Portfolio Manager Askar Brands
Growing Detroit multiconcept operator Askar Brands mixes and matches chains to suit the market, real estate and franchisee.
By Mary Boltz Chapman, Editor-in-Chief -- Chain Leader, 9/1/2008
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| Papa Romano's tends to support evenings and weekends in co-branded locations and Mr. Pita sells more at lunch and on weekdays. |
Askar has a long way to go. The Commerce Township, Mich.-based company owns local quick-service chains Papa Romano's, Mr. Pita and Stucchi's, as well as a one-off casual-dining concept, CJ's Brewing Company. Together, they total less than 100 stores, almost all of them in Southeast Michigan.
But Askar, whose multiunit experience includes stints at Jet's Pizza, Speedway and Powerhouse Gym, has been taking some serious steps toward his goal, bringing in big-gun executives at headquarters, refining the concepts and their operations, offering co-branding options, and recruiting large area franchise developers.
Teaming UpThe portfolio play began last August, when takeout and delivery pizza chain Papa Romano's, which Askar had been managing since March 2006, acquired Mr. Pita. Askar had been familiar with the sandwich concept and its founder, Frank Lombardo, and was looking for a co-branding opportunity.
The bulk of Papa Romano's business comes in the evening and weekends, while Mr. Pita sees more traffic at lunch and on weekdays. “It's like a dream come true [for a franchisee],” Askar says. The two concepts can share the lobby and kitchen, plus many overhead costs. “There's minimum investment,” he adds. “They're buying another business for practically nothing.”
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| To make pizzas consistent, Papa Romano's bakes in conveyor ovens. Older franchised stores must convert as their contracts come up. |
Both concepts have sandwiches, salads and pizza. Askar Brands decided that the subs on Papa Romano's menu would stay, but the pita pizzas at Mr. Pita were redundant. The company continues to simplify menu operations by purchasing the same dressings, lettuce blends, cheeses and other ingredients.
“You have to make sure franchisees are set up for success and that they can handle the rush,” Askar says. “The simpler you can keep the menu, the easier it is.”
Three co-branded locations are open today.
Growing FamilyAskar next went looking for a dessert concept for the portfolio. He spoke with a few ice cream concepts, including Carvel. He found another hometown favorite, Stucchi's, which David and Chris Fischera founded in 1986 in Ann Arbor. “It's almost weird the kind of following that brand has,” Askar says, especially among University of Michigan alumni.
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| Stucchi’s stores are operated by licensees, but the company expects to convert many to franchisees. |
He imagines strip centers where a co-branded Papa Romano's and Mr. Pita might sit next to a Stucchi's. “I love the whole co-branding and co-tenanting concept.” Askar says. “You need every competitive edge you can get.”
A CJ's Brewery Company, which is Askar Brands' one-off casual-dining concept, could also be part of the arrangement. Askar says CJ's achieved record sales for the first half of the year thanks to its microbrewed beers, which comprise about 25 percent of the restaurant's sales.
Ready to RollAskar Brands was prepared for the challenges of combining and expanding the brands, having bulked up at headquarters. Askar doubled the corporate staff and brought in a high-caliber team of experienced operators. Lombardo, now president of the company, was a longtime Little Caesars franchisee before founding Mr. Pita in 1993. Chief Operating Officer Gary McCausland had worked for Domino's as corporate controller and then president of international. The company added in-house accountants, attorneys and franchising staff.
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| Mr. Pita offers a menu of hot and cold pita sandwiches and wraps, and is easy to execute, according to Askar Brands executives. |
Askar plans to expand the company three ways. The first is organically, store by store.
The second is via area developer agreements. A few contracts have been signed and are under way already, including a 100-store deal in Denver for singles and co-branded stores, a similar agreement for 120 stores in Houston, and a 30-unit Mr. Pita franchise in Charlotte, N.C. Each should have restaurants open by the end of the year.
The third way the company will grow is by more acquisitions. Askar is considering other regional pizza chains that could be rebranded to Papa Romano's. He also expects to add new complementary concepts to the portfolio, possibly a chicken chain. “Be watching for acquisitions,” Askar says, “because that's one thing I've been doing, with Mr. Pita and with Stucchi's, and there are more to come.”
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