Brian Petruzzi with 1000 Degrees Pizzeria on Franchise Interviews
Brian Petruzzi with 1000 Degrees Neapolitan Pizzeria was interviewed on “Franchise Interviews with Martin McDermot”. The transcript of this interview is below.
Martin McDermot: Hi everyone. Welcome back to a very special edition of Franchise Interviews where for over nine years we’ve been asking the “frantrepreneurs” who own one. I’m your host, Martin McDermot. I’m the president of Franchise Interviews and as we were saying earlier, we have a great show today. We’re meeting with Brian Petruzzi of the 1000 Degrees Neapolitan Pizza Franchise serving customizable, authentic Neapolitan pizza on hand-tossed, never frozen dough and topped with more than fifty of the finest, freshest ingredients. 1000 Degrees Pizza perfectly captures American appeal and an old world Neapolitan flavor. We’re going to go right into our interview with Brian.
Brian, that’s fantastic. We started the show nine years ago, Brian, because we’ve always felt that every franchise like yours has a story and when I was researching your background, I was researching the concept. I said, “Oh my God, we have to have you on the show”. Maybe you could describe the history of 1000 Degrees Neapolitan Pizza.
Brian Petruzzi: Sure. I started the company in 2014. The goal in this company was to bring Neapolitan pizza to the quick serve environment. As Americans trend towards quick serve, fresh serve, and fast, casual style dining… My family is from Naples so that’s the type of pizza I’ve always grown up eating. I’ve had an affinity for Neapolitan pizza. It’s the original pizza. It’s not what we’re used to here in the States.
I originally was going to bring this out as a coal-fired concept but the scalability of a coal-fired oven really wasn’t there. As an experience I have a self-serve yogurt franchise as well. I’ve worked with franchisees for quite a few years now. I really wanted something that was scalable. The guy in Florida can make the same thing we can make here and so on and so forth.
What we did is we went and we found what we thought was the best coal oven manufacturer. It’s an Italian American company so they’re based in Spades but they’re also still shipping in brick and parts and such from Italy and we have them make us a custom proprietary oven which looks like a coal oven. It’s two hundred years old but it has an iPad mini touchscreen and you can turn it on from your phone, so it looks like it’s back from the old country but it’s fantastic. It’s the heart and soul of the whole entire restaurant.
With that we also did a rotation of floor so we were the first pizza franchise, to my knowledge, that has had that. We’re doing Neapolitan pizza. I don’t know how familiar you are with Neapolitan but if you’re in Italy it’s going to be a 90-second pizza. It’s going to be a tipo 00 flour. It’s going to be hand tossed and it’s certainly not going to have the build-your-own or cast casual aspect to it but it fits. It meshes seamlessly with that.
What I really wanted to do was bring the best pizza that I think we can make to more of a franchise model and so it just kind of all fit together really nicely. We do beer and wine in the stores that aren’t in New Jersey. Unfortunately in Jersey we don’t have that option because we have these million dollar plus liquor licenses here so we can’t do that. Wine on tap. Beer on tap. Some IPA’s, craft beers. Local stuff depending on where the restaurant’s located and just a really a high end pizza.
We use a Grande cheese which is the best cheese money can buy, and Grande is notorious for never selling to any chains. We distribute all 50 states. Our products are distributed through U.S. Foods and we had to go through some hurdles to get Grande to put them in all the U.S. food houses across the states because they’re mission was always “we don’t want to be chain.” Well, we said listen, we’re going to be franchised but this isn’t modified cornstarch cheese kind of chain like you’re thinking about and give us a shot. I sat down with one of the founders of Grande myself and he told me it’s one of the best pizzas he’s ever eaten and the best pizza he’s had in years and it was really cool. The man was in his eighties. He’s been eating pizza, Jersey guy and that was the biggest thing. Our cheese is almost twice as expensive as the cheese that other chains use but it’s just such a different product.
What we do as a franchise system is we just have a policy where we’re not marking food up on our franchisees. We’re able to put the franchisees head to head with a much better product than anybody else that’s a franchise system and more often than not, they’re going to have a lower food cost. When you look at the product separation, it’s really not even close. Then if we can put them into battle with the lower food cost than the guy serving modified cornstarch cheese across the street, there’s obviously a lot more to it but the cliff notes version is we really wanted to be able to bring the best pizza to a quick serve, create-your-own, I want this, I want that, I want that on it, but using high end stuff. We use Burt’s Farms for all of our meats. We use a real 00 flour to make our dough.
