FranDev Players: Kim Andereck, Director of Franchise Development for Russo’s New York Pizzeria & Italian Kitchen

Kim Andereck has nearly 40 years of franchise development experience under his belt. In various executive franchise development roles over the years, Andereck has sold thousands of franchises for brands like Bennigan’s, Friendly’s and Steak n’ Shake. Most recently, he took over as the director of franchise development for Russo’s New York Pizzeria & Italian Kitchen in 2020. Andereck is a true franchise industry professional and entrepreneur who holds a law degree, a masters degree in franchise management and other advanced certifications. 

1851 Franchise spoke with Andereck to learn more about his story and gather his advice for up-and-coming brands in the franchise industry.

1851 Franchise: Tell me about your company.

Kim Andereck: Russo’s New York Pizza is a 50-plus unit chain that serves New York style pizza. Our menu includes more than pizza. We also have a large selection of pasta items, buffalo wings, calzones, Italian soups, breads and salads. Russo’s was started in New York when the Russo family relocated to the U.S. from Avellino, Italy. Their son, Chef Anthony Russo, grew up in a New Jersey home where the kitchen was the center of family life. There was always the opportunity to cook and bake in the Russo home, and many of the ingredients came from the family garden.  

These Italian experiences stuck with young Anthony long after his family moved to Galveston, Texas in 1978. Chef Russo’s father opened Russo’s Italian Restaurant featuring New York-style pizza, which quickly became a local favorite. Just like that, Anthony found a second home in the restaurant kitchen. By the age of 12, he was learning family recipes from relatives who flew in from Naples and Sicily each summer. Over the next 20 years, making pizza and squachatta (calzones) became his passion.

1851: Are there any keys to consistent franchise growth? 

Andereck: Finding franchisees who have a passion for great Italian food and the gift of genuine hospitality is always a challenge. Of course, the franchisee must meet minimum financial marks to qualify for financing a restaurant, but money alone is not the key to success. Our goal is to seek franchise candidates of good character who have the financial ability to undertake and complete the projects they propose in territories we wish to grow.

1851: What are the biggest hurdles to successful franchise growth right now? 

Andereck: Funding sources in the hospitality have dried up amid the pandemic. Capital drives America, so when lenders are on the sidelines, the individual’s own financial resources must drive new development. In these uncertain times, the number of individuals or companies willing to embark on a new venture without funding sources is limited.

1851: How did the COVID crisis affect franchise growth opportunities? 

Andereck: For Russo’s, the COVID impact was minimal in regard to growth. Franchise and corporate stores in the pipeline pre-COVID continued to open on schedule. Our unit-level sales and profit lines actually soared during COVID-19, driven by huge growth in takeout, delivery, online ordering and catering business. About 90% of our sales during COVID-19 have been takeout and delivery. New store prototypes now feature a much smaller footprint, as we do not need to build and maintain and pay rent on larger units with 50 or 60 seats. Our 1,500 square foot model targeting the delivery format may contain only three or four tables, since most pizza and Italian orders are consumed off-premise.

1851: Are there any common mistakes you see franchisors making when trying to grow? 

Andereck: Franchisors can sometimes get caught up in maintaining “control.” Of course, there is an obligation to create and maintain consistency within the system, but that does not mean the franchisor can treat franchisees like paid employees. Franchisors must remember that the franchisee is an entrepreneur who is putting their own capital, skill and time at risk.  Because of this, the franchisee must be treated with respect and be allowed to question or even challenge corporate culture. This must be done through a clear process to avoid chaos, but open dialogue and communication by both parties must flow comfortably and normally to assure collaboration and success.

1851: What are your biggest goals/plans for 2021?

Andereck: Russo’s hopes to open 10 to 15 new units in 2021 (20% to 25% system growth).  Most of the units will be the smaller, 1,500-square-foot prototype building space, and will target delivery and takeout business for adjacent neighborhoods within a two-mile radius of the store. We continue to cost-engineer our furniture, fixture and equipment package to create locations that can keep up with the growing demand for New York-style pizza, authentic Italian pasta dishes, soups, salads and breads. Simultaneously, we are working to speed up service and delivery times without diminishing quality of product.