In just a year, 100 Montaditos has made its mark on Miami, with restaurants from the decade-old Spanish chain opening in the city’s hippest spots, including Midtown, Brickell, even the restaurant space at the highly anticipated H&M on Lincoln Road.
Its midtown location, in particular, has outsold more than any of the chain’s existing 200 restaurants in Europe and Latin America.
But now, as owner Juan Gervas launches ambitious plans to stake out territory beyond South Florida and open about 25 more restaurants along the east coast, the question is: Can that success be duplicated?
For Gervas, the answer is clearly yes. Within five to seven years, he hopes to have 500 restaurants nationwide.
“The way I see it is Italians have made a very good product in terms of brands and concepts,” he said. So why not do the same for Spain? “One of the biggest industries in Spain is food. It’s a player in the world. We have top chefs with restaurants in Singapore, Shanghai and the U.S.”
But for the success to translate out of South Florida’s heavily Hispanic market, Gervas will have to proceed carefully, said Dennis Lombardi, a restaurant consultant and executive vice president at Columbus, Ohio-based WD Partners.
“On the consumer side, it has a lot going for it. Obviously the price point and variety and the fun of going in and trying all these different things,” he said.
From an operation standpoint, however, things could get tricky.
“I think the product will travel. It’s a sandwich,” Lombardi said. “And the concept makes it fun and interesting. But that doesn’t mean if it’s sitting in Columbus, Ohio it’s going to get the store volume it needs.”
The concept behind 100 Montaditos, owned by the Restalia Group, is simple: a well-appointed Spanish tavern serving 100 different tapas-style sandwiches made from high quality ingredients, including Jamon Iberico, a free-range ham made from Spanish pigs who live in oak groves, grazing on grass and acorns. 100 Montaditos only uses its own bread, again from Spain, shipped frozen to the United States, where it is baked in ovens specially designed for the restaurant.
Sandwich prices range from $1.50 to $2.50, except on Wednesdays when every sandwich is just $1. The restaurant also serves salads and appetizers on cutting boards loaded with Iberico ham, crushed tomatoes and olives or different cheeses. There’s even a dessert montadito made with chocolate bread. 100 Montaditos also serves Gervas’ family beer and another house special, Spanish red wine mixed with lemonade.
One recent morning at the chain’s Brickell location, the only one open for breakfast, Milagros Alfaro stopped for coffee, yogurt and 100 Montaditos’ signature bread.
“The artisan bread is more special, like the bread in my country,” said Alfaro, a nanny who is from Peru and usually meets other nannies from the neighborhood three or four times a week at the restaurant after morning walks. “And it’s not expensive.”
While the menu is priced like a fast food restaurant, Gervas, who ran his own law firm before founding MGH group, an investment and management firm, says he’s carving out a new niche.
“I know they put us in fast food, but in that case, this is the only fast food where you have your drink in a glass and your food on a plate,” he said. “We think our restaurants present a specific offering that hasn’t existed before.”
Indeed, the setting looks more quaint Spanish tavern than plastic American. And while European customers tend to linger over a beer or wine, and eat less food, American consumers eat first and drink second. Gervas explained that kitchens had to be enlarged and ovens reconfigured to accommodate American production. Changing that original formula could affect profits, Lombardi said.
“If they’re not selling a lot of beer and selling a lot more sandwiches, that’s probably changing their margin mix in terms of total restaurant sales,” he said. “When you come into a new country, especially a new hemisphere, you’re going to find that the consumer expects different things from the concept and use it differently, and you need to be able to adapt to that.”
But Gervas said 100 Montaditos is already embracing those different tastes. The restaurant plans to update its menu at least once a year, allowing it to respond to customer demands. And the American menu includes platters, so customers don’t have to go through the entire menu.
Gervas started thinking about bringing 100 Montaditos to the states in 2009 after receiving repeated requests for franchises. His family has been doing business in Miami, including real estate and transportation, for 35 years. And in addition to the U.S. expansion, the chain has two stores in Mexico, with 32 more committed, and two in Colombia, with plans for 20 more.
“We felt very confidant about the concept and the way the restaurant works,” he said.
Just last year, he said the company received 600 applications for franchises. A franchise fee runs $35,000, plus 7 percent royalties and an average investment running between $350,000 to $500,000, depending on location. The company projects franchisees can recover their investment in less than 24 months.
But even while franchise interest is high, Gervas said the company has been very careful about awarding contracts and is not interested in just franchising 100 Montaditos.
“We don’t want to be seen as just a franchisor trying to sell a franchise,” he said.
The company plans to open a U.S. factory this year to produce its bread and is exploring buying more of its products in the United States. It is already in negotiations with a cheese maker in Wisconsin, Gervas said.
“Although we’re a Spanish chain and the idea is from Spain....we’re a Spanish concept supported by the United States in every way: employees, supplies, everything,” he said. “We came here and we feel very humble and grateful we’ve been received this way.”