PrimoHoagies owner and CEO Nicholas Papanier Jr. has a message for private equity firms interested in purchasing his thriving family sandwich business. He is open to talking, but he is not ready to sell.
“Every week I get calls from private equity firms, and I make it a point to listen to what they have to say because I think it’s always good to know what people are thinking and share ideas. I tell them the same thing, though. We’re just not ready to sell our company and give up control at this point,” said Papanier, adding, “We’re a private-held, family-owned business, and there is a lot more we want to accomplish on our own.”
PrimoHoagies, which jumped 23 spots to land at No. 361 on the Franchise Times Top 400 rankings with $80.4 million in sales in 2022, eclipsed the 100-location milestone this year. Papanier said the popular Philadelphia sandwich brand is well on its way to meeting its goal of having at least 115 stores open by the end of 2023 with more than 80 stores in development, including a 10-unit deal signed in Albany, New York, an eight-unit package signed in the metro Detroit market, a five-pack deal in Louisiana and a pair of three-unit deals in Rochester, New York, and Springfield, Massachusetts.
Nicholas Papanier Jr., CEO of PrimoHoagies
Founded in South Philadelphia in 1992, New Jersey-based PrimoHoagies began to franchise in 1999. It now has franchise locations open across Pennsylvania, Delaware, Florida, Maryland, New Jersey, North Carolina, South Carolina, Texas and Colorado. It opened its first Tallahassee location near the campus of Florida State University in August. That same month, cast members of the “Real Housewives of New Jersey” appeared at a store opening in Wayne, New Jersey.
While a typical PrimoHoagies offers some sitting inside, most of the typical 1,500- to 2,000-square-foot locations are set up for takeout which, according to Papanier, makes up 90 percent of its business. The CEO also said his brand will experiment with drive-thru service as well as third-party delivery in 2024.
To help incentivize its latest expansion efforts, and help get its name out there in the targeted markets of Texas, Florida and Colorado as well as the Midwest, PrimoHoagies is offering a limited-time 50 percent discount on the initial franchise fee. For multi-unit candidates who solidify agreements for three or more units, the deal also includes royalty abatement.
The initial investment range for PrimoHoagies is $350,500 to $759,500, according to the franchise disclosure document, with franchisee fees ranging from $15,000 to $40,000. Royalty fees are 6 percent.
“We are well known and established here on the East Coast, but a lot of people still haven’t heard of us in other parts of the country,” said Papanier, when asked why PrimoHoagies is incentivizing its franchisee development efforts at a time when the brand is doing well. “We want to change that and become a nationally recognized name with 350 locations across the U.S. within the next three to five years.”
Since transitioning from chief operating officer to CEO in 2019, when he took over for his father, Papanier said he has made it a priority to change the company culture while positioning PrimoHoagies for its biggest growth push. Along with hiring a chief financial officer, he also brought in the company’s first marketing director. Next month, the Italian specialty sandwich brand is set to launch an online ordering app that the IT department custom designed and built.
“I didn’t want to grow nationally without having a sound infrastructure in place because you have to have your basement built first to be able to build on top of that,” said Papanier, who acknowledged the biggest challenge for PrimoHoagies is making a name for itself in a crowded space dominated by Subway, Jersey Mike’s, Jimmy John’s and Firehouse Subs.
“The differentiator between us and them is the quality of our sandwiches. Quality is a word that everyone uses and throws out there now, but when you really dive into our sandwiches, and dissect it from our fresh-made bread and the quality of the cheeses and meats we use, it’s really what separates us from the rest of them,” said Papanier, who said the biggest sellers for his brand are the Italian and turkey subs.
“The other big difference between those other brands and us is that we are still privately owned and we’re still a family-owned and -operated business. We are not owned by private equity,” said Papanier, “and we have no plans to change that.”