Marco's Pizza Franchise

ANUARY 2009

Jack Butorac knew when he first tasted

a Marco’s Pizza that he’d found what

he was looking for. As a former restaurant

chain executive seeking a new challenge,

Butorac wasn’t intent on joining the pizza

industry specifi cally. Instead, he was on a

quest to fi nd a small independent company

with a quality mission and a founder with

the desire to grow. If he could turn the

right stone, Butorac reasoned, he could

nurse it into a successful chain.

Then he bit into a Marco’s pie while

passing though Toledo. Though it was late

into the evening on a weekend, he

immediately began working the phones

and brainstorming.

“The quality was better than anything

I’d had,” recalls Butorac. “It was fresh

and hot and just really tasted delicious.

I knew right away it was something I

wanted to look into.”

Butorac and a group of investors went

on to purchase the franchise rights to

Marco’s in 2004. Flash forward to today,

and the company now has more than 170

stores in 14 states. Marco’s added nearly

40 locations in 2008 and says it plans to

have 500 units in operation by the end

of next year. Thus far, 735 total locations

commitments have been signed.

That’s aggressive, but company offi cials

say they’re prepared to sell, build and

service those planned locations. They

point to their same-store sales increase

of 6 percent systemwide last year (13.1

percent for company-managed stores) as

proof that they’re on the right track. Perunit

sales at Marco’s were $498,000 in

2003. They now stand at $660,000.

“That was one of our goals early on,”

says Butorac. “We had some primary

goals and 190 action plans. We wanted

to build brand awareness to 60 percent

in each store area; we wanted to reach

$600,000 for our average store sales; and

we wanted to run 15 percent EBIDTA.”

EBIDTA, also known as operational cash

fl ow, stands for Earnings Before Interest,

Depreciation, Taxes and Amortization.

He considers his crew,

pieced together from foodservice and outside

industries alike, to be “a group of allstars.”

Says Butorac: “We have some

very impressive, accomplished people

on board here. These are people who

have already made a very nice career

for themselves and decided to join

Marco’s because they saw where the

company was headed and wanted to

be part of something special from the

ground up.”

That cast includes Dave Black (executive

vice president of operations),

Cameron Cummins (VP of franchise

marketing and recruitment), Mike

Jaynes (VP of sales, research and

development), Bryon Stephens (VP

of new business development), Don

Vlcek (VP of purchasing) and Peter

Wise (VP of marketing). Together

with Butorac, the aforementioned company

Pizza Today last fall

to talk about the company’s structure and

its future plans. They all agreed the recipe

to success starts with a quality product.

They are so adamant on that point that

they designed a poster that hangs in the

kitchen of every Marco’s store. The poster

is a mission statement of sorts with a twist

— it also serves as a pep talk.

“It’s something that’s very important

to us,” says Jaynes. “When you go down

through it you see it covers service, product,

image. It’s what we want

our employees to project to our

customers and it really keys in on

our freshness and quality.”

When asked how the company

goes about getting its employees

to buy into its mentality, training

was a quick answer. All new hires

undergo online training as part of

their orientation.

“It’s a Web-based system

consisting of 12 modules,” Butorac

says.

Adds Jaynes: “Marco’s University

is meant to enhance what

they’ll be learning in the stores

from their manager. It’s easy to

use and is very direct.”

That’s where the growth goals and

action plans come in. A substantial investment

in both time and money was given to

these points from the very beginning, says

Cummins.

“When we retooled the brand, 11 of us

were here working,” he says. “Bryon and

I worked on growth. We took the good

points of chains like Subway, Quizno’s,

Coldstone (Creamery) and used what

ANUARY 2009 www.pizzatoday.com Pizza Today 63

Because of its

momentum, Vlcek says he’s had an easier

time negotiating with suppliers.

“I’ve got vendors saying ‘many of our

pizza chains are going down. We want

an account like you.’ I was doing a lot of

single sourcing from the same people, but

when I fi rst got involved with Marco’s I had

to educate myself and call people I knew

and try to get people interested.

Now, we’ve looked at the key

components of our cost, and

with the economy and everything

that’s going on you can’t

really give yourself to just one

company these days. That said,

if we add a supplier or change

a supplier, we do it very, very

cautiously.”

That approach, coupled with

a focus on the end product, is

what Black considers to be the

Marco’s difference.

“One thing that has amazed me is that

the product really is the same after we’ve

added all these stores,” he says. “There’s

consistency with the product. That’s hard

to do. I was scared to death about that. I

was scared it would be all over the board,

but we have the quality control systems.”

Now, the trick is to continue growing

and for the existing stores to stay sharp.

Stephens doesn’t see that as a problem.

“We’re going to have 198 locations in

Florida, and we have 31 commitments

from franchisees right now,” he says. “Some

of the other markets we’re looking at for

growth soon are cities like Atlanta and Columbus.

We’re also looking at Arizona. But

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is editor-in-chief at Pizza

Today.

ANUARY 2009