Franchise Guide Table of Contents Capriotti’s is a 41-year-old heritage brand in the 1. The Industries fast-casual restaurant sector with a following of 2. Who is Capriotti’s? raving fans lovingly known as CAPAddicts. 3. Brand Growth 4. The Capriotti’s Brand 5. What Makes Capriotti’s So Scrumptiously Different? Many are driven to open their own location after 6. Our Franchise Partners falling in love with the food. 7. Support for Our Franchise Partners 8. Restaurant Formats 9. Qualifications for Prospective Franchise Partners 10. Process and Next Steps 11. FAQs 12. Contact Fast-Casual Industry Capriotti’s occupies space in the $47 billion fast-casual restaurant sector. Sandwich concepts make up 18 percent of that. Fast-casual is a subset of limited- service restaurants, which include quick-serve restaurants (QSR). The fast-casual sector leads all other restaurant sectors – full-service and QSR – in growth. Fast-casual is anticipated to make up 22 percent of the limited-service market by 2021. Sandwich concepts account for $31 billion in limited-service sales and $8.5 billion in fast-casual sales. Franchise Industry The franchise industry in 2017 grew faster than the overall economy for a seventh consecutive year. The industry shows no signs of slowing down. The franchise industry is expected to have grown by $36 billion in 2017. Franchising is a powerful economic engine providing more than 120 different industries a way to sell products or services to consumers through independently owned and operated franchises. Who is Capriotti’s? An award-winning fast-casual sandwich restaurant, Capriotti’s is a fast-growing chain where franchise partners earn exceptional returns by selling the best tasting, highest- quality food in a comfortable and inviting atmosphere. Capriotti’s has more than 100 locations in 18 states, with $58 million in system-wide sales, as of 2017. More than 70 percent of the system is made up of multi-unit franchisees, proving that partners are reinvesting in the brand. The top quartile of Capriotti’s owners average nearly $1.1 million in sales annually, which is higher than other sandwich competitors. Our leadership Our leadership team has fostered the momentum to open 500 franchise locations by 2025. Ashley Morris & Jason Smylie Ashley Morris and Jason Smylie became CEO and President, respectively, after buying the company in 2008. They tripled the number of locations to 106 stores today. The friends and business partners had been Capriotti’s multi-unit operators in Las Vegas since 2005. David Shelly Barr Sun Barr, who serves as Vice Chair of the International Franchise Association’s Board of Sun is Chair of the IFA and CEO, CFE and co-founder of BrightStar Franchising LLC. Sun Directors, brings a wealth of experience as multi-unit franchisee for Yum! Brands, is an investor in other franchise companies, including TITLE Boxing Club. In 2009, she operating 23 KFC and Taco Bell restaurants. Barr is also an investor in TITLE Boxing Club was named Entrepreneur of the Year by the IFA. Sun is the author of the book, Grow and is managing director and partner for Franworth, a franchise growth equity firm. He Smart, Risk Less – A Low-Capital Path to Multiplying Your Business through Franchising, also serves on the board of several franchise companies, including BrightStar Care, The in which she shares her experience and knowledge of franchising success. Spice & Tea Exchange and The Bistro Group. David Jane Bloom McPherson David Bloom serves as Chief Development Officer, overseeing all aspects of franchise Jane McPherson is Capriotti’s Senior Vice President of Marketing responsible for development, operations and training. Bloom’s background includes senior leadership marketing and technology. She brings more than 20 years of marketing experience positions in a variety of high growth franchise brands. His early career in the franchise and deep knowledge of the franchise restaurant category. At Quiznos Subs, industry began as a multi-unit franchisee and included such milestones as serving as McPherson was the Senior Director of Marketing, where she was responsible for Senior Vice President of Brand Expansion for Quiznos, growing it from a small regional driving 900 percent growth for the brand. Leading the revitalization of the TCBY and brand to opening over 5,000 locations in 28 countries. In subsequent senior roles, he Mrs. Fields brands, she also served Vice President of Marketing at Famous Brands was responsible for the rapid growth of numerous enterprises, including Clockwork International. With additional experience in a venture funded early stage technology Home Services, which has system-wide revenues in excess of $2.5 billion; Bridge company and a top U.S. marketing agency, McPherson blends start-up style creativity International Academies based in Nairobi, Kenya, which has schools throughout Africa with big brand corporate discipline to