Mediterranean restaurant chain Panini Cafe is changing the name of its 13 locations and selling franchises in a series of shifts that also include a new logo and ambitious plans.
“We think there can be 500 to 1,500 locations” long term, said Mike Rafipoor, founder and chief executive of the 20-year-old company, which is run under parent SPCorp Services Inc. in Irvine.
Santa Miguel Inc. owns the chain’s intellectual property, and MRFranchise Inc.—MR are Rafipoor’s initials—filed state documents on Dec. 2 to start selling franchises.
The franchise fee is $55,000, with a 20% discount possible for additional locations. The royalty fee is 5% of gross sales, and marketing fees range from 0.5% to 4%, depending partly on annual sales volume.
Single restaurants take in $2.2 million to $5 million and average $3.4 million in sales, or about $44 million systemwide. It costs $1.2 million to $2 million to open a location.
Panini Cafes serve Mediterranean fare and panini—sandwiches on grilled Italian bread—including “clean protein” and vegetable dishes, with a dollop of traditional items, such as baba ganoush, a roasted eggplant dip, and three kinds of hummus.
All are in Orange and L.A. counties.
The restaurants’ new name is Panini Kabob Grill. Locations will swap in new signs and the logo this year, and all new franchised and corporate restaurants will open under the name.
In a Name
Rafipoor said the name change stemmed from deciding that “healthier Mediterranean food”—part of one of the franchiser’s trade names, franchise documents show—is what he’s selling.
“Even as we’re adding food items, people sometimes think we’re just a sandwich place,” he said.
Panini Cafe might sound like a place where sandwiches are served and you sit for a bit, but Rafipoor said the three parts of the new name give continuity—“We have panini—lots of them”—and kabob and grill were added to connote health and speed.
Rafipoor said restaurants do high take-out business and rarely locate in malls.
“We don’t want you to circulate and waste time” in a food court, he said.
Other favored spots are high-profile outdoor centers that give high visibility and, again, quick access. A location at the Park Place retail layout in Irvine is near a parking structure and set apart from most other offerings to make it easier to access.
Panini Evolution
Rafipoor said there’s no downside to a name change because “no other state has any idea who Panini Cafe is,” and therefore franchising isn’t hindered by the shift.
The chain’s roots are in one Corona del Mar restaurant with a third name—Caffe Panini, which was founded in 1995 by Moe Ghazi, Rafipoor’s former brother-in-law who is no longer with the company.
Rafipoor had come to the U.S. from his native Iran, by way of England, moving here in 1989. He ran a car wash chain, and owned a sushi bar in Laguna Beach and a nightclub in Newport Beach when he joined with the single cafe in 1997.
He reversed the words in the restaurant’s name, expanded the menu, and prepared the improved company to add locations. A second restaurant, opened in Beverly Hills in 2007, ushered in the chain’s first phase of growth.
Healthy Menu
Chief Operating Officer Hansen Kamci said the present expansion plan comes amid an overall move toward healthier restaurant food choices and “foodie” customers seeking healthy fare.
“The consumer is smart,” he said. “They have become professional eaters.”
Food prep is done throughout the day at each restaurant to maximize freshness and minimize waste, he said.
“We’d rather do too little and have to make more, fresh, than do too much and ruin it,” he said. “The only freezer we have is for the ice cream.”
Panini recently expanded its breakfast menu and culled unpopular items.
“The restaurant business is about purchasing and prepping,” Kamci said. “It’s almost impossible to screw up a dish if you do those two things right.”
Fine Focus
Category growth in Mediterranean food has brought competition.
Two chains—Pleasant Hill, Calif.-based chain Yalla Mediterranean and Denver-based Garbanzo Mediterranean Fresh—have one location each in OC and 30 restaurants between them, and both franchise.
Panini has beefed up employee benefits, honed its food focus, and stepped up technology, all to better compete.
The chain uses tablet ordering, for instance, but the tools are wielded by servers rather than parked on tables. Kamci said that meets twin goals of speed and customer service, even as Panini keeps doing what it knows: Mediterranean fare.
“We keep everything that sells and make it perfect. If you want a burger, go to Houston’s or The Counter,” two chains near its Park Place location.
