Business Profile: Franco Manca

David Page has a number of rules for Franco Manca, the Neapolitan pizza company of which he is a director, the most eye-catching being his diktat that its top price pizza will always be 50p cheaper than a Margherita at PizzaExpress.

Among Page’s other rules are that all directors of the company are paid just £4,000 a year and that they take no shareholder dividends, which are equally attention-grabbing decrees. They do, however, go some way to explaining how Franco Manca can pull off the first goal.

So far, so achievable. Franco Manca’s most expensive pizza is just £6.95, while a PizzaExpress Margherita is £7.80 (its highest price option is £13.20). Little wonder, then, that Franco Manca took the pizza world by storm when it opened in Brixton Market in 2008.

As a former chief executive of PizzaExpress, Page is a long-time pizza player, but Franco Manca isn’t the result of him deciding to go head-to-head with his former company. It is the brainchild of Naples-born Giuseppe Mascoli who came to the UK in 1989.

Mascoli moved to Brixton (where he still lives), and in 2008, joined forces with Sami Wasif, owner of Eco Pizza in Clapham, to convert his Brixton Market restaurant into a Neapolitan pizzeria – it was originally called Franco, so Mascoli named it Franco Manca, translated as ‘Franco’s missing’, in homage to it. Unlike the crispier base pizzas of the high-street chains, Mascoli serves the traditional soft-base pizzas of his home city, with which he has been fascinated from an early age.

The change proved a hit and Franco Manca kicked off a restaurant scene in Brixton Market that today is one of the most progressive in the capital. It often has queues outside both its doors on evenings – it operates from two opposite premises, the second was bought two months after opening the first – and on a good day Brixton can serve 600 pizzas.

Buoyed by this success the pair did the same with the Eco site in Chiswick, transforming it into a Franco Manca in 2010. However, realising they needed more experience to roll it out further they approached Page and his business partners Nabil Mankarious and David Sykes for help. Sykes had two Rocca Italian restaurants – in Dulwich and South Kensington – so they did a 50:50 merger, with the shareholders in Rocca taking 50 per cent of Franco Manca and vice versa. The result is five shareholders owning 75 per cent of the business, with the other 25 per cent owned by the managers.

Changing pizza perceptions​

Now with 10 London sites and a number of others in the pipeline, Franco Manca is going places. But while it was a hit early on, success wasn’t instantaneous. “In the beginning it [Brixton Market] wasn’t busy at all,” says Mascoli. “People would come and send the pizza back because it was soft and soggy. A lot of people called it a ‘crap crêpe’. Then Marina O’Loughlin (the then Metro​ restaurant critic) said it was the best pizza in England and that it was made the way it should be, so people began to understand and enjoy the softness and charred bits. After that, it took off.”

Mascoli’s pizzas were different, not just because of their texture (a Neapolitan pizza can be folded and eaten as a hand-held snack), but their slow-rising sourdough. They are baked in a wood-burning brick oven that produces a heat of 500°C and the slow leavening of the dough combined with the intense heat locks in the flour’s natural aroma for a soft crust and a pizza unlike the majority available in the UK at the time. The dough requires a 24-hour fermentation period “so if you run out, you run out,” says Mascoli.

The brand’s streamlined approach to its menu also stood out from the pack. Unlike the high street chains, which offer a large array of pizzas – Prezzo has about 13, PizzaExpress 24 – Franco Manca has only ever served seven varieties, six standard and one special. Mascoli’s approach is to use a few high-value toppings, limiting the number of pizzas he can put on the menu but also allowing the flavour of his bases to shine through. “What you want to taste is the base – not a lot of stuff on it. The most important thing is the ingredients and how you balance them.”

A drive for high-quality ingredients sees Franco Manca use the best organic British product where possible. The sausage is made from pork neck, leg and belly that’s chopped by hand and its mozzarella, instead of coming from Italy, is actually sourced from Somerset.

“Much of the Italian buffalo mozzarella you buy over here has a base made in Germany,” says Mascoli. “A good fior di latte mozzarella is non-pasteurised or very low pasteurised and lasts only three days, you can’t ship it to the UK. England has got some of the best milk in the world so why buy fior di latte from Italy and transport it? It doesn’t make sense.

“The one we use is better than you find in Italy. Not all of it, of course. If you go to a small artisan producer you’ll find some exceptional ones, but ours is better than the vast majority over there.”

This stance might have Neapolitans up in arms, as might Franco Manca’s use of ingredients such as butternut squash and wild broccoli, but the brand is built around offering genuinely good pizza, not sticking staunchly to tradition.

“There are two or three menu changes a year,” says Page. “Courgettes have just come off the menu and butternut squash gone on. Giuseppe is not afraid of using British produce on pizza; you certainly wouldn’t get that in Naples. If you want the genuine product have a Margherita – or better still bread with tomato, garlic and oregano.” 

Keeping costs down​

Low price and great product have been the key to Franco Manca’s success so far and, as the company grows, it intends to keep it that way.

“We don’t spend much on the restaurants,” says Page. “Food is the thing, not the interiors. We also make sure they are very hard wearing, so we put in a lot of tiles so as not to spend a lot of money on them going forward. No expensive refurb also reduces menu prices. And we don’t go for really big places because they are expensive and it’s just hubris – it’s much better to have really buzzy place that seats 50 than an empty cavern that can fit 150.”

Balham is a case in point. Franco Manca opened a 60-cover restaurant across the road from a 200-seater PizzaExpress in the south London town. Come a weekend lunchtime it is packed while the PizzaExpress opposite often isn’t close to hitting capacity. Even though both sites are probably doing the same number of customers, Franco Manca looks to have the edge.

