Interested in starting a pizza place, advice anyone?

[omdown]

Howdy all!  I found this group in my search for information on starting a pizza place, and I love the site.  Ctrl-B . . . nice.  Kay, now on to business:

When I lived on the east coast (Macon, GA, specifically), there was a resturant chain called CiCi's Pizza.  CiCi's was a pizza resturant that had something that seperated it vastly from the competition, or at least put it in it a different weight-division anyway:  instead of ordering by the pizza, they served a $3.99 all you can eat pizza buffet.  The place was always booming; I can't remember a night that it didn't have at least a good sized group of customers.  I loved that place.

Naturally, when I moved here to Corona, CA, I looked around for a CiCi's but to no avail.  They haven't expanded this far out yet.  Rats.  So I looked around for any kind of pizza buffet type place.  Still haven't found anything, but it's always possible I haven't looked hard enough.  Anyway, that got me to thinking:  why not try to open one?  I know that obviously I'm not going to do as well as a CiCi's, them being a franchised resturant and all, but I think it has potential, especially if I can manage to place it where I'm hoping to.  My prefered location would be close to a college or possibly a high school.  Would really prefer a college though.  The reason I'd love to be near a college so much is the high exposure rate, slightly easier advertising (posters and flyers around the schools), and seriously, is there anything college kids love more than pizza and beer?     And being lower cost just sweetens the deal for them.  I know I'm not going to be able to afford to be as low cost as CiCi's, but I'm hoping for a $4.99 buffet, $1.39-$1.49 fountain drink, haven't decided on prices for carry-outs yet but I'd really like to have that available as well.

In all seriousness, this is all in a very preliminary, feeling it out kind of stage.  I know alot of people are reading this and think that I have no idea what I'm doing and I'm doomed to failure but seriously, don't we all start out at that level?    Basically what I'm interested in is start-up advice.  I've been researching costs and things, but I'm looking for general advice.  My friend and I are looking into trying this as a joint venture, which would help cut costs somewhat because he does construction and has alot of free time (he hasn't had alot of work for a while) and said that he wouldn't mind being paid over time after we got rolling, and he does specialty work including making furniture (ie.  chairs and tables) and is pretty much offering us his work at zero down payment aside from helping out with the supplies.  So that's a small point in our favor.

As far as my general ideas for the place, I'm looking for a bit of a family-friendly place but with nice atmosphere for teens and adults as well (considering my target is more aimed at the college kids to get me off the ground).  What I'm getting at by that description is staying away from the neon "Budwiser" signs on the wall but having it available for those that want it.  Still trying to decide on the color schemes, but I know that really that's the least of my worries.  Still, I've always thought that environment was something that was a serious contributor to what makes or breaks a resturant.  People take very subconcious things away from every shopping experience.  If you have the best food in town but your place doesn't comfort the eye, you still only come off as a middle-rung place.

I think price is going to be my main selling point as far as advertising goes.  The way I see it, you can blabber all you want about the freshest ingredients and service with a smile and everything in between, but in the end price sells.  I currently work for Vons (grocery store for those of you in an area without one) and I can tell you we insanely advertise things that attempt to seperate us in the minds of the competeition (Rancher's Reserve Beef:  supposedly special grain-feed super tender meat;  Specially hand-picked produce;  Special "exclusive" soups and sandwiches at our service deli), but in the end, the local Albertsons is absoluetly killing us in the weekly ad, and we're loosing customers hand over fist because of it.  And that's on top of our obsession with customer service and making sure we never have more than two customers in a line for speedy checkout.

Anyhow, I'd like some general "well, here's where you look like you need a little schooling" from you guys as most of you seem pretty knowledgable.    Thanks in advance . . . . oh yeah, if anyone has a clever idea for a name I'd love to hear it   haha

[Bill/CDMX]

omdown,

I have no experience in the selling end of pizza, but lots of experience in the buying end. 

There was a CiCi's in my town - $3.99 for all you can eat. Lot's of foot traffic in a very popular shopping mall next to the movie theaters - young people hanging out all over the place. Plenty of advertising in the local paper. And it went out of business. Why? Well one reason is that the pies they served were crap. At those prices, how couldn't they be? And the same thing is happening one after the other to all of the local Chinese "all-you-can-eat" for $5.95 buffets. Life is tough on the low-end; razor thin margins and high volumes are very unforgiving as you must know from Vons. My uneducated guess is that the failure-rate for new restaurants of 60% for independents over a 3-year period is probably a lot higher for the type of business you envision. And it must be even higher for first-timers.   

