- WHITE PAPERS
In the year 2000, when the world celebrated the birth of a new millennium, Vic Cassano Jr. lived below a cloud of dread.
His 28-store company, Cassano's Pizza King, had recently emerged from bankruptcy, which left him confident enough to take a three-day trip to Las Vegas with his sons. But just one day later, he got an urgent phone call. Cassano's business partner, the caller said, had written a $90,000 company check — to himself.
When he learned the partner had stolen much more, advisers told Cassano to close the Dayton, Ohio, company. Cassano's had survived a bad buyout in 1985, an ill-advised buyback in 1989 and a bankruptcy in 1995, and now Vic was learning his partner, Randy Leasher, was a thief.
Close the business, his advisers said. But he wouldn't do it.
"I said, 'No way. Next subject,'" said Cassano, now 61. "I'd survived a lot, and I didn't want to quit."
In addition to his wife and three children, Cassano's employed about 600 people. He couldn't think of letting them go or closing the company his father founded nearly five decades earlier. He told his employees about the embezzlement and what had to happen if they were going to save Cassano's.
The royal family: From left to right (seated), Sharon Cassano, Lora Hammons, Chip Cassano, Vic Cassano Jr. and Chris Cassano.
The pizza prince becomes a pauper
Pizza Hut, Little Caesars and Domino's Pizza weren't around when Vic Cassano Sr. started Cassano's Pizza King in his tiny Italian grocery store in 1953. Dayton locals knew nothing about pizza, but they quickly fell in love with it. Originally, Cassano cut his pizzas in wedges, just like at East Coast pizzerias. But Midwestern ladies thought it a crude way to handle and eat their food like that, so they asked that he cut their pizzas in squares. The cut remains the same today, as do the finely crumbled meat toppings and thin, chewy crust developed by Vic Sr.'s mother, Donisi.
Vic Jr. said his father had a natural ability to "sense trends before they were trends." In addition to his pizza chain, he opened saloons and restaurants "that were just way ahead of their time." Dayton's pizza king had the Midas touch for creation, but managing operations wasn't his gift. "He ran the franchise community like he ran his stores, and you can't do that."
By 1985, Cassano Sr. was in his 70s and ready to pass his scepter to someone else. His son hoped it would be him, but his father sold the company to Greyhound Food Management. Vic Jr. believes selling it to an outside party allowed his father to detach from "his baby" completely.
Vic Jr. had overseen Cassano's operations for his father, which made him a natural appointee to president under Greyhound's watch. At first, Vic found working for Greyhound fascinating. It was a heavily diversified, multibillion-dollar umbrella corporation over 120 companies, and he wanted to learn the workings of a major entity.
But the luster soon wore off as he saw how the snap-decision making his father enjoyed as an entrepreneur gave way to corporate bureaucracy and strict processes and procedures demanded by supervisors detached from operations. In buying the company from his father, Greyhound also promised to invest in refurbishing tired Cassano's stores and boost marketing dollars, but neither happened.
Cassano's charge was to grow the company, and in 18 months, 33 new units were added to the 48 Cassano's brought to the sale. Greyhound believed delivery-only units were the key to the future, and it changed many Cassano's menu favorites.
"The changes didn't work, and the stores weren't doing well, but they just kept telling us to grow it," Cassano said.
His daughter, Lora Hammons, said the changes to the pizza company upset longtime customers.
"It was changed so much that it wasn't our company any more," said Hammons, Cassano's marketing coordinator. "I saw them destroy what our family had built up and that was difficult to watch. Our customers didn't like it either."
The pair worked to restore the company to its original identity, but progress was slow. When sales didn't pick up as they'd hoped, they trimmed Cassano's unit count from 48 to 28. Worse, the pair realized they paid too much for the company and they couldn't service the debt. They filed for bankruptcy in 1995, though Vic planned to pay all creditors.
"A lawyer we worked with looked at our plan to pay
Donisi Cassano, a.k.a. Mom Donisi, helped her son Vic Cassano Sr. develop the recipes for Cassano's Pizza King. Photo courtesy of Cassano's Pizza King
Dewey Weeda, vice president of Presto Foods, a distributor in Dayton, said he never doubted Cassano would make good on his debts.
