Inside Franchise Business

SLICE UP YOUR LIFE

When it comes to fastfood favourites, it’s hard to go past pizza.

- By Nick Hall

It’s hard to go past pizza, it’s a fast-food favourite.

From traditiona­l Neapolitan to deep-dish Chicago to squarebase­d Sicilian, pizza has proven to be Italy’s greatest gift to the franchise sector. And while the cuisine itself has roots that trace back over 1000 years, here in Australia the pizza sector is just heating up.

While the fast-food industry has seen its fair share of fad offerings, few have stayed the test of time quite like the nation’s pizza chains. However, it hasn’t come without constant change.

Over the last five years, customer preference­s have evolved significan­tly, splitting the sector in half.

A developing gourmet pizza market, characteri­sed by healthier options and higher price points, has not only worked to solidify the offering as a cuisine for all occasions, but helped to bolster the appeal of the sector as a whole.

In its Pizza Restaurant­s and Takeaway in Australia report, market research firm IBISWorld Australia revealed that the new focus on gourmet was driving profitabil­ity sector-wide.

“Industry pizza restaurant­s have embraced these trends and provided a growing range of gourmet pizzas at premium prices,” the report reads. “As a result, industry profit margins have risen over the period to represent an estimated 7.3 per cent of industry revenue.”

Where once, pizza shops that offered Aussie staples such as meat-lovers and Hawaiian dominated the industry, a changing of the guard has seen restaurant­s work hard to reposition themselves as specialise­d offerings, and consumers are responding.

“Rising health consciousn­ess can dampen demand for traditiona­l fast food, which is generally perceived as unhealthy. Thus, restaurant operators that respond to this perception by offering healthier options and marketing them successful­ly will tend to fare better.”

So, with over 4000 businesses operating in the booming pizza sector, which brands are slicing up the competitio­n?

CRUST GOURMET PIZZA BAR

One brand that has well and truly embraced the “premium-isation” of pizza is home-grown franchise Crust Gourmet Pizza Bar.

The chain was one of the first domestical­ly owned and operated pizza franchises to position itself as a specialise­d offering on the takeaway scene. Hosting a menu emblazoned with gourmet ingredient­s like fresh prawns, truffles and house cooked Mediterran­ean lamb, Crust hasn’t been

afraid to experiment with flavours.

“Customers value the quality and innovation that is anchored in the pizza offering and it is this advantage that has assisted with the brand’s longevity in the market,” Crust general manager Renée North says.

For over 20 years, the chain has placed itself at the forefront of franchise gourmet grub, even weighing into the emerging ketogenic consumer demand, rolling out a low-carb pizza base for the health-conscious customer.

It’s all part of the chain’s reposition­ing strategy, North reveals. Announced late last year, the rebranding saw Crust focus its energies on digital transforma­tion and customer experience.

“The brand’s DNA prides itself on staying ahead of global trends and continuall­y challengin­g itself to remain current and relevant to its customers,” she says.

“The once in 20-year brand refresh was designed to future-proof the brand in a modern and appealing way that would position Crust’s premium offering across the competitiv­e quick service restaurant (QSR) landscape.”

The full-market revamp isn’t just boosting sales here in Australia, either. Since the rollout began, the entire Crust team has been monitoring its success, with internatio­nal acclaim.

“Analytics have demonstrat­ed an increase in new customers online and walk-in customers have been evident as consumers are invited in by the new branding,” North says.

“Further abroad, the rebrand has attracted interest from potential internatio­nal buyers, with our first UK store now open with the new branding.”

As consumers continue to develop new palettes and preference­s, North says the key to Crust’s growth will be segmentati­on through health consciousn­ess.

“The demand for low-carb, glutenfree, meat-free, vegan, Halal and lactose-free is increasing constantly and it’s our promise to continue thinking and creating adventurou­sly for all our customers.”

While Crust may have the specialisa­tion sector all sewn up, it isn’t the only iconic pizza franchise to step into the meat-free arena.

DOMINO’S

Earlier this year, global pizza giant Domino’s unveiled plans to roll out a series of plant-based pizza options, catering to the growing vegan and vegetarian consumer market.

The three new pizzas made their debut on the Domino’s menu in September, after the growing success of the chain’s vegan cheese experiment last year.

“The decision to launch this range was made in a bid to offer our customers more choice, ensuring there’s something on our menu for everyone, and that regardless of food preference­s or dietary requiremen­ts everyone can share in the joy of pizza,” a Domino’s spokespers­on explains.

“It took nine months of developing and testing behind the scenes before the team decided on a plant-based beef product which would be affordable for customers, without compromisi­ng on taste or price.”

While the new plant-based range caters to an already establishe­d consumer market, Domino’s hasn’t shied away from some more controvers­ial flavour combinatio­ns.

After former New Zealand Prime Minister Bill English took to social media to share his now infamous homemade tinned spaghetti and pineapple monstrosit­y, Domino’s grabbed the idea and ran with it.

Partnering with canned food brand

Watties, the New Zealand arm launched a localised Hawaiian Spaghetti Pizza, featuring glazed ham and a smattering of mozzarella cheese.

“We work hard every day to give our customers more of what they love,” the spokespers­on says.

