Opening of a pizza restaurant : USA vs CANADA

[Yael]

So here is the question I have. I directly copy it from pizzamaking:

Hello everybody,

As you may understand I am in China now, I’ve been there for a couple of years now.
But sometimes it’s not easy when you are entrepreneur, specially when you have a family (you know, pollution, education, healthcare…).
So sometimes I’m thinking. I’ve never been to the US but it’s been a top 3 on my to-go-list since like I was born, so I wonder.

What about a pizzeria there?

A couple of years ago I make a quick market research on the internet, and the result was that there is already EVERYTHING. I could have a good project making French pizza, but it’s still complicated, it would need a huge marketing plan etc.
Then I thought about Canada. One of my brothers lives in northern Quebec, and always teasing me “come here”. But I have no clue about the market (didn’t make any research yet), then I thought “who can tell me more than pizzaiolos from these 2 countries?!”
I still have 2 or 3 years ahead before making such a big decision, it’s not immediate. So first, I’d like to know.

What would be your opinion about Canada? Why would you open a shop there, and why wouldn’t you?

Thank you in advance for your replies !

 

[Daddio]

You will find the same challenges in Canada as you would in the US and some additional ones added on. An example is the price of cheese. I see the US operators start complaining when cheese reaches $2.50 per pound. In Canada the price is regulated at $4.65 per pound. The minimum wage is higher in Canada and so are the taxes.

 

[Yael]

Daddio,

Thank you for your reply.
Indeed, my brother always complains about the price of the cheese. But I would guess that the pizza you sell is more expensive, isn’t that right ?
Would you consider the pizza market to be saturated ?

 

[George_Mills]

Hi Yeal:

We Have planed and sold equipment to Pizza shops in both countries. As far as I know they are most all doing well.

When you decide where to locate We would like the chance to plan and equip your shop. We have done so for thousands of shops nation wide.

George Mills

 

[Yael]

Hi George,

Thank you, good to know
But as I said, still have a couple of years before I make any decision

 

[Daddio]

Daddio,

Thank you for your reply.
Indeed, my brother always complains about the price of the cheese. But I would guess that the pizza you sell is more expensive, isn’t that right ?
Would you consider the pizza market to be saturated ?

In my area there seems to be a new shop opening (and closing) at a rate of two per year. There are over 30 places too get pizza in a city of 60,000. I have had my shop for 13 years. Most don’t last more than 2 years.

 

[URNUTS]

What do you think the reason for the turnover is… just curious more than anything?

 

[Daddio]

What do you think the reason for the turnover is… just curious more than anything?

People think it is easy money, just like the some of tire kickers we see looking around here. They don’t understand the effort required to build the business. Often they leave the operation in the hands on teenagers because there is better money to be made in the oil patch. When things don’t work out they walk away.

 

[URNUTS]

Yeah… I guess that scenario never changes.
It’s funny… and yes… nobody can hijack a thread as well as I but… people used to say to me when I had Domino’s stores “Oh, you must be raking it in” and “I see your cars everywhere… all the time”
To which I replied “Yeah, that’s why in 20 years you’ve never been in here when I wasn’t here- or seen me wearing anything but a DP uniform… because I am raking it in!”
The other line (which you mentioned) is “Just throw some teenagers in there and take a week off” Umm… ok- that’ll work well.

 

[pizzapirate]

What do you think the reason for the turnover is… just curious more than anything?

Most businesses fail period. And restaurants are among the riskiest, as I’m sure you know.

This has been a side business for me the past few years and I’ve only recently decided to liquidate my other business and get back into it. I always keep the 25-25-50 rule in mind. 25% of your crew will always be honest, 25% will always be dishonest, and the other 50% will be honest if you keep them that way. Not an advisable “side business”

 

[smiling_with_hope]

most people making pizza have no real background with it and at best turn out a forgettable product. Then they start chasing their tails with trying to get people in with specials, coupons, competing with the chains, and basically end up making lots of product with no profit. The pizza industry is saturated with this approach and it makes for easy failure and conversely an easy success if you know what you are doing.

 

[pizzapiratespp]

In my area there seems to be a new shop opening (and closing) at a rate of two per year. There are over 30 places too get pizza in a city of 60,000. I have had my shop for 13 years. Most don’t last more than 2 years.

I have seen places that seem to change hands easily every 2 years. It goes like this.

• Original guy invest 300k and opens brand new location. Over a 2 year period he loses another 100k and sells the place for 200k.

Next guy loses another 100k over the next 2 years and then sell for 100k

Next guy looses another 100k and sells for 50k

50k guy loses another 100k. Closes down, and it gets converted to some other business.

 

[URNUTS]

Original guy invest 300k and opens brand new location. Over a 2 year period he loses another 100k and sells the place for 200k

Wow… nice way to call me out in public!

 

[Yael]

Original guy invest 300k and opens brand new location. Over a 2 year period he loses another 100k and sells the place for 200k

Wow… nice way to call me out in public!

@Daddio : indeed, +30 places for 60000, it’s a little bit much…

Sometimes there are places that are less attractive (less touristic…), maybe less inhabitants but significantly less competitors, could think about it.

I guess there’s still more room in China