Making the vocational leap from being an electrical engineer on nuclear power plants to pushing sub sandwiches was a dramatic change, but Spokanes Gary Turnidge says its one he doesnt regret.
Recognizing in 1987 that the construction of nuclear power facilities faced major environmental challenges, Turnidge signed on with the Subway sandwich chain, and as the fast-food chain has grown, so has Turnidges value to the international company.
Since moving to Spokane in 1989 as Subways development agent for Eastern Washington and North Idaho, Turnidge has been instrumental in launching 109 Subway franchise restaurants in the region. Twenty-seven of those eateries are in the Spokane area, with another eight in the Coeur dAlene-Post Falls area. He envisions having 130 Subway outlets in the area he serves, which is Washington east of the Cascades and Idaho from Lewiston north to the Canadian border.
Turnidge, who started his career with Subway by opening two franchise restaurants in Utah that he sold years ago, now owns a total of four Subway sandwich shops in the Spokane and Yakima, Wash., areas in addition to serving in his role as regional developer. He says he could easily retire on his Subway income, but enjoys the work too much to quit.
Rather than paying its development agents a salary, Subway pays them a percentage of the gross sales of the stores they help open, Turnidge says.
I receive 2.5 percent of the gross sales of the stores I get to open, he says. Those gross sales from the 109 stores in his territory in 2005, including partial-year revenues from the 12 stores Turnidge helped open last year, came to about $43 million, he says.
A new opportunity
Now, Turnidge says, the owners of the Subway chain are providing more opportunities for economic growth.
Six months ago, Fred DeLuca, one of two original founders of Milford, Conn.-based Doctors Associates Inc., which launched Subway in 1965, and three Subway development agents from Utah, bought a small chain of Mexican fast-casual restaurants called Bajio Grill, and they plan to develop the business into another national chain, says Turnidge.
We are waiting on the state of Washington to license the Bajio Grill concept, and when they do I hope to begin selling those restaurants by late spring, Turnidge says. They will be larger, sit-down restaurants, and I estimate about 30 will fill this territory.
He saw the earnings potential for Subway early, and says he motivated five other nuclear-power engineers to become involved in the sub-sandwich chain within two years after he made the leap.
But it wasnt always easy.
The early years were quite lean when I had to scour the streets to find franchisees and locations, he says, but during the last four or five years theyve been actively pursuing us more than weve been pursuing them. Today, I rarely scour the streets, unless its a small town I feel is ready for a store.
On Jan. 1, the cost of a Subway franchise rose to $15,000 from $12,500, says Turnidge.
Turnidge says the 109 Subway outlets in his territory are owned by 38 owners, and adds, most of the existing owners want to fill the remaining store opportunities in that territory. In addition, he has a list of 73 other people who have expressed an interest in opening a Subway in the region.
He anticipates that in that territory, Subway will reach by 2007 or 2008 its national targeted saturation point of one store for every 12,000 to 13,000 residents. Still, he says, population growth in the region could generate the capacity for additional stores beyond 130.
The typical Subway sandwich shop is between 1,200 square feet and 1,800 square feet in size, employs about 12 people, and serves a menu of 16 sandwiches selected by the chain, plus as many as two sandwiches, such as pastrami and chicken fajita, selected by the franchisee, Turnidge says. He says about 80 percent of all Subway locations in his territory are in leased spaces.
A development agents role
As a development agent, Turnidge not only sells franchises and coordinates site selections, but runs a regimented follow-up program to ensure that a franchisee observes the rules and regulations set by the worlds second largest fast-food chain.
To accomplish that, Turnidge oversees the work of four field consultants who evaluate all 109 stores in the region on a monthly basis. They inspect how the sandwiches are being made and regulate what Turnidge calls portion control, and also check to see that proper uniforms and sanitary gloves are worn, he says.
Subway mandates that each franchise restaurant undergoes a faceliftat the franchisees expenseevery seven years. Although we rarely move a wall or an electric outlet, a cosmetic change is required, he says.
The mandatory upgrade is an economic plus for each store, Turnidge says.
In my territory, Ive found that sales climb quickly by about 8 percent once the remodel is completed, he says. It seems to trigger a repeated frequency of regular-customer visits, and isnt something that generates new customers.
When Turnidge first invested in Subway in 1987, the chain had 700 outlets, a far cry from the more than 23,000 locations Subway now has in 84 countries.
In the early years of Turnidges career with the chain, Subways limited name familiarity and desire to include out clauses in its leases compounded the difficulty of persuading landlords to lease restaurant spaces to Subway franchisees.
Turnidge says of the out clauses, Its not so much that we want to get out of a lease, but when traffic patterns change we need the ability to move to the traffic. He says only two or three stores in his region have had to implement the out clause.
Subways popularity improved steadily over the years, but particularly blossomed over the past four or five years thanks to an advertising campaign that has featured spokesman Jared Fogel, who lost more than 240 pounds while documenting on his debit card that he had bought Subway sandwiches twice a day, Turnidge says.
Restaurant Trend, a division of New York City-based Nations Restaurant News, says that the 109 Subway locations Turnidge oversees sells 70 percent of all submarine sandwiches that are sold in Turnidges Eastern Washington-Idaho territory. With that statistic as advertising, hes not surprised that the owners of new strip malls and other new developments contact his office in Mead continually to learn how to open a new Subway sandwich shop, he says.
Ranked by Entrepreneur magazines Franchise 500 listing as the No. 1 franchise opportunity for 13 of the past 17 years, Subway franchises are becoming harder to come by, Turnidge says.
I have a lot of owners who want to grow and theres not a lot of space to grow within the Subway name, Turnidge says. He hopes to tap into the list of willing Subway buyers he has now when he begins selling Bajio Grill franchises this spring.
Launched in Utah in 2000, Bajio Grill now has 17 restaurants in Utah, Idaho, Oregon, Texas, Arizona, and Indiana. Its new owners have formed a corporation named Bajio LLC, which is based in American Fork, Utah, and are offering franchise investment opportunities, says Turnidge.
Unlike its fast-food predecessor, Bajio Grill offers a fast-casual dining concept. Customers can watch the food being prepared in an open kitchen.
While Subways typically seat about 30 patrons, the average Bajio Grill will seat about 140 people in about 3,200 square feet of space, says Turnidge.
The restaurants offer about 20 menu selections, including such traditional Mexican fare as fajitas, quesadillas, burritos, tacos, and salads.
Turnidge, who says he eats at Subway an average of four times a week, doesnt see himself slowing down soon.
In five years Ill still be working for Subway and Bajio, and maybe another concept or two, depending on what Fred DeLuca decides to do, he says.
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