Breaking into New England isn’t easy for an outsider. Bill Van Epps learned that firsthand as a top executive at Papa John’s, the Kentucky pizza company that was unable to gain much of a foothold here under his watch. This place can be fiercely loyal.
Now, Van Epps is on the other side of that regional loyalty, running two of our most well-known homegrown chains: Papa Gino’s Pizzeria and D’Angelo Grilled Sandwiches.
He started on Monday as chief executive of their new holding company, New England Authentic Eats, as they emerge from bankruptcy after private equity firm Wynnchurch Capital acquired them for $20 million.
Van Epps knows he can’t rely simply on nostalgia to sell more pies. He is preparing to spend money that the previous private equity owner, Bunker Hill Capital, either didn’t have or was unwilling to use.
Some changes were set in motion during the bankruptcy; Van Epps was involved as a consultant to Wynnchurch, which had been the chains’ largest creditor. Those fixes seem simple, but effective. Bring back the bonus program for store managers. Improve the restaurant staffing levels. Replace exterior and interior lighting. Launch a new loyalty program that pings people with discounts on their phones.
Longer term, Van Epps will test various store designs with a plan of modernizing the look of the company’s 96 Papa Gino’s and 43 D’Angelo locations (alongside 37 franchised D’Angelo shops). His team will also test various menu items and drop those that aren’t popular. (He has no plans to touch the core pizza recipe or D’Angelo’s popular grilled sandwiches.) He also wants to try to bring back beer and wine to Papa Gino’s.
Then there are his aggressive expansion goals. The company abruptly shuttered nearly 100 restaurants at the time of the Chapter 11 filing in November, essentially wiping out leases for dozens of poor-performing shops overnight. Van Epps now wants to build the business back, in part by seeking higher-traffic locations in communities that were abruptly exited. He talks about a future expansion into New York, or maybe further south to New Jersey, possibly even Florida.
The new stores, though, will be smaller. The typical Papa Gino’s restaurant occupies about 3,500 square feet. The new locations will be closer to 2,000. He anticipates exceeding $130 million in revenue this year and expects to grow from there.
Van Epps left Papa John’s in 2009, soon after his boss Nigel Travis departed to lead another Massachusetts company, Dunkin’ Brands. During his eight years there, Van Epps built valuable relationships. He’s bringing back a few former colleagues to join the leadership team at the Papa Gino’s headquarters in Dedham.
But he still needs to rally the troops, all 2,500 of them. Bankruptcies can be unhappy experiences: This one was no exception, what with more than a third of the store count evaporating, and all the bad blood and publicity that went along with it.
The chains still face the same issues that cooked the previous ownership — including intense competition and rising labor costs. It’s survival of the fittest. He’s determined to improve customer retention: The more satisfied the customer, he says, the more often they return, and the more they eventually spend.
The Full Contact agency is back on board to promote both chains, after playing a diminished role in the company’s last year under Bunker Hill. Marty Donohue, creative director of the Boston ad agency, says the new owners understand the Papa Gino’s/D’Angelo legacy and are willing to invest in its revival.
New England’s loyalty serves as a solid foundation. We’ll soon learn whether Van Epps and his team can effectively build on that foundation, while keeping other chains at bay.Jon Chesto can be reached at email@example.com. Follow him on Twitter @jonchesto.