The Pizza Pipeline Inc., a Spokane-based company thats been expanding here and elsewhere in the country for nearly 20 years, not including a temporary downturn after 9/11, is eyeing more stores here.


A franchisee in Missouri opened the newest Pizza Pipeline store last month, and the company has an agreement with a franchisee in California who plans to open a store there soon, says President and CEO Mike Kight. In the Spokane area, the company is considering the Hillyard neighborhood, Airway Heights, Liberty Lake, and Post Falls as potential locations for new company-owned and franchise stores.


We just keep plugging away, offering good products at a fair price, Kight says.


In addition to its plans to add new stores, the 18-store chain will be introducing several new productspopcorn chicken and additional types of its popular breadsticksto the Spokane-Coeur dAlene market soon, Kight says.


The company has about 175 employees, mostly part time, at its six company-owned stores in Spokane, and always is hiring drivers, he says. Kight declines to disclose the companys revenues, although he says they have been growing since a downturn after 9/11.


The company receives fresh pizza ingredients at a two-story, 4,000-square-foot warehouse and office space in a building at 418 W. Sharp that Kight and his Pizza Pipeline partner, Gene Boik, own through a company called Kibo Funding LLC. Employees prepare pizza dough, slice toppings, and make pizza sauces at the companys commissary, at 1303 N. Washington, then ship the ingredients to stores in Spokane and Coeur dAlene.


Franchisees buy products from vendors that are near their own stores, he says. Pizza Pipeline charges franchisees $20,000 initially for franchise rights and then charges up to 6.5 percent of their sales in fees. The company helps them with site selection, trains them at its corporate office in Spokane, and helps them set up their stores and buy equipment. Company supervisors then work with franchisees on-site for a month.


Beginning this month, customers in Spokane and Coeur dAlene will be able to order a third type of the companys most popular side item, Tricky Stix bread sticks. In addition to its cheesy garlic and cinnamon sweet bread stick varieties, the company now offers a Ragin Cajun Tricky Stix item that comes with a cream cheese dipping sauce, he says. Its not unusual for stores to receive 100 orders for the doughy side item a night, and he expects the Cajun flavor to be a popular addition to the Tricky Stix line.


Pizza Pipeline plans to add a popcorn chicken side order to its menu starting next January. It offers 25 pizza toppings and six sauces, and its pizzas sell for an average of $12.99. Its second most popular sauce is white garlic, and pepperoni is its most popular topping, although demand varies in different locations. For instance, its pesto sauce is a huge hit with customers in Oregon, he says.


Pizza Pipeline has offered free delivery and free soda drinks with its pizzas and sub sandwiches since it started in 1988, Kight says. Its goal was to fill homes with its 24-ounce plastic cups that bear the companys name, so that word-of-mouth advertising could help boost business.


Its always fun to go to someones house and see our cups in their cupboard, and it shows that free pop is a draw to people, especially the younger crowd, Kight says.


The company hopes to continue the tradition, but with fuel and labor costs higher than they were in the 1980s and less consumer demand for fast-food products, free services become more difficult to maintain, he says.


Its getting tougher and tougher to do, he says. Pizza hasnt crept up as much as inflation, and the bottom line shrinks.


Diet trends also affect business, he says. For instance, the Atkins low-carbohydrate diet craze that swept the country a few years ago hurt sales for awhile, Kight says.


Places were starting to offer bunless burgers, and I was thinking, What do you want me to do, put pepperoni in a bucket? he says.


Cleaning house


9/11 also caused a drop in sales for the company. Drive-through establishments sales rose during the first few months following the terrorist attacks, but delivery companies sales fell, perhaps because people didnt want strangers coming to their house, he says.


Pizza Pipeline cleaned house after 9/11, closing a total of five stores in Idaho, Utah, Colorado, and Texas over the next two years, he says. Since then its opened two stores and is sending out four franchise packets a week to people across the country who are interested in opening stores. Its focusing on development in the Northwest, such as in the Tri-Cities. It has franchise stores in Boise, Missoula, and Fort Collins, Colo., among other locations.


Were taking it at a steady pace, Kight says. We want to be able to handle our growth.


He says Pizza Pipeline faces several different levels of competition. It competes with companies that provide pizza delivery and carry-out services as well as other gourmet pizza producers that dont deliver their products. Frozen pizzas that can be bought at the supermarket also are rising in popularity. He says the company at some point might consider selling its pizzas in grocery stores, but for now is focusing on its traditional ready-to-eat items.


Our ovens cook pizza at 550 degrees, and home ovens cant do that, he says. Its a flavor you cant get from cooking at home and is ready to serve.


Delivery sales make up between 85 percent and 90 percent of the companys revenues. It also offers carry-out products, and hopes to continue its Love at First Slice deal, which is a slice of pizza for $1 to bring people in the door to taste its pizza.


He says another challenge involves competition not only with other fast-food providers in general, but with any item customers would spend their discretionary income on besides fast food.


If a high school student buys a stereo instead of a pizza on a Friday night, that takes away from our business, he says. Theres only so much money spent on fast food, and compared to 15 years ago, everybodyburgers, taco, pizzas placesour margins are tight.


Pizza is a coupon-dominated industry, so the company always is looking at new discounts to offer.


Everyone is always asking, Whats your special? in this business, he says. So I like to go to places like Nordstrom and ask, Do you have a coupon for that? and theyre not sure how to respond.


Kight says business has been going well, but that he and Boik anticipate a lean January, because people might be struggling to pay heating bills. They expect that if sales drop during the winter, theyll pick up again when energy bills arent as high in the spring.


Kight says he and Boik met in the 1980s at Washington State University, in Pullman. Boik worked at a pizza place there called Pizza Answer, and Kight worked in the restaurant industry. They decided to start their own pizza business, sold everything they had, and opened their first store in Spokane, he says.