For the married co-founders of MOD Pizza, a chain of artisan-style pizza restaurants throughout the U.S., their business model was built from taking risks. Scott Svenson, who launched the company with his wife Ally, says the gamble has paid off in many ways.
"There will either be financial return, or you'll have more loyal employees or more loyal customers," says Scott. Luckily, it's worked in their favor. The Inc. 5000 company (No. 327) opened store No. 302 in December, and now has locations in 27 states across the U.S. In 2016, it reached $131 million in revenue.
Risk-taking is in their DNA.
The Svensons are no strangers to starting a business. Scott was an investment banker and Ally worked in the publishing industry before the pair opened the Seattle Coffee Company in London in 1995. When Scott gave his notice that he was leaving to start a coffee shop, his boss asked if he'd lost his mind.
"He managed an intervention from the board because he thought that I'd been working too hard and was having a breakdown," Scott recalls. "People thought we were crazy, and because of that pressure, we couldn't fail."
Three years after opening the Seattle Coffee Company, the couple sold it to Starbucks for around $90 million. The same year, they collaborated with Antonio and Priscilla Carluccio to create Carluccio's. The first deli cafe opened in 1999, with Scott and Ally on the company's board. Since then, Carluccio's has built more than 100 locations across the U.K, Turkey, and the U.S.
A slice of the pizza market.
Scott and Ally moved back to Seattle to take a break from the restaurant business and focus on raising their four boys. Several years later, a business connection suggested they look at the pizza industry. They found it lacked innovation; while new technology was changing the delivery process, and local pizza joints continued to pop up, they didn't see fast-casual options in the space.
Scott says customers outside of New York City (where slices go for as little as $1) had the option of either getting a pizza delivered to their homes or spending an hour at a dine-in restaurant. But the Svensons' imagined a place that would bring a fast-casual format to the pizza business. The model would allow customers to add an unlimited amount of toppings to an 11-inch thin crust pizza for the same set price.
Going against the naysayers.
Scott and Aly opened their first store in November 2008--about a year into the recession. They were told it was a terrible time to start a business, and they should wait for the dust to settle, but they pushed forward. They had a driving force to create more than just a pizza chain; they wanted to make a social impact.
"Of course, building a successful business is gratifying," Scott says, "but the things that gave us the most happiness were the times we were able to make a positive impact on someone's life."
Costly benefits that create more durable results.
MOD provides staff with free meals as well as leadership and life-skills coaching. Ally and Scott also aim to give employees a living wage, benefits, and opportunities they typically wouldn't find elsewhere. For instance, MOD hires multiple-time felons, people with learning disabilities, and those recently released from drug or alcohol rehabilitation.
But these efforts aren't cheap. Training and higher wages add up, and when Scott and Ally started their first two businesses, they didn't have the courage to include those benefits. Now, they want to show others that it's possible. "If we give them an opportunity and treat them well, we can make them feel trusted and empowered," Scott says.
MOD has seen tremendous growth. The company grew from 192 stores to 302 stores between 2016 and 2017, and saw sales north of $150 million in 2016.
"Today, companies have to think about more than just their shareholders, they have to think about the health of their community," Scott says. "If we all wait for the government to solve the problems we have today, we'll be waiting for a long time."