How Russian pizzeria chain Dodo Pizza conquered the American market

In 2014, the founder of the Dodo Pizza chain in Russia, Fedor Ovchinnikov announced that he was going to enter the US market and open 400 points there. To many, the idea seemed insane. However, two years later, the first American pizzeria really worked.

Photos: Dodo Pizza Team Blog

Success story Dodo Pizza in the US, the company published on its website.

The idea of ​​opening restaurants in the United States arose from the owners Dodo Pizza in September 2013 of the year and they started looking strategic investor.

“We offered 10% of the company funds in exchange for 100 million rubles of investments in our development. Thus, the investment valuation of the company amounted to 1 billion rubles (17,7 million dollars). It turned out that finding 3 million dollars in Russia is not so easy for a company from Syktyvkar. Representatives of the funds with whom I met called our assessment fantastic, but it was an assessment of our future, which I did not consider fantastic, so I did not lower the rating. As a result, we refused to work with the funds and created unique crowdinvestment program for private investors,” said Ovchinnikov.

Thus, in October 2014, the company managed to collect 40% of the required amount, they also had a steady stream of applications from private investors, which allowed them to publicly announce plans to enter the US market.

Opening the company, Ovchinnikov could only dream of such a success.

“In 2011, I opened a pizzeria in a 68 square meter basement. This pizzeria only did delivery. The estimate for its launch was only 1,5 million rubles. From this small pizzeria a chain has grown whose revenue in 2014 will exceed 400 million. I didn’t have a lot of money, but I had energy and faith in victory. I started small and it worked,” he said.

The decision to enter the American market was dictated by the desire to gain experience.

“We act locally, but think globally and think about the future. The modern world, no matter how much anyone would want it, from the point of view of business is the “Roman Empire” and “Rome” are the United States of America. No matter how cool the company, the system, the franchise, the marketing, in order to “take over the world”, Dodo Pizza must gain experience in the most developed and competitive fast food market in the world - the USA. We need this competence. We need to test our system, our brand and our company. The sooner we start, the better. If we can work there, then we can work everywhere,” Ovchinnikov explained his decision.

The action program was as follows: one of the company's top managers goes on a long-term business trip to the United States to open a pizzeria in partnership with local businessmen. Dodo Pizza.

From Russia it was planned to carry out only the management of the pizzeria, and all financial benefits should have been received by local investors, because the task of entering the American market was to test the model, gain experience and competence.

“We understand that in the United States in such a developed market as fast food, marketing is the main weapon. We will use all the power of our marketing from Russia to win the local US market. At the very beginning of 2015, I and several of our top managers will travel to the USA, on a visit to Steve greento the publisher of the magazine PMQ Pizza Magazine and former large franchisee Domino's Pizza. Our task is to interest our project, brand, system Dodo IS and just the enthusiasm of local entrepreneurs and find partners who will be ready to launch with us Dodo Pizza in USA. This will not be a franchise, it will be a pizzeria that will be managed by our company. This will be the first step,” Ovchinnikov wrote in 2014.

Arriving in the US in February 2015, Fyodor first went to explore the fast food market in order to understand what appeals to US residents and investors in this area.

He noted the austerity of design and focus on quality in Chipotlelag and crisis McDonalds. After that, visited the pizzeria Papa Johns in Chicago, where I realized that Dodo Pizza There is every chance to win the American market.

“Even if we don’t invent anything new, we’ll open a test Dodo Pizza in the USA with the same model as Papa Johns and Domino's Pizza, we already have competitive advantages that will give us a chance in the fight for customers in the local market. Yes, we don't have a brand. We do not have suppliers or centralized production of dough, but all this can be solved even within the framework of one starting pizzeria. But we have marketing finds. Quality control system. And I’m also sure that consumers will appreciate uncompromising cleanliness, order and service, and this can be achieved in any market, it’s just a matter of focus and desire,” Ovchinnikov decided.

In the US, he researched many institutions, choosing the format of the work of his restaurant.

Фото: Depositphotos

After that, it was decided to register a business in the United States.

“Any person can open a business in the States, even without US citizenship and a residence permit. States are loyal to budding entrepreneurs. The USA, like Russia, is a federal state. But if our republics and regions have a rather decorative role and work mainly according to the same laws, then in the USA each state may differ from the other. Laws on registering and running a business also differ,” Ovchinnikov wrote.

It was decided to register “Dodo” in the state of Delaware. The decision was based on a developed state legislative system that supports various types of business organization and works according to the philosophy justice rights. In other states, the court operates by case law and relies on existing court decisions. In Delaware, the court considers all cases separately and evaluates them on their merits. If a customer slips and hurts himself in a pizzeria, a court in Delaware will not award us a multimillion-dollar fine simply because McDonald's once paid such a fine. Registering a company in Delaware is easy even for a foreigner. All documents are submitted electronically, the presence of the entrepreneur is not required,” said the Russian entrepreneur.

