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Janice Gable Bashman reports on Godfather’s Pizza, a franchise that focuses on pizza, passion, and progress.

When the Academy Award-winning film “The Godfather” hit the big screen in 1972, it was the highest-grossing film of its time and went on to become a cultural phenomenon that influenced filmmakers and moviegoers alike, including Willy Theisen, founder of Godfather’s Pizza.
Theisen began the Godfather’s Pizza business in 1973 in Omaha, Neb. with the idea of selling a thick and juicy pizza, which he called a pie, from a bar he owned next door. Theisen cut a hole in the wall between the two establishments, and sold his pizzas through the hole to the bar’s customers.

Godfather’s Pizza became a quick success. The restaurant opened its first franchise in Lincoln, Neb. in 1974. In 1978, Godfather’s Pizza held the position of number one in sales growth for fast-food chains. By 1982, Godfather’s was the second largest pizza chain in the United States, and its common stock was offered by the EF Hutton Company. The year 1983 brought with it change when Godfather’s Pizza was acquired by the Chart House and then merged to create a new company, Diversified Foods Inc., in the same year. Under the Diversified Foods umbrella, Godfather’s Pizza offered thin crust pizza, pizza by the slice, and home delivery. The company was one of the first pizza chains to offer home delivery and to venture into that previously untapped market.

In 1985, Pillsbury acquired Godfather’s Pizza and subsequently put it up for sale in 1988. Herman Cain, the president of Godfather’s Pizza at the time, and Ronald B. Gartlan, the executive vice president, purchased Godfather’s Pizza from Pillsbury. Gartlan has been the President, CEO and controlling partner for the last 10 years. He will complete the buy-out of Cain’s share of the company in 2009.

Today, Godfather’s Pizza boasts 670 regional locations consisting of traditional restaurants, delivery and carry-out locations, and non-traditional locations that focus on the grab-and-go customer. The grab-and-go locations are found in airports, on college campuses, in convenience stores, etc. That’s a pretty impressive growth rate for this 35-year-old company that began selling pizza through a hole in the wall.

CHANGING WITH THE TIMES

Godfather’s Pizza is not a company to sit back and rest on its laurels. The company recognizes the need for change in an everchanging market. In the 1980s customers desired a quick lunchtime product, so Godfather’s introduced the hot slice, where it sold pizza by the slice. At the same time, the company introduced stuffed pan pizza.

The desire for fresh salad and salad bars in the late 1980s led Godfather’s pizza to replace pre-packed salads with salad bars. The company also introduced thin crust pizza at that time.

The early 1990s found Godfather’s pizza launching a campaign for a jumbo pizza, which has proven to be very successful. “We were the first chain to offer and promote a family feast,” says Kathy Johnson, senior vice president. “The family feast consists of a specialty pizza with one topper and a side item. We also launched chocolate chip cookies in the late 1990s and brought in monkey bread. One of our most popular items is our cinnamon streusel dessert. These items are popular side items with the feast.”

Today, Godfather’s Pizza recognizes the growing trend in which customers prefer to eat at home rather than in a restaurant or eat on-the-go. Because pizza can be purchased outside of the traditional restaurant atmosphere where before it wasn’t, the competition for customers has increased. “We used to have an 85 percent dine-in rate,” says Johnson. “Now we have 85 percent either delivery or take-out. But we can compete in this venue because of the values we have to offer. Our customers can feed a family with our feast, and it’s cheaper than McDonald’s drive-through or the deals at Subway or other fast food establishments for a family of four.”

Competing for customers also means adjusting the Godfather’s Pizza establishments. Although there are still customers who prefer to eat in a traditional pizzeria, others want fast and easy food. In responding to this change, Godfather’s Pizza is building a new model of a pizzeria in Omaha Neb. that it expects to open in March, 2009. “We no longer need or want or can afford for our franchisees to have 4,000 to 5,000-square-foot facilities,” Johnson says. “We maybe need only 60 to 80 seats with the consumer purchase shift, so we have pared down our size and added a drive-through to our restaurant. We’ve found that our drive-through business in Omaha is much busier than our pick-up or delivery. Even with gas prices what they are, people are coming through the drive-through. It’s important that each of our locations meets the demands of that area, and we need to be flexible in order to achieve that goal.”

