How to reinvent franchising with tech and transparency

🗓 June 16. No traction in the UK pizza market

It pains me to write this but we have to face up to the facts. Despite our best efforts, Dodo Pizza hasn’t got traction in the UK pizza market.

As of now, we have 4 units in Great Britain — in Brighton, Coventry, Walsall, and Walsall Wood. Weekly sales range from £5K to £10K. Not a disaster, but far from being a resounding success.

Oddly, our sales improved during this corona crisis, and it was exactly what made us see the limitations of our current model. Even when options for eating out were scarce for customers, Dodo Pizza Brighton only reached £43K in monthly sales.

The main problem with our UK startup probably concerns our current model which is focused on delivery and American-style pizza. This model doesn’t allow us to differentiate and stand out against more established pizza brands in the UK.

What are our options?

• Close the branch for good and focus on other markets in EMEA where we see much more traction.
• Hunker down, as many brands do when growing globally: raise more funding, launch more units, tweak the brand — in the hopes that at some point (in 1, 2, 3… years?) the business will take off.
• Pivot and come up with an entirely new pizza concept that will allow us to cater to a new audience — assuming even more risks than before.

What would you do?

🗓 June 22: Dodo Pizza UK is pivoting!

When I posted about our situation in the UK, many people on LinkedIn suggested to give it time. In foodservice, building a brand in a mature market takes years.

Only we don’t have years. We don’t have resources to invest in dozens of units and wait for things to improve. We must crack the market now.

So our team decided to pivot and start building new pizza concept around a new type of crust: square-shaped and par-baked.

We opted for such crust in China when launching our company-owned stores in Hangzhou last year. It’s a tricky type of pizza to master, but operationally, it brings many benefits: par-baked crust needs less space in store and is much easier to handle (so, it drives down labor cost). In Hangzhou, we make a pizza in 4–5 minutes — instead of 8–10.

More importantly, par-baked crust is much lighter than the American-style pizza — and wins the hearts of modern customers. We receive rave reviews in China. And we hope it will help us finally find our point of difference in the over-crowded UK pizza market.

🗓 June 23: The stupidest idea ever…

Yesterday, I shared our idea to pivot in the UK and build a pizza concept around a new type of pizza. Judging by some comments, a fair number of people are of the opinion that we’ve come up with the stupidest idea ever.

At issue is the fact that our new crust will be pre-baked and frozen. Is it a supermarket-quality pizza?

I’d like to try separate apples from oranges.

We’ve developed our concept based on so-called Roman pizza. There are endless versions of it but most of them have two shared features:

1. more water is used which makes the crust much lighter;
2. pizza is double-baked — first, you bake the crust itself, then you add toppings and bake it again (which makes this pizza even lighter).

This pizza is as “true Italian” as it gets. Fast-freezing such a crust has lots of operational advantages and, in our research, doesn’t impact on quality anyhow.

From a marketing point of view, it poses a challenge: some customers might be biased against the frozen crust and we’ll have to find a way around that bias.

🗓 June 24. Dine-in or delivery?

With the re-launch of Dodo Pizza in the UK, we now have a unique opportunity to introduce an entirely new pizza concept. And there is 1 question we have to answer before everything else.

Will it be a concept focused on on-premise or off-premise dining — or a combination?

Before our latest pivot, we were aiming for a combination. Maybe even with more emphasis on dine-in. This pizza segment, especially in quick service, seemed more prone to disruption.

Then we decided to do a one-eighty and switch to square-shaped Roman pizza in the UK and build a concept around this innovative type of pizza. And one day, Fyodor, the founder, said: “What if we do away with dine-in entirely in the future?”

Reasoning:

• Doing dine-in and delivery/takeaway is hard (2 different businesses, basically);
• Delivery is in our DNA — that’s our strength globally;
• Lowered CAPEX — more potential franchisees — faster growth;
• Most importantly, our light Roman-style crust should be appealing to the usual audience of fast-casual pizza brands — but there is no strong fast-casual pizza concept in delivery.

The team is already on board.

🗓 June 26. Fast-casual pizza delivery in Great Britain — pros and cons

This is how we see several advantages for customers:

• lighter crust (thanks to the use of Roman-style dough)
• top quality toppings;
• super fast deliveries (par-baked crust allows us to make a pizza in 4 minutes so we can guarantee deliveries in under 15 minutes)
• easy ordering via our app/website;
• convenient locations (par-baked crust makes it possible to reduce the size of our units — easier to find good spots).

