Outfoxing The Competition

(Thursday, March 23, 2006) - March 7, 1971 will forever be etched in the mind of entrepreneur and pizzaiolo Jim Fox. With $500, a 300-square-foot storeroom, some scrap equipment from a salvage yard and a dream, Jim Fox started the first Fox's Pizza Den in Pitcairn, Pennsylvania. Since its inception, Fox's has become a huge success in the pizza industry with over 250 franchise stores to date in 28 states.

That sly Fox got his start

"I started making pizzas when I was 12 years old, back in 1959," Jim said. "I folded boxes and swept the floor for the Original House of Pizza in Monroeville, Pennsylvania. One night I was working and the lady that owned the place asked if I could watch the store. She asked me if I thought I could handle making the pizzas, and I said ‘Hell yea, I can make them.' After she left, I got to making the pizzas and just honest to God fell in love with it and have been making pizzas ever since."

Jim said he worked in pizza shops all through high school and then got a job with Mellon Bank. "I didn't see any future in banking because there just wasn't enough money in that for me. I just wanted to open a pizza shop. Back then the failure rate of restaurants was so high that the banks wouldn't lend money, but my old boss at the bank, Mr. Buckholtz, had an extra $500 he loaned me out of his pocket to open the store. We opened at four p.m. and by 10 we were sold out of everything," he said. He said they opened on Thursday and by Monday he had paid Mr. Buckholtz back and tucked away some profit for himself.

Franchising

In ‘73, Jim Fox opened his second, third, and fourth restaurants in the Pittsburgh area, along with his new concept in Pittsburgh—delivery. People began asking Jim to allow them to open a Fox's Pizza Den and he realized the potential of franchising. "If someone were to call me to buy a franchise, we'd send you out a sales package, then I'd bring you into Pittsburgh for one or two nights and let you work in one of our training stores," Jim said. "If it's something you like, and you like me and my concept, then we go step by step right through the whole process of getting the location, securing the lease, and getting financing and equipment." Jim said he sends two trainers to each new franchise for seven days and nights to teach the employees how the operation works.

Jim said franchising for most companies is ridiculously expensive and unfair to the franchisee. "Our franchise fee is the lowest in the industry at $8,000," he said. "Our royalty fee is an unheard of amount of only $200 a month. We have no mark-up on equipment or signage."

Jim supported the fact that Fox's franchising fees were the lowest by admitting how much he loves to help people. "I have so many young kids that have worked for me over the years, and that's just my big thing—changing kids' lives around," he said. "These kids that I have helped get into our franchises five or 10 years ago are now married and have families, they're driving new cars, living in nice houses…and these are guys and girls that probably would have had minimum wage jobs somewhere else." Jim said his owners pocket about 20 to 25 percent of sales. The average store is doing about $10,000 a week, while the largest store in Cumberland, Maryland does about $1 million a year.

Customers First

And Jim says getting into the pizza business is not as difficult as some people would think. "Honestly, it's just about knowing your customers and working with them. I make it a point to say something personal when someone comes in, ‘Your car looks great today,' ‘What's up for the weekend?' ‘How old are your kids now?' I can teach anybody the pizza business, but the hardest part is teaching the young people to talk to customers and show them they care," Jim said. "I've been working with my nephew on this a lot—giving people more attention and showing them they're number one.I said, ‘Tommy, listen to me over the telephone, listen to what I'm saying to the customer.' If someone comes in, just for 10 minutes or so, and you're making them number one, buddy, that's what gets your repeat business today, and that's one thing our world's really screwing up on."

Jim maintained the reality that just below customer service, advertising and marketing play a huge role in the success of a pizzeria. "I didn't even know what a website was until my son and my niece came to me and said we needed one for the company. Where I used to have three or four people a week interested in franchising, now I have seven or eight a day! I don't even have time to get to all of them," Jim said. Before the website, Fox's was opening between 10 and 14 stores a year, but now they're doing over 50 a year.

Advertising Strategies

"We don't spend a nickel on TV or radio because it's so costly and it shows no absolute results. All we do is direct mail. We have national contracts with Advo, which is a marriage mail company, and St. Ives out of Cleveland, Ohio—so all the advertising is in-house, ready to go for the new stores that open," Jim said. He added that all the storeowners simply email the coupon ideas to the company and they take care of the rest—the printing, the mailing, and the prices particular to each location. "We also do a lot of door hangers. Monster Magnets is the most expensive advertising we do, but it works the best. If we ever have a store that's really slow and the owners are doing everything right, we send out the Monster Magnets." Jim explained that Monster Magnets is a postcard-mailing program. "It's about 10 inches long with magnets at the top and bottom with tear-away coupons. It costs about 33 cents a pop and we send those to every household within the zip code. That is the number one thing we do to kick it into high volume real fast." Jim said the coupons are catered to the local level, consisting of "2 for 1" deals and various discounts, along with the family meal deal, which is the Big Daddy pizza (a 21 cut one-foot by two-foot pizza), and a 2-liter Coke.



