Rosati’s Pizza

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Rosati’s Pizza is expanding its famous pizza franchise empire into new states.

By Kat Zeman

There’s nothing quite like a Chicago-style pizza. No matter what style you like - stuffed, thin-crust or a pan-cooked deep-dish smothered with cheese and chunky tomato sauce – this Italian-inspired pie has long been a staple of the Windy City.

Rosati’s Pizza, the second-largest local chain of restaurants in the Chicago metropolitan area, is banking on that.

It has been working its way into the hearts of Chicagoans through their stomachs since 1964. Last year, the pizzeria started franchising. Since then, it has opened more than 15 new stores, bringing its total to 185 stores in 16 states.

“We expect to open 15 new locations throughout the country each year,” President Daniel Perillo says. “Right now we have 105 stores in development. Those stores will be operational within three to five years … Our brand has been very popular and within 10 years our goal is to hit the 400 mark.”

Pizzalicious

Not all pizzas are created equal. The taste of a pizza depends on its crust, sauce, toppings and the method of cooking. Rosati’s prides itself on the taste of its pizzas. Regardless of style, they are prepared with homemade sauces and peppered with fresh ingredients.

“Our tag is ‘keep it real,’” Perillo says. “We make our sauce every day. It’s a family recipe. No canned sauce, and dough is made fresh every day.”

Rosati’s menu offers stuffed, thin-crust, deep-dish and double dough pizzas. Its stuffed pizza, with the ingredients positioned between two crusts, is baked for 40 minutes and topped with sauce. Its deep dish is pan-cooked.

Thin-crust pizza is a best seller in the Chicago area, but deep-dish reigns supreme outside of Chicago, Perillo says. “We sell a lot of deep-dish outside of Illinois,” he says. “Our largest opening in history was outside of Chicago.”

Expanding Empire

America is full of pizzaterians. According to Rosati’s, the retail pizza market is a $40 billion industry that accounts for nearly 10 percent of total foodservice sales in America. Roughly 90 percent of Americans enjoy pizza.

As it expands its pizza empire, Rosati’s looks for certain qualifications in its franchisees. “We’re looking for good businesspeople with a good work ethic and an American heart,” Perillo says.Rosatis Pizza Fact Box

Entrepreneurs interested in opening a Rosati’s franchise must have at least $100,000 in liquid assets and a net worth of $400,000. The company charges a franchisee fee of $25,000 per location and an ongoing royalty fee of 5 percent. It also collects a 1 percent advertising and marketing fee.

Rosati’s is a preferred vendor with the U.S. Small Business Administration (SBA). “That makes it easier for the franchisees to obtain loans,” Perillo says. “We’ve done a lot of SBA loans and they recognize us.”

Franchisees can choose three different Rosati’s store models. The most popular is the carry-out model. These 1,200- to 1,300-square-foot stores generally cost around $360,000 to open. A full bar and restaurant option is the most expensive. Its start-up costs range between $600,000 and $800,000 for a 3,500-square-foot restaurant with about 100 seats and a bar. Finally, there’s a hybrid model at roughly $450,000 for a 2,000-square-foot store with about 20 seats.

“We’ve grown the most with our carry-out delivery model,” Perillo says. “It’s less expensive with less labor. It’s a very simple model.”

Rosati’s start-up program includes store design, facility construction, site selection and field assistance. The company works with a general contractor – Naperville, Ill.-based B3 Construction – along with various brokers and architects that are available to assist franchisees.  

They will also receive six weeks of training at one of Rosati’s corporate store in the Chicago area. After that, franchisees receive on-site assistance from two to four corporate trainers for two weeks after opening. Rosati’s also assists its franchisees with soft openings and grand openings, and offers ongoing support once the store opens.

“The No. 1 reason for our success is the food and No. 2 is the location – we target areas where they don’t have Chicago pizza,” Perillo says. “We have a lot of stores in Chicago so the growth for us is outside of Chicago.”

 

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