Connect with us

Entrepreneur Profiles

Primi Piatti: How Francesco Zanasi & Peter Castle Built Their Restaurant Chain

Success in the food industry is not easily won but Francesco Zanasi and Peter Castle, co-founders of Primi Piatti, have cooked up a profitable recipe of passion and energy.

Juliet Pitman

Published

on

Francesco Zanasi & Peter Castle of Primi Piatti

Peter Castle was never looking to own a restaurant empire. But then neither was Francesco Zanasi. Which makes the story of how the two entrepreneurs got together to form Primi Piatti (today a 30 store empire) an interesting one. Castle, a quantity surveyor by training, came to the food industry quite by accident. “I was busy building a small retail centre in Tyger Valley and Spur Steak Ranches were going to put a Panarotti’s and a Hard Rock Café franchise in it. But when it came to it, things didn’t work out with the two prospective franchisees they’d been talking to. So there I was with a building that had been purpose-built for these two restaurants, and no tenants. I decided the only way to make sense of the development was to become a franchisee myself,” he relates. In his extremely limited spare time, Castle did the Spur training course during the evenings. “Here I was – 35 years old and this was not what I had planned to be doing. I was trying to run a full-time development business during the day and do this course at night, but I went through with it,” he says.

 

The restaurants opened their doors in 1990 but, as Castle relates, neither of them worked. “I always say I got together with Francesco because of my business failures – and those were two of them. But I guess I didn’t learn my lesson because I continued in the restaurant trade, opening a Spur in the Waterfront.” He secured a lease at the Waterfront extension and a franchise agreement with Spur for a Hard Rock Café. “And then one of the best deals of my life landed in my lap. The Americans who own the Hard Rock Café brand in the US wanted the Waterfront store and they paid me $2 million to hand back the franchise agreement and cede the lease to them,” he recalls. If Castle thought his restaurant fortunes had changed, he was about to be proved wrong. Cash-flush and with his Waterfront Spur doing well, he sunk his capital into a Waterfront version of London’s prestigious Sloane Street Joseph Ltd clothing store and affiliated Joe’s Café. “We took a bath!” he laughs, “Neither the clothing store nor the restaurant worked. My partners and I lost about R5,5 million in that store over three years.”

 

You’d think that by this stage, a man who’d never wanted to be in restaurants in the first place would have been put off them for life. But, asked why he didn’t throw in his apron, Castle is characteristically philosophical, “I knew the industry backwards by then – I certainly knew how to lose money in it! And remember that I came from the property development industry where no one ever wants to pay you and if the market turns bad, you just sit. The restaurant trade is a cash business where you don’t have to carry debtors. Even with failed restaurants, I was always attracted by the positive cash flow.” One day as Castle was pondering the sad state of his fortunes, the idea for Primi was born. “I was eating lunch in a place called Nino in Greenmarket Square. It was run by this maverick old Italian guy called Nino Zanasi and his two sons, Christian and Francesco and let me tell you, this place was the buzz.
It was an institution in Cape Town – if you wanted good food, that’s where you went. It was the kind of place where people didn’t mind queueing. The energy and the vibe were intoxicating – it was a unique dining experience,” he recalls. “At Primi we have a concept called Urban Energy and that describes exactly what these guys were about – from father and sons to the waiters, everyone was passionate about that restaurant.” Castle’s idea was for the Zanasis to help him create a new restaurant on the site of his failed Joe’s Café Waterfront shop. But the Zanasis had other ideas. “I approached Francesco and he just batted me for a six,” he laughs. “Old man Nino ran the floor with Francesco in the kitchen and Christian at the bar – they had a thriving family business over which they had total control. Why fix something that’s not broken, right? So they had no intention of helping me to open a restaurant,” he explains.

 

 

Castle was nothing if not persistent, however, and for a year tried to convince Francesco to join him. “During that year, they were approached by investors to open a Nino in Kuwait City which Francesco managed there for six months, and they took over a restaurant in Camp’s Bay.” With those forays into ‘expansion’ Francesco finally agreed to Castle’s offer. “I told them to come and look at the business and that I’d change anything they wanted and they could have 50% of the profits,” he says.

