The premium pizza buffet, version 2.0

Jan. 21, 2010
Matthew Loney, new president of Stevi B's premium pizza buffet, could have the perfect mix of tradition and innovation on his side to step up the premium pizza buffet's presence in 2010. On one hand, he stressed the importance of the basics when he took over last year — like the importance of precisely made dough, whose particular process he painstakingly dictates to franchisees: a certain temperature water needs to be used in making the balls, which, after properly cooled and proofed, are warmed to exacting temperatures before use. Often, this process gets hurried with house-made dough.
On the other hand, Loney is introducing some renegade flavors that hail from his days with the quirky upscale Mellow Mushroom pizza chain. He's also developed a marketing co-op pool for funds with which franchisees can decide collectively how to use. And he's upgrading the pizza buffet's digs from B and C level real estate to cohabitate with brands more aligned with his fast casual concept, like Barnes & Nobles or Panera Bread.  
Loney's franchising and other incentives has set the restaurant on track to sell and build an unprecedented amount of stores in 2010.  As for other recent initiatives Loney described below, the proof will be in the dough.  
Did Mellow Mushroom give you any insight into the art of differentiation, or maybe something else that's been helpful in re-energizing Stevi B's?
We already had a great lineup of specialty pizzas. But obviously, Mellow Mushroom was very creative, had a very active R&D department. (It reinforced) that train of thought that pizza doesn't always have to be pepperoni and cheese. In fact, we used to have a rule with our R&D at Mellow Mushroom: "There's nothing you can put on a pizza that won't taste better once you put it on pizza." So we have hot wings, taco, mac ‘n' cheese pizza.
We haven't rolled it out yet, but on Feb. 1 we're introducing a breakfast pizza. It's a western omelet base, with egg, green peppers, onions, mushrooms and red tomatoes. And it really tastes good. We're going to roll out dessert pizzas — pumpkin, chocolate peppermint, creamsicle and then a lemon. Those are seasonal. And then on top of the breakfast, we're going to have a consumer build-your-own contest. So that people will be able to submit ideas, and we'll roll that pizza out as an LTO. So my goal is two or three new pizzas a year.
A lot of quick-service and fast casual restaurants are pursuing innovative breakfast items. Are you looking at that hour more?
We'll be rolling (the breakfast pizza) out during our opening hour, 11 a.m. to noon. We'll also be using it a lot on weekends; we get a large after-church and Sunday brunch crowd. It's a good day part for us. But I think a lot of people don't use this to its potential — catering. This opens a new time of day we can do catering to businesses and schools, where we can come in the morning. And our customers are still always able to add things, like bacon and ham, etc. 
You are also building more store prototypes.    
Yes. Now is not the time to saddle franchisees with (remodeling) costs. So I said, let's build some prototypes, take the assets and put them into some of the older stores.
Lot of aspects of the new prototypes fit the direction we're moving as a system: One, we lowered the cost by about $150,000, which is great for our new franchisees. Also, in the old prototype, they had a bus cart on wheels. That's been taken out; we now go out and buss tables like at a sit-down restaurant. We've also put closed-circuit TVs in the game room in the back so parents can keep an eye on kids without being there.
It's the little things: Warmers used to sit up on a piece of granite, and now are inset in the granite, which gives it a more streamlined look. A more significant change was … we've cut out a huge portion of wall (by the kitchen), and you can see the mixer where they're making the dough balls; there's a window where you can see the proofing — emphasizing that we're stressing the quality of this product. It's a little bit of theater.
Tell me more about the marketing co-op models—who they'll benefit, where they'll pool money from, and what their function is.
Here's what we did: We have a national marketing fund, and the way it was working in the past was that the national marketing fund built all the ads, then it also purchased all the media buys. The problem with that model, which a lot of franchise systems use, is that you're not able to get regionally specific to the type of marketing that would be most effective in a certain area.
So … we eliminated food rebates, and that represented about 1 percent of our franchisees' sales, which we redirected into local marketing co-ops for our franchisees. So the national marketing funds still build the ads, but then at the co-op level they're able to take their dollars — and some have contributed even more than that 1 percent. They meet once a year for a marketing spend, deciding how much to contribute to their funds, and they'll say to us, "We want you to look into TV, billboard, radio, etc." ... Then they elect among themselves how they want to spend that money in 2010. The only rule is that it has to benefit the entire region and not one store at a time.
I'm a big believer in giving back to franchisees as much control as possible. I think a lot of franchisors shy away from that, when there are a lot of good recommendations that franchisees make.

Topics: Business Strategy and Profitability

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