“In New Zealand, the Kiwis love potato wedges on their pizzas and in Japan exotic seafood is a crowd pleaser. We are committed to giving our customers more of what they love – whatever that may be.”

While tinned spaghetti pizzas may not be the golden ticket to global success, Domino’s believes a focus on customer experience may well be. Over the last 10 years, the chain has introduced a series of initiative­s aimed at improving the customer journey, investing heavily in technology to bridge the gap.

After Domino’s identified a growing demand for consistenc­y of quality, the brand introduced its biggest innovation since the iconic GPS Driver Tracker, DOM Pizza Checker.

The smart scanner sits above the cut bench and uses artificial intelligen­ce to check the quality of every single pizza before it goes out the door, ensuring customers remain satisfied and fewer pizzas are returned.

“Ultimately, business success is about keeping our franchisee­s profitable and our customers happy. Because if our franchisee­s are profitable, then the business as a whole is profitable,” the spokespers­on says.

“To do that, it all comes down to the customer and putting them at the heart of everything that we do. By launching so many ‘firsts’ in technology and innovation, we open our brand up to a whole new set of customers with each new launch.”

From global technology leaders like Domino’s to family-owned operations such as Melbourne-based Bubba Pizza, the franchised pizza sector is an industry that stretches almost as wide as a traditiona­l New

York deep dish.

BUBBA PIZZA

Born and bred in the streets of Australia’s foodie capital, Bubba Pizza is the family-owned franchise taking a bite out of the fast-food sector.

Where Crust focuses on gourmet, and Domino’s targets value, Bubba Pizza hits that sweet family-centric spot in the middle.

“We as a brand are committed to making life a little bit better for our customers at times when they want to relax, so having families in our stores providing this service is a huge advantage,” Damian Hopper, Bubba Pizza director explains. “They can relate with and understand their customers on a personal level, it’s a more genuine experience.”

It’s been a long journey for Bubba, and franchisin­g wasn’t always on the cards, Hopper reveals.

“As a family we initially owned about five or six stores at one time which was a lot of work, we had to be in too many places at once and relied heavily on store managers to operate the stores. Franchisin­g gave us the opportunit­y to have like-minded business owners in our stores who are willing to go far beyond the level of effort that a manager is willing to commit.”

Now with 23 stores under their belt, the team at Bubba Pizza is revamping its franchisee structure, offering greater support.

“We have broadened our horizons in terms of what ways we can offer support to franchisee­s, placing more emphasis on individual goal setting, local marketing support and, most importantl­y, reducing the running costs of owning a franchise,” Hopper says.

“Support is a two-way street in our business: as a franchisor we need just as much support from our franchisee­s as they need from us.”

Where the challenge lies for Bubba, much like others in the QSR space, is in the evolving platform demands.

“The QSR space is on one hand a prosperous industry with an exciting future, but it has a lot of competitio­n, and the current climate has redefined the word competitio­n for the industry,” Hopper says.

FAST-FOOD FUTURE

Delivery platforms and third-party aggregator­s have hit the fast-food and casual dining sector hard over the last five years. While consumers are more inclined to purchase fast-food than ever before, high partnershi­p costs and delivery fees are threatenin­g to diminish returns, even for the most popular of operators.

“In previous times, a QSR operator was competing with other stores to attract customers who were choosing where to have dinner,” Hopper says.

“In the current space, even if you have acquired the customer, you are now competing with how the customer chooses to order, and the decision they make could mean anywhere from 0 per cent to a 35 per cent cost to the bottom line.”

While delivery platforms have the potential to cut profits for other operators within the fast-food industry, it must be said that pizza delivery is by no means a new notion. In fact, Hopper believes the sector’s ability to adapt to new market change will stand it in good stead to combat the aggregator revolution.

“The aggregator­s take away your ability to communicat­e with customers, things like offering promotions, asking how their meal was, even the simple things like opening the door for someone or thanking them for their business. You have to let your product do the talking, we are improving the quality of our products, how they are made and the way we package them.”

Across the board, pizza franchises are moving quickly to address the evolution. Brands like Domino’s have bolstered their own online ordering systems, offering delivery in a speedy and consumer-focused fashion.

“Back in the day, most customers ordered via phone and it could take upwards of 45 minutes for a customer to receive their delivery. Now, more than 65 per cent of our orders are placed online and we are consistent­ly delivering, safely, in under 10 minutes,” Domino’s says.

As the sector continues to grow and consumers find their place in the delivery platform space, change is imminent. Smart franchisor­s are backing their franchisee­s by leveraging the very differenti­ators that made them popular in the first place.

For Crust, that means gourmet flavours and health-consciousn­ess, for Bubba, a fresh, family-friendly focus and according to a Domino’s spokespers­on, a greater emphasis on innovation looks set to lead the global chain into the future.

“In the QSR space, we’ve certainly come a long way. Artificial intelligen­ce and augmented reality are playing an increasing­ly bigger role in the industry and customer convenienc­e is the ultimate king.

“Whether that be the speed of delivery, the quality of the product, or the price, our goal is to make the entire experience one they will remember and come back for again and again.”

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 ??  ?? Domino's Australia CEO Nick Knight
Domino's Australia CEO Nick Knight
 ??  ?? Bubba Pizza director Damian Hopper
Bubba Pizza director Damian Hopper

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