Christine Specht As Cousins Subs starts to see a return on big moves it’s made in recent years, company leaders remain focused on developing new markets and possible acquisitions. The Menomonee Falls-based chain, now in its 48th year, wrapped 2019 with the highest total system sales since 2012, having increased 2.5
[caption id="attachment_471095" align="alignright" width="214"] Christine Specht[/caption]
As Cousins Subs starts to see a return on big moves it's made in recent years, company leaders remain focused on developing new markets and possible acquisitions.
The Menomonee Falls-based chain, now in its 48th year, wrapped 2019 with the highest total system sales since 2012, having increased 2.5 percent over the previous year. Also last year, Cousins achieved nine percent unit growth thanks to the additions of six Chicago-area stores, its first-ever airport store at Milwaukee Mitchell International Airport and its first delivery-only location in downtown Milwaukee.
The growth comes in the midst of a company-wide rebrand, which launched in 2016 under the direction of chief executive officer Christine Specht.
Cousins and its franchisees operate a total of 99 locations in Wisconsin, Illinois and Indiana. So far, 47 of those restaurants have been updated or newly opened with exterior and interior rebrand elements, including natural wood, stone and metal design accents, Cousins' new logo, digital menu board and grills.
Last year also brought a shift in the company's leadership structure as Specht transitioned out of her dual role as president and CEO, handing over president responsibilities to Jason Westhoff, who was promoted from chief financial officer. She was named president in 2008 and took on her role as CEO seven years later when her father and company founder Bill Specht retired.That decision created what Specht calls yin and yang, allowing the two leaders to divide and conquer under a shared growth-oriented vision. In a recent interview with BizTimes Milwaukee, the executives discussed what the recent changes and past high-growth year means for the longtime Wisconsin company.
"I'm top line and bottom line and Jason is everything in between, which includes launching growth in new markets, includes getting into the weeds with each one of the departments that serve Cousins... to help them make sure we're on the same page and we're all collectively moving forward with the same growth strategy," said Specht.
One of those new markets is Chicago, but as Westhoff noted, the brand isn't a complete stranger to diners in the area because Cousins had operated some stores there in the early 2000s.
The six Chicagoland Cousins stores that opened last year are part of a 40-unit deal with franchisees and brothers Amit and Kalpesh Patel. Their company, OM Group, is the only Cousins franchisee in the Chicago area, but the chain is currently in talks with other operators who want to move into the market.
Cousins has longer-term plans to also expand across the Midwest, including Minneapolis, Iowa, Indianapolis, Detroit and Michigan's Lower Peninsula, but for now, the Chicago area remains Cousins' priority over other out-of-state markets, said Westhoff.
"Chicago is such a large undertaking on its own," he said. "Chicago alone has more than 40 suburbs and each one of those suburbs has high population density, so I'm not saying it's a 100-store market, but there certainly are brands that have 100 locations in that market alone."
In Wisconsin, which is home to 93 Cousins restaurants, expansion opportunities lie in Wausau as well as in the western region of the state. Milwaukee is Cousins' most saturated market with 16 units, including the airport store and delivery-only commissary.
Westhoff said the company is seeking franchisees to develop the Wausau area and has gotten some leads. But untapped markets like Eau Claire, La Crosse and Madison could be fertile ground for corporate growth.
"We're 100 percent bullish on our own brand," he said.
Currently, Cousins has 28 corporate stores, with two additional units slated for 2020. Last year, the company acquired six franchise locations, five located in the Fox Valley.
"That was kinda a reach for us to get outside of Milwaukee, but now we have the infrastructure set up in the Fox Valley to actually help develop there as well," said Westhoff.
Cousins plans to bolster its corporate store footprint, either through its own development or by buying stores back from franchisees, as a way to fill in the Wisconsin market and to boost sales overall, said Westhoff. Plus, it helps corporate stay in touch with the rest of the company.
"(Corporate stores) keep us connected as franchisors to actual operations of the restaurants, so it makes us better equipped when there are challenges," Specht said. "We understand the brand well enough, it's not just a situation where we're telling franchisees what to do when it comes to maximizing an individual store."
Cousins is also considering ways to scale "inorganically." And like most restaurant chains these days, that means acquiring other brands.
Cousins this year has already considered a couple potential deals to acquire what Westhoff calls sister brands, those similar in size and product offering.
"If we were to do an acquisition, it would probably be aligned with what we do currently first because you don't want to have your first one be something that could blow the wheels off the bus," he said.
Westhoff couldn't disclose details, but said one of the potential acquisitions was a brand based in the Southeast with approximately the same number of units, menu and regional reach as Cousins.
"Acquiring a brand of that size basically doubles your brand size over night," he said.
Cousins made its last (and only) acquisition back in the 1990s, converting a small sub shop chain in Minneapolis to Cousins stores. Now, the company is targeting brands that are regionally segmented, allowing it to run two separate brands without changing either identity, Westhoff said.
"What makes us successful in Milwaukee, in Wisconsin and now Chicago is that we have a known presence in this locality," he said. "And it's the same for each one of those regional brands as well."
