Pizza Union: Union power

Pizza-Union-Bobby-Hashemi

The music is loud and pulsating. The lunchtime crowds are swarming in and pizzas are flying out of the oven.

Welcome to Pizza Union, the latest food concept joining the capital’s growing emporium of fast-casual pizza places, where the average dwell time is around 20 minutes.

The man behind this buzzing, noisy concept is Bobby Hashemi, co-founder of Coffee Republic, who wanted to create somewhere people could grab “great-quality pizza, quickly, in a great environment”.

Customers can get their pizzas cooked in minutes in a restaurant with a minimal rustic décor, seated at rough wooden tables, surrounded by vintage adverts and dominated by that massive
wood-fired oven. Pizzas start from £3.95 for a margherita and a bottle of Prosecco costs £15.

Having opened the first Pizza Union in Spitalfields in July 2013, and a second site in King’s Cross in June last year, Hashemi is keen to get the message out that he is on the hunt for more outlets. Lots more.

Typically, he wants 2,000-2,500 sq ft units with a 20- to 25-year leasehold. “What we are looking for is the quality of the area (see panel)… We are more interested in up-and-coming areas.”

Hashemi adds: “We want to create an income stream for ourselves and the landlords, the partnership for years to come.” That is why he is fearless in taking on such long leases. “I have no intention at this time to think about an exit.”

After waiting three years to open two restaurants, why the expansion drive now? With the saturated pizza/pasta market, what makes Hashemi think landlords will be interested and, more importantly, what makes his restaurant stand out?

It is by looking at his past that you see how Hashemi now intends to operate, and that is cautiously. Hashemi set up Coffee Republic with sister Sahar in 1995 – the UK’s first coffee chain inspired by his time working in the New York branch of Lehman’s in the early 1990s – and within five years they had more than 100 branches.

“The growth of Coffee Republic was too fast in hindsight,” he admits. “Keeping in mind I was something like 30 [at the time] and never had any experience outside of investment banking, I was focused purely on growth. Too much of my time was spent looking for sites and building the business and not enough time focusing on getting the fundamentals right, the basics of the business.”

Time has taught Hashemi a lesson: bed in a business first. “Focus on quality versus quantity and spend all the energy in the early days making sure the team is right and well trained, the product is right, then you have got a model that is built on strong foundations for the future,” he says.

“The important thing is it is not just about growth, it is about creating a solid business.” Thus explaining the two years between opening the sites at Spitalfields and King’s Cross. “We have now proven the model and are ready for a measured roll-out,” he adds.

That roll-out, however, is rolling in to a very crowded market. According to market research company Mintel the pizza/pasta restaurant market grew by 3% in 2015 to £1.7bn, and it believes it will climb to 95% by 2020.

There are the old stalwarts like Strada, Pizza Hut, PizzaExpress and Bella Pasta, not to mention trendy new start-ups like Pizza Pilgrims, Franco Manca and Homeslice. Then there is the home delivery market.

But entrepreneur and investor Hashemi is undaunted. He believes he has a different concept, approach, and attitude.

“Pizza Union is a pizza bar – a fast-casual concept – not a restaurant like the other brands mentioned. There is no waiter service, our pizzas are usually ready in about five minutes from ordering at the till, and are baked Roman-style ‘thin & crispy’, not Neapolitan style (which possesses specific characteristics and ingredients), and our prices are almost half that of other restaurant brands.”

Inspiration fro Pizza Union cam from a trip to Naples. There, you are looking at anywhere from €3.50-€5 (£2.70-£3.90) for a 12-inch pizza and it got me thinking about the British pizza market.

“It is good quality. So just because you serve it quickly and it is value, does not mean you are going to sit in a horrible environment.

“The more I looked into it the more convinced I became. Then I travelled to America and I realised a few small chains were starting to do this, each originally with a handful of shops. That gave me more confidence. At that stage I was consumed by this idea. Once an entrepreneur, always an entrepreneur. As much I love working in private equity (see panel), this idea… I just thought, ‘if I don’t do it, someone will’.”

Pizza Union attracts all types of customers, although it initially set out to have a youthful customer base. “We are looking for a younger audience, but interestingly our customer base is quite broad,” – hence the loud vibe as Sheena Easton’s Morning Train blares out over the sound system.

In Hashemi’s hunt for sites, money is no option. Finance is coming from private investment, which means the company can move quickly on deals – King’s Cross was signed within two weeks. “We think we have done enough operational work, where I am comfortable. We are scalable,” he says.

Luckily for Hashemi the landlords he has met have said they are not just looking to sign the big chain names. “They are not interested in having those. I won’t name names, but people with a hundred sites across the country: landlord’s don’t want that.

“We are finding a lot of landlords shying away from the cliché of big chains inside the buildings. They want something slightly more edgy, slightly more contemporary. Something that attracts the younger audience and not the older.”

But Hashemi is already a known name in the business – surely that helps to convince landlords of his past business success and covenant? “I think the answer is no, to be honest with you,” he says, “this concept had to sell itself.”

So, how many Pizza Unions does Hashemi want? He is currently in negotiations for sites in Holborn and the East End. “We think there is big potential for the rollout of the Pizza Union brand across the UK,” he says.

Then his caution kicks in again as he adds: “Years ago a number would have rolled out from my tongue, but the market is very competitive… and sites can be difficult to find.” So, an actual number is not revealed.

With Dolly Parton’s 9 to 5 starting to playing loudly and the crowds still filing in, Hashemi is keen to leave his Coffee Republic past behind – it is now all about the new venture.

“This is not just about me wanting to build another Coffee Republic, it is about building a chain of good Pizza Unions.”

Pizza-Union-montage

Bobby Hashemi CV

1990 Lehman Brothers New York– leaves in 1993
1995 Sets up Coffee Republic with sister Sahar. Leaves in 2001 and rejoins from 2003 to 2006
2007-2012 Partner and shareholder at Risk Capital Partners, an established private equity investment firm with a £75m fund investing in growth companies across the UK, originating, appraising, executing and monitoring deals across the consumer sector.
2012 Founded Union Ventures, a private investment vehicle focusing on investing and supporting growth companies across the UK consumer/leisure sectors. Sought to invest £3m in entrepreneurs and management. Now inactive.