Popular local sandwich chain PrimoHoagies has signed agreements to open 21 new franchise locations throughout the Northeast after the company closed out what CEO Nicholas Papanier Jr. called its “best year ever” — despite 2020 being engulfed by the Covid-19 pandemic.
PrimoHoagies, founded in South Philadelphia in 1992, currently operates 81 locations in Pennsylvania, Delaware, Florida, Maryland, New Jersey and South Carolina. The forthcoming franchises will push the company past the century mark for a total of 102 stores.
The new deals include 15 new stories in New Jersey: one in Moorestown; two in Essex County; three in Hudson County; four in Bergen County and five in Middlesex County. Deals are also in place for one new store in both Baltimore and Pittsburgh.
The family-owned-and-operated brand, headquartered in Westville, New Jersey, closed out 2020 with more than $55 million in sales across its footprint, Papanier Jr. said. That’s a roughly 13% increase year-over-year from 2019, he noted. Business was particularly strong at suburban locations, while city stores “suffered a little bit of a blow” due to office workers primarily working from home during the pandemic.
Ahead of Covid-19, 95% of PrimoHoagies business stemmed from takeout, which Papanier Jr. credits with helping the brand “tremendously” in weathering the public health crisis.
When coronavirus took hold in spring, the company hunkered down on growing its third-party delivery through partners including DoorDash, UberEats and Grubhub. It also launched curbside pick-up, which Papanier Jr. said the brand had been considering for awhile because of the convenience it offers, and now plans to keep the service at some stores even post-Covid.
Catering sales dipped in 2020, and PrimoHoagies adapted offerings from typical sandwich trays of sliced-up hoagies so each portion now comes individually wrapped to reduce shared points of contact.
Most of the deals for the 21 new franchises were inked toward the end of quarter four in 2020, Papanier Jr. said. Depending on how the pandemic progresses, PrimoHoagies aims to open at least 50% of them in 2021, with the rest coming online in 2022.
Papanier Jr. added the brand is “saturated in the South Jersey and Philadelphia market,” and that central and Northern Jersey is the next natural progression.
“There's a real stronghold for our kind of product there and we think it's going to be a good fit,” he noted.
As PrimoHoagies establishes its footing in the new market, the brand aims to push into the Midwest region. Ultimately, the company looks to “expand the brand outside of the east coast” and establish a national presence.
PrimoHoagies aims to have at least 25 new stores signed by June, as nearby as Pittsburgh or as far out as Ohio and Utah, Papanier Jr. said. He anticipated between 10 and 15 stores to be signed within the next two months, and an additional 10 in March and April.
The company’s initial franchising fee is $35,000, though Papanier Jr. noted that it will be lowered in March to between $20,000 and $25,000. Startup costs typically range from $250,000 to $300,000 depending on required costs for plumbing, electric and similar components at a particular location.
However, that price range looks different in a Covid-19 world that has forced many concepts to close, he added. PrimoHoagies is seeing more real estate come on the market for locations that previously housed eateries that shuttered due to the pandemic, presenting an opportunity for growth at a lower cost.
For example, the upcoming PrimoHoagies location in Baltimore was a former Jimmy John’s location. That shop requires minimal electrical and equipment changes, placing the buildout costs under $100,000.
“What we’re seeing is some of our franchisees are getting into these really lucky spots where a majority of the work is done and we’re getting in there for around $100,000, $120,000,” Papanier Jr. said.