Uno Restaurant Corporation - Company Profile, Information, Business Description, History, Background Information on Uno Restaurant Corporation

100 Charles Park Road
West Roxbury, Massachusetts 02132

Company Perspectives:

Uno is well positioned for continued growth. We have established a distinctive niche in the restaurant industry, as the only full-service, casual dining restaurant with a signature product--Chicago deep-dish pizza. We have built on the widespread popularity of this product to broaden the appeal of our concept, while leveraging our expertise to create additional opportunities through retail sales, new initiatives, and an expanding franchise system.

History of Uno Restaurant Corporation

Uno Restaurant Corporation is the controlling body for a group of companies that operate and/or franchise a chain of casual dining restaurants known as Pizzeria Uno ... Chicago Bar & Grill. Specializing in Chicago-style deep-dish pizza, Pizzeria Uno restaurants are full-service establishments which also offer a broad range of other menu items, including pastas, appetizers, salads, and desserts. In addition to its responsibility for approximately 150 restaurants around the United States, Canada, Puerto Rico, and Korea, Uno Restaurant Corp. also controls a consumer food products division which produces and distributes Uno food items for retail sale in supermarkets and convenience stores.

Deep-Dish Pizza: A New Concept for the 1940s

The Uno concept dates back to 1943, when Ike Sewell decided to open a pizzeria in Chicago with his friend, Ric Riccardo, founder and owner of Riccardo's Restaurant. Riccardo had just returned from a trip to Italy, and was hoping to capitalize on a relatively new item on the American scene: pizza. The two men utilized space in the basement of a Chicago mansion to create Pizzeria Uno, where they began showcasing a pizza creation that came to be known as Chicago-style deep-dish.

For 12 years, Sewell and Riccardo's establishment continued to perfect its pizza, which was a thick-crusted version baked for almost an hour in a deep pan. While Sewell continued at his position as an executive for Standard Brands and Riccardo managed his other restaurant endeavor, their deep-dish pizza product gained immense popularity throughout Chicago. In 1955 they opened another restaurant just blocks away from the original, naming it Pizzeria Due.

Ten years later both restaurants were undeniable successes, and Sewell retired from his position with Standard Brands at the age of 62. He decided to open a third restaurant in the Chicago area, this time with a different focus. Su Casa began operating in 1965, and was regarded by many to be the first upscale Mexican restaurant in Chicago.

Nationwide Expansion in the 1970s and 1980s

In 1975, a man by the name of Aaron Spencer was in Chicago on business and ate dinner at Pizzeria Uno. As the owner of 24 New England Kentucky Fried Chicken units, Spencer was well-versed in the restaurant industry, and recognized that Sewell and Riccardo possessed a product capable of success on a national level. He contacted them with an offer to purchase franchise rights for Pizzeria Uno, but was initially rejected, as had been all other franchise offers throughout the years.

Three years later, however, Spencer was still interested in expanding Pizzeria Uno nationally. He finally convinced Sewell to allow one test unit to be opened in Boston; it was an immediate success. Based on that unit's proven prosperity, Sewell agreed to sign a full franchise deal giving Spencer complete expansion rights, and by 1979 the deal was set. Sewell maintained control of his three restaurants in Chicago, while Spencer created a company called Pizzeria Uno to manage his new restaurants in Boston, and Uno Restaurants, Inc. to manage all other franchised units. Although Sewell never took an active part in the management of the newly-formed Uno chain, he continued to manage his own restaurants and served as a director for Spencer until his death in 1990.

In 1984, Spencer decided to sell his Kentucky Fried Chicken units in order to concentrate solely on strengthening his blossoming Uno business. Three years later, Uno had expanded so much that Spencer formed a new body called Uno Restaurant Corporation to preside over the two existing divisions housing the company-owned and franchised operations. Stock in the new Uno Restaurant Corp. was offered to the public, helping to earn approximately $6.2 million to fund future expansion efforts.

By 1988, Uno Restaurant Corp. had grown to include 15 company-owned restaurants and 26 franchised units, with a strong concentration in the Boston area. Prospective franchisers were continuing to make offers to Spencer, whose company made efforts to select new owners based mainly on the potential of the location. After choosing new sites, Uno Restaurants, Inc. collected a one-time $40,000 fee from new franchisees, and then offered them support in starting operations and implementing the Uno concept program. The program, known as "Going For the T.O.P.," (an acronym for Train, Operate, and Promote), was created in an effort to ensure a consistent level of service and management throughout the rapidly growing chain. The program was instituted by a committee known as the Number One Club, composed of three of the top franchise operators and three company owners.

Diversification in the 1990s

After ten years of building Pizzeria Uno into a strong presence across the eastern seaboard, Spencer began to widen the restaurant's scope. A diverse assortment of new items designed to satisfy a wide variety of customers was added to the Uno menu. The decision was also made to begin selling Uno's prepackaged deep-dish cheese pizza in supermarkets and convenience stores throughout the New England area.

Entering the 1990s, the restaurant industry was hit especially hard by a weakened economy, which meant less money was available for consumers to spend on dining out. Pizzeria Uno, however, fared extremely well in comparison to its competitors, which had come to be other full-service chains such as Chili's and Applebees, rather than other pizza makers. Uno and its prospects looked so good, in fact, that it began to attract other important players in the restaurant industry as franchisees. New owners included Art Gunther, former Pizza Hut president; J. Jeffrey Campbell, former Pillsbury Restaurant Group chairman; Jeff Grayson, former president of General Mills; Louis Neeb, former chairman of Burger King; and Stanley Nippon, a former executive at McDonald's.

