Figaro’s Ventures for a Larger Slice of the Pie

Figaro’s Pizza Looks to Expand in Established Markets;
California Among States to See Most Dramatic Growth
(Salem, OR)—Figaro’s Pizza Chairman and CEO Ron Berger wants his strongest markets to resemble the pizzas that customers of the nation’s largest chain in the “We Bake or You Bake” segment of the industry enjoy so much.
The 114-store national chain already is recognized as “the best pizza you can have at home.” Now, with Figaro’s Pizza coming off its 25th anniversary in 2006, Berger is looking to further strengthen the company’s position in its strongest markets.
Much like a pizza covered from edge to edge with fresh, piping-hot pepperonis, Berger wants to look at a map and see it filled with successful, thriving Figaro’s Pizza franchises.
To achieve that goal, the 58-year-old Berger – who purchased Figaro’s Pizza in June 2001 along with his wife, Carol, and business partner, Bill LeVine – wants to focus growth in 2007 and for the next several years on both states and individual cities in which Figaro’s Pizza already has strong brand recognition and/or established, successful master franchisees, while also attracting multi-unit, multi-concept operators seeking to diversify the portfolio of brands they manage.
Franchising veterans Berger and LeVine have made a strong imprint on Figaro’s Pizza in a short time. Berger has completed a re-imaging and brand positioning process including a new logo and imaging, new menu items and new Tuscan kitchen store design by award-winning San Francisco store design firm, Tesser, Inc. Delivering outstanding service that elevates the customer experience has been Berger’s other mandate.
Figaro’s Pizza speaks for itself. Each distinctive pizza delivers “flavors that sing” because Figaro’s uses only premium meats (no fillers), vegetables (never canned or frozen), cheeses (a special blend of 100 percent real cheese), dough (made fresh daily in each store) and a blend of fresh sauces. Figaro’s Pizza is believed to be the only national chain offering delivery of both baked and unbaked pizzas.
“We believe that by marrying those elements – a fabulous product, fabulous store design and terrific customer service, Figaro’s Pizza will be one of the top-performing restaurants in the industry,” Berger said.
States targeted for growth include those where Figaro’s Pizza has its largest number of locations, including Oregon (49 stores), Washington (12) and Wisconsin (11). California and Nevada are also on the list. While Figaro’s Pizza currently has only two locations in Southern California, it has two strong master franchisees in the state. About 30 franchises have been sold in the state that are scheduled to open in 2007.
Figaro’s Pizza master franchisees are individuals who not only own and operate their own stores in large geographic territories, but they also recruit and provide training and support to other franchisees in their territory, from whom they receive a portion of royalties.
“By the end of 2007, California is likely to be our second-largest state in terms of number of locations. We see a lot of growth potential there and we are doing quite well,” said Berger, making reference to a Figaro’s Pizza that opened in Corona, Calif., in 2006 and achieved national record-breaking sales in its first 90 days.
Individual markets being targeted include Minneapolis, Phoenix, Richmond, Va., Memphis, Tenn.; Birmingham, Ala.; Oklahoma City, Okla. and Biloxi, Miss.
“In every one of those cities we have one or more locations that deliver a ‘wow’ experience for our customers in a beautiful store with the highest-level, quality product,” Berger said. “It’s easy to build on those.”
Master franchisees comprise about one-third of Figaro’s approximately 65 to 70 franchisees who operate stores in 20 states and Canada. Figaro’s largest franchisee oversees six locations in Oregon. In addition, master franchises were recently awarded for the opening of 50 stores in Mexico and a minimum of 35 locations in eight Middle East countries.
Berger’s focus is on quality growth. While Figaro’s Pizza expects to open 15 to 30 new locations per year over the next several years, its primary objective is ensuring highly profitable franchisees who deliver superior customer service.
“The essence of the ‘wow’ experience is to underpromise, then exceed expectations,” Berger said. “When a customer comes to Figaro’s Pizza their expectation is for a fresh, hot pizza that’s delicious. We want to deliver a pizza that’s the most delicious they’ve ever had, the hottest they’ve ever had and the freshest they’ve ever had, delivered by people who care more about the customer experience than any other employee at a pizza establishment they might have gone to.”
Berger said the Figaro’s Pizza brand is well-suited for existing multi-unit operators looking to expand or diversify into a different concept as well as individuals with experience in the restaurant industry.
“There are many restaurant groups in the country for which Figaro’s Pizza would make a terrific addition to their portfolio of brands,” Berger said. “But I also want to emphasize that we believe a lot of our future growth will come from individuals who have previous restaurant management experience, but aren’t currently in restaurant operations and are simply looking for a new opportunity.”
Conversely, Berger said many Figaro’s Pizza franchisees have found success regardless of whether they have any previous experience in the restaurant industry. More than half of Figaro’s Pizza franchisees are couples, many of whom are former corporate executives pursuing the American dream of business ownership and being their own boss.
For instance, Dave Binkowski, a master franchisee and owner of a Figaro’s store in Corona, Calif., has skills developed as national sales manager for a food manufacturing company. His wife, Christina, manages their successful restaurant, bringing along her experience and background as a food broker.
“We are not strictly focused on groups who currently operate restaurants,” Berger said. “Success within the Figaro’s system has not been a function of whether you own other restaurants or have prior restaurant experience.”
Co- or tri-branding represents another investment and growth opportunity for current and prospective franchisees. Currently, about 15 to 20 Figaro’s are in co- or tri-brand locations, primarily with ice cream and sandwich concepts such as Chocolate Shoppe Ice Cream, All American Ice Cream & Frozen Yogurt, Carvel, Cousins Subs, Blimpie and Quiznos.
The combination of pizza, sandwiches and ice cream not only draws a steady stream of customers for all day parts – sandwiches for lunch, pizza for dinner and ice cream throughout the day – but also offers economies of scale.
“It’s a good opportunity for the operator,” Berger said. “The advantage of co-branding is that one dining room, one set of chairs and tables, one walk-in cooler, one set of kitchen equipment and one set of restrooms does triple duty and supports all three concepts.”
Berger believes Figaro’s Pizza is well-positioned for continued success, especially since it is believed to be the only national chain offering delivery of both baked and unbaked pizzas. As millions of time-pressed Americans look for convenient options to serve quick, delicious and fresh meals at dinner – witness the rise of curbside pickup at casual restaurants and the fast-growing popularity of do-it-yourself kitchens – Figaro’s Pizza fits nicely into the equation.
“There is a movement in the country today toward freshness and home-meal replacement,” Berger said. “Figaro’s Pizza is perfectly positioned because we are the only chain that delivers both fresh baked as well as unbaked pizzas directly to consumers’ homes. And what could be more convenient than that!”