Third generation joins Donatos
Going into business with one’s family can be a daunting proposal. Staying in business with one’s family is even trickier—while more than 30 percent of family-owned businesses successfully transition into the second generation, barely more than one in 10 family businesses remain viable into the third generation, according to the Family Business Alliance.
But for the Grotes, founders of Central Ohio mainstay Donatos Pizza, practicing what they call “agape capitalism” has been an integral part of the family’s success. It’s one reason they were able to usher their third generation into a leadership role over the holidays.
Tony Capuano, son of Donatos Executive Chairwoman Jane Grote Abell and grandson of founder Jim Grote, joined the company as its executive director of innovation in December. In that role, Capuano will serve as a liaison, working to help incorporate innovations the company identifies into its traditional operations, says Donatos CEO Tom Krouse.
Stay up to date with the region’s thriving business scene. Subscribe to Columbus CEO’s weekly newsletter.
Jim Grote says having his grandson join the family business is extremely rewarding.
“I can’t tell you the satisfaction that it is to not only have your daughter and grandson come in, but to come in with the same beliefs and principles that you do—as you go through the chapters of your life, it makes you say ‘Gee, this could carry on’—you can do business, keep your principles, and still make money. And I think it’s a very critical time to keep the principle-based businesses successful,” he says.
Krouse says the move will help the company stay mindful of the future.
“The industry is changing so much, whether it’s in terms of automation or third-party delivery, which has skyrocketed in the past five years, there’s so much change happening right now,” Krouse says. “We have to be focused on the horizon and bringing change into the picture, and we needed to solidify our ability to see the future and operationalize it.”
Capuano, 31, has been a franchise owner of five Snap Fitness locations in Columbus for the past five years and served on that company’s Franchisee Advisory Council and Technology Advisory Council. A 2011 graduate of Mount Vernon Nazarene University, Capuano is also a co-founder of Prescribe Fit, a tech company that services the health-care industry.
“Being an owner-operator of a franchise has given me the opportunity to experience the successes and also the struggles of running your own business,” Capuano says. “Franchise partners continue to play a key role in our growth here at Donatos, so having a keen understanding of their daily struggles is crucial.”
Founded in 1963 when Jim Grote bought a small pizza shop on Thurman Avenue in Columbus, Donatos has been a family affair since the beginning, although what that means has been constantly evolving, Abell says. When McDonald’s bought the pizza company in 1999, she chose to stay with the company while her siblings explored other endeavors. However, at Jane’s suggestion, she and her father were able to repurchase a majority interest in the company in 2003, making Donatos a family business once more.
“We bought it back and then it was a different kind of family business—dad and I,” she says. “We had to decide what kind of a family business we were going to be.”
Jim Grote says during that time, after selling the company he’d put so much of his life into, he’s not sure if anyone other than family could have talked him into buying it back and starting things over.
“I once questioned—do I really want to do this again? Because when I first started, I’d never envisioned taking it off the table. I thought I’d always be involved with it,” he says. “I don’t know how much I’d have fought for it like Jane did—she just said ‘We gotta get it back. Are you up for it? I need your help.’ And I think that feeling of how passionate Jane was, it was like I didn’t hesitate—that motivated the heck out of me. I got my second wind there.”
Jill Hofmans, executive director of the Conway Center for Family Business, says one of the strengths of family-owned businesses is the ability to zoom out and look at the big picture.
“I think a major benefit of multi-generational, family-owned businesses is having vision and goals that reflect the family’s values,” Hofmans says. “Indeed, family-owned enterprises tend to take a long-term approach to their businesses, which benefits future generations and drives their mission and values.”
Abell says that while there is no one formula for success for a multi-generational business, working with other family-owned local businesses and organizations has taught the Grote family three important lessons for longevity.
“First, allow the next generation to learn about the business at an early age, but give them the freedom to choose,” she says. “Second, ensure that the next generation finds their own sense of identity by working outside the family business, as that reinforces the importance of self-discovery. And finally, be sure that the next generation is passionate and has conviction for the business.”
Capuano will be working under the direction of Chief Information and Innovation Officer Kevin Myers, formerly the company’s chief marketing and information officer, Krouse says, determining how the ideas proposed at the family’s Edge Innovation Hub can be incorporated into operations.
“Whether that’s automated equipment, artificial intelligence or a number of new things, Tony will be representing us in terms of how do you bring those elements into a company that isn’t doing a ton of innovation on a regular basis,” Krouse says.
Abell emphasized that she and the rest of the family did not want her son to feel pressured into joining the company.
“Carrying on the values and legacy of a family business is a huge responsibility,” she says. “As the second generation, we were always given the freedom to choose whether or not we wanted to join the family business. I wanted to make sure that the third generation had the same freedom.
“Tony is a true servant leader who has unwavering integrity. He is smart, loving and humble,” Abell says. “His experience in owning his own business and starting a new business brings a unique perspective to our family business. I am excited to see how he will lead by honoring our heritage and laying a strong foundation to build the future.”
Lin Rice is a freelance writer for Columbus CEO.
935 Taylor Station Road, Columbus 43230
Business: Pizza chain and maker of prepared foods
Employees: 5,000
Restaurants: 161
2019 revenue: $200 million (estimated)
Founder: Jim Grote
Chairwoman: Jane Grote Abell, Jim Grote’s daughter
President & CEO: Tom Krouse, Jane Grote Abell’s husband
Executive director of innovation: Tony Capuano, Jane Grote Abell’s son