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Romeo's Pizza operating system, pillars make it unique in industry
Romeo's Pizza is on a hot streak right now. With sales up 26%, and a rewards program that boasts a 300% growth last year, the Ohio-based brand is ready for the next level.
February 28, 2022 by Mandy Wolf Detwiler — Editor, Networld Media Group
Ohio-based Romeo's Pizza is on a bit of a hot streak right now. The 53-unit company grew sales 26% in 2019-2020 even as the pandemic shut down other restaurants across the U.S. 2020-2021 sales haven't been released yet, "but I can tell you they're fantastic results," said Mike Rao, chief strategy officer for Romeo's Pizza, said in a phone interview.
The brand, founded in 2001, is owned by Ryan Rose, who bought a minority stake around 2016. Rose now serves as CEO of Romeo's Pizza.
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| Mike Rao, chief strategy officer for Romeo's Pizza |
As is customary, the top seller is pepperoni pizza. Another top producer is the Italiano, a deep-dish style pizza. Romeo's is known for its sweet sauce. Beyond Chicken products were introduced this year as a test, and "we see a large vegan component starting to grow and it's getting pretty popular right now," Rao said. The company also testing sausage, pepperoni and a few other plant-based products with success.
In some areas, the brand is consolidating its menu to stick to high volume offerings, as 80% of the company's revenue is comprised of just 20% of what it sells. New LTOs are released quarterly.
"Our product really speaks for itself," Rao said. "You either love Romeo's or you hate it."
There's no commissary at Romeo's. The dough and sauce are made in-house every day.
Continuity across the brand is easy, Rao said, as the franchisees are heavily involved in operations, and there's a franchise success manager who works with the area representative franchisees on a regular basis. Rao and Rose themselves work with larger ARs, helping them to become better leaders as well as run their businesses more efficiently.
So what sets Romeo's apart from its competition? It's a three-part entrepreneurial operating system with handcrafted excellence, local pizza champions and pizza with a purpose.
Each pizza is made with quality ingredients and care. Each employee is also considered a local pizza champion, and each pizza has a greater purpose.
"You cannot hit your ultimate capacity unless you engage with the community, and we have a very long and demonstrated history of giving back to the community," Rao said, "from abuse shelters for women to children with cancer. … We created a 501c3 called the Sweet Smiles Foundation, and every one of our owners and every employee is a local pizza champion. So someone making pizza is not just making pizza for a nice family meal. Everything they do winds up back in the community some way.
"Most important for our employees, they know their efforts make a difference."
As a result, the company has "extremely low" turnover, Rao said. Giving employees a say in changes and operations is just one of the ways the company celebrates its employees and builds trust between management and ground-level employees.
Customers are loyal, too. Thirty percent of business comes from the company's rewards program, proving customers are often repeat business. Still, the rewards program grew over 300% last year. "These are all new people coming in because of what we're doing in our communities (and) because of the quality of our products," Rao said.
Romeo's Pizza also lives by the "culture eats strategy for breakfast" philosophy, meaning if the culture isn't right, the strategy will falter, "so we hire and fire based on our core values," Rao said. "That also goes for new owners who want to come in, and if they don't have a demonstrated history of giving … they can have all the money in the world and we're not signing them up as a franchisee."
Also important to the company are its five pillars:
- Systemwide communication.
- Training and support programs.
- Effective use of technology.
- Innovation and creativity.
- Marketing and promotional programs.
The company has an extensive library of training videos and is looking to get into automation in the future to aid in labor challenges.
The company has a median sales volume of $824,000, and a total of 75 units will be open by the end of 2021. There are 205 units in development over the next six years. In 2021, 37 franchise agreements were signed, and eight of those were completely new to the Romeo's Pizza franchise.
Romeo's Pizza just opened in Colorado and Texas, a franchise store is preparing to open in Florida, and there's growth planned for Ohio, North Carolina and South Carolina.
The company prefers suburbs for their locations, and a perfect location has low competition. Romeo's shies away from second-generation spaces, and they're not interested in being a late-night delivery brand.
"We're more of a family-oriented business," Rao said.
They're looking for franchisees who have a demonstrated history of success, and those who can actively be involved in the day-to-day activities of the business. Eight current and former employees now own their own franchises.
The biggest challenge for Romeo's has been supply-chain issues and construction woes with the build-out of stores. Walk-in freezers, for example, have been difficult to source, as have printed cardboard pizza boxes.
"What this has really done is just fine-tune our operations and strengthen our relationships by getting on these things early," Rao said.
About Mandy Wolf Detwiler
Mandy Wolf Detwiler is the managing editor at Networld Media Group and the site editor for PizzaMarketplace.com and QSRweb.com. She has more than 20 years’ experience covering food, people and places.
An award-winning print journalist, Mandy brings more than 20 years’ experience to Networld Media Group. She has spent nearly two decades covering the pizza industry, from independent pizzerias to multi-unit chains and every size business in between. Mandy has been featured on the Food Network and has won numerous awards for her coverage of the restaurant industry. She has an insatiable appetite for learning, and can tell you where to find the best slices in the country after spending 15 years traveling and eating pizza for a living.
