2011 September: BEER & BULL

Introducing the Players
Scott Anthony, franchisee, Fox’s Pizza Den, Punxsutawney, Pennsylvania

Mike Bausch, owner, Andolini’s, Owasso, Oklahoma

Adam Borich, owner, Lucifer’s Damned Good Pizza, Hollywood, California

Zach Current, Operations Manager, FUEL Pizza Café, Charlotte, North Carolina

Mark Dym, owner, Marco’s Coal-Fired Pizzeria, Denver, Colorado

Jeffrey Freehof, owner, Garlic Clove Italian Eatery, Evans, Georgia

Clayton Krueger, Director of Marketing & Communications, Farrelli’s Wood Fire Pizza, Tacoma, Washington

Jeremy White: When did you last raise prices? What was the impact?

Scott Anthony: July 2011. (There were) no comments from customers, no decrease in sales. We only increased prices due to the cost of doing business. It helped maintain
our profit margin.

Mike Bausch: We did it on our last menu pass this past March. We’ve had positive
response because of our positioning as a high-end pizza establishment with our new site,
that discounting could potentially hamper. So both sites slowly started to stray from coupons and the sales have reflected that positively.

Adam Borich: November 2010. The sales went up. We changed all prices up to the
next .99-cent mark to try and hide the increase as much as possible.

Zach Current: FUEL hadn’t raised prices in more than 4 years, but we did so just 6 weeks ago. We raised the prices on our pizza by the slice and fountain beverages, which affect 60 percent of our guest checks. Our sales have increased 3.68 percent with limited customer pushback.

Mark Dym: We raised prices 6 months ago when we opened our second store.We did
not raise prices across the board. Only on select items. None of our guests said anything about it. We were able to improve our food cost on those items and our food cost overall.

Jeffrey Freehof: I actually and finally just raised prices after 4 years this past April.
They were small increases across the board, but I also did it while introducing some exciting new menu items.

Clayton Krueger: We raised our prices about a year ago. By doing so, we were able
to better control our rising costs. Luckily for us, there was no recognized decline in sales.
We didn’t scare anyone off!

Jeremy White: What was the most effective promotion you ran in the last year?

Scott Anthony: I would say our 9th annual Pizza & Prevention event. We added some more community aspects to this, such as ‘Touch the Truck.’ We substantially beat our previous record and raised over $30,000 in one day for our volunteer fire company.

Mike Bausch: By far it was having a public relations social media consultant. Her ability
to get me on local news segments and radio shows for free (just bring the crew a fantastic lunch) was huge. I got positive exposure that came across as unsolicited news, and along
with that came a fantastic bump in sales and new customers.

Adam Borich: Living Social e-mail one day promotion. We sold 1,800 $30 meals in
24 hours. It drove huge numbers of new customers through our doors.

Zach Current: We have some really fun and exciting things going on at FUEL all the time. What I am most proud of was our FUEL Pizza Field to Fork program.

Mark Dym: Direct mail piece to kick off delivery. Very very expensive, but it’s still paying
for itself.

Jeremy White: Can an operation survive by selling pizza alone, or are sandwiches, pasta, salads, etc. necessary?

Scott Anthony: My point of view is that you need other menu items. Customers want
convenience/one-stop shopping. Being that the combo is the No. 1 offer across the country, you need to have other items such as wings, drinks, appetizers … Menu items such as sandwiches and salads are also excellent ways to build your lunch business.

Mike Bausch: It’s all dependent on your overhead costs and how popular your pizza is. My rule is don’t sell anything that isn’t the best you’ve ever had. If you can’t make a great pasta, don’t sell it and sully your good name for the sake of having a larger menu. In-N-Out Burger just does burgers and they kill it every day of the week. I have a 10-page menu, but it’s all things I make from scratch, nothing frozen, nothing pre made, and I can hang my
hat on it. Anything I wasn’t in love with, I tossed out in 2008.

Adam Borich: I believe that you should stick to what you do best as much as possible, but need to offer sides and salads. Pasta and Sandwiches are not needed to be successful if your pizza offering is good enough.

Zach Current: I am certain that FUEL could ‘survive’ by selling pizza alone, but I feel we flourish because of the 15 percent of food sales that are not pizza — sandwiches, wings, salads and dessert.

Jeremy White: What was the most effective promotion you ran in the last year?

