Localization equals innovation for pizza franchisors
Charlie Morrison, CEO of Pizza Inn, said he encourages his franchisees to experiment with new flavors and toppings on their pizzas. After all, some of the 310-unit-strong chain's best-selling specialties started at the franchisee level, including a bacon cheeseburger pizza with a mustard base and pickle on top.
 
He also knows specific flavors play especially well only in particular areas. For example, jalapenos are especially favored in Texas. And Southeastern consumers like the barbecue sauce on a barbecue pizza to be more or less sweet.
 
Morrison is channeling a movement other CEOs are just recognizing. In the current do-or-die economic situation, struggling franchisees sometimes turn to localization naturally in a bootstrapped effort to stay afloat, according to Onsite Consulting's James Sinclair, author of "How to Save your Restaurant in 10 Days."
 
But franchisors shouldn't fret about that prospect. Localization can be a great source of innovation up and down the corporate ladder. Of course, initiatives must be harnessed and checked: "Corporations need to become consultants to their own brand now more than ever," Sinclair said. The smartest corporate cultures have already made franchisee feedback actionable.
 
The taste of an area
 
Morrison didn't decide his customers' regional preferences by throwing darts at a rotating menu. He used his built-in R&D department — his franchisees' localized expertise.
 
Pizza flavor favorites by region
More Americans in the West (32 percent) prefer pesto sauce than those in the Northeast (20 percent).
 
Thirty percent of Midwesterners pick sausage as their pizza protein of choice; only 15 percent of Southerners echo that sentiment.
 
Sixty percent of Northeastern consumers prefer brick oven pizza to that cooked in a conventional oven; only 37 percent of Midwesterners agree.
 
Southern (50 percent) consumers find buffets appealing, compared to only 28 percent in the Northeast.
 
SOURCE: 2009 Flavor Trend Report, Technomic
"We have a product and purchasing committee made up of franchisees that are geographically dispersed throughout the country," Morrison said. "So any new menu items or concepts that we bring forth, we first pass by this community. Therefore, we get a lot of perspective on whether these products will work."
 
He illustrates the committee's collective genius in a recent example.
 
"We had an enchilada pizza that was voted as ‘wouldn't work' in the Deep South. Sure enough, (the reception) was different in Texas vs. the Southeast. So this committee is set up to help us ensure we don't make mistakes and roll out a product that isn't at all well received."
 
Location-borne LTOs
 
It's no surprise that many company-wide rollouts start with the successes of a regional campaign. Upscale Italian eatery Piatti, which focuses on artisan pizza, was so successful with a recent Montecito location offering that it's rolling the program out to the other 11 stores around Christmas.
 
Piatti originaly introduced a $20 three-course menu in celebration of their Montecito location turning 20 years old. Luckily, the company's responsive corporate culture allowed higher-ups to recognize the program's potential.
 
 
 
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"Company-wide, we're all at different phases of 20 years — some at 21, some at 12," said Heidi Darling, marketing manager for Piatti parent company Moana Hotel & Restaurant Group. "But this (Montecito promotion) was so popular that we listened and are in the process of rolling it out at the rest of the locations."
 
Darling said repeat diner frequency and check averages have shot up at every location the program has been introduced so far.
 
But she's not particularly surprised at such an outcome, or even its process, as "bottom-top" is often the way her company works.
 
"(Location directors) are the experts — they're living it and breathing it every day," she said. "We put good people in place, train them, share with them our philosophies — and then rely on them."
 
Couponing small communities
 
Tailored marketing initiatives may be one of the least visible ways to localize, but they're also one of the most important applications of the measurement. Community building through sponsorships or attendance of local events, store-specific e-mail marketing lists and other up-close-and personal initiatives drive local sales more directly than storewide mass media projects. Here again, individual store leaders' participation is paramount. 
 
Leadership at Pizza Patron, the Dallas-based Latino pizza brand that has posted comparable sales increases each month of 2009, believes its store-wide involvement in local schools and charities has much to do with its enduring success. Guillermo Estrada, the company's president, says that's part of the business' moral fiber: Patron means "benevolent leader of the community," according to him. The company makes it a point to hire franchisees who are passionate about participating in their communities.
 
New England-based Papa Gino's has instituted a similar local focus in the last 15 months. Store managers are responsible for implementing certain localized marketing programs.
 
"The business climate caused us to look at all aspects of our business in more detail and identified (local marketing) as a growth opportunity, because some of the more successful restaurants we had were already doing it," said Michael McManama, senior vice president of marketing for D'Angelo and Papa Ginos.
 
McManama said successful local marketing initiatives include simple networking strategies like locking in daytime business at the local courthouse or fundraising for local schools or sports teams.
 
E-mail marketing is also store-specific. Each list of virtual addresses will get messages sent from the particular locations where customers signed up, and coupon values and offers disseminated through such programs change and are personalized from store to store.
 
"All restaurant sales are local, first," McManama said.

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