See Jane Run the Company
Growing up Jane Grote Abell was lulled to sleep by the blinking Donatos sign outside her bedroom window, a giant, lighted arrow pointing toward the little pizzeria her father owned. It was a magical time in her childhood. Abell remembers her father waking the four kids after his shift to escort them outside. They’d stand under the beckoning sign and her father would talk about his vision for the fledgling company—about “growing and making a difference on every block that we do business on.”
Jane Grote Abell
“I thought it was midnight, but my dad claims it was more like 9,” she says, laughing.
Abell, 43, never questioned whether having a pizzeria dining room in her home was the norm. Nor did she question years later that feeling nostalgic for your grandmother every time you smelled sausage was not the equivalent of other people’s Hallmark moment.
The Grote family lived in the house right behind Donatos. Since there was no seating area for waiting, much less a dining room, Jim Grote would send his customers back to his house to wait for their pizzas. Abell remembers customers sitting at the kitchen table drinking beer and chatting with her mother as they waited for the box with a hand-scrawled “BAG”—Back at Grote’s—on it. Sometimes the customers didn’t stop their conversations when their pizza arrived, choosing instead to open the box and eat dinner with the family.
“It was only because we were so busy that I sent them back to the living room,” Grote says in his defense. “My wife had a lot of fun. I was working a lot, so she was just happy to have someone to talk to.”
It was a lot of fun for the kids, too.
“I thought everyone grew up this way,” Abell says. “We grew up eating pizza breakfast, noon and night. My grandmother smelled like sausage and I thought that was normal.”
Donatos was a family business in the truest sense. They used Jim Grote’s mom’s sausage and meatball recipes and she made the dough from scratch in her basement. His wife simmered the sauce on her kitchen stove. When they were old enough, the kids worked in the store. The first location was compliments of his future father-in-law who had wanted the spot in front of his plumbing shop for his daughter’s beauty salon. When it became evident she wasn’t interested in fixing hair, he offered the storefront to Grote.
As good as you give
Donatos has had a rich history since founder Jim Grote, pictured below, started the company with $1,300 in 1963. The early crew may look a little rough around the edges, but one of Grote’s missions was to ensure that the young employees he hired were treated fairly and taught a good work ethic. His daughter, Jane Abell, now president/COO of the company, who started out in HR, has the same dream for the current crew. Early delivery vehicles have been improved upon, as well as the graphics, but the heart of the company has stayed constant—just like the recipe for the pizza. One of Donatos’ touch-points is that it delivers on its unspoken contract with its customers that the pizza they bought today will be every bit as good as the one they bought a week ago.
Like his children, Grote grew up in the pizza business. At 13 he worked for a local pizzeria. “They needed someone to slice pepperoni with a paring knife,” he says. “By 15 I was managing and they offered to sell me the place at 16.” Grote had two bosses—polar opposites. One made each pizza the same way, time after time. He put the cash in the register and respected the kids working for him. The other boss would raid the cash register and spend the money buying rounds of drinks at a nearby bar; sometimes returning with the women he met there. He’d tell raunchy jokes to the young workers and didn’t trust them. Boss No. 2 also wasn’t averse to watering down the sauce and removing toppings so that every 10th pizza was 100-percent profit. Grote quickly learned that on the night the cheapskate worked, fewer people ordered pizzas.
Grote was still in high school when he had the opportunity to buy the pizza place with no money down. He tried to convince his dad to work the Friday night shift so he could still play in his high school football game. His dad told him he needed to finish high school. “Pizza is just a fad,” were his dad’s immortal words on the subject.
In 1963, Grote did buy Donatos for around $1,300 and when it became obvious they had outgrown the little space, Grote says he began to visualize a new version of the restaurant in a vacant lot across the street. He’d stand outside his shop and imagine a black brick building with a line of happy customers coming in and out the door. He’d visualize ample parking and every detail of the architecture.
“Two years later he built it,” Abell says. The only drawback was that in order to fulfill his visualization he needed to find black brick and no one local made it. “He said he had it imported, but I think it was from 30 miles away,” Abell says, laughing.
Once the new building was completed, customers’ boxes still had the “BAG” notation. “I don’t know why he didn’t visualize a dining room,” Abell quips.
Abell used that same visualization technique when she wanted to buy the company back from McDonald’s, but more on that later.
