The road to Hell, paved with pizza

The Dominion Post

Hate mail, a sustained broadside from the combined Australian media and the odd death threat were water off a duck's back to the boys from Hell.

In 2005, Hell Pizza directors Stuart McMullin and Warren "Otis" Powell were tossing ideas around when they came up with a promotion based on the odyssey of Schapelle Corby, who had just been sentenced to 20 years in a Balinese jail for importing 4.1 kilogrammes of marijuana in a boogie board bag.

The prize was a "holiday that could last a lifetime" to Bali and a boogie board for the person who named the politician most deserving of being sent to hell for his or her sins.

The winner would pocket another $500 if they came back with a photo of themselves with Schapelle.

Vitriol, threats of murder and arson, and demands for an apology via blogs and the Australian press prompted Mr McMullin to offer an apology, albeit one with a couple of strings attached.

First, the Australia Government would have to say sorry on behalf of the country for historical wrongdoings, including claiming Phar Lap and Neil Finn as their own, allowing Britain to conduct nuclear tests on Aboriginal land, and for producing nationalist Queensland politician Pauline Hanson.

Other stunts have included the lampooning of American President George W Bush for foreign policy mismanagement and the "Lust Pizza" random mailout of 170,000 branded condoms that spurred Bishop Denis Brown to describe the promotion as an "affront to New Zealanders" and a New Zealand Catholic newspaper to call on followers to boycott the stores.

Hell also set the New Zealand Advertising Standards Authority record for complaints in 2006, thanks, in part, to a campaign by morality lobby group Family First.

More importantly, for a company that shunned high-powered ad campaigns and discounting, their public relations exploits have endeared the company to its target market, a hard-core following of younger people and anyone else with an off-centre sense of humour.

"I hate it when someone asks me how the chain of stores is going. It's not a 'chain', we're a cult," Mr McMullin says.

Nursing a cup of coffee in a Wellington cafe, he smiles at the memory of raising a few conservative hackles; just below the surface, though, Hell is all business.

In New Zealand, the company underwent phenomenal growth. In four years, Hell went from four stores to 66, with revenue accelerating from $1.2 million to $55 million before its three owners sold Hell's New Zealand rights to Burger King New Zealand franchise holder TPF for about $15 million in 2006.

Hell did not need to advertise for any of the 62 franchises because of the steady flow of Hell employees and young entrepreneurs wanting a piece of the action.

"The money was always secondary. It was always about having heaps of fun and having a good time with [the company].

"And as long as everybody is doing their jobs and doing what they said they'd do, then we're all happy campers."

This expansion across the country was done at minimal cost, Mr McMullin says.

In 2005, while addressing a sellout crowd of Harcourts real estate agents at SkyCity, Mr McMullin pointed out that when Hell was first moving into the Auckland market, he would sleep in his car in SkyCity's underground car parking lot, several floors below.

Times have changed and Mr McMullin, Mr Powell and Hell's founder Callum Davies are finalising master franchise agreements for Ireland and Canada. The hope is that Canada will be a launch pad to the US.

A third restaurant in Brisbane opens this month and the master franchise licence requires at least 90 outlets across Queensland, New South Wales and Victoria to be opened within nine years.

After a slow start a year ago, a pilot store in Fulham, southwest London, is finding favour locally and developing a wider reputation.

Without the brand recognition it has in New Zealand, London has proven a hard nut to crack, with Mr Davies and Mr McMullin returning to long hours at the shop making pizzas, delivering them and scoping out new sites.

The first months in Fulham were tough until one Tuesday they purchased a cheap gold pen and wrote "all you can eat between 6pm and 9pm" on their sandwich board. The restaurant filled up immediately and customer numbers have jumped across all trading days.

"It's one of the most effective things we've done here and it cost us [PndStlg]2 [NZ$5.20]."

Importantly, the word is beginning to spread.

"This is purely our opinion but over in London they won't try anything unless somebody else tells them it's good or they won't buy it unless they've read somewhere that it's a good thing to try."

One or two more London restaurants are planned for this year and once the stores have a stronger profile and start producing cashflow statements, Hell will be ready for franchising.

Based on Dominos Pizza sales, London could have up to 150 Hell outlets, Mr McMillan says – and the wider United Kingdom could handle up to 600.

First things first, however – when the number of stores hits 10 or more, the Hell style of self-promotion will probably shift into gear, he said.

"But really, the brand, the marketing is nothing unless you have a great product, and that's always been the primary target."

BAT OUT OF HELL

* Stuart McMullin is managing director for Hell Pizzas.

* He is married to Helena.

* He was born in Manchester and came to New Zealand with his parents in 1973 at the age of three.

* He attended Karori West Normal School, Wellington College and completed a BA in English literature and sociology at Victoria University.

* He teamed up with Hell founder and Wellington College schoolmate Callum Davies in 2000.

* His interests outside Hell are squash and tennis.

A PIECE OF THE ACTION

Hell was the brainchild of Callum Davies, a Wellington College schoolmate of Stuart McMullin. The brand, its high-end-of-the-market menu and the first Hell outlet in Kelburn, Wellington, were created in 1996.

Tiring of a string of corporate jobs with Westpac, ACC, ACNielsen and IT Manpower, Mr McMullin, asked his friend, over a game of golf, if he wanted a partner – and the deal was struck.

The pair worked between 90 and 100 hours a week, opening a further three stores and doing most of the renovating and outfitting themselves.

Warren Powell – who had managed the Fletcher Challenge GIB franchise, been country manager for Burger King New Zealand and Hire a Hubby's general manager – brought his franchising expertise to Hell in 2003, and what they call the "unholy trinity" was born.

It also marked a more concentrated effort to franchise Mr Davies' creation.

Hell Systems Ltd owns the Hell trademarks and other intellectual property (IP) and whenever the company had spare cash, Mr McMullin would register Hell's IP in countries with potential markets. Hell gets $250,000 for each master franchise licence for a country, $10,000 for each store opened, and a 1 per cent royalty.

It tries to keep the initial price down to ensure franchisees are not overburdened with financial obligations. Hell has largely avoided debt by accumulating savings before tackling the next stage of development.