Nation's Restaurant News: Mich.-based Rio Wraps ventures into Fla. with franchises

BLOOMFIELD HILLS, MICH. -- Rio Wraps, a 5-year-old fast-casual chain whose 24 branches specialize in wrap-style sandwiches and burritos, recently signed its first outside-of-Michigan development agreement, for the Fort Myers and Naples, Fla., region.

The chain, one of two concepts operated by Sheena Management, based here, sold the franchises for 19 planned Florida restaurants without having solicited any buyers, according to Tom Stegeman, Sheena Management's vice president.

"All franchisees are customers who've come in and asked about buying franchises," he explained.

Stegeman and two of his friends, brothers Mark and Joe Sheena, established the Rio Wraps brand after sensing an opportunity to develop a concept that offered an alternative to typical quick-service chains. They say Rio Wraps will benefit from its differentiation from more-prevalent burrito chains--such as Chipotle Mexican Grill, Baja Fresh Mexican Grill and Qdoba Mexican Grill--because its menu goes beyond Mexican flavors and food formats.

For example, Rio Wraps" Club Rio contains turkey, ham, bacon, Monterey Jack and Cheddar cheeses, lettuce, tomato and onion in a whole-wheat tortilla with a house-made chipotle dressing. The Mystical Chicken wrap has teriyaki-marinated chicken with Chinese vegetables and pineapple salsa.

"When we developed this, Mexican was fast-growing, but we didn't see much frequency. Ours is more Southwestern. There is some Mexican, but [there also are] dell and grilled sandwiches and salads," Stegeman said.

Sheena Management's older chain, PizzaPapalis, a Chicago-style deep-dish pizza concept, started in 1986 and now has 10 locations, including one franchised branch. However, the company's partners are focusing on the growth of their wraps concept.

All of the items at Rio Wraps are prepared to order, and salsas are made fresh daily in-house. Customers may choose their own toppings, which expands the menu's 24 listed items to a much larger number, Stegeman said.

With an average check of $7, Rio Wraps rarely discounts, except for its 99-cent Taco Tuesdays, a weekly promotion begun last January that has been a traffic generator.

The chain maintains a value image primarily through large portion sizes. Its burritos weigh between 1.25 and 1.5 pounds. "We give away a lot of carryout boxes," Stegeman said.

Wraps and burritos use 13inch tortillas in four flavors-white flour, honey wheat, tomato basil and garden spinach. In addition, the chain offers grilled sandwiches on fresh-baked ciabatta bread.

The lunch-driven concept does about 65 percent of its business in that daypart. About 60 percent of customers eat in. Large, catered orders account for 12 percent of the sales volume.

Rio Wraps' systemwide sales last year were about $7 million, Stegeman said.

The chain's branch at Detroit Metropolitan Airport has given Rio Wraps exposure to visitors from around the country, including the new Florida franchisees, Bob Roulette and Dick Reese. Their first Florida unit is expected to open in Naples this fall.

Rio Wraps, with its out-of-state expansion, joins several other more-established, multistate chains that specialize in wraps. Among them are Roly Poly, based in Jacksonville, Fla., with more than 250 units; Camille's of Tulsa, Okla., with 63 units; Seattle-based World Wrapps, with 15 units; and Tacone, a Los Angeles chain that has 21 units and plans to enter Arizona.