Little Caesars: The Pizza Empire
In 1959, Mike and Marian Ilitch launched Little Caesars in Garden City, Michigan with one location. Franchising since 1962, today the brand is the fastest growing pizza chain in the world* and the largest carry-out pizza chain in America. Experiencing significant growth in sales and store units between 2008 and 2012, the famous five-dollar HOT-N-READY® pizza has helped Little Caesars earn the title of “Best Value in America” for six consecutive years.**
Mr. Ilitch, a former Marine and minor league shortstop for the Detroit Tigers, first became interested in the pizza concept while traveling the country with the Tigers. Recognizing the growing demand for pizza, originally a snack food introduced to North America by World War II veterans returning from Italy, Mike took the pizza path after an injury prevented him from continuing to play in the minor leagues. Leaving his athletic dreams behind, Mr. Ilitch and his wife pursued growing Little Caesars. Their hard work led to building a successful enterprise, which today includes ownership of the Detroit Tigers, the Detroit Red Wings and Olympia Entertainment, which together employ thousands of individuals.
Prior to Little Caesars, Mrs. Ilitch worked in the airline industry. Leaving her career to embark on a new path with her husband, whom she often referred to as her “Little Caesar,” with a combined $10,000 in savings, the couple opened the door to their first Little Caesars on May 8, 1959. “The pair complement each other; Mike is a dreamer with a lot of ideas and Marian offers a strong financial skill set,” Bob Mazziotti, Vice President of U.S. Franchise Development for Little Caesars says.
Moving away from the snack category and becoming a meal item in the early 1970s, today pizza nights are a celebrated event for families throughout the country. Little Caesars is serving up the dish with fresh, never frozen, mozzarella and Muenster cheese, dough made fresh daily in the stores and sauce made from California crushed tomatoes.
Prior to 1979, Little Caesars offered a broad menu including pastas, chicken and fish. Later it began to focus on offering incentives such as two-for-one pizzas, affectionately known as Pizza!Pizza!®. The introduction of the HOT-N-READY® concept in 2004 brought even more national brand recognition, making Little Caesars a strong player in the market.
“The fast-paced American lifestyle has fueled growth with the HOT-N-READY® concept, so we make sure we’re ready when the customer is, and today the customer is on the move,” Mazziotti explains, adding, “People don’t have time to be sitting around waiting for pizza to be delivered.”
Little Caesars franchisees are entrepreneurs who share a great work ethic and a desire to follow a proven system. Franchisees are involved in their businesses and local communities and come from all walks of life including military veterans, small business owners, and former employees of corporate America looking for a change. Ideal candidates are willing to develop a passion for ownership of their business and product, and are local to their community.
“Whoever the candidate is, it’s important that he or she can develop a passion for what pizza is and what it brings to the community,” Mazziotti says. “There are a lot of families waiting for great pizza at a great value. If we can connect with a franchisee who has a passion for pizza and community, it’s a marriage made in heaven.”
The process to become a franchisee begins with filling out an application and supplying supporting documents to establish eligibility. Upon receiving the Franchising Disclosure Document, candidates can then start the due diligence process, speaking with existing Little Caesars franchise owners to learn about the performance of the business and the support provided to them. Attending a Discovery Day in Detroit is next. Here, candidates meet with key players, get behind the counter and experience first-hand what it feels like to be a team player. Once approved, franchisees make a deposit on the franchise fee, which enrolls them into a six-week training program that covers the basics on how to operate the restaurant, insights on human resources, finances, marketing, and everything else necessary to be a Little Caesars franchisee.
“We want to be where the people are who crave value and quality pizza products, which is virtually everywhere,” Dan Ducharme, Director of Franchise Development explains. After their six weeks of training and as franchisees return to their market to seek out an appropriate storefront, corporate assists them in getting their site established. Leading up to the grand opening, the new franchisee will receive architectural support, help with a floor plan, marketing plans, and staff training. Ongoing training is also provided to franchisees and includes cash management skills and multi-unit supervision advice, among other things.
The estimated initial investment required per franchise location ranges from approximately $221,290 to $653,540 for a standard Little Caesars carry-out location. Stores in the higher end of the range are typically free-standing buildings, not strip center locations. Of course, costs vary on a variety of factors. (Item 7 of Little Caesars Franchise Disclosure Document provides additional information, including assumptions.) Through the International Franchise Associations’ VetFran program, Little Caesars also offers various discounts to military veterans on the franchise fee and equipment.
Setting the company apart from its competition is its national advertising campaign featuring creative, attention-getting commercials. “We have a great national program and we support it all with a local approach as well,” Mazziotti explains, adding that while franchisees are responsible for doing their own local marketing, corporate takes care of advertising at the national level, a factor that benefits franchisees.
Franchisees also benefit from what the brand represents. “The key is who we are and what we offer. Being HOT-N-READY®, we’re the best value in America, says Mazziotti. “We get involved with communities and when people see the quality of our products and the value we offer, it’s what makes us so appealing.”
Giving back to the communities in which they do business is also important to Little Caesars franchisees. The Little Caesars Love Kitchen is one such initiative that helps them do this. A pizza kitchen on wheels, the Little Caesars Love Kitchen travels across the continental United States and Canada meeting the needs of the hungry, the homeless and disaster survivors.
To date, the Little Caesars Love Kitchen has fed over two million people and an estimated 50,000 Little Caesars franchise owners and employees have volunteered their time over the years to support the program in the communities in which their stores do business.
The Love Kitchen has played a part in providing meals to the victims and first responders at various catastrophes including the Oklahoma tornadoes, the Katrina and Sandy hurricanes, and Ground Zero in New York City. “We are where we’re needed,” Mazziotti says. “With the convenience of our product and unique initiatives, we do what no one else does.”
In a new initiative to expand its growth into attractive rural territories, Little Caesars is now providing small town entrepreneurs with the opportunity to take the national brand into their communities. “We’re looking to expand into small town USA where families are waiting for a great value and a great pizza,” Ducharme, says. “When people are going to have a pizza night, it’s not going to be a regular dinner, it’s going to be a fun evening, a festivity, and it’s going to be special. When an area of any size has a good family base, it means it’s usually a good area in which to operate one of our stores.”
The secret behind the company’s momentum is in both the product and the business’ simple system. These factors allow franchisees and their employees to follow the model and provide great service to customers to grow their business. Through witnessing smooth transactions and an effective business structure, customers are often drawn to becoming involved with the company and decide to own their own Little Caesars.
“The last decade has seen sales and store growth,” Ducharme says. “We’ve been in business for the past six decades, our business model is solid, we have ongoing support for our franchisees, and we know the key points as to where and what to focus on in the future.”
* “Fastest growing pizza chain in the world” based on the net number of stores added 2008-2012
** “Highest-Rated Chain – Value for the Money” based on a nationwide survey of quick-service restaurant consumers conducted by Sandelman & Associates, 2007-2012
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