PH and Dominos got big fast because the market conditions where right. Nobody was really doing pizza like they were. I think the convience of what they offered played more into it than the product quality, which has went up and down over ther years. I have no idea what their product was like when they first came out. When they added delivery (I think Dom’s was the first to do this) things started going nuts and the pizza wars were on.
In today’s market I would think growth would be slow even regionally. it’s a big industry but for the most part pizza is pizza and an underserved segment that would give you national momentum doesn’t immediatley pop to mind.
I think it is a missconception to say that they got big fast. I was working for Dominos when they opened the 200th store and they had been doing it nearly 20 years by that time. Five years later they hit 1000 stores. The company is 50 years old this year! It got fast, but not until they had been doing it for some time and had systems for everything from operations to staff training well established.
The thing I remember most about how they did it was the focus of the company on franchising and on developing managers. The required stores to have a lot of assitant managers because that was where the franchisees came from. They assisted in the financing of new stores for strong candidates. They had area manager meetings once a month and the MAIN topic was franchising.
They also concentrated on franchising in clusters which allowed them to leverage marketing and to open commisary locations to serve multiple locations.
Back when the big guys were growing rapidly about any pizza shop that got opened was fairly successful. Some were fabulously successful.
Now you have to be more than just another pizza shop to be successful.
There were not a lot of people around years ago that knew how to make pizza or how to open and run a pizza shop. The burgeoning new pizza franchises offered to teach any one who could come up with The money to open a store.
The cost to open a shop was much lower and every shop was at least marginally successful .
Things are a lot different now. A lot of people know how to make a good pizza. They don’t need someone to teach them. A lot of folks have worked in a pizza shop and know how to operate one and it takes some substantial funds to open a shop.
Giving those that will make good operators and have the funds ample reason to join your group, rather than doing it on there own, is apparently not an easy task.
One of the big things is how you enter a market. Let’s say you’re based in Colorado and decide to target St. Louis as a new market. You need to get multiple stores moving at the same time. You have to get marketing going and the only way to spend the necessary funds on marketing is to have franchisee’s willing to pay for it. I worked in STL when PJs was pretty new there. They had a mix of franchise and corporate-owned stores. There were probably 10+ stores in the STL area before we had enough money to get TV ads going. TV ads helped revenue a lot.
There is a chain in Chicago called Rosati’s. I like their pizza. When I moved to Texas, I found one! I was excited. Oh, they don’t serve stuffed pizza (there went the excitement). They’ve since closed. I would bet a good part of the problem was that they didn’t have corporate marketing support. One store in the whole freaking state? Bad expansion plan. I think they had a loyal customer who wanted to spread the great pizza to TX, but in the end, you have to do the marketing.
You mentioned about 20 stores across the state. How about scaling down a bit… How about becoming the absolute BEST in your town, hands down, just BLOWING away all competitors - even the chain gang?? Not only in quality, but in REVENUE!!! Now to me, that’s something to market! If you can do that, the surrounding counties/towns will ALREADY know about you and your reputation. Expansion becomes so much easier and you’ll get far more for your marketing dollars!
Why expand a concept that is only #4 or #7 in its local community??
I couldn’t agree more. If you can’t dominate your competitors in the store(s) you run, how is a franchisee or manager going to compete 10 miles or 100 miles or 1000 miles down the road. If the dominos in your market is doing 100k/month, I would want to be doing 125-150k/month to have a realistic chance of being competitive with a less knowledgeable, less motivated franchisee or owner.
I totally agree with what your saying, We do have the best pizza hands down.
And also, dominos has been there 24 years and they do really well. We have been opened up 3 months now and doing close to 50k a month, I think thats one great opening!!! I know we will grow from here and im sure we will get up to dominoes sales in time. You can expect to open up and be doing 125k in 2 months!!! Thats almost impossible.
We are #2 in the town in Pizza revanue for DELCO, in just 3 months. I am very pleased with the results of moving my store to this town. Went from 10k a month in sales in the old town we were in to 50k. I think i made the right choice
The above statement sheds a lot of light for this discussion. You say you moved your 10 K per month operation to another town where you do 50 K per month. You do not say so but apparently the old and the new shop are the same franchise.
It appears that location is a major factor in the volume of sales attained. If your product and modus operandi are the same why were you only doing 10 K per month in the old location?
As the discussion was about expanding a franchise it would appear that the franchise concept works not so well in some locations.
Actually signing up new franchises appears to be fairly easy. Having them be successful is another story. We have had untold numbers of operators with a few successful shops sally forth with a view to expanding a franchise.
It appears that an ad placed in about any newspaper offering a pizza franchise gets good response. Many folks, who do not have the background to open an independent shop, apparently would like to be in the pizza business. Most all responders have contacted some or all the franchise groups in their area only to find that none of them have openings for additional units in the town or territory where the prospect wants to open a shop.
In the above scenario the prospect is pleased to find a franchise that will let him open in the area he lives in. The result is another pizza shop opening in amongst several existing shops with little chance for success unless the product and operation is overwhelmingly better than all the existing pizza shops. We have had several situations like the above where the new operator fails.
George = I cannot recall seeing you comment so strongly in a thread that does not involve your field of expertise. Thanks for those rational words from someone who has seen a lot of “good concepts” fail.
Joker - Are you sure there is room in this market to expand or invite new franchisees into your business? If you’ll come into my shop and promise me I’ll make $50K/month at my same business model, then come on down.
I think you’re making yourself some good money, but getting sucked into the corporate rah, rah, rah.