There are also a few risks our team identified last week during a SWOT-analysis meeting:

• customers might be biased against par-baked frozen dough;
• we might fail to adapt Roman-style pizza for delivery (in theory, the lighter the crust, the less suitable it becomes for delivery);
• fast-casual pizza brands don’t focus on delivery which often results in bad customer experience — another bias;
• the whole idea of super-fast deliveries might fail due to the high demand for drivers and our inability to put together a strong team.

I hope we haven’t missed anything on either side of the equation.

🗓 June 30. No sandwiches!

We’ve just had an animated discussion about our new pizza concept for the UK. The argument was about how diverse our offering should be. The marketing people, being the customer’s advocate, were pushing for several additions to our core pizza offering:

• sandwiches;
• drinks made in-store;
• signature salads, with an option to make your own;
• sides, desserts, ice-cream, etc.

Many fast-casual pizza shops have similar menus but Fyodor, the founder, pointed out some critical issues with the proposed approach:

• too many operational complications;
• increased labor costs;
• harder to scale in the future;
• harder to control quality in franchised units;
• too many new products to launch at the same time;
• most importantly, risks of introducing subpar products that will ruin the brand.

Is marketing always at odds with operations? It seems marketing wants as diverse a menu as possible and operationally, a perfect menu should consist of only 1 product. The question is how to strike a balance. So far, the team has agreed on a laser-focused menu. No sandwiches. No signature drinks. Just pizza. But… extremely awesome pizza. Delivered in 15 minutes.

🗓 July 1. First dough tests in Great Britain

These photos made my day. The very first test of Roman-style dough carried out by the Dodo team in Great Britain… Just look at this crust! Yummy, isn’t it? 😋

Getting such amazing results from the get-go is really inspiring since this crust represents a huge bet we’re making with our UK venture.

Our big idea for the UK: to build a fast-casual pizza brand focused on delivery and takeaway instead of dine-in. The whole venture depends on the crust and our ability to make it right. This isn’t easy since the team with knowledge in this field is in China and our UK team is… in the UK.

But the guys managed to pull it off. (Thanks, Google Meet, for connecting the UK and China!)

🗓 July 3. Figuring out branding: orange vs black

If you had to create a new fast-casual pizza brand, which color would you choose?

Every brand has its primary color. And picking one is a strategic decision with far-reaching implications. We now have to make this decision — since we’re developing a new pizza concept for the UK.

To be clear, the brand isn’t really going to be new — we aren’t changing Dodo Pizza to T‑Rex Pizza, for example. But since the core product will be different, we need an upgrade.

There are lots of fast-casual brands that can serve as references here (Sweetgreen, Mod, etc.) And for us, &Pizza with its black-and-white style is one of the most inspiring examples.

We even coined an internal term — Dodo Pizza Black — to describe our project.

But now we think that Dodo Pizza Black will actually be… orange. Reasons:

• going black-and-white is already becoming a cliche in the fast-casual market;
• orange hasn’t been claimed in the pizza sector in the UK;
• orange is our color across the world — let’s stick to our guns!

Yet sometimes orange is perceived as a color that is more suitable for a generic mass-market brand. It will be a challenge for our designers to make it feel “upscale.”

🗓 July 6. Momentous decision: no delivery aggregators!

We won’t be working with delivery aggregators… The team has decided to do away with 3d-party delivery — even though all of our franchised units currently active in Great Britain have no problem working with aggregators.

Reasons?

1. We aim to be the fastest fast-casual pizza delivery out there. Gotta do it ourselves.
2. How will our product be handled by the drivers? We want to maintain full control over the process.
3. Most importantly, delivery will be our primary sales channel. Reaching profitability is only possible through in-house service.

You might think you’re getting somewhere with growing 3PD sales, but you aren’t.

There are 2 critical metrics in any foodservice business: cost of customer acquisition and the number of returning customers. Usually, you don’t make any profit on new customers (thanks, competition) and earn something only when they return.

When a 3d party tries to get a cut from the sales to returning customers, it upsets the whole business model.

Thanks but no thanks.

🗓 July 7. Our big idea: the Pizza Game Changer

Okay, we have a product — or at least we have an idea of a product. Now we need to figure out how to communicate it.

