In 1992, Scot Cosentino was rummaging around through his brother-in-law's closet and stumbled across a pizza stone and pizza making kit. It had been given to his brother-in-law, E. Jay Myers, as a gift. "Hey, let's make some pizzas," Scot said.
As they played around in the kitchen, a previous conversation about starting a business came up again. Before they knew what they had done, they were owners of a pizzeria. It wasn't a smooth start.
"We didn't know what we were doing," E. Jay recalls as we drive out of New York City on the way to Thornwood, New York where they are about to open their newest franchise. "We had the location, but knew nothing about making pizza. I remember, just before we opened, being in the kitchen trying to make dough and it just wouldn't rise. Someone told us that you gotta let the dough warm up first, so we took the freshly made dough and slid it into the brick oven in a big pan to heat it up. After we cleaned the oven and the mess we made we looked at each other with a blank stare on our faces. We needed some help, quickly. Everyone we spoke to up to gave us 'advice'. Unfortunately, that advice was 'you can't make a large pizza in a brick oven' or 'you have to sell slices or you won't stay in business', etc. Basically, a whole bunch of 'can'ts' and 'don'ts'. Thank God we never listened to them or we never would have opened."
Goodfella's began franchising in 1998. They expect to have a total of 20 stores opened by the end of 2003, all of them franchised except the original restaurant on Staten Island.
I first met E. Jay Myers, Scot Cosentino and Sal Russo of Goodfella's Brick Oven Pizza about two years ago. They came by the PMQ booth with their pizzaiolo, Sal Russo, who had just won the Pizza Expo pizza competition. When I visited Goodfella's this spring I picked up on some good marketing ideas and some key concepts for those who are thinking of franchising.
I asked Sal what it takes to make an award-winning pizza. "It takes putting your heart into what you do," Sal said with a thick accent. "For Italians, food isn't just a meal, it's an event. A chance for family and friends to come together and celebrate."
It sounds a lot like soul food. "It is," Sal responded. "Italian soul food. When I was a kid, I have some great memories of life and the smell of the food that was around. What I try to do is create that feeling in the tastes of the pizzas and dishes I create. What I really want is for our food to remind them of something good." How to Build Fame
After I met the Goodfella's crew a couple of years back, I asked that they send me some information. Soon, I received a media kit. Packed inside were a couple of dozen copies of articles from magazines like Entrepreneur Magazine, Pizza Today, clippings from Nation's Restaurant News, local papers and even a letter from Rudy Giuliani.
Obviously, a key factor in becoming well-known and attracting franchisees and investors is gaining publicity. The more they see your name published, the more credibility it adds to your business. "Publicity is what makes you stand out," E. Jay says. Each time Goodfella's wins an award or makes the headlines, they add it to their media kit. "We keep an accurate and up-to-date list of media contacts and send press releases to them when something happens. We package our media kits in nice four-color folders and include background information, contacts and copies of newspaper and magazine articles. This gives our small company a big image and makes getting publicity a lot easier. In a big city you have to seize any publicity opportunity you get and make yourself look bigger than what you are. Keep sending those press releases because the more reporters see your name, the more credibility it adds and you begin to appear bigger and bigger."
Goodfella's sends out 100 to 150 press kits each year. They also use PRNewswire.com. E. Jay says that for a fee, they will proof your press releases and send them out to various news sources based on how you want to pay. There are other ways Goodfella's has found to gain publicity. "You want to be thought of well," E. Jay says. "One of the things we do is to donate $100 worth of food each week to schools, MDA, PTA, Boy Scouts and other groups. We tell them that we are happy to do it and only ask that they give us a mention in any newsletters, press releases or other materials they distribute. We simply ask them to tell others. Sometimes we ask for a thank-you letter to add to our media kit. This turns into great PR and gets us a lot of catering jobs, too."
Preparing to Franchise
Goodfella's had already established the brand, now they had to begin to build the model to duplicate it. Some of the keys to their success are capitalizing on every publicity opportunity they get; when something good happens they make sure people know about it and publicize it. They have also learned that identifying with customers and treating them as friends rather than just a customer works well. Early on, they realized people liked the atmosphere of a wood-burning oven and its tender working right there in front of them. They have also learned people love the New York personality and have worked to train employees outside their Staten Island location how to be New Yorkers. I asked how they began preparing to franchise, what were some of the systems they had to have in place before taking the next step and what were some of the unknowns that occurred.
"One of the first things we had to do was to create a uniform system for food preparation. This started in the original locations and was already in place before developing a franchise system," E. Jay says. "Next, we had to decide whether to franchise to individual investors who would open one or two locations or offer the concept to area developers. Then we had to figure out how to carry the Goodfella's experience to different locations and train their employees how to do things the Goodfella's way. There are a lot of details and we spent in the neighborhood of $800 thousand to get the franchise stuff together. This includes legal work, systems, manuals, architecture, financials and marketing."
