Neck and Neck

The Slow Road

With all the discussion about submarine sandwich franchises, it should be noted that there's another sub chain taking a nonaggressive path toward the No. 2 spot. Started in 1964, Blimpie International Inc.'s Blimpie Subs and Salads franchises number nearly 1,600- plus stores in the United States and 15 foreign countries. Traditional stores were found in shopping centers, malls, free-standing buildings and downtown markets, but newer ones are found inside convenience stores, gas station food marts, colleges, office complexes, hospitals and sports arenas. Blimpie's food offerings are also sold through their "Grab 'n GO" refrigeration cases, carts, kiosks and vending machines.

However, even though Blimpie has been around for 17 years longer than Quizno's, it has a smaller store count and nowhere near the buzz of its toasty competitor. "It's one of the interesting strategies that some franchisors take," says Spinelli of Blimpie's quiet position. "If behavior indicates their strategy, theirs indicates what I call regional fortress-building. If they get a market presence in a specific geography, get the best sites, target local advertising, understand their franchisees, and succeed in building a competitive wall around this geography, they can win. That might not be their strategy, but that's been their behavior."

Doesn't sound too bad, so why isn't it a foolproof approach? "Three things can happen," says Spinelli. "You either intentionally break out, and it's difficult; you get acquired; or you get attacked by someone who will lay siege to the fort."

Perhaps after recognizing the stiff competition, between 1998 and 1999, Blimpie expanded its brands with Maui Tacos, a majority-owned subsidiary; Pasta Central; and Smoothie Island, which is franchised through Maui Tacos. Blimpie's attempts to expand through these new brands are furthered by co-branding Smoothie Island with Blimpie and Maui Tacos locations, proving that Blimpie isn't completely passive about its industry position. It has even ventured outside the food realm with BI Concept Systems Inc., an equipment and design services business catering to Blimpie franchisees as well as other restaurant and hotel concepts.

The Race Is On
Food isn't the only category with aggressive movers and shakers. Curves has demonstrated tremendous franchise growth. Ranked No. 2 in our Franchise 500® for 2003 and 2004, the women's-only fitness centers franchise has grown from 23 franchise locations worldwide in 1996 to more than 5,000, coming in at No. 1 in the "Fastest-Growing Franchises" category in 2003 and in the "Fitness Center" category for the last four years.

While a Curves can be found in nearly every city and town in the United States, Curves' marketing director Mike Raymond stalwartly maintains, "Our goal is not to be the largest. Our goal is to serve the needs of a market that has been ignored: women. It's because we're doing a good job of serving our market, and word-of-mouth has fueled tremendous growth." Curves continues to add locations in the United States and also plans to expand aggressively internationally.

Does Curves have aspirations of one day unseating the No. 1 franchise? "Not really," Raymond says. "This business was started by two founders who are motivated primarily by making a difference in women's lives."

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This article was originally published in the January 2004 print edition of Entrepreneur with the headline: Neck and Neck.

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