Schlotzsky's Tickets Dallas, Houston for Role Models

AUSTIN-Schlotzsky’s Inc. will try to lead by example in putting company-owned stores in Dallas and Houston. The idea is to show franchisees how the company’s stores–which generate higher per-store revenue–operate in hopes the franchised stores will follow suit.

“We plan to place a few stores in each market to show a leadership position,” John Wooley, the quick-service restaurant chain’s CEO and president, said in a conference call with analysts and investors. He said the Austin-based company is talking to owners of multiple Scholtzsky’s restaurants to find one in each market to work with. The company’s stores are 3,200-sf freestanding units and smaller restaurants that are endcaps in retail centers.

The company Thursday reported net income of $750,938, 10 cents a share, on revenue of $16 million in the second quarter ending June 30. In comparison, Scholtzsky’s incurred a $4-million loss or 54 cents per share on revenue of $14.6 million in 2000′s second quarter.

The company wants to get franchised stores to use some of the same business practices and customer-related features that, Wooley said, are driving up sales of the company-owned stores in Austin. Same-store sales increased 6.6% in those stores. “These restaurants are serving as our proving ground for how restaurants should look, operate and perform across our franchise system,” he said.

The menu of items includes upgraded decor, coffee bar, bakery, iMac computers with Internet connections, point-of-sale systems and a pocket pager system to alert customers when orders are ready. The three Austin stores that have what the company calls the “full package” averaged sales of more than $40,000 a week. The average sales of all company-owned Austin stores were more than $33,000 a week. The system wide average was $12,000 a week.