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The term “fast casual” is now well known as an exciting sector that’s still growing across the food landscape. When Jim Minidis of Palmdale, CA, launched Red Brick, his gourmet “Old World” pizza concept, he didn’t know the term. All he knew was that he and his wife, Lynn (now VP of Red Brick) believed they could sell high-quality pizza with healthy ingredients after a scant three minutes in the oven.
“We became fast casual by accident,” Jim says from his Palmdale office. “We were already doing it when that phrase came up. The marketplace created these buzzwords, ‘fast casual,’ or ‘quick casual.’ We’re just trying to sell quality pizza for busy consumers.”
Jim says another trend Red Brick Pizza anticipated was the banning of trans fats. “We serve homemade gelatos for dessert which people have flipped over,” he enthuses. “That is an all natural product, no trans fats. It is creamier and richer than ice cream and it is something we adapted from the old Euro school of food. We had to gourmet it a little bit, Americanize it a little bit, if you will. But at the same time, it is on the healthier side because it is less fat and has less calories than ice cream.”
Old World New School
Jim says he and his wife took the idea of a Euro-café, what they call, a “neighborhood pizza café,” and placed the concept in a fast, consumer-friendly environment. The pizzas are seared at more than 1,000 degrees in – what else? – a red brick oven. Special dough formulation was required to ensure maximum performance at such heat. The process takes anywhere from three to six minutes. Customers are in control during every step: they can even choose crust flavors, from roasted red pepper to parmesan garlic. After these decisions, a “pizza ambassador” wearing a fetching red and black beret, customizes each order. (Another cozy bit of ambience is a small flat screen DIRECT TV in every booth).
There are 16 different types of pies, ranging from four cheeses to meat works. There are specialty pies such as the Pizza Bianco, which has an olive oil and garlic sauce, ricotta cheese, mozzarella, and Italian-style sausage or fire-roasted chicken, mushrooms and roasted pine nuts. The pizzas start at $10.95, sandwiches, at $5.95. The gourmet gelato that Jim mentioned is made daily in-house in 50 different flavors.
“Yes, we want to change the way people think about pizza,” Jim admits. “Our dough is made fresh every day with heart-healthy olive oil. The dough forming and baking directly on that hot stone ensures a crisp, thin center with a light crust that isn’t filling. We like to say our goal is to blend old school charm with new world convenience.”
Getting There
Jim and his wife Lynn were Little Caesar’s franchisees for twelve years (1986-1998), part of their shared 25 years in the pizza industry. During that time, they learned the business and came to believe there is a market for the fast-upscale pizza concept they had in mind.
“We saw that the major players were mostly moving toward a delivery-driven, coupon-driven market,” Jim recalls. “We felt like that opened the door for a traditional dine in-experience.”
In 2000, the couple converted ten of their Little Caesar’s into Red Bricks. Red Brick, now a totally franchised enterprise, has more than 65 units in eight states, Cailfornia, Arizona, Nevada, New Mexico, North Carolina, Florida, Texas and Oregon. Another 50 stores are signed to open this year, or, as Jim says, “That’s a new store every week and a half.” Another 400 stores are a part of a development expansion deal in Europe, Asia and Central and South America. Jim won’t release sales figures, or operational statistics, but industry research shows that an average Red Brick store can generate sales of $17,000 a week in its first year of operation for annual haul of $850,000.
“The food business is very simple,” the industry veteran opines. “You can market the heck out of your stores, but you have to have an outstanding product.” Again, Jim wouldn’t disclose comapny figures, but he said Red Brick’s advertising budget is miniscule. Rather than coupons (he doesn’t like them) or other promotions (rare discounts) Jim is growing the Red Brick brand by way of his careful calculations of franchise figures.
Red Brick franchisees pay a $25,000 fee and are required to have a net worth of at least $300,000 and a good credit rating. Red Brick Pizza takes a 6% royalty on sales and charges a 2% advertising fee. A Master Developer owns the territorial rights to a geographical area, i.e. county, state or country. They act as a sub-franchiser and receive a portion of the franchise fee, royalties and advertising for all the locations opened within their territory. An Area Developer would license the rights to open a pre-determined number of their own franchise locations within a specific area and time frame.
Most master developers operate at least one store in their respective territories, although they also receive a portion of franchise fees, advertising and royalties. Territories are purchased based on population multiplied by 10 cents per person, with a minimum investment level of $200,000 plus applicable training fees.
“We do all the training,” Jim points out,“ but we rotate through different master developers, different area developmental regions. We do the primary training and the master developer assists us and learns from us.”
World Domination
Jim says his company has definite goals for the future and he isn’t shy about telling you what they are.
“We want to be the number one worldwide pizza chain,” he says casually. “Competition is always there in the pizza business. We think between our food, and our attitude, we can accomplish our goal of being number one in the world.” Jim says part of the intense training his new franchisees and master developers undergo is in the area of customer service.
“I think customer service gets replaced by gimmicks and coupons,” Jim declares resolutely. “We think it’s very important how our counter people talk to consumers, for example. Are you smiling? Are you eager for the customer to enjoy their experience? These are the things we feel like are our calling card – that and our delicious food.”
Red Brick has progressed from one store to international juggernaut by adhering to the simple rule of business: know what you’re offering and to whom you are offering it. In the case of Red Brick the equation is very simple: The company has a clear market niche, which is, a gourmet, fire-roasted pizza that cooks in three minutes. The company employs a proprietary baking system that has streamlined the entire process so that the pizza ambassadors can go from dough balls to gas-fired hearth ovens in five to six minutes. Any naysayers who scoff at Jim’s lofty ambitious should pause and consider that Red Brick Pizza finished out 2006 with chain growth of over 750%. Jim’s goal of eventually fielding 12,000 stores worldwide is doable if the recent past is any guide.
“We have concentrated on getting our operation to the point that it can be duplicated anywhere, by anyone in the world,” Jim says. “We are selling license rights for master developers that can cover various-sized areas, be it a country, a state or even a county. The only criteria we impose is that the minimum territory size is based on a population of two million.”
The master developer approach is thought to be particularly beneficial for franchisors looking to expand overseas. However, such expansion is only possible if partners truly understand the markets they are entering. Still, any way you slice it, two million here and two million there, adds up to a lot of red bricks.