Grote learned more about business from his original bosses than just how to make a pizza. He saw the pizza business as an opportunity to influence young people on how to succeed in the workplace and in life. “We still hire 14- and 15-year-olds for the same reason my dad did,” Abell says. “You have to manage them; shape their character.”
The four cultural touchstones for Donatos—a Latin word which means “to give a good thing”—are “live, love, laugh, learn.” Developing quality people is as important a company value as delivering a quality pizza.
As far as the quality of the product, Grote was committed to making the pizza the same each and every time. He bought a scale, which in the 1970s cost $2,000—the price of an oven. Toppings and dough are weighed to a 100th of an ounce. Donatos’ signature is “abundance edge to edge.” To that end, a large pepperoni pizza has 100 pieces of pepperoni topping it.
“We have a visual contract with the customer,” Grote explains, and if the pizza is not as good the second time as the first, “we’re breaking that contract.”
Grote opened two more restaurants after his first, but when customers started complaining to him that the pizza they got at one of the other restaurants wasn’t as good as the one he made, he decided to close the other locations. “I said, ‘We’re not going to grow again until we have systems in place,” he says. One of those systems included a machine he invented called a Pepp-a-matic, which slices the pepperoni consistently thin. The invention provided a second business for him in the equipment supply end of the restaurant business.
While other chains are going after the low-cost end of the business, Donatos is looking for the premium pizza “share of the stomach,” according to Tom Krouse, president of Donatos expansion brands division. And while pizza is not exactly a health food, Donatos does slice its veggies fresh every day and has added a line of salads and even a crustless pizza for people who are gluten-sensitive. The crustless pizza was originally developed during the Atkin’s craze of low-carb diets, Krouse says. They noticed people scraping the toppings off the crust and tossing the crust. “We thought it was our crust,” he says.
When they tried to accommodate that high-protein dieter, they discovered a low-carb crust didn’t taste very good. That’s when they came up with the idea to bake the toppings on a plate, foregoing any kind of crust. The decision paid off when the next wave of low-carb dieters hit the industry—people with gluten sensitivity. Scraping the toppings off the crust resulted in cross-contamination from the cheese touching the crust. It’s not a big seller, Krouse admits, but it is a nice customer-service touch.
Getting noticed by Mr. Right
The consistently good food is what brought the small Ohio-based chain to McDonald’s’ attention in the late 1990s when it was looking to diversify its brand portfolio. There’s something mesmerizing about being considered best in class by the world’s largest restaurant chain, Abell says.
“It’s a great compliment to have McDonald’s come knocking at your door,” Grote agrees. “I wanted international and McDonald’s had international expertise.” At the time, Grote was also in informal talks with Wendy’s—another Ohio-based chain—about a similar deal. “I had gotten to know Dave Thomas (founder of Wendy’s) and they had just bought Tim Hortons.” But when the McDonald’s deal came up, Grote decided it was hard one to turn down. Abell was the head of human resources for Donatos at the time, and her older brother, Tom, was COO. Their other two siblings were also involved. The interesting thing about being bought by a larger company, Abell says, is that it gave them all the opportunity to reevaluate why they were involved in a family business. McDonald’s brought in a new president, and more layers of management. Grote had a three-year “stay-on contract,” and Abell stayed on as head of HR. The other three kids, however, decided to pursue other careers: “My sister is an artist in Florida; my younger brother has a ranch in Colorado (where he raises yaks and organic vegetables); and my older brother has a start-up bio-fuel company (which Jim Grote is also involved in).”
Grote says he always told his children the choice to be in the business was their choice, but Abell admits sometimes there’s a sense of obligation you don’t realize you feel until you have a reason to leave.
One of the inherent problems with family staying on after the company has been sold is that it’s difficult to no longer be the ones calling the shots. Abell was on maternity leave during the hand-off to McDonald’s. She ruefully admits that she really didn’t understand the transformation from family business to being part of a corporation—from private to public. “I came back and had to introduce myself to all these VPs,” she says. When she met the new president of the company, she thought she was interviewing him for the job, not the other way around. “I didn’t know you couldn’t knock on the president’s door and tell him what you think,” Abell says, shaking her head at her naivety at the time. It was the first time in her life that someone other than her father signed her paycheck. It was also the first time she experienced fear at work. “I had always told our managers, ‘Don’t work in fear,’” she says. “But I hadn’t experienced it because I was in a family business. I was safe.” Working in fear, she explains, occurs when employees aren’t comfortable sharing what they think with supervisors, or worrying that they may be let go for not contributing enough or possessing the right skills.
