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Mike Hanley had absolutely no restaurant experience and no background in cooking food until 1995, when he decided to purchase Royal Pizza in Edmonton, Alberta. There are over 150 pizzerias and nearly a million people in Edmonton, the capital city of Alberta. Royal Pizza was first opened in 1968 by former owners Gus Pappas and John Pontikes. Mike bought the restaurant in 1995 after taking an interest in the business.
Entering into a world of Royalty
“I was going through the MLS listings and saw that the restaurant was for sale. I had been a customer a few times, and thought it looked interesting. I thought I’d pursue it and check it out,” he said. “I have a background in sales and marketing, but no experience in the restaurant business.” Mike said that Gus and John were very helpful in teaching him the tradition of Royal Pizza. “I had to qualify myself through the previous owners and take their business they had for 25 years and keep the tradition and the recipes, and everything else,” he said. Mike said they worked with him for three months making sure everything was in order and running smoothly before they handed the business off to him.
“One of our main struggles in the beginning was proving to the public that we hadn’t changed—we kept the tradition, the food, and the ambience of the restaurant just the same. We had to create an advertising campaign that reflected that,” Mike said.
Advertising
After about two years in business, Royal Pizza made its mark in Edmonton by appearing frequently on four of the city’s most popular radio stations. “We created a jingle that says, ‘Royal Pizza still making it great. Come on home’. We use that for all the radio spots. It’s been very catchy to the point where children will come in here singing our song,” Mike chuckled. He said finding someone to do the jingle wasn’t as hard as you may think. “We went through one of the local radio stations to help us track down someone that could write us a jingle—and they found someone.” The jingle was written, produced and recorded by Imagine Words and Music Inc. (www.imaginewordsandmusic.com). He said when competing with the nationals, nothing has worked better for Royal Pizza than having a jingle. “It builds brand awareness and also lets people know we’re still here and we’re still carrying on the traditions that have been in Edmonton for almost 40 years.” Mike said the jingle cost about $10,000 from start to finish, but admits that’s a small price to pay for such a huge investment in branding.
Mike said they have 60 spots on each station every three weeks. “With the three week period, one station’s on for three weeks and off for two weeks, so we’re always on at least three radio stations at a time,” he said.
Aside from radio, Royal Pizza also uses direct mail for marketing their takeout menu. “When we’re first opening a new store, we wait a week and then send out our takeout menus to everybody in the area,” he said. “Our radio advertising also changes with new stores—for about six weeks after opening we just promote that one location. We don’t give away too much information, just the location and the fact that it’s open. We don’t give a phone number, but instead use that tactic to discover the awareness of the new restaurant.” Mike said people will call all the other stores except the new one, and try to find the phone number—“That helps us because now we know we’ve created some awareness through the radio ads.” Mike said they also advertise in the Yellow Pages, but admitted that it’s hard to track its effectiveness because you never know when people are using the Yellow Pages. “We send everybody to our website, www.royalpizza.ca, from the radio ads. And we can tell they work because we get so many hits on our website everyday,” he said.
Mike said they also like to get involved with the sports teams in the area, such as the University of Alberta’s football and hockey teams. “We don’t do much sponsorship of the small teams, like kids coming in looking for sponsors for their soccer teams. You just don’t get the value. If you buy their uniforms for $500 you never get $500 worth of business back from them. We go for the larger teams. For the University’s athletic department, we give a large cash donation and in exchange, we get spots on all their broadcasted radio programs during the games,” he said. “We don’t get a lot of the students’ business because we’re a 20 dollar pizza, but we get the alumni. They come in and say thanks for supporting the university and thanks for supporting our children.” Mike said they believe in supporting the local youth and leave no child in Edmonton behind. They are huge supporters of the Kids with Cancer Society.
Meals fit for a King
Royal Pizza has seven locations in Alberta’s capital city: two corporate-owned and five franchises. They also have a commissary where all the dough is prepared, the sauce is made, and the vegetables and meats are cut for toppings. “Because of the cost of renting space nowadays, we decided to open up the commissary to improve our bottom line and consistency. It cuts equipment costs and labor, plus, we can do it all in one place. Why duplicate it when you can just have it in one place?”
Instead of having 300-400 sq. feet of space dedicated to all the chores that are accomplished in the commissary, Mike said they utilize that space in the restaurants for more table and chairs to maximize profits. “It helps create a more positive revenue. Now, it just comes off our refrigerated trucks and it goes right into their coolers.” Royal Pizza uses 10 x 12 walk-in coolers in every restaurant, as well as separate dough coolers.
Royal Pizza isn’t just pizza, although pizza comprises about 85 percent of their business and roughly 400,000 pizzas were sold in 2005. They also have calzones, baked pastas, salads, sandwiches, ribs, and donairs, a sandwich made of rotisserie beef brisket.
The lunch special at Royal Pizza is also a successful side of their business. “We do lunch specials 364 days a year. It’s a set menu of pizza, pasta and calzones that’s discounted about 20 percent off the normal price. And all the restaurants are busy at lunchtime.” Mike said they see about 2,000 customers every week overall at their main corporate location.
Expansion and location
Mike said there are plans to expand further, but that the main thing they have to be sure of is, “We have to have the right infrastructure in the front office to be sure we can support them from top to bottom.” Mike said finding a location that can support the business is one of the tasks to opening new locations. “Our demographics are ages 35 to 55 with an income of over $60,000 a year with two kids in the family and parents with a university background.” He said finding all that information is not that hard if you’re working with a good realtor. Mike has been successful in working with such people and this has assisted his franchisees in finding good locations.