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Recipe For Success

[ 0 ] Apr. 2, 2012 | SBO Editor

Hot dog vendor moves on to subs & $19 million a year.

No matter how you cut it, a sandwich is lunchmeat put on bread, says Mike Liautaud. But the founder and president of sub chain Milio’s Sandwiches has perfected the art of creating a masterful Dagwood.

Milio’s Sandwiches are indeed “Mighty Tasty” – as the Midwest chain’s tagline says – but Liautaud has also built a mighty good business plan for success in the increasingly competitive sandwich segment of the food industry.

A Chicago native, plain spoken and sensible, Liautaud got his start running a couple of hot dog stands in the Windy City in the early 1980s. “I always knew I was going to be in the food business,” Liautaud says. “No doubt.”

Liautaud also sold subs and they became his best seller. But trying to run a business in inner-city Chicago was challenging, so Liautaud changed course and relocated to Madison, Wisconsin, where he found 40,000 University of Wisconsin students hungering for Big Mike’s Super Subs, which opened in 1989 – carryout and delivery only and open till 3 a.m.

Success followed and by 2004 Liautaud was franchising, though that plan forced him to rename his concept in 2005 when the Federal Trade Commission deemed “Big Mike’s” too generic to be trademarked. Milio’s is a combination of Liautaud’s first and last names.

Today, Milio’s Sandwiches has almost 50 locations in Wisconsin, Minnesota, Iowa and Nebraska. Over the next five years, Liautaud expects to sell 200 franchises targeting nine central and Midwestern states: Wisconsin, Minnesota, Iowa, Nebraska, Missouri, Illinois, Indiana, Michigan and Ohio.

The draw is simply the best bread baked fresh all day long, vegetables that are delivered fresh and whole instead of pre-shredded and vacuum-packed, cheeses that aren’t pre-sliced and only premium select meats. And Milio’s delivers.

System-wide sales for the year are expected to be around $19 million. Liautaud says Milio’s is “doing better than we ever have,” even though the U.S. economy might say otherwise. While Liautaud concedes that the economy “affected us tremendously,” it also resulted in some unexpected positives. “It sharpened me up,” Liautaud says.

Liautaud cut debt and expenses, sharpened operations and strengthened marketing to increase sales. The result has been seven consecutive quarters of increased average unit volumes over the previous year for stores open more than one year.

“We’re very excited about that,” Liautaud said. “It made us think harder and work harder and as a result of that we’re outperforming what we’re accustomed to.”

Sandwiching success between two pieces of bread runs deep in Liautaud’s family. His first cousins are Jimmy John’s founder, Jimmy John Liautaud and Erbert & Gerbert’s founder, Kevin Schippers.

Liautaud says the fact that three cousins could find success in the same segment of the food industry speaks volumes to the potential of a category that counts for 35 percent of all restaurant sales.

“It just tells you how much opportunity there is in the sandwich segment,” Liautaud said. “We’re just three different competing sandwich shops, but when you add in the other 15 competing sandwich shops, it tells you that this industry is very ripe for opportunity.”

Liautaud is targeting multi-unit developers with the resources to open at least three to five stores in a market. And while some competitors have already played their best hands, Liautaud says Milio’s is still holding its best cards in one critical area: availability of prime locations.

“We have opportunity,” Liautaud said. “I can give you Main St. and Main St. I can give you the whole county. That is huge when combined with our business model that generates the profits that it does.”

Liautaud said Milio’s is comfortably positioned between its two biggest competitors, ubiquitous Subway and Jimmy John’s, which has more than 400 locations.

“Subway is a value-driven concept backed by huge marketing dollars. Jimmy John’s hangs its hat on quality, but at a higher price point,” Liautaud says. “Jimmy John’s is also the rebel. It’s an in-your-face brand that’s fast and edgy. It goes after the 18 to 25-year-old crowd.”

Milio’s scores points across the board – offering customers a wider range of sandwiches featuring its unique recipes, several choices of breads, competitive pricing and Limited Time Offer programs that have proven very successful.

“We’re more humble and American pie. Families are one of our strongest customer bases. People go where they are comfortable,” says Liautaud, whose conference room at Milio’s Madison headquarters is filled with more than a dozen signed guitars, posters and pictures of music stars that Liautaud has met through either feeding their crews or sponsoring their shows. The names range from B.B. King and Harry Connick to the Rolling Stones.

The fact that customers find Milio’s to be a warm, welcoming place to stop for a sandwich is no accident. It’s a backbone of the company’s philosophy and success: genuinely putting the customer first.

The philosophies aren’t complicated: Engage the customer. Have fun and be who you are. Check your attitude at the door. “If you get everybody aligned with your goals, you’re unstoppable,” Liautaud said.

The company is based in Madison, Wisconsin. Visit www.milios.com

Mike Liautaud likes to practice what he preaches: engage the customer, have fun and be who you are. The successful franchise is getting set to roll out a value meal program this year as it continues to offer customers a wide range of sandwich choices with unique recipes and competitive pricing.

Category: Magazine, Small Business Opportunities, Small Business Opportunities July 2012