So things are looking rosy in the foodservice industry, right? That's only true for operators of certain kinds of restaurants, as it turns out. "Overall, customer traffic was up just 1% in 2004," says Harry Balzer, vice president of NPD Group's food research division, who has been following trends in the way people eat for almost 30 years. "Industry growth peaked in 2000 and has been flat ever since, but certain segments within the industry are faring much better than others."

Balzer sees the best opportunities for foodservice operators lying in one area in particular. He says that consumers want fresh food that tastes great, but they don't want the hassle of having to prepare it themselves. Foodservice operators who find efficient ways to meet that growing demand will be best positioned for future growth, Balzer contends, and he sums up the opportunity in a single sentence: "You can see it’s sandwiches."

Sandwiches and salads are extremely popular with diners because the best ones are made with fresh, wholesome ingredients, they taste great, and they're convenient for busy families with on-the-run lifestyles. That is, they're convenient as long as someone else is making the sandwiches and salads for them. As evidence of the strength of this trend, Balzer points to the burgeoning number of restaurants in all sectors of foodservice scrambling to add those items to their menus.

Of course, all of that is old news to franchisee-owners of New York NY Fresh Deli restaurants. Robert Palmer, founder and principal owner of the fast-growing chain, spotted this trend emerging several years ago, and he moved quickly to capitalize on it. A 30-year veteran of franchising and the foodservice business, Palmer has keen instincts that have helped him stay ahead of the curve over the course of his career.

In 1995, just as wraps were starting to emerge as a popular fast-food option, Palmer launched New York Burrito Gourmet Wraps and served as its president. The chain quickly developed into the largest and fastest-growing wrap concept in America. He later sold the chain to another franchise company and acquired New York Subs Franchising Corp., which would become New York New York Franchising Inc., the franchisor of New York NY Fresh Deli.

Needless to say, Palmer wasn't the only savvy entrepreneur to spot the breakthrough potential of the quick casual sandwich business in its early stages. But supported by a brain trust that includes his son Gary, an MBA and vice president of the company, and Clyde Culp, a legendary food service executive whose resume includes stints at the head of several well-known companies, Palmer zeroed in on a concept that was unmatched in the marketplace.

"Our concept is uniquely positioned to grow," he explains. "Sub shops have always been kind of a guy thing, and we knew we needed to serve a larger market in order for our concept to flourish. Since Subway pretty much owned the teen and blue-collar segments, we decided to target some non-traditional segments—specifically, white collar workers, professionals and women."

To do that, Palmer's team had to re-create the concept of the sub shop virtually from the ground up. While they retained the hot and cold New York-style subs in 6-, 12- and 24-inch sizes that had been the chain's signature menu items in its original incarnation as New York Subs and Salads, they drastically expanded and upgraded the menu. The new offerings include gourmet sandwiches, hand-chopped salads, tasty soups, upscale deserts and, in some stores, espresso, cappuccino and other specialty coffees.

The upscale image is reinforced both by New York NY Fresh Deli's décor and by its atypical approach to food preparation. The architectural design includes lots of shiny corrugated metal along counters and walls, eye-catching neon tube lighting along angled soffits, and sparkling glass deli cases that spotlight the restaurant's abundance of fresh meats, cheeses, produce and other mouth-watering ingredients.

In place of the cafeteria-style walk-along food-prep lines found in conventional sub shops such as Subway® and Quizno's®, New York NY Fresh Deli employs a more personal approach that is a hybrid between full-service and self-service formats. After customers place their orders, they are encouraged to select a seat, and an "expediter" then delivers the order to the table when it is ready.

While New York NY Fresh Deli tweaks the conventional quick casual sandwich concept to enhance its appeal to a new target market, it does so without undermining its positioning as a restaurant with solid roots in the Big Apple—considered the "Mecca" of deli by true sandwich aficionados.

The chain's signature sandwiches are named for familiar New York haunts and landmarks, such as the Bronx Bomber (corned beef, pastrami, provolone and more), Rockaway (roast beef), Empire State (turkey and ham) and Penn Station (pastrami). Standout menu items bear a logo asserting them as "Certified Tasty by New York Tony," a character immediately recognizable to any native New Yorker.

"Our concept operates in an area between where Subway, Blimpie and Quizno's operate and the big boys like Panera Bread®, Atlanta Bread® and Jason's Deli® operate," Palmer says in explaining the success of his unique concept. "With our upscale décor and tastier menu, we hit a niche above the Subshops of the world. In some ways, we are a smaller version of the big boys—except without their much larger development expenses and huge overhead."

However you describe it, Palmer's concept for New York NY Fresh Deli is clearly working. By the start of 2005, the two-year-old chain had 30 stores up and running, eight leased and under construction, and almost 90 (including 30 in a Middle East master franchise agreement development deal) sold. It has established a strong following among its target customer base of white-collar professionals, adults and women and is generating average cash-register rings of $7 to $9 per person.

"Our immediate goal is to recruit development agents for 118 territories in the U.S. and about 50 new franchisees in 2005," Palmer says. "Longer term—and assuming we are successful in our recruitment of development agents—we think we should do about 500 stores between now and 2010."

So is the New York NY Fresh Deli concept really as good it appears to be? We decided to check with the indisputable top expert on all things New York. New York Tony says, simply, "Fuggedabowdit!"

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Source: New York Fresh Deli