How to Choose the Right Pizza Franchise?

How to Choose the Right Pizza Franchise?

Pizza franchising has come and gone….come and gone and now come back again for what seems like an incredible turn around in the entire pizza franchise market segment.  For years, the market was generally “stale” and lacked any real innovation or growth overall.  Brands such as Pizza Hut had their “hey-day” and grew systems to almost 20,000 units only to shrink during pizza lull’s.  The majority of the innovative ideas and new approaches to the market were developed in the 1980’s and ran their course into the 1990’s.  Recently though, Blaze Pizza, Pieology and others have redefined the pizza franchise model with a “subway-type” offering where the customer chooses toppings while pizza artists assemble the pizza behind a glass counter.  The equipment, ovens and technology that came about in recent years allowed for this process to work and for the customer to get a pizza in an incredibly short time period.  Today, Blaze boasts almost 1,000 franchises sold in only a 5 or 6 year time period and the growth has spurred on a renewed enthusiasm for the entire pizza market. 

Why does Pizza seem to work so well?  For one, everyone seems to like pizza, you have this incredibly wide and deep consumer demand that seems to be pervasive to demographics, market type, age ranges and just about anything else.  In addition, pizza can be anything form a gourmet meal to an economical food choice.  Pizza feeds a family of four for about the lowest possible cost per eater you could find on the market which makes the pizza franchise model economy-resistant when compared to other food service franchises.  When it comes to franchising, the ability to duplicate processes and systems always plays directly into how well a particular business will scale and pizza has some of the most straight-forward and simple operating models on the market.     

The consumer market for pizza has expanded RAPIDLY:  41% of customers order a pizza weekly as opposed to 26% two years ago which is almost mind boggling to get your arms around….that’s a lot of pizza. 

http://www.pmq.com/December-2016/Pizza-Power-2017-A-State-of-the-Industry-Report/ 

Several key factors are supporting this surge in the pizza franchise market and driving more pizza entrepreneurs to consider franchising vs. going it alone:

1. Online ordering – the need for effective and capable online ordering systems has increased the value proposition to investors in joining a franchise network as opposed to going it alone.  Franchise investors want access to Franchisor’s technology and online ordering systems.
2. Branding and Market presence have become more and more relevant and important.  The market is noisy and in many markets are competitive, the need to combine marketing dollars and generate exposure at the store level has increased the value proposition of pizza franchising.
3. Operating expenses and group purchasing power has driven the demand for pizza franchising as well, franchisees benefit from cooperative purchasing and volume discounts on supply and inventory expenses. 

When comparing pizza franchises, it is critical to do your research and understand not only who is on the market, but how their existing units have performed.  We always recommend that you work with pizza franchises that offer an Item 19 and are willing to disclose financials for their operating locations.  Do your due diligence after you have compiled the data and speak with franchisees who are in the network to verify information and also confirm what your Net Margins might look like in the business…Gross Revenues only tell part of the story.  Determine your return on investment and you can begin to sort through the pizza franchises that are good franchise investments and the one that might not be a good fit. 

We’ve compiled this chart for a quick review of some numbers for a group of pizza franchise brands – as you can see, not all pizza franchises are created equal. 

The process of evaluating a pizza franchise should start with building charts such as this one and putting together a franchise business plan to understand what value each of the brands offers and what kind of track record the pizza franchise has had up to this point.  Review their FDD, make calls and set face to face meetings when possible with existing and terminated franchisees to understand what works in the system and what doesn’t.  When you leverage the advantages of a franchise model, you never completely eliminate risk, but you are able to narrow down the data and information available to make better decisions. 

For more information on pizza franchising, contact Chris Conner with Franchise Marketing Systems at:

Christopher Conner

President

Franchise Marketing Systems

www.FranchiseMarketingSystems.com

Cell:   770-519-3910

Email:  [email protected]