Another big separation in this brand and other brands in quick serve or fast casual is going to be that we’re hand stretching. When you walk into our restaurant you’re going to see someone at the front of the line. You’re going to see them stretching the dough. You’re going to see that imported Neapolitan fork style mixer working with the big forks. We’re not using traditional Hobart or hook style dough mixer like most brands. We’re leaving a lot of air in that dough and we’re making it as authentic as we can.
We do tend to step a little bit away from traditional Neapolitan in wanting to appease the masses of mostly American—we’re starting international now. What we’ve done is it’s still Neapolitan dough recipe but the way we do our proofing on the hydration rates and such are so that the center of the pizza is cooked, so we don’t have a pizza that’s under cooked in the center and again I’m referencing if you’re in Italy and you understand traditional Neapolitan, they’re going to hand you a fork and a knife and it’s going to be raw in the middle and you’re going to ask for a slice and they’re going to look at you like you’re from Mars.
We’re different. It maintains its integrity. You can pile protein and veggies on it and you can still hold your slice of pizza without it folding or drooping. We really have a special product from soup to nuts. I think one of the biggest things I’ve noticed in our food reviews is not only is “this the best pizza I’ve ever had” but “I don’t eat crust” and “I love your crust” or “my husband never eats crust and he finished my crust and his crust.” Those kind of things. We just have a really good dough.
Martin McDermot: When did you realize it was time to franchise? Did you know from the beginning? It’s like you knew you had something. You knew you had this great product, and I guess at some point you said okay I can take this thing national and international. When did you realize that franchising would be a good option for 1000 Degrees Neapolitan Pizza?
Brian Petruzzi: Originally when I built this system, again referencing wanting to get away from a coal fired oven but still have coal fire or a high heat wood oven style product, I wanted to make sure systematically that this would work as a franchise. I think really our first restaurant we opened and we took over. We bought out a pizzeria that had been failing. They’d been there for seven years. They had six other pizzerias. They’d been around since 1952. Traditional New York style, mom and pop shop. Six stores, like I said but not a chain. Grandpop’s working there, mom’s working there, and they were failing. They were barely making their bills all working a hundred hours a week.
We closed that restaurant down for twenty-one days and reopened with 1000 degrees. We really only promoted on social media because how can you schedule print ads in twenty-one days? They’re usually a month or two ahead of time. Really only social media driven and that restaurant did a hundred thousand dollars the first five weeks. It was crazy. It doubled what they did in the previous year on its fourth month and it eclipse what they did in the previous year in six and a half weeks. It was just all that type of feedback.
We replaced a slicery which as you know, you’re from Jersey, there’s sliceries on every corner. They’re like gas stations or tanning salons in the nineties. When we saw the customer response and the lines around our store and we had a Buffalo Wild Wings next to us and just wrapping around the building for the first three months. That was the restaurant that we worked the Kings out on, so we definitely made mistakes and we figured out our process and simplified our process and every part of it in that restaurant. We made the mistakes that you wouldn’t typically make on restaurant number four, ten, or forty. We went through, “are we doing eleven inch pizzas or are we doing ten? Then where’s our price point need to land and how can we get our food costs to be where we need it to be and still using these ingredients?”
That was to really iron out the deal and that restaurant today is still doing very, very well. It’s by far the busiest pizzeria in that city. Restaurant number two did better than that and then once we had two corporate units open we really started to build out a franchise interest and we didn’t have a lot of units open. We had two units open, but every franchisee that came in would leave saying this is the best pizza I ever had. We had that happen like forty times in a row and we were selling franchises with just two units open.
Our first partners were a Michigan group and they also did some Arizona stuff and in the meantime we sold quite a bit in New Jersey and now we have well over a hundred units under development. We had four open in the last two weeks. In the last two weeks we just opened three different Michigan restaurants and then we opened one in the Tanger Outlets in Mashantucket which is Foxwoods Casino in Connecticut which is doing extremely well as well. All of our openings have been crazy, crazy busy and they seem to be doing better on each one.
