With Diligence and Commitment to Franchise Success!
Interview with Thomas Wilde, Managing Director of Call a Pizza Franchise GmbH
Call a Pizza has pioneered the German takeaway market as a pizza delivery service. Today, the company relies on a strong franchise system, where individual franchisees retain many freedoms – even though Managing Director Thomas Wilde knows exactly what a successful pizza store needs to have. He revealed the most important secrets to success to Wirtschaftsforum.
Wirtschaftsforum: Mr. Wilde, when the first Call a Pizza store launched in the 1980s, the business model behind it was still quite new in Germany – how much pioneering work is in the history of your company?
Thomas Wilde: I myself started in 1989 as a part-time pizza delivery driver in my first shop. My parents – both civil servants – could hardly believe the business concept at the time: Customers would order a pizza over the phone, and it would be delivered to their home just half an hour later. Back then, the most you would pick up was maybe a half a chicken from Wienerwald, just like my father used to do. Later, I became a shift leader and eventually bought the store, where I had originally started, in 1991. Strictly legally speaking, I am still a franchisee today.
Wirtschaftsforum: Shortly after, you left the world of Call a Pizza for some time – until you took over the company in 2002.
Thomas Wilde: At that time, Call a Pizza shared the market leadership in Germany with two other well-known chains – and yet, due to major mistakes by the then management, it was on the brink of bankruptcy. I managed the chain's highest-grossing store, also conducted store checks in other branches, and was responsible for expansion in Berlin. I then acquired the company to lead it into the future with a clear turnaround concept. To do this, we first had to shed quite a bit of ballast and thinned our network of branches from 75 to 50. We now operate just over 120 stores – so in terms of the number of branches, we have been stable but very cautious in growth over the last two decades. The same applies to our revenue and profit development. Due to the difficult overall economic situation, we had to report a loss of revenue for the first time last year and also lost stores for the first time in a long time, which unfortunately could no longer be maintained. Nevertheless, our financial position remains stable.
Wirtschaftsforum: A stability that you also expect from your franchisees?
Thomas Wilde: Essentially yes – but a franchisee is an independent entrepreneur who is allowed to make his own decisions within the conditions we set: freedoms that we deliberately grant. Each of our partners may, for example, choose their own opening hours, their pricing, and a major part of the sources of their raw materials – we only prescribe the specifications of the products that the franchisee has to offer. Only if there is a breach do I terminate the contract relationship decisively. Otherwise, our partners may also make decisions that I consider completely wrong: for instance, unreasonable price deviations compared to competitors or too short business hours. Because anyone who I can show at 11:00 PM that I have the best pizza in town will also order from me at noon.
Wirtschaftsforum: What advice do you give your franchisees?
Thomas Wilde: Unfortunately, many fail on the way to the franchise agreement – because they do not bring enough equity, because the financing concept proves unsustainable or because a suitable location cannot be found. Many of these hurdles are predictable, but many of our franchisees come from lower and middle social backgrounds, have gaps in their employment history, and sometimes do not have the best school qualifications. This requires a lot of patience on both sides. Once the store is open, the real work for the franchisee just begins. Being a boss means: Work, work, work! You're the first one in the store in the morning, and the last one to leave at night, locking the door before heading home. I also strongly advise to handle all administrative activities such as accounting in the store and not in a home office: Because when the boss is in the office, a company can be managed quite differently than if he shines by his absence.
Wirtschaftsforum: Do some franchisees have the wrong expectations about their new tasks?
Thomas Wilde: Absolutely – and that is the reason for failure in most cases. Then the health insurance for half the family comes through the pizza store, and, adding insult to injury, there are withdrawals of 5,000 EUR every month to finance an increasingly lavish lifestyle – including the Rolex on the wrist. But arrogance can also lead to ruin: One of our franchisees was a bank clerk, but took his new project far too lightly. Just over half a year later, bankruptcy followed. Fortunately, he was understanding and realized that he should have taken his own store more seriously. But by then it was too late. As a captain, you must not come to the bridge only when the ship is already sinking.
Wirtschaftsforum: And what are the success stories at Call a Pizza?
Thomas Wilde: I think of my assistant, who cleaned the tiles in my store 25 years ago. Today, he earns a six-figure salary with me. Phrases like 'I can't, I won't, I don't do that' don't even appear in his vocabulary. He is as passionate about Call a Pizza as I am – and shows what is possible in a franchise environment!