As an employee of McDonald’s, Abell worried that their small company, around 154 units at the time, would become a different company. With the infusion of cash and expertise from McDonald’s, both Abell and Grote say they had a top business school education in everything from real estate to operations. No one does operations better than McDonald’s, Grote says. The company received a makeover, including a new logo and redesigned stores with McDonald’s resources. But the direction in which McDonald’s wanted to take the company to fit its needs in the marketplace was transforming it into a different restaurant company than the founders had envisioned—larger footprints with spacious dining areas, more equipment. For Abell, who had grown up in one business, it was hard to change direction. You won’t find anyone who doesn’t consider McDonald’s a chain, Tom Krouse says. But Donatos, at least in its home state of Ohio, is seen as neighborhood restaurants—one-of-a-kind family eateries.
When the market shifted and McDonald’s decided to return to its core business and sell Donatos, Abell remembers walking into her father’s office and saying, “Let’s buy the company back.” This time, instead of receiving a paycheck from her father, she was having to write a check of her own. McDonald’s worked with them on the financial arrangement; and they brought in equity partners. During this time, Abell had a sign on her desk, an ad she had torn out of a magazine that said: “See Jane Run the Company.” Her father had never thought of her in that role, she says, but Donatos president, the same man who had been a bit put off by her open-door policy—of his door—became her champion.
Grote agreed with his daughter’s former boss that she had the passion and the skill to run the company. “She’s got the dream,” he says about his daughter. And her dream is in alignment with the bedtime story her father told her all those years ago under the blinking lights of the Donatos sign— “growing and making a difference on every block that we do business on.”
“If your kid is working for one of our stores, he’ll be a good worker. We know we’ll be a good influence,” Grote says.
By the end of 2003, Grote and Abell were putting together their plan to buy back the company. Abell says they used to take vacation days to go to the bank or even meet on the project, because they didn’t think it was fair to do it while McDonald’s was paying their salary.
The father-daughter partnership works, Grote says, because “I grew up dedicated to the product. Jane’s (specialty) is knowing the people; getting the right people.”
Returning the company to its roots has been a labor of love for Abell. As president, she’s set aggressive goals going forward—2015 targets are 575 to 600 stores, 70 percent of which will be franchised. She also has a lofty goal for nontraditional sites—1,500 in that same time span, she told the Leadership Conference at the recent IFA convention.
Every franchisor tries to attract experienced, multi-unit franchisees, so signing Joe Drury as a “franchise partner” was a major coup. Drury started his franchisee career with Wendy’s. “In the restaurant business back then, everyone was treated horribly,” he says. Profits were put ahead of the quality of life for the employees. Like Grote and Abell, Drury believed workers should be treated fairly. “I demanded they take a day off to spend with their family,” he says. “I came up under those (Draconian) conditions and I didn’t want to perpetuate it.”
Drury became the franchisor for Bojangles, turning it around and then selling it. He liked the pizza business and thought it would be a good complement to his other concepts.
“I wanted to be a franchisee of Donatos. It’s not just a little better, it’s a lot better. Jim Grote is a legend. I tell him that and he just shakes his head,” Drury says. The problem the first-time around was that he was still involved with Wendy’s and was one of Dave Thomas’ top franchisees. “At the time I was looking at it, McDonald’s bought it and I was a franchisee of Wendy’s and Dave liked me, but not that much,” he says, grinning. “Jim ended up with it again, thank goodness.” When Drury signed on he says he told Grote, “Don’t take it personally—this is going to be a long run —and I’m counting on Jane, not you.” Drury has exclusive rights to North and South Carolina, both as a franchisee and area developer. The plan is to open 200 stores.
In addition to the better-than-usual pizza, Drury says he’s sold on Abell as a leader. “She’s smart; she’s the most passionate person I’ve ever met. She lights up the store when she’s in it. I’ve got a lot of confidence in her,” he says.
What impressed him, he adds, is that after Abell visits one of his locations, she knows things about his staff that he doesn’t know. “She’s talking about food, their families, she knows their dog’s name,” he says, adding, “Our employees have street smarts, they know when someone’s fake.”
Not everything we visualize comes to fruition, of course. But just as Napoleon Hill advised in his best seller, “Think and Grow Rich,” if you can imagine your dream in all its detail, it can come true.
And it’s even better when you have the same dream as your father—especially when you’re running a daughter-and-pop franchise.