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Crafting a Franchise-Friendly Business: Jeff Sinelli

 

Jeff Sinelli’s Story: If Jeff Sinelli’s quick success with his Which Wich? chain of sandwich shops seems surprising, consider that he’s already basically done this before.

Even in his twenties, Jeff became known as a savvy, serial entrepreneur who bought, improved and sold eateries and other entertainment properties in metro Dallas. When he was 30, he transformed the storefront and menu of a Mongolian restaurant into a new concept that he dubbed Genghis Grill. By 2002, the company was on Franchise Times’ list of “20 To Watch.” And when a big local restaurant group made Jeff an offer he couldn’t refuse for Genghis Grill, he gave it up.

After a short sabbatical -- and with his proceeds from the Genghis Grill deal available -- Jeff was ready to jump back into the restaurant business. But this time, he was on a mission to find an idea that he could develop into thousands of franchise businesses nationwide.

He was drawn to the sandwich category. For one thing, he knew that it was one of the few quick-serve-restaurant segments that could support thousands of units of a single chain. And while big chains such as Subway, Blimpie and Quiznos already had built the category, Jeff perceived some weaknesses.

"I saw a lot of burned-out brands in that space dealing with concepts that are 20 to 40 years old,” Jeff says. “We’re a couple generations newer than the leading sandwich concepts out there, so we think differently. I thought there was room for new ideas.”

So, for example, Which Wich? emphasizes a “superior sandwich” that includes only Grade A meats, cheeses, produce and condiments. He tries to work in regional products as sides on the menu. A la Starbucks, Jeff has added trendy music, his by Aware Records. Which Wich? franchise architecture is modern.

“We want people to interact with the brand, so we put in lots of little hooks,” Jeff says. And customers are biting: Which Wich? opened with three stores, had a total of six open within a year, and just opened its 13th company-owned and franchised store. Revenues have climbed to more than $7 million.

“We’re just building our infrastructure daily and weekly to scale our growth, and it’s working,” he says. “It’s a powerful name and a powerful vision, and everyone’s buying into it.”

Jeff’s Key Move: Creating a Franchise-Friendly Business

Making Which Wich? appealing and rewarding to franchisees was integral to the very idea of the business: Without it, there would be no Which Wich?

“From day one we were going to create a model that was replicable, that could be done again and again as franchises must be,” Jeff says.

His very choice of the sandwich category in part reflected that criterion. “Sandwiches work in that kind of environment,” he says. “There is a limited menu with limited components. It’s easy to teach franchisees how to do it and to build a system off of it.”

But picking the right category was only the beginning of making Which Wich? franchise-friendly. Jeff also believes that the name “Which Wich?” is extremely strong and attractive, and a crucial component of the brand identity.

And Jeff did his future franchisees another favor by taking the sandwich concept upscale with the quality of ingredients, amenities and atmosphere of a Which Wich?

“Our customer is more aware of brands, more conscious of their surroundings and just better-educated,” Jeff explains. “We call them superior sandwiches, and I think our customers are superior as well. It creates a little bit of an edge for our franchisees.”

Fully aware of the importance of cost control for his franchisees’ success, Jeff also put his industry experience and contacts to good use. He sought out national vendors and leveraged his reputation, he says, into pricing that a 250-outlet chain would receive rather than one that had yet to open more than a handful of franchises.

“We demanded that pricing and got it,” he says. “Then we proved our model with one store.”

Jeff also says that the franchise terms for Which Wich? are more favorable than those of established sandwich chains. Which Wich? requires an initial franchise fee of $25,000, which is relatively affordable by industry standards. Moreover, the chain’s continuing royalty requirement is only 6%, plus 1% of the franchisee’s revenues to contribute to the chain’s advertising fund. By comparison, he says, the big boys in franchising charge 8% or more.

One reason Which Wich? can afford more reasonable royalties, Jeff explains, is that headquarters is more diligent about passing cost breaks and improvements on to franchisees.

“Some in this business might call me a maverick, or even stupid,” Jeff allows. “But we’re getting the loyalty of our franchisees with some of the core decisions about how we’re running this company.”

Training franchisees is another area of emphasis for Which Wich? Each one goes to Dallas for a three- or four-week immersion program. “It’s included in their franchise fees,” Jeff says, “and they just pay room and board.”

Still another element of franchise friendliness is that Jeff is determined to maintain relatively large territories – again, compared with existing behemoths such as Subway, which is infamous for selling franchises nearly regardless of territorial concerns.

“We’d rather have one, $1-million store than three, $300,000 stores,” Jeff says. “That’s even if they’re owned by the same franchisee. The margins are better that way.”

Proof that quality franchisees are being drawn to Which Wich? goes beyond the steady increase in those who are buying in. The quality of new recruits is steadily rising as well. Initial franchisees, he says, were customers of the initial store and other, nearly random “small developers”.

Then Which Wich? began to attract couples with desirable characteristics: both employed in white-collar, corporate jobs that would allow one of them to quit and focus full-time on building their Which Wich? franchise. The current third wave, he says, are restaurant professionals who recognize what he is building.

Jeff is ecstatic that Which Wich? has caught on so quickly and strongly among potential franchisees that they’re all being attracted simply by word of mouth. “We’ve done zero to advertise this franchise opportunity,” he notes, “and yet it’s going extremely well.”

Jeff’s Bonus Insight

Whether you’re developing one restaurant or a template for a thousand eateries, Jeff says, forging a strong brand is crucial.

“A brand makes a concept memorable; it appeals to customers’ senses and emotions,” he says. “If it’s done right, a connection between the customer and the restaurant is created that locks the customer in for the long term.”