Anthony Nardelli remembers meeting Subway co-founder Fred DeLuca once at a Las Vegas card table several years back.
Vegas had no shortage of Subway restaurants to choose from ”“ more than 100 are there today. And, that could soon be the case with Nardelli”™s Grinder Shoppe, which is franchising new stores in the state, including its first in Fairfield County opening next month in Danbury.
That happens to be the home of Peter Buck, whose investment in DeLuca”™s idea for a sandwich restaurant turned into the largest franchise in the world according to Entrepreneur magazine. The Danbury store is just Nardelli”™s fifth location, but Anthony Nardelli does not mind thinking big.
“I”™d like to go worldwide one day,” Nardelli said.
Whether and how soon he can hit that goal will depend in part on how well he is able to sell franchisees like spouses Jaime Benitez and Quyen Ly on the merits of Nardelli”™s, which Connecticut Magazine readers have voted as having the state”™s best grinder 11 years running, and which has been featured on the Travel Channel.
The couple first began considering obtaining a Nardelli”™s franchise in the fall of 2008 as the economy was buckling. Despite the difficulties for many entrepreneurs obtaining financing, they elected to move ahead seeing business ownership as the best bet for securing the financial future of their son.
Two years later, they are preparing to open their shop at 100 Newtown Road in Danbury, lodged in a busy retail strip with plenty of franchise businesses along its length.
Quick-service restaurants among fastest-growing franchises
In the United States this year, quick-service restaurants were the fastest-growing franchise business concept, according to estimates by PricewaterhouseCoopers L.L.P. PWC calculated a 3.1 percent growth in establishments, ahead of the overall 2 percent growth achieved by all franchises in 2010.
In its first-ever study of the franchise sector last month, the U.S. Census Bureau estimated that franchises make up more than one in 10 businesses in the United States.
In a bid to increase the viability of the sector, the International Franchise Association has been lobbying in support of a U.S. Senate bill to increase loan limits offered by the U.S. Small Business Administration, to $5 million from $2 million today. SBA has been working to encourage banks to lend more to franchisees under its guaranteed loan programs.
Access to capital a tricky issue
“Nearly 50 percent of our members cite access to capital as the most pressing issue they currently face,” said Stephen Caldeira, CEO of the International Franchise Association, in a prepared statement. “The credit provisions and tax credits in the Senate bill are important first steps in helping franchise businesses create jobs.”
The price of going into business with Subway is substantial ”“ according to Entrepreneur, the cost of a franchise starts at $84,000. Still, that has not dissuaded franchisees ”“ the Milford-based company was the second-fastest growing franchise company, sandwiched between commercial cleaners Jan-Pro Franchising International Inc. and Stratus Building Solutions, whose entry costs are far less.
Franchise support is essential to success
“I think it is no secret why the failure rate (for startups) is higher than for franchises,” said Marco Nardelli of Nardelli”™s Grinder Shoppe. “There”™s more brand awareness ”¦ There”™s more support.”
Even as Subway prepares for a wave of new restaurants in Connecticut ”“ thanks in part to a deal with the state Department of Transportation for new highway pit stops ”“ Nardelli”™s is readying its own expansion campaign.
Perhaps the company will make it as far as eastern Connecticut, where the Foxwoods, Mohegan Sun and MGM Grand casinos are the state”™s biggest tourist draw; or beyond.
Anthony Nardelli, for one, is betting on it.
