Ali Kerachi, whose father ran a high-end clothing business in the Los Angeles area, cut his teeth on entrepreneurship, so there was no question he would go into business for himself. Just not the clothing business.
“In the garment industry, you have to maintain a half-million dollars in inventory to hit $800,000 to $1 million in revenues a year,” Kerachi says. “In the food industry, my inventory is around $10,000. If I didn’t buy food for 48 hours, I would burn through it. That’s the extreme opposite of the clothing business, where you might buy 18 items in one color and you’ll have sold 9 at the end of year and have to sell the rest at cost. That just didn’t pencil out in my head.”
Kerachi became a Round Table franchisee in 1999. Today he and his business partners, his brother-in-law and sister Ali and Heather Karachi, have 21 Round Table Pizza locations open or in development within a 100-square-mile radius of Oakland, California. The prospect of serving people and making them happy had always appealed to Kerachi and ultimately led him to the world of food franchising.
“There’s a satisfaction to feeding people that you just don’t find in the clothing business,” he says.
This is his story.
There are so many pizza franchises to consider. Why did you choose Round Table? I didn’t like the deliver-only concept that you find in the top 3 brands, and I didn’t want to do anything other than pizza. The Bay area is the heartland for Round Table, and in Northern California you’ve got a dine-in and take-out pizza that’s loved and well known and yes there’s still a lot of opportunity to grow.
What were you doing before becoming a Round Table franchisee? I worked in my father’s business growing up, and up until age 20 I was in Southern California. In 1995 I moved to Dubai and started my import/export business, which I ran from 1995-98. Why did you choose to invest in Round Table? I have in the last 15 years been pre-approved with 8 different franchise concepts. Every time I went to ink something, I kept asking myself, why reinvent the wheel? If I can make my money back in 3 or 4 years — and sometimes I’d make my money back in one year — I’d be stupid to invest in something else. It didn’t make sense to go into another concept with less volume and risk not making my money back in 3 years. I couldn’t find something that made my money back faster.
When did you decide to become a multi-unit franchisee?
Since Day 1 the plan wasn’t to have 20, 30 or 40 restaurants, it was to make as much money as you could and work as little as you could. By year 4 or 5, I got my organization streamlined enough to where it was almost a cookie-cutter type of concept. The hardest part was going from store No. 2 to store No. 3. You have to learn to delegate and trust if you want to do this on a multi-platform arena. You learn what to let go and what not to. On a scale of 1-10, what qualifies as a 10? Being out of mushrooms is a 1. An employee not showing up is a 2.5. A fire is a 9. If you can master it and accept it, then it makes sense to scale up.
Knowing what you know now, if you were starting out today, would you still become a Round Table franchisee? If so, why? 100% moreso today than ever. The increase in sales over the last 24 months have been the highest back-to-back sales I’ve seen the whole time. We’ve had historic low cheese prices, and there’s been a really good feeling to the name Round Table in 2015 and 2016. If you look at all the franchisees, everyone’s up at Round Table.
How do you feel about the direction of the brand?
Round Table went through some tough times, as with most other chains during the recession. That was a big wake-up call. There was a disconnect between the franchisees and the franchisor. Since then, (CEO) Rob (McCourt) has made every single human effort to close that gap. He’s always asking, ‘How do you feel, what can we do.’ I myself have made a half-dozen requests of corporate, and I’ve seen 2-3 come to fruition. As long as the concerns make sense, they’re willing to listen. Being in multiple businesses at once, you hear more non-urgent matters more frequently. If it makes sense, I always try to provide proof and examples and research. There are people in the system who have skin in the game. There’s enough experience and leadership there to respond to change.
What do people think about the Round Table product?
I re-opened 4 stores that had belonged to a franchisee who passed away, and they are blockbusters. I’m on the ground and listening to people, and I had a customer who came up to me and said, ‘I want to thank you for bringing Round Table back.’ He said there were other concepts pretending they were Round Table, but you could taste the difference. Round Table has done a lot of proprietary research and is always fine-tuning. Unless you’re a scientist and can figure out the exact ingredients, which all too often people think they can, there’s just no way to duplicate the Round Table product. It’s the proprietary flavors of the product, the sourcing of the product, the brand awareness and 54 years of history.
What is the genius of this brand, when you strip everything away?
It’s not any one thing. It’s a feel-good feeling when they see the logo that comes from over 50 years of marketing and good product and carefully picked locations. Round Table standards are so much higher than everyone else; that’s why it’s sort of the go-to place for pizza. Personally, I didn’t like pizza until I was 14 or 15. We lived in Sherman Oaks and there was a Shakey’s we went to once a month as a family. I didn’t know what Round Table was until I went to Dubai. I became ingrained with Round Table when I was in Dubai. When I came back to the Bay area, I was a huge fan.
What kind of person makes a good franchisee?
I’ve seen a rainbow of different people in the system. Different people from different backgrounds all doing great, as long as they understand it takes hard work. This is not a passive type of investment. I don’t recommend an attorney buy one and hope to hire a manager. Your sales can be up 20% but your bottom line can be cut in half if you’re not engaged. We’re in the business of cost control rather than selling food; 90% of your business is cost control. You need to understand how to market and how to improve on marketing. I have 2 people who do a great job with marketing. Understanding cost control marketing and really hard work. You’ve gotta love what you do. I’m behind a desk 92% of the time, and the other 8% of the time I’m visiting new stores.
What’s your goal?
I haven’t worked weekends for 7-8 years. Monday through Friday is my goal, but my goal is to spend more time at home with my family, whether that means 10 stores or 40. It’s all about the team around you. My wife, Lailee, and I have been married for 10 years, and we have a 5½-year-old son, Ashkon, and a 3½-year-old daughter, Nikka. We’ve just moved into a brand new house, so being home is extremely fun. Saturday and Sunday is all about family. My son is recently into sports, my daughter thinks she is a princess, and me and my wife are always yearning for date night.
Take me out 10 years or 20 years from now. You’re hanging it up, you’re done. What do you want people to remember about your business?
That I’m a giver. I’ve probably introduced at least six people into franchising, including a cousin and an uncle and 2 different friends. My wife tells me sometimes I should charge a consulting fee! I’m always open to sharing my experience in any way shape or form. I’m a believer in this product. It’s worked great for me.
Round Table Pizza is an iconic West Coast brand with more than 450 franchise locations in California and other Western states. If you’d like to learn more about the Round Table Pizza franchise opportunity, please fill out the form to download our free franchise report or take a look at our research pages.