We do some pretty intense promotions. We do free pizza for a year for the first ten people so we have people camping out five, six, seven, days in tents in front of the restaurant. Social Media has been a huge thing for us. We’re really big on that. We do 1,000 free pizzas given away. Ten a day for the first one hundred days that each restaurant is open. That’s just a viral social media thing. To win they have to just like and share the daily status which announces that days winners.
That’s been a really big deal as far as social media. Our restaurants are opening with anywhere between five and ten thousand Facebook fans at each location and unlike other brands, we do take the risk of giving each restaurant its own social media account so they all have their own Facebook. You don’t see a lot of national brands do that because there is some liability there and we just have a system in place that we’re very confident that we can manage that. The positive side of it is the upside is just so high. The ceiling on getting the community integration and doing sponsored events an things that can give back to the community.
You have your finger on the pulse of your store in real time. If someone has a mistake or bad experience, we know. Usually while they are in the restaurant, so we can really fix that. Whoever made the mistake, wherever we failed the guest, we’re able to really stay on top of that. Yes, it’s a little bit of a liability but it’s a huge part of a brand building and community integration. Like I said, we had our New Jersey, as an example, Cherry Hill store open that had over nine thousand Facebook fans that lived in that city before it opened. It’s a really big thing for us is social media. We do a lot of Twitter. We do some of the new Instagram stuff now through Facebook but Facebook first and foremost for us is just a great tool. It’s cost effective if you know how to do it right.
We have franchisees have their own but then we offer as a service that we can manage their Facebook pages from our corporate headquarters. We do a little bit of both. We have some that are managing on their own and we have a good portion that we manage the page for them and good, bad, everything, they’re kept abreast of it real time. It’s such a nice tool to have to be integrated into the community. Our Facebook reviews are … we just had one open in Allen Park, Michigan. Their first forty-two reviews were five star in a row and it’s pizza so you don’t expect five. You expect a lot of fours even if everything is perfect. It’s good pizza.
It’s going really well.
Martin McDermot: It’s interesting, Brian, because my son, he’ll eat some of the other types of pizza and I’ll say that’s not really pizza, I’m not saying any names here, some of the other companies but it’s like eating cardboard and I say to him all the time, that’s not pizza. When you’ve had true Neapolitan pizza there is nothing like it.
When I was reviewing your business model as well, 1000 Degrees is also an experience isn’t it? I mean when you go into one of your restaurants, the customer is also getting an experience aren’t they?
Brian Petruzzi: Absolutely. That’s a huge part of it, is the experience. They should be welcomed as soon as they come in. You’re eating with your eyes and when you see the guy tossing the dough and you see it, it literally cooks in two minutes, so when you go through building the pizza, there’s not just like four cheeses. There’s nine to ten cheeses and so you’re picking different stuff and you’re able to get fresh mozzarella and even our specialty pizzas, like the Phili, it’s a crazy spin on a cheese steak in our cheese blend there is a provolone mozzarella whole milk so it has that little sharpness. Then when we top it with the rib eye, it’s just a great pizza.
You’re watching them make it, whether you make it yourself or order it on your own. They’re making it right in front of you and since it’s a two-minute cook time and it’s a revolving oven, there’s other fast casual brands that are saying their cook time is three or four minutes. It’s really five, six. When you see it cook in two minutes and it’s two revolutions and it’s a minute, you see it go in raw and then you watch your crust. You can see it. It’s in your line of sight. The ovens are always positioned so as your making the pizza, you see them. As you’re ordering your pizza, you see the pizzas turning and you can see it. You see the crust rise, you see it start to bubble. You start to see the char on the outside of it. It is a really cool experience and getting it in two minutes, you have your soda and your pizza is bringing it. As soon as you’re sitting down they’re bringing the pizza out to your table for you, so it is, while we’re bringing it out.
We’re more of a fresh serve and not just a fast casual. We’re a fresh casual as much as we’re going to be fast because we are serving the pizza to you at your table and at that time, that’s when our staff is able to say, do you need anything else? Do you want some different cheeses or oregano or whatever you’re going to want to put on your pizza. It’s still a lot of human to human contact which is important. We have franchisees ask us, you have iPad’s on the walls and they can do Facebook and stuff, how come customers can’t order off the iPads? That’s because we want them to interact with our staff.
