HURRICANE KATRINA: Regrouping, rebuilding and reopening

Oct. 3, 2005

Hurricane Katrina was the kind of storm Richard Mueller III and his friends used to joke about, a calamity they dubbed generically "The Big One." In their minds, Gulfport, Miss., where Mueller moved to 25 years ago, already had endured its once-in-a-lifetime lashing from Hurricane Camille in 1969. They never considered — not seriously, anyway — they'd endure an even greater catastrophe.

The joking ended on Aug. 29, when Katrina delivered a knee-buckling blow to the U.S. Gulf Coast's mid-section. A day later, as the storm spread its soggy sadness northward, 86 of Mueller's 140 Domino's Pizza stores were out of business and his home was demolished.

"At first you don't know what to do when you see something like that," said Mueller, chief operating officer of RPM Pizza, the largest domestic franchise group in Domino's system. "You think your life is over because it's so overwhelming."

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But before the devastation hardly could sink in, Mueller was working to reopen those stores. Two days after Katrina made landfall, the ovens came on in one of RPM's closed units. Thirteen days later, 65 were reactivated, and of the remaining 24 still closed, 14 are expected to reopen. Ten, however, remain underwater in New Orleans, and Mueller expects they'll be demolished.

Though his business was hurt, Mueller's spirit remains strong. The "unbelievable support" he's received from Domino's Ann Arbor, Mich., headquarters and hundreds of its franchisees — some of whom journeyed from California and Minnesota to lend a hand — has kept him going.

"We've got a franchisee out of Jacksonville, Florida, who called us Monday afternoon — the day of the storm — and said, 'I've got 12 generators and 300 gallons of gas on a truck. Tell me where to go and I'll be there tomorrow,'" Mueller said. "I don't know how he got here so fast, but he even beat the power companies in here."

The Domino's commissary in the area was not damaged, which has helped Mueller's shops feed people involved in the relief effort. "We've already given away over 20,000 pizzas. If you put a dollar value on that, that's about $200,000. And Ann Arbor is footing the bill."

Randy Boswell is glad to hear RPM's stores are reopening. As the owner of Alexandria, La.-based Bosco Services Group, a pizza-oven cleaning firm, nearly 30 percent of his revenue comes from RPM. That's left his crew with a lot of time on its hands since Aug. 29.

"(RPM) said a few stores are coming on on-line every day and that they've got some mobile units up," said Boswell. "The question I have is whether the clientele will be there to support the stores they get open again. You find tons of people who aren't planning on going back. And if they don't go back, who (is RPM) going to serve?"

Where RPM's stores have reopened, Mueller said, "Many times, we're the only game in town." Nearby competitors have been slow to resume business, he said, plus many Domino's customers claim the pizzas they're buying are the first hot meals had in a long time.

"When customers drive by and see us shaking a 'Now Open' banner, they start cheering," Mueller said. "We've had people hug us because they've been eating MRE's (meals ready to eat, supplied by the military) for two weeks."

The day after Katrina's departure, the top three pizza chains reported the following closures: Pizza Hut 85; Domino's 100; and Papa John's 50. As of Sept. 16, however, Pizza Hut had reopened 61, Domino's 88 and Papa John's 30.

With power lines, phone lines and cellular networks damaged all across Mississippi and Louisiana, assessing the damage to independent and regional operators is nearly impossible. Travis Dickinson, a two-unit Italian Pie franchisee in Baton Rouge, La., said it's likely some of the New Orleans-based chain's units will reopen. Of 27 restaurants in the system, 11 are located in the Big Easy, some in areas deluged by levee breaks.

"As you can imagine, (the principals) have been somewhat out of pocket and hard to reach lately," said Dickinson. "I'd heard they were meeting and discussing the fate of stores that might not reopen, but that's all I know."

Though the destruction in New Orleans is beyond anything he's witnessed, Mueller doesn't believe the flooding is as widespread or devastating as some media reports claim. Ongoing coverage of damage to areas like the French Quarter is overshadowing progress in less-famous neighborhoods.

"Every day it gets a little better here; something good happens every day," said Mueller. "People wake up, one new thing happens to them which shows them it's better than the day before, and they move ahead."

A boom in Baton Rouge

Eighty miles northwest of New Orleans is the state capital of Baton Rouge, home to 450,000 people before the storm. Since then, an estimated 350,000 evacuees have moved there temporarily or permanently, keeping pizza operators busy feeding them. As a result, Dickinson estimated his sales are up 30 percent, while Louis DeAngelo, chief executive of DeAngelo's Casual Italian Dining, will only say the pace is frantic.

"All I know is we're busy, which you'd expect

start quoteEvery day it gets a little better here; something good happens every day," said Mueller. People wake up, one new thing happens to them which shows them it's better than the day before, and they move ahead."end quote

— Richard Mueller III, Domino's Pizza franchisee

when the city's population doubles," DeAngelo said. "The big joke is real estate agents will be out of work soon because nothing will be available to sell. I've heard people are buying houses sight unseen."

Baton Rouge operators like Dickinson and DeAngelo have struggled to help in the relief efforts because of damage to the city's telecommunications system. (Though far from Katrina's eye, Baton Rouge received hurricane-force winds and endured minor damage.)

"It was very difficult at first because we couldn't get hold of anybody," said DeAngelo. "About all we could do was make 10 or 15 pizzas and bring them to places where we saw the most people congregating. When the communications got better, we started bringing things to the food bank, the blood bank, nursing homes."

Matters also were complicated by operators running out of supplies or lacking the ones relief workers requested because many foodservice distribution hubs are located in New Orleans.

"A problem I've run into is (relief organizations) needing things like paper products we didn't have much of to begin with," Dickinson said. "And our distributor can't get replacements to us very quickly."

Until its New Orleans hub is fully operational, DeAngelo said Sysco is servicing his 10 Louisiana units from hubs in Houston and Dallas — drives of five hours and eight hours respectively, under normal conditions.


Houston, we have a solution

About five days after Katrina hit, evacuees from the main damage area arrived in Houston. The city was eager to care for the 250,000 people streaming in from the east, but it didn't anticipate the need to feed the thousands of volunteers serving the needy. According to Jeff Doyle, president of Revention, a Houston-based POS software developer, 2nd Baptist Church's Operation Compassion alone was directing some 60,000 volunteers helping evacuees.

"A lot of those volunteers are spending 12- and 18-hour days out there taking care of the evacuees," Doyle said. "And because a lot of those people are sick, they're very concerned about proper sanitation, so they're cooking all the food on site."

While donations of cooked food from restaurants couldn't go to evacuees, volunteers could accept them. That led Doyle to ask one of his customers, New York Pizzeria, to help out. His proposal was simple: If owner Anthony Russo would cook the food and deliver it, Revention would pay for it indefinitely.

The preparation of those meals is costing Russo, too, in overtime pay. But he said he's not counting the cost.

"I want to keep the morale up so they'll keep helping out," he said. "If I said they had to do it for free, some might not like it. It's for a good cause, so it's OK."

Russo also helped out by turning one of his 12 units into a drop-off site for a food drive led by Houston's food bank. When he borrowed a tractor trailer from a trucking company, news of the effort spread and the trailer filled up quickly. When it was taken away, Russo asked for another.

"Everybody is dropping off food and asking, 'What else do you need?'" he said. "Just one guy gave 40 cases of bottled water — 40 cases! People are giving their hearts out here in Houston."

Read also A hurricane of help

Topics: Domino's Pizza, Operations Management

Companies: Touch Express by Custom Computing

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