The six-unit Fresh Brothers Pizza chain in the Los Angeles area has received an equity investment from Skechers shoe executive Michael Greenberg in a move aimed at ramping up growth.
In an interview with Nation’s Restaurant News, Greenberg on Thursday declined to disclose the amount of the investment, describing it as a minority stake in the Manhattan Beach, Calif.-based restaurant chain. However, Adam Goldberg, Fresh Brothers founder and majority owner, described the investment as “in the millions.”
The investment comes from Greenberg, not Skechers USA Inc., Greenberg noted.
Greenberg said he admires Fresh Brothers for its focus on quality, and he sees the chain as having potential to grow to more than 100 units. Skechers owns and operates about 350 retail locations across the country, he added, and has deep relationships in real estate and marketing that could offer potential synergies.
“I think it could be very rewarding for Fresh Brothers,” he said.
Greenberg has been president of Skechers, also based in Manhattan Beach, Calif., since the sporty shoe company was founded in 1992. He is also an investor in the Zislis Group, a hotel and restaurant company that operates restaurant concepts like Rock ‘N Fish and The Strand House, as well as the Shade hotel.
The fast-casual Fresh Brothers chain was founded four years ago by Adam Goldberg, now chief executive, as a family operation. Adam’s brother Michael Goldberg, who serves as chief operating officer, also holds a minority stake.
Adam Goldberg's wife, Debbie Goldberg, is also a co-founder and serves as chief marketing officer. She introduced the brand to Greenberg after working with Skechers on a fundraising event.
Fresh Brothers is a Southern California spin on yet another Goldberg brother restaurant: Older brother Scott Goldberg founded the single-unit Miller Pizza Company in Gary, Ind., in 1985.
Fresh Brothers’ menu is based on the same recipes. Though rather than focusing on the Chicago-style deep-dish pizza Miller’s is known for, the California chain offers both thin-crust and deep-dish options, as well as a gluten-free crust.
Adam Goldberg said the chain prefers to describe its deep-dish version as “Midwest-style,” so as not so scare off fans of New York pizza.
Fresh Brothers’ menu also includes build-your-own-salad options and baked Buffalo-style chicken wings.
Though the Los Angeles pizza market is becoming increasingly competitive, Fresh Brothers has succeeded by “feeding the entire family,” said Adam Goldberg. Because the chain offers gluten-free and vegan options, the veto vote is eliminated, he said, and the menu offers something for everyone.
Fresh Brothers also uses high-quality meats and cheese, he said, and has focused on building community relationships with philanthropic efforts.
Adam Goldberg declined to give specifics on systemwide sales, but Greenberg estimated that Fresh Brothers locations are earning an average of about $1,250 in sales per square foot. Fresh Brothers locations are typically about 1,200 square feet, so average unit volumes would be roughly $1.5 million.
According to research connected with the forthcoming Nation’s Restaurant News Top 200 census of America’s largest foodservice operators, most large pizza chains, including Pizza Hut, in their latest completed fiscal years had estimated sales per unit from $700,000 to $900,000. A few, such as Papa Murphy's Take 'N Bake Pizza, had estimated sales per unit in the $500,000 to $600,000 range, while others, including regional player Donatos, had estimated sales per unit of about $1 million.
Fresh Brothers looks for high-volume locations in higher-income neighborhoods, Adam Goldberg said. The average transaction is about $23, and units offer dine-in, takeout and delivery options — with delivery accounting for about 50 percent of sales.
Two more Fresh Brothers locations are scheduled to open in 2012.
Greenberg said he hopes to see the chain double within 14 to 16 months, and the company has identified roughly 39 areas within greater Los Angeles where Fresh Brothers could go.
For now, new units will be company operated. Down the road, Adam said, the company may look at franchising.
Skechers has been in the news lately after agreeing last month to pay $50 million to settle class-action lawsuits and charges of making unsupported advertising claims related to the marketing of its Shape-ups toning shoe line.
Alan Liddle contributed to this article.