We want you to feel like it’s the perfect pizza so you should never say “hey my pizza didn’t have enough hot sausage on it” because we’re going to say to you, “how does that look?” You’re going to say “I want more” or “I want less” and we can also can control the quality, so if someone says I want extra cheese and then they say I want more, we’re able to say “we can put as much cheese as you want but it’s not going to be crispy in the center if you want to put a mountain of cheese on it.” We can do it and that way we know if there’s ever, especially in our restaurant it’s the first five to seven days, it’s very new, if we ever have a complaint and it’s something about my pizza was doughy, we know exactly what it was because we know that the portion control wasn’t used or I didn’t get enough sausage. Well, our first response is going to be “did they ask you how it looked?” If they say no, then we say, okay, it’s a guest service issue. We fix that.
It’s an important part of it. The interaction and the experience is an important part of it and it’s funny, even bread sticks. It sounds so simple but the bread sticks. Bread sticks showcase that real Neapolitan dough and you’ll see reviews like the bread sticks were out of this world and it’s just a bread stick, but we do a cheese bread stick. We do four cheeses. We do some extra virgin olives on top and some oregano, but they’re just such a great bread stick. Everything, even our sauces. We have a great marinara that we make but we also have a Sriracha version of that, so it’s spicy. It has the heat, it has that Sriracha. You can just taste it. All of our stuff is what we think is going to be the best that you’re going to have. When you have our buffalo chicken pizza, we think it’s going to be the best buffalo chicken pizza you ever had. If it’s not then we did something wrong.
We really try to take every pizza, whether it’s create your own or specialty off the menu, to that next level where I feel as the founder of the company that it’s the best whatever it is. It’s the best meatball pizza you’re going to have in that city. That’s kind of where we separate as a chain because I don’t really know of chains that are really sitting down going “we got to have the best.” They’re not. It’s just not like that. We really do want to have the best pizza that we can have and if we don’t, we’re going to go back and we’re going to figure out why it wasn’t and how we can fix it. That’s the mission of the brand to do that.
In fast casual, quick serve, which is what we are essentially, most all brands that I can think of in pizza, they’re using a dough press. The dough is precooked before it goes in the oven. It’s not pizza. It’s pizza but to me it’s not pizza, so we’re different there. We really want to separate on that. We’ve never used a dough press or a sheeter. If you don’t eat it while it’s hot, it’s going to be rock hard in twenty minutes. Our pizza you can heat up, I say this because when I go to discovery day, once to twice a week we have three to four franchisees partners come in a day and tour the restaurant. We feed them until they’re going to burst. They experience both sides of it from ops, guest service, just everything. Sitting back watching the customers and how they experience a lunch service and such. I’m always bringing pizzas home. Travability of Neapolitan pizza, typically you don’t see that. They just don’t go together. They think Neapolitan pizza doesn’t travel. Ours does. It travels. Ours travels very well and it reheats very well.
I’m typically eating our pizza with my family when it’s been cooked at noon and I’m cooking it at 6pm when I come home. I’m just reheating it and my wife and kids have only had our pizza when I make it or at the restaurant. I have four kids. We’re an hour and a half away from the closest restaurant. Until next year, we actually have one opening in Atlantic County where we live so we’ll have one soon. It’s just the focus on quality from soup to nuts. The other thing is we do the fourteen-inch pizza so we do a family size. That’s not quick serve at all and that really doesn’t exist in fast casual at all.
They’re all doing ten or eleven inch dough pressed pizzas and that’s it. That’s a huge part of it.
Obviously most of our lunch service is going to be that generation X, millennial crowd and a lot of offices and stuff depending on where the store is located but our dinner service, we don’t have an age demographic for dinner. We’re eighteen to eighty.
Brian Petruzzi: Yeah. I just say that because I’m looking at it from the QSR perspective. You guys are really lunch based. They do some dinner but if you have a family of four, you’re going to leave with four pizzas and you’re going to drop forty dollars. Where with us, you’re going to leave with two and they’re going to be fourteen inches and so we do both. I would say dinner service, we’re probably just about 50/50 on the ten inch and the fourteen inch size.