Franchise food should possess two characteristics; it needs to taste good and needs to be equal in taste, portion size and appearance at each location. Before the first franchise was sold Goodfella's began developing a menu around this concept. "We selected high quality products, but also looked for suppliers who would be able to provide us with prepared foods and have widespread distribution abilities. We didn't want to have a great product, and then find out we couldn't get it in a new area we developed down the road. Now that we are franchising, the only prep work, other than cutting some of the vegetables, is we bread our own chicken. Everything else is prepared and portioned before it gets to the restaurant."
In the transition from a small to a large company there are some details to be considered that deals with operations. "First we had to put all of the specs for food down on cheat sheets," E. Jay explains. "We first developed manuals with recipes and ingredient amounts. From there we went to production sheets that gave specific instructions on how to prepare the food. Here we instruct them on things like starting with butter in a pan, how hot the pan needs to be and when each ingredient needs to be added. Next, we created a manual with photos of each dish allowing the staff to visualize how food should be arranged, what plate it should go on and how many pieces should go on them. This helps in creating a uniform look and taste in all of the locations and aids in portion controls, which is really important when you have multiple locations.
Training for Success
"Prior to opening, we send in our guys, like Sal, to train new staff and make sure things are being done the right way. We spend a lot of money cooking food and training before the first plate is sold. Before they open, the staff is given a written quiz to make sure they know how to do things properly. We change the menus every six months to keep things fresh, and the staff is quizzed again before the menu is put in place."
One of the things they try to instill in employees is the Goodfella's attitude. This is where Sal Russo earns his money. Not only is he a great pizza chef, he may be one of the best coaches I have seen. "I want to teach these employees is how to treat people like people and not just treat them like another paying customer. I want to teach employees how to be from New York even if they are not. We are New York Italian and that experience is what we are selling. We want customers to feel like they are walking into one of our Staten Island locations even if they are in Burlington or Yonkers. I teach them to ask customers in a bold, New York accent, 'Ow yoo doin' when they walk in. People love that and identify with it. I teach then how to be personal with customers and make them feel like they are at home when they are here. Anybody can smile and say hello."
It's not what Sal says; it's how he says it. I was standing off to the side at the Yonkers location just one week before their grand opening. Sal was training some managers and hosts without knowing I was listening in. He didn't tell them what to say or how to say it. He told them a story with a lesson about how to treat people, not customers. He told of an Italian woman who came in the original Staten Island location near Christmas. She had been coming in daily and was staying with her father who was at the nearby hospital. Sal identified that something was bothering her. She spoke only Italian and an employee translated. It was the holidays, and she had three children at home in Italy that she missed. That night Sal made three stockings with each child's name on it and hung it over the door. The next day when the lady returned, Sal pointed to the stockings and had the employee tell her that, "she was at home with her kids when she came in here." He said she teared up and hugged everyone there. The moral: Get to know your customers. This is what Sal teaches employees…in addition to how to cook.
"Our growth of the franchise system is happening fast," E. Jay said. "To manage more locations, we need to be able to step out of the business and look at it from above. If we have to manage dozens of individual franchisees, we don't have the ability to do that. We need someone to oversee the new locations and that is where area developers come into play. With an area developer, it is his responsibility to monitor his locations and manage them because it is his business that is at stake. We manage the area developers and they manage their locations. Our job is support and their job is the day-to-day operation of their area. If someone wants to purchase an individual location, we refer them to an area developer.
"Our franchise fee is $22,500 per cafe unit and $40,000 per full-service unit. We also get 5 percent of gross sales and the advertising fee is 2 percent, but we don't receive that money. It goes into a regional ad fund, which pays for the marketing for that particular area. A large portion of the franchise fee is consumed in product and training before the first day of business. Sal, Scot and myself along with a couple of other employees can spend two to three weeks at a location training for an opening. The cooks are cooking and the waitstaff is eating. At the same time, we are paying for a lot of food and paying a lot of employees."
Determining a Location and the Grand Openings
There are a lot of factors Goodfella's looks at. One of the main things they look at when it comes to selecting a new location is what percentage of sales will be consumed by rent. First, they do profit projections and look at the area's demographics to help determine what sales may be. E. Jay says rent should be no more than 7 percent to 10 percent of total sales. If rent is $10 thousand per month, sales should be at least $1.2 million per year. "If your rent is more than 10 percent you are probably taking a risk," E. Jay says.
Prior to any grand opening, Goodfella's does a V.I.P. night. For this, they invite any businesses next to them, the mayor, police, media and such to dinner one night. They try to include potential customers who may order catering or bring groups in for dinner who can bring them publicity, like reporters, editors and local radio personalities. This gives them a chance to sample the food and also gives the employees a chance to practice with real people. A soft opening usually lasts about six to eight weeks before a grand opening so they can fine-tune systems.
