In this week's Workstream Webinar, we are joined by Gregg Imamoto, CEO for Pieology, a fast casual pizza company with 150 corporate and franchise locations globally. Mr. Imamoto is a high energy, values-based leader that has transformed companies and cultures. Over the past 25 years, he has successfully turned around businesses for distressed to start-up and growth phase companies while securing ample funding to build globally recognized brands. We chatted with Gregg about what differentiates top-performing restaurants, growth strategies, and modernizing operations.
Read on for the full transcript:
Lydia: Hey everyone welcome to Workstream's Wednesday webinar. Today we are joined with Gregg, CEO of Pieology. I am so excited to have you Gregg. Let's kick this off by learning a little bit more about your career path, how you ended up going up and becoming the CEO of Pieology.
Career Path Towards CEO of Pieology
(00:18 - 01:21)
Gregg: Thanks for having me. It's an honor to be here so I appreciate the time and all those folks that are joining in as well but for myself it's pretty simple. I started off as a CPA and as I worked in public accounting, one of the things that I naturally gravitated towards was helping the business that we were auditing improve themselves. I found myself doing a lot of operational improvement, reporting, internal control type stuff and what that led to was working in private industry. I worked in consumer products, I worked in tech, aerospace, defense professional services and I ended up doing a lot of consultative work around strategy organizational development really to help businesses fix themselves and get themselves on on a pathway to profitability.
Lydia: How long have you been with Pieology?
Gregg: It'll be three years in January for me.
Lydia: Wow and I know now you have over 150 stores is that right?
Gregg: 120, 125 stores right around.
Pieology's Expansion and International Development
(01:22 - 02:10)
Lydia: Could you speak to the expansion and also the international development that you're currently working on?
Gregg: Sure. We're growing within the U.S and I think a lot of different brands in fast casual, everybody's gone through this period of volatility and some challenges but I think as we've right-sized the company and we've really gotten ourselves on a different trajectory, our franchisees that we have here domestically are growing. But also on an international basis, we have a franchisee, a master franchisee based in Spain we have a master franchisee based in Mexico and then just recently we signed a new master franchisee for China. Now, we have six locations on an international footprint. The China expansion is going to be relatively significant over the next three years but our current two locations that they just opened up in Shanghai are doing very very well.
Adapting to COVID-19
(02:11 - 05:48)
Lydia: That's amazing and obviously right now top of mind for people is what restaurants are doing right now during COVID. I assume you've had to close and reopen some of your locations. How is that going and what sort of processes have you put in place to be able to stay flexible and make sure communication is going on?
Gregg: For everybody, March 16th week was devastating and obviously we've seen the remnants and the collateral damage of what's happened to our restaurant industry and that's been really difficult to watch and see. At the same time though, you have whether it's some brands in QSR or it's some other unique brands just outside of QSR that are having a lot of success with COVID because they were already set up for delivery. One of the first things that we did is we got our entire system together, we had a weekly call and we walked through, we always start with healthcare. I ran a hospital system back in the day and so when you're in tune a little bit to what's happening in healthcare that there's this little bit of a lag so whatever's happening in healthcare will affect the economy, will affect what's going on nationwide. About two weeks later when we tapped into what was what happening from a trend perspective in healthcare, we started informing our system of what to be prepared for and so obviously when the government's local governments in particular really weren't sure where to pull back, what to keep open, our business slowly started to come back from March going into May and as we got closer to July 4th everybody was optimistic that maybe we can break through and get back to normal. But obviously in July we all saw the pullback in different areas and we're heavily concentrated in Southern California and in Florida and both of those particular areas were hit pretty hard and restaurants had to re-close. With that setback, our recovery flatlined a little bit and now we're finally kind of back on that trajectory as things are starting to open back up. We continue the weekly pacing and updates with all of our franchisees and we include guest speakers every week so we have people from our finance in an auditing company Moss Adams comes in and gives updates. When PPP was hot right at the very beginning, we had somebody speaking on a subject matter expertise basis every week on PPP, which banks were available, we had an investment banking broker available so if people were having trouble finding money we made that available and then we brought in healthcare people to talk a little bit about what franchisee should be thinking about in terms of keeping safe clean healthy work environments for not only obviously the employees but for all of our guests as well.
Lydia: That's amazing and I think it's so smart that you have the guest speakers come in and it's like the experts come in and speak to it versus just trying to be the game of secretary, passing this information along. I think that's one of the reasons that we've seen franchise businesses bounce back so much better than the mom and pop restaurants which have struggled a lot more is that you provide those resources to them. Something that I think is interesting about Pieology is obviously with Workstream, we started working with you at the corporate store level and a lot of those became franchised out. Could you take me through the business model of franchising, the locations and how you switched from corporate to franchise as you passed those stores over.