Martin McDermot: Maybe we could talk a little bit about franchising brand. What do you look for then in your perspective franchisees? I imagine, again like you said, you had a lot of people, they come in to the place and they say “wow, I’d love to own one of these.” What do you typically look for? What type of characteristics or traits do you look for in your franchisees?
Brian Petruzzi: First and foremost, we really want people that appreciate what we’re doing in terms of the food. I can’t tell you how many franchisees we have come in and they just don’t care about the food quality. They like it but they really don’t care and they’re not going to be involved and so that for us … During our discovery day there’s obviously a lot of interviewing going on both sides of the table. One of the biggest things we want are people that are focused on quality. We want franchisees that want to have integrity in their product. They don’t just want to make money. They don’t just want to have the local pizzeria but they bought into this brand because they want to have the best product wherever they go. Those are the franchisees that are going to pay the most attention to the product in the end.
Those are the ones that are going to go, “you know what, that’s not right, because they’re not using portion control and this or that and that’s why that happened,” and that’s a huge thing for us. Obviously we want a lot of business experience. We want franchisees that have owned their own businesses. We definitely look for food restaurant experience but we really want the business experience, the understanding, the understanding of marketing and advertising and just the general things.
Martin McDermot: It almost sounds like you’re describing people that are almost like yourself, Brian, in the sense that you’ve had all this business experience. You have a strong background in social media and marketing. You’re definitely an entrepreneur and you’re looking for somebody who wants to sell that highest quality type of pizza. I think that’s fantastic. What happens when someone says … You like them, they like you and they decide to come on board and be a franchisee. How does the training work, Brian? Do they come down to New Jersey? Is that typically where the training happens?
Brian Petruzzi: It’s going to be closest to where you’re at geographically. We’re mainly training in New Jersey to start but then we’re going to come out to your location. We have Austin, Texas opening in a month, as an example. They will be down here in a couple of weeks and they’ll spend ten days with us. There’s quite a bit of training, not just operations, but business management, marketing, advertising. There’s a whole lot to it. Normally they’re going to bring their team. We’re going to welcome as many people. If you want to bring thirty-five people in to train, we’ll train thirty-five people. There’s no charge there and if you want to stay and train for thirty-five days and take the training session three and a half times over, you can. We’re fine with that. We have no problem with that. We know that that’s first and foremost, just so important. It’s a key stone of success.
Especially on their first restaurant, is getting the training and for not just the owners but the managing partners and everybody in between. We really do like our owners to train even if they’re not going to be hands-on owners. We do want them to understand why we do certain things and the ramifications of following right and not following them, and deviating from some of the system and what can happen from that.
We definitely prefer to do the training here at one of the corporate units or we’ll do a local franchisee unit depending on where they’re flying into and where they’re coming from. Then when your restaurant gets its certificate of occupancy, in a few days before then, we’re going to come out and we do a full on retrain of all your staff, whether they’ve come out with you or not. Then we’re going to stay there for your first seven to ten days of business. What we normally do is we’ll do a soft opening and then four to five days from there is when we have the grand opening scheduled. From the grand opening, that’s when it’s kind of crazy, nuts. 2,000 customers at least on the first day. It’s crazy.
We want to overlap for that grand. We want to make sure that our team is on the line with your team because you’re going to serve 2,000 people in twelve hours. It happens every time and they’re going to tell another 500 people that came out that, hey, sorry. It’s 11:00 at night. We’re going to give you a coupon to come back and get a free pizza whenever you like because you came out and we appreciate that. We overlap that. We stay a good three, four days from there and then there’s just constant contact.
Every franchisee in our system has my personal cell phone number. Not that they’re going to call me with, “hey I’ve got a question on flour” but they have it. They know that they can contact me if they need to. They’re going to have contacts for ops and marketing and graphic design artist to help with the marketing and guest service and anything and everything in between. We really do treat them and their stores like they’re our own and if you talk to any of our franchisees, they’re going to tell you, “I don’t know if Brian realizes that he doesn’t personally own the store because he calls me and checks on me once a week and any questions I have, he’s right there. I can call him on a Sunday afternoon and he’ll answer the phone even if he’s playing with his kids. He’ll take the time to try and spend some time with me.”
