Death of a Pizzeria (in Canada)

Just over a year ago I used my savings to put a down payment on this pizzeria from my boss at the time…and easy monthly payments for a few years. He holds the paper as they say. Let’s call it “My Pizza”. I had worked here for 3 years so I knew all about it. The one thing I couldn’t do was eat the pizza. Every time I ate it I got violently ill. There were many reasons for this. And when I bought it, I made changes effective immediately.

Every dish, pan, utensil, etc., used was washed and sanitized each and every day. No more frozen meat and other toppings going on a pizza. Veggies were cut at most the day before, and not on Monday for the whole week. Meat was thawed properly in the cooler before put on a pizza. And so much more. I upgrade the dough, sauce, cheese and just about everything else. I even switched the garlic bread from a glorified hot dog bun to a herb baguette. I switched from a quantity mindset to one of quality. Our customers were commenting upon how much better the pizzas tasted. They said it was fresher. So many came in based on recommendations from others. We were growing.

When I took over we were at $4,200 per week in sales. I did extremely minimal advertising. I wanted a slow and controlled growth so as not to lose vast numbers of customers by not being prepared for it. By the first week of November, we were averaging $5,400 per week. I felt we were on our way, and that all this hard work was finally paying off. Just 2 days off in 10 months, but I felt energized.

Then in mid-November sale started to decline. At first I thought it was a slump, but it continued. December was always a good month here, but not now. January was worse than expected, and February is setting new lows. I was wondering what the heck was going on. I was here from open to close. There was no change in product, quality, or recipes. Were the staff being rude to customers? No. Were drivers somehow affecting sales negatively? No. I examined every single aspect of this operation and I could not see why my sales dropped by up to 45% some weeks.

I was stumped. I did not think the economy would hit the business that hard. I didn’t think it was the economy, but what else could it be? I tried to come up with an exit plan with about $40 in my pocket and zero in the bank. I figured I could always drive somewhere else, much to my deep disapointment.

And then 2 weeks ago a customer comes in and says that he wanted a pizza and asked his wife to call us. She looked in the Yellow Pages, but we weren’t listed. She tried online to no avail. She then tried 411 and the operator said she had no listing for “My Pizza”.

The first thing I did was look in the phonebook, and sure enough, we weren’t listed. Ditto for online and 411. I called Yellow Pages to complain andthe person said that we were indeed listed in the book. Where, I asked her. She said - get this, this is rich - we were listed under “Chicken”. The air just left my lungs. Chicken, I asked? How did a place with the name pizza in it, such as “My Pizza”, end up under chicken? She said that I must’ve requested it. I assured her that I did not do so, and that it needs to be fixed asap. She said the online and 411 can be done in 5 to 10 business days, and the phonebook listing will be corrected with the new book. I asked when that would be and she said late October or early November.

That was when my head exploded in a series of bells…I thought it was going to explode. I had the answers to why business was dropping so badly. If you want a pizza from an independent shop, a person usually looks in the book. No number? then many people dial a competitor. On the commute home you want to pick up dinner for the family, and the operator tells you there is no listing, you figure the small place went under. And if you’re young and you look it up online, and it’s not there, well you’d go somewhere else too. So for 3 to 4 months now people could not get our number and have moved on, thinking we are no longer in business.

I have 2 drivers and one part time counter helper and they have all volunteered to do flyering all over…on their OWN time if need be, to get the phone number back out there and to let the people know we are still alive.

Meanwhile, I figure I’ve lost $10K to $14K in sales as a result of this. My kid works with me and he hasn’t gotten any money except for gas and car insurance for almost 4 months. I still don’t take any pay yet. The bills have not only slid, they have fallen back severely. I haven’t paid my home rent since December. I am in arrears with the store landlord too, but at least they are willing to work with me. I borrowed from family once to avert a crisis, but they are unable to help out anymore. My bank won’t help because I have been inbusiness less than 2 years. I can’t even get overdraft protection. They won’t even help on the personal side because I have no credit. Twenty years ago I stopped using credit cards, and now I have no credit. Nobody wants to buy my 17 yeard old beater car. I am SOL.