So Primi Piatti opened its doors in the Waterfront in August 1999 and made a fortune. “Joe’s Café never did more than R200 000 a month. In the first ten days that our new restaurant was open, we did R250 000, and R800 000 in the first month,” says Castle. The reason for the success? “The Zanasi family following. Simple,” he answers. “The buzz in Cape Town was that the Zanasis had opened in the Waterfront.” In fact, for the first six months, the public referred to Primi as Nino at the Waterfront. “It was a year before I heard the name Primi being used,” he says.

 

With the success of the Waterfront store, Castle set his sites on expansion. “I just knew we were onto something big.” But, as anyone who has tried to set up a restaurant franchise and failed will tell you, running a tightly-controlled family operation is very different from running an extended restaurant empire. The essence of the Zanasis’ success lay in their personal and passionate attention to service and the quality of the food, and Castle was warned by colleagues in the restaurant trade to leave well alone and not try to replicate the success of the Waterfront Primi store. “They said it couldn’t be done,” he says. And yet, that’s precisely what Castle and Zanasi have managed to achieve. How? Castle explains:  “I remember in the early days when we spoke about expanding, Nino always used to say to me: ‘Yes Peter, but what about the food?’ and it’s something I’ve never forgotten. Never forget the quality – the food has to be outstanding. That’s a given and it’s something we’ve never deviated from.”

 

But there was something else as well. “At the end of the day, you can probably make a Napolitano sauce as well as we can, so it can’t only be about the food. Back in the days of the Greenmarket Square store, the thing that the Zanasis had that attracted people was passion. Passion that led to a level of customer-centricity that had people lining up outside. And that’s what we needed to capture and keep,” he says. Today, if you walk into any Primi Piatti, one of the first things you’ll notice is the iconic orange overalls worn by the waiters with the words “Work is Love made Visible” emblazoned on the back. It’s a principle Castle says is absolutely central to the company’s success. But passion, unlike Napolitano sauce, is not easy to bottle. Castle and Zanasi know this better than anyone. “The biggest challenge, back then and still today, is the human one. To find passionate people, train them properly and keep them motivated,” says Castle. And motivation, he says, comes not purely from money, but from the ability to grow and develop. So Primi has focused on two things – stringent, comprehensive, fanatical training and developing people from the inside.

 

“In the early days we had a training barracks. Anyone who wanted to work at Primi Piatti, from a waiter or chef to a franchisee, had to go and live there while undergoing training. The only separation was between men and women so you literally lived with the people you were going to work with. It was like an army camp – in fact, that’s where the chevrons on the waiter’s overalls come from – it was like a ranking system,” Castle explains. The barracks itself may be a thing of the past but the training programme is no less rigorous; it takes between six to 12 months to train operators and staff before opening a new Primi store. “To operate and run a restaurant successfully you need to have empathy. And empathy only comes from knowing how to do everything that everyone else in the restaurant has to do. So our operators have to be the best at everything – the best waiter, the best griller, the best barman,” explains Castle.

 

Finding the right operators is an ongoing challenge, as Castle explains, “We need people who are aligned with our belief system but once a restaurant brand is perceived to be successful, you get inundated by people with money who want to invest in it. In this industry there is no easy way to make money – there are no short cuts. You can’t sit on the sidelines and expect to be successful. The operational intensity is very high and you can’t just have managers and investors – you have to have owner-operators.” Finding people with the right mix is a tough job, which is perhaps why Primi has focused so much on internal development. “We don’t actually care what skills or experience people have. What we’re looking for is passion – for people and food and the Primi way of doing things. You can train people to do tasks but you can’t train them to be passionate. So taking people from the inside who have the right attitude and giving them the potential to grow and develop and improve has really worked well for us. We have people here who started in the scullery and are now general managers of stores.”

 

But while he concedes that it’s not the easiest or fastest approach, it’s certainly the most effective. This is why development is so close to the heart of the company. “Sixty percent of our stores are operated by people from historically disadvantaged backgrounds – but this hasn’t really been by design. It’s because we’ve taken people from the inside and given them opportunities.” A search for new opportunities is what compelled the birth of Primi and it’s what continues to drive the growth of the brand. The company has diversified into hotels and currently owns and operates three. “Hotels are something I’ve been involved in over the years and it made sense to link the two in the way we have. We cross sell between the hotels and the restaurants,” says Castle.

