DENVER Spicy Pickle Franchising Inc., parent of the 34-unit Spicy Pickle and 17-unit Bread Garden Urban Cafe fast-casual chains, has hired franchise-system veteran Mark Laramie as chief executive officer.
Officials of Denver-based Spicy Pickle said Laramie’s hiring is part of an initiative to strengthen board and corporate management at the company as it begins to see unit growth pick up after some contraction.
The company’s namesake Spicy Pickle deli chain has seen its net unit count fall by five since the end of 2008, but expects two closed stores to reopen at new locations this year. Another of the closed restaurants was part of a consolidation of two stores in one market, said president Marc Geman, who, prior to Laramie’s recruitment, also served as chief executive for the publicly traded company.
Geman said Spicy Pickle has opened two franchised restaurants to date in 2010 and expects to open four more by the end of the year. Of the Spicy Pickles now operating, seven are owned by the franchisor.
The completely franchised Bread Garden bakery-cafe chain, which only operates in Canada, has opened three units to date this year and anticipates opening two or three more by Dec. 31, Geman said.
Any net gains in franchised restaurant counts in the current year would mark a noticeable improvement in that arm of the Spicy Pickle chain’s business, as it closed or converted to company operations more franchised locations than it opened in each of the past two fiscal years.
After adding corporate personnel to open 19 new franchised restaurants in 2007 -- more than doubling the size of the chain in one year -- the company was forced by slowing franchise sales in the second half of 2008 to reduce full-time employees from 28 to 13 between the end of 2008 and 2009, according to filings with the U.S. Securities & Exchange Commission.
Geman said the company, for the short term, is not planning on any hiring sprees, but rather “will stick to our knitting.” He said he takes it “as a very good sign” that nearly all of the restaurants now being opened are the second and third restaurants of existing franchisees.
Laramie, the bulk of whose industry experience has been with large chains operated primarily by franchisees, most recently was chairman and chief executive of FranExecs Consulting Group and Pinnacle Restaurant Group, which is affiliated with the 12-unit Smiling Moose Deli chain of Boulder, Colo. His previous positions in the restaurant industry include president or executive vice president and chief operating officer of Papa Murphy’s International, parent of the Papa Murphy’s Take ‘N Bake Pizza chain; president and chief executive of Quiznos of Canada; chief operating officer for Quiznos’ U.S. operations; and group vice president of franchising for Little Caesars Enterprises Inc., parent of the Little Caesars Pizza chain.
“We have been working steadily to improve both our board of directors and bring in ‘C’ level personnel with extensive experience in growing franchise chains and refining retail operations,” Geman said. “Mark Laramie fits these criteria perfectly. With his background we add the needed ingredient of operational know how for rapid expansion while we continue to look at multiple opportunities for the growth of our system.”
Geman said he expects Laramie to help Spicy Pickle “establish both of our brands – Spicy Pickle and Bread Garden Urban Cafe – throughout North America and beyond.”
The company acquired Bread Garden from Bread Garden Franchising in October 2008.
New chief executive Laramie said Spicy Pickle’s brands “have the nucleus of a great staff as well as dedicated franchise operators and we will now take our systems and development to the next level.”
In March, Spicy Pickle added to its board outside directors Mo Siegel, founder of specialty tea company Celestial Seasonings Inc., and Gregg Marshall, founder and chief executive of the SYGMA Network Inc. foodservice distribution company that is now the largest subsidiary of SYSCO. Also added to the board then was Stacey Reed, a principal investor in Spicy Pickle, who, until the company was sold in 2008, was president of Reed Group Ltd., which specializes in identifying, preventing and managing employee absences.
Spicy Pickle in March also announced that Stacey Reed’s husband, Preston Reed, a principal investor in the company who had served on its board for several years, had become chairman of the board, succeeding Geman.
For the fiscal year ended Dec. 31, Spicy Pickle Franchising reported a net loss of $2 million, or 4 cents a share, versus a loss of $5.6 million, or 12 cents a share, in fiscal 2008. Total company revenues fell 6.7 percent, to $4.1 million, primarily as a result of operating one less company restaurant, following the sale of that branch to a franchisee, and recessionary pressures on same-store sales.