That guy sprinkling the anchovies on your Mod Pizza might be a two-time loser and ex-con, but that’s part of the business plan at the 150-store, fast-casual restaurant chain.
“The idea of second chances…is a byproduct of the commitment we made early on to use the business as a platform to make a positive social impact,” said Mod founder and president Scott Svenson.
Svenson is a millionaire a few times over, due to the success of his Seattle Coffee Company and Carluccio’s restaurant chain. The money has liberated him to pursue what is known as a double bottom line, which means doing good while making money. And Mod Pizza seems to be doing both, continuing an expansion at a time when some in the Chipotle-like fast-casual assembly-line pizza business are starting to fail.
He calls it “enlightened capitalism.”
“Let’s be honest,” Svenson said in a phone interview on Friday. “We are doing this because my wife [Ally] and I have built two previous businesses. We know what gives us personal satisfaction and contentment. It’s not just going out and making another dollar. It’s the impact we’ve made and the people we’ve impacted.”
Around 20 percent of Mod’s new hires have a troubled past.
That can include “individuals with criminal records, past drug and alcohol problems, developmental or physical differences, those with no job history, or those looking to get back into the workforce,” according to the company.
There’s lots of room for initiative. People are encouraged to show their stuff.
“We have wide boulevards,” Svenson said. “You have a lot of empowerment to execute. You have to strive to do the right thing. All of us know instinctively what that right thing is.”
Stay within the curbs and you do well. Jump the curbs – “lie, cheat, steal” – and you are gone.
Svenson said most last, but not everybody.
He offered to examples.
“We had a team member, a three-time former felon, we promoted to general manager within a year. He couldn’t imagine someone trusting him in a cash business to be in charge. Three months later, he lost a $3,000 deposit. We believe he truly lost it. He not only paid it back, he has paid us back a million times over.”
Here is the other example:
“An assistant general manager had been in jail. He was cashing out, and the til was $30 short. A mistake had been made. He didn’t want to leave the company $30 short, so he took tip money to make up for the company’s loss. He denied [taking the tip money] and he was fired. If he said, ‘We were $30 short,’ we would have said that’s okay. We will make it up.”
Most hires at new stores come from traditional sources, but the chain looks harder to find those who need a do-over. It finds them through partnerships with community organizations that are helping people transition out of everything from prison release to foster care.
“There is a risk and that freaks people out,” he said of his enlightened capitalism. “But we are all fallible. Some mistakes are bigger than others. If you really take the time to understand the story behind those mistakes, you realize in many cases people make bad decisions.”
Svenson, who is a 1988 graduate of Harvard, said not everybody has the family, role models and support network that he and others enjoyed growing up.
“Can you imagine being 18 and not having a family or a place to turn,” he said, referring to young adults coming out of foster care. “There is a population of people who when we hire them, they are homeless.”
The pay starts at $10.50 an hour and goes up from there. There are health benefits and paid time off. There is no 401k program as yet, which is not unusual in the fast food industry where turnover is frequent.
So how is Mod doing these days?
Svenson said the business grossed more than $60 million last year and was the fastest -growing restaurant chain in the U.S. in 2015, according to Technomic.
“If you want to spend $10 for a individualized and customized product that is healthier and faster and a 15-minute to 30-minute experience, we are a great option.”
One differentiator is cost. The pies at Mod, depending on the market, start around $7.47 or $8.27. For that, you get whatever toppings you want.
Their slogan is Random Acts of Modness, which I surmise is another word for encouraging a funky, welcoming culture. You know, the kind where they yell hello at you as soon as you come in the door.
Those random acts of Modness can include giving away free stuff.
“If the Mod Squad member wants to buy you dinner, a milkshake or give out pizza coupons, or he or she wants to buys everyone in line dinner, they are totally empowered. It has happened.”
Mod Pizza may be no Michelin three-star. But Svenson expects to be a winner in the shakeout under way affecting the fast-casual pizza business.
“It’s already begun,” he said. “Dozens of brands who said they will be the next Chipotle of pizza” are failing. “Many don’t have the resources or experience to build a business.”