J. David Karam began his restaurant career as a teen working in the second location of Wendy's hamburger chain in Columbus, Ohio, and eventually made his mark helping to turn the company around as president.
His latest revamp project is Melville-based Sbarro LLC, a quick-service pizza and Italian cuisine chain that has been remaking itself since emerging from bankruptcy in 2011.
Karam, 55, chairman of Sbarro's board since 2012, took the helm as chief executive in March. Since then, the company has debuted a more upscale restaurant concept called Pizza Cucinova in Columbus. Plans are also in the works to launch Sbarro Brooklyn Fresh, a remake of its Sbarro restaurant brand and menu that will be located in strip centers rather than the malls and airports where many of the company's eateries are now located.
Though Karam worked as a public accountant for four years after college, he returned to his roots in the restaurant industry. His father was an early investor in Wendy's, and, as a teenager, Karam worked alongside founder Dave Thomas' children. The Wendy's franchise Karam's father founded is now a family-owned business of 175 Wendy's restaurants in five cities. Karam served as president at Wendy's between 2008 and 2011, playing a major role in improving the chain's profitability.
Are you finding similarities between Sbarro's situation and your experience turning around Wendy's?
There's a lot of common characteristics between the situation at Sbarro and at Wendy's when I stepped in. They had had a period of six years of steadily losing traffic and market share, and as a result earnings had deteriorated, too. Certainly that was the case at Sbarro. [Sbarro] is a bit more vulnerable primarily because the brand has been operating largely in the malls, and that presents a whole other set of challenges. That's one of the reasons why we have been moving aggressively to develop growth options outside of the malls.
Where do you begin designing a turnaround plan for a large company like Sbarro?
What we've done is to step back and say, What is the essence of the Sbarro brand? The reality is we have not done an effective job communicating the brand. We actually have a quality product. We make our product fresh every day in stores with whole-milk mozzarella cheese. To maximize freshness and taste we shred that cheese every morning. Finally we use tomato sauce of the highest quality -- 100 percent San Marzano tomatoes. But most consumers don't know that.
There's another [area] we are attacking with a sense of urgency, and that is the whole execution piece. So the products we are serving are done in a fresh and clean environment and done to specifications and built the way they were designed ... and the product delivers that brand promise.
What is Pizza Cucinova?
Our new artisan concept. We see this more elevated segment of the market that is the fast-growing and emerging category that is artisan pizza. We import double-zero [highly refined] Caputo flour from Italy. All the ingredients are fresh and many of the [vegetables] are freshly roasted every morning. We make our sauce fresh and a variety of toppings. We have a group of standard Neapolitan-style pizzas. The key feature is the customer can build their own or modify a standard pizza. And then we have five really high-quality salads we make fresh in the store every morning. And we have eight craft beers and wines.
What is Sbarro Brooklyn Fresh?
Our roots are in Brooklyn. That's where the Sbarro family [settled] when they immigrated from Naples and opened the first delicatessen. And that evolved over the years into the restaurant that Sbarro is today. The [Brooklyn Fresh] menu will be anchored in the product lines that historically we have sold -- pizza, pasta and salads. The focus first is to develop the prototype in a strip center that is outside of the mall, an in-line location somewhat similar to where you would see a Panera.
Because Columbus is a good middle-market city to test ideas and to see if they have appeal throughout the nation. I am also splitting my time between a home in Columbus and a home on Long Island. So it's a matter of personal preference to keep an eye on this.
Who are your heroes?
The individual in my lifetime I have the highest regard for is Pope John Paul II. I just thought he had a unique and beautiful vision of mankind. That's important to me, [because] the restaurant industry often attracts people who didn't have the kind of opportunities in life that I have had with education and family with wealth. I feel it's a beautiful blessing for me to provide, hopefully, principled leadership that helps some of those folks fulfill some of their God-given potential.
Dave Thomas was a dear friend and also a great role model for me. He also is kind of a testament to that profile I described. Dave had an eighth-grade education, was shuffled around in foster homes and ultimately adopted. Look what he was able to make for himself and create, and the wealth he enabled others to have as a result of his skills and talent and determination.
What's your favorite Sbarro pizza?
NAME: J. David Karam, CEO and chairman of Sbarro LLC in Melville
WHAT IT DOES: Operates a chain of more than 1,000 pizza and Italian eateries worldwide
EMPLOYEES: 8,000 between company-owned and franchise locations
REVENUES: $400 million in U.S. sales in 2012, according to Nation's Restaurant News