I explain to the old owner why things have slid. Show him the Yellow Pages phonebook. I was behind $800 to him…asked him to wait a week. The next day he came in and tried to reposess the store without a court order. That was his response. I have made over $30K in payments to him (equity?) and he would take that away in a heartbeat. I told him this was not the way to do it. He had no legal authority, and that his lawyer should talk to mine. As per my lawyer’s advice, I asked him to leave and that if he didn’t, then he was trespassing and I would call the police. He said to go ahead and call the police because it would be me they would remove from the premises. I called the police and to make a long story short, they escorted him out. He screamed he would shut me down.

So now here I sit. Every day I come in with fear and trepidation. Will the electricity finally get cut off? Will the phone be cut off? Will the sheriff come today and throw me out of here, with just my personal belongings, leaving my inventory for this guy’s benefit?

I supply the store on a day to day basis. Yesterday’s sales finance today’s food purchases. I never have more than 1 bundle of each box size, and I never open a bundle or box of anything unless I need it right then and there, thinking that if it comes down to it, maybe I can take it back to the cash and carry for a refund if I get a chance.

I haven’t hit $3k in sales for a week in 3 weeks. I don’t even make enough now for one of those credit card sales advance places. Even if I get some unexpected huge ords to have a record day, I am not stocked enough for it.

I really don’t know what to do except wait until the sherrif shows up one day. I will not do any flyering unless the old owner removes the threat of reposession from here, and he won’t do that. I will not drop flyers off only to have him reap the rewards of it.

It’s kind of like death row for a pizzeria…I sit here and wait for when it will all come to an end, business-wise. Thank you Yellow Pages

Can you share with us the other marketing you have done (marketing plan)? Maybe there is something else in there that you can tap into to boost some ales in the short term. Yellow PAges area dinosaur thes days, and won’t account for much sales driving. Useful, but not a huge asset. YOUR marketing is what will truly drive the sales. What has worked for you?

WOW!! I am also in Canada…and let me tell you! Your story sound VERY SIMILAR to mine. Not the old owner stuff, but sales dive etc.

Watch my post on here, maybe it will help us both with the info they are giving me…

You are not the first person to get screwed by the phone book. The people at the phone company should be hung/drawn and quartered for doing this to hard working people. All too often when you go from having a paid ad to just wanting you free listing they “forget” to put you in the phone book. The lesson we ahould all learn from this is it pays to at least buy a bold listing, not because of the benefit of the bold listing but because it makes sure you don’t get ommited.
In my brothers third year in business, the phone company “forgot” to include his free listing. Sales suffered immensely for two or three months to the point he wasn’t sure he would be able to stay in business. One night a plan was hatched after drinking many cold beverages. The next day 500 wanted posters were printed up. WANTED DEAD OR ALIVE the red phonebook… Their crime- leaving out small businesses phone numbers and trying to put them out of business. Reward…A free large one topping pizza. The first day, 20 phone books were redeemed for a free pizza. Day 2, 40 books. Day 3, the “other” secondary book comes in and says they will give him 75% off an add if he starts giving out their book to anyone who redeems the red book. Soon 50 or more books are getting redeemed each day. Ther was not a red phone book to be found at any phone booth in town. Hotels were out of phone books. The red phone book people came in and threatened him, wrong answer. The newspaper ran a story and more and more books came in. They filled one whole wall of his store floor to ceiling. the second row began. In 4 or 5 months the red book came in to try to sell him an add and the salesman was appalled at the sight of the books and the story. Over the next week or two executives from the company came in and offered a free add (half page maybe) and 50% off the following year if he would take down the posters and stop the offer. He accepted and when they came to remove the books it took two or three loads in a 26 foot ryder truck.

Please don't take this the wrong way but I'm just going to say it.

Stop feeling sorry for yourself. The pity party has to end or you will be out of business.