The company was open, now it was necessary to create a checking account.

“Opening such an account in an American bank turned out to be very difficult. Russian banks seem like children's sandboxes compared to banks in the United States. The fact is that banks in the United States are under severe anti-terrorist pressure. They are wary of foreigners who register a business in the States and bring money into it. Therefore, you can open an account, but when you add funds, the bank may freeze your account and your money until it is sure that it is “clean”. It’s almost impossible to open a current account without an American in the company’s management,” Ovchinnikov noted.

Some companies in this situation appoint the president of any more or less familiar American. However, this is dangerous, since such a person may empty the company's account, since it will have unlimited access to it.

Dodo Pizza used the services of a special intermediary company. They provide legal support services. Such a company selects US citizens, carefully checks them and hires them. It then literally “rents them out” to foreign companies. Such “executors” are very convenient when opening a current account and maintaining it.

“Our American lawyers from Themis advised us the company “Kerkus". We hired a vice president there and have already completed the account opening procedure. The hired vice president is bound by a strict contract with the legal support company, so we are not afraid that he will spend our money. When our employees become eligible to work in the United States, we will be able to fire that employee and manage our checking account independently,” the company blog states.

After that, the company, opened in Delaware, needed to obtain permission to do business in the state of Mississippi, where the first Dodo pizzeria would open.

Фото: Depositphotos

As a result, the company spent about a month and about $20 thousand to register Dodo in the USA. Most of this money went to lawyers.

It was decided to open the first pizzeria in Oxford, Mississippi. It would seem that everything was ready - the business was registered, the account was opened, but the entrepreneurs still could not find a suitable place for the restaurant.

After almost four months of hard work, the Russian team was never able to find a decent shelter in the city.

“Dodo Pizza” signed a lease agreement with the owner of a nice building in the very center of the city (it was called the Red House among themselves). However, it turned out that in the parking lot in front of the building there are not enough places for catering according to local laws.

Photos: Dodo Pizza Team Blog

But the issue was resolved by issuing a part of the building adjacent to the Red House as a warehouse, not an office, which reduced the number of parking spaces required.

Everything was ready for the opening of the pizzeria. In March, 2016, the restaurant was launched.

«American concept Dodo Pizza: use the best, freshest ingredients, sell only seven pizzas, but stunning ones, and discard everything unnecessary that does not affect the quality. The balls were clearly of no use here. “Dodo” pizza must sell itself, which means that we just need to give people the opportunity to try it at least once,” the company’s website says.

In order to give people the opportunity to try, it was decided to organize a beta test Dodo Pizza in Oxford: just give away for free one pizza of any recipe from the menu to each of the 500 people who subscribe to the test on the site.

The American team commander, Alena Tikhova, invented to ask each tester to leave a comment on the pizza, honest and frank, and she also promised that the reviews would be published without censorship, even if they were not too biased. They promised to broadcast these reviews directly on the Dodo website.

It was a huge risk. If the testers thought that the pizza had failed, the pizzeria could have been closed - and moved to another city to start from scratch. But if I liked the pizza from Dodo, the testers would buy it themselves, and they would tell the friends, and the pizzeria would gain momentum without any advertising. What would be a new word in the theory and practice of promotion of pizzerias working for delivery.

Dialing 500 testers was easy. To promote the post in Facebook with the proposal to subscribe to free pizza was spent three dollars.

In order to control demand and not to drown in orders, every day Dodo sent out invitations in small batches. They diverged in less than a week. The statistics are as follows: from 500, 80% sent letters were read, 226 people followed the link and ordered pizza, of which 116 people left reviews on the page Dodo Pizza Oxford on Facebook.

From 116 reviews, the pizzeria received only 7 fours, the rest - 109 - fives. Almost every assessment was accompanied by laudatory reviews.

Photos: Dodo Pizza Team Blog

On the first day of operation, sales amounted to $638. Second: $942. Then - $619 and $390. And this is without advertising, except for a couple of posts on the pizzeria’s page in Facebook. In the two weeks that have passed since the beginning of commercial work, the number of reviews has grown to 137 - mainly due to reviewers who have already paid for their orders. From the 21 new review, only one four, the other fives again.

Revenue is growing steadily. According to calculations for December 2015 of the year, in the first month Dodo pizza oxford was supposed to earn 5 thousand dollars, and in the second - 10. But in reality, in the first 13 days of operation, the pizzeria’s revenue already amounted to $10161. And all this - still without any advertising.

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