Donatos Pizza Serves Up Success By the Slice

In this Salute to American Success, we’re taking a look at pizza franchise Donatos Pizza. This company, headquartered in Columbus, Ohio began serving customers back in 1963, when then-19-year-old Jim Grote bought an existing pizza shop for $1,300.

“Jim was working in the pizza business already,” said Tom Pendrey, chief operating officer of Donatos Pizza. There were two owners with two different philosophies and he [Grote] noticed a difference in customer reaction. Jim believed the way to serve was to give customers the best value.”

Since Grote bought the original pizza joint, Pendrey said the company has been operating with the best value in mind.

"You see very little crust with our pizza,” he said. “We go edge to edge with toppings... 100 pieces of pepperoni on our pizza. We also cut fresh vegetables every day. That’s important because everyone wants great a tasting product and fresh ingredients, and they want to customize any food product to their specifications.”

In 1999, the Grote’s received a call from McDonald’s (NYSE:MCD), which at the time was looking to diversify the brand (McDonald’s would also eventually acquire Boston Market and Chipotle (NYSE:CMG) around this time) and was interested in Donatos. The family eventually sold the business to the hamburger chain. When McDonald’s decided to sell the business, the Grote family reacquired it.

Today, Donatos has expanded their menu to include salads, wings, strombolis, oven-baked subs and desserts, which are doing well and growing, according to Pendrey. The company also focuses on offering many different types of access points for its customers.

“Our restaurants have dine-in areas, party/celebration rooms inside, delivery service… many restaurants have pickup windows and we cater for large parties as well,” Pendrey said.

Donatos is taking advantage of advances in technology to help grow their business.

“Having a website is very important,” Pendrey said.  “You have to have that to survive in the pizza business going forward and you must have that technology to meet customer needs.”

The company also relies on data collection to improve its service.

“We really use big data so we aren’t going with a gut feeling, said Pendrey. “Capturing customer survey information allows managers to react in every restaurant. We know what works and we start to know what doesn’t, which is also very important.”

Currently, Donatos Pizza has more than 150 locations, 53 of them company-owned. Four new locations are set to open this year, according to Pendrey, who said outlying states are doing very well and the Columbus, Ohio economy is helping improve the core business.

“The Columbus economy post-recession is growing,” he said. “There is a strong economy because of diversity. It’s the state capital and there are universities in the area as well. There is a great economy, great environment, great people and a collaborative community business side that helps each business to grow.”