There are lots of aspects to any marketing strategy, but essentially, it comes down to just one task: finding one underlying idea that will bring everything together. Sometimes people call it “the big idea.”

You can easily end up paying a million to some fancy marketing agency for just a slogan representing such an idea. Or you can spend a year researching, creating, and testing it. We have neither millions nor many months. So the team has decided to agree on a good-enough “small idea” — which potentially can grow into a big idea over time.

A few weeks of debates, and we think we have something workable. “Dodo Pizza — the Pizza Game Changer.”

1. product — lighter, healthier, square-shaped, locally-sourced pizza;
2. experience — super-fast deliveries, cozy takeaways;
3. communications — dialog with customers vs brand’s monologue.

At some point, it was “Join the pizza revolution”. But we decided revolutions are overused. See our latest design brief for details.

🗓 July 13. Another “true Italian” pizzeria? No way

We debate lots of things when working on our new pizza concept for the UK. But this decision nobody wanted to assail. From the get-go, the team agreed that we wouldn’t be playing this “true Italian” game.

1️⃣  It’s a cliche.
2️⃣  Moreover, it’s a cliche more suitable for casual dining than for a QSR brand.
3️⃣  This niche is overcrowded with moms-and-pops pizza shops.
4️⃣  Also, these words — “true Italian” — are misleading. In Italy, pizza can differ from region to region. We could split hairs for eternity debating what a “true Italian” pizza should look like.
5️⃣  It seems customers have already grown tired of all this nonsense.

What can we offer instead? Fusion. A product inspired by traditions but rethought for the modern customer. The team aims to develop a wide range of pizzas and introduce signature recipes that you won’t find elsewhere. “Let’s do something ambitious, guys!” That’s what we’re telling ourselves.

Dodo Pizza Hangzhou serves as a great inspiration for our UK team. Just look at these pizzas!

🗓 July 14. Lease signed!

Anyone who’s ever tried to rent a place for a restaurant in the UK will agree how big a deal this is.

In this market, even if you zero in on a good location and the landlord is happy to see you as a tenant, the whole process of figuring out all the details usually takes months of work. We were almost ready to sign when the corona crisis hit, and everything came to a full stop. It’s hard to sign a long-term contract when you don’t know what will happen next month. Then life resumed, in some odd form at least. Our UK team got the go-ahead from Dodo headquarters.

At this point, we already knew that we were going launch an entirely new pizza concept in Great Britain — a fast-casual pizza shop focused on delivery and takeaway. It was a departure from our previous concept more skewed towards dine-in. The whole place now looked too spacious for us. Yet, we decided to proceed. Nobody wanted to waste another year searching for a new place. We also figured the team might use some space for an R&D lab and dough production facility.

Now there is no going back. We’re to launch our new concept in RLS and make it a success.

🗓 July 20. Design challenges…

We’ve built hundreds of pizza shops but our 1st company-owned unit in the UK easily makes it onto the list of our most difficult sites. Dodo’s design team has been overwhelmed with a number of peculiarities in relation to the Leamington Spa project.

1️⃣  New format: #delivery and #takeaway (while in most of our 600+ shops, it’s a mix of delivery and dine-in).
2️⃣  A new type of dough — Roman pizza (which has an immense impact on how the back of the house should be organized).
3️⃣  Three different business units under one roof: the pizza shop itself, plus a dough production center, plus an R&D lab.
4️⃣  A new competitive market where it’s not easy to stand out.
5️⃣  The space is too… spacious for our needs.

Weeks of work. Dozens of drafts… At last, the solution seems to be close. Everything fell into place when we split the premises into four sections (A, B, C, D) and realized that we MUST place the front of the house in C and the oven in D. The reason? C and D sections have windows — which gives us the opportunity to show our customer area and kitchen to the passerby. For the same reason, we’ll probably place our dough production in B. The least visible A will accommodate the lab — the most boring part of the site.

🗓 July 23. Tables or no tables?

This might sound like a simple question. But for our UK team, it led to hours of debate.

PROS. Even though it’s takeaway, some customers will want to eat their pizza on the spot. It makes sense to provide them with at least a bar table and a few chairs. We have more than enough space for that.

CONS: Even a bar table will tamper with our pure takeaway concept. There is a risk that customers will perceive it as a poorly designed dine-in area — instead of seeing it as a takeaway with a bonus.

The founder, Fyodor Ovchinnikov, was pushing for the table. The design team was defending the pure takeaway concept. For now, the winning idea is to have no tables but to arrange a cozy seating area for customers waiting for their orders.