If I can, I’m usually readily available in one business day. It’s not to say they don’t have dozens of people that they can call but they always can still contact the owner if they need to. That’s an important part of having that family aspect to the franchise. As we grow, obviously franchisees are put in connection with one another and we have franchisees in Michigan. We have three different groups up there now and they all are in constant contact. In fact, we’re bringing a fourth group on which is a Sky Zone franchisee, won Sky Zone franchisee of the year last year so we’re excited to have these guys. They’re opening up in Grand Rapids area. They’re doing their first three. We’ve already linked them up and they’ve already met the other three.
It’s a family kind of thing. What’s working for so and so, and obviously there’s a lot more than that. There’s local co-op advertising funds and different things like that that we bring in to play as units open in proximity to one another.
Martin McDermot: That’s great. The majority of this business, Brian, we call them aspiring “frantrepreneurs”. Those are the people that listen to our show and podcast, they know that they want to go into franchising but we find that a lot of them simply just don’t know where to begin because there’s so much out there today. From your background, everything that I studied about you, you certainly have all the characteristics and traits of an entrepreneur. What advice would you give to our listeners in their quest to buy a franchise?
bI think the first thing is you got to pick something you’re going to want to do and you’re going to like doing because you’re going to be involved in it. It sounds like your listeners are more of the scale of the ones that are kind of getting into it. The ones that are into twelve franchises probably don’t have as much time to listen to the radio like I do. I don’t know the last time I did, but the aspiring franchise entrepreneur, I think the first thing is to find something that you really like and that you’re going to be passionate about because you’re going to live it.
There is a time in my life, I’ve been with my wife since we were fourteen years old and I remember in my late teens, early twenties I was self-made millionaire at nineteen years old. I remember sitting through double major in college and sending emails out to my staff and running my business while I’m sitting here trying to pay attention to class and I just remember the time of when you think of your business as business and you have to separate it. You have that constant separation between business and life and business and life. At some point, I don’t know when it happened, it became a part of my life and it wasn’t something that took over my life or detracted from my life but it was something that we understood that it was an enjoyable part of my life.
Maybe that’s when I got into the companies that I really had a passion for and I really loved founding and being in there day to day. I’m the first one to the office. I’m the last one to leave and I’m the one that’s in between checking emails at the red light that you’re beeping at. I know, I live my business but I also have four kids and I think that hopefully they’d say I’m the best dad ever because I’m that part as much as I can too. They also know what’s going on with the business. I have an eleven year old that can set up a Twitter ad campaign for you in three minutes with her eyes closed… targeted better than the guy from Twitter that gives you your once a month ninety-day call. Once every three months call I should say. It’s part of it.
Finding something that you really like. Then when you start looking into brands, you really have to look at what does it cost. This is just the way I think of it. What does it cost to open that unit? What’s it realistically cost? Is that burger concept really cost $950,000 for twenty-eight hundred square foot in one space or does it really cost 350,000? If it’s 350, 4-wise, why is the cost to get into this unit 950,000 per unit and there’s a ten store minimum and I have to pay up front?
I say that because I’m certainly not into sales position in this company any longer or in my other companies but that’s one of the things I would always have people ask themselves. Why is it that if you want to get into that pizza brand and you just tried our food and you’ve said our pizza’s not even close, it’s a hundred times better. Why is he 755 to open a restaurant and why am I between 150 and 400 and the last three stores landed on the lower side of 3? How does that happen?
I’m not in the business of selling stores and so when you think of stuff like that, where does the franchise derive its revenue from? Is it selling stores or is it long term royalty because they believe in what they do and their product and they think that the probability of success because of everything they’ve put together, their process is what it should be. That’s kind of the way that I would look at it, I would say to myself. That doesn’t mean that there aren’t expensive ventures that are very lucrative but when you’re getting into something and you’re looking at doing your first unit … that franchisee that’s under half a million dollar venture that they’re looking for, and in food there’s not a lot of those. That’s one of the things I focus on.
