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Bought My First DELCO Today

ok so you got a good deal it sounds like as far as buying the buisness and a good revision on the lease.

now do you have ANY proffesional cooking experiance? pizza, fast food, fine dining, short order,any culinary training?
do you have a passion for food? a passion for money? or a passion for ppl kissing your a$$ because you own a buisness??
how do you handle stress? and im not talking you have 2 financial reports due by morning, im talking you got 4 phone lines blowing up, all the ovens are full, your oven guy is feeling sick and is barely able to keep pizzas from falling off the conveyer, much less box em, cut em, post top em and sell em. your topper is new and unsure of himself and doesn’t ask questions but just assumes its better to put what he thinks goes on your specialty pies causeing refires if you or your oven guy notice the slip up. your walk in is tettering on 42 degrees, and its saturday so your gonna be paying overtime to the repair guy.
ohh also since its a kitchen its 110 degrees, and no matter how much water you seem to consume you cant stay hydrated, and flour has worked its way into every crevasse of your body(ahh throwing dough is so much fun, even if you do feel like a loaf of bread after a 10 hour shift).

im not saying this is a everyday occurance, but expect and prepare for days like this.

what kind of ovens will you be using? do you plan on prepping everything as much as possible in house? will dough be made in house? will all your topping be IQF stle products? have you looked into what local vendors are available?

sheb
 
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Another practical piece of information to obtain is the date of purchase, age, and maintenance history of all the equipment in the shop. By the way, you need to also learn the maintenance procedures on all the ovens and coolers ASAP . . . you can eat up a compressor during summer in no time flat.

Find out what your expected pizzas per hour peak is going to be . . . make sure your oven is designed to handle it.

Make sure you get third-party driver insurance to cover a driver hitting someone else. Don’t rely on the drivers’ insurance; it won’t protect your business.

Learn today . . . not tomorrow . . . what the tax schedules are. Even if you hire an accountant, I suggest you know what weeks are going to be big payout weeks for all your taxes.

Your experience in marketing and team building will help with marketing and team building. Find a way to learn the"hard skills" of the pizza business. You need to learn menu development, product development, food safety and handling, running the dish wares machine, all things grease trap, dough formulation and handling (unless you go the way I do with frozen dough), staff development and training and probably lots of other things I cannot think of right now. If the guy was running teeny-tiny labor margins and doing lots of shifts himself, then your labor casts are going to bloom up nicely when you hire people to actually operate the shop. I’ll bet there will be no general manager money to get someone in who has all this experience and hard skills . . . it is all you, baby.

Finally, I have zero trust or belief in the franchiser or the current owner and what they SAY the shop does. Franchise says this store has seen figures in high 50k month sales. Could have been once five years ago. You have not said that you have demanded and reviewed the financials of this business. If it isn’t outlined and filed with a government agency that provides some level of accountability, then it is fantasy. Fools will pay the tax on their ignorance and misplaced trust . . . trust, but verify.

You may find that pizza customers seldom make reasoned “buying decisions” based on best offer in hand. The majority will buy out of habit, and we make the bulk of our marketing decisions and investments to establish and maintain those habits of buying from us. We don’t get to define “Best Offer” and it often changes without a corporate memo informing us.
 
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Nick
Thank you very much;
This info is very helpful and eye opening; I greatly appreciat the help and find this info very useful.

Jimmi
 
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Do not pay the aptly named “fools tax” that Nick mentions.

Rules for buying a buiness (among others)
  1. ALWAYS LOOK AT THE NUMBERS. Get advice, if needed, from someone qualified to look over the numbers. WALK AWAY from any deal that will not show numbers unless you are only buying equipment. If you are buying equipment, make sure that is what the contract says.
  2. Have an attorney look over the deal to protect your interests. Make sure you are buying what you think you are. Things to check on:
    Franchise agreement.
    That you are buying assets not obligations.
I assume(?) that you had an attorney look over this new lease? Leases are sizable contracts.
 
