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Part 2 Interview with Ron Berger, Franchise Industry Leader and CEO of Figaro’s Pizza

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This is the second part of an interview with Ron Berger, CEO of Figaro’s Pizza. (Read Part One here.) Ron has been in the franchise industry for 36 years and has been a member of the IFA Board of Directors in the 1980’s, 90’s and until February, 2010. Part 2 of our interview includes a discussion of recent acquisitions by Figaro’s and a program that enables existing Figaro’s franchisees to benefit directly from the acquisition.

FKH: Ron, Figaro’s recently made two acquisitions. Can you provide some background to these transactions?

RB: We acquired a company called Pizza Schmizza, which has 26 locations in Oregon and Washington State. The business consists primarily of lunch time trade and features an 18” and 24” pie. Pizza Schmizza differs from Figaro’s, which does 80% of its business after 4pm.

FKH: Although the two concepts appeal to different markets do you intend to sell individual franchises for both or combine into one?

RB: We do not combine the two, and are actively developing both. We focus our Pizza Schmizza development in Southern California and Oregon, as well as international. We focus our Figaro’s development in Wisconsin, California, the Pacific Northwest, the U.A.E., and wherever we have existing restaurants, such as Florida.

FKH: How did your existing Figaro’s franchisees react to the acquisition?

RB: Figaro’s franchisees welcomed the acquisition because it instantly grew our system-wide buying power by nearly 50%, allowing franchisees of all our systems to enjoy lowered cost of goods and supplies.

FKH: I understand you made another acquisition.

RB: We acquired a company called Sargo’s Subs. They have 3 franchise locations with an Italian theme similar to Blimpies. It offers Figaro’s franchisees the opportunity to enter the sandwich business. We’re providing our existing pizza franchises the ability to add the Sargo product line to their menu. We also co-brand with other quality sandwich brands. For example, we have a number of Wisconsin restaurants co-branded with Cousins Subs, a 170 unit franchise based in Milwaukee, and we’re offering franchisees in certain other markets an opportunity to co-brand with Blimpie’s. And when we enter into a successful co-brand relationship, such as the one with Cousins, we won’t offer Sargo’s in that area.

FKH: Will your Figaro’s franchisees have to pay a franchise fee for Sargo’s?

RB: No. We want to provide them the opportunity to sell more products to a larger market. When our franchisees generate more sales we receive more revenues.

FKH: I think that’s a great idea. Perhaps more franchisors should use this approach.

RB: Well, I think its concept specific. If the synergy is apparent, and it’s an obvious ‘win-win’, then why slow it due to a franchise fee up front?

FKH: With three franchise concepts, how do you see your company evolving in the near future?

RB: We’ll grow Figaro’s and Schmizza organically, and add additional strong regional brands as they become available at attractive prices.

FKH: You’ve taken Figaro’s to a few countries. Do you have a strategy in place for international development?

RB: Yes. We are very interested in international development. We have successful units in the U.A. E. and Cyprus, and would love to grow in other markets, provided we identify great franchisee partners.

FKH: Ron thanks for the opportunity to interview you. Any advice for emerging franchisors?

RB: Now there’s a loaded question! Join IFA, focus on your brand promise, and avoid growing too fast. I guess those are my pearls of wisdom for today.

© 2010 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com

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