Simple bread dough, tomato and mozzarella. Pizza, the world’s favorite fast food, has long since become—much to the chagrin of many Italians—the basis of highly profitable global franchises. In Spain, this business has a great school, that of Telepizza, whose secret is not only in the dough, but in an internal learning system and scrupulously measured costs to satisfy the stomach of thousands of consumers. Last year the brand delivered 36 million pizzas thanks to 716 stores that employ 13,000 people. One of those people was, a long time ago, a man named Francesc Ros, who, in order to get some money, took a job as a delivery man in Barcelona, when he was trying to finish his degree to be a quantity surveyor. “Telepizza was my school, I was with them for 18 years”, he says in front of a café in a neighborhood on the outskirts of Madrid. From very low down, Ros added ingredients to his resume: store manager, manager, supervisor, director of operations in Mexico… “When I came back from the international experience I made the leap. I became a franchisee of Telepizza, I was there for eight years, until in 2009 another ex-worker and I decided to set up our own brand”.
They called it Pizzería Carlos, perhaps because the name of their partner (Carlos Hernández, who left the project in 2018) sounded more Italian than Francesc —in fact, the company appears in the Mercantile Registry as Pizzerías Di Carlo—. “We believed at that time that in the national market, where at that time there were only Telepizza and Domino’s Pizza, there was room for another operator. We appeared two kids with great enthusiasm, with a project in mind and desire to work who decide to get into this adventure. I always say it: when you have an entrepreneurial spirit, either you take the step or you feel bad about yourself”. That alone was not going to be enough for the new pizzaioli Spaniards in a market dominated by very powerful giants. In addition, the country was going through a deep recession and they barely had 200,000 euros to open and maintain their first store in Alcobendas. They couldn’t fail. “It was very well received. The following year we decided to start the expansion, we opened two more stores in Madrid capital and from there we have been adapting the company to the growth of each moment”.
Pizza, as they conceive it, is a volume business. That is why in 2012 they made the decision to grow through franchises. It was the year they left Madrid. “We grew little by little… Catalonia, Andalusia, Extremadura, Castilla-La Mancha”. In 2015 they set up their own mass workshop (the bases were made until then in rented premises) and in 2019 they set a goal of having 100 premises. Now there are 33 own restaurants and 37 franchisees with a combined turnover of around 40 million euros. “If we believe in something, it is in the quality of the product. Our dough, our tomato and mozzarella are essential to maintain the flavor, as well as our image”.
After Hernández left, the group was joined by another former Telepizza employee, Xavier Crespo, who shares the shares and management of the company with Francesc. The pandemic, unlike for the rest of the restoration, was not a major setback for them. On the contrary, being home delivery professionals, they found that they had a certain advantage over the rest. “We were able to get a little bit better results in 2020 compared to 2019 because 70% of our income comes from the delivery. In 2021 there were strong restrictions in some communities, such as Catalonia, but we continue to grow. In fact, last year they opened 12 stores, the best year for openings in their short history.
The franchisee, says Ros, is offered a consolidated, profitable, mature business, with training and know how. In exchange for an average investment of around 300,000 euros, one can open their own pizzeria Carlos —”the one who came to install the air conditioners ended up becoming a franchisee”—. They charge 20,000 euros of entrance canon, a 5% of royalties on sales and a 2% contribution to the advertising fund. “We are entering towns with more than 60,000 inhabitants.” They need a certain size to sustain an average turnover of the premises close to 600,000 euros, with a staff of about 25 people. Always, yes, in locations outside the center of large cities and far from shopping centers. “We wanted to become the neighborhood pizzeria, for the customer to empathize with our brand, for them to have a different experience. We aspire to be something more than a pizza dispenser in the market”. They offer a range of pastas and salads, and they have products for certain groups, such as vegans, celiacs or lactose intolerant. “The customer ends up making the pizza to the flavor he wants.”
He knows in depth all the sides of the coin.
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tricky balance
Being an entrepreneur in this highly competitive market requires a special ability to combine growth with a sustainable financial situation. His debt is, according to Ros, “below 10% of turnover”, about four million euros. “We are comfortable with that indebtedness. I always say that we will be able to open as many stores as the banks allow us to,” he smiles. He makes calculations with the possibilities of expansion of his food. “In Spain there is room for more than 300 Carlos Pizzerias.”
Perhaps it sounds very ambitious, taking into account the great dominance of Telepizza and Domino’s, which together have 1,071 stores. Also, the pizza race is a race that never ends. Other operators, such as the American Papa John’s, have recently entered the peninsula and are already of a similar size (they have 85 stores), hungry to reach 200 stores very soon and financial muscle that they do not have in Carlos. From behind, new players are knocking at the door, such as Little Caesars, the third largest chain in the world, which already has seven establishments in Spain. With its neighborhood pizzerias, the Spanish group wants to provide differential value in a market that is distinguished by great uniformity. “Our customer profile is that of people a little older than the competition, between 35 and 40 years old. In our premises we have table service and we are also the most competitive in prices”. That may be enough for them to keep their share of the market safe.
New Horizons
A young population with a good takeaway culture. That is what the owners of the Carlos chain are looking for in Mexico and Colombia, two markets where they will open their first international stores this year. They will also add openings in Portugal. The approach is as austere as the one they applied in their beginnings in Spain: a rented workshop to make their dough and a minimal structure that allows them to start franchising. And adapt to the taste of each place. Because a pizza is a dish as simple as the customer wants to make it complicated, according to its founder.
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