DII DD F10 Sandwich Blitz, Inc. Case Study Sandwich Blitz, Inc. Sandwich Blitz, Inc. is a small growing specialty sandwich shop chain in Atlanta, Georgia. The business is owned by Jack Balmer, who serves as President and Chief Executive Officer (CEO) and Jenny Smallwood who serves as Vice-President and Chief Financial Officer (CFO). The company currently operates eight free-standing sandwich and refreshment shops located near three universities, one hospital, and four high-traffic office complexes in the metro Atlanta area. The firm caters to an upscale breakfast and lunch crowd and specializes in organically grown food ingredients and health-conscious beverages. Currently, the firm employs a staff accountant, eight location managers and forty employees. The corporate headquarters occupies rented space in an office park which houses Jack, Jenny and the corporate accountant, Lawrence Jacobs. Each operating sandwich shop is staffed with a manager, a crew supervisor, and four customer associates. Revenues from 2022 operations are projected to be $3.5 million. Beginnings Sandwich Blitz was the inspiration of Jack Balmer whose previous experience was in middle management for a wholesale food distribution company headquartered in Atlanta. An ardent devotee of healthy food, Jack received the inspiration for Sandwich Blitz while visiting San Francisco on corporate business. Jack noted the presence of healthy sandwich shops in that locale and was surprised on his return home that no such models were in operation in the Southeast. After entertaining the idea for several weeks, Jack approached his long-time friend Jenny Smallwood, a CPA working within the life insurance industry with his idea. Jenny considered the idea a good one but was concerned with the overhead expenses involved in leasing and developing retail commercial space in the expensive urban Atlanta market. One day, while driving to work, Jack noticed a small, free-standing prefabricated building located on an out- parcel of land adjacent to a strip shopping center. Suddenly, he envisioned the Sandwich Blitz model- small space, great location, negotiated low costs on small parcels of land unsuitable for most commercial purposes and most of all, great healthy food! Jack couldn't wait to show Jenny this model. Within three weeks, Sandwich Blitz, Inc. was born. The initial startup capital of $150,000 was split between Jack and Jenny evenly. Jack was able to secure a second mortgage on his home and use his personal credit cards for most of his share. A gift from Jack's father of the remaining $5,000 completed his investment. Jenny was able to use her substantial personal savings to finance her share. The first land lease was signed and the first prefabricated unit was ordered on July 4, 2018. Both Jack and Jenny considered July Fourth to be a good omen and indeed an "Independence Day" for the both of them. Sandwich Blitz opened its doors for business on October 15, 2018. Jack, Jenny and two college students were the initial employees. Each signed the first dollar bill received during that first day. It is still proudly displayed in the corporate office. Operations The Sandwich Blitz operational model reflects both Jack and Jenny's management philosophy that allows each operating unit a great measure of autonomy. This translates to allowing each location manager to make the day-to-day decisions dealing with their unit budgets, employee matters, and customer service issues. Each location manager is carefully chosen and given a compensation package which includes incentives based on location performance. These are based on location sales projections. Each location manager is presented with quarterly budgets and is accountable for meeting these guidelines.F10 Each crew supervisor is responsible for ensuring good customer service by making sure that all customer associates adhere to the Sandwich Blitz Creed which is proudly displayed over each location's counter: "Sandwich Blitz - Where our quality, freshness, and customers always come first." To that end, each customer associate is empowered to resolve any customer-related complaint. This allows the customer associate to refund purchases, replace food, and take other measures to satisfy the Sandwich Blitz customer. The original location also serves as a training unit for the company and Jack is a regular fixture at these training sessions. Food recipes and preparation techniques are of particular concern to Jack since he feels that consistency of product is critical to the company's competitiveness. Jack considers a few ingredients to be of sufficient importance to justify a private branding of these to protect these from potential competitors. Lately, Jack has mostly been visiting the operating locations and dealing with matters that each manager requests help with while Jenny has concentrated on financial matters like budget preparation, leases, taxes, and overseeing the daily accounting process. Both Jack and Jenny are pleased with Sandwich Blitz's past performance but feel that they are each unable to devote their time and energy to take the business to the next level. All of their time seems to be occupied with "fighting little fires" within the existing operation. Expansion Possibilities Jack and Jenny have recently discussed the future of Sandwich Blitz. Jenny has noted the emergence of two new franchise operations that offer food and beverages similar to that of Sandwich Blitz. Although these have not yet entered the Atlanta market, she feels that this is only a matter of time. The company has the resources to open two additional locations if good places in Atlanta can be found. The recent economic downturn has adversely affected the occupancy rates in the larger office parks that have historically been good locations for their shops. They could always look at other cities but have never considered this. Jack and Jenny are wondering if they expand again, should it be a small expansion or should they try something on a larger scale