How does one go from working behind the scenes in a hometown restaurant to leading the acquisition and development of some of Canada’s most recognized brands? Ask Foodtastic founder Peter Mammas
By Roma Ihnatowycz
Peter Mammas, the founder and president of restaurant franchisor Foodtastic, didn’t exactly have a happy start in the restaurant business. He was, after all, just 12 years old when his immigrant father enlisted his help in the family’s Greek restaurant, which was going through a rough patch. It meant Mammas, a keen hockey player, had to give up the sport, and he wasn’t happy about it.
“I didn’t talk to my dad for quite some time!” jokes Mammas today. “I’d go back to school and my friends would be talking about beating Laval (Quebec) or another hockey team, and I was embarrassed to tell them what I did on the weekend. But it’s obvious things happen for a reason, as they say.”
Indeed they do, and for Mammas, that initial restaurant work eventually led to him opening his own restaurant, followed by the acquisition of more restaurant brands and, decades later, starting Foodtastic, now one of Canada’s largest multi-brand foodservice companies.
Back-of-house beginnings
It’s an impressive success story, and it all began in his father’s Greek restaurant on Montreal’s Parc Avenue. “I started as a dishwasher in my father’s restaurant, and then I became a busboy, bartender, waiter, and manager. That evolved to my opening my own restaurant when I was 20,” says Mammas of his early start in the business.
Mammas then teamed up with his older brother Lawrence, who was also in the restaurant trade, and a friend to open a Montreal deli they planned to call Smokeys. In an extraordinary twist of fate, his brother knew Paul Sara, a cousin of René Angélil—the same René Angélil who managed and later married singer Celine Dion. As luck would have it, Angélil and Dion decided to invest in the deli venture as well.
“At first, I honestly thought it was a joke, the idea that they wanted to be partners,” says Mammas. “But it wasn’t, and we made a deal. Only Celine didn’t like the name Smokeys. Her lucky number was five, and she collected nickels, so we decided to call the restaurant Nickels.”
Nickels Delicatessen grew to 30 stores, and the company went on to create an Italian restaurant brand, as well as purchase the grill house Bâton Rouge. Then in 2007, when they were generating $130 million in sales, the owners decided to sell their successful restaurant business. Mammas, only 39 at the time, had made “enough money to live on” and wanted to focus instead on spending more time with his young family.
A lot on his plate
Six years later, however, Mammas and his two partners were back in the game: they bought back Nickels and proceeded to acquire new brands. Mammas also worked on the side for Imvescor, the company that had purchased Bâton Rouge. By 2016, he decided it was high time that he and his partners start their own company to consolidate different restaurant brands, and “that’s how Foodtastic was born,” says Mammas. “It wasn’t a big company to start; we were basically operating out of a garage at the beginning and doing only $20 million in sales.”
Things moved quickly after that, with Foodtastic buying or creating popular quick service and full-service restaurant brands like Souvlaki Bar and Carlos & Pepe’s. In 2018 they partnered with Oaktree Capital Management, a private equity firm, giving them the capital to acquire even more brands. Then the pandemic struck, hitting the franchisor hard. “Our system sales dropped 90 per cent, so we were really challenged,” explains Mammas.
Within a week, Foodtastic had all its restaurants on third-party order and delivery systems. More importantly, Mammas saw an opportunity to buy even more brands at a good price, including established names like Milestones, Second Cup, and Pita Pit. “We realized restaurants were in dire straits, their sales were low, and this was the best time to buy,” says Mammas. “So we convinced Oaktree Capital to give us another $50 million for more acquisitions. The company just grew from there and has kept growing.”
Today, Foodtastic has 26 brands under its belt and operates across the country with more than 1,100 franchisees in its system. It’s set to make $1.2 billion in system sales this year and has plans to open 100 new restaurants. The company has also expanded abroad and just signed a deal with a large European operator for the rights to Pita Pit throughout Europe. Peter Mammas continues to run the company as its president and CEO, while his brother Lawrence is vice chair of the board. (The third partner has since left the company.)
To put things into perspective: in the pre-COVID era, Foodtastic had 24 employees. Now it has 260. “It would have probably been easier to do one acquisition, stop, reset, and do another one. But on our end, it never stops; we’re constantly doing acquisitions,” says Mammas. One of the benefits of continuously bringing new brands into the mix, notes Mammas, is that the company can adopt and integrate new and better practices while simultaneously sharing some of its own, resulting in synergy and a cross-brand learning arc.
“While we acclimate the brands into our own system, because we have the scale, in many cases the reverse happens. If we see a brand doing something better, we capitalize on it,” says Mammas. “Freshii’s inventory management system, for instance, was more spot-on than ours, so we brought that on board. And Milestones’ dining experience protocol was more refined than what we were doing, so we incorporated that into all our full-service restaurant brands as well.”
Shaping a brand identity
The company has long outgrown its original garage location and now has offices in Montreal, Toronto, and Abbotsford, B.C. But Mammas says that despite this exponential burst in growth, Foodtastic remains committed to providing the same personal and attentive service to its franchisees as it did when it was a smaller operation.
“I used to refer to us as a family, but now I refer to us as a team,” he says. “The most important thing is to instill our values all the way down the ranks. I always tell everyone who reports to me that our employees and franchisees are our most important people, because our future success is dependent on those two groups.”
Also key to the company’s success is bringing the right franchisees on board. Mammas says that when he first started franchising back in the ‘80s, the concept wasn’t as formalized as it is now. The company was essentially learning as it went along. “It was a massive learning curve because franchising was not as sophisticated then as it is today,” says Mammas. “A lot of times, we were kind of inventing the franchising rules. We didn’t always do the due diligence on franchisees back then, and we’re more stringent now in making sure the franchisees are the right fit.”
Primarily, Mammas looks for industrious people who enjoy the restaurant business as much as he does. “You want hardworking and honest people who care about their customers, because if you’re hardworking and care about your customers, you’re going to do the right thing,” he says. “On our end, it’s our job to do the marketing and get those people through the door. But it’s the franchisee’s job to make sure they’re served properly, they enjoy their meal, and they come back.”
What Foodtastic does not want, stresses Mammas, are franchisees who are solely in it for the paycheque: “When you’re motivated by money, you make bad decisions. When you’re motivated by doing the right thing, your success rate is higher.”
Mammas could very well be talking about himself. His decision to do the right thing by helping his dad in his restaurant decades ago has proven to be the right call. He may have missed out on a few hockey games, but many years and many restaurants later, Mammas now oversees one of the largest restaurant companies in Canada and some of its most dynamic brands. And the list just keeps growing.