marketing and technology at Capriotti’s. and India; and Famous Brands International, which has approximately 900 franchised locations in over 30 countries. Brand Growth With locations open in 18 states and growing quickly, Capriotti’s is well on its way to reaching the 500 restaurant mark by 2025. Having expanded the Capriotti’s presence in our home market of Las Vegas, we also recently expanded in key markets such as Chicago, Indianapolis, Nashville, Salt Lake City and Minneapolis. We signed more than 50 franchise agreements in 2017. But, Capriotti’s still has prime territories available for development, including locations in the Mid-Atlantic, Midwest, Middle South and Mountain West regions. In addition to domestic expansion, we have our sight set on international growth. Franchise partners outside the United States should have a high-level of restaurant or retail development and operational expertise in country. Additionally, the right franchise partners are individuals who align with our brand’s mission and values, and are as passionate as we are about the extraordinary food at Capriotti’s. The Capriotti’s Brand Capriotti’s began in 1976 by brother and sister duo Lois and Alan Margolet in While attending the University of Nevada in Las Vegas, best friends Ashley Morris and Wilmington, Delaware, based on the idea of creating a unique sandwich shop for “real Jason Smylie became so enthralled by Capriotti’s that they broke their apartment lease turkey lovers.” They named their shop after their grandfather, Philip Capriotti, who to move closer to a restaurant. In 2005, the duo opened their own franchise location loved to cook. The company took off, spreading across the country simply based on and quickly became multi-unit operators, opening their second location that same word of mouth. year and the third location in 2007. In 2008, they bought the entire company. Ashley and Jason nearly tripled the size of Capriotti’s which now has 106 locations open Capriotti’s became famous for its nightly tradition of slow-roasting whole, all-natural across the country. turkeys in-house and hand-shredding them each morning to feature in a variety of fan-favorite subs. This includes The Bobbie, the shop’s acclaimed best-seller, made with Although the brand has experienced tremendous growth, Capriotti’s still insists its homemade turkey, cranberry sauce, stuffing and mayo on a soft roll. The Bobbie was mission – To share our passion, one sandwich at a time – and values exist at every voted “The Greatest Sandwich in America” by AOL users in 2009. location that carries its name. Capriotti’s core values Capriotti’s core values, which flow from the leadership at the corporate level to each member of every restaurant’s staff, include: Passion – Be the Best Family – Care About People Integrity – Walk the Talk Profitability – Everyone Wins Genuineness – 100 Percent Real What Makes Capriotti’s So Scrumptiously Different? We are obsessed with food and exceeding expectations. For example, The Bobbie, Capriotti’s signature sub, was voted “The Greatest Sandwich in America” by thousands of readers across the country and reported by AOL.com. Additional accolades for our food include being ranked by No. 1 QSR Brand for Highest Quality and Taste by Sandelman & Associates in a 2014 study. Why? Because we prepare our food the hard way: • Slow-Roasted Homemade Turkey • Meatballs Made from Scratch • Homemade Tuna Made Fresh Daily • Premium Grilled Steak & Chicken • Slow-Cooked Hand-Pulled Roast Beef • Fresh Coleslaw Made Daily Our Franchise Partners Besides being committed to the quality of our food, we are also committed to our family of franchise partners. In 2014, Forbes ranked Capriotti’s Sandwich Shop as one of The 10 Best Food Franchises for Your Buck. We are happy you’re interested in joining the Capriotti’s family. Check out what some of our partners have to say about their experience with Capriotti’s: Kim Schneese Wilmington, Delaware On being part of the growing Capriotti’s brand: Kim has been with Capriotti’s since the company’s start, growing up in the restaurants as her mother was best friends with the company’s founder, Lois Margolet. After working in the original Union Street Capriotti’s, her mother bought the Silverside location in 1997, the fourth Capriotti’s ever opened. Kim worked with her mother in the restaurant until taking ownership in 2015. “I’ve had the unique opportunity to experience first-hand where the company began,” said Kim. “This perspective has allowed me to stay true to our founding quality standards while also playing an important role in the evolution of the brand. It’s exciting to see the growth we have experienced and the innovation paving the way for Capriotti’s future.” James Gimbel Davenport, Iowa On owning a Capriotti’s with confidence: In 2007 on a trip to Las Vegas, James stopped by Capriotti’s and instantly fell in love with the sandwiches.