Deli's Success Piled High

Sunday, April 23, 2006

A Denver couple who missed New York food doesn't stop with franchising one eatery concept. Now they're juggling four others.

A craving for the New York food they loved led Heidi and Steve Naples to open a bagel and ice cream shop in 1994. Twelve years later, that north Denver location has become Heidi's Brooklyn Deli, a venture the couple has turned into a 17-store chain along the Front Range. The first of nearly a hundred Heidi's franchises they've sold nationwide just opened in Phoenix. They're also serving up an ambitious buffet of four additional restaurant concepts starting in Colorado: the organic Soup 'n Juice, a Japanese chain called Sushi Hai, the brand new Sister's Pizza and Mussels, and the upcoming Lucille's Italian steakhouses. "I think I'm a restaurant guy now," said Steve Naples, who used to think of himself as a TV guy after studying broadcasting in college and a first career in sales for KUSA/Channel 9. Steve, from Jersey City, and Brooklyn-born Heidi - both 45 - met at high school in Hopatcong, N.J. Steve credits his Italian grandmother Lucille for sparking his interest in food. Both worked in restaurants during college at Montclair State University, as Heidi was studying psychology. Channel 9 moved the couple to Denver in 1990. It wasn't long before the Napleses were homesick for the authentic food they'd grown up with, in a town where fast food was far easier to find. "I created all the sandwiches," said Steve, whose hefty menu includes the $7 Bronx Bomber - pastrami and egg salad on rye - and the Hell's Kitchen - egg salad, bacon, Swiss cheese and hot sauce. "We sell a lot of liverwurst, believe it or not," he said. The New York edge is infused in the menu board's invitation to design your own wrap, "but don't be a pain in the ass." "Some of those attitudes make them more irreverent, and irreverence is linked to younger target customers," said consultant Arjun Sen, president of Centennial's Restaurant Marketing Group, about the Heidi's image. "They could very easily have become a 'me too' and you could have felt they were a Subway imitation. They're not that." But he said that edge might not appeal as much to families. "Will mom be comfortable taking little John to Heidi's after soccer practice?" Sen asked. A Japanese challenge After the first Heidi's opened in 1994, the couple opened another four, and then began franchising in 2004. The first Soup 'n Juice opened across the street from the original Heidi's at 32nd and Lowell in north Denver in 1997. Then it was moved inside the deli, to make way for the couple's Japanese venture. "I kind of like building things," Steve said. "So I created Sushi Hai because I had pretty much gotten the Heidi's thing down, and I wanted to challenge myself. So I went to Japan, took Heidi and the kids." The couple has two daughters, Jenee, 16, and Juliana, 12. After stressful early years, missing mortgage payments and sleep, the Napleses are confident in their original concept and the new culinary terrain they are exploring. "We've got so many e-mails from people and customers who want to do these, we're actually trying to slow it down," Steve said. A disagreement with one metro Denver franchise holder has led the couple into court. The case is currently in arbitration. Launching multiples of the same concept, like Heidi's, is hard enough, according to restaurant consultant John Imbergamo, founder of Denver's Imbergamo Group. He said the Napleses are tackling several new concepts at once, with pizza, sushi, steak and health food. "You have to have a deep set of resources, both financial and human resources, to pull that off," he said, noting that even big players like McDonald's have pursued new restaurant concepts, only to retrench. Sidelines for building The Naples Group's multi-concept growth has led the couple to start two sidelines - a construction business and a heating and air conditioning firm - to build their franchises. Their initial franchise fee for a Heidi's with a Soup 'n Juice is $35,000, higher than some other chains, but with higher store revenue and stronger training support, Steve said. Many franchisees purchase an area - encompassing 20,000 residents or up to two miles - to ensure that sister stores won't be too close, Heidi said. The couple said that owning multiple locations improves the quality of all the stores. "We always felt once we opened our second location, we could pay better people, have more consistent quality, move people around as needed - and Steve and I wouldn't be the ones behind the counter getting burned out," Heidi said. She described their growth as "exponential" and said they'd originally set 2,500 stores as their 10-year goal. By comparison, Quiznos, another Denver-based sandwich chain, has more than 4,000. But that target is now less important than ensuring that the Heidi's franchise holders are successful, Steve said. Sen, the consultant, said the challenge for Heidi's is to achieve critical mass in the competitive fast-casual restaurant business. "A consumer has to cross maybe four or five Subways, two Quiznos, two Chipotles and other mom-and-pops, to come to a Heidi's," he said. "So the big question would be - as they grow - will they become compelling enough to do that?" The first out-of-state Heidi's Brooklyn Deli opened Friday in Phoenix. Geneva, Ill., is slated to open by June and Washington, D.C., and Las Vegas by July. Do they hope to export the concept all the way back to the Big Apple? "That would be a real proud moment," Heidi said. "Because all the food is good (in New York). To compete on that level would be really wonderful."

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