Start to Finish: What Inspires Execs | November 2016

How Sbarro’s CEO is Revitalizing the Brand

David Karam shares his journey, from serving as a top Wendy's executive to leading a restructuring of the pizza chain.
David Karam assumed the role of CEO at Sbarro in 2013. Sbarro

My first foodservice job was at Wendy’s when I turned 14. I worked at store No. 2 with a number of founder Dave Thomas’ kids. It was really exciting because Wendy’s was a small chain that was growing rapidly. My dad became a franchisee and opened his first unit when I was in college. After four years in public accounting, I came to work for him. We grew it from 13 stores, and today we have 215 Wendy’s.

When Trian Partners acquired Wendy’s, CEO Nelson Peltz asked if I would run the brand, and I did that from 2008 to 2011. We got the business back on track and grew our market share; we actually overtook Burger King. I left at the end of 2011 and was going to focus on fast casual, which I really believe is an emerging segment. But then some investors reached out and asked if I would help them with Sbarro.

I assumed the role of CEO in 2013 and realized the business was very heavily overleveraged. While it had gone through a restructuring a few years earlier, Sbarro had left a lot of debt on the books. We developed a plan for a second restructuring. Sbarro had a broad menu offering, and I felt there was a big opportunity to tighten the positioning around pizza. We eliminated probably 30 or 40 percent of the menu items. I also relocated the company to Columbus, Ohio, which is where I live and where [Karam’s holdings group] Cedar Enterprises is based. We closed about 170 restaurants, shed almost all of our debt, and put the business on very sound financial footing.

At the same time as the restructuring, we were also developing our fast-casual pizza concept called Cucinova. We ended up with two brands in the pizza space: One is what I would call our mainstream quick serve, and the other is our fast casual, which is more premium.

It’s been a very hectic three years, and I feel very proud of the work that our team has accomplished with the Sbarro and Cucinova brands. We’ve attracted a lot of new franchisees and have the brand growing again. We’ve got a long way to go, but I think we’ve got a very bright future.


What was your first job?

Paper route.

What’s your favorite menu item at Sbarro?

A slice of pepperoni pizza; it’s delicious.

What is your favorite restaurant or type of food, excluding Sbarro?

I love hamburgers.

What are some of your interests outside of the business?

My family is at the center. The other two for me are my Catholic faith, and I enjoy golf.

Who has inspired you as a leader?

Former Wendy’s CEO Gordon Teter and Pope John Paul II.

What is the best piece of advice you think quick-serve executives should hear?

Fortitude, patience, and discipline are qualities that are really needed to succeed in this industry. It’s a crowded, competitive industry, and it just takes a lot of fortitude.

Comments

It is amazing how many successful leaders started as paperboys, Warren Buffet, Tom Cruise, Walt Disney and on and on. Those days are gone and it will be curious to see what if any your childhood experiences will be foundational in future leaders.

Add new comment