Showcasing pizza making
One of the main ingredients to Goodfella's success is the atmosphere. The name Goodfella's says Italian and hints of New York. Brick Oven hints of authentic Italian. When you walk in and have a staff greet you with a bold 'Ow yoo doin' you suspend disbelief and start thinking you are in New York. Goodfella's took an extra step to give customers an authentic experience. In their original Staten Island locations they had a mason who built their ovens from scratch. They had him intentionally make the bricks uneven and rustic looking. They are also in plain view for customers to watch the oven tenders peeling pies into the flaming ovens. It is part of the pizza experience that many times is hidden away in the back of the kitchen. Since it was a key element of the atmosphere, they decided to showcase it in newer locations.
The kitchens in franchises are split with sides orders, salads and everything but pizza and calzones cooked in the back. The ovens are placed out front where customers can watch the process of dough and cheese being transformed into pizza. It adds a feeling of warmth to the room while providing a level of entertainment for customers. A system was developed so the oven tenders can communicate with the back kitchen so pizza and entrees are completed at the same time. It is a nice touch that adds to the ambiance and if you are going to have 'brick oven' in your name, why not let customers watch the action?
Goodfella's has come a long way since they first started. Making the decision to franchise is a bigger decision than opening that first location. If you are headed in this direction, make sure you identify what created your success in the first place and then duplicate it – and think ahead and plan for the future. One of the best pieces of advice E. Jay offered, was for business owners to take the time to step away from the day-to-day business of running a restaurant and look at things from above. Many times obvious problems and solutions are right under our noses.
Goodfella's Good Ideas
Good Idea #1: "The pizzas are good, but entrees equal more money. A group of four customers can order one pizza and pay $18 for everyone to eat. Entrees average $15 each, which can come to $60 for four people. We try to push more of these because it increases our profits. Pasta is cheap to make. We also sell beer and wine because it naturally goes with pizza and Italian food." E. Jay Myers
Good Idea #2: Another successful promotion is offering Goodfella's Gift Cards during the holidays. "Customers who use the cards usually spend more than the face value," E. Jay says. "Our Burlington location sold $18 thousand in gift cards during the holiday season. Here's one of the great things about these cards, industry averages show that 20 to 25 percent of gift card values are never redeemed. Because gift cards were purchased in December, we saw an increase in customer count in January. We believe it is because people came in to redeem their gift cards. In fact, there was a direct correlation between those stores that sold a lot of gift cards in December compared to the increased customer traffic in January." E. Jay
Good Idea #3: "One thing we have found to be profitable is selling bottled specialty sodas. We sell Boylan Soda that costs us 50-cents a bottle. We sell them for $2 each and unlike fountain drinks, when it is empty customers usually buy another. Fountain drinks cost us 12-cents and sells for $1.65 with free refills. That's $1.53 profit on fountain drinks or $3 profit on two bottled sodas. Bottled specialty drinks also brand your restaurant as unique." E. Jay
Good Idea #4: Andrew Scudera, manager of the original Staten Island location said a very successful promotion they ran in November involved the local hospital. Most hospital employees work long hours and don't get a chance to leave the building. If you have ever eaten hospital food, you know what it tastes like. Andrew said he went down and talked to the person who runs the nurses station. During the month of November, he offered the nurses and staff a 10 percent discount for dine-in or delivery. "That worked really well," Andrew said.
Good Idea #5: "Customers order with their eyes," E. Jay says. "We have professional photos taken of our entrees and pizzas and change out the photos every six months. We look close at the profit margins to determine what is featured in pictures on the menu. Another thing we do is offer a separate menu for pizzas. This serves two functions in that it opens up space on both the pizza menu and regular menu. With this space we add flavorful and detailed descriptions of the entrees and pizzas. The descriptions combined with the photos allow the customers to almost taste the food from the menu."
Good Idea #6: "Another thing we do is go through our database during slow periods of the day, usually between 2 o'clock and 4 o'clock. We call the 60 and 90 day lost or lazy customers. This gives us a chance to clean up our database by deleting those who have moved. If someone is there, we ask them about their last visit, service and the food. We don't offer any discounts, but it reminds them about us and cleans up the customers list," Andrew Scudera says.
Good Idea #7: "One night one of the guys brought in a steak and cooked it in the pizza oven. It was so good, we decided to try it on the menu," E. Jay says. "We now sell about 80 to 90 steaks each week at the Staten Island locations. A food critic heard about the brick oven steaks and came out and gave us a great review. We offer shell steaks, filets and a couple of other specials. It's just another thing that we can offer to make us unique."
Good Idea #8: One of the more successful ideas Goodfella's has used to boost sales is an employee points incentive promotion. Near the time clock they have a board where all of the employees are divided into two teams. Each person earns one point for an entree, one point for a glass of wine or beer, three points for a bottle of wine and other points are assigned for selling higher profit margin items. Some high profit items can earn an employee 10 points. After a specified time, the winning team gets $1,000 to split between them. The individual with the most points gets an additional $100. E. Jay said they have run the promotion once already and are in the middle of round two. "The month before we ran this contest, we sold 400 specials. We sold 1,047 while employees were competing. It was so successful, we wrote it up and gave it to all of our franchisees."