FranDev Players: Ryan Rao, Chief Franchising Officer, Romeo’s Pizza

As bad as 2020 has been for almost everything else, it’s been a pretty good year for pizza delivery. 

No one knows that better than Ryan Rao, 29, who is the head of development for the Ohio-based chain Romeo’s Pizza. The chain has been riding a wave of strong growth — it plans to grow it’s unit count by 50% by the end of 2021. 

But Rao says he’ll take quality over quantity any day. He’s not the type of development officer that will just allow anyone “able to write a check” to become part of Romeo's system. He would rather have well-managed growth for the brand into the next year. 

We asked him more about what he does, how he sees growth shaking out next year and how he got into the pizza-franchise game. 

1851 Franchise: Tell me about what you do.

Ryan Rao: I am the chief franchising officer for Romeo's Pizza. I handle everything franchise development, franchise sales and real-estate development for Romeo's Pizza. Currently, Romeo's Pizza has 45 locations and we're projecting to have between 60 to 65 open by the end of next year, so we have quite a few in development. I also support V/O Med Spa out of Strongsville, Ohio, in a franchise development capacity as a consultant with franchise sales and real estate. 

1851: How did you get involved with pizza franchise development?

Rao: In 2013, my father actually acquired a franchise along with a business partner, Ryan Rose of Romeo's Pizza. I started to learn about Romeo’s and franchising at that point. When I graduated in 2014, Ryan Rose became the CEO of Romeo's Pizza and ended up acquiring the brand. I started in a franchise sales capacity for Romeo's back in 2015.

1851: What are the keys to consistent franchise growth?

Rao: Certainly, one is the leadership team in the franchise. It helps if the team had franchise experience in the past, or that they have consultants that have scaled brands before working with them. Secondly, unit economics. What is the overall investment? What is the potential profitability for a franchisee? Does it make sense to get existing franchisees out there in front of prospects who will validate the economics to prospects? Also, another key is franchisee selection and making sure you have a well-defined sales process, as well as value propositions created to attract strong candidates. You should have a selection process that’s not just awarding franchises to anyone who's financially qualified, but may or may not be a good fit for your brand.

1851: How has COVID affected franchise growth opportunities?

Rao: I think like anything else, COVID has either positively impacted your business or negatively impacted your business. I don't see much in between.

Sophisticated franchisees are taking a look at two things. One is consumer behaviors. Are consumer behaviors going to stay as they are today? Or will consumers shift back to how they were behaving before COVID? If so, I think there's a large opportunity in the acquisition market right now, both for new territories, and distressed assets of brands and concepts negatively impacted by COVID. 

On the other side is, if your concept is doing really well, it's an attractive time to continue to bring on new quality franchisees in the system, especially if it's a retail concept. We're seeing a lot of opportunity to negotiate from a real estate perspective on better terms than we saw before. 

1851: So as you look ahead to 2021, what are your goals for your businesses?

Rao: For both businesses, a managed growth strategy. For Romeo's Pizza, we have 45 stores open and are celebrating our 20th anniversary next year. We're projecting to open between 20 and 25 locations. It's a big undertaking. On the V/O Med Spa side, currently, we sit at nine open locations. And our goal is to double the company next year to get to between 18 to 20 open locations. 

1851: What are the mistakes you see franchisors make when they’re trying to grow?

Rao: Quite a few, I think it really boils down to the three I mentioned before: Having a leadership team, or at least a few people who've been a part of developing a franchise previously. That experience is crucial. Secondly, just not having the right infrastructure, the economics to support the growth, and then bringing franchisees, but you really haven't validated unit economics well. And then I think third is to sell on to anyone who can write a check, and a lot of people use that term. But it's true. If you don't vet out your prospects — just like they're vetting out a franchise opportunity — and doing due diligence on them and just awarding franchises to anyone that can cause you a lot of problem problems and headaches in the future.