🗓 July 28. Another dilemma…

We’re making great progress in everything except for the layout of our pizza shop. This has been a real bummer for the team. Since the product (Roman-style pizza) and the format (delivery&takeaway) are both new to us, it takes a lot of time to figure out all the details of our first company-owned pizza shop in Leamington Spa.

The most recent example: our takeaway setup. We want customers to collect orders themselves to reduce labor cost. But what should the takeaway area look like?

1️⃣ A heated shelf for pizza with a cooler nearby for drinks and salads, customers will have to use both to put together their order;
or
2️⃣ A regular shelf for pizzas, drinks, and sides.

Solution 1: pizza will remain hot, drinks — cold, even if customers are late. But they will be more likely to mess up their orders, forget drinks, etc.

Solution 2: the entire order will be put together by our crew — just grab and go. But if you’re 20 min late, drinks will get warm, pizza — cold… And this might ruin the whole experience.

Many hours spent debating this. So far, we agreed on Solution 2. It’s easy and straightforward, and the team wants to test this approach. Worst case: we’ll change the shelf later.

🗓 July 28. Takeaway: a new level

Our ambition goes beyond launching just an okay pizza shop. We want to disrupt the market and make some waves. A big part of it: a new takeaway experience.

We want to challenge the notion that a takeaway pizza shop can’t look trendy and welcoming. The 10 minutes you spend waiting for your pizza should make your day. The question is: how to take the takeaway experience to a new level?

This week, we’ve studied the UK market and other well-developed brands (not just in the pizza sector) trying to find small details that make takeaways better. Here is what we’ve got so far:

— Bike racks
— Cozy seating area
— Free filtered water
— Open kitchen
— An instagramable interior
— Coat racks
— Charging stations
— Nice music
— Wifi
— Recycling bins
— Play area for kids
— Storytelling via posters
— Outdoor seating
— Over-the-door heater (for winter)

🗓 August 3. Brand development

Let’s be honest, this is a bit insane. Usually, it’s Russian companies that employ fancy British agencies to develop brands for Russia. We aim to reverse the trend having employed a Russian agency to develop our brand for the UK.

In our home market, we can leverage Dodo’s renown and attract the best talent. Time is of the essence, and alacrity is not exactly the forte of the UK agencies. Moreover, Russia is cheaper. BUT… what do those folks in Moscow know about our customers in Leamington?

We believe they can research and learn. Also, within the last year, we’ve done our own research and can guide them.

Here are a couple of slides from the 1st week of work. The agency we picked out of 40+ contenders, did a semiotic study to see how our core values — openness, trust, and transparency — play out in the UK. A possible big idea: the UK is so much divided. Yet there is something that unites us all: passion. Our passion is pizza. What’s yours? (My free interpretation.)

🗓 August 6. The bench

A big part of the equation is our vision of the takeaway experience. We dare to challenge the notion that a takeaway pizza parlor can’t look and feel cool. How the guest area is designed will obviously impact on the overall experience. There are lots of small details we’re working on. But there is one thing we’ve already nailed: the sitting area.

Our team came across this innovative bench in downtown Moscow some time ago. It immediately caught the eye of Oleg Koulik, our chief architect. It was clear that such an eye-catching bench could make a real difference in our interior.

We even tested it with our butts to make sure it’s comfortable to sit on (and it is). When Oleg added the bench to the 3d model of the Leamington shop, and it brought together all the other pieces of the interior. As a bonus, a part of the structure can be used just for leaning on.

🗓 August 11. Brand design concepts

We now have 8 (!) pretty cool design concepts for Dodo Pizza UK from the agency. We see a number of thought-provoking ideas. And one of them (number 7) has been favored by most of the people on LinkedIn and on the team. Yet we can’t move forward with any of the presented concepts.

To be honest, the team got a bit carried away. All the current drafts might look great in the presentation or even on pizza boxes but they won’t work in other mediums. They all are skewed towards communication while we now need to create a concept that can be applied across different marketing channels: on social media, Facebook or outdoor ads, facades, in-store posters, packaging, UX/UI, uniforms, etc.

Sadly, we see that most of the proposed solutions — even the coolest ones — might be hard to develop across all these mediums. That’s the feedback we gave the agency.

Nobody is discouraged. It’s work in progress.

