In Volatile Times, Little Caesars Believes it's Equipped to Grow

    The pizza brand says it can expand to greater heights thanks to its streamlined model and new development executive Patrick Cunningham, who came from Inspire Brands. 

    Web Exclusives | December 28, 2022 | Ben Coley
    Little Caesars pepperoni pizza.
    Little Caesars
    Little Caesars opened around 100 restaurants in Latin America this year.

    This year marked Jeremy Vitaro’s first full calendar as Little Caesars chief development officer, and in that time, quite a few observations have stood out to him.

    To begin, he applauds the brand’s ability to move across markets and existing operators’ ability to scale, like Vicki Dunn-Marshall, a longtime franchisee who's developed two dozen restaurants across multiple states. Internationally, the pizza chain recently opened in the U.K. after more than a year of planning and finding the right franchise groups. The first debuted in Derby and more are on the way in Liverpool and London. In the next couple of weeks, Little Caesars will come to Portugal, which will be the company’s 27th country. Then there’s the core Latin America market, including Mexico, where the brand should open about 100 stores this year.

    Vitaro also pointed to the strong management team around him that’s powered development.

    “Folks from all over the industry that just bring a lot of credibility and knowledge and relationships," says Vitaro, describing his coworkers. "Bringing those folks in to transform how we develop, how we use technology, [the operators] that we've been able to bring on the franchisee side—again, thanks to the vision that we've laid out and the relationships. I think all of that, I'm really, really pleased with and really proud of. And maybe more specifically a lot of really strong multi-unit deals and groups both on the new and the existing franchisee side really energizing our system.”

    One of the biggest recent hires is Patrick Cunningham, who came on as vice president of U.S. development. The industry veteran spent 16 years rising through the ranks at Dunkin’, eventually reaching director of operations. With Inspire Brands, who purchased Dunkin’ and Baskin-Robbins for $11.3 billion in late 2020, he served as senior director of franchising.

    Vitaro describes Cunningham as an executive with longstanding, deep relationships and one who approaches expansion with trust, integrity, and optimism. He would know as well as anyone since the two spent more than 15 years working together at Dunkin’.

    That’s only a portion of momentum, Vitaro says. There’s also Little Caesars’ official pizza sponsorship with the NFL and the company’s partnership with popular video game Call of Duty.

    “It enables candidates to see the brand I think in a different light and lets us just communicate to the candidates just how big we are, which isn't always evident,” Vitaro says.

    READ MORELittle Caesars' Development Journey Takes Aggressive Turn

    Little Caesars’ unit count dropped by 81 restaurants between 2019 and 2021, but the brand is still close to 4,200 units and earned roughly $4.2 billion in U.S. sales in 2021. Among all U.S. pizza chains, it’s the third-biggest in domestic unit count and sales (Domino’s and Pizza Hut are above), according to this year’s QSR 50. Vitaro says some operators are surprised by these figures—both in the U.S. and internationally—mostly because the company is family owned and prefers to keep much of its business private.

    The beauty for Little Caesars is that it has a model fit for today’s consumer. The chain’s hero item is its value-conscious $5.55 pepperoni pizza. It was previously $5, but costs increased due to inflation. The pizza, however, does come with 33 percent more pepperonis.

    In 2018, the chain introduced its pizza portal, a convenient locker system for customers to pick up orders, and right before COVID hit, it officially launched third-party delivery in conjunction with the Super Bowl. Additionally, prototypes are small and efficient, allowing for a streamlined labor model.

    “That combination is changing our consumer base,” Vitaro says. “It’s letting us play in a larger field and with different consumers that are wanting customization. So what that means for development, I think it's giving us a lot more opportunity to go into new places—even within existing markets—than I had expected.”

    “I knew we had a lot of opportunity in new markets when I got here, for example, the Northeast is a big new area for us, but I didn't realize how much opportunity there was in existing markets,” he adds. “And we need to do things differently. We need to continue to emphasize digital and delivery particularly in those areas, but it's just a lot of opportunity as long as we continue to get it right.”

    In terms of new markets, Little Caesars is looking in areas from Washington, D.C. to Boston and working with franchisees that Vitaro and Cunningham have worked with in the past. The Pacific Northwest, Denver, parts of Florida, and parts of North Carolina are also under consideration. For current trade areas, Little Caesars is using cell phone mapping technology to figure out the best way to infill between existing restaurants. Globally speaking, the pizza chain is finding opportunities in South America (Chile, Peru, Colombia), Europe (the Netherlands, Germany, Poland, and France), and the Middle East (United Arab Emirates, Kuwait, and Qatar).

    Vitaro says Little Caesars prefers to sign multi-unit deals between five-10 units, depending on the strength of the operator. However, the brand wants to remain a place where entrepreneurs can sign on for single stores and continue to give special opportunities to first responders and veterans. Vitaro notes that many of Little Caesars best franchisees began as single-unit owners and scaled to 15-25 restaurants.

    “We want to be progressive and systematic about how we grow,” Vitaro says. “We got be careful not to be completely opportunistic. We want to go in a logical way, a hub-and-spoke way to continue to build upon the foundation that we've got.”

    Heading into 2023, Little Caesars is aware of the challenging economic backdrop and what operators are feeling because it has a system of nearly 600 company units. Vitaro says the chain is built to overcome these obstacles because of its pricing, labor model, and high transactions.

    “From the time that I've come in, and then the ability to continue building this really strong team and bring in great franchisees and energize our existing franchisees, all of that is setting us up really well for 2023,” Vitaro says. “From a development perspective, we're going to have an even stronger year in 2023 than we did in 2022, which was already significantly up from prior years. So we're feeling really good about the trajectory. Even though it's not an easy environment, we're feeling very good about how we fit into it.”