The interior of Schlotzsky’s new prototype, with the company’s new brand positioning. | Photo courtesy of GoTo Foods.
Schlotzsky’s was founded in Austin, Texas, in 1971 and, in the years since then, has had almost as many versions of its moniker as it’s had sandwiches on the menu, which is to say quite a bit.
Schlotzsky’s was first called simply Schlotzsky’s. It was then changed to Schlotzsky’s Deli. And then over the years it was called Schlotzsky’s Bakery-Café, Schlotzsky’s Austin Eatery and then just Schlotzsky’s again.
All of which makes the company’s change back to Schlotzsky’s Deli curious. Until, that is, you hear Donna Varner talk about a trip she once took in a van to Austin with several strangers after their flight was grounded by a haboob.
When it came time for introductions, Varner noted that she is the chief brand officer of the sandwich chain Schlotzsky’s. “One girl goes, ‘Schlotzsky’s Deli! I used to go there all the time with my dad!’” Varner recalled. “Every single person in that van of unknowns knew it as Schlotzsky’s Deli.”
Varner did not rely purely on that van of unknowns for the decision to change the brand’s name back to Schlotzsky’s Deli. The company, owned by the Atlanta-based GoTo Foods, had a consumer study for that. But the introduction was certainly proof point for the decision. Everybody knows it as Schlotzsky’s Deli, so why call it anything but Schlotzsky’s Deli?
At the same time, the company hopes this will be the last change for a while.
“We’ve been a lot of things,” Varner said. “Our franchisees are really great at accepting change. But what I want to get across for them is, let’s not change a lot anymore. Let’s be who we are, who the customer knows us for. Let’s get back to our roots.”
Schlotzsky’s was initially founded as a hole-in-the-wall restaurant based around a sandwich patterned after the muffuletta, called The Original. The concept proved popular and a decade later the chain had 100 locations.
In 1986 the concept rebranded to Schlotzsky’s Deli to make it clear what the chain was all about. The chain was publicly traded for more than a decade, filed for bankruptcy in 2004 and was sold in 2006 to the Roark Capital owned Focus Brands, now GoTo Foods. Along the way it changed its name a couple more times.
Schlotzsky’s system sales declined 4.7% in 2024, according to Restaurant Business sister company Technomic. That’s the last year for which data is available. The chain has been closing locations for years, including 43 restaurants since 2019. The chain currently operates 290 restaurants, most of which are owned by franchisees.
The chain started working on the rebrand in 2024, shortly after Varner arrived. The company did a lot of consumer research, talking with hundreds of consumers, while Varner listened to franchisees. “It was kind-of like a self-actualization tour that was grounded in the consumer,” she said. “What we really learned was there was a lot of stuff we didn’t know about ourselves.”
Among those things: Not everybody realized what Schlotzsky’s actually was.
“People would say they weren’t familiar with the brand,” Varner said. “They would say, ‘I thought Schlotzsky’s was a dry cleaner. I didn’t realize it was a food place until I saw Cinnabon on the side. We have a brand recognition problem.”
The new name is designed to improve that identity so consumers don’t walk in with a dirty suit, as is the chain’s new brand positioning, “Life Needs Lotz.”
In addition to the new branding, the chain has also developed a new prototype featuring self-order kiosks, dedicated pickup zones and grab-and-go offerings, such as premade cold deli subs.
The modular prototype is designed to improve operating efficiency, reducing operating costs by 20% to 25%, said Tony Maldonado, SVP of design and construction for GoTo Foods.
One other thing that Schlotzsky’s discovered with its consumer research? Its customers are younger than the company thought.
“I was told when I started, ‘Good luck, your customers have one foot in the grave. They’re all dying,’” Varner said. ‘You need to find new customers.’ That was part of my assignment.
“I found out when we started to dig into who’s really coming to Schlotzsky’s was Millennials. Over 50% of our customers are Millennial males. We overindex with Hispanics, not just because of our Texas footprint because they really like our food.”
All of which should make life a bit simpler for Varner. After all, it’s easier to sell sandwiches to somebody that isn’t walking into your shop looking to have a shirt pressed.
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