A franchise that epitomised the boom hits hard times

ANALYSIS: A VISIT to New York in the 1980s inspired businessman Brody Sweeney to found the O’Brien’s sandwich bar chain which…

ANALYSIS:A VISIT to New York in the 1980s inspired businessman Brody Sweeney to found the O'Brien's sandwich bar chain which yesterday sought High Court protection from its creditors, writes BARRY O'HALLORAN

Sweeney was looking for a business idea. His “eureka” moment came when he visited a Subway outlet in New York.

It struck him that there was no comparable brand in Ireland, and the low-skill, minimum preparation approach appealed to him.

He opened his first sandwich bar 12 months later in 1988, and admits in his book, Making Bread – The Real Way To Start Up And Stay Up In Business,that O'Brien's lost money every year for the first six years – at which point he says he ran out of mistakes to make.

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After that stuttering start, the franchise began to grow, and from the mid-1990s expanded along with the Irish economy.

More people going to work and more disposable income meant more people looking for convenient and fast lunches, coffees and whatever else.

At the same time, along came fad foods like juices and smoothies, all of which O’Brien’s added to its range.

In an interview in February last year, he pinpointed health-conscious young women as a core market.

At that point, O’Brien’s was selling 140,000 sandwiches a day and was the biggest seller of coffee in the Republic.

It had outlets in 16 countries stretching from Canada to Australia.

The combined turnover of franchises was about €140 million a year. The holding company, which owns the concept and the brand, was making profits of more than €1.2 million annually.

In Ireland, O’Brien’s was well established and had become part of the fabric of the high street. At least part of this was due to the founder’s eye for marketing and publicity opportunities.

The chain joined forces at one stage with Tony Fenton’s lunchtime programme on Today FM, where listeners were invited to vote for their favourite sandwich combination.

Sweeney himself is not averse to the spotlight. He ran unsuccessfully for Fine Gael in the 2007 General Election, an experience that, going by his own remarks afterwards, he found bruising.

However, it was by no means fatal, and he’d had plenty of setbacks before. In his book, he says that his ambition was to run his own business and get rich, or at least rich enough to do the things that he wanted to do rather than those that he had to do.

He grew up in Sandymount on Dublin’s southside and went to Blackrock College. He was not academic and in 1981 left third level before graduating. He went into business with his father, running the master Irish franchise for Prontaprint. Last year he said that this enterprise never made a profit, but described it as a “learning experience”.

On his return to business from politics in 2007, he announced a joint venture with the owners of the Café Bar Deli restaurant chain, Jay Bourke and Eoin Foyle.

But things weren’t necessarily going smoothly with O’Brien’s.

A failed run at the US had cost it €500,000. It was restructuring its operations in Britain, where Sweeney estimated last year that it had lost between €2 million and €4 million. He said that the brand simply wasn’t big enough to resonate with consumers in that market.

The previous year, its reputation at home was dented when health inspectors found cockroaches in an O’Brien’s outlet in the Stephen’s Green centre.

Last month, its British arm was placed in administration, a corporate rescue mechanism focused on recovering creditors’ debts. In a statement, Sweeney, said that business was falling and franchisees were having difficulty paying their rents. This in turn was putting pressure on his Dublin-based company, which held the head leases on many of the British outlets.

A number of its bars here have also closed, not surprising given that they depend for much of their business on working people. There are fewer people with jobs, and many of those that do are earning as much as 13 per cent less than last year.

There’s also more competition, for the food-on-the-go market in Ireland these days, including, ironically enough, Subway, the very chain that provided him with inspiration in the first place.