Will Lapin’s Pizza-Video Idea Sell Like Pancakes?

Al Lapin Jr. says he gets a kick out of spotting an International House of Pancakes Restaurant when he’s traveling around the country. The sightings still evoke warm feelings, he says, although many no longer have the familiar features such as A-frame roofs that were the chain’s trademark.

“It’s kind of like seeing your child growing up. From time to time, I get irritated because the grass isn’t cut right, or the paint isn’t right. But like any other parent watching a child grow, I know that the child will do whatever it wants to do,” the 60-year-old founder of the restaurant chain says.

Lapin hasn’t been associated with IHOP for the past 16 years. In those intervening years, he hasn’t been wallowing in nostalgia. Instead, he’s tried his hand--with a checkered record of success--at other franchise and food ventures, including his latest plunge into the video business. It’s a venture that he hopes will evoke the kind of good feelings among today’s consumers that he created in 1958 when he opened the first IHOP as a family-style diner that offered hot pancakes with a dazzling choice of sweet, gooey syrups.

Aware of Risks

For the past two months, he’s been in and out of a tiny, sweltering shop on busy Lincoln Boulevard in Marina del Rey. The shop is home of Pizza Playhouse, a food and video home delivery venture Lapin formed with his son Randy and Michael Lenzini, an entrepreneur with a restaurant management background.

The venture isn’t a radically new idea. Consumer demand for home delivery of hot food is stronger than ever, and there is no shortage of people around trying to satisfy that demand. Video is also hot, and several entrepreneurs are trying mightily to get the dollars of people who don’t like standing in line at the video store.

Lapin says he is aware that the restaurant business has a high mortality rate and that the nascent video delivery business also has a high failure rate to show for its short history. But he’s convinced that he has found a winning combination that he believes can be duplicated elsewhere.

Pizza delivery is a great idea “if you can come up with a clever way to do it,” says Jim Lahm, a Fullerton-based video consultant. “There aren’t a lot of people who have done it successfully,” he says, adding that he, too, thinks the combination of food and video delivery might work. In fact, says Lahm, he wrote a business plan for a big Las Vegas video rental store that wanted to deliver video and food 24 hours a day. The problem, he explains, was that potential financiers didn’t buy the plan and his client couldn’t get backing.

The video rental business is still in a shakeout phase, Lahm says. “It’s a very dynamic business. What works in July might not work in August,” he says.

The basic problem with video delivery is that although consumers say they want home delivery, many entrepreneurs haven’t been able to find enough willing to consistently pay the price necessary to make a profit.

The latest gimmick to entice customers are lock boxes that are placed on the porches of customers for easy delivery and pickup. (Video Valet, a video delivery service in the Leucadia area of San Diego County has an arrangement with a pizza restaurant whereby customers calling either location are asked if they would like a pizza to go with their video or a video to go with their pizza. Then the deliveries are combined.)

Lapin and his partners say they think the key to making their venture work is that they think of themselves as restaurateurs first. “We’re in the food operations business. It’s one that happens to have an extra service--videos,” Lapin says, explaining that the profit is clearly to be made from the food.

On the face of it, the customer who orders food and a video isn’t charged specifically for the video. A video delivery alone costs $5, and customers who want to pick up a video from the shop pay a $2 rental fee.

Aims at ‘Couch Potatoes’

That said, Randy Lapin points out that several elements piggyback on each other. One edge that he believes Pizza Playhouse has on the plentiful food delivery competition in the area is that “our variety is vast.”

The company is clearly aiming for the yuppie “couch potato”--though Lapin describes his customers as “upscale people who are very busy.” The entrees on the menu include pasta dishes, “Scampizza” and pizzas with pesto sauce instead of plain tomato sauce.

Marina del Rey “is a great experimental area,” Lapin says. “It has the density of apartment and condo dwellers and the yuppie demographics.”

He says he next plans to duplicate Pizza Playhouse in Playa del Rey. There are also several other high density, upscale communities in the Los Angeles area where he believes the concept can be repeated. “It’s a highly repeatable, cookie-cutter-type operation,” Lapin says.

Getting started wasn’t easy, Lenzini says. Getting a computer programmed for the unique service was a chore, he adds. “There was software for video orders and software for food orders, but no software for food and video,” he says. An expert eventually worked that out. In mid-July after six weeks of operation, Pizza Video had 500 customers signed up, Randy Lapin says.

A clay model of Marina del Rey sits near the computer terminal with hundreds of pins showing the frequency of deliveries to certain apartment and condominium buildings. The computer keeps track of individual orders.

For Al Lapin, this is relatively small-scale stuff after International House of Pancakes, which grew from one Toluca Lake pancake house to a diversified conglomerate anchored by a nationwide restaurant chain. The company came close to collapsing altogether in the early 1970s under the combination of tight credit and heated expansion.

Tried Other Ventures

Austrian restaurateur Friedrich Jahn bought the chain after Lapin ran into problems and started scaling back the company. But he, too, had a hard time, and IHOP Corp., as the company is known today, was eventually taken over by a Swiss holding company consisting of Jahn’s creditor banks.

After resigning in 1974, Lapin bought Uncle John’s Family Restaurant in Santa Monica. A plan to build a big franchise system proved too optimistic. Lapin bought a photocopying franchise company out of bankruptcy in 1981. But Quickprint of America also proved to be troublesome, and Lapin shed that company a few years ago.

Today, Lapin’s ventures also include a video production company that contracts with rock stars for videos to teach youngsters how to play their instruments. As he sees it, he’s essentially doing the same thing he was doing in building the pancake houses. “It’s the basic entrepreneurial quest. Find a need and fill it,” he says.