Upper Crust Move over, sub, hero and hoagie: the sandwich has gone upscale. And for enterprising entrepreneurs, it's the best thing since sliced bread.

The year is 1765. A marathon card-playing session is underway ina London club. One famished player, John Montagu, the fourth Earlof Sandwich, orders a bit of salted beef between two slices oftoasted bread. Within a few short years, the tasty and portablesandwich, as it came to be called, was the favorite food of workingpeople all over England.

More than two hundred years later, sandwiches have become anAmerican fast-food staple. Sandwich chains such as Subway andBlimpie have thousands of outlets nationwide; sandwich franchisescan even be found in exotic locales like Saudi Arabia and Taiwan.While the market for sandwiches seems to be very close to becomingsaturated, according to retail and restaurant marketing consultantRay Coen, the truth is there's always room at the top forrestaurants offering higher quality at a correspondingly higherprice. "In every [fast-food] category, after the initialexpansion, there comes segmentation, because the only way to grow acategory beyond a certain point is for new entries to develop adifferent position [for themselves]," says Coen. "Upscalesandwich shops are definitely identifying a new segmentposition."

Like politicians and actors, food items can undergo imagemakeovers to improve their salability. Take Ruth's Chris SteakHouse, the wildly successful Metairie, Louisiana-based steakhousechain. When Ruth's started franchising in 1976, many felt itwould drown in a sea of steakhouse competitors, all offeringessentially the same food. But Ruth's took the steakhouseconcept upscale, serving gourmet beef on a white tablecloth with agood bottle of wine. While a steak at Ruth's was more expensivethan one at, say, Sizzler, diners with a taste (and budget) forquality food flocked to Ruth's in droves.

"The improved national economy is giving consumers theconfidence to go out and spend money on a better quality sandwichor meal," says Coen. "People are simply enjoying themoney they're making. As long as things go well, these upscalestores will continue to proliferate. Even when the economy falters,the stronger sites will survive and prosper."

The Right Stuffing

What exactly is the difference between a mainstream and anupscale sandwich store? According to Coen, it's all aboutidentity and perception. "If a franchisor calls itselfupscale, there had better be a perceivable difference in qualityand price," he says. "It's OK to have a higher price,as long as you've made a noticeable improvement [over otherchains] in decor, atmosphere and food quality. Most working peopleeat lunch out 22 times a month, so consumers are the ultimateauthority on the differences in food quality."

Upscale sandwich stores use a more diverse selection of fooditems to differentiate themselves in a crowded marketplace. MikeStimola, 41, founder of Redding, Connecticut-based Sandella'sCafe, believes his franchise's distinctive menu selections area large factor in the chain's success. Sandella's offers 80different sandwiches, including pita wraps inspired by ethniccuisines, as well as soups, salads and smoothies. "We foundhaving a sandwich that people could only get at Sandella's gavethem a reason to come here," says Stimola, who grewSandella's from a single coffee bar he opened in Redding to aneight-restaurant chain in five years. "They can get turkey,ham and roast beef sandwiches anywhere. What really sets us apartis our creativity and the uniqueness of the product. We'regoing after that sophisticated consumer who's looking forsomething different in a sandwich from what they get everyday."

Lacking the heavy fried food items and greasy hamburgers of mostfast-food chains, upscale sandwich shops are able to capitalize ona trend toward healthier eating spearheaded by aging (and generallyprosperous) baby boomers. The menu selection at Wall Street Deli,an upscale sandwich franchise with more than 115 stores nationwide,puts a strong emphasis on healthy foods. "We saw where themarket was going and felt there was a tremendous opportunity to tapinto foods that were perceived as healthier than traditionalburgers, fries and pizza concepts," says David Thomas, seniorvice president of marketing for Wall Street Deli. "We knewfrom past experiences that we could produce sandwiches very quicklyand efficiently, so the upscale sandwich concept works well forus."

With the Greatest of Ease

Unlike many other quick-service franchise concepts, gourmetsandwiches require little cooking or other preparation, making anupscale sandwich franchise ideal for entrepreneurs who lackrestaurant experience, says Stimola. "I designed this conceptso you don't have to be a [restaurateur] to run it. There'sno cooking in our stores--the food comes ready to go--just [reheat]and serve it to customers. Even the business side isn't asdemanding. We have computerized cash registers that trackinventory, labor costs, accounting and purchasing, which makes itvery simple to run our stores." And because much of the foodcomes prepared, the average upscale sandwich franchise doesn'trequire a large outlay of capital for ovens, fryers and otherkitchen equipment.

While being a successful upscale sandwich franchisee may notdemand much in the way of cooking skills, you should still havesome general business experience, a drive to succeed and, mostimportant, a friendly attitude, says Stimola. "We'relooking for outgoing people who are entrepreneuriallyspirited," he adds. "At the end of the day, the mostimportant thing is people skills. If you don't like to bearound people, you don't belong in the restaurantbusiness."

Upscale sandwich franchises are a relatively new phenomenon. Assuch, a large segment of the potential market for these gourmetfoods remains untapped, says Jim Kucik, 30, a Wall Street Delifranchisee in Orlando, Florida. "Business is good and gettingbetter, but with one of these [sandwich] stores, building a nightbusiness is one of the big challenges," says Kucik. "Ifyou open in a good market, your lunch crowd is going to be therewithout a doubt. The difficulty is building [traffic during] therest of the day."

While there may not be an upscale sandwich shop on your blockyet, expect the growing popularity of this quick-service concept toquickly attract large numbers of hungry competitors, says Coen."Right now, [upscale sandwich shops] are still a relativelysmall segment of the market. In terms of development, this is agood stage to get in on it. The only downside to getting in earlyis there are more mistakes to be made. But the higher the risk, thehigher the reward."

Hold the Mayo

The following are a few upscale sandwich franchiseopportunities:

McAlister's Gourmet Deli

(888) 855-3354/pwalls@usa.net

New York Burrito-Gourmet Wraps

(800) 711-4036/http://www.newyorkburrito.com

Sandella's Café

(888) 544-9984/http://www.sandellas.com

Wall Street Deli

(205) 868-2566/http://www.wallstreetdeli.com

Compiled by Liza Potter

Contact Sources

Ray Coen, (310) 459-8843, rlcoen@aol.com

Sandella's Cafe, 9 Brookside Pl., West Redding, CT06896, (203) 544-9984.