 

Other exciting developments in the pipeline include the launch of Primi Caffé and Primi Espress, which will diversify the business into the European coffee bar and fast-food take-out markets. All existing Primi restaurants serve take-aways but the company wanted to have a specifically-focused outlet to avoid having to ‘serve two masters’ in the restaurant. Primi Espress stores will be suited to residential nodes, food courts, high streets and the like, with a lower capital outlay and a higher return on equity. “Everything we do is about redefining the restaurant experience and we want to continue to push boundaries.” The company recently won the international MAPIC Award for Retail Regeneration for its sustainability-driven store at the Lifestyle Garden Centre in Randburg as well as the Spectrum Award – Celebration of Retail Excellence from the South African Council of Shopping Centres. Castle concludes, “You need to continually be innovating and looking to the future. This means pulling through young blood in the company that will infuse new energy into the brand.”

 

Finding the right franchisees

Finding the right franchisees is a challenge with which Primi’s franchise director, Hitesh Patel, is intimately familiar. He explains: “Screening franchisees is probably the single most important thing to do at the outset. That rests with the directors of Primi. The prospective franchisee meets with Peter and me initially and then gets to meet with Francesco and Gavin Burnard, our operations directors. We make every effort to be upfront and realistic about owning a Primi. We do not create a false illusion. Key to franchising is what is known as the disclosure document, where you disclose every single piece of information that would be relevant to a prospective franchisee. We also insist that they spend time in the restaurant with Gavin or Francesco in order to experience it first hand. We do not make use of psychometric tests as we find that they are too subjective. If after all of this, the franchisee wants to proceed, we begin the training process and site selection suitable to the specific franchisee.”

There are a range of mistakes to avoid. Of these, he lists the following as the most common:

1. Insufficient support from the franchisor with regard to training, regular menu updates, area management support, brand awareness, point of sale database support, purchasing power and negotiating with suppliers

2. The concept that is being franchised has to have critical mass, be unique and identifiable and must have good food first and foremost, which often is not the case.

3. Many restaurants try to grow their brand by opening stores too quickly, without bedding down the foundation and getting it right first; 

4. The franchisor gets franchisees to sign rental deals that are onerous and unaffordable, placing undue pressure on the franchisee;

5. Businesses are over-capitalised, again placing undue pressure on the franchisee and ultimately the brand.

 

Adapting models for greater efficiency

Franchising and growth bring other challenges as well, as Primi’s franchise director Hitesh Patel explains: “A challenge that we continually face is the signing of good rental deals with landlords. Interest rates have risen, building costs are higher than ever before and land is at a premium, which ultimately results in excessive rentals being charged. This places a burden on the franchisee’s business, particularly at the outset when they are redeeming high debt. Coupled with this are the excessive labour costs associated with running a restaurant. In order to address these problems, we have opted for smaller premises, more efficient kitchens, multi skilled staff and an intensive training programme. It makes more sense to turn tables faster than to have half the restaurant empty for most of the day. We have also been successful in negotiating with the IDC and various banks good finance packages that ease the pressure on the franchisee at the outset.”

Juliet Pitman is a features writer at Entrepreneur Magazine.

Continue Reading
Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Entrepreneur Profiles

6 Lesson Gems From Appanna Ganapathy That Helped Him Launch A High-Growth Start-Up

Twenty years after first wanting to own a business, Appanna Ganapathy launched ART Technologies, a business he aims to grow throughout Africa, starting with Kenya thanks to a recently signed deal with Seacom. As a high-growth entrepreneur with big plans, Appanna spent two decades laying the foundations of success — and now he’s starting to collect.

Nadine Todd

Published

on

appanna-ganapathy

Vital Stats

Like many entrepreneurs before him, Appanna Ganapathy hadn’t even finished school and he was already thinking about his first business venture. A friend could secure the licensing rights to open Nando’s franchises in Mozambique, and they were very keen on the idea — which Appanna’s mom quickly dampened. “You can do whatever you want,” she said. “As long as you finish your degree first.”

Unlike many other entrepreneurs however, Appanna not only finished his degree, but realised that he had a lot of skills he needed to develop and lessons to learn before he’d be ready to launch the business he wanted.

