A SLICE OF HAPPINESS

Franchise veteran finds ingredients for $24 million pizza chain.

Ron Berger’s passion began on the streets of Manhattan in the 1960s. On almost every street corner was a pizzeria where you could buy pizza by the slice, cut from tasty pies pulled out of hot ovens and covered with bubbling cheese.

“I became a person who really loved piping-hot pizza, almost burn-the-roof-of-your-mouth pizza,” Berger said. “In New York City that was easy to find.”

Now, Berger’s passion for the pizza business has been rekindled in a grand manner. In June 2001, Berger, along with his wife, Carol, and business partner Bill LeVine, purchased Figaro’s Pizza, a Salem, Oregon-based chain recognized for its pizza with distinctive “flavors that sing” that can be baked in the restaurant or taken home in oven-ready trays for home baking.

“My wife says I’ve been in training for this job all my life,” said the good-natured Berger with a laugh.

Today, Figaro’s Pizza has grown to about 100 locations in 18 states since it was founded in 1981 by Corkey Gorley and Al Debacker, who wanted to meet the needs of busy families by selling unbaked pizzas on a takeout-only basis. In 1986, food broker Ken Robertson purchased the four-store chain, and using his expertise is credited with developing the distinctive taste of Figaro’s Pizza and spearheading steady growth.

In 1996, the chain was sold to five investors who brought with them extensive experience in operations gained from the well-respected Carl’s Jr. hamburger chain. They not only grew Figaro’s Pizza to 82 units in seven western states, but refined operations in a way that immediately caught the eye of Berger when he was researching the company.

“I was blessed when I got here and found a company that had an operations manual to die for,” Berger said. “They had done a terrific job on it.”

Berger ought to know what a great operations manual looks like. He got his start in the industry in 1974 when he used a $10,000 investment to start the Photo Factory, a retail camera chain that eventually grew to 54 locations. Six years later Berger started National Video, Inc., a chain of video rental stores at a time when there were less than 1 million households in the country with VCRs.

From a $1,000 investment, National Video became a publicly traded company and the largest chain of video stores in the world. When National Video, Inc., was sold in 1988 it had 750 locations in 46 states and every Canadian province. Blockbuster wasn’t even founded until 1986.

In 1989, Berger further influenced the video industry when he founded Rentrak Corporation. Traditionally, video retailers had paid movie studios fees as high as $50 to $80 for videos of new releases for which retailers were getting only $2-$3 per rental. Rentrak created a pay-per-transaction system of distribution in which retailers paid a percentage of each video rental to the studios instead of having to purchase the videos themselves.

As a result of this fundamental change in distribution, Berger said the video industry grew 20 to 25 percent. In turn, Rentrak Corporation evolved into a $100-million domestic company and $300 million business in Japan through a licensee. During this time, Berger also purchased Pro Image, the nation’s largest chain of specialty sports apparel shops, serving as its chairman for three years.

Berger left Rentrak in September 2000 and decided to get back into franchising, an industry he thoroughly enjoyed and one in which he and his wife, Carol, had made many lifelong friendships. Still in the back of his mind was a mental note he had made back in the 1980s when he found several chains in Oregon that had begun selling take-and-bake pizzas.

“I fell in love with the concept,” Berger said. “I thought it was a terrific idea, but I was in the video business at the time.

“My decision became very easy,” Berger said. “I could have spent years trying to develop a competing product along with the necessary operations or could invest in a growing company that has fabulous products, tremendous recipes and great operations.”

It didn’t take long for franchising veterans Berger and LeVine to leave an impression on Figaro’s Pizza. Soon after actively marketing the concept, Figaro’s Pizza more than doubled its number of stores sold and the number of states it will be operating in when those stores open.

Berger especially values the input of LeVine. The founder of Postal Instant Press (PIP), LeVine built the concept into a 1,200-store chain before selling the business. LeVine is considered among the fathers of modern franchising and was the third person ever named an “honorary life member” of the International Franchise Association (IFA).

Changes that Berger and LeVine instituted immediately included adding seating, soda fountains and selling pizza by the slice. New menu items have been added including thin-crust, low-carb, low-fat and kids’ pizzas, along with individual calzones and other Italian sandwiches.

A Seattle branding firm was hired to create a slogan that captured the essence of Figaro’s Pizza, and it came up with a phrase that legions of loyal Figaro’s Pizza fans had long known was true. It was simply “the best pizza you can have at home.”

Lastly, the award-winning San Francisco store design firm, Tesser, Inc., created a comfortable, warm Tuscan kitchen store design. The first Figaro’s Pizza featuring the new design opened in October in Appleton, Wisconsin. The design is adaptable to locations with seating and those offering only delivery and takeout.

“The Tuscan kitchen look was intended to evoke the feeling that we’re just an extension of our customers’ kitchen and dining room at home,” Berger said.

By year’s end, Figaro’s Pizza expects to have opened 20 stores in 2004. The chain expects to add to that number by opening 30 to 60 units each year in the near future. Much of the focus will be on building mass in existing markets, but it will also consider single- and multi-unit development growth in new territories.

Figaro’s will look to master franchisees to spur much of its growth. Master franchisees not only own and operate their own stores in large geographic territories but they also recruit and provide training and support to other franchisees.

Already, a group of four master franchisees in Wisconsin, Illinois, Minnesota and Iowa expect to have more than 30 locations open by the end of 2006.

When Berger decided to get back into franchising, he said he wanted to go into a business that wasn’t susceptible to rapidly changing technology, as were the camera, film and video industries. He seems to have found it. “I think with pizza we picked something timeless,” he said.

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