Aug. 29, 2010
Fifty-two-year-old pizza chain Pizza Inn elevated QSR veteran Madison Jobe from vice president of development to COO this spring. Now he oversees franchise sales, construction, real estate and design – “things that directly relate to the growth of the business,” as he puts it.
One of the company’s big growth initiatives has involved a concerted growth effort in Saudi Arabia, where they have begun launching almost 50 new stores. Here, Jobe sheds some light on the benefits and challenges of erecting new stores in that area.
After our last interview, you all announced the launch of 44 new stores in Saudi Arabia. How are those all coming on line, and why is that such a popular market for the pizza industry right now?
The timing of those 44 stores are over the next five years. … But we have every reason to believe that over five years, that number will exceed 44. The entire Middle East, and Saudi Arabia specifically, continue to be progressive in their accepting of Western culture.
Pizza Inn, specifically, has been in the market for over 18 years. The early days were not quite as lucrative. It has only been in the last (couple of) years where their development has been more aggressive and (Western acceptance) has progressed. In the last two years, many more brands in the U.S. have opened there -- Freshberry, Vapiano, etc. And as the world economy goes, Saudi Arabia, even though their growth has slowed over last two years, has been much more aggressive as compared to the U.S. economy. There's more stability in their economy because of continuing strength of the oil and gas business. The opportunities there have grown because of the continued development of housing: In many cases, it's expats and foreign nationals from around the world (taking up residence). So they still have a growing economy, growing housing market.
What sort of cultural mores do you have to plan for when expanding your chain to the Middle East?
Saudi Arabia is a unique market in that you have to be not only conscious but also respectful of the religious customs. And there are much more government and religious restrictions in Saudi Arabia than in any of the other countries I've named that we're in. Part of that is by law; they recognize prayer times (so) if you're open, you may have to close temporarily. And then there are laws having to do with separate segments; you have to sequester single males in the bachelor area.
There is a movement that's changing the way U.S. companies do business in Saudi Arabia. There's a movement in Oman and Saudi Arabia to employ more locals in your business. In Oman the initiative is called Omanization, where you have a certain number of your employees that are nationals, because many companies import much of their labor. In doing that in Saudi Arabia, you have certain restrictions under Muslim law as to how single women can work in the service environment.
Not all regions are the same, however. In Kuwait you have these religions and traditions, but you're not required to close during prayer times. That doesn't mean some businesses don't, but they're not required to. And even following Muslim traditions in Kuwait, single women can go out by themselves. .
What's the next new market, flavor, or promotion?
We have a couple of new products that will be more appropriate for fall, and the American take on the pizza side, but we'll be ready to announce that soon. At least two of those will become optional products. But they will not become a core part of our menu.
We have a couple of deals that will be multiple-unit agreements. I'm personally very optimistic, but not ready to announce to public just yet.