Top 250 Franchise by Entrepreneur-Rank no.137-Schlotzsky’s-USA
Products & Services: Sandwiches, pizza & salads
Number of Locations: 356
Total Investment: $356.73K – 981.9K
Began Franchising: 1976
Founded by Don and Delores Dissman in 1971, Schlotzsky’s serves meat, light and specialty sandwiches, along with pizzas, salads and soups. Today the company is a subsidiary of Focus Brands, which also franchises Carvel and Cinnabon.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $30,000
Ongoing Royalty Fee: 6%
Term of Franchise Agreement: Term of agreement renewable
Net Worth: $1,500,000
Liquid Cash Available: $600,000
Franchise Ranking History
Don and Dolores Dissman founded the company in 1971 in Austin, Texas. The initial menu consisted of one sandwich of mixed meats, cheeses and black olives on a freshly made, toasted bun called “The Original." The first sandwich was based on the Muffuletta sandwich. In 1981, the company had 100 franchise stores when real estate investors, John and Jeff Wooley and Gary Bradley, purchased the company for less than $3 million. Bradley split with the Wooleys in 1982, with Bradley taking the real estate business while the Wooleys kept the chain.
The Wooleys expanded Schlotzsky’s menu to include panini, specialty pizzas, toasted wraps, salads, soups, and other items. The Wooleys also took the company public on 15 December 1995, trading as BUNZ on NASDAQ,
The chain peaked in 2001 with 759 stores and over $400 million in sales, when same store sales started to plateau. 2003 saw the company posting a $11.7 million loss; as a result The Schlotzsky’s board of directors relieved the Wooley brothers from day-to-day management on 17 June 2004 and named Sam Coats as the new chief executive officer of the company. The Wooleys eventually resigned from the board in July 2004.
The company ceased public trading once the Bobby Cox Companies came on board.Under new ownership and management, Schlotzsky’s spent two years strengthening its franchise operations and restructuring the brand. The new owners operated the business under the corporate entity Schlotzsky’s, Ltd., and began streamlining the menu. Under new ownership and management, Schlotzsky’s has strengthened franchise operations and is licensing new franchisees in Texas and other states. The company also plans to open several new corporate-owned stores.
On 21 November 2006, Schlotzsky’s was acquired by Focus Brands, an affiliate of private equity firm Roark Capital Group, parent company of Moe’s Southwest Grill, Carvel, Cinnabon and Auntie Anne’s. The following year, the company named Kelly Roddy as president, who joined Schlotzsky’s from H-E-B Grocery Company. With Kelly on board, Schlotzsky’s began to plan for growth along with a systemwide reimage, which included updated restaurants, improved menus, table service, and the addition of Cinnabon. The company is currently remodeling its locations across the country with a “Lotz Better" look, which includes bright, bold colors, circle-themed furniture and decor and playful slogans.
Before moving in to 301 Congress, Schlotzsky’s was located at 203 Colorado in downtown Austin.
Current slogans are “All ‘Round, Lotz Better," “Lotz Better," “Every Bite Lotz Better." Former slogans include “Funny name. Serious sandwich." and “Just one sandwich, it’s that good."
|In 1971, a small shop on South Congress Avenue in Austin, Texas was home to a single, one-of-a-kind sandwich. The menu was succinct: one delectable sandwich composed of a unique combination of premium meats, cheeses, and marinated black olives served on hot Schlotzsky’s sourdough bread. From humble origins, The Original® created a passionate customer following.Now close to 40 years later, Schlotzsky’s is an international franchise restaurant chain with locations in 35 states and four foreign countries.|
As we’ve grown, customers’ tastes have evolved, and so has our menu. The Original® sandwich is still the mainstay of Schlotzsky’s, but today you can also enjoy fresh baked bread, delicious hot sandwiches, specialty pizzas, toasted wraps, freshly tossed salads, gourmet soups, and more!
Yet even with an expanded offering, and hundreds of franchises, our tastes remain true to our roots. Schlotzsky’s is still using the highest quality ingredients to make the world’s best sandwich. Stop by for a cup o’ joe, The Original®, or a toasted wrap — you may be surprised by what you find.