Member News

March 11, 2016

For years, Bill Freeman enjoyed the Chicago-style pizzas that this friend Francisco “Patxi” Azpiroz turned out. Freeman thought others might like the recipes, too, and the serial entrepreneur set out to grow the Paxti’s Pizza brand. It’s now 17 stores with an average three-year growth rate of more than 100 percent and plans to open at least four restaurants in 2017.

How’s business? We hired a new chief operating officer. He was previously with BJ’s restaurant (where he ran more than 165 locations.) We opened three new locations in 2015: San Carlos, Marin and Dublin. All three of are doing extremely well.

What let’s you know a new market would respond well to a Patxi’s? If we are going to head into a new market, we would like for indicators in that market to say it can support five to seven locations. We see that in Denver and Seattle. But really the biggest thing we are looking at is household income, density and how underserved a market is. Livermore is a great example where there is an excess demand for casual dining.

What’s your biggest business challenge? People. When the economy is good, it is harder to find and keep good people. So this year we set up a salary increase for all the managers and compensation packages that put us in the top 20 percent of all national restaurant concepts, in terms of compensation.

Did you consider stepping away from tipping? We took a hard look at that option and have been watching and talking with companies that have moved toward service fees.

What are the pros and cons to being based in the Bay Area? The biggest pro is actually that it is so competitive here in the Bay Area. Restaurants are forced to really deliver at a higher level than in other metro and suburban markets. The cons are higher rent, competitive hiring, etc.

How do you manage sourcing for stores in three states? We use four produce companies that are each local to the market they are servicing. That means that the Bay Area has one, Denver has one, Seattle has one and Santa Barbara has one. That was the only way we could assure the best possible quality.

Biggest surprise? Third-party delivery companies have come in with fervor. Postmates, DoorDash, Eat24, etc. have created an even greater range of what you can possibly order in a given night. Before it was pizza and Chinese food, now you have to have the strongest brand that people trust and will select over dozens of others. What would have once been a disadvantage, has become a boon to our business. We partner with UberRush and they can deliver a pizza for $7, where it would have cost us $10. They are able to optimize to a level that we cannot.

You took private equity a few years back. How has that impacted your business? We knew it would be lot more work for us, but it has challenged us in the best way. They put some great experts on our board and are invested in 13 other restaurant concepts so, essentially, we landed funds and a roundtable of peers to bounce ideas off of.

What is happening this year? You’ll see that 2016 will be all about the business. We are remodeling five older locations; we have hired a number of new people in operations, human resources and finance. The focus will be on improving the business so that we can open four new restaurants in 2017. We also see some menu changes coming up.

First job? A dishwasher in a restaurant when I was 15. Then I went on to be a waiter and a bellman and a lifeguard. I’ve had a lot of service jobs.

Pastimes? I am a volunteer deputy sheriff for the mounted unit in San Francisco so you may see me in a parade or during a natural disaster.

The Freeman File

Company HQ: Sausalito

What it does: Deep dish and thin crust fast casual pizza restaurants in Denver, Seattle and across California

Number of locations: 17

Founded: 2004

Funding: Took on private equity in 2014 from KarpReilly LLC

Employees: 795

Growth: 105 revenue percent between 2012 and 2014

2014 revenue: $29.23 million

Projected 2015 revenue: $39 million

Background: Sales manager for the San Francisco Hilton right out of school. Started a telecom company that he sold in 2000. Then went on to develop 1,000 multifamily and apartment units. Also owned a cake business “I Dream of Cake” that he sold to Marissa Mayer.

Age: 45