Yorgo Koutsogiorgas wasted no time getting to work since being named chief executive of Chicago-based Giordano’s on March 5, and with good reason. His plate is full, with plans to grow the chain known for its “stuffed” deep-dish pizza from 44 restaurants in Illinois and Florida to more than 85 locations in the next three years.
Although Giordano’s exited Chapter 11 bankruptcy last November in an acquisition by Chicago-based private-equity firm Victory Park Capital, Koutsogiorgas said that the brand itself was never in trouble from a sales or traffic standpoint.
To pave the way for growth, Giordano’s will develop a menu that can complement and support its signature deep-dish item, and will build several locations using a smaller, more efficient prototype.
EARLIER: A Chicago deep-dish bankruptcy battle
“The bad press associated with the bankruptcy did not help our franchisees, but in spite of all that, we were running an hour-and-45-minute wait from noon till 9:30 [p.m.] last Saturday at the flagship store on Rush Street,” he said. “The brand resonates with the consumer, and we can build that now that all the negativity is behind us and we can see blue sky ahead.”
Koutsogiorgas, a former executive with Lettuce Entertain You Enterprises, discussed Giordano’s future with Nation’s Restaurant News.
As a new chief executive with plans to grow Giordano’s, what’s job No. 1?
Job No. 1 is to build a team of very experienced, passionate people who will be aligned with my vision for Giordano’s moving forward. A very close second is the food. Right now, we have a product that’s truly phenomenal — the stuffed pizza — which is very integral to the brand’s value. There’s also a strong emotional connection between our customers and that pizza. Visitors to our restaurants from out of town and locals love it. We will not do too much to it other than position it in a more central way to our food offerings, and we’ll build around it on the menu, which is why I wanted a culinary team in place to focus on developing a line of salads, sandwiches, soup and some other Italian specialties.
We’re also going to develop a thin-crust pizza comparable to the desirability of our crown jewel, the stuffed pizza. We’re making the menu all relevant to contemporary needs, so we’ll pay more attention to the calories of the dishes and what they’re made of. It still will be focused on the stuffed pizza, but there are people with reasons not to have that, and we’ll still have something wonderful for them.
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How does the split between tourists and locals affect growth plans outside Illinois?
Our menu development will be extremely sensitive in addressing this issue. As we move beyond Chicago, where we have strong brand recognition and local support, while we’re fortunate to be a must-experience item for many tourists in Chicago, that won’t be the case in Michigan or Wisconsin. We’re very aware of that, so our menu will be such that we can position the pizza as something unique in those markets that nobody else does — and we’re also a wonderful restaurant otherwise.
Our thin-crust pizza will be as good as anything you expect from a good pizza restaurant. Up to a point, we can sometimes take this name we’ve built in Chicago for granted. In those new markets, we have to earn the trust of the locals first, and then we want to make Giordano’s their local favorite as well.
With franchise lending still well below peak levels, what makes you optimistic that Giordano’s will realize its growth targets?
What makes me confident is that our price points are still extremely competitive and within basic expectations of consumers for a good meal when you dine out. Whenever our restaurants appear in a new market, they’ll be the de facto price of highly desirable food.
Our existing franchise community — some have been in the system as long as the brand has been around — is eager and anxious with the promise of new ownership and management to support them, and they’re eager to acquire rights for new locations not only in Michigan and Wisconsin, but also for expanding within Greater Chicago, which hasn’t been fully penetrated. A third of the targets could be in Chicago, because there are many opportunities to expand south of the city.
I’m confident because the investment in Giordano’s is not a big one, although in this market we’re still in a very tentative environment for expansion of any brand. Money is not as available as it used to be, but Victory Park has committed substantial resources to develop several company-owned restaurants and build around them, with franchisees eager to join us in this growth plan.
How do you compete when the pizza segment’s largest chains are promoting discounted prices so aggressively?
It’s competitive, but we’ll differentiate ourselves because of the experience we’ll offer and the variety of food. We’re still a nimble company compared with the giants in the pizza space. Because of the choice they’ve made to compete on price, those chains can’t offer the experience and menu we can, or build the relationships and rapport we can. We won’t compete there; we’ll make our restaurants neighborhood pizza places in the traditional way of making a market.
When you position yourself as a restaurant with more to offer than a single product, it gives you many more times to connect with the customer in a way that’s unique. Until Apple came up with Apple stores, with a way to bring the product to the consumer based on service and the experience, nobody gave them a chance. Then they broke the mold of selling computers as commodities. That model can be used in many platforms, including restaurants. Am I an optimist? Yes. But I have to be, because the environment in which we operate is very competitive.
Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN
