New Pizza Factory CEO targets better margins, traffic

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Mary Jane Riva, co-owner, president and chief executive of franchisor Pizza Factory Inc.

Photo credit: Jana Buzbee Photography.

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Pizza Factory is working to reduce operational costs and drive additional guests into its stores through TV commercials and direct mail, among other strategies, according to the chain’s new co-owner and chief executive.

Mary Jane Riva became president and chief executive of the Oakhurst, Calif.-based pizzeria chain in September after she and her husband, Bob Riva, acquired the Pizza Factory Inc. franchising system from founders Daniel and Carol Wheeler and Ronald Willey.

Terms were not disclosed for the deal that brought the Rivas the 111-unit chain, which has average annual sales per unit of about $540,000 and saw 2012 systemwide sales climb by 4 percent compared with 2011.

The Rivas have franchised Pizza Factory restaurants for 24 years and currently own single units in the Southern California communities of Temecula and French Valley. For several years prior to the sale, Mary Jane Riva also was a nonpaid member of the chain’s marketing team and an area developer for the brand as an independent contractor.

“In 2013, my biggest goal is to reduce costs and increase the bottom line for franchisees," said Riva, adding that she also aims to help them attract new business.

In order to help meet those goals, Pizza Factory recently streamlined its menu and reduced the number of mandatory products to reduce menu printing and paper costs. The move also aims to give franchisees the flexibility to discontinue the slower selling foods that can hinder operational efficiency and inflate inventory.

Also new to Pizza Factory are systemwide schedules of offer-free, brand-building TV commercials to increase awareness of the brand, which Riva said was lacking. The brand recently ran spots on the Fox Sports network, said Riva, and benefitted from about “$80,000 in freebies” from the network, including 1,200 additional spots at no additional cost.

The TV commercials were paid for by the ad fund for the chain that, with the exception of one company restaurant, is otherwise entirely operated by franchisees in Arizona, California, Idaho, Nevada and Washington.

Driving traffic, franchising

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As part of Pizza Factory’s ramped up focus on increasing guest numbers and traffic, in December each of the chain’s restaurants sent out 1,000 direct mail postcards with such offers as get a large one-topping pizza for $7.99 or 20-percent off the check, Riva said. That “very successful” direct-mail effort bumped traffic from 3 percent to 10 percent, depending on the location, she added.

In the past, Riva said, the chain’s promotions often rewarded customers who were already in the stores, such as through scratch-card prize giveaways.

Pizza Factory, which according to operations director Nikki Van Velson has about 70 percent of its restaurants in communities with 20,000 or fewer residents, had a net increase of two units in 2012, but has seen its store base remain virtually flat for the past decade. To spur unit growth it is now offering existing single-unit franchisees — or about 87 percent of the system — a $15,000 discount off the normal $20,000 per-store franchise fee if they open a second location.

As a franchisee, “I’ve seen the [financial] challenges” of trying to open additional restaurants, so “we now have tools in place so that they are able to do that if is their dream is to have multiple stores,” Riva explained.

According to Riva, other recent changes or changes under way at Pizza Factory include:

• The launch by the end of January of Internet portals to let franchisees more easily review, tailor and order marketing materials and receive text or video answers to commonly asked operations and marketing questions.

• The addition of advisors who are current franchisees of the system and who will work out of the chain’s Oakhurst headquarters to help corporate support personnel answer questions and concerns from other franchisees. These new paid advisors are in addition to the chain’s existing field supervisors, each of whom are responsible for about 20 restaurants, Riva noted.

• Involvement in the International Franchise Association’s VetFran program through which former U.S. military personnel can receive a 25-percent discount on initial franchise fees.

Contact Alan J. Liddle at alan.liddle@penton.com.
Follow him on Twitter: @AJ_NRN