🗓 August 19. The challenge of clarity

The agency took the concept that got the best feedback (here on LinkedIn and from the Dodo team) and tried to dispel our doubts about how it can work in different mediums. I guess we can agree that this approach can work in many formats. Though we still need to explore how we can use it to promote our product (dough, toppings, service) since this will be the marketing goal during the launch.

But even a bigger question now is: how clear will the underlying idea be to our customers and what can we do to make it more explicit?

People are divided by passions and beliefs. Yet we still can be united being different. Just like Dodo that reconciles 2 different concepts: restaurant-quality pizza and the speed and convenience of modern delivery service. This is the proposed “agree to disagree” underlying message. But… would you get it from the drafts alone?

🗓 August 31. New boxes

Every week, we make some progress with the development of our UK brand. The latest design sprint has brought us new mockups for the most sacred part of any pizza shop’s identity: pizza boxes. A week before, we already had a promising concept built around a space divided into two equal but contrasting parts. These parts represent two entirely different worlds which are nevertheless united by Dodo. On top of being just visually attractive, the layout plays into our big idea of “unity in diversity.”

Our team also identified 2 problems:

1️⃣ The “do“s looked too different from each other. Which probably communicated “diversity” well. But the whole idea of unity was a bit lost.
2️⃣ We wanted our boxes not to be just “cool” but also to promote our product and its rational benefits. Some product marketing, please!

The agency we employed for the job took a week to work on the concept and has come back with this. The right “Do” now represents “dough,” and its shape is equal to the shape of the left “Do.” So they are now similar while being as different as before. Unity in diversity! It’s not final, though. Not everything is clear here. For example, I thought the hand is holding a coin — when in reality it’s a tomato.

🗓 September 4. Students or families?

We had a noteworthy discussion at our last UK team gathering. What primary audience should we choose to target in marketing when launching our pizza shop in Leamington Spa?

Obviously, pizza is one of those products that are appealing to everyone. Students. Software engineers. Bankers. Football fans. Kids. Parents. Housewives and househusbands… You name it. And, strangely, this makes the choice more difficult. You still need to pick someone. Otherwise, your communication might turn out bland and generic. But whoever you choose, you end up feeling that someone important is left behind.

Some team members were rooting for adults/families. And for a reason: our lighter crust and high-quality toppings should cater to a more picky and mature audience. On the other hand, we know from our experience in Coventry and Brighton that converting students is easier. They are more open-minded and not that loyal to brands. Always eager to try something new. Besides, our shop is located close to a dorm. It feels churlish to ignore that fact. So another party was voting for students…

It’s a hard choice between what’s logical (families) and what’s easier and can bring results faster (students).

🗓 September 16. Fast gourmet

I thought we were launching a fast-casual pizza delivery in the UK. I was wrong… The closer the day of the launch, the better we understand our place in the market. A few discoveries made over the past few weeks pushed us to raise the stakes:

1️⃣ Our Roman dough. We knew it was good but only after lots of tests we started to appreciate its true potential.
2️⃣ The new dough inspired us to be bolder in our menu development and use high-quality ingredients.
3️⃣ Having learned more about “fast fine dining,” we also recognized its marketing benefits. In “fast fine” this clash of highbrow and lowbrow is even more pronounced than in fast casual and this is good for creativity.

So, we’re now launching a fast gourmet pizza delivery in Leamington Spa. How is fast gourmet different? In fast casual, you use the same ingredients as in fast food, only better. And we’ll have pizzas with things you won’t find in your typical pizza joints, like lobster or burrata. Interior, branding, and service will also have to give customers a different feeling. Still, it will be a mobile-first, super-fast, and affordable product.

🗓 September 23. Interior

This is it. Our brand new boutique hotel… wait, no!… our brand new pizza shop in Leamington Spa, UK. Well, what you see is just a 3d model — we’ll now have to actually build the shop this fall to make these nice images a reality. Still, it’s an important milestone for our UK team.

We’ve finally zeroed in on the design we love. And it’s no small feat — since this project can easily top the ranking of our most challenging design endeavors. The only detail Oleg Koulik, our chief architect, is still working on is the product promo inside the shop. The entire place does look like a boutique hotel — which is good in many ways, but it would be nice if customers could identify that they entered a pizza shop that only looks like a hotel — not an actual hotel. So we’re now exploring how to add some posters featuring our amazing dough and pizzas on the left wall.