Value, support makes Little Caesars attractive to franchiseesQSR Web

For years, Little Caesars has been a notoriously private brand. But the company is changing, said Jeremy Vitaro, chief development officer for Little Caesars, and he sat down with Pizza Marketplace by phone to talk food, operations and growth.

Today, Little Caesars is privately owned by Mike and Marian Ilitch of Ilitch Holdings. The pair founded the brand in 1959, and the first location was in a strip mall in a Detroit suburb. (It closed in 2018.) Franchising began in 1962.

David Scrivano has been CEO since 2005. Although the company doesn’t disclose how many units it has has, a rep for the company said it has thousands across the U.S. and internationally.

On the menu

Pepperoni is a top seller, followed by traditional cheese. Build-your-own pizza is a fan favorite, especially since the company rolled out its app. “The customizable side of the business has really grown,” Vitaro said.

Limited time-only products have also been successful this year.

“One thing we’ve been doing more of are the partnerships that we’ve done,” Vitaro said. “Earlier in the year we had the Batman calzone, which was extremely successful with the product that we launched around the new Batman movie. It was a product in conjunction with Warner Bros. That was a really successful promotion.”

The brand is also relaunching Detroit-style deep dish pizza. Being from Detroit, it had to make sure they mastered the product before marketing it. A pretzel crust has also been successful and makes its return every so often to the delight of Little Caesars’ fans.

So how does a chain with thousands of stores make sure its restaurants are maintaining continuity across the brand as it grows internationally?

“We have a significant company-owned presence,” Vitaro said. “A good percentage of our stores in the U.S. are company owned. That helps ensure that everything we’re launching or any of our operational procedures are relatively easy to execute. I think that’s important, and it allows us to test things, whether it be processes, products, new designs or layouts.”

Vitaro added that the menu and the model are both also relatively easy to execute. It’s a high-transaction model, but it’s primarily carryout and some delivery. The brand has a partnership with DoorDash to deliver its pizzas.

Little Caesars also launched “pizza portals” which allows guests to pick up their pizzas from heated boxes in some of the stores. Those were especially useful during the pandemic, as a QR code given to the guest unlocked a box to receive their pizza inside.

Vitaro said the brand also has a good support system both in the U.S. and internationally. “We have a really strong field team with a lot of tenure,” he added. “We’re a family-owned company and tenure and experience are important everywhere but it’s really present at Little Caesars. That enables us to support growth and consistency with franchisees in the U.S. and internationally.”

Vitaro said the quality of franchisees is but is especially important outside the U.S. It becomes more fundamental as they deal with challenges that may be local to the countries in which the franchisees are located.

“Franchisee selection (and) franchisee quality are things that are very important to us,” Vitaro said. We’re really trying to grow with the best franchisees.”

On the field

Little Caesars became the official pizza of the NFL this year. It’s a great partnership, Vitaro said, one that benefits both brands. It also broadens Little Caesars’ reach.

“The NFL is a great franchise, a great brand and a great partner,” Vitaro added. I think (it has a) 100 million-plus people fanbase. It’s an unparalleled reach in terms of the folks that are connected to the NFL and then watch football games. It’s very unusual in today’s fragmented media space to be able to reach that broad and significant of a demographic and to connect with consumers beyond our traditional neighborhood consumers. Now we’re connected with a much broader group.”

It’s a five-year partnership, and the brand will have plenty of time to experiment and build upon what’s working and what’s not. From a sales perspective, they’re already seeing good results from the marketing revolving around the NFL.

“We have a significant marketing presence, and we’re backing up (franchisees’) in-store efforts with a powerful outreach with a major brand like the NFL to connect with consumers. So far, it’s been very, very exciting and very successful,” Vitaro added.

Provided.

Growth

Despite its size, there’s still room for Little Caesars to grow via franchising. The brand finds a lot of opportunity in the Northeast, including from Washington D.C. to Boston. The Pacific Northwest also looks ripe for growth, including Washington and Oregon, as do parts of Florida and Denver.

They’re also looking in larger markets like New York, Kansas City, Phoenix and Houston. There’s a lot of opportunity in those markets, though small towns have been good to the brand historically.

“We’ve got the opportunity to go into different trade areas in many of our existing markets,” Vitaro said. “We have a really big presence in many of the Texas markets, California, throughout the Midwest. We still have areas within those markets that we think we have a presence in. As the brand has evolved with digital and delivery in particular, we’ve found that we can expand where we’re successful. We can move into demographic areas (that are) slightly higher income areas that previously we weren’t really focused on.”

Vitaro said the country certainly isn’t saturated by Little Caesars. The brand has recently signed several multi-unit development deals with franchise partners and has grown in the past with single-unit franchisees.

“Historically, the brand has been a great place for an entrepreneur to start with one unit. Our veterans’ program is fantastic,” Vitaro added. “You start with one unit and grow over time. And we’ve got really special family-run networks that have gotten to a really good scale — 30, 40, 50 units — by growing one at a time. We want to keep doing that.”

Vitaro, whose background includes Dunkin’ and Baskin-Robbins, has been bringing in members of his team from other concepts as well.

“We don’t we don’t always talk about ourselves a lot. We’re doing more of that, and I think that the brand is very appealing to the multi-unit groups as well,” Vitaro added. “Because of the business model, it’s a relatively low cost of entry. It’s very scalable across multiple markets in an unusual way, because … it’s really efficient to operate. It’s efficient to operate during a challenging labor time. And it’s very flexible in terms of asset time. Just think about drive thrus. And in our system, we have a high percentage of drive thrus, which is very unusual in the pizza business so I think (we have) a lot more flexibility than your normal pizza chain would have.”

International markets remain attractive as well. Pizza remains popular around the world and is a growing segment. “Europe obviously is a massive piece of the market,” Vitaro added. “And it continues to grow. And then areas like Latin America, Middle East and Asia are somewhat newer markets to pizza, but they’re very, very high growth markets.”

Growing into these international markets, Little Caesars differentiates itself with its value proposition as well as its high transaction model.

“We’re in 27 countries today, but predominantly in Latin America. And it’s really a special business that we have there,” Vitaro added. “But we have a lot of white space and opportunity in front of us, especially in Europe and the Middle East. We’re excited about how that will complement our U.S. business and our Latin America business.”