited stores in Atlanta and Charlotte recently, boom, he went right behind the counter to check the thickness of the tomatoes, onions and lettuce. He sliced up some roast beef because we use certified Angus roast beef that we bake on premises. Was it cooked properly? Was it tied properly? Everything that we're doing today, he was doing 30 years ago and that's pretty neat. It's simple and it works.

JC: From the customer perspective, they come back because they know what they are going to get. They crave it.

FL: With regard to customer experience and the culture, it seems like a big component is keeping it simple but having attention to detail. Would you agree with that?

HJ: I'll give you a quick example. If a tomato is not ripened properly, when you sprinkle the oil & vinegar on it, it will splash right off of it and it's not going to soak into the tomato. So you want a properly ripened tomato because that enhances the flavor profile of the sandwich. Every single piece of the business has a reason for doing it. So while it looks like a simple process, there's a great amount of detail and attention paid as to why we do things.

FL: You keep talking about how upper management is very hands on. That has to be a huge reason why the culture is so strong right?

JC: Right. All of us love to be hands on. I can't make a sub, that is not my thing, but I can clean a table.

FL: Jersey Mike's also has a catering component of the business. Who generally uses your catering services and how does your catering menu differ from your normal menu?

HJ: We've put together a professional piece of packaging and trained extensively out in the field so that when we go into a business or a doctor's office, we can make the presentation on caliber with the Paneras of the world. Catering can be for an office but it's also somebody coming in and just getting 5 giant subs for the Super Bowl or a basketball game. So there are different components and we've been able to take it to the next level with our packaging.

JC: With the basic box component, the subs slide right out and they're quartered and up so you can see them. It's a very nice presentation. There are other components for chips, drinks, etc. The product remains true to the brand but is enhanced with the packaging.

FL: Another area in which you've gained a lot of recognition is in giving back to the communities where you have franchises. It's obvious that your commitment to serving your customers extends beyond the walls of your shops. Why have you gone to such extraordinary efforts to not just be good citizens, but make a big difference in the communities in which you are located?

JC: It's part of everything we do. HJ: When Peter was becoming a young businessman, he was mentored by some outstanding individuals here in Point Pleasant and it was ingrained in him that you're in business to make money, sure, but also to give back to the community that is patronizing you. At a very early age, he got involved with local schools and charities in and around Point Pleasant and quickly realized that this was a relationship you need to continue to build upon all the time. Now it's a key component of our company's culture that our franchisees love and value about the brand. You feel good. Every store we open, we give away free subs and customers contribute to local schools or charities.

JC: When you give back, you get so much more back. When we talk about franchisees fitting correctly, this is a huge part of our value system. This year, we anticipated that many people might be cutting back on their philanthropy, but Peter said "Absolutely not, we will do more this year than we ever have." Our franchisees embrace the philosophy and we're all involved in our own ways. What's better than supporting someone, being charitable and kind?

HJ: It's just natural to the brand. It's natural to the people we attract as franchisees and it's natural to the managers that come on board.

FL: Not only have you helped the communities your shops are in, but you've also partnered with a lot of large organizations driven by various causes (ex. Autism Speaks, American Red Cross, Boys & Girls Club, Special Olympics, Big Brothers Big Sisters, etc.) What has partnering with these organizations meant to you and your business?

HJ: Most of them started as small organizations too and many were partnering with one or two franchises around the US. We felt we could do a little bit more. What we typically like to do is be more locally involved, we want to deal with them nationally but more locally focused. We want to make sure that the money we're generating goes into the local communities where we have businesses, even if we're dealing with a national charity.

JC: The Boys & Girls Club is a great example. One thing that is very important to them and to us is mentoring. Boys & Girls Club was a great fit for us because they have so many local chapters. We would close stores for a couple hours, have the kids come in to learn how to make subs and they had a blast. We did it across the country in every market and it was great fun.

FL: Another big trend lately is "going green." Does Jersey Mike's have any "green" initiatives and if so, what are they?

HJ: It's funny, when you talk about going green, we've been green for a long time. We do recycling in all the stores. But since our products are fresh, we don't bring in many products that are prepackaged into the store. So we've inherently been green since 1956. Everything is fresh.

FL: Obviously Jersey Mike's is still a growing franchise. Other than new locations, what else does Jersey Mike's have planned for the future?

HJ: The big thing for us right now, from a technology standpoint, is rolling out a new POS (Point of Service) system that's proprietary. We're going to have online ordering and even an iPhone App. We also will be going back to retrench and make sure that every location has the brand experience of the original store.

FL: So while you are definitely doing things to be more modern, like your technology, basically what customers should expect from you guys is more of the same in the future?

HJ: The thing that I tell customers is don't get tied into one sub. A lot of people come in and order the #13, the Original Italian, and they just can't get enough of it. I tell them try the tuna, "Mike's Way", it's unbelievable. Try the roast beef, the turkey, try the chipotle cheese steak. We have a menu that can keep you busy for a couple months so don't get locked into one sub. It's incredibly simple yet incredibly broad and diverse. I brought my wife here two weeks ago and she got a sub in a tub and she was blown away. She didn't want the bread and it is like getting a naked burrito at Chipotle.

If any franchise shows strong entrepreneurial spirit in New Jersey, it's Jersey Mike's. No matter how far the away the franchise is, each location stays true to the culture that was born right here in New Jersey. For more information feel free to call Josie Capozzi at 732-223-4044 or visit the Jersey Mike's website http://www.jerseymikes.com/.