New Private Equity Owner of Dave’s Cosmic Subs Promises to Emphasize Quality and Open Dozens of New Regional Locations

The meatball sub at Dave’s Credit: Courtesy Photo

Dave Lombardy opened the first Dave’s Cosmic Subs shop in Chagrin Falls in 1997. Since its inception, the brand has expanded to about 20 locations thanks to various franchise deals, but it never blew up the way Lombardy envisioned. For the past decade or so, the number of shops has remained relatively constant, with new ones occasionally popping up and underperforming shops closing their doors.

If new owner Paul Sidhu has his way, Dave’s Cosmic Subs will more than double its store count in the next three years while increasing visits, sales and satisfaction at existing shops.

Sidhu, President and CEO of Shaker Heights-based Sidhu Realty Capital, purchased his first Dave’s franchise in 2017, when he opened a shop in downtown Oberlin. In 2022, Sidhu Realty Capital bought the entire company from founders Dave and Maryann Lombardy citing great brand recognition, product differentiation and growth potential.

“Everyone knows about Dave’s in the Cleveland area – that nostalgic craving for the food,” says Sidhu. “But having said that it also was very dated, the concept, in terms of the technology, restaurant equipment, point of sale systems, the design, the website, the online ordering platform, not having a mobile app. So there was a lot of opportunity.”

In advance of major expansion, Sidhu and his partners have been laying a solid foundation. Already they have rolled out a redesigned logo, installed new POS systems, launched a new website with online ordering and released a mobile app, which might be the ripest piece of low-hanging fruit of them all.

“When we get to know our customer, then we can start targeting them and offering promotions to get them back in the store faster, more frequently – all the things that make a huge difference in growing sales,” explains Sidhu.

When new ownership – especially a private equity firm – takes over a beloved local brand like Dave’s Cosmic Subs, the natural assumption is that quality will suffer at the hands of cost-cutting measures. Sidhu says that since taking over, the opposite has been true.

“I can tell you definitively that the food has gotten better,” he states.

The menu, which had crept up to include more than 30 different subs, has been trimmed to 22. At the same time, the company – in collaboration with chefs – has introduced seasonal LTOs (limited-time offerings), the most successful of which land on the regular menu. New vegan and gluten-free options have been added as well.

“But our top-five subs have been the same top-five subs they have been historically,” says Sidhu, rattling off a list that includes Original, Meatball, Crazy, Peacesteak and Turkey.

Modernized kitchen equipment is increasing both efficiency and quality, he adds, starting with the larger, crispier European-style baguettes that are baked in house.
When it comes to décor, a new “streamlined” look and feel will gradually replace the groovy – and legally problematic – use of celebrities’ likenesses with a more generic, less-cluttered interior.

“We have to think about how fast we can get these up, the availability of various materials, and the legality,” Sidhu explains. “But Chagrin Falls won’t change; call it the Museum of Dave’s.”

Also in advance of imminent expansion, the company has been doing a little house-cleaning. Underperforming shops like Ohio City and Coventry were closed to help boost neighboring locations like downtown Cleveland and University Heights. Going forward, the focus will be on untapped markets.

“We have a high level of concentration of stores all within a stone’s throw of each other, so our idea is to spread out into new markets,” he says.

In addition to a new store in Fairview Park, which will open this summer, Dave’s has plans to expand into Pittsburgh, Cincinnati, Toledo, Nashville and more. These will be a combination of franchises and company-owned stores, Sidhu says.

“We’re going to put our money where our mouth is,” he says. “We’re investing alongside our franchise partners. We’re trying to get to 50 stores within three years – and we’re on track to hit that and probably even exceed it.”

The assumption might be that the farther one travels from Chagrin Falls, the less familiar one would be of Dave’s Cosmic Subs. And while that’s true to some extent, it’s not an impediment to success, argues Sidhu.

“You know it’s crazy. In some of these locations, like Toledo, there are a significant number of people who’ve been to the University Heights and Chagrin Falls locations,” he says. “Dave’s is known as a niche concept – and that’s part of the appeal. It’s not generic. It’s not going to be the cheapest sub sandwich you’re going to get. But it is going to be the best sub sandwich you’re going to get.”

Dave’s Cosmic Subs
davescosmicsubs.com

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