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Mike Liautaud: Milio’s Subs

Sandwiches run in the family. Cousins Jimmy John and Kevin Schippers (Ebert’s & Gerbert’s) both started successful chains.


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Mike Liautaud began his sandwich chain in 1989 as Big Mike’s Subs in Madison, Wis. Those Big Mike’s were renamed Milio’s as he gets set to grow the chain—already at 45 units—through franchising. The name Liautaud has become a familiar one in the sandwich business—Mike’s cousin is Jimmy John Liautaud, founder of Jimmy John’s subs.

 

Mike Liautaud, founder of Milio’s Subs, photographed in front of his autographed guitar collection at the Milio’s corporate offices in Madison. “There’s not a whole lot of secrets in the sandwich segment. It’s lunch meat put on bread. What it comes down to is management and outperforming your competitor.”

Why the name change?

I came to a crossroads growing the business. I looked at a few options, including angel investors, banks and franchising, and determined that the best avenue was franchising. One of the steps to franchise was to trademark the name. Big Mike’s was rejected; it’s a very generic name. There’s Jersey Mike’s subs, for example. There’s an outfit in Canada that might be coming down here called Big Mike’s Diner. So, reality hit me.

Your restaurant background…

I grew up in Chicago, and ever since I was 10 years old I wanted to own a hotdog stand. And it never left my soul, and I don’t know why. In the early 1980s I opened a hotdog stand in Chicago, and we also sold sub sandwiches. It always was a destiny.

You have a famous family in the sandwich business…

Jimmy John is my first cousin. He started in 1983; we were best buddies at that time. The game plan was for me to come up to Madison, and we’d be in business together. But that didn’t materialize. So I started Big Mike’s in 1989. Kevin Schippers (founder of Ebert’s & Gerbert’s subs) is also my cousin.

How do you differentiate between yourselves, because they are similar products?

Whether it’s Jimmy John’s or Subway or Blimpie, there’s not a whole lot of secrets in the sandwich segment. It’s lunch meat put on bread.

What it comes down to is management and outperforming your competitor. With Subway, they’ve got stores upon stores, and I think it’s going to hurt them. Operators become disgruntled. You need to out-manage the competition, have a consistent product that’s competitively priced and make your margins.

Our gig is community relations, and we do it in a sincere manner. We do everything we can to support the community; it helps business. And our employees are well trained, because they are the real representatives of the company. We really have no secrets. And of course, it’s who’s got better locations.

What are your growth goals?

We’re staying in the Midwest for now, concentrating on four states: Minnesota, Wisconsin, Iowa and Illinois. This way we can maintain the support systems. If you spread out too fast, it’s not cost effective. And my job is to make those guys—the operators—money. We’ll have a better shot at supporting them if we control our growth. That’s not to say we’re not looking at multi-unit developers. We’re being very selective. We want to make sure they have the money and the operators to do it. That’s the key, do they have the expertise and the operators.

We love Minnesota. Minneapolis is an awesome city. The population is smart, they don’t mind transitioning and trying new things. We’re looking at projections in the Minneapolis/St. Paul metro area and we think we can do one store per 20,000 people, so that’s about 100 stores.

We have 45 units now, 35 are company owned, and 10 franchises. We’d love to be national—or world-wide—but one step at a time.

With Quiznos came the toasted sandwich craze. Any thought to following?

I don’t follow. I’ll take the lead on something. We’ve stayed with our product, but are thinking of things to roll out. With the sub sandwich segment, 70 percent of your business happens during lunch. There’s a hell of an opportunity for nighttime business. My menu items are limited to cold products. People usually want something hot for dinner—I can’t think of when I’ve craved a cold sandwich for dinner. So we’re thinking of ways to drive nighttime business. With our unit development, we follow the fundamentals, but we’ve found ways to step out of the box.

How does the family get along with the competition between the cousins?

We all get along. We’re not going out to eat every Friday, but we’re fine. Jim is wildly successful, with 350 stores. He’s the King Kong of the sub business. My hat’s off to him; he’s done a fantastic job. I’ve had to digest competing against him, but in the end he’s a competitor just like anyone else. And I try to keep that competition out of the family, and at family events. I’m at peace with that. We’re all doing well for our businesses, and it’s obviously a very unique situation to have that success.

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