At Oggi’s Pizza & Brewing Firm, the recession first turned evident final yr. Our gross sales for shops open one yr or extra had been stalled and, in some neighborhoods, had been displaying a decline. What wasn’t making sense was the tempo of enlargement within the restaurant trade throughout us. With gross sales progress stalling and even falling at our shops, how might all of those chains proceed to open new shops? It was nearly like we had been in a contest for websites — and the rents had been changing into ridiculous. In our minds, we couldn’t work out why the world wasn’t listening to the headlines coming from Wall Road. There was a credit score disaster coming and the results of low-cost cash and unfastened rules within the mortgage trade had been about to ship the financial world right into a tailspin.
After all, this was so totally different than what we had been experiencing we doubled in dimension throughout within the earlier 5 years that it was like saying that the rain was coming even because the solar shined. The indicators, although, had been throughout us. As in any bubble, the housing market behaved irrationally. Housing was experiencing what I can solely describe as hyperinflation. Folks would compete with one another to purchase properties, solely to show round instantly after the acquisition and checklist it on the market at the next worth. Many occasions, this is able to additionally appeal to consumers competing with one another for the actual property — and the cycle would start once more in a way that was clearly unsustainable. Bankers had been lining as much as provide this insatiable demand for mortgages, they usually too turned complacent in not requiring the debtors to substantiate their incomes. These indicators had been throughout us, however I believe when you’re experiencing it first hand, it’s tough to acknowledge the risks that await you. There have been different indicators on the market. Out of the blue, considered one of our franchise shops in northern San Diego County declared that he was in bother. His location was simply not producing the site visitors that his high-priced lease had promised him. He was in a mall one of many first locations to be hit proper within the coronary heart of shopper spending. One other franchise retailer was additionally struggling, however we had recognized this and had been preventing what gave the impression to be an uphill battle to reverse the gross sales developments in that retailer. This retailer was within the Phoenix space and was additionally being hit onerous by the actual property decline.
The indicators had been throughout us. All anybody needed to do was take a look at them. Effectively, we did. Not solely did we see this tsunami, however we additionally ready some measures that we felt would insulate our shops from the risks. We not less than ready for the onslaught of unhealthy financial information and did what I consider any enterprise must do in this kind of state of affairs — get in entrance of the curve.
Way back, again in my graduate faculty days, we subscribed to the philosophy of being in contact with what was actually occurring. It stemmed from our studying of the e book “Zen and the Artwork of Motorbike Upkeep” by Robert M. Pirsig. I’ll always remember the half within the e book the place one of many riders on a motorbike journey who relied solely upon the gauges that indicated bother broke down and needed to cancel the remainder of his journey. Within the meantime the opposite rider, who was very in tune with the noises and vibrations of his machine, felt that it was not working “proper.” Because of this, he put a repair in place in order that he didn’t break down like the opposite rider. In our world, figuring out what it was imagined to really feel like versus what it did really feel like meant that we reviewed our key efficiency index numbers on a weekly foundation. As we talked about, the indicators had been all there.
Our technique of co-branding with our native skilled sports activities groups has undergone its check as a serious technique play for us. Our perception that it’s going to carry us ahead by way of this recession was additional examined after we determined to sponsor the Anaheim Geese though the recession was looming down on us. Perhaps I ought to say “as a result of the recession was looming down on us.” We actually consider within the soundness of this technique for our idea. However, we would have liked to make some changes to assist us on the prices aspect. The strikes that we engineered made us extra environment friendly and lower our bills as we headed into this harmful local weather. We cancelled our suite at Petco Park as a part of our renewal with the Padres and reorganized administration within the area. Now that our prices on the franchise stage had been below management, we focused on getting ready our franchisees to outlive and perhaps even prosper on this storm. Within the 2009 menu replace, we launched 27 new menu objects for our clients to discover and experiment with. Our hope right here was for us to tempt them with variety and provides them a motive to frequent us extra typically (whereas our opponents bombarded them with commercials to try to lure them away). Along with the brand new menu objects, we launched a newly designed menu format that included footage of a lot of our dishes. Lastly, we centered a whole lot of our consideration on creating some beneath 550-calorie menu alternatives, which had been highlighted in our menu in addition to our promoting.
We might all prefer to consider that these measures helped our small chain climate many of the storm. The outcomes appear to help that notion with identical retailer gross sales declining 3.5 % final yr and working comparatively fl at thus far this yr (down 1 %). Our forecast is for identical retailer gross sales to start out enhancing within the second half. Let’s all preserve our fingers crossed.