You sound like you do have a handle on reality and are filled with enthusiasm and I truly hope you can make your dreams true. And I really don't mean to rain on your parade but the biggest problem I see is that there is no mention of you or your partner having experience in this type of business. If that is true, then I strongly suggest you work for a year or so in a business of this type before striking out on your own. Even if you have deep pockets and can afford to "learn on the job", if your early customers have a bad experience, they may never give you a second chance.

Bill/SFNM

[chiguy]

 Hi, Omdown
 I am glad to hear your enthusiasm. There is money to be made in the pizza business, thats for sure! There is also alot of work that goes with it. The buffet style you are talking about may have some higher equipment cost. Plus additional rent overhead. If it is money you are interested in you may consider buying a already operating pizzeria. You can go on buybiz.com and search for pizzerias in any state, some in business for over twenty years. They will also do a good portion of the financing. If you decide to take this challenge on yourself you are on the right track. The Location and atmosphere are important , but dont underestimate a quality product, this is what brings customers back. A place like CiCi's may be absent in California for a reason. Your idea of a low cost product is excellent, this is what the chains have been doing for years. The difference between you and them is that they get national television exposure. Hopefully you can be a owner operator, this is how you will be able to control your food cost. A sad fact is that most employees could give a damm about your business. I am sure you are aware of some of theses factors and i did not write them to be a deterrant, i just wanted to point out some of the obvious. If i were you i would consider attending a Pizza Expo that are held 3 times a year. At the show you can attend  classes for free and every vendor under the sun will be there. You will make some excellent connections there and talk with alot of current pizza operators. Goodluck with your new venture.    Chiguy

[Snowman]

I'd love to own a CiCi's.  CiCi's proves the phrase "it is what it is".  It's cheap, decent pizza.  It's not meant to be gourmet. 

CiCi's owners pay the managers a VERY good "pay" (mostly bonus).  The franchises are heavily suggested to show the manager the money.   You can't own a CiCi's franchise unless you either a) are a certified manager with them or b) hire one. 

Can you duplicate the success?  Sure.  But you have to watch HOW they do it.  First, they hire cheap labor (except aforementioned expensive manager).  They use small glasses, small plates, and 12" pizzas and they charge a lot for their drinks (when compared to the cheap pizza).  The salad bar and pasta must be passed up to get to the pizza.  Food waste MUST be minimized.  As Bill mentioned, the margins are thin, so you have to make up for tiny margins by selling more. 

Now, here's where I think you have a problem -- cost of rent and utils.  California is the land of high taxes and higher cost of living.  I can't fathom what the rent would be out there.  $4.99 might not cover your increased rent. 

Every store must have a niche.  With pizza it's good or it's cheap.  If you try to be middle-of the-road on price and quality, there's very little market.  You either have to be the cheapest or the best -- you cannot be both, that's for sure. 

I'd suggest you go do some reading on www.pmq.com in the Think Tank.  Domino's and Little Ceasars seem to be the more respected of the larger corporate chains -- not LIKED, but respected.  They both do one thing and do it well... CHEAP pizza.  Personally, I find Papa Johns to be better than either of those, but again, they're doing middle-of-the-road quality at a non-bargain basement price.  Pizza Hut has been losing market share (at the store level) for years.  Pizza Inn/Panteras also suffers hard from not being CHEAP or GREAT.   

Why refer you elsewhere?  Well because this site is hobbyist-centric.  Very little "business" is discussed here.  Conversely, at PMQ, it's mostly business (or research paper requests). 

If you're going for a cheap buffet, you have one oven choice -- conveyor.  It saves LOTS of labor, provides great consistency, and speed.

One thing that you'll see every time at CiCi's is a scale on the make line -- used religiously. 