Another of Page’s golden rules is to not pay too much for sites, something to which the company has stayed true thus far. Brixton Market rents are still 60 per cent of those charged on the high street, according to Page, and the company looks for locations where the rent will be less than 5 per cent of turnover. It pays £45,000 a year in rent for Balham and £30,000 in Broadway Market and Southfields. “We go for cheap locations, which also reduces the pressure on putting prices up.”

There has been one exception, with Franco Manca’s Tottenham Court Road branch, which is owned by Page’s investment vehicle Fulham Shore. When he approached the Franco Manca board about the site, and revealed the rent would be £130,000 a year they turned it down. “It was outside of their normal comfort zone,” he says. “I said if you don’t like it, I’d open a franchise and we agreed I’d pay £15,000 and 5 per cent of turnover. It is now the busiest one out of the lot. I have great fun reminding the board of that.”

There is an option for the company to buy it back but, because it’s making a lot of money, it’s quite expensive, says Page. Its nine-year lease also makes it less attractive. “They are quite happy with their 5% fee.”

This move isn’t the beginning of an elaborate franchising scheme, although Page believes that for Franco Manca to move outside of London it would most likely be led by an experienced manager. “If we did expand it would probably be through an employee-led expansion, somebody who had worked with us for five years and was from Hungerford or Bath and said ‘I found a cheap shop’. Given we know them and they know what they are doing, we might give it a shot.”

What Tottenham Court Road has done is show the possibilities of opening in higher footfall locations and has encouraged spending if the location warrants it. Rents at the company’s next three properties are £75,000, £80,000 and, for Covent Garden, £105,000.

While Tottenham Court Road is the exception, one other location sticks out as being incongruous for the Franco Manca brand: Westfield Stratford. The company’s third site, in the shopping mall, is a far cry from rough-and-ready Brixton Market where it all began. But was the transition from one style of market to another the right thing to do?

“We had a long discussion about it,” says Page. Westfield is a modern version of Brixton Market, that was our reasoning, and they promised it would be a different food environment. But it’s still a shopping centre. We do all right there and would probably consider another shopping centre, but we would think about it a bit harder than we did the first time.”

Mascoli echoes this view. “It was something we had to try but I don’t enjoy it. It is the opposite of a great square in Rome. It’s good to be commercial, but personally it’s not a place that I enjoy.” 

The price of fame​

Franco Manca’s pricing structure, as well as the quality of its product, will have no doubt made it a very attractive proposition to Westfield. Indeed, low prices have been at the bedrock of the company’s approach since day one, and so far is has not raised its prices.

“The prices haven’t gone up since 2008,” says Mascoli. “We do that by having close talks with our suppliers and growing to support them.”

Considering the quality of its offer. Franco Manca does seem absurdly cheap compared with the high-street competition. But, given the high margins at which pizza players can operate, it’s the others that are expensive, says Page.

“Average spend per head is £8.50 to £9.50 for dinner and £7.50 at lunch. It’s possible to have a pizza and a drink at Franco Manca for less than a Margherita on its own at PizzaExpress. A lot of high-
street pizza chains started discounting through two-for-one deals so had to put up their single pizza prices. People who don’t know about discounting are being put off. At a large pizza chain, only one or two pizzas are below £10.” 

Hitting for six​

Although the company is keen to grow, expansion plans are a modest six sites a year for the next few years. “We don’t borrow any money so there is no pressure from the bank to increase this to 20 or 25,” says Page. “We want to have two months between each opening. I’ve been involved in a lot of businesses where they’ve expanded very quickly and you lose the preciousness of each restaurant.”

Most sites for this year have already been sorted, with openings due in London’s Bermondsey Street this month, Ealing Broadway in March, Berwick Street in April and Covent Garden in July, and pace is unlikely to quicken dramatically in the future. “We might increase our openings to seven a year in a few years’ time when we get the expertise, but if you go beyond one new store a month you get overtaken by the opening programme. But we’re not afraid to grow. The phrase small is beautiful is true, but if you were an elephant you’d be a bit offended.”

Mascoli shares these concerns. “My main worry is losing our essence as we grow. That’s why we have put a cap on growth. If you go slowly, you can patch up problems. Quality and quantity are not compatible in theory. Nowhere is there written that it’s going to be a success.”

The fact that the directors only pay themselves a small wage also dictates growth rate and means the brand will concentrate on the capital in the immediate future. “We are only getting £4,000 a year so I can’t really afford the petrol to go around the country looking at potential sites – I’m not joking,” says Page. “There is no incentive to open more stores apart from the capital value you’re growing as a business, which is a bit nebulous until you realise it. We might go outside London in a couple of years time; we’ve had offers from Dubai, Abu Dhabi, Moscow, all of which we’ve politely turned down. We’ll probably open in Hungerford before Moscow.”

There may be more synergies with Page’s other brands, however. As well as Franco Manca, he is an investor in The Real Greek, Bukowski Grill and MeatLiquor, and is actively involved in securing sites for all four brands. For the Berwick Street opening, he found a site big enough to house a The Real Greek on the ground floor and a Franco Manca in the basement, and this flexible approach could see Franco Mancas popping up in some interesting locations.

Whatever happens, both Mascoli and Page are adamant that growth won’t kill the essence of the brand. Page dismisses the rumblings of discontent that typically arise once a well-loved brand starts to expand. “Because it’s a hand-made product you’re never going to get it the same; every single pizza we make is different. We try for consistency but it’s more luck than judgment.”

Each restaurant still makes its own dough, adds Page: “It’s not made in Milton Keynes and put in a lorry and sent round the country. Every restaurant lives or dies by its dough.”

The company’s mission statement hasn’t changed either. “Twenty five years ago at PizzaExpress, we were on a mission as the best thing to happen to the British high street. In Franco Manca, we are doing it all again.