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I do feel the #s are relevent but not as important as the demographics. My thought on this is that I am not so concerened about anothers lack of ability to succeed as I am totally confident in my ability to Improve product quality, and build a reputation for great customer service. As well as my ability to put advertising dollars to good use and create new and loyal customers.
An Important part of the process is to build the sale while the customer is on the phone, I know many people have the ability toupsell and to add product to the ticket by suggestive selling.
Would you like an order of Garlic bread stix for 3.00?
Our Special today is a apple desert pizza for 4.99?
little things mean alot and the first thing you know the rent is paid with a little effort and consistant suggestive sales…

I have More concerns about the ability of the equipmentto hold up and function properly. I will bring in service company to do preventive maintanance and assess the equipment. I do have some experience with equipment and will be able to do preventive maintanance myself. removing dust from vents and the cooling fins on the walk in compressor units. I believe in cleaning and caring for equipment. I also believe in watching the papers for good deals and buying equipment that can be used to replace aging equipment.
 
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Pizza Boom:
I do feel the #s are relevent but not as important as the demographics. My thought on this is that I am not so concerened about anothers lack of ability to succeed as I am totally confident in my ability to Improve product quality, and build a reputation for great customer service. As well as my ability to put advertising dollars to good use and create new and loyal customers.
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You very possibly do not have the objective knowledge you need to succeed in this venture. If you dismiss actual financial information in favor of enthusiasm and and bravado (we all do it at some point to some degree) . . . you will become a statistic.

Without an independent advocate to review this deal to YOUR benefit, you are left to take the word of a franchise who is trying to keep another monthly fee online whatever it takes . . . and a selling owner who is looking to offload a liability that he is spending far to much time and effort in to make it worth his effort. Neither one has your best interests at heart and will take your pants and shorts when you aren’t looking.

Do consider that you came to this thread asking for what you should know . . . and have summarily dismissed the most important information that can be offered by really skilled and knowledgeable business people in this industry. Without independent representation, you are vulnerable beyond your wildest imagination.
 
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My only question…
If you are the pizza maker, general manager, dishwasher and driver, when are you team building, improving product quality, “watching the papers for good equipment deals”, and such? Make sure you have some idea how thats going to work, because it took me 5 years to move from pizza maker to what I would consider part time gm, in my own store.

I wish you the best of luck. And be sure to post here again after your 30th day with no day off and no paycheck. I’m sure you’ll have plenty of questions.
 
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Sorry to beat the same drum again but…

“food cost 23%, labour and utilities 20%”

You need to see the real numbers (which includes sales tax returns to verify sales and 941s and Work comp audits to verify wages).

The percentages you quote are not plausible.
 
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bodegahwy:
Sorry to beat the same drum again but…

“food cost 23%, labour and utilities 20%”

You need to see the real numbers (which includes sales tax returns to verify sales and 941s and Work comp audits to verify wages).

The percentages you quote are not plausible.
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im going to beat the dead horse with bodega, food cost with 3 well trained employees may well be 23% right now, if so someone is darn good with there vendors, and they must not make any mistakes at all, no loss of product, no missmade pies, no burnt pies, no signing for product from a vendor before realizing all the cans are dented and your fresh basil(basil and dill here just went up 200%) is brown. no figure in you jumping on the line with little to no experiance your true food cost will be closer to 40% until you get it right(it takes me 2 months to get someone fully up to my standards on the entire pizza line, tossing, saucing, topping, filter, and ovens are the hardest). the only way labor is 20% is you making all the food, a dishwasher working under the table, and one delivery driver.

also have you taken a servesafe class? are you well versed in sanitization laws, both federal and state because they differ. have you reviewed the places last few health inspecitons? fire inspections? and like nick said dont trust the owner or the franchise any more than you would a rat leaving a drowning ship.

sheb
 
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Fall off cloud nine and come in for a reality check.

There is no way you can sustain a business on the number of employees you stated and still have sales levels that you can make a living from.

To say that the business once did $50K a month would be imposssible on the staff levels.

All the good intentions and bravado and self belief means nothing if you haven’t done the due dilligence and had an independent qualified person look at it.

I am a lot older than you, have more experience insales and marketing than almost the years you are old and still got “burnt” buying my shop. I got outside advise (who advised caution) I did in depth due dilligence and had some prior background in food, but I got hit with “Fool’s Tax” bigtime. Someone more clever and savy than you can put together figures and stories that could sell ice to Eskimos. I know from experience.