The second thing is, where does the food cost lie and do I believe that … Again I’m referencing food. Where does the food cost lie and do I believe that that’s the quality food I should be preserving at that cost? I don’t want to reference other brands but sandwich brands, they’re sandwich brands that are franchises and they go into areas. You’re from New Jersey. You can appreciate this. We have sub shops on every corner. Some of them have absolutely fantastic subs and they’re seven, eight bucks. Then there are other ones that are six bucks and they’re a chain but it’s not the same quality in cheeses and breads. It’s just not even close. Who’s food costs are higher? Often times the chain has a higher food cost on the franchisee and a substandard product.
Those are two really big things that I think. Then the other thing is, is the brand young? Is the brand old? Is the brand in between? Where is the brand in its growth pattern? I have a frozen yogurt chain as well and that got so crowded at some point that we still franchise, but again it’s the same as 1000 Degrees where we’re not selling stores. We’re not looking to make money off of you building your restaurant. We know that it looks better than every other restaurant. Our yogurt chain put almost every other national brand, most from the West coast, out. They’re all gone. We have stores that have seven competitors that now have none and they’re still rolling and doing well.
There’s a lot of reasons. I don’t want to put my franchisees behind the eight ball where they’re not going to be in the black until year four. My goal is to have them in the black by the end of the first year if I can do it. Obviously nothing is guaranteed but we do everything we can do to try to make their cost out of pocket as low as possible. We look at their marketing budget and we want to make sure that it’s an effectively-spent marketing budget. We’re not going to overspend. If we don’t think you’re getting that ROI, we’re not putting it into action. Just looking at stuff like that. Where is the brand at? Is it over saturated? Is there seven hundred of these already in my state and if I want one, I’ve got to drive two and a half hours to another state and area that I have no idea about because there are a lot of brands that are at that stage too.
The other thing is, talking about geography, how close is the brand putting the restaurants? If it’s a restaurant I should say or whatever it is they’re in. Are they over saturating their market or are they forcing developments schedules down your throat that are unobtainable unless you want to choose low end or what we would call B-minus or C real estate. We’re not looking at those spots. Part of over saturation is you force people into those spots. I’m sure you can think of quite a few fast casual food brands that have gotten that, and what happens, the franchisee ends up having six stores. He’s making less money than he made when he had two. He’s working six times as hard. Store one and two are paying for the losses.
We’re not looking for that. We don’t just do a rule of thumb with 1000 Degrees on geographic. We have a set and then we adjust based on pop density. If you’re in North Dakota you might get seven miles. If you’re in New York City you might get a city block. It’s all going to be based on each individual and it doesn’t just go state by state. It goes city by city and really it goes by the pop density of the exact area that we’re targeting. That’s kind of how we spread that apart.
Those are three, four real important things I think people should look at. Obviously success. Talk to the franchisees. See how they’re doing. See how the franchisees that are not just open, they might be doing great but talk to the franchisees that are in the process of opening. Talk to some of the franchisees that are in the site selection process. See what their stories are. Are they excited or have they been signed for six months and they haven’t been shown a property to look at yet. These are all things that are important. Just doing your homework. Ask a lot of questions when you apply for a franchise because the good franchisers are hoping that you ask those questions. Don’t think that you’re being a pain in the behind or you’re being over analytical. You’re not.
It’s funny when people say “I hope this isn’t.” We say no, no, ask more because this is important to us. Our meetings after you leave us, a lot of that revolves around what did you ask us and not just how did you answer when we asked you things because we want to know that you’re doing your homework because that says a lot about the individual as well.
Martin McDermot: That’s great. That’s fantastic advice. The final question, Brian, because you’re the founder of the company. Where do you see 1000 Degrees three to five years down the road?
Brian Petruzzi: Nationally speaking I would say next year we’re going to be, by the end of sixteen, probably around eighty units open. We could be as high as a hundred. I think that the growth pattern’s just going to follow suit. Three years from now, I’d like to say four to five hundred restaurants open. Five years, we can certainly be over a thousand. The growth is exponential once you reach a certain point, so somewhere in that neighborhood.
