As Bread and Sandwich Sales Soar, “Hub & Spoke” Cafe Model Produces Operational Efficiency
DILLON, MT (StLouisRestaurantReview) The industry-leading fresh-baked bread and cafe franchise is reporting same-store sales for Q4 of 2021, are up 14.9 percent compared to 2019, the last “normal” year for comparison. For like-to-like sales comparison to big-box competitors and other QSRs in the space, advertised Great Harvest markets for that same quarter, reported cafe sales are up 17.7 percent vs. 2019.
“Being a high-growth concept, we chose to perfect our expansion model, which aligns with the direction of the quick-service, casual dining environment that must provide investors and entrepreneurs with state-of-the-art strategies to address real estate challenges and production costs, all while serving ‘main street’ and surrounding communities efficiently,” said Eric Keshin, President and CMO of Great Harvest Bread Company. “We have identified 50 markets positioned for this multi-unit expansion program.”
This Hub & Spoke concept is made for the multi-unit operator to reduce cost through smaller footprint cafe locations to maximize a Hub’s production capabilities.
Hubs are full bakery-cafes with seating for 40-45 people and have all the handmade bread production on-site. Spokes operate as cafes; they have fresh bread supplied by the Hub daily and should be located within 40 minutes of a Hub. Their menu is the same as their Hub; they bake items on-site like cookies, biscuits, scones, etc., to maintain the aroma of a bakery.
The footprint of a Spoke should be around seventy percent (70%) of a Hub’s footprint. This significantly reduces upfront development costs as well as operating costs.
The Hub & Spoke model can be purchased from existing legacy locations with an active revenue stream to then expand around them, partner with single-operators to further expand the market presence, and enter brand new markets with Hub & Spoke units. Opportunities exist in the following markets: Atlanta, Chicago, Birmingham, Greenville, and Spokane, and within the following states: California, Florida, Texas, and Washington D.C.
The owners of Southlake, Texas, took over an existing location and quickly added two additional spokes around the legacy store. In Elkins, WV, the owner introduced the company into the newer market first, then added the second location within his second year.
The made-from-scratch bread-making concept was deemed essential as bakery-cafes around the U.S. continued to feed communities through food shortages and provided donated bread to local food banks.
“We held on and grew through the pandemic as franchisees adapted to meet the needs of the consumer. From popular annual LTO’s, superior breakfast sandwiches to on-the-go convenience, our wide variety of sandwiches and specialty sweet items naturally set the company apart from big box QSR competitors,” said Eric Keshin, President and CMO of Great Harvest Bread Company. “Demand for authentic bread is evident.”
According to Technomic’s 2020 Sandwich Consumer Trend Report, consumers ate an average of 3.3 sandwiches each week, and nearly 60 percent of those sandwiches were purchased from food service providers. That same report shared that 61 percent of consumers chose to purchase a breakfast sandwich at least once a month, up from 57 percent in 2018.
In addition to its strategic expansion model, available within ample territories, the experienced franchisor is investing in new drive-thru locations, further supporting online ordering and advancing its loyalty platform.