Buddy’s Pizza lays claim to creating Detroit-style pizza in 1946. Now, the brand is looking to take its signature pies beyond its 16 units—all of which are in Michigan—and recently named Nando’s veteran Burton Heiss chief executive officer. Heiss is expected to oversee the goal of transforming Buddy’s into a 50-plus unit brand within the next five years.
After spending five years in the corporate offices at fast casual Baja Fresh, Heiss was the CEO of Nando’s U.S. footprint for about eight years, until his departure in 2017. He sees parallels between Nando’s—a purveyor of South African-inspired peri-peri chicken—and Buddy’s.
“At Nando’s, we were trying to take a signature product and leverage that in new markets,” Heiss says. “We spent a lot of time exploring thoughtful growth, and how do you pick markets and sites and get those right, because if you miss on the location of a store, that’s a mistake that’s very hard to reverse.”
He inherits a similar challenge at Buddy’s Pizza: Outside of Michigan, who has heard of Detroit-style pizza? Heiss admits he hadn’t until six months ago, when he began exploring the brand before coming on board. Baked in square blue steel pans, Heiss says Detroit-style falls somewhere between the deep-dish staple associated with Chicago and the more ubiquitous New York offering. Sitting at a medium between the two is something the brand plans to leverage when it enters new markets. It won’t polarize either side of the pizza faithful.
“I think the authenticity and realness of the brand really sets it apart,” Heiss says. “We have a great product and story, being the originators of Detroit-style pizza, which is starting to get some attention around the country, and I think rightfully so. It offers a lot in taste and the unique profile of the item. It’s a bit crunchier around the edges with sauce and cheese in every bite.”
In early 2018, CapitalSpring bought Buddy’s Pizza for an undisclosed amount, adding to the $1.5 billion the firm has invested across 60 restaurant brands, including Taco Bell and Popeyes. At the time it was sold, Buddy’s was a 12-unit chain with all stores residing in Michigan. Though it has added four more Michigan locations in the past two years, much of CapitalSpring’s development of the brand has been an investment in back-of-house technology, adding in tech solutions for staff scheduling and recruiting, a new point-of-sale system, and an upgraded accounting system.
“Overall, the changes we made were all around the edges, but we really strived to keep the fundamentals of the brand the same,” says Jim Balis, the head of CapitalSpring’s Strategic Operations Group. “The product, the service standards, a lot of how we deliver against the guest experience, we wanted to really leverage that and if anything, just make it better.”
“We aren’t going to open up new stores just for the sake of building new stores and meeting some number. We are comfortable where we are, but we also want to become a bigger brand.” — CEO Burton Heiss
Another major tweak has helped the brand grow over the past two years—though 35 percent of Buddy’s business is carry-out, there was no delivery program until CapitalSpring acquired the brand. Delivery added a new revenue stream, and there is a plan in the works to add catering, too.
Despite the robust off-premises sales, Buddy’s occupies a unique space in the world of pizza restaurants: 13 of its units are full service, while three are quick-serves. That stands in stark contrast to a fast-food giant like Yum! Brands’ Pizza Hut, where 90 percent of sales are off-premises and there’s a staunch commitment to the newer “Delco” model that focuses on take-out and delivery.
“That’s really part of the Buddy’s story that we think is so unique,” Heiss says. “Whereas much of the industry in the past two years has moved to the ‘Delco’ model, Buddy’s has been around for 70 years and there’s something to that. Growing up I remember mom and dad ordering a whole pizza, giving us quarters, and we would go play Pac-Man while they waited for the food to arrive. That’s something that doesn’t exist as much anymore outside of Buddy’s.”
Still, the brand won’t be plunging into the New York market any time soon. The initial plans for expansion involve “adjacent markets.” Tight-lipped about specifics, Heiss and Balis, who served as acting CEO before the hire, did offer that they are looking for areas similar to Michigan, meaning other Midwestern states like Ohio, Indiana, and possibly Illinois. All existing units are corporately owned, but Heiss indicates franchising is something the brand is willing to explore, especially in the limited-service capacity.
For now, the brand is focused on what it calls thoughtful growth, saying that the offered target goal of 50 units in five years is less important to them than the overall health of Buddy’s.
“We aren’t going to open up new stores just for the sake of building new stores and meeting some number,” Heiss says. “We are comfortable where we are, but we also want to become a bigger brand.”