Jeffrey Freehof: I take great pride in the quality ingredients I put in every dish, and if it were up to me, I would never discount my food. I’m not an idiot, though. I understand that when the economy gets tough, people are not going to all of a sudden start eating at home every day. They’re simply going to find less expensive ways to eat out. That’s why I’ve teamed up with Restaurant.com and a couple of other discount programs to let diners purchase discounted gift certificates to come into my restaurants. It’s opposite of the newspaper, magazine and radio advertising that I’ve always done where you’ve got to cough up the advertising dollars and then pray for a return on that investment. With these other programs, there’s no upfront cost. The money we spend to get them in the door is the discount we are offering. Here’s the big prize: while we’re discounting their meal (spending advertising dollars), they are already in our doors spending money. That’s a win-win if you ask me!

Clayton Krueger: We held our very own ‘Pizza School’ for our customers that wanted to learn the art of creating their own pizza masterpieces. It consisted of three courses, Pizza 101: Dough Making, Rolling, Storing, and Opening; Pizza 202: Getting Creative with Sauces, Toppings and Baking; and Pizza 303: The Capstone Pizza Competition, where the students would create an original pizza recipe that would be judged by a panel of ‘celebrity’ judges. The winning pizza won a spot on our menu for a quarter! The proceeds from the school went to a scholarship for the Washington Restaurant Association’s Education Foundation, which helps local aspiring culinary students with financing for school. Pizza School was a full circle promotion; students got so excited for the classes, competition, and a chance to be featured on our menu. The concept went viral and more and more people inquired when our next Pizza School would be. The school generated a lot of very positive word of mouth for Farrelli’s, and we can’t wait to start it up again. It was wildly successful, and didn’t cost us a dime …
only the passion for what we do!

Jeremy White: Can an operation survive by selling pizza alone, or are sandwiches, pasta, salads, etc. necessary?

Mark Dym: Yes, I think we could survive on pizza alone. But our gross sales numbers wouldn’t be nearly as good.

Jeffrey Freehof: Look, you’ve got to know your market! If you are in a crazy busy location with tons of foot traffic and you have a tiny spot, selling pizza and slices alone will be a huge success. But if you have the space to produce sandwiches, salads and pasta and there is a need for it, it will absolutely draw more folks to your door or counter. Remember this famous quote: ‘if you’re going to play the game, you might as well play to win.’ I’m saying don’t just serve some inferior product. Put something amazing out there, every time. My goal with the food I serve is not to just fill them up, but to get them talking about how awesome it was at the water cooler the next day. You can do it, too!

Clayton Krueger: Some operations could survive, but ours could not. We are a full-service, growing restaurant that strives to cater to all different appetites, regardless of their opinion on pizza. We don’t want to lose any business because we don’t have alternatives to pizza on our menu. We are also able to increase our average guest check significantly by selling our calzones, sandwiches, salads, etc. A smaller operation could definitely survive on pizza alone, but their product would have to be really good.

Jeremy White: What specific item on your menu generates the highest profit margin? How do you push it?

Scott Anthony: Pizza. Specifically our signature item, the Big Daddy pizza — a 21-slice, 12×24-inch pizza. Since this is a signature, we nearly always feature this in a combo meal, although it sells well on its own. I will tag it with ‘Family Favorite’, ‘#1 Seller’ or ‘feeds 7-8 adults.’ This is the pizza we offer to non-profit organizations and for catering needs, so it gets a lot of exposure.

Jeremy White: What specific item on your menu generates the highest profit margin? How do you push it?

Mike Bausch: Our 1889 Margherita of Savoy (classic Margherita) is very profitable, but it is for a reason. We sell the story on each pizza and push for quality. I mean just look at the name, it connotates the historical authenticity of the pie. We make the whole milk mozz from curd, use very expensive high-quality olive oil, source real DOP San Marzanos and use fresh basil. Even though all the ingredients are super expensive, the amount we use of each is light to create an authentic Margherita. So the perceived value is high, as it should be, but the actual cost is minimal.

Adam Borich: Our five premium pizzas. We have them first on our Web site on their own page before you can even see the other Pizzas on offer. We also have them prominently placed on our menu and in our store so that people are more likely to choose these.

Zach Current: FUEL’s highest profit margin item is our 12-inch pizza. The way we promote our 12-inch is through bundle packages that include two Medium pizzas and either a salad or wings. We also promo the 12-inch pizza with the purchase of a 14-inch or 19-inch at full price. Even though the 12-inch is our highest margin, if our customers are going to order just one pizza, we’d rather sell a 14-inch or 19-inch where our Gross Dollar Profit is higher.

Mark Dym: Margherita pizza. It our best seller. It pushes itself. It’s the cheapest pizza on the menu at $12.

