Pizza Fusion’s Web site is powered by renewable energy. Its toilet paper and towels are 100 percent post-consumer. Countertops were once plastic detergent bottles. The insulation inside the walls used to be blue jeans. There are brands that talk commitment to the environment—and then there is Pizza Fusion. The LEED (Leadership in Energy and Environmental Design Standards) certification that each store holds is just one part of what the chain is doing to “save the Earth.”

What began as one store run by two friends in Deerfield, Florida, in 2006 has since grown into a 24-unit chain, complete with a seasoned franchising veteran on board. See, Pizza Fusion founders Michael Gordon and Vaughan Lazar intend to make their brand and its operating model a national movement. And Vice President of Franchise Development Randy Romano is along for the ride.

QSR talked to the trio about the challenges of growing a brand like Pizza Fusion, with its higher construction costs and stringent construction standards, in an industry more accustomed to blue jeans on its customers than in its walls.

Quite a few concepts are going the organic menu route, but most aren’t focused on green building. How did that strategy become part of the Pizza Fusion model?

Michael Gordon: It was more like a challenge of what more could we do. I read something about it, and we were doing a couple things already. We were using environmentally friendly materials, different recycled-content materials.

Once I read about it, I was like, “This is the way we should do everything.” I realized there was so much more, especially in the water efficiency and actual cost-saving tasks that we could complete that really cut down on the everyday cost of running a restaurant.

I come from real estate, doing houses, so there are different things I picked up. Then it was a matter of putting the whole puzzle together—low-flow toilets, low-flow this, low-flow that, different materials, different paint. As you gain more and more information, you see what changes you can make.

Are your homes green?

Gordon: I am so energy efficient I don’t even have a refrigerator.

Vaughan Lazar: At home, the way it works for me is like in our restaurants—we have to be as practical as possible. If you’re going into a store that’s already built, a retrofit, a $120,000 solar-panel system isn’t really practical.

So at home, when it comes time to change out a toilet, I’ll be sure to change it to a low-flow toilet, but I’m not in the financial position right now to go in and retrofit my house just to be a “green” house. But as each opportunity presents itself, I would certainly choose that option over a traditional option.

Which brings up an interesting point: What percentage of new Pizza Fusion stores are retrofits versus new construction?

Gordon: All are brand-new.

Does retrofitting fit into your model?

Lazar: It’s possible, but, for the most part, the concept is so unique and in order to build to LEED specifications, it’s got to be done from the ground up.

Once you decided to take the notion of running a green restaurant into your building specs, how did you find the suppliers you needed?

Gordon: You know, you just really sit online. I contacted the U.S. Green Building Council. They have contact information for the suppliers listed on their Web site. Still not everyone we use is a member. For some of the members, distribution is a major problem because you have a lot of small companies.

It’s just a time thing. Every day you get new magazines, get new articles, and you put the pieces of the puzzle together. I just got back from the Chicago Greenbuild International Conference and found the last couple of resources that are local. It’s really my passion, my hobby almost.

Pizza Fusion is in expansion mode. Won’t the lack of distribution you mentioned slow that growth?

Gordon: No. What we’ve done to be even greener is for our California stores, we found California suppliers that do salvage materials. For the Philadelphia stores and the Pittsburgh stores we have up north, we have suppliers.

Now we’re at the fortunate position where people are contacting us a lot more than we’re contacting people. We had a great piece on CNN, and, since then, we’ve had a lot of suppliers calling us and saying, “Hey, we think we can help you.”

You’ve mentioned cities on the coasts. What happens when Pizza Fusion wants to move inland, say to Kansas City? Can green suppliers still service those stores?

Gordon: There are small companies throughout the country, international even.

Durham, for example, is not too far from Atlanta, and we have suppliers for this type of material in Atlanta. So there are some things that we will ship, no doubt. But we’re very fortunate that with all our Florida stores, with all the stores we’re opening right now, we’re finding independent resources for each one, making it local building—which is a huge part of LEED. You want to try to cut down all the shipping costs. We’ve done a good job with that.

Lazar: It’s like traditional build out of a store that’s not green. You go online, you find suppliers of certain products. If there are two options available, one’s on the East Coast and one’s on the West Coast, and you’re building a store in Atlanta, it’s just practical to save by ordering and shipping from the one on the East Coast. We definitely do homework in terms of trying to find a supplier as close as possible.

A big part of the LEED certification is sourcing your materials locally so it’s a big part of our build-out.

Does each Pizza Fusion unit have the same standard green specs?

Gordon: Yes. All the drywall we use is post-consumer drywall, 100 percent recycled. The paint we use is a no-VOC [volatile organic compounds] paint. The floor we use a concrete sealant, low VOC, or and/or bamboo or cork. The tiles we use are from recycled glass bottles. All the toilets and sinks have to be low-flow. All the electricity has to be energy efficient—compact fluorescent lighting. The air conditioning has to be very efficient, about 30 percent more efficient than your standard.

These are set standards we put in our UFOC, our building code.

All the equipment is energy efficient.

Lazar: It’s all ENERGY STAR rated.

