What a distinction two years make.
Cicis was all the way down to 300 places, half of its 2009 peak, when Sunil Dharod’s household agency SSCP Administration and Anand Gala’s Gala Capital purchased the 38-year-old pizza buffet-and-games model out of chapter court docket in March 2021, assuming $83 million of Cicis debt and changing it to fairness.
“We’re doing effectively,” stated Cicis President Jeff Hetsel when reached this January. “We have actually bounced again from COVID. It was somewhat darkish there for some time, however we had been capable of put collectively an excellent workforce and an excellent plan and located an excellent associate. We’re beginning to get some traction.”
He praises majority shareholder SSCP for his or her operations chops. “That is actually who I cope with is Sunil and the workforce at SSCP, all the time being accessible for fast selections and actually no interference,” he stated. “Being debt free and with the ability to make very fast selections, million-dollar selections by means of texts, that is a dream for any president.”
Chris Dharod, the ‘C’ in SSCP Administration (the opposite letters are for his father Sunil, mom Sharmila and sister Puja), returns the praise. “Now we have such nice operators for every of our 4 companies,” Dharod says, “Our greatest model is Cicis. Now we have an exceptional workforce,” noting Hetsel’s standing as a franchisee together with being president is a giant profit.
“We’re centered on adjusting the pizza recipe. Again to what it as soon as was, so it is significantly better,” Dharod stated about Cicis, in an interview on the Restaurant Finance & Growth Convention in Las Vegas final November. “We ran our first TV advert a month in the past,” in October 2022.
“Once I was somewhat child, we used to go there on a regular basis. We knew it had a spot.”
Greater recreation rooms enhance gross sales
Hetsel stated Cicis nonetheless has about 295 shops, across the similar quantity as two years in the past, with 15 company shops, up from 5, and 280 franchised. “So we’re not asset-light. We’re investing proper together with franchisees. We’re actual bullish on shopping for nice companies.”
They’ve additionally began on two worldwide offers, one in Mexico and the opposite in India.
Identical-stores gross sales grew by 31 p.c in 2022 vs. 2021, “after which 2022 vs. 2019 we had been 10.4 p.c constructive,” he stated. “I attribute plenty of that to our franchisees and our advertising and marketing workforce.”
The largest distinction? “The doubling down on the video games a part of it has been a recreation changer for us. It is actually pushed the franchisees to put money into video games and rework, and the returns have been nice. We reworked 40 shops final yr,” he stated.
Conventional Cicis shops had 400-square-foot recreation rooms. “We have had shops that add 1-, 2-, 3,000 sq. ft onto the sport room. No extra tokens, it is card readers. And the returns have been phenomenal,” he stated.
“It prices anyplace from $100,000 to $300,000” to construct the sport rooms. “I simply put $180,000 value of video games into my retailer in Fort Price, and my recreation income doubled. It has been unbelievable,” he stated.
“I want personally I had executed it sooner. Something I ask the franchisees to do or put money into, I do the very same factor proper alongside them. I do the very same factor in all the company shops.”
Hetsel was named president in October 2019, proper earlier than COVID. “I really feel like I used to be uniquely suited to do it. Rising up in operations, being the chief improvement officer for the corporate, and being a franchisee, it gave me a perspective that somebody who parachuted into the model did not have,” he stated.
Hetsel led Cicis by means of its disaster, when it filed for chapter safety in January 2021 and was bought by SSCP and Gala in March. He cited quite a few components resulting in the Chapter 11. “We had $83 million in financial institution debt, owed to 4 banks, and because the volumes of the shops dropped within the pandemic, and we misplaced 100 shops within the pandemic, throughout that point the corporate wasn’t value $83 million,” he stated on the time.
“So we removed a giant workplace, take a look at kitchen and all that, and it was an opportunity for us to emerge an actual lean, imply, combating machine. We had plenty of actual property on the market. At one time we assured plenty of leases for franchisees. We had been capable of clear that each one up.” Learn extra about Cicis emergence from Chapter 11 and its new homeowners right here.
Now’s significantly better than then. “31 years with Cicis, and I feel that is probably the most enjoyable I’ve ever had,” Hetsel stated when reached in January.
An eclectic portfolio
Dharod says SSCP Administration’s Applebee’s shops—they personal about 80, its web site says—are up in gross sales. “We actually like Applebee’s. We might like to purchase extra. That is the very best management workforce in 14 years: nimble, near the customers.”
SSCP additionally owns 4 Roy’s eating places, the fine-dining model it purchased in 2015. “We’re up about 20 p.c in gross sales. We might wish to construct extra Roy’s.” It additionally owns and operates 43 Sonic Drive-Ins.
Requested about his eclectic portfolio, Dharod says, “We’re distinctive in that we’ll take a look at plenty of issues,” though he famous “deal move is gradual” on the finish of final yr. “I’ll brag, as a result of now we have a debt-to-EBIDTA” or money move “ratio below 0.5, the place our friends are 4. Money to debt ratio is 6 to 1,” he stated.
“We’re not the largest, however I feel we are the healthiest restaurant firm. We’re family-owned so we do not have to get levered as much as give our buyers a return.”
Dharod grew up working in his household’s eating places, then went to school and labored in banking for a time earlier than returning. “That is my dream job. I really like the restaurant enterprise. I really like the profession paths that we create. For instance, at Applebee’s, now we have 12 space administrators. Eight of them began as hourly workforce staff.”
