Why TOGO’S Can Be a Recession-Proof Investment
With over five decades in operation, TOGO’S has proven itself to be a resilient concept.
Now, its innovation and flexibility continue to drive the brand forward.
By Morgan Wood, 1851 Franchise Contributor
TOGO’S Sandwiches, the 160-unit sandwich franchise based out of Northern California, has been in operation since 1971. As such, the brand has proven itself to be resilient to a wide range of challenges over the course of its growth. As questions of current economic instability continue, TOGO’S presents a fantastic investment opportunity for entrepreneurs seeking to expand their portfolios in 2023.
“As you can imagine, with a brand that’s been around since 1971, it has seen its share of hard times, including recessions and a major pandemic,” explained John Dyer, Vice President of Franchise Sales and Real Estate. “The brand just continues to revitalize itself, invest in the future and do everything it can to make sure that it remains extremely relevant going forward.”
In addition to the brand’s ability to prove itself through a range of challenging circumstances, the fact that it has existed for over 50 years provides an advantage, too. With decades in operation, TOGO’S has built a strong brand awareness and has even become ingrained in the lives of individuals and families who have made traditions out of Togo’s visits.
TOGO’S Remains on Trend with Technology
In recent years, the brand’s willingness to stay up to date with technology, or even ahead of the curve, has served it well.
“Our investment in technology to make it easier for our guests to order and receive our product has been instrumental in our success,” Dyer said. “Our guests have access to our product through third-party delivery partners like UberEATS, Grubhub and DoorDash, and we have invested a lot of time with them to ensure that our POS systems are integrated with those partners to simplify operations.”
Dyer added that many brands who embrace third-party delivery services too soon are not able to integrate systems, leaving store-level employees to manage a “tablet farm” of sorts, transferring third-party orders to the brand’s POS system, which ultimately complicates operations.
TOGO’S has also upgraded its app and rewards program for loyal guests and implemented self-order kiosks in many of its restaurants.
Recent Annual Data Shows Resilience
Though much of the food service industry has seen a slow recovery from COVID-related revenue challenges, TOGO’S has bounced back quickly. In 2021, the concept exceeded its 2019 sales numbers by 3.2%, and its sales in 2021 by 5.4%.
“We came back in 2021 and continue to grow, even surpassing our last regular or pre-pandemic year,” he added.
Dyer attributes much of this growth to TOGO’S ability to adapt and continue pushing forward. One of the two major changes that has driven this recovery is consistent, system-wide remodeling efforts, bringing stores up to date with 3.0 prototype build-outs. The other is how the brand has also reworked its operations, implementing a new assembly-line sandwich-making model, which allows employees to become trained up more quickly and work with more expertise in their specific role.
Franchisees Have Flexibility with Their Investment
As costs of construction, materials and labor rise, TOGO’S has been successful in identifying second-generation real estate that simply needs a remodel. Rather than having new franchisees pay for all-new construction, the initial investment and time to open can be lowered with the utilization of a second-generation location.
“Between the slightly smaller size of space that we’re taking on now and some of the second-generation locations coming back onto the market, the difference in cost becomes that of remodeling an old sandwich shop that is likely already set up in a favorable way and building something brand new,” Dyer said. “It’s a big difference. Our franchisees see significant savings.”
For entrepreneurs who are interested in the strength and stability of the TOGO’S model but feel concerned about taking on a large investment in the current economy, flexibility from the TOGO’S corporate team can largely eliminate the hurdles.
The current initial investment for a Togo’s franchise ranges from $216,500 to $451,500, which includes a $30,000 franchise fee. For more information, visit https://togosfranchise.com/. (2021 FDD)