Cici’s is becoming more like Chuck E. Cheese.
Jeff Hetsel, the president and COO of the pizza buffet chain, joined me on the Restaurant Business podcast “A Deeper Dive” to discuss a variety of topics, including its big move into video games.
Cici’s struggled going into and during the pandemic, filing for bankruptcy in early 2021, but it emerged quickly with new owners in SSCP Management and Gala Capital Partners. The brand has made numerous changes since then, including a big move into eatertainment.
Jeff discusses numerous issues in the podcast, including labor costs and efficiency and technology. We also talk a lot about pizza.
Check out this transcript of the podcast.
Jonathan Maze: I’m here with Jeff Hetzel. Jeff, welcome to the podcast.
Jeff Hetsel: Well, thank you very much for having me today, Jonathan.
JM: Alright, I'm based on your shirt. I can see that you work for Cici’s. What's going on in Cici’s land?
JH: Everything, lots of changes, lots going on. And it's been an incredible year last year and getting off to a great start this year.
JM: One of the things, I think one of the more interesting things that CICI’S has done in recent years is becoming more of a games concept. How's that going? Is that still something big for you guys? Tell us a little bit about that.
JH: Yeah, the game thing has really been awesome for us. We've had games in the stores from the very beginning, but really now games have changed so much. The games that folks have in their phones for a long time may have been better than what we had in the restaurants. So we've really invested heavily in it. The entertainment segment of our industry has gone crazy and there's so many options, but.
We always had a really good focus on the quality and the pizza and those kind of things. But the games were always just relegated to kind of a small little tiny bit of real estate in the stores. And now we have one, two, three, and we're building a 4,000 square foot game room, actually at one of our new locations under construction in Georgia. So the games has become a huge deal. The franchisees love it.
They've let it, most of the great ideas always come from the franchisees in the stores anyway. So, they've let it, they really embrace it. We had a franchise advisory council meeting yesterday and a good couple of hours of it spent on how we can enhance and leverage the games to really make it a wonderful dining experience for the whole family.
JM: Yeah, yeah. You know, as an aside, if you think of, you know, you think of some of the best ideas, certainly in the fast food industry over the years, the Egg McMuffin, the Big Mac, the Subway's $5 footlong, though Subway franchisees don't like that very much now. And you know, you probably come up with a massive list.
If you give me long enough and I won't do that here, but we can come up with a ton, a huge number of things, ideas that came from franchisees. And, uh, if you got a good, always says to me, if you got a really good group of. Active and, um, aggressive operators. They'll come up with a bunch of ideas for you.
JH: Yeah, that's no doubt actually went to the Irwin, Pennsylvania, I think the Big Mac Museum restaurant right there one time and no, you're right. The great ideas do come from the field and haven't been with CICI’S since 1992. The gentleman that I ran a store with in the very beginning, now he's a 20 store franchisee. And he's also a major proponent of the game, the game part of it. He's on the FAC and he's really led the way for all of our franchisees and the games has really got the franchisees back excited about growing stores about what that does for the financial model for us. So yeah, we listen and love to listen to our FAC and all of the franchisees in general.
JM: Now, so let's talk a little bit about what does it do for the model.
JH: But from a financial standpoint, we had in a lot of cases over time, there was really no leadership or partnership with the franchisees and the games in the stores. So it just became kind of an also ran older, dusty if you will kind of token based game room and from a financial model side, they're investing in games that drive play.
We've gotten rid of the tokens and a focus on card readers, much like a Dave and Busters. The things that you put inside of those games are super critical to their suCici’sess. Kids love to win. Parents love to win a sloth with a CICI’S shirt on it or great things like that. But from a financial standpoint, as you've had so much pressure in our industry, the pressures of labor.
the pressures of food cost and all of those kind of things. The games is a highly profitable segment of our restaurant. And it's really taking that spare footage in every one of those stores and making it a partner, along with a quality product drive that profitability. But it takes very little labor. You're already paying rent, you're already paying for the air conditioning and the heat and those kind of things. The games work themselves.
