'Undercover Boss': Pretzel CEO In A Twist Over Working Conditions

Dan DiZio Undercover Boss pretzelWe all lose touch at one time or another. Indeed, disconnect is a problem that plagues every workplace, given that the bosses can't truly know what's going on during the day-to-day grind -- as much as they might try. But for a chief executive who went from the bottom to the top, you'd hope he'd at least hold onto a memory of what the climb up was like.

That's what Dan DiZio, the co-founder and CEO of the Philly Pretzel Company, expected before his appearance on Friday's "Undercover Boss." "I thought that because I was a founder of the company, and that I had twisted pretzels, that I would never forget all that," he told AOL Jobs. "You don't want to become that CEO that's out of touch. But I lost perspective."

DiZio's executive-suite-induced amnesia was made plain during his first site visit on the episode. DiZio had every reason to be wary of working with a Philly Pretzel franchise based out of Bridgeton, N.J. -- one of the company's 120 on the Eastern Seaboard. DiZio said that he remembered having once met the franchise's owner, Bill, at the company's annual expo two years ago. So did Bill, and his wife Donna: They quickly put together whom they were dealing with during a pretzel-rolling session in their bakery. "It is me," DiZio admitted after pretending not to know how to make pretzels and barely trying to keep his cover story as "Michael Downs," a data entry processor appearing on a job-switch reality show.

But DiZio had forgotten what actually happened during their encounter. "To me, it seemed like you forgot how you got started, and that's how it felt when you walked out the door that day," Donna told him, bringing him up-to-speed as they sat down to once again discuss the challenges being faced by the Bridgeton franchise. And even before they huddled, Bill admitted to "Michael" that he had not received the proper training on how to make and roll the pretzel dough. But that was the least of the Bridgeton franchise's problems.

Bill and Donna can't afford to pay the repairs for a broken window at their shop, estimated at $500. They're also struggling to make ends meet, having fallen behind on rent and utility payments. Bill has even been forced to introduce his own product, a pepperoni pretzel roll, to boost revenue. And though the roll is being sold at a Philly Pretzel installation, it was not approved by the corporate office.

Being forced to confront the fact that he not only had forgotten the couple's story, but also had done nothing about it, moved DiZio to tears during an off-camera confessional, as seen below.

CEO Tears Up on 'Undercover Boss'

"It says I am not doing that good of a job," was how DiZio sized up his own performance. And after initially being irked by the unauthorized pepperoni pretzel roll, saying it "drove him nuts," DiZio grew to accept it. Bill, after all, had tried to reach out to the corporate offices for help. "I can't fault him," he said of Bill's choice to go "rogue," as he put it. He even assigned himself the harshest condemnation of all: "My mom would be embarrassed."

Boss Confronts Widespread Problems

But that wasn't the only disappointment for DiZio.

Marques, a baker working out of a franchise in Broomall, Pa., showed up to work at 4:07 on the morning we met him. He's the kind of employee you want to treat right. He works 60 hours a week and is hoping to send his daughters off to college, where they can realize their dream of becoming doctors. But DiZio found it "devastating" that Marques was looking to change jobs. The baker said that he wants a job that gives him and his family benefits. "We can't afford to lose a guy like Marques," DiZio said, closing out the session.

The lack of medical benefits is a problem compounded by, in DiZio's estimation, the inadequate protections provided to workers who go out on deliveries. While working with Dino, a deliveryman in Philadelphia, the company's headquarters, DiZio found that Dino didn't have the proper gear to get to his kiosk in a downpour. "My jacket was soaked down to the clothes," DiZio said about his own delivery experience. And the carts that the workers use to make the deliveries seem to be leaving them in danger. Wheeling one down a stairway in the subway, DiZio was scared that he would lose his grip. "It gets a little crazy," he said of the delivery job.

Bosses are accustomed to coming across a let-down or two while appearing on the show. Chad Hallock, for instance, was forced to confront the problems in not allowing his franchisees of his Budget Blinds company have control over advertising plans. They would have been able to take advantage of the local market, they told him. And then there was hotelier Stephen J. Cloobeck, who on the season's premiere, flipped out when Sarah, a worker in the call-center for his Diamond resorts, failed to implement his "meaning of yes" doctrine. His workers are supposed to offer potential clients alternatives to rejected vacation plans. Sarah just ended her phone calls at "no."

A Life-Long Pretzel Education

DiZio was more than willing to address the problems in his company. "No one sends you to school to be the CEO," he presciently noted at the show's opening. "I am learning, every day." His education in the pretzel business stretches back to when he was in seventh grade in Philadelphia. DiZio recalled during the episode that he began selling pretzels while making the dough at a neighbor's bakery. So he took what he had made, and went to the street corner to sell his produce. And in a few months' time, 50 friends had joined him in his new cottage industry.

He had picked a good market: Residents of the City of Brotherly Love eat 16 times more pretzels than the average U.S. citizen, DiZio pointed out.

So after finishing college, and after trying a 9-to-5 job in the finance industry for a few years and tiring of it, he decided to get back into the pretzel business. He opened his first franchise in 1998, and maintained that annual growth rate until 2004, when eight new franchises opened. Today, Philly Pretzel has an annual revenue of $45 million, and sells more than 100 million pretzels a year.

While DiZio aspires to one day own a billion-dollar-a-year venture, he pledged that before he gets there he will become a better boss.

He told AOL Jobs that each year he will visit all 120 of his chain's franchises to check in on them. He now feels that his staff's on-the-ground work experience is invaluable in figuring out how run the business. "The person who has been on the floor will have the answers," he told AOL Jobs. "Every CEO needs to go undercover in their company."

During the episode's reveal, DiZio sought to make up for management lapses. He told Bill, of the pepperoni pretzel roll, that he wanted to send him to a month of business training so that he can run a smoother, leaner operation. And DiZio included a new branded van so that Bill can get the word out about Philly Pretzel when he makes deliveries. The rogue pepperoni pretzel roll, meanwhile, will be brought under the wing of the company's operation.

For Marques, DiZio told him that he will provide him with full medical benefits. DiZio also told him that he wants to open a kiosk division within Philly Pretzel, with Marques as his partner. And Marques will also be given $2,500 to open a college fund for each of his kids. "I am going to be able to do so much for the girls," Marques said.

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