San Marcos Mercury | Local News from San Marcos and Hays County, Texas
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by WES FERGUSON

Rising like a sourdough bun, Schlotzsky’s has emerged from bankruptcy and is pairing with the San Marcos-based Sac-N-Pac chain of convenience stores for rapid expansion into San Marcos, Kyle, Buda and other markets.

Sac-N-Pac, a private company with about a dozen stores in San Marcos, has purchased eight franchise agreements from Schlotzsky’s, with the first eatery targeted to open March 16 at the corner of FM 967 and FM 1626 in Buda.

The chain intends to open a Schlotzsky’s, possibly at their  Wonder World Drive location, by summertime, said Raymond Cavazos, Sac-N-Pac’s director of food operations. Two more restaurants will open in Kyle at some point, Cavazos said.

“Schlotzsky’s had their issues,” Cavazos said. “They regrouped, were purchased by Focus Brands and are up to about 240 stores. They’re up and coming.”

Nationwide, the deli chain has plans to open 50 to 60 stores this year alone, he noted. Sac-N-Pac expects to break ground next month on a combined gas station and Schlotzsky’s at the corner of Kohler’s Crossing and Interstate 35, with a planned opening in June or July. For its second Schlotzsky’s restaurant in Kyle, Sac-N-Pac is considering its existing store at the southeastern corner of FM 150 and I-35, Cavazos said.

Each restaurant will share a building with the fuel/convenience retail store and have its own entrance, a separate drive-thru and a connected pass-through in the building.

Cavazos said changing markets have driven Sac-N-Pac to look beyond fuel and traditional convenience-store products for revenue.

“Before, if you needed a loaf of bread or a gallon of milk, you would typically go to a convenience store,” he said. “Now you have so many options. You can buy milk or bread at CVS or Walgreens or a dollar store.

The market share is shrinking, so the national trend for owners of convenience stores, everybody’s leaning toward restaurants as a draw.”

The company does not consider sales at the fuel pump a strong moneymaker, he said, so Sac-N-Pac has extra incentive to find new ways to lure customers into its 45 stores for inside sales on higher-margin products.

“If you have a restaurant at your store, somebody who might not typically go in might walk over into the store to buy something,” Cavazos said. “You consider that an incremental sale.”

Sac-N-Pac is also undergoing a rapid expansion in its own right. Now a regional chain with 45 stores in seven counties, Sac-N-Pac started at the corner of Old Ranch Road 12 and Hopkins Street in 1966.

Earlier this month, the company opened a convenience store and Quiznos at FM 150 and Texas Highway 21 near Uhland. Company officials are also discussing plans for a store behind the CVS on FM 150 and I-35 in downtown Kyle.

“We’re talking about putting a store and restaurant there, but it’s probably a couple years out,” he said.

Schlotzsky’s, formerly based in Austin, filed for bankruptcy protection in 2004 and closed numerous delis in the process. Atlanta-based Focus Brands, the parent company of Carvel and Cinnabon, has owned Schlotzsky’s since 2006. The sandwich shop has been out of the San Marcos market since about 2009 when it shuttered its stores near the outlet malls on Interstate 35 and in the San Mar Plaza on Texas 80.

WES FERGUSON is editor of the Hays Free Press where a version of this story was originally published. It is reprinted here through a news partnership between the Free Press and the San Marcos Mercury. Brad Rollins contributed reporting to this story.

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3 thoughts on “Sac-N-Pac, Schlotzky’s ink franchise agreement

  1. I’ll be extremely disappointed if they decide to get rid of the Angus Grill/44 Grille in the San-N-Pac on Wonder World only to replace it with Scholtzsky’s. Alvin Ords’ is worlds better and the Grill in there currently does an awesome job with their burgers…

  2. I’m with Travis – the burgers at the grill there (thought it was Ancho Grill now?) are the best in town and it would be a darn shame to replace their goodness with another sandwich shop. Anyone know who we can contact at San & Pac to request that they spare us this travesty?

    By the way, did you realize that we already have six Subways, Alvin Ord’s, Quiznos, and Jimmy John’s in this town?

  3. You’re right Dano. It’s Ancho…I just had one of those moments. I’m going to look into who to contact because that really would be a travesty.

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