Pieology's Franchise Model
(05:49 - 08:02)
Gregg: When I first walked into Pieology, a lot of different brands sometimes identify themselves strategically with some type of percentage. We want to be 80/20 franchise to corporate or 95/5 or whatever they think their model is for us. It was about how do you create a great company and what's the right way to leverage the business to create the great company. Since we already had a robust number of franchisees in the system and we were also operating our corporate restaurants, what we said was we need to be able to develop restaurants as if all of them are our own whether they're corporate or franchise. As we develop these restaurants to levels of profitability, we need to build scale within the franchise community and so it wasn't something where we were looking to shift from a corporate owned restaurant model to a franchise model. As much as our franchisee said we want that territory, we want to invest, we want more skin in the game and so we use the skin in the game concept to say, corporately we will always own restaurants because we want places where we can test our new ideas, we want to make sure we have a statement. In Pieology, corporate always goes first and so everything that we're going to try, we skin our knees, we fall off the bike, we're going to go through all of those exercises first before we push that out into the system and the rest of the franchise community but what we saw was because we were effectively running these restaurants, a franchisee approached and said we'd love to re-franchise these and put these under our umbrella because it builds more scale for what we're doing and it allows us to make investments much like you have for things like district managers, general managers, additional infrastructure IT etc to really build their business.
Lydia:Yeah that makes a lot of sense. You're talking about these roles like district managers, IT, all of these, there's obviously a wide variety of roles that you're hiring for at Pieology both at the store level and also more at the corporate level when you implemented Workstream. I would love to hear how Workstream was pitched to you and what you were using it for in the early days and how you're using it now.
Leveraging on Workstream
(08:03 - 09:28)
Gregg: When you think of the migration to mobile and using an application, when our HR manager approached me and said I just had a very enthusiastic energetic conversation with Desmond from Workstream and he wanted to introduce me to this new application for how you could help with your recruiting and make it much more efficient for our GMs and he compared it to a dating app and said it's as simple as just swiping and scheduling and I was like well come again, explain that one more time and as we started to really understand and dissect where our general managers were having the most difficult time. I mean obviously pre-COVID and U.S. dealing with unemployment at record lows, everybody was fighting for labor and so just getting people to come in for interviews and figuring out how to get those scheduled and still run your restaurant and optimize that, it was just a challenge. And when you've got a tight labor pool and people are turning over at a much higher rate than you would have ever anticipated there's just less time to schedule and so you're caught in this catch of how do you finally reset or at least get an opportunity and some time to fix this problem. Well Workstream helped us do that. You have a very easy to use fluid app that's integrated into your system and it was as simple as scheduling people in very very quickly and it helped us tremendously right out of the gate.
Hiring and Turnover Trends
(09:29 - 10:51)
Lydia: That's wonderful to hear. I'm always so happy when I hear just how it's helped different companies. Right now with what's going on with COVID, how are you seeing the hiring and turnover trends, have there been any big changes and how has it affected Pieology?
Gregg: I mean clearly the hiring need has slowed down because as you've tried to figure out how do you optimize for limited dine-in capacity with an acceleration and everything you need to do, and off-premise shift or where the puck kind of moved quickly was all of these projects that you have on your roadmap related to it off-premise that whole environment for the customer experience all of that gets accelerated. So you find yourself needing more capacity, more subject matter expertise in that particular vertical for function in terms of technology. But then, inside the restaurant, you still have the need to secure your leadership in every single location because as things change dynamically you need to be able to recruit replace quickly and so you've got people who just because of the nature of COVID and the fact that if somebody is exposed and the quarantine, you're constantly dealing with this shifting landscape in terms of how you bring your labor in. We use Workstream to help deliver some of the risk associated with bringing in those folks.
Stepping Up On Delivery
(10:52 - 12:24)
Lydia: Awesome and what are you doing as far as delivery right now? What companies have you had additional companies that you partner with, as far as the third party ordering and are you hiring more delivery drivers yourself if any?
Gregg: We don't do any direct delivery ourselves, we use all the third party folks. We really went big on this corporately. In 2018 when a lot of this was first bubbling up and everybody was still up in arms with respect to the fees etc, we jumped in early and we told our franchise community this is coming you're not going to be able to avoid it so you need to get prepared and maybe off premise as a percentage of the business for a fast casual was very very low. Maybe obviously our pizza product is much different than a Domino's or a Pizza Hut in terms of how it travels so there's different challenges that we had to overcome but what we said was that part of the business model you need to be prepared for so we signed up with all the big ones, all the big four they're all within our our deal they're directly integrated into our POS system as well.
Lydia: And which do you see the most orders from if people tuning in are trying to decide which one to join first?
