$10K Ilitch investment baked up billion-dollar empire

Melissa Burden, and Michael Martinez
Mike and Marian Ilitch celebrate the 50th anniversary of Little Caesars, which began in 1959 with their Garden City, seen behind them. The company has grown into thenation’sthird-largest pizza chain, behind Pizza Hut and Domino’s.

A $10,000 investment made nearly six decades ago by Mike Ilitch and his wife Marian to open a pizza shop in Garden City grew into a massive Detroit-based business enterprise that last year brought in revenue topping $3 billion.

Mike Ilitch, a self-made billionaire, died Friday at the age of 87. He and his wife co-founded Little Caesars Pizza. They started the empire with their $10,000 life savings, investing it to open Little Caesar’s Pizza Treat in Garden City on May 8, 1959. More than a half-century later, the company has grown into the nation’s third-largest pizza chain — trailing only Pizza Hut and Domino’s.

The Ilitch family currently is worth $6.1 billion, according to the Forbes 2016 list of the World’s Billionaires. The family ranks No. 298 on the list, up from 330 in 2015. They also are the 101st richest in the United States, according to the magazine’s annual billionaire’s list.

A private company, Little Caesars doesn’t release the number of its stores, franchises or its profits. Forbes puts the business at roughly $4.2 billion in annual sales, while the Nation’s Restaurant News says Little Caesars U.S. sales are growing. It estimated its U.S. sales at $3.5 billion in 2016 with nearly 4,100 locations.

But, the Ilitches are known for much more than pizza. The Ilitch business empire goes well beyond Little Caesars and includes food manufacturing and distribution, major league sports franchises and entertainment complexes.

Ilitch Holdings Inc. includes 10 businesses owned by Mike and/or Marian Ilitch. In 2016, those businesses that include Little Caesars, the Detroit Red Wings, Detroit Tigers, MotorCity Casino Hotel and others, had combined revenue of $3.4 billion. The companies employ 23,000.

Ilitch originally wanted to call his first store Pizza Treat, but his wife added “Little Caesars,” her nickname for her husband.

In 1962, the duo had their first franchise. Their business plan relied on low overhead and no home delivery, and expansion throughout the Midwest followed. When the economy slumped after the 1973 oil embargo, Ilitch drew business away from competitors by offering steep discounts, which was unheard of then.

It was one of the first companies to introduce the two-for-one pizza concept, which they called “Pizza!Pizza!”

Mike Ilitch: A timeline

“That put Little Caesars on the map,” said David Scrivano, president of the pizza chain.

Ilitch in the late 1970s also created a conveyer-belt oven to bake pizza quickly and consistently, and to meet customer demand.

“Mr. I was always busy, busy, busy,” recalls Little Caesars franchise owner Vicki Dunn-Marshall, who started working for the Little Caesars company at age 16 and worked in the corporate offices before ultimately opening 25 franchise stores in West Virginia, Kentucky and Ohio.

Dunn-Marshall said Ilitch was an innovator and creator and she recalled how he walked through the offices and talked with employees.

“He was a mentor,” she said. “He was just such as brilliant man. Whenever he gave you advice or talked to you, you just listened with such admiration and respect.”

Dunn-Marshall of Huntington, West Virginia, said she learned from Ilitch how to be humble, to work hard and be passionate.

“What an awesome gift he gave to Detroit, his life,” she said. “It’s just going to be tough going forward.”

The world’s largest carry-out pizza chain again revolutionized the industry with the $5 Hot-N-Ready concept in 2004: pre-made pizzas ready when customers walked in, eliminating the need to call in an order. The company also was first for innovations such as serving pizza in just minutes for lunchtime customers, for having drive-through windows and for operating inside stadiums. The pizza chain continues to expand franchises, including international locations stretching from Mexico to Saudi Arabia and Australia.

Last year, the Ilitches were honored and received an award from the International Franchise Association’s Hall of Fame for their contributions to franchising.

“There is no doubt that Mike and Marian Ilitch are deserving of this award. They have made tremendous contributions to the advancement of franchising and the franchising community,” Melanie Bergeron, chairwoman of the board of Two Men and a Truck International, said in a statement at the time. “At the same time, they have worked tirelessly on behalf of their hometown of Detroit, which continues to benefit from their involvement and commitment.”

Ilitch businesses also include Blue Line Foodservice Distribution; Champion Foods, a New Boston-based manufacturing facility of take-and-bake pizzas, breadsticks, calzones, cookie dough and scones sold under private label and store brands; and the Little Caesars Pizza Kit Fundraising Program.

Entertainment holdings include Olympia Entertainment and Olympia Development.

Marian Ilitch owns MotorCity Casino, which last year had adjusted revenues of $465 million, up $20 million from the year before. The casino, which finished a $300 million expansion in 2008, features a luxury hotel, conference space, restaurants, theater for concerts and a casino floor with more than 2,900 slot machines.

Ilitch’s companies

■Little Caesars Pizza: Pizza chain founded in Garden City in 1959

■Blue Line Foodservice Distribution

■Olympia Entertainment: The concert and events branch of the Ilitch empire that includes venues like the Fox Theatre, City Theatre and Sound Board at MotorCity Casino Hotel

■Detroit Red Wings: National Hockey League team Ilitch purchased in 1982

■Detroit Tigers: Major League Baseball team Ilitch purchased in 1992

■Olympia Development: The real estate arm of the Ilitch empire, in charge of the new Little Caesars Arena

■Little Caesars Pizza Kit Fundraising Program: An organization that lets individuals or groups register fundraisers and sell pizza kits to raise money

■Ilitch Holdings Inc.: The umbrella organization, formed in 1999, that oversees all Ilitch companies

■Champion Foods: A company that offers take-and-bake frozen pizza, breadsticks, calzone and cookie dough kits.

■MotorCity Casino Hotel: Run by Mike Ilitch’s wife, Marian, the casino at 2901 Grand River opened in 1999