By mid-1990, Uno Restaurant Corp. was responsible for the operation of 75 restaurants, after experiencing a remarkable 84 percent increase in profits over the previous four years. Average per-unit sales were well over $1 million, and the demand for Uno's retail pizza product was rapidly increasing. The company made attempts to keep pace by purchasing a processing plant near Boston, which enabled it to expand its retail pizza offerings to include pepperoni and sausage varieties as well as the cheese pizza already being sold. Prior to that acquisition, all retail production had been done out of the kitchen of one of the Boston restaurants. This new division began operating as Uno Foods, Inc.

Meanwhile, in response to a recession brought on by the Gulf War, Uno tried to counter the downturn in sales within its major markets of Boston and New York by offering different specials and promotions. It advertised specially-priced deals during the lunch hours, and lowered prices on its children's menu in an effort to capture more families as patrons. Furthermore, the restaurants continued to expand their menu items, serving pizza, pasta, sandwiches, and salads, in addition to a full array of appetizers and desserts. One popular addition to the menu was the plizzetta, a light, thin-crusted gourmet pizza which accounted for 15 percent of the chain's sales by 1992.

Based on the success of the Uno pizza retail line following the purchase of the new production facility, the company decided to test a new take-out concept in selected restaurant locations. It began offering fresh, refrigerated unbaked pizzas for customers to pick-up and take home, which allowed people to enjoy the product at home without Uno having to implement a delivery service. Another benefit of the take-out pizzas was the availability of all topping combinations, as compared to the limited offerings available in supermarkets.

The End of the Century and Beyond

In 1992, almost 50 years after Sewell and Riccardo entered the pizza business, Uno Restaurant Corp. acquired all of the outstanding shares of the three original restaurants in Chicago. The Pizzeria Uno chain had grown to include 109 restaurants throughout the United States, Canada, the U.K., and Australia. Uno was also experimenting with the hotel food service market by offering its pizzas as room-service items at selected Hiltons and Marriotts in the U.S.

Unfortunately, the chain's push to expand its menu beyond its pizza roots had not yet proved as successful as had been anticipated. While Uno's signature deep-dish pizza was a unique high-quality item, many of the restaurant's additional items did little to set Uno apart from other restaurants. Therefore, in 1993 Uno launched a $2.5 million effort to upgrade its units' kitchens, adding sauté stations, charbroilers, grills, and fryers, enabling them to produce dishes of the same high-quality as the pizza. The menu shifted slightly from its "Italianized" base, and the chain's restaurant units took on the name Pizzeria Uno ... Chicago Bar & Grill.

Meanwhile, franchise expansion slowed for a short time while Uno tried to deal with an unsolicited $100 million acquisition bid by Morrison Restaurants, owner of the successful Ruby Tuesday restaurant chain. When Morrison originally initiated the offer, Uno's yearly sales were approximately $84 million; by the time Morrison backed away a year later, Uno's sales figures had far surpassed the $100 million mark for the first time in the company's history. Also, Uno Foods, Inc. had just landed a contract with American Airlines to put its pizza aboard selected flights, and was benefitting from increased distribution into supermarkets in the east.

In 1994, as Uno was completing its restaurants' kitchen renovations and beginning to see success from marketing Uno as an eatery with a diversified menu, the company made an acquisition that coincided with the new focus. Uno Restaurants, Inc. purchased all rights to three Bay Street seafood restaurant units in Illinois, New Jersey, and Pennsylvania. A far stretch from Uno's early beginnings in pizza, the restaurants further diversified the company's offerings in the dining industry.

Entering the late 1990s, Uno Restaurant Corp. was well positioned for continued growth in each of its divisions. The company was composed of 150 full-service restaurants, including 86 company-owned and 64 franchised establishments, and was finalizing plans to enter new markets. In 1996, Uno formed an agreement with the Kolon Group in Seoul, Korea, to open 10 Pizzeria Uno restaurants. Due to the increase in international activity, the company created Pizzeria Uno International, and hired Bruce Raba to act as president of the division. Later that year, Spencer passed down his duties as CEO to Craig Miller, who had been president since 1986. Spencer retained his position as chairman. With increasing consumer acceptance for Uno's position as a full-service restaurant with a diverse "bar and grill" menu, and with many market areas still open and sales steadily rising, the company headed into the next century poised for even greater success in the future.

Additional Details

Further Reference

Autry, Ret, "Companies to Watch: Uno Restaurant," Fortune, July 16, 1990, p. 75.Bell, Alexa, "Betting on Pizzeria Uno," Restaurant Business, July 20, 1989, p. 170.Frumkin, Paul, "Growth Gurus: Pizzeria Uno's Strong Operations and Phenomenal Growth Have Wooed Industry Luminaries," Restaurant Business, July 20, 1989, p. 164.------, "Pizzeria Uno Charts Its Course for Smoother Times Ahead," Nation's Restaurant News, April 15, 1991, p. 35.------, "Pizzeria Uno Eyes Retail Expansion," Nation's Restaurant News, May 28, 1990, p. 1.Frydman, Ken, "Pizzeria Uno: More than Just Another Fast-Food Pizza Place," Nation's Restaurant News, November 16, 1987, p. 3.Hodges, Dave, "Public's Appetite for Pizza Keeps Franchise Searching for Sites," Orlando Business Journal, October 1, 1989, p. 1.Mehlman, William, "Boston Doldrums Not Likely to Derail Uno Restaurants," Insiders' Chronicle, April 23, 1990, p. 1.Paul, Ronald N., "Going for the Top," Restaurant Hospitality, April 1988, p. 162."Pizzeria Uno to Open 10 New Locations in Korea," Nation's Restaurant News, July 15, 1996, p. 92.Prewitt, Milford, "Pizzeria Uno Founder Sewell Dies," Nation's Restaurant News, September 3, 1990, p. 3.

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