Askar brothers juggle seven brands
Casey Askar wants to become a major franchisor in the pizza world, and he’s leveraging his love of mergers and acquisitions to get there. His company, Askar Brands, has used a succession of acquisitions to add brands—seven so far and counting.
As president of the Bloomfield Hills, Michigan-based company, Askar, 45, has averaged one acquisition per year since his 2006 purchase of the Papa Romano’s pizza chain. With the help of his younger brother, Sam, now its CEO, Askar Brands has swelled to more than $75 million in annual revenue and 200 units across seven chains. The goal is 1,000 units.
Their portfolio leans heavily on pizza, a category in which they see unique advantages due to lower overhead than other restaurant categories and a lack of big box-style competitors that could muscle them out of their markets. Beyond Papa Romano’s, its brands include Papa’s Pizza To-Go, Breadeaux Pizza, Blackjack Pizza, Mr. Pita, Stucchi’s Ice Cream and CJ’s Brewing Co.
“I’m fairly aggressive,” says Casey Askar, right, with brother Sam, who are growing Askar Brands through acquisitions.
“I’m fairly aggressive, and anything I’ve ever done I’ve always done at a macro level and grew pretty quickly,” Casey said. “Even outside of pizza, I’ve had that growth where I was the largest franchisee in the chain.” Askar is not a franchisee any longer, having quit that end of the business when first becoming a franchisor.
Askar has methodically brought additional family members into his company with a merit-based structure designed to make sure no family members are placed in positions beyond their skill and experience.
“I played the father figure at a very early age, and we’ve done a really nice job of becoming successful as a family,” Casey said. “We have a very simple chain of command, we follow it and we’re very selfless towards each other.”
Through his enthusiasm for piecing together transactions where they often retain the owners and managers for their expertise and local goodwill, both Askars feel they have perfected their operational know-how to create a formula that leads to happy employees, a profitable family company and big year-over-year sales gains in the brands they acquire.
Sam said the company’s strategy centers around a time-tested set of systems they bring to newly acquired companies that help them improve purchasing power, marketing, recipes and day-to-day operations.
“When Casey’s able to bring in an acquisition, there’s a certain set of systems we are able to implement to really gain market share very quickly, typically in a 13- to 24-month turnaround to help take the existing franchise base and help them make more money and grow their sales,” Sam said. “I think that makes us unique.”
Denver-based Blackjack Enterprises was already a successful pizza chain with about 40 units before being acquired by Askar in early 2013. Vice President Mike Gaston said Casey and Sam established a two-year relationship with the brand before both sides signed the buyout paperwork.
Gaston appreciated that the brothers understood the pizza business, both recipes and back-house expertise. That expertise encouraged the former brand president and two-unit franchisee, which has resulted in three years of mid-double-digit sales growth throughout the system.
“They’ve operated pizza stores themselves in the past and really understood where I was coming from, the problems we were dealing with, the challenges—and they had great solutions,” he said.
After investing in training materials and adding their proprietary square pan pizza and salads to the menu, Gaston said the brand’s sales improved 10 percent the first year, 17.8 percent in 2014 and 16 percent by June of this year.
“It’s difficult to pick and choose your battles, but after the acquisition, we have the people to attack multiple problems and really come out of the other side as a better company,” he said. “I think the customers are obviously seeing this with the sales increases.”
As the founder of the company and de-facto leader of the family, Casey is aware of the unique challenges in hiring family members to run the growing enterprises, and takes care to make rational, not emotional, decisions about who does what.
“Sam is not going to become CEO of this company because he’s my brother and he’s entitled—absolutely not,” he said. “Sam is the CEO of our company because he is the most qualified individual that I have ever had, and that I have access to, plain and simple.”
It’s a decision that’s been made easier, he added, due to the amount of experience he and his family members have gleaned through years of fine-tuning operations, developing recipes and merging new companies into the Askar fold.
“As critical as Casey can be—and he says things you don’t want to hear—you benefit from it first, so he’s always worried about your best interest,” Sam said. “When you have that at heart, it makes it so much easier to make it all work.”
Before he was CEO, and serving at a lower rung within the company, Sam added it was difficult to avoid bumping heads with non-family members, especially those with power to spend the company’s money.
“Early on, I wasn’t at a capacity to voice my opinion, even though I felt a certain way,” he said. “I’d watch people come in doing what they thought was in the best interest, and I would struggle with that, because Casey’s all about empowering people and giving them opportunities.”
In sizing up potential new acquisitions, Casey weighs the company’s long-term priorities, and how the addition might help Askar Brands enter new markets, add volume for its distribution partners or bolster the customer base of an existing territory.
“I look for companies that are going to help me grow the right strategic way,” he said. “Most companies that we buy have been there for 25 years, 35 years, 50 years—that’s priceless.”
Growing through acquisitions, he said, allows the 1,500-employee company to expand much faster than organic growth would allow.
Most owners don’t look to sell when things are going very well, Sam said, especially with midsize companies. While they may have “grown through luck or hard work,” he finds many companies feel stuck or run out of resources when they reach a certain size, making them ripe targets for a company with larger-scale infrastructure.
Once a new chain is in the fold, Sam and his operations team begin a process he likens to a weight-loss program that focuses on slow and sustainable progress, rather than shortcuts that he says often fail, like the Atkins Diet.
“Since we’ve been successful at the store level in the past, we come in and understand what it takes to make an employee successful first, not the owner,” he said. “Our goal is to make them better than us, because that’s what they do every single day.”