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Saturday, Dec 3, 2022

Pita Pita $13M Investment to Launch Expansion

Pita Pita Inc. founder and President Haitham Hammad enlisted his mother to help create the culinary profile of his Mediterranean concept. Now, he’s looking to bring those flavors to the national stage.
The Laguna Hills-based company recently announced a $13 million investment—its first from an outside source—from Samer Fakhouri, executive chairman of Jordan’s Al Eqbal Real Estate Development and Triumph Venture Capital. The funding will help push the four-restaurant concept to open 20 locations over the next three years.

It’s a rapid expansion plan for the OC restaurant brand, which started in 2010 and seeks to make a name for itself in the fast-casual market for Mediterranean food, with a focus on what it says is fresh, simple and authentic Mediterranean cuisine.

“There’s a lot of people—they slap Mediterranean or Middle Eastern on their restaurant,” said Hammad, who hails from Jordan. “There’s quite a few out there, but it’s the authenticity of the food. I don’t want to give you baba ghanoush that doesn’t taste like baba ghanoush.”

Hammad worked at banks and in IT up until 2010, when he decided to try his hand at the restaurant industry.

“My wife thought I was the craziest guy, rightfully so. It was really challenging,” he recalled of the company’s start. “The good thing was the common business sense and whatever experience from corporate helped me navigate through the challenges.”

He was also guided by a desire to create a concept that he would have no problem taking his kids to multiple times a week.

“The food is clean. The food is fresh. Whatever we have in our [Pita Pita] kitchen, I assure you have in your house—lemon juice, salt, olive oil,” he pointed out.

“It’s home cooking in a restaurant, and that was my goal.” 

A Brand to Scale

The company hopes Pita Pita’s menu and flavors will help differentiate the brand as it pushes to open more locations.

“The type of food that we offer and the experience that we offer with our restaurants, we feel that that could be very easily well received around the United States,” said Chief Operating Officer Ramy Elguindy.

“As unique as our food is, it’s still a very palatable flavor profile. We absolutely, 100% want to be a national brand,” Elguindy said. “What Chipotle did for Mexican cuisine, we want to do for Mediterranean cuisine.”

The company’s most recent restaurant opening last month was in Newport Beach, a 1,600-square-foot spot on MacArthur Boulevard, not far from John Wayne Airport.

Another four spots are set to open this year, with the focus on near-term growth in the regional market between Los Angeles and San Diego.

Average checks are $18 per person, which includes food and a drink. The company declined to say what the business is projected to do in sales this year. It was down last year due to the pandemic and shelter-in-place orders.

The aforementioned Newport Beach-based Chipotle Mexican Grill Inc. (NYSE: CMG), at over 2,750 restaurants and a recent market cap of $39.6 billion, is an ambitious goal to aim to run alongside.

Elguindy would know. He was a general manager of a Chipotle in Santa Monica before becoming managing partner at Mendocino Farms, director of operations at Mainland Poke and director of operations at Dave’s Hot Chicken.

Longer term, the company could consider franchising to reach its aspirations, but the current focus is to build out and succeed with company-owned locations first, Elguindy said.

“We’re thinking about both [franchised and company-owned locations],” he said. “But we know it’s our responsibility first to make sure that we have our ducks in a row. We know it’s our obligation if we decided to take it to franchise to be able to deliver internally on our own units and achieve the unit volumes. And once we have it in place, [franchising’s] not off the table.”

He added that the infrastructure’s already there to be able to scale with franchisees.

Business Improvements

Pre-pandemic, the decision was made to invest in technology and also a smaller footprint, with restaurant sizes of under 1,200 square feet moving forward. Restaurants to date are as large as 2,500 square feet.

The recently opened Newport Beach store is a glimpse at that new model, with “East Meets West” branding, pickup cubbies for contactless takeout and integration with a new mobile app and revamped website that launched in mid-February 2020.

“Last year was extremely challenging,” Hammad said. “We started the year really good. We were hitting numbers. Our February was the best February in 10 years and March was on the same track. By mid-March everything shut down and it was devastating in terms of the business.”

“The plan was to expand and go to a smaller footprint and focus on delivery and a digital presence,” Hammad said. “That decision was made prior to the pandemic. The pandemic came and put this projection into the fast track.”

By mid-September, the company switched to counter service from an assembly line. Much of the restaurant operations are now designed with third-party delivery in mind, Elguindy said.

While industries are continuing to adapt to consumer behavior, Pita Pita management sees the business well positioned to take on changes—even the unknowns.  

“We still don’t have a full picture of how it’s going to be after this [pandemic] is all over,” Hammad said. “But we are ready … the timing was perfect. If we lagged a little bit last year, we probably would not be riding the wave we are on right now.” 

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