A
Peck of Peppers
BY
GARY PERILLOUX
Northeast Mississippi Daily Journal
6/29/03
A Peppers primer
Name: Sweet Peppers Deli
First one: Columbus in 1997, followed by Tupelo in 2000. A third
company-owned restaurant is planned for The Mall at Barnes Crossing's
Food Court in August
Franchise firm: Sweet Peppers Franchise Systems LLC
Owners: Bernard, Myrrl and John Bean; Robin Fant; Robert Fort
Size: 3,500 to 4,000 square feet
Seating: 150
Initial franchises: Hattiesburg, Southaven, Florence, Ala.
Franchise fee: $25,000
Capital needed: $200,000 to $300,000
Franchise information: 1-888-716-9931
Menu: Soups, salads and sandwiches, featuring paninis (Italian-pressed
sandwiches) and wraps
Related restaurants: One or more of the Peppers owners has an interest
in Harvey's, (Columbus, Starkville, Tupelo); Bulldog Deli,
Starkville; Cotton District Grill, Starkville; Jackson Square Grill,
Columbus; Park Heights, Tupelo.
Two years ago, the creators of Sweet
Peppers Deli faced a moment of truth.
With a trio of successful delis under their
belts, they could taste the lure of multiplying their menu across
America.
And they took the franchise challenge.
"What made us decide to do it is we
wanted to grow," said Bernard Bean, whose family also owns Harvey's
in Columbus, Starkville and Tupelo; Jackson Square Grill in Columbus;
and Cotton District Grill in Starkville. A Peppers partner, Robin
Fant, owns Bulldog Deli in Starkville, and Bean's sister, Blair
Hughes, owns Park Heights in Tupelo. "We realized that growing so
many concepts further was not feasible. And we had to pinpoint the
concept we wanted to grow."
That concept, pinpointed by two independent
consultants, was Sweet Peppers Deli.
Bernard Bean, his mother Myrrl and
his brother John had joined Fant in tweaking his Starkville deli
with a new menu and name when Sweet Peppers Deli opened in a Columbus
shopping center in late 1997.
"We had such great success there," Bean said,
"that we decided in 1999 to start looking here in Tupelo. We've
been a firm believer in investing in the Crosstown area. This is
a lunch-driven business and this is where lunch is."
By early 2000, they'd opened a freestanding
4,000-square-foot Peppers in Tupelo, mining a busy Crosstown lunch
market and focusing on salads, soups and signature sandwiches, including
paninis - or Italian-pressed sandwiches - and Peppers wraps.
Perfecting the concept
Fant was eyeing the Columbus market
for a second version of his Bulldog Deli in the mid-1990s when he
found out John Bean was doing likewise.
They decided to pool their resources and perfect
the success Fant had created in Starkville, changing the name to
Sweet Peppers Deli through an employee contest. The Beans' expertise
in concepts such as Harvey's intrigued Fant.
"One of the big things that came out of this
is they brought a little bit more of the full-service," Fant said.
"We were totally counter-service. Now, with Peppers, we've changed
Bulldog Deli to the same way. You order from the counter. And from
the time you go sit down, we're full-service. That's where the fast-casual
comes in. It's the casual dining with a little bit of the faster
pace."
"Fast-casual" is the dining concept that's
come of age in the last five years, said Bernard Bean, who believes
the concept holds great potential for growing a franchise.
"All you were hearing about in the industry
is this is the great segment of the future," Bean said. "The industry
trend, plus independent consultants coming in and saying the deli
concept is the one you ought to consider doing, is how we decided
to go with Peppers (as a franchise). If we didn't have a fast-casual
concept, I don't know that we would have started this."
While fast food entrees range from $3 to $6
and casual dining - such as Applebee's and Chili's - hits the $9-$14
range, fast-casual restaurants fit snugly in-between.
Dallas franchise consultant Paul Stewart began
refining growth plans for Sweet Peppers Deli Systems LLC more than
a year ago. His regimen included working with Sweet Peppers on franchise
documents, establishing an organizational structure with quality
control and training components, and marketing the restaurant to
potential franchisees.
Stewart has helped build more than 250 emerging
franchises in the past 30 years, companies that generated more than
$500 million in sales the last 10 years. His company takes on only
a handful of new clients each year, but the Peppers team caught
his eye.
"They represent strong infrastructure, good
management, a sophisticated concept, excellent food and satisfied
customers," Stewart said. "It's all of those things that make a
restaurant successful. It has to sustain itself on food quality,
but that's only if the customer service is equally important. And
I think Sweet Peppers excels at customer service."