JM: But now, but now you're going to the point where you're actually expanding it like a 4,000 square foot facility is a little bigger than my belief of a typical CICI’S. Yeah.
JH: Oh yeah, typical restaurants across the country probably average 4,000 square feet. The franchisees are taking on, if the space is empty next to them on the dining room side, they're expanding into that space and building a party, really a place where you can have parties and really focus in on driving in more of that, that kind of business. And we've been really supportive of it because the franchisees have gone out and done it. They've been suCici’sessful with it. They show us their results. We collect all the financials. So we're kind of up to speed on everything and how it works in their models. But it's really been a game changer for us as far as getting franchisees excited about remodeling and growing the brand. So it's been really cool to watch and be a part of and see.
JM: Did you intend that pun?
JH: Yes, sir. That was part of the show tonight.
JM: Nice, nice, awesome. So now, does it take some pressure off of your, off of the food to have that, cause games are very profitable. Once you get the game paid for, based on the numbers I've always seen at Dave and Buster's and Chuck E. Cheese over the years, that gaming room for those guys is just insane. And does that take some pressure off the food side?
JH: It absolutely takes pressure off the food side, the labor side, all the cost, drives down your occupancy cost. It really is a unbelievable asset to the financial model. And I think even more importantly, it drives traffic because there's more reasons to come if there's something else to do besides just eating. I'd love the folks to just come in and eat, but it's really important. We're not trying to be the big box, big game thing, but for the franchisees in the right market and the right mindset that want to take on that challenge, then we're more than happy to help support that. I would say the average franchisee is probably expanding their game rooms to 500 to 1,000 square feet, some a little bit more, but we do have those larger ones. And if a franchisee wants to do that, we have a model of a store that we want from a buffet standpoint and a carryout standpoint. We do a lot of catering and those kinds of things as well.
But if a franchisee wants to build those larger game rooms, we've largely been supportive of it. I'm a franchisee besides running Cici’s and our distribution company here. I'm also a franchisee at two stores. And so right along the side, the franchisees I've invested into the games. And to your point about the payoff, typically in a store when you go spend $100,000 in games in 12 months or right around there, our experience has been that we've recouped that.
So, it's really a great investment. And you have to keep investing in it. You have to rotate the games. I had a meeting this morning about in Dallas, Fort Worth. We've got eight corporate stores here. We're gonna shuffle the games, buy some new games. And the technology shows you what people are playing and how often they're playing it, what breaks down the most. So you're constantly looking at those kinds of things while your major focus is on keeping them faithful because that's our, that's our bread and butter. That's who we are.
JM: You know, the games are kind of a different business than operating a restaurant, I assume.
JH: Absolutely.
JM: Yeah. So now you're a franchisee, Cici’s is owned by a couple of franchisees, a couple of good guys. What does that do for us? How does that make, how does that change Cici’s? You've been in the business for a few years. How has that changed the business being owned by a couple of franchisees?
JH: I think the partnership, I think being partners in the company with folks that walk in the same shoes you do every day, I think I've said this before, I really believe that if you run a company, you should own a franchise of it. Because I can sit at any meeting with anybody any day and they can talk about what they think should happen in the stores and I can immediately deduce that to how much it's going to cost, how operationally difficult that would be. But it's really ingrained in me.
And SSCP and my partner, you know, Sunil, whom I deal with, you know, the most, he's a franchisee of a hundred Applebee's and 60 Sonics and all these other brands. And he knows the things he likes and doesn't like from a franchisee, franchise or relationship. And so he's been a really unbelievable sounding board for me, the entire team at SSCP has been a great sounding board. You know, for me, because our belief systems are very much the same. That franchising is a system that you get involved in and it's designed for you to have a return on that investment, right? And so it's really important, you're constantly mindful of the financial model. Everything we do should either drive sales, cut costs or enhance the experience of the guests and keep our teams safe. Everything you do, that's what franchisees wanna do.
