- WHITE PAPERS
Though Dave Ostrander has 195 credit hours from a handful of colleges, he has no formal academic degree. Were the school of hard knocks a real institution, however, he just might be the dean.
Ostrander's industry reputation as a corporate pizza giant slayer is a well-deserved badge of honor. In his 35 years as an independent operator turned consultant, he's been there and done that at the expense of many competitors.
Today he travels the U.S. speaking at trade shows and talking with other operators about those successes -- but also the failures that taught him his most valuable lessons.
"I think people can get a formal education to make a living, but people who get an education from the school of hard knocks can make a fortune," said Ostrander, known in the industry simply as "Big Dave."
As a widely sought pizza industry speaker and consultant, "Big Dave" Ostrander shares his own tricks of the trade with thousands of pizzeria operators each year.
As a high school student in suburban Detroit, he worked in a pizza business after football practices. Sleep deprived but motivated to succeed, he pulled Bs all through his senior year.
After two years in the military, Ostrander moved to St. Helen, Mich., in 1969. There he convinced the owner of a meat shop to let him open a pizza business in an unused 8'x15' space in his building.
Ostrander borrowed $400 from his landlord to buy a used electric pizza oven "a 20-quart mixer that dripped oil" and some beginning inventory. Every other piece of equipment he needed -- coolers, worktables, scales and grinders -- was owned by the meat market.
After opening Big Dave's Pizza on a Wednesday, he was "totally, financially solvent by Sunday," he said. But he wasn't rich yet. "You know how people put their first dollar on the wall? Well, I bought green peppers with it -- and I haggled. My petty cash was what I found in between the seat cushions in the car."
A year and a half later, Ostrander spied a pizzeria for sale in Rose City, Mich., about an hour away. The bankrupt owner sold Ostrander the fully equipped shop for $6,000, also dubbed Big Dave's Pizza.
Ostrander later bought into a failing 75-seat truck stop, which became his alone after two months when his partner left town. He kept the business running and successful until tragedy struck in 1972, when a French fryer caught fire and set the restaurant aflame.
An employee called Ostrander at Big Dave's and told him the business was on fire, but by the time he got there, it was beyond rescue.
Just as he thought things couldn't get worse, they did.
The IRS said he owed $27,000 in back taxes. Penalties and interest made the total bill $42,000.
Hoping for a little mercy, Ostrander explained that he wasn't aware he was obligated to pary the particular tax, but that he'd make good as soon as he could. Unwilling to buy the story, the agent had all Ostrander's business property seized and positioned it for sale at auction.
Ostrander, however, sent several friends to buy all his equipment back at 5 cents on the dollar, and shortly after, he moved to the tourist town of Tawas City, located on Lake Huron, where he set up another Big Dave's Pizza. This time he created a partnership deal that didn't list him as the owner.
Uncle Sam, however, wasn't fooled for long.
"We were back in business and I was instantly making money doing big numbers and cranking out pizzas," said Ostrander. "And then the IRS came in again and demanded full payment."
This time Ostrander struck a deal: He promised to pay the government every penny he owned at a rate of $1,000 a month, and the agent agreed.
Big Dave's doubles
Not far from Tawas City was Oscoda, Mich., another lakeside tourist town with 10,000 residents -- plus 10,000 enlisted troops at Wurtsmith Air Force Base. There Ostrander leased a spot in a strip mall and set up shop. Its opening week was less than auspicious.
"The store in Tawas was doing thousand-dollar days, and on my first day in Oscoda we did $85," said Ostrander, recalling that Saturday in 1975. Sunday's sales improved only by $5, and on Monday, when two teens came in looking for work, Ostrander told them "there wasn't much work to be done unless they had a lot of friends who they could tell about us."
Not only did they take him at his word, the few folks who'd already eaten his pizza were spreading the word as well. By the next weekend Big Dave's in Oscoda was posting $800 days, and by the end of the following year, he'd paid off his bill to the IRS.
In the decade that followed, Ostrander sold his Tawas City store to focus on his Oscoda property, which was averaging nearly a $1 million a year in sales. When that sales number ranked Big Dave's 25th in Pizza Today's top 50 pizzerias in 1988, Ostrander was both shocked and thrilled.
Ostrander knew the fight was on to preserve his 75 percent market share when Domino's promised delivery within 30 minutes and Little Caesars offered two-for-one pizza deals. Customers gave the newcomers a try and Big Dave's sales showed it.
To turn the tide, Ostrander fought back by accepting competitors' coupons and guaranteeing pizza delivery in 29 minutes. He also guaranteed that any customer who didn't like a pizza purchased at a competitor of Big Dave's could bring the uneaten portion to Ostrander's store and receive a free one.
"We got back all our market share and then some after that," said Ostrander. "The Domino's went out of business about four years after it came in, and we put Little Caesars down to the point where it wasn't a factor anymore."
Call for help
In 1990, Grand Rapids, Mich.-based distributor Gordon Food Service wanted to grow its sales to pizza businesses and Ostrander called for advice. GFS eventually broadened its pizza-specific offerings and assembled an "A Team" of industry experts who could serve as pizza problem solvers to its customers.
Paul Nyland, then a GFS salesman, was made the company's customer service manager for pizza and teamed up with Ostrander to lead the A Team's visits to trade shows across the eastern U.S.
Nyland said Ostrander's work with GFS helped the operator launch his career as a pizza industry consultant.
"In our association together, I've watched him go from a wannabe consultant to the top consultant in the industry, in my opinion," said Nyland, who called Ostrander "always unselfish. He has a wealth of knowledge ... and he'll share those so-called secrets of the game."
John Correll, also a pizzeria operator turned consultant, met Ostrander in 1982 while serving on the board of the Michigan Restaurant Association. Despite Correll's history working for large chains, he said he respects Ostrander's achievements as an independent.
"I always viewed him as being a progressive and innovative individual," said Correll, founder of Correll Concepts in Canton, Mich. "If all the independents were as savvy and smart as Dave, the chains would have a really tough time."
Both Nyland and Correll said Ostrander's ability to put people at ease has made him a highly sought-after consultant and industry speaker. Correll said his own suit-and-tie presentations at industry gatherings actually may have made Ostrander's Everyman appeal stronger.
"In all my seminars I appeared more an executive than a hands-on consultant to independents," Correll said. "Even Dave's name -- 'Big Dave' -- makes him sort of your best buddy. ... He's succeeded in creating the image and persona as 'the operators' consultant,' and deservedly so."
Logging thousands of air and road miles with Ostrander, said Nyland, has made the two closer friends than business associates.
"Friends don't come any better," Nyland said. Of their work together for GFS, Nyland added, "You got two guys that clicked and made it happen. It wouldn't have happened without him."
When Ostrander sold Big Dave's Pizza in 2000 to become a full-time consultant, he was glad to release the 24-hour burden of ownership, but he knew he'd miss the camaraderie of his crew and the rush of a busy Saturday night. Still he's certain he's answering his calling to help others by sharing his experience, many times for free.
"Some people just need a quick answer, usually a reality check," said Ostrander. "I just tell them what I know and don't try to nickel and dime a client. If they want to know more, then maybe we'll talk about a visit. Otherwise, I just try to help."
Topics: Independent Operation