How did I survive to get to where I am now? 100+ hours per week, 7 days per week; losing sleep and relaxation time; bloody hard work; TAKING TIME TO LISTEN TO PEOPLE WHO KNOW THE INDUSTRY; TAKING ADVISE ON BOARD AND NOT LETTING MY EGO RULE THE ROOST; having a ralistic approach to what is sh1t and what is clay; employing the right staff; not taking a wage for over a year; and finally BEING A DOER AND NOT A DREAMER.

If you think you have covered everything and you have the knowledge and experience to make ago at it then good luck to you. BUT. If you think someone will be giving you a business for $10K that can make money from it, well … the old saying rings true “If it sounds to good to be true then it will be too good to be true”.

For your sake I hope you don’t do your money, but then again I have a bit of scepticism on your posting anyway. Leave it at that.

Dave
 
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Pizza Boom:
“In your words, you are underfunded, have you “back against the wall”, have no pizzeria or even food-service experience, and have no personal skin in the game. That is a classic set of hurdles that doesn’t bode well for short term viability of your project.”

I am not in this for the short term, and in the short term plan to reinvest cashflow into remarketing and rebuilding this store.
I believe that the customers deserve a great pizza and I ultimately deserve to make a living.

I feel my experience in marketing, and team building will put in place a winning DELCO that will be second to none in quality and service.

Besides sitting at home watching reruns of law and order is getting old,

Jimmi
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I really miss “watching reruns of law and order” but I wouldn’t trade this for anything right now…I am on a roller coaster that has not been built…what A ride!!!
 
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wa dave:
Fall off cloud nine and come in for a reality check.

There is no way you can sustain a business on the number of employees you stated and still have sales levels that you can make a living from.

To say that the business once did $50K a month would be imposssible on the staff levels.

All the good intentions and bravado and self belief means nothing if you haven’t done the due dilligence and had an independent qualified person look at it.

I am a lot older than you, have more experience insales and marketing than almost the years you are old and still got “burnt” buying my shop. I got outside advise (who advised caution) I did in depth due dilligence and had some prior background in food, but I got hit with “Fool’s Tax” bigtime. Someone more clever and savy than you can put together figures and stories that could sell ice to Eskimos. I know from experience.

How did I survive to get to where I am now? 100+ hours per week, 7 days per week; losing sleep and relaxation time; bloody hard work; TAKING TIME TO LISTEN TO PEOPLE WHO KNOW THE INDUSTRY; TAKING ADVISE ON BOARD AND NOT LETTING MY EGO RULE THE ROOST; having a ralistic approach to what is sh1t and what is clay; employing the right staff; not taking a wage for over a year; and finally BEING A DOER AND NOT A DREAMER.

If you think you have covered everything and you have the knowledge and experience to make ago at it then good luck to you. BUT. If you think someone will be giving you a business for $10K that can make money from it, well … the old saying rings true “If it sounds to good to be true then it will be too good to be true”.

For your sake I hope you don’t do your money, but then again I have a bit of scepticism on your posting anyway. Leave it at that.

Dave
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Wa Dave - U Rock … this is the statement that says it all! “TAKING ADVISE ON BOARD AND NOT LETTING MY EGO RULE THE ROOST” applies to all that only wants to hear the positive and can’t take the heat from the experinced KITCHEN…
 
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:shock: So I get a call at 8 pm owner says that franchisor brought by new price list for dough that gets delivered to store
price on flour going from 8.60 to 21.60 as of may 1st, Dough price to store raise 35% from 5.60 per tray to 9.00 reccomends that increase price 1.00 per pizza. to cover cost. So the fliers and menu’s we ordered today will need to be changed, The fliers are scheduled to be deliverd on my first day in the shop… Stop the presses we gotta change something already. that cost 25.00 to the printer for new plates thankful the printing not done yet. so we hashed it all out for a few hours Raised the prices to cover the new cost and set them at level to cover any extra increases we may see in the next few months. I also decided to raise the delivery charge to help drivers out with fuel. last thing I need is the 1 driver that is there to quit. could happen though. thinking the extra charge on delivery may help in finding new drivers. best specials or for carry out orders. 75% of all orders are delivered and would like to see that at closer to 50%. Like to increase sales 35% over next 2 months and see carry out up to 35% as well. Seems to me 35% is realistic increase with out too much sweat since there won’t be any extra sweat to be had, from what others are saying.

