The pizza market in Canada is a highly competitive business. Pizza Shack, a popular franchise throughout Eastern Canada, has successfully carved a niche for itself by focusing on smaller geographic areas and satellite franchises. There are locations throughout New Brunswick, Nova Scotia, and Prince Edward Island serving up deliciously flavourful pizza, wings, and more. This month, The Canadian Business Journal spoke with Allain Bourque, Vice-President of Marketing and Operations, to explore the Pizza Shack formula for franchise success.
Quick growth, continued success
Raymond Bourque, father of Allain Bourque, purchased a 50 per cent stake in the company back in 1992 when there were only three stores in the franchise. It was after this that Pizza Shack began to experience an extensive growth, awarded as the fastest growing franchise, for two years, in 1994 and 1995. Today, it boasts more than 30 locations and a very loyal client base in the Maritime region.
The menu consists of pizzas and the traditional extras such as wings, garlic bread, salads—and the east coast favourite, donairs. This maritime version of the kebab features a special sweet garlic sauce and is a longstanding regional favourite. Pizza Shack also offers convenient and popular U-bake pizzas, prepared fresh for customers to bake at home in their ovens.
Unique franchise model key to success
Beyond having tasty, high quality products, what has Pizza Shack accomplished that has allowed it to stay competitive? Its choice of location, according to Bourque, is a key factor. Rather than going for urban centres saturated by major pizza franchises, Pizza Shack seeks out smaller towns. The second critical part of its success is because of Pizza Shack’s unique franchise model that offers both full and satellite franchise options. “We are very flexible in terms of the people we partner with,” says Bourque. “It is often that the people we partner with for franchising have other business interests, such as owning gas stations or convenience stores or other restaurants. We combine with those types of businesses really well.”
The satellite franchise option uses a business owner’s existing resources to build an easy source of revenue. This mutually beneficial relationship, Bourque explains, makes it an easy addition to existing businesses. “They take advantage of some of our contacts and suppliers and negotiated prices, and in turn they get a product that is well-known in the area and that has been tested. We know exactly how to do our product well and have spent years perfecting it, and it matches up with their existing business.
“Just to give you an idea, if someone owns a convenience store and he has a 600 square foot space that is not being utilized to its full potential, we are able to use that space and help increase that business without paying extra money for heat, space, power, and so on.”
“Some stores have seen a 15 per cent increase in sales—and that is just from everything else, not the pizza.”
Strong brand identity
Pizza Shack is a strong brand in the Atlantic region and all of its current marketing initiatives are set to continue building that. There are opportunities for investment in full franchise locations, as well as in satellites. Although its top-selling stores are standalone locations, Bourque sees particular opportunity with the satellite franchise. “The combo stores don’t have the biggest sales but they have the biggest profits, because by adding us a lot of the costs are already existing so it makes them very profitable.”
Pizza Shack has remained relatively stable during the recent economic downturn, a testament to its reputable place in the Maritime marketplace. It has plans to continue its growth and expansion, starting with a location between Saint John and Fredericton in a Harvey’s. Pizza Shack is always keeping its eye out for new investors and locations, with several more locations slated to open in 2011.
Pizza Shack attributes part of its success to its excellent relationship with its franchisees, and putting them first is a key business philosophy. “We learned a long time ago that it works better when we work with them rather than against them,” Bourque says. “Whenever we do a promotion or put our prices together or our marketing together, we have this in mind. There is no point in having an extremely low price point or have something happening that they are not happy with.
“We are constantly interacting with them so when we put these things together everybody is on board and everybody believes in what we are doing.” This respectful approach to business is sure to attract more franchisees in the future and keep Pizza Shack serving its fresh and tasty favourites for many years to come.