And then by listening to your system, you know, having a two-day franchise advisory council meeting with people from all over the country and you're in your, in your office telling you, Hey, this is what we're seeing, or this is how what we think. There's a lot of change going on in CICI’S. You know, last year we invested in a new ERP system. We put a new point of sale system on every single counter. We've invested very heavy heavily on technology and now this year we're leveraging it. So, you have a franchise system that's never had a unified POS system, has never had a loyalty program that was unified throughout the whole brand, never had a party and a birthday platform. So we're ruling out all this technology and we're all hypersensitive to, we wanted to enhance their ability to drive sales, cut costs and improve their financial models, but at the same time not be disruptive. So it's a, it's a balancing act and I'm one of those everything now kind of people I want to move and I like to make decisions in a fashion where we're not wasting too much time. But bringing the franchise advisory council along, bringing the franchisee along is very, very important.
JM: So, you mentioned a loyalty program. Tell me about that.
JH: Well, we've never, when you don't have a unified POS system, it's very difficult to have that loyalty program. And our, it's amazing how many folks come into Cici’s multiple times a week. We have very, very loyal raving fans. And for lunch, you know, we're 8.99, all you can eat pizza, pasta, salad, dessert. We'll make you whatever you want, whatever kind of pizza you want. And at the same time, you can have as much as you want. And I was talking to someone the other day.
We were talking about 8.99 and they're like, wow, this smoothie I just I have in my hand right now costs 15 bucks. So it's, you know, it's a, it's, uh, you know, folks, you know, part of what is ingrained in CICI’S's DNA is we're the best pizza value anywhere, the best pizza value anywhere at TVPVA. It's on the license plate of my car. It's on the wall in our restaurants. It's on our pizza boxes. We have to be an unbelievable value, but you know, value has a lot more to do than price.
It's about quality, it's about variety. I think value also equates to fun. So, you know, it's really, really critical to us that we always remain the best pizza value anywhere, but you have to continue to innovate. You have to embrace technology and games and be willing to look at things outside of the scope of what you normally do.
JM: You mentioned labor. I want to ask you a little bit about that. What's, from your perspective, what's the state of, what's the labor environment right now? Like, what's that like?
JH: I think from my perspective, obviously, we all were really struggling with it over the last couple of years. Folks just opted in to not working and those kinds of things, but the available labor pool was very small. We are not struggling with that. We are really fortunate that through a partnership with our SSCP and our partners and with our training department, each year we have a really big hiring push where we go out and spendmoney out there in the media. You've got a very robust hiring system that we utilize for all of the restaurants for managers and team members. But I think the most important thing is not so much the hiring, it's the keeping. Most brands, if they haven't already, had better immediately start focusing on the frontline folks. It's way easier to keep an unbelievable manager, prepper, cook, bus person.
All of those team members to us are very valuable. And the first thing I do when I go into a store, I go seek out the dishwasher, I go seek out the cook and the cut, shake their hands, talk to them, find out how they're doing, how are we treating you, how am I treating you, right? It's our business. And it's amazing how the franchisees have responded to, they know they've got to pay more, they know they've got to pay more attention, and they know they got to pay more time with them. And you know, working on training them and one of the biggest things I think people miss in our business. And I know when we do a good job of it, I know when we do a bad job of it, it's just that orientation. You know, welcoming them to the family, getting them all the things they need, helping them understand when that first check is coming. But from a hiring perspective, you know, quite frankly, you know, we've been pretty solid on that. Now, different parts of the country, it's different.
But largely in the areas that we are hiring over the last year or so and to right now, I would say corporately we're fully staff in all the corporate stores and the franchisees I'm here much the same sentiment that they have the tools they need to go get people when they need them.
JM: Now, have you done anything to try to make your operations more efficient?