Our household is on the coronary heart of our enterprise. Every member of the family holds an essential place within the hierarchy that’s Oggi’s Pizza & Brewing Firm. The truth that we now have stayed collectively for thus a few years (nearly 20) is a testomony to mutual respect and familial love. After all, all issues finally come to an finish. It was our aim for the primary technology to exit in a step-by-step trend whereas the second technology steps as much as lead the corporate. To a big diploma, we appear to be attaining this. My daughter, Estella, was awarded her MBA from San Diego State late final yr, which was the catalyst for the altering of the guard. She is following in my footsteps (MBA from Pepperdine College in 1985) and, fairly actually, has the entire information essential to convey Oggi’s and our enterprise companions to the subsequent stage.
My son, Tommy, has additionally made an influence as he not too long ago took command of the beer manufacturing portion of the enterprise. Tommy is the final supervisor of Left Coast Brewing Firm, the corporate charged with producing these award-winning micro brews which are served at our 17 shops. Tommy has a level in advertising and marketing from the College of San Diego, however has a love for brewing nice beers. He not too long ago traveled to Chicago to obtain a gold medal for his Black Magic Stout Beer on the World Beer Cup. It was an honor past creativeness for Tommy, who’s not too long ago married and introduced his bride alongside for the ceremonies. On the award ceremonies, Tommy flew out of his seat as he heard his beer was the winner within the American Type Stout class. Any such enthusiasm is a essential facet of his management fashion.
My nephew, Shawn, has been described as an Oggi’s professional. He can recite historic information in addition to minutia solely somebody obsessive about this enterprise can keep in mind. As director of operations for franchising, Shawn has had a private function in hiring most individuals, coaching them and watching because the shops spawned below his supervision embrace their markets with the newly minted franchisees in our system.
My spouse, Dora, has all the time been concerned, though she is now stepping again a bit as we await our first grandchild. Though our household is essential to the way forward for Oggi’s, increasing our horizons and bringing in contemporary concepts in addition to new individuals is much more essential as we proceed to color the portrait that’s our enterprise. Making good hires is all the time a problem. While you make profitable hires, it might flip your world the other way up, and largely for the higher. This has been one of many areas that has proven probably the most enchancment throughout this era. Who is aware of, perhaps we had a wider choice to select from. However, we now have made nice strides internally with a implausible controller. We additionally employed a company chef to information us by way of this nutritionally challenged period. Lastly, we created a brand new place of franchise enterprise advisor. This publish will work instantly with our franchisees with the intention to assist them enhance their enterprise and their backside traces. These three hires had been made potential by our reorganization, which freed the funds essential to enhance our help employees.
In addition to our new hires, we now have invested in some administration intelligence that can even give us a leg up on the competitors. In this kind of enterprise setting, promoting turns into an essential aspect of any offensive that you’ll have for your enterprise. Simply spending promoting {dollars}, although, isn’t sufficient. With redemption charges for regular promoting working at lower than one %, it turns into an train in futility once you spend your hard-earned and restricted promoting finances on one thing that returns one new buyer for each 100 solicitations. We invested in market analysis software program to assist us higher goal our promoting to these clients which have the best chance of responding to our affords. This partnership helps us to not solely analyze demographic information, however now psychographic information, which can assist us higher perceive our markets.
Making every promoting greenback rely extra is a vital aspect in changing into extra environment friendly — which might solely result in larger profitability. After all, with the intention to totally make the most of this, you first need to know what your buyer seems to be like. What’s your buyer profile? The excellent news right here is that this software program is telling us. Armed with this information, we’re in a position to advise every of our shops extra successfully because it pertains to what to promote in addition to the way to promote it. As a result of this market has created the so-called “buying and selling down” mentality, we’re additionally busy conducting focus teams and looking for out what our clients like and don’t like about us. On this financial setting, you’ll be able to take nothing with no consideration.
On the finish of the day, although, all of it boils right down to the client expertise. It’s important that you just try to please every buyer that chooses your restaurant over one other one. Keep in mind, the very nature of what we name a “recession” signifies that the market that you just as soon as catered to is now shrinking. Not solely is it shrinking, however your remaining clients are being lured away by your whole opponents. To outlive, you have to by no means lose sight of high quality of product and high quality of service. Offering worth in each pricing in addition to complete buyer expertise is about as essential as oxygen in Maslow’s hierarchy of wants.
My brother, John, and I opened our first restaurant in 1991. It was the start of a horrible recession, and all of our plans had been placed on maintain by an financial system that was in transition. I keep in mind the actual property brokers after they advised us of their rally cry: “Keep alive until ‘95.” Effectively, 1995 got here and we had been nonetheless standing. Apparently, although, a whole lot of our competitors was gone. What it meant for us was that on this now growing expansionary market, we had been positioned to take pleasure in an even bigger piece of the market as these opponents who tried to hit dwelling runs went out of enterprise.
Typically hitting singles and scoring runs is best than that grand slam. While you swing for the fences, you generally have the propensity to strike out. In an effort to survive, we should take a look at every of our clients as potential singles and simply preserve doing the issues that really feel proper for our circumstances.
