Food Service & Agriculture, Real Estate, and Retail

New pizza chain uses GR store as national model

Local success will fuel nationwide expansion plan.

October 16, 2015
| By Pat Evans |
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Toppers Pizza
Toppers Pizza fits in with the local businesses in the Wealthy Street SE neighborhood. Photo by Pat Evans

Grand Rapids has the only Toppers Pizza in Michigan.

The store, at 947 Wealthy St. SE, opened in August 2014 and has done well enough that the company will use the Michigan market to fuel its nationwide expansion plan.

The atmosphere is a large part of the restaurant’s success, according to Mark Cairns, Toppers director of franchise development. That stems from franchisee Nathan Leder, a Grand Rapids native who spent nine years managing Taco Bell restaurants in the area.

“We have to make it feel like a small mom-and-pop shop,” Leder said. “We definitely have to do that in Eastown. If you’re not local, half your customer base is gone. They make that very known.”

The location is in old storefront in a historic district so no flashy signs are allowed, which helps differentiate Toppers from other pizza chains such as Pizza Hut, Domino’s, Little Caesars and Papa John’s, Leder said.

Those “big four” pizza chains control approximately 50 percent of the pizza market, and Cairns said while many consumers will not claim to be chain pizza fans, it’s where the large majority of pizza is sold.

That’s why Toppers wants to take its market share by approaching it like a local store — with fresh ingredients, daily-made dough and an edgy marketing style, he said.

“We look and operate like a little guy,” Cairns said. “We’re not on TV or radio; we like guerilla marketing, digital connections. We need to do things like that. It’s not ‘hang the name on the door and people come in.’”

In comparison to Domino’s and even Papa John’s, Toppers is small. Domino’s has nearly 12,000 locations; Papa John’s has approximately 4,000.

Toppers currently has 71 stores in 11 states. The business was founded in Whitewater, Wisconsin, in 1993. The first franchise opened in 2002.

Next year, Toppers has 17 new stores slated to open, including another one by Leder in Grand Rapids. He said the location isn’t finalized, but he’s looking at spaces near Knapp’s Corner in Grand Rapids and in Wyoming — and, in the future, one near Allendale.

“The ideal time would be next fall,” Leder said. “I don’t want to open a summer store; we don’t have enough of a name in town yet.”

The name is growing rapidly: In 2011, Toppers had 30 stores. Executives plan on having more than 700 within the next 10 years.

It hasn’t all been easy, however. During the initial run-up to 30 stores, in 2008 a Toppers opened in East Lansing. It closed less than a year later due to financial issues related to the recession and an inexperienced franchisee.

“All brands close stores,” Cairns said, citing Starbucks’ contraction a few years ago and the massive amount of stores Quiznos has closed during its existence.

“It was a perfect storm. (The franchisee) was not a restaurant person, and they were undercapitalized at a time when the banks froze up.”

That experience helped form the current policy of only setting up multi-unit franchise deals with experienced restaurant industry professionals, Cairns said.

Unlike East Lansing, Grand Rapids wasn’t awash in food options that stayed open after the 2 a.m. bar close, which has helped lead to successful sales, Leder said.

“It helped keep us alive in the summer,” he said.

The success of Toppers in Grand Rapids has led to  confidence the concept will work in other Michigan markets, including Lansing, Kalamazoo, Battle Creek and Detroit suburbs, and the company is seeking franchisees.

Cairns said an average franchise costs $400,000 to start and brings in an average of $900,000 in annual sales.

“It is a significant amount to start up, but it’s very in line with other concepts our size,” Cairns said.

The “doable” entry cost and company philosophy were what drew Leder in as he looked for a new career path outside Taco Bell.

“I liked their attitude. The product looked good. It looked fun and it looked doable,” he said. “I don’t come from a family made out of money, so it had to be doable to begin with.

“We just try to make it inviting and have fun with it.”

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