Recruiting the team
Clark and Beth Callahan, among the
first franchisees, will open a Sweet Peppers Deli in October along
U.S. Highway 98 across from Turtle Creek Mall in Hattiesburg.
A bird's-eye view of the Fant and Bean restaurants
convinced them to join the Peppers franchise team. For years, Clark
Callahan did business with them as a food-service vendor.
"I lived in Starkville and I had a business
relationship both with Robin Fant and with the Beans," Clark Callahan
said. "The Bean family and Robin Fant and Bulldog Deli - they really
have impeccable credentials and standing in the food-service industry
in this region. I mean, they really shine. The caliber of people
they are and what they're bringing to the table is just really something.
That's why I was interested."
The Callahan's have an option for a second
Peppers in the future while partners John Godwin and Adam Paxton
are planning Peppers franchises in Southaven and Florence, Ala.
Meanwhile, Sweet Peppers and Stewart are marketing the rights to
a five-unit Peppers territory in Houston, Texas, that's nearing
fruition.
In August, Sweet Peppers Deli will open a
smaller company-owned restaurant in The Food Court at The Mall at
Barnes Crossing in Tupelo. The reason? Peppers wants to be in the
mall area and wants the smaller format test-marketed and in operation
when future franchisees ask for that option.
Stewart, who has a three-year contract with
the Peppers team, can help potential franchisees with such key ingredients
as obtaining a Small Business Administration loan. Only 2 percent
of SBA loans linked to a franchise default, he said.
A $25,000 franchise fee is required and franchise
owners will need about $200,000 to $300,000 of their own capital
to get started. Options include a strip shopping center format that
costs $500,000 to $600,000 to open and a freestanding restaurant
on one acre - similar to the Tupelo restaurant - that carries development
costs of about $1.5 million.
The recruiting effort has included advertisement
in the Wall Street Journal and Nation's Restaurant News along with
attendance at food industry trade shows. Franchise interest has
been generated in the Carolinas, Florida and Missouri.
Intensive training and support for franchisees
begins 120 days before opening and a month beyond, though quality
control and other support systems will continue through the life
of the restaurant. Among recent improvements, Peppers has shaved
20 to 30 seconds off customer ordering time by investing in a new
point-of-sale (cash register) system.
Tupelo architect Gary Bailey designed the
Peppers prototype restaurant with a series of glass-and-wood garage
doors that allow the restaurant to let the sun shine in and the
customers to breathe in fresh air when the weather's right.
"It's a little bit of a signature thing that
really draws business when we open the door on a good spring or
fall day," Bernard Bean said.
Stewart believes such innovation will be vital
in separating Peppers from the pack.
"People expect more value and more service,"
he said. "The sales at Sweet Peppers bear out that reality. We do
higher volumes than other stores in our fast-casual segment. And
that, of course, is going to make owners happy."
Stewart said Peppers appeals to children and
women who are the decision-makers for families on where to eat.
And a buoyant atmosphere with music and fresh air attracts twenty-somethings
to retirees.
"It's a fun concept," he said. "It can't be
said enough that eating food is an enjoyable experience. People leave
Sweet Peppers smiling and that's a good sign."
The long haul
Consistent food quality, customer service
and restaurant management will be keys to growing Sweet Peppers
Deli as they've been in the owners' other restaurants the past two
decades.
But some intangibles have helped the restaurant
partners succeed so far.
Fant said it's not uncommon for him and John
Bean - with no prior knowledge - to bring the same restaurant ideas
cut out of the same catalogue to strategy sessions.
"We have common goals," Fant said. "It's all
taking care of the customer. ... And each one of us has a different
part of the business that we naturally lean to. Bernard is a great
personnel guy who knows how to deal with employees and I'm more
on the product and equipment end. And John is the cohesive part
that pulls it all together."
Don't expect Peppers to grow at a breakneck
speed. The company aims for one new franchise location a month through
2004 and two a month thereafter.
"We've taken our time doing this," Bernard
Bean said, "because we want to do it right."
Still, it wouldn't surprise Clark Callahan
to see those growth targets revised upward in the not-too-distant
future. Homework done by the Peppers team should enable great things,
he believes.
"I wouldn't pretend to know national trends,"
Callahan said. "But regionally, I think the sky's the limit for
it throughout the Southeast. It's just exactly the kind of food
that most Southerners love to eat. It's good and it's kind of fun
and not that expensive."
For Fant, finding more partners like the Callahan's
will be a key to franchise success.
"That's going to be a big challenge," he said.
"You really can't expand to more stores than you have people to
run them. I just want to make sure that as we expand and grow that
we don't lose that personal touch that a lot of chains lose when
they grow.
"That's the part that makes Peppers, Peppers."
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