Come up with a plan. Take action. The first thing I would do if I got left out of the book would be to get magnets made. Make sure every customer gets a magnet with every order. This is more important to you or new businesses that are not yet in the phonebook than you can imagine. Make sure you have somekind of a web presence. If I can’t find a number in the book I will google it. Make sure when your customers google you, they find your number.
Stop worrying about building the business for the previous owner. You can’t think that way. You have to build the business for you. If you can build it quick enough, you may be able to hol off repossession/foreclosure. Talk to an attorney, bankruptcy may be a viable option. It might buy you the time you need to build the business up and emerge intact. I had a tenant file bankruptcy and it took me over a year to navigate the bankruptcy court and finally evict him.
Try to be profitable with the 3k a week you are doing. Squeeze every nickle. Try to get back to 5k/week.
If my life depended on it I could increase my sales by 2k in a week or 2. Your life (or at least your way of life) depends on it!

Here is a twist.

The commercial landlord has been very understanding of the problems, and why they were caused, ie., Yellow Pages, and was willing to work with me to get things right again. We signed an agreement which allowed me to pay smaller amounts for a while (which I did), and then to pay the rent broken down into weekly chunks. And here is the positive part. They would let me run behind a month, up until October/09. Yes, I could pay February’s rent in March, March’s rent in April, and so on.

Here is the catch: I signed the agreement, but they would not give me a copy because then they would have to give the former owner a copy of it too, which would show I am in arrears. So I wrote down the dates and amounts, and made the first 2 payments.

The former owner, who is also on the head lease as the tenant, and I am a sub-tenant, ask if I was in arrears. They said that they were sitting on Feb’s rent cheque, and sent him a letter (he requested) stating this.

So this morning I go to open up and right away see there is a notice on the door and the lock has been changed. A guy is there waiting for me, some bailiff.

Apparently the former owner did some sort of self help thing, went to a bailiff, showed him the contract, said that I was in arrears, and wanted me out. I had no opportunity to defend myself.

In the notice it states that he is the landlord, and that my rent for February 1st was late on January 21st. Yes, no typo on my part. The dates are goofy, the info is mushy, and the whole thing just stinks. The Bailiff did not have the warrant on him. I took photos of the notice, etc., in case this is some ploy and he says somewhere down the road that I abandoned the place. I took out all my personal posessions and inventory and equipment I purchased.

I have $38K equity in the place and he gets in on a debt less than $2,000, for which there was an agreement in place with the actual landlord. Talk about free labour.

So anyways, I speak with my landlord, but they don’t want to give up the secret agreement, because I suppose then they would have violated something or other with the previous owner.

Talk about a Catch-22…they have the agreement which automatically nullifies the previous owner’s actions, but they won’t give it to me voluntarily. They will sit on things for a week or so to give me a chance to get into court about this.

My lawyer says that with the factual errors in the notice, supplied by the previous owner, etc., we have a good chance of getting the store back, but that it would require going to court. Now he wants a $2,500 retainer. I have about $300 left, that was deposited into my account by the CC processing company this morning.

I have tried everywhere for help, but no luck. Looks like I will have to do all the court stuff myself.

The store was closed today. What a shame. My name on the door…totally embarassing, and closed down, as if business wasn’t bad enough already.

:frowning: WOW!!!

This is SOOOOOOO SAD :frowning: I am really sorry to hear it… :frowning:

Sorry to hear all the bad news and all the things that has transpired since you took over, but I do NOT agree that your huge decline in sales is due to the simple fact that you’re not in the phone book…

Ow.
http://theactofpursuit.files.wordpress.com/2008/10/mc_beat_down.jpg

by total co-incidence I was looking for something in our phone book - which is split in three sections, Classified (by business type), by company name and then personal. Its 2 years old and neither of my stores are in the classified bit - got straight onto that BUT having said that I would never relie on the phone book as a key marketing tool in any case - why would anyone think - oh I fancy pizza tonight - lets have a look at who’s in the phone book?

I’m not in the phone book either, nor will will I ever be…
YP are not the best place for mkt $$$ anymore…
Door hang, magnets, direct mail etc works 4 me…

Wait, you’re not in the phone book? You must be closed then lol…

Trust me, you want to be in the phone book. You don’t need to puchase an ad but you really want your free listing to be correct. A huge percentage of your customers still use the phone book to get your number. If you aren’t in the book, they just might call your competitor. Im sure not going to pay $1.50 to call 411 to get your number.

You are not alone. I will be closing my doors at some point SOON. I have always had a profitable and successful business. Some things are just out of our control…