Again, we’re not looking to have 25,000 restaurants on every corner. We’re just not. We can work in most markets. We’ve had restaurants there literally in the poorest county in the state of New Jersey that kicked butt, and we have ones that are in super rich areas as well. We have ones where the pop density is only 29,000 people in five miles and we have restaurants that have 29,000 people in one mile. It has to fit the mold, so we really can go, I don’t want to say anywhere, but we can go almost anywhere in the country just obviously finding the right population density niches we need. We can work in reasonable pop density and the income level to us really doesn’t seem to affect us because we’re a dinner quality or better product at one’s quality price. I would say three years from now we could be at five to six, seven hundred stores and maybe a thousand stores or more five years.
International wise, our first restaurant in Malaysia opened a few weeks ago. Doing very well. They just signed their second lease. We’re working with groups in Dubai right now in Qatar. We’re looking to do some of the UAE. We do have some interest from Pakistan doing a custom deep dish version of our pizza for those guys. Just a little bit different as to what they’re looking for. International to us, we’ll really see where that goes. In Malaysia, it’s been on fire as far as the same type of feedback. Slightly different menus. Slightly different variations using different spices and such on their sauces. If you see any of the national chain brands out there and you think they’re, “eh, okay” food out here and then you read their menu in Malaysia, you go “wow they took it to a whole other level.” It’s different. Different spices and stuff like that so it’s pretty interesting stuff.
Somewhere in that neighborhood. We’re not looking to force growth. We’re really just looking for the right partners in the right spaces with the right experience that fit our mold and we go from there. We don’t have any forced, crazy trajectory right now but we do have three to four hundred franchise inquiries a week. Of those, we schedule twelve or more discovery days, meaning we really found a dozen people that we like enough to bring in and we think might be a match for one another. That like us as much as we like them. Somewhere in that neighborhood. It’s been great because the amount of franchise interest we have as a brand is just so high that I feel like we really can be selective with finding the right people. I go back to the same thing, it’s not the biggest groups. It’s certainly not. It’s the right groups and it’s not groups always. It’s a husband and wife or it’s brothers or it’s cousins. Just the right people.
Martin McDermot: It sounds like you’re in a nice position because you’re not under this pressure to, as you said, being able to sell thousands of franchises and I think that’s really what makes franchising work. Again, you know better than I do because you’ve been doing it such a long time, is finding that right fit. That right franchisee. It certainly takes the pressure off and you can say no, probably to a lot more people than you say yes, don’t you?
Brian Petruzzi: Oh absolutely. That’s what’s great. My sales team, our VP of sales, I have known since I was seven years. I can’t say enough about how everybody in this brand, the culture is so tight and it’s a tight-knit group. Even as we expand we just bring in people that fit our culture and so everybody is on the seam page there. We don’t have the issuer where the sales guys are trying to drive franchisees into the system that we wouldn’t want to work with because they don’t have the experience or they’re so absentee that they’re not in the country. There’s many different things like that. We don’t have that. I can’t tell you the last time I had somebody that my sales team recommended that I didn’t like. That probably hasn’t happened in years.
It’s a great advantage and it’s fun coming to work.
Martin McDermot: That’s great. What’s the best way for our listeners, Brian, the get more information on 1000 Degrees? Any websites you’d like them to go to?
Brian Petruzzi: Just the corporate website. 1000degreespizza.com. It’s just 1000Degrees, plural, pizza.com and then there’s a franchise section on the top right. In there you’ll see a lot of the PR stuff, a lot of news. We’re on TV all the time when we opened so a lot of the news clips are on there. In fact we opened the Morning Show the other day in Detroit. We had pizza on stage. That stuff’s on there. A lot of press releases. There’s just a huge Q&A section on there. Franchise facts. A lot of different stuff on there. Then from there, if they’re interested they’ll fill out an app. They’ll get a call from typically one to two business days from one of the franchise sales teams and we do a phone interview and go from there.
Martin McDermot: That’s fantastic. I want to thank you again, Brian for coming on the show. I’ve been wanting to interview you for some time now so it’s great to finally have the chance to talk to you especially someone from New Jersey. When I get down that way, some day, I’m going to look you guys up.
Brian Petruzzi: Absolutely. Feel free to give me a call to set up a time and meet and have some pizza. I appreciate your time as well.
Martin McDermot: Fantastic, Brian. Great to talk to you. We’ll be right back with more franchise interviews.