[chiguy]

 Hi, Snowman
 I have a book on franchises and decided to look up CiCi's, the Franchise fee is $30k and the start up cost is $401k to $607k. They require a 4% royalaty. I know they probably do pretty well but $500k for a pizza place sounds crazy. I can't imagine that when the idea of a pizza place popped into OMDOWN'S head these were'nt the numbers dancing around. I was wondering if OMDOWN could give us an idea of how much he thinks he can get a buffet style pizza place started for.        Just curious, Chiguy

[Rick]

Hi, Snowman
 I have a book on franchises and decided to look up CiCi's, the Franchise fee is $30k and the start up cost is $401k to $607k. They require a 4% royalaty. I know they probably do pretty well but $500k for a pizza place sounds crazy. I can't imagine that when the idea of a pizza place popped into OMDOWN'S head these were'nt the numbers dancing around. I was wondering if OMDOWN could give us an idea of how much he thinks he can get a buffet style pizza place started for.        Just curious, Chiguy

500K ?? 
It's crazy.....     
With 500K U can open anything on your own, in a big place and hire 4 pizza makers and a lot of waiters to stay open 24h a day 7 days a week.... in the 5th Ave. NYC !!!!!!!! 
Or CICI's is going to pave your pizzeria with gold ? LOOOL 

[T-Man]

Lots of good "reality check" advise so far.  Let me throw out a few non-pizza issues.  First, you mentioned having beer available.  That will create a significant increase in your expenses when it comes to liability insurance.  Maybe someone here can speak to that specifically. Secondly, you mentioned going into the business with your friend.  Obviously there are advantages to having a partner, just make sure that you think you will get along with him when things get tough as they inevitably will from time to time.  Depeneding on your corporate structure, make sure you have a well thought out partnership/operating agreement between the two of you.  Being friends does not negate the need for this.  Lastly, and I assume you will do this, you will need a business plan.  It's a good exercise for you, but if you are going to look for bank financing it's a must.  And speaking of bank financing, if you do attemt to get it, be prepared to give your personal guarantee as there is no way the bank will do it without.  In other words, be prepared to put all of your personal assets at risk.

Having said all of that, it's fun to consider the possibilities.  People do run successful pizza places.  Good luck.

[Perk]

We have many CiCi's pizza places here in Jacksonville.
It is what it is, Cheap pizza.  It's not bad pizza but they rely on selling
lots of buffets. Too much work for me. I would rather go on  quality.

Like T-man says have a business plan, and if you have a partner, before you start.
Have an exit plan. If you have to close the business and/or if you have to release a partner.

No one ever thinks about a exit plan but with partners you have to have one.
It saved me many times with 3 partners I had in my A/C business.

For me, I will never have another partner again. If I think a business will work I take a chance by myself
and hire people. If those people are great, I'll profit share with them, but I will always be the boss.
It's really the only way it will work. Be your own boss.

[RockyMarciano]

6K a month rent is insane

[Pete-zza]

If you look at some of the recent housing prices in the San Diego area, at http://www.sdhc.net/giaboutus2.shtml, you will see why commercial rents are likely to be very high also.

Peter

[Acehigh]

Well, my thing with this would be that you need a place of somewhat dense population.  Like a big shopping complex or something.  Simply having one in town wouldn't always give you the best place for this.  Around me there are 2 pizza shops(i have worked at both).  One is located near a college, and one near a high school.  Neither deliver, takeout only.  Basically, im suprised neither are closed.  Near a college doing a buffet thing would be ideal, but high school most kids dont even have enough money for lunch.  Another pizza shop near me which is probably one of the busiest does an all you can eat buffet for 5.99 on sundays.  They usually get a descent amount of customers for that.  I think the drink is included and senior citizens and young children get like a dollar or two discount.  Its a good idea to do it on sundays because usually its a slow day of the week.  As far as an all you can eat pizza place, i've never seen one that I would want to go back to again.  Im just not for that 10 hour old pizza sitting under a heat lamp.

[BigV]

There've been a few buffet pizza places around me.  There used to be a Shakeys and there used to be a Godfathers that both did buffet.  Did I mention "used to be?".

I've looked at opening a place myself.  Came close to buying one last year.  Problem with that place was the guy was a crook.

There are two types of places that do well in my area.  Delivery and take-n-bake.  The only places that produce really good pizza are taverns.  The profit from liquor sales allows them to loose money on food.  Especially since the state requires them to have a liquor to food sales ratio to keep their license.

One of the best places I've been to actually has the oven behind the bar.  They use a nice wood fired brick oven and you can watch them bake the pizza.

The places that don't have anything to supplement the income rely heavily on delivery.  Insurance costs associated with delivery can be staggering.  You have to turn out low food cost pizza in great quantity to turn a profit.  The dough is the weak link.  You have to be able to produce dough balls that are usable in a couple of hours.  Very bland.