Godfather’s Pizza is also working on changing its décor. The company’s new franchises will have a “modern/old Italy” feel. In addition, each establishment will contain a one-of-a-kind “Godfather booth” located in a special area of the restaurant that can seat eight. A black chandelier will hang over the booth. “That will be the place to be,” says Johnson. “If you are meeting with the Godfather you go to that booth.”

Technology also plays a role in the changes at Godfather’s Pizza. By offering on-line ordering in its Omaha market (and soon throughout its franchise system), Godfather’s Pizza expects to see double digit increases in sales. The on-line ordering process draws new customers and presents a huge opportunity for the company to expand its customer base.

Soon, Godfather’s Pizza will create a Facebook page to attract customers and also will engage in e-mail marketing. “The way people order pizza has changed,” Johnson says. “Soon they will be texting in orders. We can make that happen. We can easily adapt to the changing environment and consumers.”

QUALITY AND VARIETY

Godfather’s Pizza is known for the quantity and quality of cheese on its pizzas. Regardless of cost, Godfather’s Pizza uses 25 percent more cheese on its pizza than its competitors. The company also uses high-quality 100 percent real cheese where its competitors often use imitation cheeses. Expanding the appetizers and entrees to include pasta and other dishes, and offering a greater variety of wine and beer are other ways Godfather’s Pizza expects to compete in the highly competitive pizza market.

In an effort to improve the product and services to a unique customer segment, Godfather’s Pizza developed a gluten-free pizza that it’s currently testing. The company worked closely with the Celiac Foundation (high percent purchaser of gluten free products) which gave Godfather’s Pizza its seal of approval in the rollout and testing of its gluten-free pizza. “We are proud of the quality and flavor profile of this pizza,” says Johnson. “It tastes like a good quality pizza and not like a lot of the products out there. We have many people expressing interest in this product, and current tests support this desire.”

Godfather’s Pizza is introducing specialty products to include microwavable and home oven baked for the retail market. Recently, the company launched a microwavable and ciabatta bread pizza at the F.A.R.E. (Foodservice At Retail Expo) Show in Chicago. The move into the retail market will enable Godfather’s Pizza to reach a new audience and a new generation of customers and enable the company to stay competitive in a changing marketplace. It also builds brand awareness for the company in markets where it does not have franchises. Ultimately, this exposure will enable Godfather’s Pizza to build its network and expand. “Because of our size,” Johnson says, “we are able to move more quickly than our competition into new areas.”

BUILDING THE BRAND

Although Godfather’s Pizza is a regional franchise, the company believes it is important to focus its strengths in the markets where it operates multiple units successfully rather than focusing on expansion throughout the United States. “There is strength in numbers,” says Johnson, “but ultimately our customers drive the development and we just need to listen.”

Building brand awareness is important to Godfather’s Pizza. To help facilitate this process, the company’s national headquarters contains a research and development center and production and editing suites where it can produce its own commercials. The company also employs an in-house photographer to shoot its photographs and uses in-house personnel and cost consultants to assist it in acquiring contracts for obtaining large product items at agreed prices over a set period of time. This enables the company to keep costs under control for both the franchisees and the company as a whole.

“The pride in our company is represented in three words: pizza, passion, and progress,” Johnson says. “We’re in the business to make the best pizza, the passion among our owners, operators and staff is what makes us unique, and we’re embracing the challenges of tomorrow to continue to show progress. It is our size, our people, and the passion behind our brand that drives everything else. That’s what makes us different, and that’s what makes us stand out among the competition today and tomorrow.”

Volume:
4
Issue:
4
Year:
2008


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