JH: I think the technology is the biggest thing that we can do. We had fairly antiquated systems, not only inside of our corporation and our distribution company. We were running on 2013 NAV for an ERP system, and now we have 2024 Business Central. Technology takes a lot of the rough spots out. It really takes away all the manual processes. If you have somebody standing in a walk-in with a pencil doing anything anymore, you, you're a decade behind where you should be. But I think from a technology standpoint, we've worked on that. We went back and the founder of the company, Joe Croce, who is still somebody that we have come to our conferences and we're really close to him. His focus was always on quality.
So we restored all of our original quality stuff. And in doing that, we've also made sure that we tried to take steps out of recipes and those kind of things to make it a little more simple to get a consistent product across the whole brand. Buffets are inherently hard. You put that food up there, and if it's not the food that folks want, it doesn't turn. The most expensive pizza we have at Cici’s, I ask people, hey, what's the most expensive pizza at Cici’s? And they'll say, oh, it must be your Supreme, or how about a double pepperoni, double cheese? And it really is the pizza nobody eats. So one of the things you can be, one, you know, that you gotta ask to guess what they want. And if you come in the restaurant and I say, hi, I'm Jeff, what can I get for you today?
And I'm good, this all looks good to me. And I'm like, hey, if you could get any pizza delivered to your house right now, what would it be? Oh, you know, it'd be a pineapple, Canadian bacon, pepperoni and jalapeno. And I go, great, what's your name? You say, Jonathan. I say, Jonathan, I'm Jeff, how many slices would you like? Three. You make that pizza for you, give you three slices of it, put the rest of it on the buffet, and then the other guests can come up and experience those flavors too. But really the key to CeCe's is making the pizzas that the people really wanna eat. But eliminating all those kind of steps out of it has been very important. We don't have any stores in California, and I really feel bad for my brothers and sisters in the restaurant industry, they're having to deal with those unbelievably high wages. I can't even imagine trying to be successful in a environment that had that, high of a wage for some of our businesses. I'm sure some can support it, but we've all watched the news and seen different things where folks are cutting back in different ways and just very thankful that in most of the areas we are, Texas, Florida, Virginia, Tennessee, Alabama, those kind of areas that we've had a lot of good luck with, you know, finding people that we can afford and keeping that 899 price point has been really critical for us.
JM: How do you figure out like the proper number of pizzas to make to sort of avoid this type of waste that you talk about? That must be a real challenge, isn't it?
JH: You know, it's actually the, sorry, sorry to cut you out. Yeah, the busier you are, the easier it is because you're literally just keeping that thing full all the time and the pizzas are flying off of there. And it's, you know, when you have a lower volume store or a lower volume day part, what we really lean heavily into is when the guest comes in, you know, we tell them, hey, here's the soup, here's the pasta, here's the salad, the desserts are at the end. If you don't see your favorite pizza, let us know.
I'll let you have as much of it as you want. And then I, and that way I know you're a hundred percent satisfied. Sometimes when we're slower, you know, quite frankly, we're better at really getting that one-on-one with the guests. But my store in Fort Worth on Sundays at my TCU store, that's the busiest day of the week and you have lines out the door. Uh, you got three ovens cooking pizzas at three and a half minutes a piece, setting two pizzas wide and those three ovens are humming all day long. And those are easy, fun and fast days. But those off peak times or those slower stores or those bad weather days, it is a challenge to manage that waste.
JM: Mm-hmm. What is my favorite pizza?
JH: Well, I'm just gonna look at you and guess that you love pepperoni. Am I wrong or right? I'm wrong.
JM: I like pepperoni, but no, it's sausage and mushroom. Actually, it's a two-part answer. So I'll tell you this. So, um, a two-part, number one is sausage and mushroom is my absolute go-to. Like if you ask me what I will all the time. Um, but I actually judge a pizza concept based on the quality of their mushroom pizza. If.
