Adrie Groeneweg, co-founder and president of pizza-buffet concept Pizza Ranch, decided in 1981 to open his first restaurant in his hometown of Hull, Iowa, after watching too many neighbors head to nearby Sioux City for pizza.
HEADQUARTERS: Orange City, Iowa
MARKET SEGMENT: pizza-buffet
NO. OF UNITS: 150
AVERAGE UNIT VOLUME: $1.2 million
METHOD OF GROWTH: franchising
LEADERSHIP: Adrie Groeneweg, co-founder and president; Jon Moss, chief operating officer; Marilyn Mayberry, director of franchise development
COMPETITORS: CiCi’s Pizza, Pizza Hut, Domino’s Pizza, Papa John’s
TARGET MARKETS: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota
“This other place was packed, and all these Hull people were in there all the time,” said Groeneweg, who at the time was working as a welder in Sioux City. “My dad said that we should start a pizza place in our own town. Hull was pretty small, with only about 1,800 people. But Dad pushed for it.”
Pizza Ranch, which Groeneweg opened at the age of 19 with a bank loan his father secured at a 19-percent interest rate, has grown up with its founder to become a chain with 150 units in nine Midwestern states, mostly in small towns like Hull.
The brand, which features a buffet of pizza and fried chicken, cozy seating, and Old West décor and artwork, is on pace to open 12 units this year and already has expanded into small cities like Mankato, Minn.; Sheboygan, Wis.; and Dickinson, N.D.
Because Pizza Ranch outlets are located chiefly in small towns where Groeneweg said buffet service is hard to execute, the brand initially resisted expanding the buffet from lunch to all-day operation.
“With buffets, you tend to think of a little lower quality food,” he said, “and I didn’t want people thinking that.”
But knowing that pizza and chicken hold well on the hot line, Pizza Ranch executives decided to push forward seven years ago and offer buffet service all day. The key to pulling it off, said Gwen Lahrs, senior advertising and marketing manager, is rolling out special pizzas every few weeks to keep the offerings fresh and guests interested.
Offering the recent Farmers Market Salad and BBQ Bacon Cheeseburger Pizza, for instance, “gives our guests a chance to try the new flavor while enjoying the same great pizza and chicken they have grown to love,” Lahrs said.
“You wouldn’t necessarily order the whole pizza,” Groeneweg added, “but you’d definitely grab a few pieces.”
Pizza Ranch’s growth plans in larger markets — outlets just opened in Waterloo, Iowa, and Rapid City, S.D., which have populations of about 80,000 and 60,000, respectively — are attracting different franchisees, Groeneweg said.
“A lot of our first franchisees were people that loved their community, wanted to start a pizza place there and were happy doing their own thing,” he said. “They were probably never going to do a second store. Some people looking at us today, while still family-oriented, are looking more at having three to four stores and having management teams run them.”
The problem isn’t finding qualified applicants but securing their funding.
“People almost have to have about 60 percent to 70 percent down before a bank looks at them right now,” Groeneweg said. “That’s been tough on growth, because we have qualified people, but banks are too tight. … We’re ready to do those 20 to 25 stores this year and have the manpower to do it.”
In a few markets, Pizza Ranch goes head-to-head with CiCi’s Pizza, but for the most part, it has the pizza-buffet space to itself. The chain derives about 70 percent of its systemwide revenue from the buffet — 85 percent in its newer stores, Groeneweg said. But Pizza Ranch has embraced popular value promotions to hang on to its delivery and carryout business.
“We don’t want to lose delivery, but that’s tough in big markets where we compete with known names,” Groeneweg said. “The biggest help has been jumping on $10 large pizzas. It’s getting people in that habit of ordering their delivered pizza from not just Little Caesars.”
Yet as Pizza Ranch looks to expand its footprint in the Midwest and open farther West in states like Montana and Colorado, the buffet will be its point of differentiation, he said.
“Our average unit volume five years ago was $600,000, and now we’re closer to $1.2 million,” he said. “That’s what buffet’s done for us.”
Contact Mark Brandau at [email protected] .