“We launched ART Technologies just over two years ago. If I had started any earlier, I don’t think I would have been as successful as I am now,” he says.

Here are six key lessons that Appanna has learnt along his journey, which have allowed him to launch a high-growth start-up that is positioned to make an impact across Africa.

1. You don’t just need a product – you need clients as well

Business success is the ability to design and execute a great product and solution, and then be able to sell it. Without sales, there is no business. This is a lesson Appanna learnt while he was still at university.

“I was drawn to computers. I loved figuring out how they worked, playing computer games — everything about them,” he says. “My parents lived in Mozambique, and during my holidays I’d visit them and a friend who had a computer business. I helped him assemble them and thought I could do this too while I was studying. I convinced my dad to buy me a car so that I could set up my business — and never sold or assembled a single computer. I delivered pizzas instead.”

So, what went wrong? The simple truth was that at the time Appanna had the technical skills to build computers, but he lacked the ability to sell his product.

“If someone had said, ‘I’ve got an order for 30 computers’, I would have filled it — but to go out and get that order — I didn’t really even know where to start.”

2. Price and solution go hand-in-hand

As much as you need the ability to sell your solution, you also need a market that wants and needs what you’re offering, at a price point that works for everyone.

In 2007, Appanna was approached by a former supplier whom he had worked with while he was based in Mozambique. The supplier had an IT firm and he wanted to expand into South Africa. He was looking for a local partner who would purchase equity shares in the company and run the South African business.

“I loved the opportunity. This was something I could build from the ground up, in an area I understood well,” says Appanna. The firm set up and managed IT infrastructure for SMEs. The value proposition was simple: “We could offer SMEs a service that they could use for a relatively low cost, but that gave them everything an enterprise would have.”

The problem was that although Appanna and his team knew they had a great product, they were competing on price with inferior products. “If we couldn’t adequately unpack the value of our solution, an SME would choose the cheaper option. It was a big lesson for me to learn. It doesn’t matter how good the solution is that you’re offering — if it’s not at a price point that your target market accepts, they won’t choose you.”

It was this understanding that helped Appanna and his team develop the Desktop-as-a-Service solution that ART Technologies now offers the SME market.

“While I was developing the idea and the solution, I needed to take three key things into account: What do SMEs need from an IT infrastructure perspective, what is the most cost-effective way to offer them that solution, and what will the market pay (and is it enough to cover our costs and give us a small profit margin)?”

Appanna’s experience in the market had already taught him how cost-conscious SMEs are, and so he started developing a solution that could deliver value at a price point SMEs could accept. His solution? A unique Desktop-as-a-Service product that combines all the processing power and Microsoft products a business needs, without any capex outlay for servers or software.

“It’s a Cloud workstation that turns any device into a full Windows computer,” Appanna explains. “We hold the licences, and our clients just access our service. A set-up that would cost between R180 000 and R200 000 for 15 users is now available for R479 per user per month.”

It took Appanna and his partners time to build the solution, but they started with the price point in mind, which meant a solution could be designed that met their needs as well as the needs of the market.

“Too many businesses set everything up, invest in the solution, and then discover they can’t sell their product at the price point they need. My time in the market selling IT and infrastructure solutions gave me invaluable insights into what we needed to deliver on, and what we could realistically charge for our service.”

3. Get as much on-the-ground experience as you can

appanna-ganapathy-art-technologies

The time that Appanna spent building the IT firm he was a part-owner of was invaluable. “I started as a technical director before being promoted to GM and running the company for three and a half years. Those years were very, very important for me. They’re where I learnt everything about running a business.

“When I started, I was responsible for sales, but I didn’t have to actually go out and find clients, I just had to meet them, compile quotes and handle the installations. Everything I did was under the guidance of the company’s CEO, who was based in Mozambique. Being the guy who did everything was the best learning ground for me. It set me up for everything I’m doing today. In particular, I learnt how to approach and deal with people. Without people and clients your business is nothing.”

Appanna didn’t just learn by default — he actively worked to expand his understanding of all facets of the business. “At the time I wasn’t planning on leaving to launch my own business,” he says. “I was a shareholder and I wanted to grow that business. That meant understanding as much as possible about how everything worked. If there was something I wasn’t sure of — a process, the numbers, how something worked — I asked. I took personal responsibility for any errors and got involved in every aspect of the business, including areas that weren’t officially ‘my job’. I wanted to really grow and support the business.”

