Rosati's Pizza

Over 45 years the Rosati family has expanded its pizza business to more than 150 franchised locations from Ohio to Texas and Arizona.

One happy payoff for the Rosatis:  they moved a year ago into a new office location in Warrenville, overlooking a pond that reminds them of their summer retreat in Door County, Wisconsin.

 “We work here and it reminds us of when we’re not working, we want to be in Door County," explained Annamarie Bensfield, one of the five second-generation siblings now running the company. "Ninety-nine percent of the time we’re here, but we need something to remind us of what we’re working for.”

The business started in 1964 when the current managers' uncles opened up a store in Mt. Prospect. Not long after that initial success Rosati’s Franchise and Development LLC began branching out, expanding through waves of franchising in the '70s, '80s, '90s and today to 154 locations. The early franchising operations weren’t as successful as they are currently, Bensfield said, but they learned something with every store they opened over the past 30 years. 

 
“We realized that we needed to put an infrastructure together to support them,” Bensfield said, “We have a mission. We have a plan of action and we have all the tools in place to take it to the next level. … We learned over the years what we needed to take it to a larger scale, and now it’s here.”

The Rosati concept and mission strive for a neighborhood restaurant experience with high quality, home-style food. “We’re cooking at home in every store,” said  Jeff Rosati, the chief financial officer. “There might be some minor variations, but it’s always going to taste home cooked. That’s going to be the constant. They just made the sauce this morning. They just made the dough this morning. They just cut the vegetables. They took the cheese from a block and shredded it this morning. It tastes different.”

Scott Selke, owner of an Arizona franchise, confirmed that pizzas are made from scratch at each location. “Places like Pizza Hut and Dominoes, they have what I call ‘flavored bread.’ It’s a loaf of bread without a lot of ingredients,” Selke explained. “My goal is just to get people to try us and realize the value.”

A recent customer at the Lincolnwood Rosati’s ate a single slice of pepperoni pizza while she waited for her stuffed spinach pizza. “It’s worth the wait,” she said. “They use fresh spinach. I like it better than Giordano’s.”

A survey taken by Rosati’s Franchise and Development LLC of eight stores put the annual sales at $490,000 to $1,300,000 each. The average was about $800,000 per year.  A spokeswoman for Chicago-based researcher Technomic Inc. estimated 2007 total revenues for the Rosati’s chain at $87 million.

While Rosati’s has grown through franchising, it hasn't exploded like other restaurant chains. Rick Rosati, the president, noted that Papa John’s International Inc. started later, in 1984, and currently has more than 3,000 stores generating 2007 revenue of over $1 billion.

“They don’t have the same concepts,” Bensfield explained. “They’re not making their food from scratch. We took a little different detour.”

A Rosati's franchisee must make a substantial financial commitment. The initial franchise fee to open a Rosati’s Pizza restaurant is $25,000. Then the owner-operator is required to pay 5 percent of gross sales to Rosati’s Franchise and Development LLC. Costs for the equipment and technology that Rosati’s requires can range from $75,000 to $110,000. Total costs for the initial investment and first three months of business are estimated at $200,000 to $326,000.

 
Jeff Rosati claims that their goal is not to be one of the big chains. Instead, they want to expand the Rosati’s concept as far as they can while maintaining the same standards. “If we have to sacrifice growth for quality, we’re going to do it,” he said. “A typical franchise is only going to go with growth. The more units you open, that is successful. Our success is our reputation that it’s going to be good, home cooked Italian food.”

The “learning curve” that supported Rosati’s expansion hinged on technology, according to Rick Rosati.

“We have grown our business and we have made sure we have the best computer system, the best technology,” Bensfield said.

 
Rosati’s uses the Internet to monitor operations across the country in a way that would not have been possible during the first attempts at franchising 30 years ago. All the kitchens nationwide are recorded through video surveillance and can be monitored through the Warrenville office.

“We can log into Texas or Vegas and watch a guy making a pizza and say, ‘This guy’s too slow’,” Jeff Rosati explained. 

The family maintains an infrastructure that keeps controls on equipment, orders and marketing. This business model evolved through years of struggling to understand “what it takes to train a person that has no restaurant experience,” Rick Rosati said.

“That gives us the ability to identify the problem, the right problem,” Rick Rosati said. “Ten years ago we would be throwing money at a problem that didn’t exist. … With technology now we can get it down to knowing exactly what the problem is.”

While the stores that have sprung up across the country are independently owned and operated, the Rosati family takes a personal interest in each new franchise. “It’s a culture … that we think you can only get from the people whose name is on the door,” Jeff Rosati said. “That’s the only way these stores are going to make it. That’s what we have to offer.”

Selke said that the Rosati family members still visit his store locations. “It’s not like they sell it to you and they go away,” he said. “They have a vested interest in protecting their name.”

Fred Rosati, now 91, started out in the pizza distribution business decades before Rosati’s Pizza opened its doors, joining the company after its start.  He calls himself “retired,” but his children say he still shows up at the office almost every day and he attends many of the store openings. He attributes the chain’s recent nationwide success to the memorable product he believes Rosati's offers at every store.

Satisfaction with that product has spread from the Chicago area to the other stores.

“Two months ago we opened a store in Arkansas,” described Fred Rosati. “One evening I was there, there were six people in the store and five were from Illinois. One was from Mt. Prospect, another from Downers Grove, another from Palatine. They were so happy to have something from home.”

Selke has had similar experiences with the second- and third-generation transplants to Arizona from Chicago. “They recognized the name and they came to me praying, ‘It this the real thing? Tell me it is,” Selke said.