Industry News | January 15, 2010

Marco's Accounts for Growth with New Distribution Service

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In order to account for its explosive growth across the U.S. and Bahamas, Marco’s Pizza announced this week the launch of its new distribution service, Marco’s Pizza Distribution LLC.

The Toledo, Ohio–based pizza chain, which has over 200 stores and more than 900 new stores signed and in development, opened its first distribution center in Maumee, Ohio, outside of Toledo.

“If you’re going to grow, and you want to serve a consistent product, you have to control your ingredients,” says Jack Butorac, president and CEO of Marco’s.

“That’s the main purpose behind it—we want to control and make sure that every ingredient that is delivered in Toledo, Ohio, is delivered in Florida, delivered in Nevada, delivered in California, delivered all over.”

The first distribution center will serve more than 100 units in the Midwest. Butorac says that the company will use the first center to make sure all operational procedures are in place, and then proceed with additional centers around the country in the next few years.

According to a release from the company, there are three significant benefits to Marco’s Pizza Distribution: better product quality, better service, and a chance for increased profitability.

“A distribution company with a single focus can achieve greater cost efficiency, monitor all product costs, purchase larger volumes at better prices, and manage inventory levels to take advantage of predicted fluctuations in commodity markets,” said Don Vlcek, Marco’s vice president of purchasing, in the release.

“Probably the biggest thing [to change] is the service is going to increase significantly to the franchisee so they don’t have to worry about what’s coming in the back door and how it comes in the back door,” Butorac says. He notes that Vlcek’s role in the process of setting up the distribution center has been critical to guaranteeing smooth service, as Vlcek was previously the president of Domino’s Pizza Distribution Corp.

Marco’s Pizza Distribution has been in development for at least the last 18 months, Butorac says. The company has been working in conjunction with its franchisee advisory board in order to assure that all franchisees are on board and comfortable with the shift.

“Some [franchisees] have wrapped their arms around it, which we anticipated, and some are cautious and say, ‘Geez, are you going to change the ingredients and lessen the quality of the ingredients?’” Butorac says.

He also says there’s been a certain amount of work done with the franchisees to make sure they trust that the company has their best interests in mind.

“There’s a history out there of companies that have taken their distribution and changed the product and also made significant profits off the franchisees, where that’s not our intent,” Butorac says.

In order to further assuage franchisees’ concerns, Butorac says the company plans on posting the distribution service’s financial statement on Marco’s Intranet site. Each franchisee will also receive a rebate at the end of each year based on the service’s profitability.

“We have common goals,” Butorac says of Marco’s franchisees. “They want to make money and I want them to grow, and I want them to be profitable.”

By Sam Oches
News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.