Emerging Concept: Garlic Jim's Famous Gourmet Pizza

 
Aug. 2, 2006

The pizza industry has mastered both delivery and gourmet pizza, but Dwayne Northrop believes his chain is the only to marry both successfully. Seeing an opportunity to fill the gourmet delivery void, Northrop and some partners formed Garlic Jim's Famous Gourmet Pizza in Everett, Wash., in 2003.

"There are lots of mom and pops out there making artichoke and pesto sauce pizza, but delivery isn't their strength," said Northrop, chief executive of the company. "And if you want a pizza in 20 to 25 minutes, you can only get that from mainstream pizza companies. And, frankly, the pizza's not that good."

In developing Garlic Jim's, Northrop took some quality and trend cues from high-flying fast-casual restaurants like Baja Fresh and Chipotle Mexican Grill. Their menus all center on well-prepared, fresh foods served quickly and at a cost higher than their quick-service counterparts.

"The trend toward those places is an example of how people are stepping up to pay a dollar or two more because they expect and want something better to eat," he said. "We knew that if we could make a much better pizza than our competition and deliver it quickly, people would pay extra for it. And so far, we're right."

In about

What's Important

Garlic Jim's Famous Gourmet Pizza was founded with the goal of blending gourmet pizza with speedy delivery.

Despite the competitive marketplace, the company believes it can grow to 500 stores by 2013.

The companny insists on hiring clean-cut, well-mannered pizza drivers to reinforce its premium image.

two years, Garlic Jim's has grown to a 31-unit operation in a half dozen states, and by the end of the year, Northrop expects the total will be 44. Weekly sales average $14,000 and comparable numbers are climbing steadily — numbers fueled by customers willing to pay more. A large cheese pie costs $11.99, and each topping is $1.50. No discounts, no coupons ever, said Northrop.

"We know not everyone will pay that much for our pizza, but we also know we can't be in every market in town," he said. "We're not trying to be everything to everybody everywhere. We're not like Domino's in that way."

But in other ways it is. Northrop and two members of his management team are former Domino's operators and/or executives. Garlic Jim's kitchen layout, he said, is based on Domino's for one reason: speed of production.

A look all its own

In founding Garlic Jim's, Northrop assembled a team of pizza and fast-food franchising veterans who shared his vision. From the start, the group envisioned the company becoming a national entity. Products, store identity, marketing, commissaries and franchising structure were developed with a nod toward rapid growth and multiple territories.

In January 2004, they bought an independent pizzeria in Bellevue, Wash., shut it down, made it their test kitchen and later reopened it as the first Garlic Jim's.

A few months later they opened a second unit, which Northrop called the model store for the rest of the chain. "We put in the copper and wood trim in the lobby ... think Starbucks but in a carryout and delivery store," Northrop said. "We wanted to convey our 'gourmet right away' image in that store. We didn't want it to be a five- or six-store chain with a bunch of one-off units."

Franchised units soon spread south to Oregon, where Eric Peterson and Terry Hardy opened their first in 2005. Selling Peterson on the concept was easy, he said, because he's Garlic Jim's ideal customer.

"I was tired

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of driving across town to find a great pizza, so we told them we'll be your first store here," said Peteson, who lives near Salem, Ore. He and Hardy opened their second store last year, and they have four more in the works. They credited the concept's simplicity with the quick growth; all stores are serviced by commissaries, which relieve franchisees of the procurement burden. "They've streamlined the process so well, and that helps you get set up as smoothly as possible."

And quickly, too. From the time a lease agreement is signed, Garlic Jim's sets a nine-week deadline to opening. Pre-approved and pre-trained contractors have six weeks to get the facility ready under the watchful eye of Garlic Jim's management. Northrop said that frees the operator to focus on marketing, hiring and training.

Instead of soft openings, the company conducts an extensive three-week sampling program. For example, Peterson gave out free product in front of his store and at events attended by customers in Garlic Jim's target demographic: middle- to higher-income families.

"One time we took a dry-erase board, wrote 'Free Pizza' on it and sent a couple the employees out to the sidewalk to hold it," he said. "Before we knew it, the parking lot was packed. We weren't open yet, but people were able to associate a taste with the store. It created a buzz right up to the opening."

Reinforcing Garlic Jim's premium image is its people. Northrop said the company insists on hiring only service-minded clean-cut employees. Despite the complaints of many in the industry who say such help is impossible to find, Garlic Jim's is getting them. Northrop attributes some of that fortune to his stores' location in better neighborhoods, and to the chain's higher check averages, which yield better tips. Peterson said many of his employees come from the church he attends.

"We found a lot of great kids in our youth group, kids whose parents I have a relationship with," said Peterson, a former manager at a Nordstrom's store. "When we first started interviewing, we never had an issue of not having enough people. We've been able to be selective, and I think part of that is because of the standard we set."

Nationwide aroma of Garlic

When they

Garlic Jim's Famous Gourmet Pizza

  • HQ: Everett, Wash.
  • Units as of July 2006: 31
  • Principal officer: Dwayne Northrop, CEO
  • Franchise fee: $20,000 first store, $15,000 second store
  • Royalty: 5.5 percent of sales
  • Net worth requirement: $275,000
  • Liquid assets: $100,000
  • Web site: garlicjims.com
founded the company, Garlic Jim's officers set a goal of having 500 units by 2013, which would place it in the industry's top 10 in unit count. Bill Volm, a sub-franchisor in Oregon & Northern California, believes that's not only doable, he thinks the goal is conservative.

"I'd say we'll have at least that many by then," said Volm, "Between Northern California and Oregon, we'll have 100 units by 2013. And I know they've already sold territories in New Jersey, Dallas and Atlanta: big cities with a lot of potential. As busy as we are now, I know we're going to get there."

Northrop said the lack of reliable gourmet pizza delivery in the U.S. will help carry the concept across the nation, while Peterson said exceptional service will be the ticket.

"With pizza delivery, customers' expectations are so low to begin with because they're used to getting a pizza an hour after they order it," he said. "So when you show up in less than 30 minutes, they're floored. And they appreciate the service to the point it justifies the additional dollars."

David Gollersrud, the chain's vice president of development, doesn't doubt Garlic Jim's customer appeal, but he said convincing landlords not to view it as "just another pizza chain" is crucial to successful expansion.

"We have to educate the landlords about who we are and what we do and why we're different," he said. "When a landlord takes the time to go into a store and eat our pizzas, that's when they identify with our concept and become much more agreeable to have us in their shopping center. Building brand recognition and separating ourselves from other concepts out there is what we have to do."


Topics: Delivery , Operations Management


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