Gregg: Because of where our restaurants are located, I think Doordash has the largest crossover with us but then by region, it really does start to fluctuate so in certain territories, Ubereats really starts to come up a little bit higher, other places it's Postmates or Grubhub. It really depends but in general, I think just because of coverage I think Doordash at the end of the day kind of has the best coverage.
Communicating Internally via Mobile
(13:56 - 15:31)
Lydia: When you are thinking about bringing in more people, have you had to do additional training and other sort of onboarding? During COVID, have you done more mobile communication with the staff to update them regularly?
Gregg: We've deployed a team and they re-coined themselves as double dragon. The reason why they wanted to come up with a fun name is, it's our two-headed monster. So on one side sits our operations and then the other side sits our training and so what we've kind of looked at across the entire system was redeploying our team to help franchisees execute within their business and so some of that lens is oriented towards how do you execute on the operation side and then the other side was oriented around the people and what sits in the middle is the training piece. We've really reinstitute retraining recertification for all these different functions and roles and also just making sure that you have the right talent in the right role and leveraging the Workstream platform and things that are available. It really helps to understand is this person more oriented towards the front of house, is this person better oriented to the back of house, could this person multitask at a much higher level given their experience, are they more on a trajectory towards leadership so how do we fully leverage the talent that's being made available? Unfortunately because of all the closures of restaurants and the limited dining, there is more available talent to bring into your different restaurants.
Finding the Right Talent
(15:32 - 17:17)
Lydia: Yeah we've heard a lot of of owners and leaders like yourself talk about up leveling their staff in that regard where they think about how can they find people, who are more of a long-term fit versus those here for a season, do you see that going on are you looking for people who will be like a better long-term fit for Pieology since you have a larger applicant pool to select from?
Gregg: We really did change over the last couple of years. When you were dealing with low unemployment, it was just this necessity to fill in slots because you just needed some bodies to come in and work. You didn't have the opportunity to take a step back and rethink what your people strategy really look, like our people strategy right now sits around letting folks who are coming in understand what the trajectory could look like for them to work at Pieology and if they decide that they're going to go to school or they've got another part-time job or whatever is the draw for them on the outside, we understand. But what we definitely needed people to understand for us was what's the path for you in our company and is it clear. And if it's not let's make sure that we make that very very clear so that folks understand if I join Pieology, I have an opportunity to stay with this company for a long period of time and that's something that I can control if I perform and I do well, I can stay at this company and I can progress if that's something I'm looking for, or maybe as I stay at this company and what I need is more flexibility, it's something that we'd obviously be willing to accommodate because the talent clearly dictates that we would want to keep that person there.
Lydia: Yeah that makes a lot of sense and we've heard that from a lot of other restaurants in the space where it's really focusing on allowing long-term opportunities.
Evaluating Real Estate
(20:34 - 21:49)
Lydia: What are the areas where you find the real estate is limited and you would need to explore?
Gregg: When you're going into the traditional MSA, we've got restaurants in Miami and so it's a good market for us. We like that market, it works for us, we've got great franchisees, good leadership out there but then when you started to look at in the trade areas of what was available, a lot of the places where you would look at from a traditional real estate identification strategy, all the places were taken. Whether you were looking at an occupancy rate that was just wooden pencil and wasn't economic to be able to open up a restaurant there or you just had other brands that had just signed longer term leases it just wasn't going to be made available but you still want to be in that local trade so maybe the B or the C real estate opportunities they are good enough but that may not be where you would want to build a brick and mortar restaurant, that's probably where maybe you'd want to go with a ghost.
Lydia: Yeah, when I'm ordering food delivery, I'm always how far away is something, filtering by that because I want to make sure my pizza doesn't arrive cold. It's a way to be in the center of things and be a lot closer to people even if the real estate's not available.
(24:21 - 26:55)
Lydia: One of my favorite franchise owners is actually a female who has Pieology Tara Lindstrom. Yeah she's a hoot. One thing I've picked up from her is that she has Pieology as well as several other brands and I joke that you see these franchise owners almost pick up like what would they want to have if they have seven different meals, like a different meal for each day of the week and variety. I'm curious what franchise owners do you see go into the Pieology space where they already have other brands?
Gregg: First off Tara is amazing. She's wonderful. I actually call her coach on the side because she provides really good feedback and she embraces what I just talked about in terms of being direct and saying things for the benefit of our flag and less about how I'm going to take something on a personal level. We're all about what's good for the brand. That being said, one of the shifts that we made in our business model is we look for franchisees that not only are multi-unit operators which shows they understand the notion of density the importance the supply chain and growing your restaurant base but multi-brand. When you think about folks that have multiple brands, they bring a different perspective and with some of these brands they may have a lot of legacy views, they can tell you a lot of while we've tried this in this particular brand and it didn't work all that well or we do this all the time in this brand and it works extremely well and just having that perspective and knowing that the back of house challenges that you might have relative to complexity or how you're going to market to grow transactions and guest check all of those things differ. What we get is just a much broader kind of cornucopia of information experience ideas that we can put into the Pieology business model.
