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| BUSINESS - US INDIAN BUSINESS |
| Former Exec. Wants Marco’s Pizza to Rise to the Top | | By RICHARD SPRINGER | | | indiawest.com | October 12, 2009 04:05:00 PM |
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LIVERMORE, Calif. – Deepak Gupta, a former senior vice president at PeopleSoft, opened the first Marco’s Pizza outlet in California in April.
“We have done extremely well and exceeded my expectations,” he told India-West during a recent visit to the store.
 Gupta and his investment group have acquired the area rights to open as many as 36 stores in Alameda, San Joaquin, Stanislaus, Yolo, Sutter, and Solano counties. He plans to open his second Marco’s in about five weeks in Modesto. Rights to other areas in California are still available.
Toledo, Ohio-based and privately-held Marco’s Pizza, which has been in business since 1978, now has 190 stores in 17 states. The chain is on track to open more than 40 new stores this year - more than twice as many as in 2008.
More than 880 new Marco’s locations have been signed up, meaning the company could quadruple its store count in the coming years.
“We have a differentiated product: authentic Italian pizza,” Gupta enthused. Marco’s also has great product quality, excellent customer service and “an outstanding management team,” he added.
Marco’s posted “positive same store sales” for the last 11 quarters. “How many companies can say they have made more money this year than last year?” Gupta asked.
Some of the low-cost, and some national, pizza chains use frozen dough and frozen cheese to save on labor. Not Marco’s, which makes fresh dough on site, never freezes the cheese and uses fresh ingredients.
“My philosophy is to provide the best quality product at a fair price. By providing this unique combination we show you don’t have to sacrifice quality for price.”
Customer Karen Emerson of Livermore told India-West at the store during a visit that Marco’s has become her family’s favorite pizza outlet. Her four kids are always clamoring for more. The service, she added, is great and “we don’t have to wait.”
“The one thing that surprises me,” Gupta said, “is how universally kids ages 3-17 love our product. They don’t want to eat any other pizza and that’s unique.”
Customer Randy Jennings, a retired contractor, said he buys a chicken sub sandwich three or four times a week, splits it with his wife, and saves money for dining out at night.
Gupta, 45, said that the cost to lease and convert an existing pizza store to a Marco’s Pizza store ranges from $250,000-$350,000. “Marco’s has a variety of financing programs,” he added, including SBA loans. Marco’s could also take an equity share in a venture, as another option.
As an area rep, Gupta gets commissions from every store in his territory, but his commission doesn’t cut into the net of the franchisee, since they pay a flat 5.5% royalty to the parent firm, and Gupta gets his share from that amount.
“As the area rep, I’m there as their coach when they open a franchise,” he told India-West, pointing out that since California is virgin territory it differs from the overexposed national chains, which sometimes allow shops under the same brand to compete with one another.
“And my store is a training store. They don’t have to go to Ohio to gain hands-on training,” he said. As an area rep, he plans to visit other Marco's stores in his area frequently to help grow their business.
Marco’s Pizza, Gupta said, makes tools available so that potential franchisees can scout an area to gauge demographics, households, competitors, etc.
“Eight percent of those who fail, fail because they choose a poor location,” Gupta said. About 80 percent of the customers in the take-out pizza business live in a two-mile radius, he pointed out.
Gupta decided he needed to recruit a director of operations “who has worked with Marco’s, so the company put him in touch with Siamak Ansari, who worked for Marco’s for over 20 years in Ohio.
“Marco’s believes in very strong partnership with its area representatives and franchisees, and a proof of this philosophy is reflected in the fact that Marco’s sent me their best guy,” Gupta said. “I’m a savvy business guy and he’s the operations guy, so we have the combination we need to help other franchisees succeed in California.”
Ansari told India-West he sees the day when there will be 400 Marco’s outlets in California and it will be “the number one pizza business” in the state. “The company has been good to me,” he added, “otherwise I wouldn’t have stayed with them for 20 years.”
Victor Bhatia, who owns a Subway franchise in the Livermore shopping center here, now wants to open a Marco’s Pizza outlet. He said he saw the long lines at Marco’s when it opened, tasted the product, talked with Gupta and was sold.
He likes the fact that he won’t have another Marco’s nearby when he selects his site. “He can cherry-pick his location,” Gupta said.
Gupta plans on marketing through newspaper inserts, loyalty mailings, coupon books and programs with schools and sports teams.
He said his wife, Nidhi, and two children, Shreya and Shaurya, are supportive of this change. “I helped make other people rich while I worked (in Silicon Valley). “Why not work for myself and leave a business to my two kids.” |
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