With nearly 300 locations that are currently open or in development, Tony Gioia is leading the next chapter for this California-based brand.
Jin Singh opened her first Togo’s restaurant in December of 2016 just north of the bustling San Francisco International Airport. Like many of the brand’s franchisees, she grew up eating Togo’s deli sandwiches, and she knew just how special its product was. She also knew that this West Coast original had developed a strong following since its humble beginnings back in 1971. But what she couldn’t have ever anticipated were the lines of hungry guests forming outside of her restaurant almost every day since her grand opening.
Singh’s Togo’s opening—and the long lines that followed—represents just one of many franchisees helping the beloved sandwich chain establish a strong foothold throughout the West Coast and beyond. And for Tony Gioia, the brand’s Chairman & CEO since 2007, it’s these kind of success stories that have reaffirmed his ongoing efforts to make Togo’s a thriving and growing brand.
Gioia had his first encounter as a consumer way back in 1986 in southern California where he and his family often visited their local Togo’s. Then, in 1997, a group of senior executives from Allied Domecq’s quick-service restaurant chains, Dunkin’ Donuts and Baskin-Robbins, made the trek to San Jose to check out the Togo’s concept. The company was thinking about multi-branding, and was looking for a lunch-heavy format to round out their day-part portfolio. It quickly became clear Togo’s was the perfect fit.
One of those executives was Gioia, a native of Queens, who had worked for Bristol-Myers, Pepsico and then Wolfgang Puck before becoming president of Baskin-Robbins. When Gioia toured Togo’s along with other sandwich concepts he knew right away that Togo’s was the one to acquire.
“It was the food that sold me—the food has always been terrific. Togo’s is a sandwich place known for its big portions, high-quality meats and freshly baked artisan breads. Of course, there’s a ton of competition out there in the sandwich space, but Togo’s truly has a unique niche,” Gioia said. “This was a California brand with a ton of raving, loyal fans. We all saw a lot of potential.”
Allied would go on to buy the concept. But around that same time, Gioia left the company to pursue an opportunity to invest in and put him in charge of a 32-unit privately held grocery chain. He would later head a Seattle coffee chain, Tully’s, and work at a New York-based private equity firm Emigrant Capital investing in the restaurant and packaged food industries.
Then, nearly 10 years after the acquisition, Togo’s had failed to flourish, and Dunkin’ Brands decided to sell the sandwich chain to better allocate its resources on their flagship businesses. Gioia caught wind of the sale, and in early 2007, he called Jon Luther, then Dunkin’s CEO, offering to buy the concept. By that following December, he had won the bidding process and took over Togo’s that same year—right when the recession began.
“I bought Togo’s back from Dunkin’ Brands for the same reasons we’d bought it in the first place. Togo’s knew good food, and they know what the customers want—good value, quality ingredients and great service,” Gioia said. “The brand had so much potential, but by the time I took over Togo’s, there was a lot of unrest. There was zero momentum as far as new development, and there was no interest from new franchisees. My first step as the new owner was to revamp the brand to help it grow again.”
For Gioia, this started with rebuilding trust amongst the brand’s network of franchisees. His first six months on the job were spent visiting with every owner, letting each of them knew who he is and his intentions, while simultaneously taking the time to listen to their needs, too.
“Everybody was struggling with the recession at that time, and we certainly felt the impact of that. When customers started pulling back on everything, including eating out, we had a few tough years. But we didn’t panic. Instead, I encouraged our franchisees to stay focused,” Gioia said.
Gioia made it his priority to improve franchisees’ cash flow, temporarily halting new store development and franchise sales. Staff worked with operators to save on food and labor costs. The company delayed remodeling requirements, having operators spend money only to make sure the store was in good condition. He also assessed Togo’s management team, making sure only the right people were on board to help grow the company and the brand.
This tactic paid off. Sales started to recover, giving Gioia the confidence to make some more aggressive moves. This included rebranding efforts and store redesigns. It took time to get over the hump, Gioia says, but by remaining patient and keeping the interests of his franchisees at heart, the turnaround that Togo’s had been fighting for started to take hold. Same-store sales were increasing year after year, and new, qualified leads started expressing interest in developing the brand. Over the next few years, Togo’s would go on to add 75 new restaurants—with more than 40 additional franchise agreements that are actively in the works today.
“A good franchisor and steward of the brand needs to be flexible, working hard to find an equal footing that can work for both parties. That’s 100 percent an art, not a science. And it’s so important to do everything in your power to strike that right balance,” Gioia added. “Creating a win-win for the franchisor and the franchisee is key to effectively running a business.”
Today, with nearly 300 locations that are currently open or in development, Gioia is ushering in the next chapter for Togo’s. With the recent hire of their new Chief Concept Officer Glenn Lunde, Togo’s is focusing on defining and refining what the Togo’s experience is all about. This starts with revamping the menu and evolving each restaurant’s ordering system—changes that make the Togo’s experience better for the guest and running the restaurant better for franchisees.
“The secret to restaurants is knowing what you do well, knowing what you can do better than anyone else in your category and doing everything in your power to keep improving,” Gioia said. “For Togo’s, it’s our food and our relationship with our franchisees. That’s what helps us stand out from the other brands. And I’ll keep working hard every single day to ensure that Togo’s is the very best franchisee-centric sandwich company out there.”