Gordon: We like to use Forest Steward Council wood, which is wood that is recirculated in a 15-year time period. And all our stores have to have a recycle department where all containers and bottles are recycled. We have a story wall explaining everything we do.

What kind of price difference exists between these eco-friendly products and standard products?

Gordon: There really is none. A CFL [compact fluorescent lamp] light bulb is more expensive, but how many times do you have to change that light bulb?

Long-term savings are a hard sell for franchisees. Credit card machines are a good example. Many operators were reluctant to make the initial investment despite the promised returns.

Gordon: We deal with a different type of franchisee. Our franchisees are looking at the overall cost of 10 years, where they are saving about 20 percent in their operational expense.

We’re not looking for the type of guy who only has like $50,000 and is trying to do everything the Wal-Mart way. So we’re looking for a very intelligent person who wants to build their business by being efficient in all aspects. And we haven’t had a problem at all.

If people are going to be looking at different costs and stuff to try to save money, I don’t think they would fit our guidelines. What we want is to build a business that is very efficient where they are making money, not saving money.

How do start-up costs for a Pizza Fusion unit compare to similarly positioned, but non-green concepts?

Lazar: It’s probably the same.

Gordon: It would be an unfair question for me to answer because I’ve never opened up another store.

You’ve never studied the competition?

Gordon: I don’t even know what you would consider our competition.

How are you going about finding these “very intelligent” franchisees?

Randy Romano: Most of our people are coming through our news coverage. We’ve found that people are willing to a pay a premium for a business that is not only profitable, but is also environmentally friendly.

Are they restaurateurs?

Romano: Some are. Some are people just looking to change their lives, looking to be in their own business but just need some guidance from a franchisor. It’s about 75 percent people who are new to the industry and 25 percent experienced restaurateurs.

When you sit down and go over your UFOC with experienced restaurateurs, what is the prevailing response?

Romano: They like the unique aspects of our business, that we’re not like every other pizza restaurant that’s out there. They like the fact that we take into our consideration environmental aspects as well as the profitability of it.

Do they question the cost of materials?

Romano: No, we haven’t found that to be true. We haven’t really found, at this point, a major difference in the build-out. We’re looking at a 10 percent difference from building a traditional store.

Lazar: To build our store, without taking the environment and energy efficiency in mind, if you weren’t aware of suppliers, you didn’t do any of your own homework, you’re probably looking at a 10 to 15 percent premium. But because of the fact that we’ve taken so much time in finding these vendors and suppliers and establishing these relationships firsthand as opposed to allowing a general contractor to do that, we’ve cut that cost down to really a no-cost premium.

So if it were Pizza Fusion as Pizza Fusion and we didn’t care about the environment, the cost would be maybe 5 to 10 percent, 15 tops, if we had no idea what we were doing.

We are a pizza place. We have walls just like everybody else. It’s the same equipment. We just opt for energy-efficient equipment. If you do the homework yourself and you spend a little time establishing relationships, you should be at a zero premium.

At the end of the day, you’re actually saving money because you’re using more energy-efficient equipment and making purchases based on that.

Break down your heat reclamation system.

Gordon: Vaughan and I started talking about this when we first opened our Deerfield store because it was in the middle of summer and so hot. We were like, “We definitely should be able to use the heat from the oven and transfer it to the water. We hired someone, and he put together an energy package. We pretty much designed our own heat exchange system.

Someone came into our store and said, “Have you ever spoken to so-and-so? You know they’re really big into solar panels.” From that contact it led to one more contact, and that was the person we wound up using as our consultant.

Do customers provide a lot of feedback like that?

Gordon: Definitely. There are a lot of people who were living this lifestyle before we were even born. Information is the key. So Vaughan and I … our whole staff knows that there is much more we can do. It’s just a matter of time. If some people have better ideas than we have, then we’re definitely open to them.

What are some other customer-generated ideas?

Lazar: Different food items. Different options. We’re getting rid of our bottled water in all of our stores now.

Gordon: I would say that’s one of the big ones. It’s something Vaughan and I wanted to do for a while.

Lazar: Gluten-free pizza was another that was brought to our attention by a customer. That’s been a huge menu item for us. You have people who travel, literally, over an hour, sometimes two hours, for the gluten-free pizza. It’s crazy. But again, it wasn’t our idea. We attribute [it] to our customers.

Let’s talk more about the heat exchange system.

Gordon: The heat comes off the oven. We capture it, and, in a roundabout way, it transfers into a water line. It gives us an excess amount of hot water.

Your original store didn’t have the system. Have you seen savings in new stores?

Gordon: Absolutely. You’re saving about 100 bucks a month.

In our Pittsburgh store we’re going one step farther. We’re heating the whole store from the oven.

Will that be standard in Pizza Fusion stores moving forward?

Gordon: In the up-north stores, absolutely.

Are you doing anything on the water conservation front beyond low-flow?

Gordon: We’re looking into a gray water system. We will be recycling our sink wastewater into a storage tank and using it to flush our toilets.

Even without the gray water system, every store from now on will see anywhere from a 30 to 40 percent savings in water reduction. We can see that going well above 50 percent. An average [commercial] faucet uses 6 gallons per minute. We’re going to be less than 1 gallon of flow per minute.

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