Well-paid employees & cheap food: MOD Pizza

While "Mad Money" is a show about stocks, Jim Cramer also thinks it is important to check in with privately held companies making groundbreaking moves in a given industry.

MOD Pizza is a fast-casual restaurant chain that was founded in 2008 and now has 110 locations spanning 16 states. Its business model? Cheap food and paying employees well — and it is working.

"Here is a company that is doing for pizza what Starbucks did for coffee or what Chipotle did for burritos," Cramer said.

Cramer spoke with MOD's CEO Scott Svenson, who founded the company with his wife Ally Svenson. They noticed that while pizza was one of the fastest growing food categories, there was a shocking lack of innovation.

"The beauty is if you can get the volumes right — which is a really important part of the equation — take care of and engage your team so that they care as much about the outcome as you do, the business has to take care of itself, and we generate great margins," Svenson said.





MOD Pizza location
Source: MOD Pizza
MOD Pizza location
"If you get behind in them and believe in them, more than they believe in themselves, they can make a huge difference." -Scott Svenson, MOD Pizza CEO

MOD has also built its model around brand loyalty through giving employees second chances. Svenson said after they opened their first four stores, they quickly realized this was a concept of scale and could build a large business.

The question then became — what would make it worth investing 10 years of their life into the business?

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The last thing Svenson wanted was just another pizza chain. Thus, they decided the core of its model is to make a positive social impact. Ultimately with growth, Svenson saw that MOD began to attract individuals who wanted to work for the company but may have had tumultuous backgrounds.

"They become culture carriers at MOD, and they have made us realize that this is a category of employees that if you get behind in them and believe in them, more than they believe in themselves, they can make a huge difference," Svenson said.

Svenson and his wife also founded Seattle Coffee Co., which was purchased by Starbucks at its entry into the U.K. Market. He took over as President of Starbucks Europe.

"My wife and I have had success with a couple of other businesses, so we are not into this to just have a pay day … We have four boys, we want to build a business that they can be proud of," Svenson added.

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