4. Stay focused

Interestingly, while the experience Appanna has accumulated throughout his career has allowed him to build a high-growth start-up, it also taught him the importance of not wearing too many hats as an entrepreneur.

“I’m glad I’ve had the experience of wearing multiple hats, because I’ve learnt so much, but I’ve also learnt that it’s important to pick a lane, not only in what you do as a business, but in the role you play within your business. I also race superbikes in the South African Kawasaki ZX-10 Cup; through this I have learnt how important it is to focus in the moment without distractions and this is a discipline I have brought into the business.”

“If you’re the leader of an organisation, you need to let things go. You can’t be everything to everyone. When I launched ART Technologies, I knew the key to growth would be the fact that although I’m technical, I wasn’t going to run the technical side of the business. I have strong technical partners whom I trust, and there is an escalation framework in place, from tech, to tech manager, to the CTO to me — I speak tech and I’m available, but my focus is on strategy and growth. I believe this is the biggest mistake that many start-ups make. If you’re wearing all the hats, who is looking at where you’re going? When you’re down in the trenches, doing everything, it’s impossible to see the bigger picture.”

Appanna chose his partners carefully with this goal in mind.

“All the partners play a very important role in the business. Ruaan Jacobs’s strength is in the technical expertise he brings to the business and Terry Naidoo’s strength is in the support services he provides to our clients. Terry is our technical manager. He has the most incredible relationship with our customers — everyone wants to work with Terry. But there’s a problem with that too — if we want to scale this business, Terry can’t be the technical point for all of our customers.

“As partners we have decided what our blueprint for service levels will be; this is based on the way Terry deals with clients and he is developing a technical manual that doesn’t only cover the tech side of the business, but how ART Technologies engages with its customers.

“Terry’s putting his essence down on paper — a step-by-step guide to how we do business. That’s how you build a service culture.”

5. Reputation, network and experience count

Many start-ups lack three crucial things when they launch: Their founders haven’t built up a large network, they don’t have a reputation in the market, and they lack experience. All three of these things can (and should) be addressed during start-up phase, but launching with all three can give the business a valuable boost.

Appanna learnt the value of networks at a young age. Born in India, he moved to Zambia with his family as a young child. From there he moved to Tanzania and then Mozambique, attending boarding school in Swaziland and KwaZulu Natal. At each new school, he was greeted by kids who had formed strong bonds.

“I made good friends in those years, but at each new school I recognised how important strong bonds are, particularly as the outsider.”

Appanna’s early career took him back to Mozambique, working with the UN and EY on various projects. When he moved to South Africa, as a non-citizen he connected with his old boss from the UN who offered him a position as information officer for the Regional Director’s team.

His next move would be to the tech company that he would run for just over three years — also the product of previous connections. “Who you know is important, but how you conduct yourself is even more so,” says Appanna. “If your reputation in the market place is good, people will want to do business with you.”

Appanna experienced this first hand when he left to launch his own business. “Some key clients wanted to move with me,” he says. “If I had brought them in it would have settled our business, but I said no to some key customers who hadn’t been mine. I wasn’t ethically comfortable taking them with me.”

One of those multinational clients approached Appanna again six months later, stating they were taking their business out to tender and that they were hoping ART Technologies would pitch for it. “Apart from the Desktop-as-a-Service product, we also provide managed IT services for clients, particularly larger enterprise clients. Due to the client going out on tender and requesting for us to participate, we pitched for the business and won. The relationship with this client has grown, allowing us to offer them some of our services that they are currently testing to implement throughout Africa.”

“I believe how we conduct ourselves is essential. You need your own personal code of ethics, and you need to live by it. Business — particularly in our environment — is built on trust. Our customers need to trust us with their data. Your reputation is key when it comes to trust.”

Interestingly, although Appanna and his team developed their product based on a specific price point, once that trust is built and a certain standard of service is delivered, customers will pay more.

6. Start smart and start lean

Appanna was able to launch ART Technologies with the savings he and his wife, Kate, had put aside. He reached a point where he had ideas he wanted to take to market, but he couldn’t get his current business partners to agree to them — and so setting up his own business became inevitable.

