Almost a year and a half ago, Mici Handcrafted Italian announced its first franchising strategy after 17 years in business.
In those roughly two decades, founders Jeff, Kim, and Michael Miceli showcased a “very deep history” of building the brand and determining Mici’s place in the multi-billion pizza segment, says CEO Elliot Schiffer, who joined the chain in 2017.
But COVID proved to be the ultimate disruptor. Many of the interested operators at the time owned other brands, and Schiffer says the pandemic forced these potential franchisees to “batten down the hatches” and focus on their business. The same was true for the six-unit, Colorado-based Mici, which saw increases in volume. Because of all the noise, the fast casual decided it wasn’t an ideal time to spend too many resources diving into the program.
This year, it’s been a much different story. Mici built a team around franchise sales and support and hired Smashburger and Taco Bueno Restaurants veteran Matt Stanton as chief growth officer.
“Launching a franchise is not a small effort,” Schiffer says. “I think that some brands do it in a small way, meaning just sell licenses or franchises and there’s not a lot of support behind that. But we take this very seriously. This is the path that we knew that we wanted to be on. … It just seemed like if we’re going to make the big investment in doing franchising correctly at the time, it was much better to wait until we come out of the pandemic and then launch.”
The patience paid off as Mici signed a 30-unit franchise agreement this fall to open stores throughout Greater Phoenix, the chain’s first presence outside of Colorado. The franchisees are Lucas Farnham, a multi-unit operator of Black Bear Diner and Smashbuger, and David Doty, a former Black Bear and Smashburger franchisee who’s served on the Mici Board of Directors since 2017.
The deal envisions the restaurants being built over seven to eight years, but Mici has found Farnham to be a “very aggressive” developer Schiffer says, so it appears the timeline is already ahead of schedule. In fact, the franchising partners have already signed leases for their first two stores in Queens Creek and Gilbert, Arizona.
“Just in terms of an early partner to work with, an early franchise partner, I don’t think we could have done any better than working with Dave and Lucas in developing in Phoenix,” Schiffer says. “It’s also very nice that I can get to Phoenix in an hour or so—just being able to stay close with them and watch them progress is going to be important.”
Similar to what it planned back in 2020, Mici’s target markets for franchising are Nevada, Utah, Arizona, New Mexico, Texas, Kansas, Idaho, and Missouri. Schiffer says advertising efforts will be focused on those core areas, but the chain has received interest outside of those regions, although the CEO is unable to share exact details. He does note that depending on the operator and what the team looks like, Mici is open to working beyond those designated states.
Schiffer says each ensuing franchise agreement will be specific to the operator’s capabilities, meaning deals will not always be as large as 30 units. The brand felt comfortable selling the entire Phoenix market to Doty and Farnham because of their experience, capital, resources, and familiarity with the chain. Mici has a number of deals in the works right now that cover smaller territories in the range of three to 10 units.
The CEO describes Phoenix as one of the fastest-growing markets in the country, providing the concept with plenty of white space. Additionally, he says Mici is not really geared toward an urban core, but more so bedroom communities and suburbia, which fits with the layout of Phoenix.
“When we talk about 30 locations, we think that there are basically 30 neighborhoods in Phoenix that we would be successful in, outside of the urban core,” Schiffer says. “So that’s a big piece for us in terms of why we like Phoenix. And then the final thing is, there is an advantage of growing in proximity to Denver with our first group, just because we will be visiting them very often to make sure that they’re supported as they open.”
Mici has prepared for this moment by treating its recent corporate locations in the past two to three years as franchise openings. An operations manual was created three years ago, and in November 2020, the chain brought on training manager Raquel Hampton, who helped open nearly 60 Smashburger restaurants in the U.S., Canada, and London. Additionally, Joe Melton, head of operations, has been with the company since 2018 and has more than two decades of experience with Outback parent Bloomin’ Brands.
Vice President of Operations Michael Miceli, who’s worked in Mici’s restaurants for 17 years and “knows the brand backwards and forwards,” will be in charge of new franchise openings. Vice President of Brand Strategy Kim Miceli will oversee the assimilation of Mici’s identity in upcoming new markets, and then there’s Stanton, who previously served as chief development officer of WellBiz Brands, a parent of health and wellness franchisees.
“Really a lot of it is the process, but also just having the right people in place to support those franchisees so that they’re not opening on an island,” Schiffer says. “We want them to have a very easy time opening restaurants and be much more focused on how to operate them once they’re open rather than, ‘How do I get this thing open?’ and ‘How do I get trained?’ We just want them to focus on their team and their guests—that is our goal.”
As for corporate growth, Schiffer believes there’s space for 30 restaurants. Right now, Mici has a presence in Denver and Colorado Springs, but Northern markets like Fort Collins, Boulder, Loveland, and Longmont also have potential, the CEO says.
The chain’s seventh corporate store will be a new, roughly 1,000-square-foot takeout/delivery only format opening in Colorado Springs in December. The venture is Mici’s acknowledgement that dine-in will never return to pre-pandemic levels, Schiffer explains, as customers have become used to the convenience of delivery and pickup. Off-premises is mixing about 80 percent in the six open locations.
The plan is to test the model and prepare it for franchise use in the future.
“When we think about a pickup and delivery model, if we’re able to be successful in that and run at about 80 percent of sales of one of our other stores, that’ll make for a very strong cash-on-cash return out of a 1,000-square-foot space with very limited rent,” Schiffer says. “We would expect to have better operating margins out of a store like that.”
Mici is also ensuring it hands off a model with operational efficiency. For instance, President Jeff Miceli has spent years perfecting the Mici-Z Pizza Press, a creation that allows someone with no experience to make a large hand-tossed pizza with about an hour of training. The invention, which has a utility patent, doubled throughput. After fixing the bottleneck of making pizza, Jeff improved cooking quality by retrofitting restaurants with conveyor-belt brick ovens that prevent heat loss.
More recently, the restaurateur has worked on a system in which inbound phone calls are outsourced to a call center, which improves labor productivity inside stores. Papa John’s implemented a similar innovation, called Papa Call. The call center is being tested at two of Mici’s units. Additionally, Jeff is looking to create a pickup shelf similar to Chipotle, but with insulation so customers are assured hot products when they arrive for their orders.
Mici expects to double in size to about 13 to 14 stores by the end of 2022. The goal is to not only bolster its corporate presence, but also focus on franchisee success.
“Our whole team and our whole office here is working on putting those processes in place and having great openings for our first franchisees,” Schiffer says. “ Should be a very exciting year.”