A pizza the action

Nation's Business, May, 1989 by Michael Barrier

A Pizza The Action

For most Americans, buying a pizza to eat at home involves either calling a pizza parlor that delivers or stopping by a grocery store's frozen-food section. But in some regions, there is a third option, called "take-and-bake."

When you buy a pizza at a take-and-bake store, you typically get fresh toppings on flash-frozen, partially cooked dough. You take the pizza home, stick it in the oven, bake it for 10 or 12 minutes, and it's ready to eat--at a price perhaps one-third less than that for delivered pizza.

"We don't describe ourselves as the best pizza that some specialty cook is going to make for you," says Gary Alcombrack, founder of Saucy's Pizza Franchises Inc., of Everett, Wash. "On the other hand, we consider ourselves a whole lot closer to that than what you would get at the grocery store."

The Pacific Northwest has been especially hospitable to take-and-bake pizza. Saucy's, whose 65 stores are concentrated in Washington, is one of the two largest take-and-bake chains; the other is headquartered in Oregon.

Most Saucy's units are in small towns with heavy blue-collar populations. The big chains "can't afford to be there," Alcombrack says, "because the draw isn't big enough. We go in there, in our 1,000-square-foot store, and we're the hottest thing since soup." A take-and-bake unit doesn't require a lot of money to install or operate--the start-up costs for a unit, including the franchise fee, can be as low as $42,000. With no expenses for an oven or for delivery, a Saucy's unit can thrive on revenues that would not support a more elaborate outlet. Systemwide sales have been running around $7 million annually, for an average of not much more than $100,000 per unit.

Saucy's targets franchisees whose ambitions are as modest as those of its customers. "We're never going to have a franchise that makes a franchisee a millionaire," Alcombrack says. "We sell to the people who want to make a good, decent living but don't want to take orders from the boss any more."

And, he says, franchisees find running a Saucy's store relatively trouble-free: "We are not a big, highly sophisticated company. If you can count to 40"--the number of pieces of pepperoni that go on a Saucy's pepperoni pizza--"you can just about make it."

Alcombrack, 38, and a partner started Saucy's seven years ago with one store in Everett. For the first few years, franchising "basically took care of itself," Alcombrack says, as potential franchisees sought them out.

But then Alcombrack and his partner had a falling out, and Saucy's began to feel the squeeze of intensified competition among the pizza chains, especially on its units near larger cities. Saucy's did almost no advertising--franchisees did not contribute to an advertising fund--and while the big chains were expanding their menus, Saucy's was still selling only pizza.

In 1987, Alcombrack stopped franchising for more than a year and started buying out his partner. Last year, things started looking up: Alcombrack took on a new partner; a few Saucy's outlets started selling frozen yogurt and submarine sandwiches as well as pizza, and their sales went up. Saucy's prepared to move aggressively into California.

Everything was falling into place--except the money to finance expansion. And so, in February, Alcombrack and his second partner sold Saucy's to Merjco, a San Jose, Calif., company that helps small corporations find financing. Says Ray Seewer, Merjco's president and now the president of Saucy's: "The company needs cash, and we're in the process of putting $800,000 into it now." He plans to take Saucy's on the same path that Alcombrack laid out, opening perhaps 50 more stores this year, most in California.

When he looked into buying Saucy's, Seewer says, he was amazed by how satisfied the franchisees were: "Very happy with the profits, very happy with the sales. Ninety percent of them are making money--that's a very high percentage."

Alcombrack remains with the company he founded, as a consultant.

PHOTO : Gary Alcombrack holds one of the take-and-bake pizzas sold by Saucy's Pizza Franchises Inc., of Everett, Wash. After 10 minutes in the oven, the pizza is done.