Pie Hole tries Saudi Arabia growth
Riyadh, Saudi Arabia’s capital, is where Alrajhi aims to open his first location, with 10 total planned for the market.
Abdulrhman Alrajhi doesn’t mince words when describing the local market potential for a U.S. franchise concept selling made-from-scratch sweet and savory pies. “Here in Saudi Arabia, we love pies, we really do love pies,” says Alrajhi. “We accept this kind of food, but it’s just not common, you can’t really find it.”
Alrajhi plans to change that, signing a multi-unit deal to develop 10 locations of Los Angeles-based The Pie Hole in Saudi Arabia, starting with the capital city of Riyadh. It’s a move that expands Alrajhi’s growing food and beverage portfolio and brings a third, complementary franchise brand into the mix.
Along with his family, Alrajhi operates eight Gloria Jean’s Coffee shops in and around Riyadh and is about to open his first location of It’s A Grind Coffee House in the city before taking that brand throughout Saudi Arabia and Kuwait. The Pie Hole, he says, is the perfect addition because of its robust food program.
Abdulrhman Alrajhi is adding a third brand to his family’s franchise portfolio with The Pie Hole.
“The Pie Hole is all about pies and they’re serving coffee alongside the pies,” whereas at Gloria Jean’s and It’s A Grind, food is the secondary focus, he explains. “I don’t see them competing.”
Alrajhi launched his franchised food and beverage group in 2013, a few years after incorporating a coffee roasting business into his family’s Alrajhi Industrial Group, a major manufacturer of plastics, foam and paper products in Saudi Arabia. Before going the franchise route, Alrajhi says he opened a local coffee shop and “it didn’t go well.”
“I learned about operations and what mistakes to avoid,” he recalls of those early missteps that reinforced the importance of having training, inventory and operating systems in place. “Everything needs to be in order to start profitably.”
Sean Brennan, The Pie Hole’s co-founder and chief operating officer, says for years there’s been inbound interest from Saudi Arabia but he’s been waiting for the right partner, which he found in Alrajhi.
“He’s passionate about coffee and wanted something with a stronger food program,” says Brennan, noting The Pie Hole’s menu ranges from sweets such as chocolate brownie pie and an orange cream hand pie to a sausage hash breakfast hand pie and cheeseburger pot pie. (Alrajhi, for the record, says the mac ‘n cheese pot pie is his favorite.)
Operationally, The Pie Hole is “pretty simple” says Brennan, and there are many synergies between his brand and those Alrajhi already runs.
Saudi Arabia is the third international market planned for The Pie Hole, which has just eight domestic locations in Southern California. Three are open in Tokyo, Japan, but The Pie Hole’s second overseas effort couldn’t withstand outside economic and political factors.
The Pie Hole specializes in both savory and sweet pies (left), and has already expanded internationally in Tokyo, Japan (right).
The brand signed a three-unit deal in 2015 with a franchisee in Qatar but the agreement was ultimately terminated because the country “had some very serious economic troubles,” says Brennan. Four neighboring countries, Saudi Arabia among them, placed a trade embargo on Qatar in early 2017, cutting economic and diplomatic ties and resulting in the franchisee there “electing to leave the marketplace.”
Rather than retreat from future expansion opportunities, Brennan says The Pie Hole has fortified its infrastructure over the past couple of years, overhauling its training program and earlier this year hiring a new CEO, restaurant industry veteran Edie Ames. Ames most recently was president of The Counter and Built Custom Burgers, and previously served as the executive vice president of operations for Wolfgang Puck Catering, the chief operating officer at both Real Mex Restaurants and Del Frisco’s Restaurant Group, and the president at Morton’s of Chicago.
While Brennan acknowledges The Pie Hole is still an emerging brand, that’s not keeping him from exploring more international markets, especially amid rising domestic challenges.
Sean Brennan, co-founder of The Pie Hole.
“We’re dealing with increased retail rent, increased food costs, increased labor in the U.S., so we’re looking at new growth markets,” he says. “But we’re being a lot more careful in the markets that we’re looking.”
In Saudi Arabia, desserts are popular, and Brennan also points to an increased interest in what he calls “this fast-casual, ready-made dinner option as well.” Plus, because alcohol is still officially banned in the country, consumers want other outlets for gathering.
“They’re not going to bars and nightclubs after dinner, but they are going out and having a coffee, a dessert,” says Brennan.
‘We are the ambassador’
Alrajhi expects The Pie Hole to appeal to local consumers across all dayparts.
“It’s a place where people can come gather, have a piece of pie in the afternoon, at night, in the morning,” says Alrajhi, adding the quality of the ingredients and coffee is evident, which will resonate locally. “They do it perfectly, non-GMO, organic ingredients. We don’t have anything like that.”
Alrajhi aims to open his first store in late December, which he says is the perfect season for opening a pie and coffee shop thanks to cooler temperatures (70 degrees versus 90-plus degrees the rest of the year) that bring everyone out for shopping. He’s evaluating real estate within a new high traffic strip mall center near Riyadh’s King Saud University.
Alrajhi anticipates immediate popularity for the brand but says it’s up to him to dig into every detail to ensure its high standards are upheld. “We are the ambassador of having The Pie Hole in Saudi Arabia.”