Staying Within Its Comfort Zone But Expanding

D’Angelo Grilled Sandwiches, which started as a shop in Dedham, Mass. about 20 miles southwest of Boston in 1967, has faced a variety of ownership changes and expansion. Currently, it has 87 retail stores including 62 company-owned and 25 franchised.

It was once acquired by Pepsi-Cola in 1993 and is now owned by Wynnchurch Capital, a private equity firm based in Rosemont, Illinois, which has over $5 billion in assets. It is stepping up franchising to build revenue, though it’s also opening company-owned stores, and getting involved in licensing as well.

But one factor has stayed rather consistent about D’Angelo Grilled Sandwiches. Despite its ownership changes, it has always stayed within the boundaries of New England and not strayed from it. Currently it is situated in five states: Massachusetts, Maine, New Hampshire, Rhode Island and Connecticut.

Tom Sterrett, president and CEO of New England Authentic Eats, D’Angelo’s parent company (which includes Papa Gino’s Pizzeria), underscores that it has stayed true to its roots of offering grilled sandwiches. And those include Korean BBQ, cheeseburgers, and its signature Number 9 sandwich, consisting of grilled steak or chicken, onions, peppers, mushroom and cheese.

It’s also known for several New England seafood specials such as lobster rolls, clam chowder and lobster bisque. To accommodate changing tastes toward healthier food, it offers rice and grain bowls and salads and wraps.

Its growth, he says, is centered in its “wheelhouse. We have strong brand awareness in New England, so we’re focusing on our strength and building our support team.” Many restaurant chains fail because they lack brand awareness, he suggests.

After that expansion is nailed down, he envisions expanding in states located in concentric circles from New England such as New York, New Jersey and Vermont.

What separates it from its many sandwich and submarine competitors is its “grill. The grill is our differentiator. It’s visible to the guest, and they can hear and smell it and watch it sizzle,” Sterrett notes.

Since it is owned by a private equity company, expansion and boosting revenue are the expected part of the equation. It expects to open six to eight new locations in 2022, including some with its sister brand of Papa Gino’s Pizzeria, and six more locations in 2023.

Asked what private equity firm Wynnchurch Capital expects from D’Angelo’s, Sterrett responds, “What anybody wants from a successful business: top-line and sustained growth, with a great managing team.” Building up revenue in the future and determining “whether it’s better to sell or do we have an option of franchising more and growing” is a question to be determined.

Sterrett says it’s pursuing franchisees that “understand operations and people, the principles of the restaurant business, and have what it takes to operate three to five locations.”

Its dual franchises combining D’Angelo’s with Papa Gino’s Pizzeria started with six outlets on the Massachusetts Turnpike and now numbers 17 of them, with three more expected by year’s-end.

“We bring the best of both worlds together and streamline the menu,” he says, since Papa Gino’s offers a sandwich line of its own.

The stores with the joint brands will be larger at about 3,500 square feet. But most new D’angelo’s will have smaller footprints of 1,500 to 2,000 square feet, with fewer seats for in-restaurant dining. Sterrett explains that “We are reacting to the guest demand for more carry-out and delivery.”

In fact, all delivery channels account for 20% of revenue, with third-party delivering generating 14% of that number and 6% from its internal delivery. Guests tap on-line ordering about 20% of the time to place orders; most of which from mobile devices.

Sterrett describes the target audience who dines at D’Angelo Grilled Sandwiches as often, “male, middle-aged, buying on the road, and 70% of our sales are walk-in or delivery out, and often working people looking for great food and quick service.”

Sterrett says the keys to its future include: “great people, great franchisees who can lead and inspire a brand, and sticking to what we know. Customers know what they’re getting from D’Angelo’s every single time.”