Kevin King knew what he was coming back to. And that might be phrasing an old adage in its lightest terms. King met the Grote family nearly 50 years ago. He went to grade school and was college roommates of Tom Grote, brother of Jane Grote Abell, and son of Jim Grote, who started Donatos in 1963 as a sophomore at Ohio State University.
But the truth is, King’s familiarity with the Grote family held more sway the first go-around, when he joined Donatos in 1990, serving as VP of development until 2003, than it did when he returned as president three years ago—a role that elevated to CEO this past summer when Tom Krouse, Jane’s husband, retired.
King took five years of Domino’s experience and helped Donatos grow outside its base of Columbus during his opening stint. In between Donatos stops, he worked at Papa Murphy’s as SVP of operations and CDO, watching the brand scale from about 400 to 700 units, and then directed development as CDO of Smoothie King for nearly six years.
He always kept in touch. King would travel to Columbus and talk shop, namely franchising and growth.
Krouse approached King with the idea to return at a Charlotte conference they were speaking at. They got a drink and King’s question was, “What’s the average EBITDA of a franchise at Donatos?” Krouse knew he found his successor.
Beyond King’s acumen in franchising growth, however, he simply understood the family-centric brand and its intrinsic value from an intimate angle. “I know what’s important to them,” he says.
That history made the decision to return and ultimately steer the ship easier.
Yet King had many of the same early observations Krouse did when he joined in 2000 after 18 years with Wendy’s (he became CEO in 2004). Donatos was a brand with culture worthy of a book (Jane wrote one in 2015) and a product fans sought around the country. It’s the financial model, though, that needed shoring up if Donatos wanted to target repeatable scale.
Donatos doubled in size during Krouse’s CEO tenure and expanded its franchise system from 10 partners to 45. Average-unit sales climbed to 60 percent higher than the pizza industry average ($1.160 million year-end 2023). Donatos added five locations in 2023 to get to 178 restaurants, 127 of which were franchised.
King feels growth is as much a mindset as a blueprint. And some companies, even with the best intentions, erect barriers without realizing. These can be everything from the approval process to flexibility, targets, goals, and the kind of partners on the radar.
“So redefining that and trying to make sure that at every step of the process we eliminate those barriers to growth,” King says of his outset plans.
Krouse guided the brand to a strong position from an economic standpoint and got franchisee returns back into focus. Then, King looked at the “other things.”
“Everybody says they want to go after the MUMBOs, or the multi-brand guys, or I only want to do [deals with] people who are going to commit to doing whole markets or 20 stores or 50 stores,” he says. “The reality is most brands aren’t very attractive to those guys. Most of them want to buy EBITDA and then grow from there. Donatos didn’t have EBITDA to sell them.”
It didn’t have, say, a 20-store package to offer somebody and have them commit to buying 10 and beyond. Does the brand want somebody with that kind of influence and power?
“Zeroing in on who do we want as franchise partners and having a strategy that’s replicable and make sense for growth—all those things,” King says.
Simply, Donatos needed to locate the roadblocks. King’s time in franchising covered a lot of bases but there’s one you can’t sidestep, he says—franchise partner EBITDA. It has to be a range where operators make money. If not, there’s no validation to grow.
EBITDA at the restaurant level is table stakes, King says. You can get people excited about building any brand. But they’re not going to develop a second store if they don’t see a path to profitability. So that’s why he asked that question of Krouse first.
Now, he has three main green flags to chase.
One is franchise partner EBITDA, as noted. He believes operators need to be well above 15 percent EBITDA margins at the unit level (the closer to 20 percent the better).
Consistent same-store sales growth. Partners want to see a concept expand and not slide back, year-over-year. It’s also a key signal for when a restaurant chain is ready to get bigger.
Lastly, how do new stores open? “If you have three solid greens there,” King says, “I think your brand is set up for growth. … Each deal is going to be hard to make if one of those is yellow or red.”
From the base level, this is where King got started with Donatos. However, there have been myriad developments through a lot of fronts. One is automation—a topic Donatos knows rather well considering Jim Grote also owns a food technology innovation company called Agápe Automation (Tom Grote is the CEO).
Back in 2018, the company began renovating a building on campus with Donatos and Grote Company. The space reopened a year later as the “Edge Innovation Hub” and started devising an ecosystem rooted in automation technology. Among the inventions was the “Smart Saucer,” which sauces a 14-inch pizza in 7 seconds. “What’s beautiful about that is it’s perfectly consistent every time,” King says. “So you get the exact right portions, all the way to the edge. And nobody can sauce a pizza in 7 seconds.” Today, it’s not in every store, he adds, but “a lot” of them. While the device saves labor, the real hook is the mentioned consistency, King says.
