Sub Chain Jersey Mike’s Expanding Into New Markets

Originally Published at Daily Vista

Quick service restaurant chain Jersey Mike’s Subs has signed on new franchise partners and is expanding into new markets, reports.

The Manasquan, N.J.-based company is now set to grow in Texas, Colorado, Los Angeles, Chicago, Minnesota, Wisconsin, Delaware and Maryland.

Existing franchise operators also plan to extend their reach into 14 other territories.

Jersey Mike’s is a sub sandwich chain with more than 500 stores open and under development nationwide. The concept, which started at the Jersey Shore in 1956, serves East Coast-style subs on fresh baked bread.

Speaking with DailyVista, President Hoyt Jones and Chief Marketing Officer Rich Hope discussed Jersey Mike’s growth and marketing strategies.

DailyVista: What are Jersey Mike’s expansion plans for this year and beyond?

Hoyt Jones: Jersey Mike's expects to open a total of 60 to 65 units in 2011. We expect to double in size in the next 5 years.

DailyVista: Are there specific regions that are key for additional growth?

Hoyt Jones: For us, growth is always about finding the right franchisees. With a mix of new and existing operators, we are filling in major markets we are already in (i.e., Washington, D.C., Los Angeles, Chicago, Dallas) where there is lots of demand.  More than half of the growth is with existing operators.

DailyVista: How will expanding into new areas affect Jersey Mike’s marketing strategy?

Rich Hope: Quite honestly, we have different marketing initiatives nationally and even locally. We’re really into cause marketing and tying into local charities. So, in terms of expansion and opening new stores and markets, the way we grand open in most markets is by tying in with the local high school as a fundraising partner.

We’ll host events with them and essentially hand out free sub cards with a donation to a certain high school. That’s how we really get grand openings going. We’ll have a big event one or two days before and hand out deals on subs to people who donate to a local charity.

We’ll do some traditional media sometimes, but for grand openings, it’s mostly a grassroots approach one mile around new stores. Our research has shown that nine out of 10 people say that they will return once they try us out. I’m not sure if that is really happening; it would be great if it was of course, but that’s why it is so important to build a following once we start developing in an area, especially one square mile around a store.

DailyVista: Does this approach also help Jersey Mike’s capture e-mails for future campaigns?

Rich Hope: While our marketing is generally inspired by cause marketing, we do a lot of tactics to drive people to stores. Among them is our own e-mail club where we do solicit e-mails to send information and special offers. That’s certainly a big initiative during these grand openings, getting new e-mails to add to the e-mail club.

DailyVista: Are Jersey Mike’s national marketing efforts focused more on building brand awareness?

Rich Hope: The national initiatives are geared towards making our brand more visible. We’re a small brand approaching 500 stores. Right now, by exposing ourselves to more people, sales can grow. We do outdoor with billboards, and usually their cause related. 

March was our “Month of Giving.” During that time our different markets, some with only a few stores and some with 32 stores and even 50 stores, got together and supported local charities. They were able to raise $650,000 for around 60 charities throughout the country. For some small charities a $15,000 or $30,000 check means an awful lot.

We’ve done what they call cause marketing now forever. That really is our thing. When our founder opened his first store when he was only 17-years-old he couldn’t even legally operate the slicer, but he built a following locally one mile around the store. He had people coming down to the area for the summer, and he built locally feeding the high school teams and helping out with local aid. He truly believed in supporting people around town before cause marketing was even a hot topic, before it was a big marketing term. It’s the same way now. We really have a strong passion for giving throughout our system.

DailyVista: How has partnering with a larger charity like Susan G. Komen for the Cure earlier this month helped build awareness?

Rich Hope: That’s the first time that we went with a national charity, so that’s never happened before. We’re always focused on local charities, but we have a couple of new products geared towards women, so we want to reach more women. But men care of course too because that’s your mother, wife, sister, etc. that could be affected. 

But we do want to welcome more women in-store and we have a new product called Sub in a Tub to go along with other healthy options, including our turkey, which is 99 percent fat free. Sub in a Tub is essentially a sub sandwich in a bowl. It’s a lot like the Burrito Bowl that Chipotle has. It’s like a chef salad, and depending on the sub you want, it can be very low in fat and have no carbs.

We have other new products to go along with that. We just introduced into a lot of stores regionally a new kid’s meal. It’s based for younger kids, eight and younger, and has small portions to get them used to the taste of sub sandwiches.

DailyVista: Are you finding that aligning with local charities and larger partners like Susan G. Komen is helping Jersey Mike’s rise above more widely known national chains?

Rich Hope: I think so. Our Facebook page had tremendous response during the “Month of Giving,” and our Web site traffic went up 50 percent or more during that time. We feel like we reached a lot of people and we raised a lot of money during the month. It culminated with “Make a Difference Day” and most stores in the country gave away free subs with a donation. That’s how we raised $650,000.

DailyVista: Are there core customer segments that Jersey Mike’s is trying to reach?

Rich Hope: We have plenty of women customers. We’re not 50/50, but that would be nice. We have products that appeal to men, but we have some products geared towards lighter eating like our mini line of subs. They’re equal to Subway’s regular subs, though they probably have more meat. Again, they’re geared more towards lighter eating.

DailyVista: How big a marketing challenge is it to compete with national chains like Subway, especially as they increase their value messaging?

Rich Hope: One of our biggest marketing challenges is getting across the quantity and quality message. We don’t feel like we want to take on any of the giants. We’re not interested in that. We have very high quality products and in our surveys we have found that people see our value. Though it’s a bigger cost it’s more of an equal value to them.

DailyVista: Does Jersey Mike’s utilize other strategic partnerships in its marketing strategy, in addition to working with local charities and Susan G. Komen?

Rich Hope: We really haven’t. This is really the first national co-branded relationship that we’ve had with a charity or anyone. Generally, what we’ve traditionally done is work with local charities more than anything. That’s what we believe in.

DailyVista: Are any agencies helping with Jersey Mike’s promotional efforts?

Rich Hope: We still have Sirius Advertising (Avon by the Sea, N.J.) as our AOR, and we have full in-house graphic capabilities. We also handle social media in-house, so at this point we’re doing a lot internally, but anything can change as growth happens. At this point, we’re focusing on doing things in-house to keep costs as low as possible for franchisees during the struggling economy.