The Little Caesars Pizza story isâ€¦ well, quite a story. Founded by Mike and Marian Ilitch, first-generation Americans of Macedonian descent, the business is approaching its 50th anniversary. Still family owned and operated, Little Caesar Enterprises, Inc. has exploded prodigiously since its first store opening in 1959 in Garden City, Mich.
The Ilitches sold their first franchise in 1962 for $5,000. The chain grew rapidly, and in the end of 1969, there was 65 restaurants. In 1988, here had restaurants in every 50 states and was firmly entrenched as one from the “Big Four” pizza franchises (together with Pizza Hut, Domino’s, and Papa John’s).
Before pizza, it was actually about baseball for Mike Ilitch, a shortstop in the Detroit Tigers farm system. A personal injury ended his baseball career, but he retained his desire for the game. In 1992, the successful franchisor bought the group he once dreamed of playing for, at a cost of $85 million. Ten years earlier, he had acquired the Detroit Red Wings for $8 million.
Today he – and Marian, often known as the financial wizard, where Mike excels at marketing – is listed amongst the Forbes 400 richest Americans (#242 in 2006), with interests in food, sports, and entertainment through Ilitch Holdings.
Straight back to pizza, by 1995, the emblem ranked third among the Big Four, having an estimated 4,800 units worldwide. (Note: the business is notoriously private having its numbers, so reports of its units and financials vary widely, with some estimates as low as 3,000 plus some as high as 5,500 at its peak.)
Regardless, since the 1990s ended, the business had its share of problems, such as a lawsuit from franchisees (settled in 2001), store closings, declining sales, and falling profits. After a lot more than 35 numerous years of consecutive growth, things were not looking so rosy at Little Caesars. (Nor particularly for a lot of the pizza industry, to get fair.)
In 1999, Ilitch hired David Scrivano from Domino’s Pizza, where he was v . p . of administration. Scrivano had spent 10 years at Domino’s, starting as being a store manager. He became a part of a corporate team that designed a five-year strategic plan to turn Little Caesars around.
Instituted in 2001, the six-point plan revamped all key aspects of the manufacturer:
the pizza itself (higher-quality, fresher ingredients)
operations (a brand new training and certification program)
image (remodeling all restaurants)
advertising (no more national ads, everything pushed to the local level)
a renewed center on franchisees (greater support, higher ROI, more local control)
new services (without complicating operations).
The company also scale back severely on delivery to focus on carry-out.
Following the first eighteen months, the historically private company went public using the initial results: double-digit sales increases for all those 18 months, and 11 percent sales increases overall (same store sales) for 2002.
Today, says Scrivano, the corporation is enjoying its seventh consecutive year of growth. As he would not confirm or deny any numbers reported by outside sources, nor release any himself, a firm profile in Forbes magazine last October reported Little Caesars had 2,300 stores, annual system growth of 10 to 15 percent, and an estimated net of $80 million on system-wide revenue of $1.4 billion in 2006, up from $1.2 billion the earlier year.
The profile also noted that during its hardest times, the organization closed 750 underperforming stores, which it estimated at 25 % of the total. (A pizza trade publication reported the business closed 400 stores in one day in 1999.)
For your U.S., the company’s current UFOC (March 31, 2007) reports 1,381 franchises and 393 company stores (up from 1,176 franchises and 375 company stores in 2005; and 1,095 franchises and 365 company stores in 2004). Additionally, at the conclusion of 2006, Little Caesars had 223 units located in Kmart stores. However, that franchise agreement expired and discussions with Kmart for renewal or some other arrangements were under way at press time.
In March 2006, Little Caesars announced offers to add a huge selection of stores worldwide, using a pinpoint the U.S. In February 2007, the corporation stated it had exceeded those plans by opening “several hundred stores worldwide, many from the U.S.,” positioned in 32 states and 9 countries. For 2007, the UFOC projects 198 new franchises and 58 new company stores inside the U.S. The business is moving directly into markets it had abandoned, including Denver, Pittsburgh, Dallas, Indianapolis, along with the Pacific Northwest, and it is expanding in others where they have remained, for example Atlanta.
“We have places that we’re under-penetrated,” says Scrivano. “We think we could build over 1,000 stores just inside the Northeast.” Its current promotion, $5 Hot-N-Ready pies, all set to go when the customer arrives, is proving a big boon for growing the manufacturer, much as the buy-one-get-one-free Pizza! Pizza! campaign is at 1979.
Another way the corporation is wanting to accelerate its growth and recovery is actually by offering multiple-unit opportunities the first time in their history within new program, implemented just a few months ago.
Previously, says Scrivano, developers using the ways to develop multiple stores would begin with one restaurant, then increase the, one at the same time. The newest program, he says, is in reply to demand from both franchisees and outside prospects. “We sent notice to any or all our franchisees,” says Scrivano. “All existing franchisees have first priority.”
In the overall plan to discover quality franchisees, in 2005 Scrivano started a treatment program where corporate staff spend a week or more working side-by-side with franchisees in their stores (for more information, see Training story, page TK). One intended consequence of this system, besides the obvious good thing about building connections between Detroit and store owners, is always to open a career path selection for people at corporate to be franchisees.
