zpizza is hot, healthful and growing
LONG BEACH, Calif. — Amir Sabetian saw a diamond in the rough the first time he visited zpizza. A general manager with California Pizza Kitchen, Sabetian knew the essential characteristics for a great concept, and he recognized several at work in the Newport Beach, Calif., chain. The products were fresh and flavorful, not to mention healthful.
 
"I could see what was working and I thought, 'This is going to be phenomenal when they get the other legs of the stool,'" said Sabetian. "They went out of their way to buy expensive, high-value ingredients like organic pizza sauce and additive-free pepperoni. What it didn't have at the time was the décor and the ambiance, the look it needed."
 
After 16 years with CPK, Sabetian became zpizza's director of operations in 2004. zpizza president, Chris Bright, knew of "California Pizza Kitchen's tremendous training culture" and convinced Sabetian he was the guy to implement it at the burgeoning chain.
 
"They needed systems and processes, and I wanted to own something of my own," said Sabetian, who cut a franchise agreement in his deal and will open his second store this year. "CPK doesn't franchise in the U.S., and even if they did, it would cost a million dollars to open one. A zpizza costs $250,000."
 
A slice of fast casual
 
In many ways, zpizza epitomizes fast-casual pizza by focusing on fresh, unique products sold at a moderate price point. Unlike its traditional delivery-carryout pizza counterparts, zpizza's sales aren't delivery centered, nor does it depend on coupons. And unlike full-service pizzerias, both the service and the menu are limited. A large portion of its business comes from slice sales, an offering designed to feed customers quickly and affordably.
 
"We sell a lot of slices, especially for lunch," said Bright. "We're a very inexpensive lunch: two slices and a soda for less than $6."
 
During the work day, the low-price, good-food formula attracts a lot of blue-collar workers zpizza likely won't feed for dinner. Stores are deliberately located in neighborhoods where at least half the customer base holds a bachelor's degree or higher, areas that also generate strong foot traffic.
 
"Were we to move a store into an area where those workers live, we'd be competing against chain pizza bargains during the dinner daypart. There's no way we'd survive," Bright said. "The single-most important demographic we focus on is education level."
 
Sabetian put it this way: "We're not looking at income first. We want people who are willing to pay $20 for a large pizza because they know it's good for them rather than wanting pizzas for five bucks each."
 
zpizza uses an outside marketing firm that applies high science to finding those customers. Using a typical profile detailing about 125 unique consumer attributes, zpizza targets nine that are common to its core customer. Where those customers are concentrated plays a large role in real estate selection, Bright added.
 
"That's been a huge breakthrough in terms of how we study real estate," he said. "If we want to end up in a site, we want to know if that area has our key customer. Of course, you have to look at what's driving these people to that area of town, too."
 
Get 'em in, get 'em out
 
The average zpizza store has about 40 seats including a mix of chairs, booths and some bar seats facing the open kitchen. Customers fetching slices are in and out in minutes, while whole-pie customers can linger if they like. Beer is available for those not so hurried.
 
Sabetian, the full-service veteran, said the zpizza is on target with the modern marketplace's desire for a fast-casual option.
 
"People are comfortable going to a place where there's not a waiter and they're not obligated to tip somebody," he said. "We want it to be like a Panera Bread, where customers are almost getting full service without being involved in a full-service process. It's more comfortable."
 
Delivery is available at all zpizzas, but carryout orders exceed delivery calls two to one. The low demand necessitates only two to three drivers per shift. Off-premise catering is also a growing part of its lunch business.
 
Mark Weeter, a two-unit franchisee in Phoenix, runs the chain's busiest store in a downtown location surrounded by office buildings, a hospital and historic neighborhoods that draw tourists. While the zpizza store sales average is $550,000, Weeter's $800,000-a-year store "gets a huge amount of pedestrians at lunch, and we deliver to all the high rises. At night, business flips to residential carryout and little bit of dine in."
 
Serving customers quickly depends upon high throughput in the back of the house. The standard test for makeline proficiency is a stiff one, Bright said.
 
"You have to produce eight items on a ticket within nine minutes," he said of the chain's cooks. In many restaurants, the fastest
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cook in the kitchen sets the speed standard, "but he might be the slowest cook at another restaurant. So putting these (standardization) programs in place allows us to create levels that all our staffs have to meet. We have learned over time what works, and to keep growing, we need all our stores to meet those standards."
 
To ensure new units get a good start, the corporation schedules detailed audits three weeks after opening, and every three months after that to check progress. The audits help determine strength and weaknesses of the leadership in each store and assess quality assurance. zpizza trainers call and place mock orders to check staff phone etiquette and overall product knowledge, and mystery shoppers are hired by the franchisor to conduct blind inspections.
 
"They engage us, they come out every quarter and meet with us so there's no loss of focus," said Michael Blank a three-unit franchisee in Northern Virginia. "You hear of cases where franchisees are left without guidance and have to fend for themselves. That's not the case here."
 
Andy Murphy is a former software industry executive and a three-unit franchisee in Northern Virginia. He said it was easy to like zpizza on the surface because of its clean look and great products. "But what I wanted to do was look under the hood to see how the company was run before I made a commitment." He said he found a company in balance.
 
"The front end is slick and the back end is running well, too," he said. "We're 3,000 miles away from headquarters, and that made me wonder if they could take care of our operations on this side of the country. But they've made a significant investment into the infrastructure of the company to allow that."
 
Go for growth
 
Hoping to produce a more healthful and unconventional pie, Sid Fanarof founded zpizza in 1987. He eschewed canned mushrooms for shiitakes, and, in that California way, brought in ingredients like truffle oil and pine nuts. The chain's sausages are additive-free and its primary cheese is skim mozzarella from Wisconsin; soy cheese is available, too.
 
Bright, who also is the founding principal of Fransmart, a franchise brand development company for multiple restaurant concepts, took zpizza under the group's wing in 2002 when the pizza chain had four units. He said the fast-casual segment was ready for a pizza company, and zpizza had the flavor profile demanded by the segment's customers.
 
The company fell just six stores short of its 60-unit goal for 2006, but according to Sabetian, the rights to more than 150 additional units already are sold. Bright's goal is to have more than 100 stores by the end of 2008, a number well within reach, Sabetian said. "If we didn't sell another, we'd be a 200-unit company in a few years. It'll get bigger, I'm sure."
 
Weeter also believes the company has high growth potential, and though he originally signed on for a single unit, he's bargained for more and is preparing to open his third unit in 2007. Still, he views the growth as a mixed blessing.
 
"The downside is you kind of lose the charm that comes with a start-up corporation," he said. zpizza was only 15 units strong when he got involved. "But the calls are coming in from all over the country from people asking me about it. They're going to be growing like crazy in the next few years."

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