Shanghai Opening Marks Start of Pieology’s Growth in China
Pieology China's first restaurant in Shanghai opened July 29, in one of the city's core urban areas, the Jing'an District.
Pieology’s flex model, which gives franchisees more autonomy than is typical in a franchise system, was especially attractive to Ben Tsen and his TZG Partners as they sought a U.S. pizza brand to bring to China. It’s since proven vital to Pieology’s launch in Shanghai, where one restaurant is open in the Jing’an District and another will follow August 18.
“Pieology’s flex model gave us as the China partner the ability to keep true to the core integrity of the brand while allowing us to adapt designs, ingredients, marketing messages and the customer experience to the local market and preferences,” said Tsen, who signed a master franchise deal with Pieology last fall. “This flexibility has proven useful in getting the Chinese consumer to appreciate our offerings, such as custom pizza, much faster than otherwise.”
Tsen is managing director of Shanghai-based TZG, which he and fellow Stanford University alum Josh Brookhart founded in 2003 “with the ideology that we wanted to do something that was good for China.” The firm builds and invests in a range of companies, including Q-TZG Leasing, a financial leasing company, and food brands such as FSJuice, which Tsen described as “China’s largest not-from-concentrate juice company.” It also built from scratch and manages China’s second largest floral franchise, Huali, which has 200 stores.
With plans for more company restaurants and a push to sign its own franchisees, TZG formed Pieology China and installed former California Pizza Kitchen senior director of international brand development BC Park as its CEO. Park, noted Tsen, brings an understanding of the global franchise and fast-casual pizza market, and “his leadership allowed us to bring in other seasoned executives who have experience not only in pizza, but also China F&B.”
On that team are chef Simpson Lu and Roger Luo, who have a combined 40-plus years of experience in China’s food and beverage space, including more than 10 years in pizza industry.
“Their combined experience allowed Pieology China to open the first store quicker than most first international brand units in China,” said Tsen, pictured at right. The team was also able to set up a locally sourced supply chain, which has proved essential to operating during the COVID-19 pandemic. Promotions and marketing were other key focuses, said Tsen, and Pieology China added more than 1,100 loyalty members in just two days during the soft opening.
“We knew during pre-opening planning that the pandemic would be a challenge, and we just made sure to offer our customers an experience at a price that they would rave about to their friends,” said Tsen. “That is really what helped us power through many obstacles and volatility that came with the COVID-19 pandemic.
Still plenty of uncertainty
Back in Tustin, California, where Pieology is based, CEO Gregg Imamoto also credited the brand’s flex model for providing the “guardrails” within which the China locations operate, along with the right amount of flexibility.
“We played that mother ship role,” Imamoto said of the support his corporate office provided as TZG prepared to open its first restaurant. “For them, it was more about taking inventory of the assets we provided” and deciding what to use.
“Our brand guidelines are almost saying, ‘you don’t have to follow the guidelines.’”
In Spain and Mexico City, where Pieology also has master franchisees, the timeline for more development is uncertain.
“Spain is stalled a little bit, they’ve been hit really hard” by the coronavirus, said Imamoto, pictured below. The Comess Group there has one restaurant open in Madrid.
“It’s the same in Mexico City, they’re in the vapor trail of what’s happening in the U.S.,” he continued. Holding company OPFRA has three Pieology locations, and Imamoto noted in both Spain and Mexico the corporate office has helped those franchisees accelerate delivery.
As for Pieology’s U.S. operations, most of its 120-plus restaurants are open for takeout and delivery, and Imamoto said sales are coming back.
“In March, it was rough. But now, we’re happy that we’re not down as much,” he said, adding the comeback has slowed a little. “We’re recovering, but just not quite as fast as maybe we were between April and June.”
The opening in China, he pointed out, “shows the resiliency of our brand,” and Pieology also recently signed a development deal for locations in Florida. Franchisee Pizzarium signed on to grow Pieology in a territory that includes Boca Raton, Daytona Beach, Melbourne and Lakeland.
Pizzarium is new partnership between established franchise groups in Latin America. The Gorrin Group runs more than 200 franchise locations including Subway, Burger King, Papa John’s and Quiznos in Venezuela, Panama and Puerto Rico. Corporación Multifranquicas operates120-plus locations between Venezuela and Panama, including local chains Full Pizza, Pizza Loka, Rico Burrito and Ohlala Espresso, plus full-service restaurants and night clubs.