1. What are you doing to improve hiring during COVID to reduce contact? Are you using video interviews, have you changed the interview process at all?
- It's amazing how comfortable everybody is now communicating this way. It's obviously disrupted the traditional go to the office that type of dynamic and you can't necessarily replace what you would do in a restaurant because you need all the equipment and the rest of the infrastructure that's physically there. But when it comes to how you communicate with the rest of your employee base your teams that work within your restaurants, everybody is leveraging this platform for video chat. Text messaging is big, I think we still all kind of understand that an email is going to have a lot more of a latent response to or from somebody versus a text, which most people are always kind of at least clicking to understand who is communicating with me and at least they're clicking through to understand what the information's about.
2. What do you look for in an applicant? Personally, I'm curious what sort of questions do you ask in the interview process? Is there anything that you've added to the structure of interviews to help you really identify great applicants?
- Absolutely, if I could land on one word it's energy because we focus on our four "E"s and so we talk about energy a lot and if you don't personally have energy, it's going to be really difficult for you to energize somebody else and we're all about that. It's a lot easier to plus one somebody if you're coming from a place where you're already self-motivated and so that's what we're looking for. Leaders are able to bring their energy, they're able to energize and then the next two we always talk about having edge. So we look for people who can challenge the status quo, we want people to have a voice. We're not looking for teammates that just step in and just want to fall in line. We're looking for those who want to stand out and use their voice to help us get better as a company and lastly. it just sits on execution so if they've got energy, can energize, they've got edge and they can execute then they fit within the profile of what we're looking for.
3. Have you guys looked into ghost kitchens at all? What are your opinions on those?
- We opened our own cloud kitchen and we believe that it is a strategy or a component or channel strategy that is here to stay and it provides a really unique way to entertain your real estate development strategy which is if you want to go in and you're really not sure or there's not a lot of good space retail available now. Obviously, post-COVID there's going to unfortunately be a lot more space available but the reality becomes you have to think about your business slightly differently and so with the notion and transition for everybody looking at off-premise and has become so strong, a ghost kitchen is a tremendous asset that you can have. That being said a virtual brand inside your ghost kitchen or even inside your restaurant is also something that we've discussed and part of that is because as you build additional creative menu items that may not be your core menu propositions. So for us, it's pizza, but if we want to bring an appetizer or something else along those lines or you've got your veto vote on salad but you might want to explore maybe broadening that line, you can do that now with a virtual brand and move that out of your existing freestanding restaurant or you can do that clearly within your ghost or cloud kitchen.
4. What have you done to promote equality and create opportunities for advancement?
- When you think about that even from our restaurant support center, we have a very diverse ethnic group. We have literally almost from every kind of country you can think of. What we're really trying to drive towards right now is I'm looking at the gender equality component and really promoting up more women in our organization so that there's more of a gender balance along with our ethnic balance. If you look at that within our restaurants, our restaurants are very diverse and it's not something that we've had to even really put on the meter to say we need to be more diverse. What it was is, let's understand what diversity is, let's look at our profiles inside of our restaurants and let's figure out if we're trying to solve a problem that doesn't really even exist and that's really where we landed which was we don't have that particular issue. The issue that we have doesn't have anything necessarily to do with race or gender had everything to do with having a platform and so like I mentioned earlier, when we're talking about employees and we're looking for qualities edge becomes important because a lot of people harbor edge different ways. I have a lot of edge maybe when I'm outside the restaurant but when I come in the restaurant, I fall in line and I follow the chain of command and so we use a statement pretty freely within our organization called "You can call my baby ugly and that's free license". In the reality of anybody calling your actual baby ugly it would be offensive, it would actually cause somebody to have a visceral response but that's really what we're trying to educate people on was, we're not trying to be offensive but what we're telling you is you have free license to tell us things like that are really hard and difficult and you don't need to sugarcoat it. You don't need to tell me that my baby's cute when in reality you know it's not and maybe over time right, that's going to change but the reality is you can tell us today what the issue is and so that's how we've approached all of this racial challenges and the volatility associated with all of this. We've approached it inside of our values and with our standard approach to how we bring on people.
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Lydia Fayal Hall is Head of Marketing at Workstream. She previously held leadership roles at OneSignal and Chalkup, acquired by Microsoft. Lydia has written for publications including The Wall Street Journal and Forbes. She is an alum of UPenn, Johns Hopkins, and YCombinator IK12. Originally from Stonington, CT, Lydia now resides in San Francisco, CA with her Australian Shepherd, Indy.