Jeffrey Freehof: In my restaurant, since I make my own desserts, they are what have the lowest food cost percentage, generating the highest profit. My servers understand that they are not just order takers, but in a sense, they are sales people working on commission! Once they understand the more they sell, the more they make, they get a whole lot better at selling. Since I want to sell as many desserts as possible, I’ve learned there’s only one real good way to do that. A dessert tray with a piece of everything you offer must be displayed on it and must be presented to the guest. My servers are instructed to ‘just bring it.’

Clayton Krueger: Our Classic Breadsticks are a top-seller with an incredibly high profit margin. The cost to make is minimal, they are easy to produce, and they’re a great stand-alone item as well as the perfect start to a meal. Everyone loves them, so we’re able to use them as a promotion tool. For example, one of our ongoing Takeout Specials is, ‘Buy 2 Pizzas, Get a Free Order of Breadsticks,’ which provides an incentive for our customers to spend more. Breadsticks hardly cost us anything to make, but they add a ton of value to our guests.

Jeremy White: Has employee recruitment and retention been easier or more difficult in the past couple of years during the prolonged economic downturn?

Scott Anthony: I really have not seen much difference in finding or keeping employees. Our town is small and already depressed with an average income in the low 20’s to begin with. We have always tried to run a smaller crew to make sure they get enough hours to make it worth their while to be here and so they were here enough to progress in our organization.

Mike Bausch: Not really. We got a good thing going and our staff knows that. I’ve had guys leave other higher paying restaurants to work for me for less because they know I’m not going to cuss them out on the floor, I’m not going to mess with their check, and I’ll work to get them a set schedule, work around their school schedule, etc. Things like that have helped me gain high staff retention and manageable labor costs.

Adam Borich: Recruitment has been easier as there are many people coming in each day looking for employment.
However retention seems to be difficult as many people in Los Angeles are here following a dream of acting, music, etc. and the downturn has made those dreams harder to achieve. Many of our employees move back to their home states when they don’t make it out here.

Zach Current: In this business, it is never going to be easy. I will say, however, that the economic downturn has amplified our attention to service, friendliness and overall good attitude. Bad attitudes and poor service will not win our customers’ loyalty. So during this downturn we set the bar high and communicate more acutely the importance of separating ourselves from our competition. Pizza is happy food and we demand that our team is happy.

Mark Dym: We have been open three years. We haven’t noticed any difference. It’s weird — it comes in spurts. People stay for a while and retention seems great. Just when you think you have it all figured out a bunch of people leave and you start all over again.

Jeffrey Freehof: It really shocks me with how many unemployed people there are and how hard it still is to find great employees. That just proves that when companies had to eliminate staff due to the economy, they eliminated their weak players (for the most part). Those are the folks we are interviewing. I have found that there are still some really good folks out there looking for work, but perhaps don’t have the experience we’re looking for. I’ve spent more time in the interview process looking for those good people and am willing to spend a little extra time during the training process to have them get it right!

Jeremy White: What style(s) of pizza do you serve?

Scott Anthony: We have a traditional Italian/American style pizza — not a thin or thick crust. Our sauce is an award-winning, 100 percent authentic Italian sauce. Our gourmet pizzas have the same crusts. We keep an eye on the industry for new menu options and will add a new gourmet pizza after some test marketing and tweaking a recipe idea to make it our own. Recently we added gluten-free crusts to our line.

Mike Bausch: New York-style crust, sauce and cheese with the eclectic influences of California and several Italian nuances like egg, speck, arugala, DOP San Marzano, etc. We’ve been dubbed TulsaStyle because we mix California and NY, and we’re right in the center.

Adam Borich: Gourmet New York-style.

Zach Current: We serve New York-style pizza by the slice and in three sizes: 12-inch, 14-inch and 19-inch. FUEL offers dine-in, takeout and delivery. We are planning on introducing a pan pizza in October.

Mark Dym: Neapolitan.

Jeffrey Freehof: As we all know there are many different kinds of pizza, thick and thin crust, sweet or zesty on the sauce and so on. My crust is more of a NY-style pizza that has a medium crust, with a sauce that is perfectly flavored without being sweet or spicy. I will never try to compete with $5 pizza chains, although I do offer that if I’m teaming up with an organization to help with their fundraiser. That gives folks a chance to try our awesome pizza. We are winning over pizza fanatics every day with our ‘perfect’ pizza!

Clayton Krueger: We serve hand-tossed, gourmet, wood-fire pizza, cooked on stone in front of an open flame. We call it the “Northwest-style pizza.” We use the best ingredients we can source; quality is paramount in our company. We also offer 100 percent honey whole wheat dough for those who want a healthy option, as well as a gluten-free pizza crust alternative. We have recently incorporated a bistro-style Neapolitan-inspired crust for those who prefer a thinner pizza crust option.

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