When Neel Patel joined Rego Restaurant Group as CEO in March, the Quiznos and Taco del Mar parent entered a new stage of development.
In May, Quiznos opened its first 650-square-foot modular restaurant, dubbed Qube, in Alpena, Michigan. The brand’s partnership with BCubed Manufacturing, which built the unit, could significantly reduce the cost of construction and development times for franchisees. Qube, a prefabricated structure created offsite, can be built in two weeks. It takes roughly 12 hours to prepare the unit for service once on site.
Offering flexible development options to franchisees is part of Patel’s overall strategy.
“In my previous roles, the goals were to drive transactional growth, drive unit-level profitability and build that as a foundation to healthily grow brands,” Patel said, discussing his role as Church’s Texas Chicken’s senior vice president of strategy and growth. His current goals for Rego are similar, he said.
Restaurant Dive spoke with Patel about his plans to boost transactions and franchisee profitability as the company expands both Quiznos and Taco del Mar brands in new and existing markets.
Editor’s note: This interview has been edited for clarity and brevity.
RESTAURANT DIVE: What are your top priorities for Rego Restaurant Brands?
NEEL PATEL: At Quiznos, it’s really the opportunity for significant growth. Quizno’s is a truly iconic brand. It continues to be broadly known. We’re not going to be unfamiliar in the markets we enter. Our guests have a deep connection with the brand. I've had the opportunity in the first months in my role to speak to hundreds of current and former customers. I always ask, “Hey, what are your thoughts on Quiznos?” What I hear is love for the brand, and usually a shoutout of their favorite subs or a couple of their favorite ads from the past. If you scroll through our social media, what I’ll see is comments of “Hey, bring Quiznos back to this market” or “Can you open a Quiznos here?”
Our franchisees have continued to be fantastic partners. They’re very well embedded in their local communities and they are extremely powerful assets for our brand. We’re also seeing fantastic momentum. Toward the back half of last year, we had a drive-thru unit open in Tucson, Arizona, that broke an opening day sales record for the history of the brand.
We've had several recent openings so far this year — three successful openings in the first month that I joined, and the launch of our latest modular concept, Qube. Specific to Qube, that represents a huge opportunity, [it is] an attractive and great looking restaurant that is cost effective to build and an attractive investment opportunity for franchisees.
And then the last piece is we have an incredible product. We’ve taken painstaking efforts to curate and maintain high quality meats and cheeses that are sliced every single day fresh in-house. We have incredible bread and we’ve expanded our offerings to include gluten-free options as well, and an array of industry leading sauces that are quite popular with all of our guests.
What lessons have you taken from your previous role at Church’s that apply to your new role?
How to grow transactions and grow the business healthily, that was a main focus in my previous role. Truly gaining an understanding and delivering on a value proposition for our guests is critical. And I think value is such a big buzzword in the industry today. The understanding of value goes well beyond just price. It's a high quality offering. It's delivering that offering consistently and in a way that guests can trust. Every single dollar is hard earned. Today, each dollar is harder earned than it used to be.
Being able to go out and buy food and engage in the industry is a special occasion for many guests. Delivering value in the right way has been a critical linchpin and learning that I understood and started to build on at Church’s and something that I think is very relevant for our customers at Quizno’s.
What is your development strategy?
I would probably term the entire development strategy around smart growth. I'm excited to see us continuing to drive a growth path. I think the Qube is a fantastic concept, and it's going to be another weapon in our arsenal of attractive footprints to offer our current and new franchisees.
With the Qube, you have a much lower initial entry cost to build with a drive-thru unit. It's optimized for driving digital, takeaway, pickup and drive-thru orders. These models are going to make it more attractive to find opportunities to build across the U.S. as well as in Canada.
What went into creating the Qube?
The Qube has been years in the making, but we've been very intentional about making a model that is, one, replicable, but, two, the quality of the unit is strong. I think modular can mean a lot of things, but what I want to be clear about is, this isn't your old shipping container flopped on the ground. This is purpose built and is meant to be a structure that lasts a long time. A lot of work has gone into smartly designing a modular unit that makes sense for our brand.
What particular markets would be ideal for Qube?
One of the best parts about the Qube is it naturally builds flexibility in the model. It allows us to operate in smaller parcels than we've potentially operated before with a traditional free-standing unit. What the Qube does is offer maximal flexibility to still be able to offer a drive-thru build for franchisees.
We’re super excited about the growth potential for it and have a couple of upcoming and future builds, but we can’t speak on any specifics right now.
What do you see as the potential for Taco Del Mar?
Where Quizno’s has a nationwide footprint, Taco Del Mar is regional. We’re mostly concentrated in the Pacific Northwest, which leads to growth potential for that business and to continue to offer a unique spin on a very popular concept. Coastal Mexican cuisine is super exciting and offers a unique alternative to incumbent Mexican players. It’s a fun brand and I’m excited to bring that fun to guests in other markets, going forward. We have opportunities to grow with both of our brands.
How have you been working on franchisee relationships?
In my first month, getting out into the field has been a major priority for me. My goal is to meet as many franchisees as possible over the course of the next several months, and hosting franchise roundtables and getting their input. Engaging with our franchise groups is a top priority for me.
It's great to understand and know what our operators are dealing with in restaurants every single day. Being able to have clear feedback on that is a huge priority. One of the elements of that is going through store training, because I want to be able to get in on the line if I need to when I visit restaurants. It's being able to truly understand our franchise experience. I think that that'll help us lay out a vision for the future.
As I've had some time to engage with franchisees, we've been coalescing around a few important strategic goals for focus, transformation and growth for both of our brands. I think of them in a couple themes. It's reconnecting our brand with guests. We know there's a strong affection for Quizno’s, and we know there's a very unique offering.
And so how do we continue to expand our brand presence and share what makes our product so unique and so high quality? It’s creating compelling offerings that convey the value that we give to guests on quality, but also ensuring that we are doing that at a price that makes that experience feel worth it, and continuing to elevate our operations to sharpen our ability to deliver for guests. The last piece is going to be strategic menu innovation and driving a whole set of new offerings over the course of the coming months and years that keep guests coming back.
Number two is relentless focus on franchisee profitability. For me, this is non-negotiable. Unit-level profitability is the core to our brands and any franchised business. I feel quite strongly that we need to continue to implement initiatives to ensure unit-level profitability, both driving top line and ensuring that top-line sales growth can translate to the bottom line.
Creating opportunities for franchisees to invest in our brand and then see what those returns can be is going to be an immense focus. That's built off the back of connecting with our guests and driving unit-level profitability.
The last piece is continuing to sharpen our ability as a team to support our franchisees and support our business’ drive for operational excellence, but also commercial and sales excellence. This can be things like ensuring that we continue to elevate and expand our training offerings in ways that allow operators to get real-time feedback on how they're operating, and other tools like that.
Where do you see the brands in five years?
Five years from now, we’ll have a growing core body of customers who continue to comment on my Instagram posts saying, “Bring Quizno’s to X city,” or “Bring Taco Del Mar to X city,” and we’ll have franchisees saying, “hey, I want to build” or “I continue to want to build Qubes,” or “I want to continue to build in-line restaurants.” That's going to get me extremely excited.
