Pizza staff cheesed off

The franchisee in central Ontario, who asked not to be named for fear of reprisals from head office, says he may be forced to declare bankruptcy. The money-losing store has been up for sale since May, but has attracted no interest from potential buyers.

The Globe and Mail
October 12, 1993

Pizza staff cheesed off
Pizza Pizza guarantees that employees will smile or the pizza is free but the result has been scowls among some unhappy franchisees
John Heinzl

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Canada’s largest pizza chain now says it won’t deliver on a controversial promise to fire non-smiling employees.

Even so, Pizza Pizza Ltd.’s smile-or-it’s-free guarantee is eliciting grimaces from some unhappy franchisees.

“I had problems with a customer last Sunday,” said one Pizza Pizza store owner in Toronto. To avoid having to hand over a free pizza to the abusive patron, “I was smiling and I was crying,” she said.

Each Friday and Saturday at another Pizza Pizza outlet, the owner instructs employees to remove buttons advertising the new guarantee – just before 150 or more drunk patrons arrive.

“Especially at bar rush, it gets very difficult to deal with customers who are harassing you about a button,” said the owner of the store in central Ontario.

The smile campaign, while boosting sales at some outlets, appears to have come at an unhappy time for many Pizza Pizza franchisees. Sources say some of the 227 stores across recession-hit Ontario are losing money and that owners are attempting to sell their businesses – often at a loss.

Most of the franchisees’ troubles began long before the campaign was launched last month – a result of the recession, the goods and services tax and cut-throat competition.

Earlier this year, Pizza Pizza withdrew from the Quebec market, closing its eight locations amid the weak economy. And competition in Ontario, from upstarts such as 241 Pizza, appears to be taking a bite out of Pizza Pizza sales.

“With this new, improved and increased competition, some of you have been suffering with lower sales,” says a letter sent to stores from Pizza Pizza chairman and founder Michael Overs.

At the same time, Mr. Overs blames the franchisees themselves for poor sales.

“What went wrong? To be perfectly accurate – some of you! That’s right, if your sales are down, it’s because you let them down.”

The franchisee in central Ontario, who asked not to be named for fear of reprisals from head office, says he may be forced to declare bankruptcy. The money-losing store has been up for sale since May, but has attracted no interest from potential buyers.

In the past few months, franchisees in Cornwall, Kitchener and Bradford have either walked away from their investments or been forced out by the company for unpaid debts. Sources say a Pizza Pizza franchise can cost from $125,000 to $200,000, with 4 to 6 per cent of sales going to head office in Toronto.

Pizza Pizza spokesman Lorn Austin said he could not confirm or deny the changes of ownership, citing competitive reasons.

Pizza Pizza, a private company projects sales this year of about $200-million.

As for the smile campaign, Mr. Austin says it was never the company’s policy to fire non-smilers. He said his comment last month that they would be “history” did not apply to the “one time” offenders. “I don’t know of anybody who has been fired for not smiling,” he said.

However, he added that “the bottom line remains the same. If they’re not friendly and they’re not courteous, then they’re not going to be working for us.” Ultimately, franchise owners decide whether to terminate an employee, he said.


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Risks: Lorn Austin, Lorne Austin, Lawrence Austin, Bankruptcy, Retaliation, Blame the franchisee, Franchisee decision, bankruptcy, Franchisee decision, abandonment, Intimidation, Canada, 19931012 Pizza staff

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