• CiCi's Pizza founder insisted sale be an inside deal

When CiCi's Pizza franchisees learned founder Joe Croce was selling the company, a wave of uncertainty gripped franchisee Pat Williamson.

During the self-service buffet chain's February franchisee meeting in Biloxi, Miss., operators learned that the six-man management team currently running the company would own it as of July 1. Croce, their 44-year-old boss is selling the 420-store operation to spend more time with his wife and two children.

In 2002, Williamson and partners Allan Huston and Larry Zwain became CiCi's largest area developers by signing on to open 100 CiCi's buffet units in Colorado. Part of what made CiCi's an attractive opportunity, Williams said, was Croce, its charismatic leader. He now wondered whether it would be the same without such a dynamo at the helm.

Joe Croce, founder, CiCi's Pizza

"I was sitting there with a knot in my stomach when the announcement was made," said Williamson, formerly the chief operating officer at Pizza Hut in the 1990s, and a franchisee with Huston of 31 Applebee's restaurants. "But as I talked to other tenured franchisees, they said they didn't have a knot in their stomachs. While they love Joe, they didn't feel we would miss a beat."

One franchisee who convinced Williams not to be alarmed was George Brown, a Dallas-area CiCi's operator since 1991. Brown said dozens of other franchisees at the meeting sought his opinion about the sale, and all got the same answer.

"I told them I have no fears at all," said Brown, who operates five stores. "I know Joe's started something great, and he left it in great hands."

Williamson's confidence grew when he learned that the sale price (which has not been disclosed) was favorably low in order to keep the new owners' debt load manageable. Too high a financial burden, Williamson feared, might shift the company's focus away from products and services.

"Joe has surrounded himself with outstanding people from top to bottom," said Williamson. "As a result, we're confident they'll take us to the next level and beyond."

According to vice president of marketing Joe Flanigan, Croce was unavailable for comment on the sale because he was on a flight -- not to a tropical destination for a celebratory vacation, but to Memphis and then Nashville to inspect new CiCi's sites.

"That shows you where his world is," said Flanigan, one of the six soon-to-be owners. "Nobody over here's got a fat cigar or is setting up tee times ... Joe isn't either. We're a hardworking, fast-moving company of an entrepreneurial mentality, and we intend not to lose a lick of that as we start paying for this thing."

Six months in the works

Flanigan said Croce shocked his executive team six months ago when he asked them to consider buying CiCi's. During one of their regular quarterly reviews, the team asked the goal-oriented Croce to outline his vision for the next three years.

"He just turned around to us and said, 'Well, as long as you're asking, what would you guys think about something like this?' " Flanigan recalled. "We were just flabbergasted. But then we said, 'Well, OK.' "

Croce told the team he'd been approached by some quick-service restaurant players and other investors about selling the company, but that he wasn't interested. Flanigan said Croce didn't want to see his company purchased by outsiders who might change the CiCi's model or not honor the friendships he'd established with employees and franchisees.

Still, the notion of selling the company wouldn't leave him, especially as he dreamed of being a full-time husband and father to his 6-year-old daughter and 3-year-old son. Selling the chain to the men already running it seemed the most favorable option.

CiCi's Pizza

Founded: 1985
HQ: Coppell, Texas
Founder, President: Joe Croce
Age: 44
Sales in 2002: $315 million
Stores: 420, 24 corporate, 396 franchised
Locations: 20 Southeastern U.S. states
Format: Self-service all-you-can-eat buffet for $3.99. Stores are typically 4,000 square-foot sites, with an average 180 seats.

"There's no question he could have gotten more for it, but he didn't," said Flanigan of Croce's sale price. "That shows you what kind of man he is."

By many accounts, Croce is generous. Flanigan said Croce told him he'll give 20 percent of the proceeds from the sale of CiCi's to Gateway Christian, a South Lake, Texas, church where Croce is a member.

Equally telling is George Brown's story of how Croce loaned him the cash to start his first CiCi's store in 1991. Brown was a technician for a restaurant equipment repair company that serviced the hardware in CiCi's first store. Called to repair an oven on a busy Friday night -- specifically Brown's wedding anniversary -- Brown got a life-altering glimpse of CiCi's potential.

"There were people lined up outside the doors to get in; it overwhelmed me to see it," Brown recalled. "That night I told Joe, 'You know, one of these days, I'd like to open one of these.' And he looked at me and said, 'The day you want to do it, I'll help you.'

"That man loaned me -- a married father of four making $35,000 a year -- $146,000 dollars without a contract. It was a handshake deal."

Brown claims he's not the only beneficiary of Croce's goodwill, and that Croce's commitment to people has made CiCi's a strong company in a relatively short period of time. Williamson agrees.

"If you look at the outside of our restaurants, it says CiCi's Pizza," he began. "But I firmly believe that we are not in the pizza business ... we are in the people business. That's the way Joe has set this company up. That's the culture here."

Team players

In addition to Flanigan, the five executive team members who will buy the company are Craig Moore, vice president of operations (who will become CiCi's president after the sale); Robert Kulick, president of JMC Restaurant Distribution, CiCi's purchasing and distribution arm; Forbes Anderson, chief financial officer for both CiCi's and JMC Distribution; Robert Grosshuesch, vice president of training; and Robert Parent, vice president of development.

Anderson currently is courting investors and lending institutions to help finance the deal.

Flanigan said many are eager "to have a shot at this," but the management team will maintain majority control over the business to ensure it's not "run by bean counters."

Flanigan won't say who's lining up to loan the team money, "but I can say there are a lot. ... We're quite confident this is going to get done. But the question is, 'With whom?' "

Once the sale is finalized, Croce's official role with the company will end, though Flanigan believes the management team will take Croce up on his offer of occasional advice and guidance.

"Joe will always be an invaluable asset that we'll look not to be steered by, but to get his perspective," Flanigan said. "That's a nice advantage for the CiCi's system."

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