"They're a family-run company, and they know what to do when things get tough," Weeda said. "They battened down the hatches and got into that defensive mode to make it through."
Needing cash to pay its creditors, Cassano turned to the company's dough commissary for new income. He approached his food broker about selling frozen private-label dough, and the idea took off.
Darkest before the dawn
By 2000, Cassano's sales were solid and the company was profitable — just not quite as profitable as Vic Jr. had hoped. "I couldn't understand it. We were pulling in a lot of money, but I kept asking, 'Where's it all going?'" With that fateful call in Las Vegas, he suddenly understood.
Back in Dayton, he confronted Leasher about the $90,000 check and asked him, "Is this all there is?" Leasher told him yes, but Cassano didn't believe him. Leasher was forced out of the company and Cassano reported the theft to authorities.
The betrayal crushed Cassano and his family, all of whom were friends with Leasher.
"I think Randy had two personalities: one for us and another for everybody else," said Sharon Cassano, Vic Jr.'s wife, who also works in marketing for Cassano's.
Cassano's son, Chip, said he was glad he was in Las Vegas when he learned about the embezzlement. "If I'd have seen that guy in a dark alley, I don't know what I would have done."
According to a Nov. 2000 report in the Dayton Business Journal, local investigators found Leasher had taken more than $700,000, though Cassano said "that's just from the paper trail he left. I'm sure there was more we couldn't find."
In court, Leasher confessed to the crime and was sentenced to three years in prison. Eighteen months later, he was released, but he was suffering from bone cancer. Two months later, he died.
Tom Noland, a lawyer who advised Cassano during the Leasher scandal said the mess was unprecedented in his career.
"I had never represented a client that had that large of an embezzlement situation," he said. "After we learned of it, it answered why the dollars they were spending on advertising weren't producing results."
Cassano faced a desperate situation, and as happened in the past, advisers told him to close the company. But this time Cassano didn't listen. He "turned it over to God. I put a lot of faith in the Lord because I knew I wasn't smart enough to turn this thing around."
Sharon said her husband lived as if the weight of the world was on his shoulders.
"He was pounded down pretty far," she said. "He'd come home and be very quiet. He was always thinking of everything under the sun to help the company."
In sole control of his chain, Cassano and his family set about rebuilding it their way. In 2001, the company launched a large advertising campaign that sent the phones ringing off the hook. The business was great, but the stores couldn't handle the volume. Over the next year the company moved to replace all its deck ovens with conveyor ovens to match production to demand. To save money, Cassano bought refurbished units that sons Chip and Chris installed.
"Our doors got blown off by the business, and we knew we had to do something fast," Cassano said. "Presto acquired those for us and carried some of the paper on them. They've been very good to us."
In 2003 Cassano's began testing a one-number call center it believed would firm up its position in Dayton. Unit by unit, stores were added to the system, which also includes a remote management POS system. Sales, Cassano said, responded incredibly well.
"The first full year we had it, we had a 20 percent increase in sales," said Cassano. "Most of it came from the phone being answered in the call center every time it rang."
Currently the company is testing Web ordering at a
A production worker keeps dough circles straight on the line at Cassano's production commissary.
In June, the company spent nearly a million dollars on new dough production equipment. Dough sales account for 20 percent of the company's overall business (Cassano declined to state annual sales), but Cassano believes it will equal the pizza chain's sales in four years.
Cassano called the 34-store company "very profitable now," and said detailed preparations are in place for his sons to buy the remainder of the company when he retires in four years. (The three children own equal shares of 49 percent of the business, and their parents own 51 percent.) Unlike his father, who never shared details of the business, his sons have equal say in all decisions on Cassano's.
"I always knew that was one of the reasons Vic worked so hard was so Cassano's could continue," Sharon said. "To give the children the business was his dream."
Lora, who declined a further ownership share in the company, said she's thrilled to see Cassano's on the rebound.
"It makes me especially happy for my dad because I've seen all the work he put in to it," she said. "I pray he can reap the benefits of his hard work, because he's worked his tail off."