2 years ago, Mike Scruggs, Sr., was senior vice president of global operations at Little Caesar Enterprises, Inc. in Detroit. One year later, he was surviving in Colorado Springs, now a bit Caesars franchisee operating two stores regarding his wife, Deb, and his awesome son, Mike II.
He stayed aboard with corporate for one more year like a senior consultant until last August, officially leaving the organization he’d worked for since 1978. This past April he opened his fifth restaurant and has plans for additional.
Scruggs spent the majority of his adult life at Little Caesars, starting as a manager trainee. He was 19, enrolled in a culinary arts program and working toward an organization degree when he “made the large switch” in 1978.
“I thought Little Caesars had something to provide,” he says. The manufacturer had fewer than 200 stores at that time. He liked the Little Caesars Pizza Station concept, that he describes as just like a Wendy’s operation having a drive-through, an 80-seat dining area, and carry-out. He was soon managing a store in Chesterfield Township, north of Detroit, opening the 3rd Little Caesars Pizza Station.
“I’ve been in operations, behind the counter, operating in the stores together with the managers and also the people,” he says. He’d began in the pizza business as he was approximately 15 or 16, he says, working at Amato Brothers in Livonia, Mich., west of Detroit. That’s where Scruggs says he learned his work ethic – plus some valuable lessons about utilizing others. As an example: “You retain people by how you train them, and the way you respect them, how you will support them. It’s not always pay.”
Scruggs cites two premiere factors behind his recent “big switch,” now from corporate executive to franchisee. “You need to build something for your self and your family,” he says. Second, “You want to work for yourself, make decisions that don’t involve plenty of red tape.” (Plus, we suspect, he really likes working in a pizza store!)
Scruggs was deeply involved and played an integral role within the six-point plan (see above) that turned Little Caesars around, returning it to growth and profitability during the past six years – red tape and all of. But it really was actually a variety of factors that drew him to Colorado and franchising.
Many years back, his now-25-year-old son, Mike II, who had never previously shown an interest in the organization, said he’d like to gain access to Little Caesars as being a franchisee. Scruggs put him towards the test inside a Detroit store for six months time. “He did well,” says Scruggs, which got him to thinkingâ€¦
Scruggs and his wife were raised in Detroit and were willing to go out. The Colorado Springs market was available. It had been with out a store for six years, was clearly an expanding area, and overall looked good to reenter. And, he adds, using the successful overhaul in the brand, “It’s a good time to be a Little Caesars franchisee.”
It’s doing work for him: Scruggs has opened his 5 restaurants in 31 months, a pace he calls “pretty aggressive.” He’s planning to build the market to 12 to 14 stores, at a rate of two or three per year.
Scruggs already has identified 6 to 8 new locations in Colorado Springs where he’d want to build. “We understand what corner we would like to be on. It’s now choosing the best bit of real estate. Sometimes you need to wait a year. That’s much better than putting one in down the street that’s less convenient,” he says. “You should be very disciplined.”
Scruggs credits http://locationsnearmenow.net/little-caesars-near-me/ founder and owner Mike Ilitch with quite a lot of his very own success. “He’s been such as a father for me. I’ve been using them since i have was 19,” says Scruggs, who turns 50 this season. “Some of the things they’ve done for me and my loved ones over the years have already been unbelievable. He’s a fantastic person, and is a huge mentor in my opinion.”
And despite Ilitch being one in the richest men from the U.S., “Normally i felt comfortable talking openly and honestly about anything without worrying concerning the consequences,” says Scruggs. “He’s been a rock constantly – for advice, or even to bounce an understanding away from.”
So in June 2004, Scruggs sent Mike II to Colorado Springs to function their first store. They found a web site, hired management, and opened in October. “I’d go back and forth from Detroit,” he says.
After having a year of that particular, and from now on with a second store open, Scruggs along with his wife transferred to Colorado Springs in August 2005. Scruggs was retained for one more year by corporate being a senior advisor, and officially left LCE, Inc. in August 2006. “Mr. Ilitch was kind enough to let me have the business going before I made the jump,” he says.
They know the device in and out, loves operations, and possesses his family involved, doing everything not handled directly by their managers and staff. Mike II is operations manager and involved with HR and everyday store responsibilities, as is also Scruggs. Deb does every one of the bookwork and accounting from your office at home.
“There might be every day once we have somebody else or two, but even at 12 to 14 stores, I don’t want to create a lot of overhead. I would like to keep my hands around the business,” says Scruggs.
His biggest challenge – not surprising here – is finding good management people with a good, solid work ethic, he says. “One of the things I tell managers who 71devxpky to work for me who tell me â€˜I’m great at this or that’ is the fact we’re not having a sprint here, we’re having a marathon. You don’t need to wow me, just show up every day and do your career. Unfortunately,” he says, these days, “wowing is arriving daily.”
After nearly 30 years at corporate, today his motivation is developing a business for himself along with his family. Bank payments also motivate him, he says, laughing. And being the competitive guy he says he is, there’s also his want to run great stores, have high sales, and stay successful. “I have a very high love for a few things i do. It sometimes gets the best of me.”
Any succession plan Scruggs has “is more inside my head at this point,” he says. He’s seeking to Mike II, 25, for taking over. A younger son, Adam, 21, still in education, also provides shown a desire for the business. With his fantastic daughter, Katelyn, an increased school senior next season, works a few days – “generally if i can get her,” he says. There’s time.