Leaner NRA show attendance not affecting pizza franchisors

Sept. 11, 2003

CHICAGO -- The aisles of the exhibit area of the National Restaurant Association's (NRA) Restaurant, Hotel-Motel Show were uncomfortably roomy this year. Attendance records for the 84th-annual event, held May 18-21, won't be in jeopardy when the NRA reports its official figure a few days from now.

Prior to the show, the association conservatively estimated this year's event would draw 75,000 people, a crowd far smaller than the shoulder-to-shoulder throngs drawn a decade ago.

To Bob Mazziotti's eyes, however, traffic is very good. Detroit-based Little Caesars is exhibiting for the first time at the show, which Mazziotti, its vice president for U.S. development, called a well-timed move for the newly invigorated chain.

"The show has been great for us: great traffic, some great conversations with people and some good leads," said Mazziotti. "It's a good time in the economy for franchising. It's a real wake-up call for people to take a look at pizza as a viable alternative for a small business."

At center, Bob Mazziotti, vice president for U.S. development at Little Caesars spoke with prospective franchisees at the Restaurant, Hotel-Motel Show in Chicago.

Mazziotti said many prospects stopping by his booth are out-of-work executives seeking control of their financial destiny through franchising. Pizza, he tells them, is the answer to their problems.

"There is nothing better than pizza," he said. Little Caesars, he added, has posted double-digit comp-store gains for 19 straight months, though the privately held company has not released its own figures to back the claim. "This is really an exciting time for us. I've been in the pizza industry now for 33 years, and it's as much fun now as it was day one."

Papa Murphy's Take 'N' Bake Pizza President Mark Laramie (see related story Who's Who: Mark Laramie) also is bullish on the industry's prospects, though a bit more calculating than the ebullient Mazziotti. He and his franchise staff reported speaking with candidates similar to those shopping the Little Caesars booth 20 feet across the aisle. He agrees with Mazziotti's assessment that corporate America's woes could be their companies' gain -- if those prospects are serious about running a pizzeria.

"A benefit of the tight economy -- if you can call it that -- is that we're seeing the highest-quality franchise applicants we've seen in some time," said Laramie, whose company is based in Vancouver, Wash. "These are people who want to control their destiny to a larger degree. ... Still, we're being highly selective about the process. We're not going to grow for growth's sake."

Laramie, a long-time industry veteran, viewed the show's thinner crowds as the bottom of a cycle that will reverse itself soon enough. "Sure, at this point in time, the industry is a little bit soft. But it will come back as the economy comes back. All these businesses are cyclical and we know they'll come back up. And by being here, we're positioning ourselves for the long term."

Boston Pizza Vice President Rich Wood expects the U.S. arm of the 170-store Vancouver, Canada-based chain to double from 12 to 24 this year, and said his company wants well-capitalized operators to help it grow. (A turnkey investment in one unit is $2 million, he said.) Not only is the Canadian casual-service restaurant market strong, he said, Boston Pizza also sees the arguably saturated U.S. market as the land of opportunity.

"There are 30 million people in all of Canada, but there are that many in Texas alone," said Wood, who calls the pizza-centered concept "the Chili's of Canada." Boston Pizza's U.S. headquarters are based in Dallas. "We see a lot of mid-size market penetration potential, and we're making a huge commitment to see it's done the right way."

Like Laramie and Mazziotti, Lance Benton, president of 82-store Buck's Pizza in DuBois, Pa., remains optimistic the restaurant industry will bounce back sooner than later. Over the 27 years since he started his company, he's watched the pizza segment weather the rough times better than other industry segments.

"Even as the economy gets a little softer, business is still good," said Benton. Between talks with potential franchisees, he said he talks to his competitors in the Papa Murphy's and Little Caesars booths. "There's plenty of business out there for everybody. I think you need to be out there talking to other franchisors, just to see what they're doing. And you just need to be here, too, to be visible."

Benton said the first three days of the show yielded several good leads, but that just one winner would make the trip worthwhile.

"It doesn't take that much to make us happy," Benton said with a broad smile. "We're looking for that one really good quality franchisee, that one really good prospect. You get that, and it's all worth it."

Topics: Little Caesars , Papa Murphy's Take 'N' Bake Pizza

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