Q & A with Terry Hopkins, owner of 80 restaurants.

by Jeff Bizzack

Voted “Best Pizza in Seattle” by Sunset magazine for the past five years, Emerald City Pizza has a special vision for focusing on customer satisfaction. With more than a 24 percent market share, the Seattle restaurant chain of 80 Pizza Huts has earned industry wide recognition for its innovative approach to building a powerful brand and is known for delivering a great product and customer experience. In this interview, Terry Hopkins, the president of Emerald City Pizza, discusses the criteria he used for selecting a finance and accounting service provider and offers advice to other CEOs looking to outsource back-office functions.

Jeff Bizzack: When did your relationship with your provider begin and what led you to outsource your back-office functions?
Terry Hopkins: We first teamed up with our provider in 1996. At the time, we had 19 stores and were considering the acquisition of additional stores. We decided that we needed to focus more on operating restaurants and allow someone else to focus on the back-office operations: accounts receivable, accounts payable, and payroll.  

JB: What criteria did you use to select your service provider?
TH: First and foremost, we looked at the product. What does the service provider have to offer and what are their expansion capabilities: Can they grow with our growth? That’s the price of admission. They needed to have core competencies in finance, accounting, and payroll and have enough people in position to handle our business. As we moved forward through the selection process, we became increasingly interested in the relationships being built, the interest shown in our business as demonstrated by the provider. We wanted to find a provider that wanted to be more than just an administrative pocket of our company, a provider that wanted to bring value-added services to provide information for all parties involved including accountants, payroll people, field operators, and even our area coaches. In the end, we wanted to find an outsourcing partner that we felt had a vision consistent with what we had in our minds as far as growing our business.

JB: How do you know if a provider is going to be someone that you can trust?
TH: I don’t think you can ever be absolutely sure. A lot of it is based on that face-to-face contact. However, if the information you’re getting resonates with what you see being demonstrated through the interview process, then you go forward. You look at their infrastructure, ask a lot of questions, check references, and talk to other people that have worked with them. Our service provider communicated that they fully understood what our needs were going to be and were committed to meeting them. They consistently demonstrated that they were serious about what they did and cared about the pizza brand. Past that, the priority becomes character and integrity; they are critical to the reference process.

JB: How important is polling data to your day-to-day operation?
TH: It’s very important. We noticed that when we bought an additional 60 restaurants, we tripled our restaurants over night. We were not familiar with these restaurants, as they had been operated by corporate for years; they were also all located in a pretty wide range of locations geographically. Being able to monitor results on a daily basis was important. In the beginning, we were really tracking whether the deposits were getting to the bank, as that was a big concern. Polling also saves us time and helps us strategize. It points us in the direction of where we need to go as far as staffing improvements, marketing changes, and success of daily promotions. It’s a scoreboard of sorts that we can look at any given time. It doesn’t necessarily tell you exactly what’s happening, all the details pitch by pitch so to speak, but it does allow us to understand which areas we want to go to first.

JB: The transition of adding stores to your service delivery system needs to be seamless. What advice can you offer to a firm that may be transitioning financial and payroll services?
TH: There are a number of things that we learned going through our acquisition that we didn’t anticipate. Someone needs to be on site; I cannot imagine anyone being able to provide a lot of value remotely. If I were trying to do this without someone in-house, I would probably go to the provider I was working with and say ‘I need someone working here for the first 60 days to ensure that everything runs smoothly.’ If I had to narrow it down to one word, it would be communication: Close communication during the transition period is key.

JB: If a CEO called you tomorrow and said he was considering outsourcing his back-office, what would you tell him?
TH: There are two things I would advise someone looking to outsource his back office. First, I think you need to have a quality person in-house to assist your outsourcing provider. This person acts like a quarterback on a football team. Your service provider can be a great team, and you cannot do without the team, but someone needs to be directing them and helping them understand that they are doing the right thing. By leveraging the leadership skills of your internal person and the expertise of the service provider, you will get the maximum benefit. The second thing I would advise is to understand that mistakes will happen, there are going to be frustrating scenarios that occur. For me, its not that they occur because I accept that they will, but how the provider will respond once they do occur is what matters.

Jeff Bizzack is the CEO of Savista, a provider of FAO and HRO services to more than 100 mid-market firms in North America. He can be reached via e-mail at Jeff.Bizzack@SavistaCorp.com