"This year we are going to move nine million pizzas and eight million sandwiches, and that number's up from last year by about a million apiece," Jim said. Fox's Pizza Den sells chicken wings, strombolis, nine different hoagies, breadsticks, salads, and a hit sandwich they call the wedgie. "Basically, it's just a pizza crust cut in half through the middle, then we put the meat and cheese on one side and butter the other side and run it through the oven. Then we bring it out and put the lettuce, tomato, mayo or what have you, on the other side, and put it back together," Jim said. "One thing that's really unique about our operation is that we let the franchisees add to the menu anything they want. So, if they like making cinnamon rolls or baking pies, they can. They can sell anything out of that store that they want," Jim said.

Marketing Advice

When I asked Jim Fox the best way to market a pizzeria, he pointed out several different strategies to help you stay on top, "Do it very often. Be consistent with what works for you. Advertising does not have to be expensive to work. The least expensive is probably the best," Jim said. "The absolute best way to advertise for us has been Monster Magnets. Second to that is a full-color menu." He stressed that if someone has one of your menus in their hand, they'll just pick up the phone and call. "Every house in our trading areas has a menu. We do them up on cardboard copy stock, and even include coupons on them," Jim said, "but we always put an expiration date on the coupons—usually 45 days."

Jim emphasized that getting to know the right people in different businesses can help bring customers. "Over the years, I've found that the desk clerks of the hotels are the right people to get to know. If you get over on the desk clerk, and give them a dollar for every order that goes into their hotel that night, give them a free meal—I don't care how much money your competition is spending on advertising—you're the one that's going to get the business," Jim said.

"Another thing I still do to this day—I'll go down on garbage night and get a dozen Big Daddy pizza boxes and stack them at the corner of a busy intersection. It's just like setting up mini-billboards." Jim said he's had hundreds of people come to him and tell him they saw his boxes out—said it's the best form of advertising they've seen. And at only 60 cents a box, who's complaining? Jim said nothing beats direct mail, but he also pointed out the worst form of advertising—the Yellow Pages. "You can't judge if you're getting any results from that, and it's just so expensive. There's always something cheaper and better to do than Yellow Pages," Jim said.

Merchandising

Fox's Pizza Den offers all sorts of fun and interesting products that aren't food. T-shirts adorned with catchy innuendos such as "Home of the big jugs" and "Have you had a good piece lately" make Fox's merchandise fun and noticeable. "We always give out a lot of free stuff. We just like people to have something to remember us by," Jim said. He pointed out that it's important for the customer to feel like they're getting something in return for buying a pizza from Fox's. "Getting footballs printed up with our logo on them has been a success too. We get the school mascot to throw the footballs into the stands during halftime, and if the people bring the footballs in within 24 hours, they get a free cheese pizza." Jim said this is great because 98 percent of the time they end up buying something else too. "Plus we get the footballs back from them, so we can give them out at the next game."

Jim believes spending money on advertising is a waste if it doesn't reach the people in the community, and that's why he says television and radio just don't work the same. "We employ these methods in the store by handing out drinking cups and mugs. When children come in for birthday parties, we serve their lunch on a Fox's Frisbee turned upside down. After they're finished eating they can take those home," Jim said.

Pizza From a Fox Eye View

Jim's view of pizza, along with the rest of the country's, has changed over time he says. "When pizza was first developed in the ‘50's, most people were eating it as a late-night snack, or taking them to drive-in movies. Most pizza shops didn't even open until four p.m. We would sell a few pizzas on Fridays, but 85 percent of the business came between the hours of eight and midnight," Jim said. "That all began to change in the late ‘70's and stores began opening for lunch. They started adding sandwiches to their very limited menus. In 1973, I got the great idea to start delivering pizzas, and Fox's Pizza Den was the first restaurant delivering pizzas in the Pittsburgh area. Back then, there was no such thing as hot bags or hot boxes, so we welded an old wooden box to the floor of a VW van and threw some hot oven bricks into the box, and that kept the pizzas pretty hot," Jim recounted. Nowadays, the trend of pizza eating has gone to almost totally an afternoon/lunch food. "Almost all of our sales are from 11:30 in the morning until one in the afternoon, and then another blast from 4:30 to eight at night." Jim attributed most of the trends today to people eating healthier. He said people are trying to stay away from pizza late at night, and instead having a bowl of cereal or some fruit.

Conclusion

With witty grassroots marketing plans, inexpensive advertising ideas, more stores opening, and franchises being sold weekly, it's no surprise to see Fox's Pizza Den doing so well. When the brains of an operation can get down on a personal level with his customers, like Jim Fox has done, the community is left with a great impression of you and your restaurant—and they'll choose you over the competition every time. Jim emphasized some key points to running a good, profitable establishment, "Keep your restaurant clean and organized with well trained employees that can offer only the best service, because customers will judge you and your restaurant by your employees. I can hire a monkey and teach them to make pizzas, so that's what I tell them. ‘You can go as far with me as you want to go,' and if they want to learn, I am here to teach them."

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