The group also invented a machine that slices pepperoni and drops it on the pizza in the proper spot. Donatos is famous for the point it places 100 of them on each pepperoni pizza. This automation can build a 14-inch pizza in about 45 seconds. If a human did that, King says, it would be a mess. Here, it’s uniform, each time. Additionally, this is a process that differentiates Donatos because it fresh slices pepperoni, kind of like how Jersey Mike’s does so for sandwiches. “If we can do that with pepperoni, we’re giving you a better product,” King says. “Every step of automation that we do is about how do we give the guest a better experience, better quality, better experience.”
The brand is also deploying call center automation. It worked with a partner to use AI on all restaurants a year or so ago. This is a better experience, Kings says, especially when you look at hiring younger people in restaurants. These days, not everybody has phone skills. They don’t want to pick up and take an order inside a busy restaurant.
Another piece is a pizza vending machine Donatos is launching in partnership with robotics company Appetronix. The plan is to install the model mid- to late-April in the Columbus airport. This fully autonomous setup is “pretty slick,” King says. It’s a bit on the larger side but he expects future versions to scale down. It uses some of the equipment mentioned earlier, along with robotic arms, and Donatos’ dough technology to deliver a freshly made pizza to a guest in five or six minutes. “We’re excited about it,” he says.
More innovation and the path forward
Overall, the larger tech puzzle for Donatos is coming together. It has its own tech stack and internal systems. Donatos runs all orders through an online environment—call center, third party, online. And those flow through the brand’s proprietary options.
“Pizza brands are lucky in a lot of ways,” King says. “We have captured phone number and address information from guests for years. So how do we use that information to continue to grow our brand? How do we use AI with our customer data? What business insights can that give us?”
Donatos also continues to reinforce its partnership with Red Robin, which began on a micro level in the summer of 2018 when the burger chain started serving pizza at four restaurants near each chain’s stronghold—in Cleveland, Ohio, and Colorado Springs, Colorado. Essentially, Red Robin nests (not co-brands) Donatos within restaurants and pays a percentage of revenue to the company. It gave Red Robin an immediate off-premises driver, but also a menu item that addressed veto votes. Early on, it was a strong appetizer pull, the company reported. For Donatos, it was a rapid avenue to national exposure.
Growth has had its stops and starts over the years, namely thanks to COVID and leadership changes, but King says there remains “huge opportunity inside that partnership.”
“That’s been a great relationship and a great brand,” he says. “They do a great job executing for us. We have people out in their restaurants working with their people. That continues to be a fantastic partnership with cultures that are aligned. We like their management team, we like their brand, we like the associates in their restaurants, and what they stand for.”
Going forward for Donatos, Kings says he set up four pillars to emphasize over the next several years.
The first centers on passionate people. The second, innovation. The third, Donatos’ brand itself. And, finally, growth.
The premise is straightforward—start with people. King put a word next to the vision: “passionate.” Donatos wants “passionate” guests. It’ll get there with great pizza and experience. It needs “passionate” employees. Donatos will achieve that with training and by building excitement through an improved work environment. Lastly, can it recruit and foster “passionate” franchise partners? Donatos won’t grow without buy-in, King says.
These ideals carry over to food innovation, too. King says Donatos wants to lead with flavor, but also make its food better for customers. It hopes to have the cleanest ingredients and get ahead of trends and potential regulations.
The brand side, however, is where a visible shift recently went public with a “Gotta love more” tagline. Launched in February, it’s a campaign that reflects “delivering more of what matters” to customers, employees, and franchisees. It was integrated across all touchpoints.
King says the tagline will help Donatos address value concerns considering it’s generally on the pricier side of the pizza category. Consider it a spotlight on “why.” The brand launched a $5 Pizza Pals platform where diners can add a $5 side dish to any large pizza purchase, from wings to subs, and more.
Working on the distribution of message is a vital component as well. Donatos, like most brands, can’t just buy print ads and stuff mailboxes anymore. It can’t even focus solely on broadcast TV. Getting Donatos through to guests in a “splintered streaming world” is something it’s constantly adjusting.
The “growth” pillar will unfold on a few levels. How can Donatos grow traditional stores? It opened its first units in Texas in November and will debut a third in April. Non-traditional alternative formats are a cog as well, King says. That includes the Red Robin partnership and vending machines, as well as other non-trad outlets where automation might provide an unlock.
King also hinted there could be opportunities for consolidation it the pizza category through acquisitions. “This is not a 2025 piece,” he explains, “this is probably the next five years that we’ll continue to work on these four pillars. Excited what they can do for Donatos. We really kicked it off strong on the ‘Gotta love more’ side. But we’re really attacking all four of these this year in 2025 and beyond.”