JH: There you go, that's a good one.
JM: So I am agnostic about types. I think all types of pizza, Chicago, New York, Detroit, I mean, I am very much agnostic. I see glories in all of them. But to me, they all have their positives and negatives and whatnot. And I find it all delicious, as long as it's well-made.
But I will determine whether a pizza concept is good or not based upon its mushroom pizza. And if the mushroom pizza is good to me, everything else is probably good. Cause you got to get that right. Cause if you don't do a good mushroom pizza, it sucks and it's not good. And I want to throw it in the trash. But anyway, that is my, that is my mushroom pizza policy. Um, in case you, in which I'm sure everybody needed to know that. So what is gonna, what's the plans for Cici’s this year?
JH: Well, back to your mushroom thing, that for a long time we had canned mushrooms and we've gone to fresh mushrooms. And it's amazing how many folks that made a huge difference for me included because that's one of my favorites too. So it's really interesting how people are very particular. And I think that's the beauty of Cici’s is I will make you, they will make you whatever you want.
JM: Thank you.
JH: If you came to the store and you said, hey, I want canned mushrooms, we have a thing called jump the counter, whatever it takes. We'll go to the grocery store and get them if you have a minute to wait. But we really know how specific, we have flatbread, the Detroit, the regular style pizzas, so those things are very, very important to get them exactly what they want.
JM: Yeah, thank you on the canned mushrooms, by the way. And if anybody listening to this uses canned mushrooms and you know who you are, stop it because they're gross. So yeah, oh man, yeah, I am definitely picky. But what's happening at Cici’s? Let's talk about what's coming up. What do you foresee in the next couple of years?
JH: Well, besides the aforementioned technology and leveraging all that technology and on the games, our marketing team and our innovation team here at Cici’s has really come up with, we showed our FAC yesterday at one of our stores in the colony, Texas, all of the new innovation that's coming out. And if I talk too much about it from a flavor perspective, my CMO will kill me.
But we've got some flavors and stuff I've never seen offered at a pizza chain before. We shot a new commercial, the second iteration of our CICI’S Pizzini, our official little three inch tall founder that we have, that we ran a commercial with last year. We shot the second version of that, it'll be launching out in March. We got a really new good ad campaign coming. And I think from a larger standpoint of development. We have a lot of folks that have expressed interest in growing Cici’s, whether it's our franchisees that exist or managers that are turning into franchisees or from outside the system, we're really starting to get some traction there. So that's, you know, the next couple of years, our dance card's pretty full with everything that we've got going on at Cici’s.
JM: Yeah, super. Let me end with this one. Let me tell you my Cici’s story, Jeff. So I am actually a fan and in dating back years, I live in Minnesota and have for nearly two decades, but I spent six years down in Charleston and one of my best friends still lives down there. And
JM: Uh, and we came best friends in part, cause we were going to, we didn't know each other very well, uh, but we were all, we were both going with a group of mutual friends to a Cici’s bunch of guys. It was going to be Cici’s and then a movie. Um, and, and we ended up getting stuck at Cici’s together because nobody else showed up, it was just the two of us with this guy I barely knew. And so we ended up sitting there talking and eating pizza together for, for a while. We've been.
Awesome friends ever since then. And now every time I go down there and visit them, we always go to Cici’s as a rule. So you gotta, just for what that's worth.
JH: Yeah, that's a great, the franchisee, that's another one that started out as a manager and became a franchisee, his name's Pete Bogianowski, he's got three stores down there, and Charleston's a great market, but yeah, I know it's funny, I think it's probably, being with Cici’s since 1992, my experience is kind of like yours, I've made a lot of friends, working at Cici’s over the years, but I love that, I love that story, that's what we're all about, so it's great.
JM: Yeah. Super. Jeff, this was fantastic. A lot of fun. Really appreciate you joining me this week on the podcast.
JH: Thank you very much Jonathan, anytime.