Bob Weissmueller explains how this quick-service Italian restaurant chain is putting the pizzazz back in pizza.

In 1988, the Fazoli’s quick-serve Italian restaurant concept was created by Jerrico, also the parent company of Long John Silver’s. After two years, Jerrico sold the five-restaurant chain to Seed Restaurant Group, after which it grew to more than 400 locations in 31 states. But the Atkins craze took a toll on the pasta-centric chain, which pared down to 315 restaurants by 2006.

Bob Weissmueller, President and CEO

“Our marinara sauce was a bit orange—the customer wanted it to be red. We had a pizza that was marginal at best—the customer wanted it to be delicious,” said Weissmueller, adding that Fazoli’s conducted focus groups to test altered products and test drove them in a single restaurant before making any company-wide changes.

The next step was to evaluate the menu from a consumer standpoint. For instance, many consumers want a fresh, hot meal that can be eaten on the go, “but eating spaghetti and meatballs while driving down the highway isn’t easy,” said Weissmueller. To that end, Fazoli’s added an Italian beef sandwich and a chicken panini to the menu.

The company also eliminated the menu’s make-your-own-pasta feature. “Although it seems consumer friendly, it wasn’t,” said Weissmueller. Service at the front counter and at the drive through slowed considerably as customers pondered the combinations of pastas, sauces, and accompaniments. “We have chosen a more standardized menu, but we retain the ability to accommodate all of our customers’ tastes.”

To cater to more cautious palettes, Fazoli’s is looking to introduce reduced-sodium, reduced-fat, and whole-grain products to its menu—without compromising taste. “We have an obligation as a restaurant to offer our patrons healthier choices, but we have to make sure we are ready to take on that challenge operationally,” Weissmueller explained.

The menu isn’t the only change Weissmueller wanted to make. Fazoli’s is currently remodeling 16 locations in the Indianapolis market. These locations, he explained, were once other restaurant concepts that had been remodeled. “They didn’t compete as well as our newer venues,” he said. The primary goal during renovation will be standardization of exterior colors and designs. Exterior lighting for easy identification, interior ambiance, and functionality are also being taken into consideration.

“We have taken out some windows so our consumers don’t feel like fish in a tank, and we have moved our fountain drink system so it remains accessible but it is not in the middle of the dining area,” said Weissmueller.

In addition to creating a more comfortable environment for staff and patrons, Fazoli’s remodeling effort is strengthening its brand. “It marries itself the introduction of new products that are more relevant to today’s customers’ tastes.”

Some of these physical changes will also improve the company’s drive-through business, which constitutes about 33% of overall sales (dine-in business constitutes about 62%, while catering rests between 3% and 5%). Weissmueller admitted that drive-through service in the past wasn’t what he’d call speedy, but by rearranging equipment in the kitchen and emphasizing expediency with the staff, the restaurant has made significant improvements. It is currently testing time-saving equipment that speeds cooking, which is the most time consuming task in the drive-through process.

The right blend
With an improved menu in place, Lexington, Ky.-based Fazoli’s is looking to grow. The CEO recently hired a vice president of development and shook hands with Birchwood, a marketing firm based out of Texas to help the company identify opportunities for growth.

When evaluating potential locations, Fazoli’s studies demographic information, including age and income levels; the proximity of people and businesses; competitive activity in the immediate area; visibility, signage, and access; and the possibility for future expansion. “We want to right this ship and blow a little wind in its sails by growing existing markets and entering new ones,” he said.

As the company grows, Weissmueller will determine each store’s ownership structure. Currently, about 45% of Fazoli’s restaurants are company owned and 55% are owned and operated by franchisees, but this formula is not chiseled in stone.

Weissmueller, who spent 35 years in executive positions at McDonald’s, understands the entrepreneurial spirit and that a good selection of franchisees makes for a stronger company overall. “It is the input from franchisees that makes a franchisor think differently about the business—you have more great minds working for the same common goal,” he said.
From an income standpoint, Fazoli’s benefits from company-owned stores as well. “We do not control real estate for the franchisees; we simply collect royalties. But we receive the operating income from the company-owned stores.”

To support its retail operations, a Fazoli’s business consultant visits each franchisee
to help identify profit potential and ensure company-wide standards are being met. In addition, the company’s financial department oversees each franchisee’s P&L. To supplement its strong inhouse marketing team, the company hired Nashville-based Bohan Advertising to provide marketing and public relations support. “We support our franchisees in every aspect of the business, but at the end of the day, it is the their responsibility to run a successful restaurant,” said Weissmueller.

“Fazoli’s has gone through some difficult times, but our franchisees see working with us as an opportunity to take the next steps in their careers and improve their livelihoods. They work hard every day to make that happen—we couldn’t ask for better relationships.”