So since there are alot of people thinkin I’ll fall on my face. I got another 10K says Ill make it a year, any body want a part of it…
what odds will ya give

Jimmi
 
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As far as advice go’s There is alot of helpful feedback from great people in the business, and i am thankful for that.
but advice to quit before ever getting started, thats just unacceptable to me.
Quitters never win and Winners never quit. Pain, from streching to the limits, is what champions are made of.
People who say it cant be done get run over every day by the people doing it…

Boom
I am a Champion
 
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several people think I am arrogant, ignorant and Stupid. to be honest I care very little what others think.

I have never turned my back on anyone in need regardless of race religion or circumstance.
I pray daily for others less fortunate than me.
I thank God, The Universe, The Source< or whatever you choose
to call it every day that I have the choice to do What I want to do.
I have chosen my path, and if I can, I will choose to help another before I choose to benefit myself.
My Source, My God, Knows My Heart,

Boom
I am A Champion
 
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Pizza Boom:
As far as advice go’s There is alot of helpful feedback from great people in the business, and i am thankful for that.
but advice to quit before ever getting started, thats just unacceptable to me.
Quitters never win and Winners never quit. Pain, from streching to the limits, is what champions are made of.
People who say it cant be done get run over every day by the people doing it…

Boom
I am a Champion
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I like people who are positive and see the glass half full not half empty.

I like people who are fuelled by success and the lure to be successful.

I fear for people who are full of cliches and false bravado.

I fear for people who think they can do anything without full knowledge.

In my past career of sales and marketing where I reached National Management level I had saw and learnt many things from many, many people who knew and had experienced a lot more than I had. I took on their advise, worked hard, then I worked smart. The biggest single thing that I learnt and passed on to my sales team was an old saying learnt many years ago " Know that you know that you know". This saying still rings true today in my pizza career. Even today where I have taken a business to levels I never dreamt of getting to in 2 fast years, let alone 5 years or more, I still work hard at the business and look to others for advise.

Will I survive and prosper? I think so, but never take it for granted.

Do I seek advise and take it on board and adapt it to my situation? Of course.

Do I think I am a champion? No way.

Boom, with your attitudeand sprouting of cliches, which sounds to me like you are paraphrasing from books of motivational speakers (and yes I have read many), I think you are in for a big, big reality check.

Sorry to say it but I think you fit the mode of a “fool and his money are easily parted”.

I trust this is not the case but you show all the signs.

If your posts are “fair dinkum” then I wish you all the best of luck because you will be needing every bit of it.

You may end up being a champion, but to me you are showing all the attributes of a chump.

Dave
 
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Pizza Boom:
As far as advice go’s There is alot of helpful feedback from great people in the business, and i am thankful for that.
but advice to quit before ever getting started, thats just unacceptable to me.
Quitters never win and Winners never quit. Pain, from streching to the limits, is what champions are made of.
People who say it cant be done get run over every day by the people doing it…

Boom
I am a Champion
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You’re sharp with the “feel good” rhetoric. but reality needs to seep in soon . . . . it is a very poor omen that you are buying a pizzeria that makes dough and had zero clue about the flour crisis impacting our industry. YIKES! that has been looming for months. Tell us that you are aware of the volatility in the cheese and cooking oil markets . . . and the federal minimum wages increases in play July 2008 and July 2009.
 
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The flour price sounds a little fishy…that price increase should have happened 2 months ago. Are you sure it didn’t, and your just finding out about it because now the deal is done?
Might be worth a phone call. Maybe more surprises are coming…
 
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Also, don’t be too quick to adjust the delivery/carryout ratio. I understand the cost of a carryout is less. But operationally, you can control the production times on deliveries easier…ie the customer isn’t in your face waiting for his order because he came in 15 minutes early. And in the first year, ease of operation is critical.

Also, you’ll get better quality drivers if you have more deliveries. And believe me, a fast driver who knows the streets and doesn’t forget parts of the order, is very valuable. A good driver might be able to help on the phones, put an order together, restock tables, and take multiple orders in one run. You’ll need all those while you have a tight crew.
 
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About flour prices. As noted in first post I had A Clue, I talked with the corporate rep he stated that they buy on contract for 25 stores and price affects us different than mom and pop stores, our food cost is lower because of buying power, and relationships with suppliers, we also get discounts because we do not ask for terms, our invoices are paid cod for deeper discounts.
Boom
 
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