Published: Friday, April 11, 2008

Pizza business breaks into nation's top 100

Founder of Everett's Garlic Jim's thinks there's nowhere to go but up, plans expansion

EVERETT
Garlic Jim's Famous Gourmet Pizza can't be accused of growing slowly.
Four years after its founding, the pizza carryout and delivery chain has more than 50 stores in 10 states, with dozens more stores already in the works. It's now the official pizza of Safeco Field.
On top of that, sales at Garlic Jim's pizzerias open for a least a year in Washington grew by 17 percent from the first quarter of 2007 to the same period this year.
But the business, which aims to trump other chains in the quality of its pies, is just starting to hit its stride, said founder and chief executive Dwayne Northrop.
"We've been on a decent growth rate, but we're ready to really step that up," he said.
By the end of this year, the chain could have 75 to 85 locations open. In five years, it hopes to have five times that many.
Garlic Jim's now ranks among the nation's 100 largest pizza chains, according to Pizza Today. The magazine, which ranked the chains last fall based on their 2006 gross sales, placed the Everett company at No. 96. The much-larger Papa Murphy's, with headquarters in Vancouver, was the only other Washington-based chain to make the list.
Garlic Jim's ambitious growth comes right as even the nation's biggest pizza chains are struggling with higher costs and squeezed profit margins.
While wanting to stay competitive with other pizza places, Garlic Jim's has never claimed to have the cheapest pizza. And that's helping the chain deal with higher ingredient and fuel costs, Northrop said.
The chain makes its own dough at regional bakeries, including one in Everett, and delivers it fresh to its stores, and that allows the corporate office to absorb the soaring cost of flour and other ingredients without passing it all along to franchisees and customers, Northrop explained.
"We can adjust our margins, do strategic buys," said Northop, who started in the industry delivering pizzas and later was a co-founder of Jet City Pizza Co. "So we can help our franchisees stay competitive. The guys who are in trouble are the ones already selling $5 pizzas."
Instead of entering the price wars, Northrop launched Garlic Jim's to appeal to the more discriminating pizza lover. Toppings at Garlic Jim's stores include artichoke hearts, roasted corn, cashews and -- of course -- roasted garlic. Northrop also emphasizes things like whole-milk mozzarella cheese and fresh-packed ingredients for the best taste. The average customer ticket at the chain's stores totals $22 to $24.
So far, the chain has 27 locations in Washington, including Marysville, Mill Creek, Monroe, Mukilteo and Bothell. New franchises are setting up in Edmonds and Lake Stevens.
Additionally, through franchises and subfranchise agreements, Garlic Jim's has a presence as far away as Florida and New Jersey.
As with any growing, but still young company, introducing Garlic Jim's name and product to potential customers is hugely important to sustaining fast growth. To that end, the chain has done some limited advertising. But Northrop said the company also emphasizes the need for its franchise owners to creatively market themselves as much as possible.
It also helps when franchise owners come up with their own ideas to boost the entire brand recognition. Ryan Reese, owner of the West Seattle Garlic Jim's store, was at Safeco Field last summer when inspiration hit.
"I was sitting out in right field, and it just seemed like a lot of people in our row were eating pizza," Reese said.
At the time, Kentucky-based Papa John's Pizza held the contract to sell that pizza at Safeco. Reese thought locally based Garlic Jim's would be a better choice.
"I said, 'Gee, we're going to have Garlic Jim's in here next year.' I actually said that to one of my buddies," Reese said.
Many phone calls later, Reese found the right person to talk to and the pizza chain's corporate office got involved in negotiating a sponsorship agreement with the Mariners. The result? Garlic Jim's pizza was being served in Safeco Field starting with last week's opening day of the Mariners season.
"They're such a great local story and a great success story," Mariners spokeswoman Rebecca Hale said, adding she's had a couple chances to taste Garlic Jim's pizza in the past month. "I was impressed. It was quite good."
Reese said he hopes the newfound exposure to millions of baseball fans will help all the franchisees. Getting people through the door is the hard part, he said.
"The great thing about Garlic Jim's is they have a really good product that sells itself," Reese said.
As the privately held company grows, Garlic Jim's can take advantage of more opportunities like the Mariners sponsorship deal, Northrop said. In the meantime, he and his management team are taking a more sophisticated approach to finding good franchise owners to make sure that rapid growth isn't followed by the rapid closure of stores. None of the chain's stores failed until last year, and the company wants to keep that exceptional track record.
Getting bigger also raises the prospect of going public and issuing stock to finance expansion, but that's not a path Northrop considers attractive "at this point." The Mill Creek resident said he's focused on guiding Garlic Jim's climb. He also still takes to the pizza ovens at times, personally baking for special events.
"It's a tremendous amount of fun," he said.

Eric Fetters writes for the Herald of Everett.