Franchise expansion simmering at Zoup!
Restaurant's new cash register system monitors sales, ingredient usage for better profit margin.
By Neal Haldane
Zoup! has debuted in Pennsylvania, opened an outlet in the home of the Cleveland Cavaliers, and continues to grow in Michigan with new locations planned for Novi and Plymouth Townships this summer.
The company also has set its sights on additional growth in the Philadelphia area, Ohio, Indiana and Illinois with Wisconsin and Minnesota on the horizon, said Eric Ersher, Zoup! president and co-founder.
"We continue to grow through franchising and are getting more aggressive now that we've established a stronger infrastructure and further evolved the brand," he said.
The restaurant chain features 12 soups, rotated daily, panini sandwiches, salads and "Try Two" and "Try Three" combos, which now account for about 50 percent of sales at the stores, Ersher said.
Technology has played a major role in the company's growth since its founding in 1998.
Zoup! was an early adopter of e-mail, sending notices to customers listing the soups available that day, and online ordering.
Now, the firm has ladled out a new cash register system that allows franchisees to better monitor sales and ingredient usage, Ersher said.
For example, the system can determine if a store went through enough turkey slices for 120 sandwiches but only sold 100.
"Smaller margins are the nature of the food service business and our Web-based system can determine the popularity of individual items by store and compare food costs based on actual sales," he said.
Counting the pennies will become even more important in the months ahead as rising food costs cut into profit margins, said Gregg Thomas, founder of CFO Partners in Rochester Hills, a financial consulting firm specializing in multi-unit restaurants.
Rising fuel prices also could affect sales.
"If fuel continues to climb, people will just not go out to lunch or dinner or trade down to lower-priced concepts," Thomas said. "They have to be careful about their price points."
But soup has become a "craveable" item, according to Darren Tristano, an executive vice president at Technomic Information Services, a food industry research and consulting firm in placeCityChicago.
People are seeking out soup on the menu and while Tristano sees Zoup! as a leader in the soup category, the firm faces a lot of competition.
"The difficulty today is everybody is offering soup," he said.
"You have a lot of options. It becomes harder and harder to service the market for that product when everyone else has it."
The competition doesn't dampen Ersher's enthusiasm for expansion and he sees system-wide sales growing to $8.5 million this year from $6.8 mile last year and $5.5 million in 2005.
"Our goal and our focus is to do what we do really well," he said.
"No one is going to eat at Panera every day, Cosi every day or Zoup! every day.
"As long as we're on a customer's short list, we're happy."
