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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

Co-branded Papa Romano's and Mr. Pita
Papa Romano's tends to support evenings and weekends in co-branded locations and Mr. Pita sells more at lunch and on weekdays.
Casey Askar is predicting big things for his Detroit-area company. The chairman and CEO of Askar Brands, operator of a growing portfolio of local chains, expects to be competing on a global level in the next five years.

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 Up

The 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.”

Papa Romano's pizza
To make pizzas consistent, Papa Romano's bakes in conveyor ovens. Older franchised stores must convert as their contracts come up.
Askar admits it's not as easy as throwing complementary concepts together. Papa Romano's menu is complex because it offers subs, salads and entrees, makes its dough and sauces in house, and does a lot of catering. Franchisees get retrained on new systems such as more efficient prep methods, and may even need to upgrade equipment and decor as their contracts come up for renewal. Mr. Pita, however, is simple to operate, but the menu needs editing when the two are together.

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 Family

Askar 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.

Stucchi's ice cream store
Stucchi’s stores are operated by licensees, but the company expects to convert many to franchisees.
Stucchi's produces its super-premium ice cream, frozen yogurt and sorbets in a commissary and ships tubs to the licensees, which makes it easier to add to or open a unit than concepts that make their treats in house. The 12 stores are operated by licensees, but Askar expects many of them to convert to franchisees for the extra support and opportunities.

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 Roll

Askar 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.

Mr. Pita sandwich
Mr. Pita offers a menu of hot and cold pita sandwiches and wraps, and is easy to execute, according to Askar Brands executives.
“We're probably overqualified for where we are today,” Askar laughs. But he believes that while the in-house team costs more, it's more efficient long term. And it gives the company the ammunition to accomplish its aggressive goals.

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.”

 

Snapshot

Company Askar Brands

Headquarters Commerce Township, Mich.

Concepts Papa Romano's, Mr. Pita, Stucchi's, CJ's Brewing Co.

2007 Systemwide Sales $40 million

2008 Systemwide Sales $44 million (company estimate)

Units 49 Papa Romano's, 36 Mr. Pitas, 12 Stucchi's, 1 CJ's

Average Check $17 Papa Romano's, $8 Mr. Pita, $7 Stucchi's, $28 CJ's

Expansion Plans 60 in next 2 years

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