While other retailers are discounting to get cash in the door, Pizza Capers founders Scott Geiszler and Anthony Russo are standing firm with their premium product. They tell PATRICK STAFFORD about the challenges of managing their fast-growing empire.
By Patrick Stafford
Pizza Capers just can’t be stopped, and founders Scott Geiszler and Anthony Russo say they are flat out keeping up.
Get business news first
Sign up to SmartCompany’s daily newsletter
As retail conditions continue to tank, many business owners will turn to discounts this Christmas in a bid to boost sales. But Scott Geiszler, founder of franchise Pizza Capers (right in picture), is doing the opposite.
“The first thing we’re not doing is discounting for a premium product,” he says. “We don’t go down that path, but we let people know they are getting a quality pizza for the price.”
The answer, he argues, is to spend more on putting your business in the public eye.
“When we first started in 1996, it was during the middle of the whole ‘five dollar pizza’ thing. To offer a $15 pizza product – that was hard. Creating the market at first was difficult, but now we want to keep it.”
Pizza Capers is not only keeping its average price at around $18, but is boosting its advertising and marketing budget.
“We’re working on a few different products – that’s something we can create a bit of noise about. We are doing more marketing and ramping it up.
“I think during times like these that people who are shortening marketing budgets are sabotaging themselves. Now is the time you want to be as loud, active and visible as possible,” Geiszler says. “It’s critical you’re out there in new customers’ faces.”
Gourmet fast food
Geiszler came up with idea for starting Pizza Capers after reaching Cairns in the aftermath of a cyclone in the mid 1990s. The only work he could find was managing a take-away pizza store. While the qualified chef was used to making gourmet meals in five-star restaurants, he found the speed of preparing take-away food provided him with an idea.
“We were certainly really good at producing a crap pizza really quickly, so I thought we could do the same for gourmet pizza.”
Geiszler and business partner Anthony Russo then started Pizza Capers – a gourmet pizza store with waiting times no longer than fast-food equivalents.
“We really focus on quality of toppings rather than use things like manufactured ham. We merged being able to produce food quickly with high quality restaurant pizza, along with steak and pasta.”
The business – which opened in 1996 and expanded to a second store in 1998 – operates with a mixture of dine in, delivery and takeaway models.
“We’re up to store number 37, and with any luck we’ll open 30 or 40 stores next year,” he says.
Pizza Capers recorded 208% revenue growth in 2007-08, coming in at $17.9 million. Geiszler says the group expects revenue for 2008-09 to be in the mid-$30 million range.
Location, location, location
Opening up to 40 stores in one year is a big move. So why is Geiszler expanding the business so quickly?
“Firstly, because we can, and from a strategic point of view, we need to get on ground as quickly as we can. Each store is recording about 25% growth.
“We are not struggling for franchisees, either. We haven’t advertised for franchisees yet, and we still have enough to keep us opening at that rate and one hasn’t failed yet.”
But despite rapid growth, Geiszler argues each store’s model and success “all depends on the location”.
“We spend a huge amount of time analysing prospective sites. We consider all factors like parking and visibility and content, and I think we focus on something that is really underestimated – co-retailers,” he says.
“We really focus on who is around us and look for other food retailers, because we think it’s important to put us around a night-based turnover. We’ll find that mum or dad may have a pizza but also buy fish and chips for the kids. Really, we think those little shopping centres are the best place for us.”
Maintaining the growth
Geiszler says a big challenge is simply keeping up with demand. Moving from a small one-shop business to a national franchise required a tight budget.
“Making that bridge from a little shop that made 300 pizzas a week to one that would produce 2500 a week – that was difficult.
“Explosion in store numbers also mean an explosion in advertising spend. We had to consider preparation space, the size of our refrigerators… it happened very quickly.”
Managing a larger employee base is also a challenge, particularly when you need to find workers for several new stores. Geiszler says the business has made staff retention a priority.
“We go through times where staff are hard to find, but we have the philosophy that the first problem we look for is inside. Are we paying them enough and treating them right? It’s all well and good to beat the drum about how employees are hard to find, but in the end that doesn’t help.”
Another major problem with a growing employee base is keeping tabs on everyone.
“We had a couple of instances where key members of staff, people we knew quite well and would have around for barbecues and so on – we’ve had a couple of those rip us off and one was for a significant amount of money. Those lessons are extremely painful.”
Geiszler says while he likes to trust people, “you have to keep an eye on the dollars and cents”. And adds: “You’ve got to safeguard yourself.”
He also says having a larger corporate base is a challenge, and managing different personalities – some who aren’t used to working retail-based jobs – is difficult.
“But we’re a business where we’re not strangers to delivering pizzas and doing everything it takes – we think no one is too good for anything.
“And as we’re growing and putting more people on things, we really want to keep that rustic, grass roots aspect to the business.”