Although he was fortunate to have savings to bootstrap the business, it was essential for the business to be lean and start generating income as quickly as possible. This was achieved in a number of ways.

First, Appanna and Kate agreed on a start-up figure. They would not go beyond it. “We had a budget, and the business needed to make money before that budget was reached.” The runway Appanna gave himself was only six months — highly ambitious given the 18-month runway most start-ups need. “Other than my salary we broke even in month three, which actually extended our runway a bit,” says Appanna.

Appanna had a server that he used to start with, and purchased a second, bigger server four months later. He also launched another business one month before launching ART Technologies — ART Call Management, a virtual PA services business that needed a PABX system, some call centre technology and two employees.

“I’d been playing around with the idea for a while,” says Appanna. “We were focused on SMEs, and I started noticing other challenges they faced. A lot of entrepreneurs just have their cellphones, but they aren’t answering them as businesses — it’s not professional.

“In essence we sell minutes — for R295 you get 25 incoming calls and 50 minutes of transferred calls. We answer the phone as your receptionist, transfer calls and take messages. How you use your minutes is up to you. For example, if you supply the leads, we can cold call for you. ART Technologies uses the call management business as a reception service and to do all of our cold calling. It’s kept the business lean, but it’s also brought in an income that helped us with our runway.” In 2017 ART Call Management was selected as one of the top ten in the SAGE-702 Small Business Awards.

The only problem with almost simultaneously launching two businesses is focus. “It’s incredibly important to know where you’re putting your focus,” says Appanna. “The call management business has been essential to our overall strategy, but my focus has been pulled in different directions at times, and I need to be conscious of that. The most important thing for any start-up is to know exactly where your focus lies.”


Into Africa

Thanks to a distribution deal signed locally with First Distribution, ART Technologies was introduced to Seacom, which has available infrastructure in a data centre in Kenya.

“It’s a pay-per-client model that allows us to pay Seacom a percentage of every client we sign up,” says Appanna. “First Distribution will be our sales arm. They have a webstore and resellers, and we will be opening ART Kenya with a shareholder who knows the local market.”

From there, Appanna is looking to West Africa and Mauritius. “We have the product and the relationship with Seacom gives us the foothold we need to grow into East Africa.”

Continue Reading

Entrepreneur Profiles

Kid Entrepreneurs Who Have Already Built Successful Businesses (And How You Can Too)

All over the world kids are abandoning the traditional notion of choosing a career to pursue until retirement. Gen Z aren’t looking to become employable job-seekers, but creative innovators as emerging business owners.

Diana Albertyn

Published

on

Prev1 of 16

kid-entrepreneurs-who-have-already-built-successful-businesses-and-how-you-can-too

Do kids have an advantage or disadvantage when it comes to starting and building a company? It depends on how you look it. Juggling school, friends, family and other aspects of childhood and adolescence comes with its own requirements, but perhaps this is the best age to start.

“Being an entrepreneur means having to learn, focus, and connect to people and these are all traits that are valuable throughout life. Learning this when you are young is especially crucial, and will set you up for success and to be more open to other opportunities,” says billionaire investor, Shark Tank personality and author Mark Cuban.

Here are some of the most successful kidpreneurs who have cashed in on their hobbies, interests and needs to start and grow million dollar businesses borne from passion and innovation:

Prev1 of 16

Continue Reading

Entrepreneur Profiles

30 Top Influential SA Business Leaders

Learn from these South African titans of industry to guide you on your entrepreneurial journey to success.

Nicole Crampton

Published

on

Prev1 of 31

_influential-sa-business-leaders

Entrepreneurship is said to be the answer to South Africa’s unemployment challenges and slow growth, but to foster entrepreneurship we ideally need business leaders to impact grass root efforts. Business leadership is vital to improved confidence and growth. These three titans of global industry say:

  • “As we look ahead, leaders will be those who empower others.” – Bill Gates
  • “Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours.” – Elon Musk
  • “Management is about persuading people to do things they do not want to do, while leadership is about inspiring people to do things they never thought they could.” – Steve Jobs

Here are 30 top influential SA business leaders forging the path towards a prosperous South African future.

Prev1 of 31

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending