Pizza Inn: Our 2008 Chain of the Year

 
Dec. 22, 2008
In a time when many restaurant companies are struggling or going out of business completely, one particular pizza chain has managed to pull itself back from the brink of disaster: Pizza Inn. Along the way, it endured enough boardroom intrigue to fuel a television miniseries and just two years ago ran a $6 million loss.
 
During the lean years, Pizza Inn existed primarily on the pride of its franchisees. The product survived intact and executives developed a renewed focus on the basics of good operations. The payoff came in a return to profitability accompanied by several consecutive quarters of comparable-store sales increases.
 
For those reasons and others, Pizza Marketplace has named Pizza Inn as its 2008 Chain of the Year.
 
Emerging from tough times
 
Pizza Inn celebrated its 50th anniversary in 2008, but for several years it didn't seem as if the company would make it that far.
 
Based in The Colony, Texas, and founded in 1958, the chain grew to nearly 800 units in 33 states before declaring bankruptcy in 1989, a result of increased competition in the pizza industry. Although the company managed to regain its footing a few years later, the number of restaurants fell to less than 400.
 
To make matters worse, a series of boardroom dramas beginning in 2002 left the company without a clear direction, mired in litigation and bleeding cash. (Read also, Pizza Inn back on track.)
The new interior look of Pizza Inn.
 
While the corporate office was suffering from the turmoil, franchisees focused on running their restaurants.
 
"The franchisees were able to survive not because of the company but because we had good pizza," said Bob Singh, a 28-year franchisee who operates six Pizza Inn locations in Mississippi.
 
Today, things are a bit different. Pizza Inn is riding a wave of six straight comparable-store sales increases and is expanding both domestically and internationally. The company also recently opened a new prototype store, located in Denton, Texas.
 
And after losing $6 million in 2006, the company has returned to profitability, earning $2.8 million in fiscal 2008.
 
"I think we've really turned the corner," said Charlie Morrison, a former president of Steak & Ale who was named Pizza Inn's CEO in December 2007. Morrison served as acting CEO for five months prior to his permanent placement.
 
"We make an outstanding product," he said. "Certainly, we've gone through a lot of challenging times and survived based purely on the quality of the pizza and the service we provide."
 
And to celebrate Pizza Inn's 50th anniversary, the company reintroduced JoJo, the mustachioed mascot.
 
"(The company) has gotten back to restaurant basics and developed a successful new prototype that brings well-known elements of our past back," said Greg Clairday, an Arkansas-based area developer who operates nine Pizza Inn restaurants and oversees another 25. "We love that Charlie bought back our icon Jojo."
 
Planning for the future
 
In November, Morrison beefed up his management team with the appointment of Scott Richter as senior director of marketing and Samuel "Bud" Boswell as executive chef and director of research and development.
 
Scott Richter most recently served as senior media director with Razor Driven LLC, a Dallas-based advertising agency whose clients included Domino's, Wendy's, Dunkin' Donuts and Baskin Robbins. Boswell most recently served as corporate executive chef and director of purchasing for Spaghetti Warehouse.
 
"Both of these guys are professionals who know the space very well," Morrison said. "Scott has done a lot of media placement for other pizza chains, so he brings in a lot of experience that we were lacking in media strategy. With Bud, the company hasn't had a corporate chef on staff for probably 15 to 18 years. It is very important in this business to keep up on product trends and to be a leader again."
 
And franchisees seem to be pleased with the changes.
 
"I think we finally have someone who understands what it means to operate a store and how to be successful at it," Singh said.
story continues below...  
 

 
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Plans for the upcoming year include growing the company both internationally and domestically. While Morrison couldn't discuss specifics, the prototype store has performed beyond expectations and additional company-owned restaurants are in the pipeline.
 
The company has signed several multiunit agreements in countries ranging from Mexico to Oman.
 
"I think it is important to regain traction domestically," Morrison said. "It has been several years since we have had a net opening trend, so I want to focus a lot of effort on domestic openings, but at the same time international growth has been strong for us, so I'm not going to let off the accelerator at all."
 
And while Pizza Inn faces the same challenges every other company faces in a stagnant economy, the chain's buffet model should help it capture customers keeping a closer eye on their spending and seeking a value proposition, Morrison said.
 
"Six straight quarters of positive comps is a great message to send in this economy," he said. "I am very proud and excited, and I am looking forward to the future."
 
 
* Photos by Johnson Price Photography for Pizza Inn.  

Topics: Operations Management , Pizza Inn


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