source: http://www.coloradoan.com/story/money/business/2016/09/26/farm–table-restaurant-pizza-brewery-tap-fort-collins/90935204/ A franchisee is planning to open 25 Mod Pizza locations in Colorado over the next few years. This segment has been growing rapidly, with contenders Blaze Pizza from Wetzel Pretzel founders and Pie 5 from Pizza Inn corporate. I’ve tried them all and Blaze Pizza does have the best tasting and textured dough. Blaze bakes pizza in a Woodstone oven which gives it a different taste profile from the conveyor belt bakes from Pie 5. It is less efficient in the Woodstone oven, and consistency does suffer when 15 seconds can make the pizza go from perfect to burnt, but the vast majority turn out well baked. Any of the concepts are a safe bet at this point. Expansion through delivery, especially through services like Uber Eats, will help this business model. I’d buy it!

Unique Pizza and Subs, a 7-unit pizza-sports bar chain traded on OTC Pink Current tier, has agreed to acquire the well branded Pizza Fusion, an 11-unit organic pizza chain. I think there is more to this story, as Pizza Fusion seems to be a much strong player than Unique Pizza & Subs. It could be seen as more of reverse merger with Pizza Fusion as the driver, whereby Pizza Fusion can now be publicly traded and potentially raise more cash for expansion. [updated March 15, 2012] I found another interesting article about this merger. [more here] It seems there may be some Bacon Raton, FL penny stock promotion linked to this merger, and it’s not the first time Pizza Fusion has flirted with the Pink Sheets marketplace to attract needed capital, as you can read below: Trafford, Pa.-based Unique Pizza, which recently issued news releases about two franchising agreements, also said in January it was in the “secondary stage” of selling its pizza in China. The China announcement, which indicated a financial partner was actually still seeking a distributor in China, was issued by Mirador Consulting via PR Newswire and gave a Boca Raton phone number. Boca Raton is known nationwide as a center of penny stock promoters and penny stock companies, which would include Pink Sheets companies like Unique Pizza. Unique’s Pizza 2007 filing said the company had raised $718,993 of a $1 million offering, so one question is how the current deal will be funded. The news release said the deal is subject to execution of a definitive agreement and other conditions including the availability of working capital. A chart on MarketWatch shows no trading volume in Unique Pizza since January, when the announcement of the China deal and a sports pizza sports bar were made. However, …

Cheese Average block cheese prices continued to drop last week on the Chicago Mercantile Exchange, averaging $1.77 from $1.81 the previous week. Cheese reached its 3-month high of $2 on Nov. 15, but continues to drop on slowing demand. Wheat Wheat prices fell again last week on the Minneapolis Grain Exchange, averaging $8.43 from $8.54 the previous week. Two weeks ago, wheat was as high as $9.26. The current multi-month low is the result of a larger-than-expected grain output from China, and a positive jobs report from the U.S. Pizza company stocks Pizza stocks were boosted by lowering commodity prices and an upward trending stock market the past week. Pizza Hut parent Yum! Brands Inc. closed last week at $56.25, up nearly $4 from the previous week, which closed at $52.72. The company hit its 52-week high in August when shares were $56.72. Yum! traded as low as $46.40 in January. Domino’s closed last Friday at $33.56 up from $30.51 the previous week. DPZ hit its 52-week high earlier in the day on Friday, trading at $33.81. Shares remain substantially higher over this time last year when the company traded at $14.72. The company has a P/E ratio of 30.8, above the average leisure industry P/E ratio of 22.4 and above the S&P 500 P/E ratio of 17.7 Papa John’s closed last week at $37.25, up from $35.50 the previous week. PZZA hit its 52-week high earlier in the week, at $38.18. PZZA’s 52-week low was last December when it traded at $25.83. CEC Entertainment Inc., parent company of Chuck E. Cheese restaurants, closed out last week at $33.17, up from $32.35 the previous Friday. CEC hit its 52-week low of $27.42 in September. The company hit its 52-week high of $41.75 in July. Pizza Inn closed at $6.28 …

Quiznos Quiznos renegotiated it’s debt load and took in an infusion of equity capital from JP Morgan and other existing shareholders.   You can read both good and bad into this.  The good being the investors saw enough upside to invest more, the bad being Quiznos desperately needed this to happen so their financial soundness probably isn’t strong. Chipotle Chipotle still showing a growing customer base with 1st quarter same-store sales up 4.3%.  They plan to open a new store every three days in 2010. Fuddruckers Fuddruckers filed for bankruptcy a few weeks ago.   It received approval to sell 62 Fuddruckers and a dozen Koo Koo Roo (similar to Boston Market) for $65 million.  It also plans to close 20 restaurants with “lease issues or low-foot traffic” stores.  Sales were down 10% in 2009. I woudn’t consider Fuddruckers part of the “better burger” craze of Five Guys and Counter, the brand is simply too old and retail square footage is way too large.  Red Robin’s are large in size too, but it invested plenty of capital in marketing and bradning to keep its brand appealing to the next generation of customers…much more so than Fuddruckers. Pizza Fusion Plans to offset its entire “carbon footprint” by paying a percentage of sales to a company to construct renewable energy facilities.

Pizza chain sales are down: Pappa Johns: -5.7% Pizza Hut: -12.9% Dominos: -6.5% Sbarro: -6% domestic, -13% internationally (taking into account increase in US dollar) Sbarro’s attributes a drop in sales to a drop in mall traffic. What is up?  Frozen pizza sales. Frozen pizza sales rocketed to $4.4 billion in America last year from $3.1 billion in 2000, the Minneapolis Star Tribune reported this week, citing market research by Datamonitor Inc.  Sales of private-label brands (produced by chains such as Walmart, Jewel, Dominick’s and Target) have risen more than 20 percent in the past year.  Clearly, cost and an acceptable level of quality is at play here. In related news, Kraft Foods Inc., maker of DiGiorno, Tombstone and Jack’s, said it selling their brands to Nestle so it can fund an acquisition of Cadbury.

The marketing function performed by most franchisors can mean the difference between a flat year-over-year sales, and 13% year-over-year decrease in sales.   For Pizza Hut’s largest franchisee, NPC, that difference in sales a massive amount of money.  Hypothetically, if the average Pizza Hut does $1.5 million in sales, then we are talking about a $195,000 difference per store.  With 1,150 stores, we’re talking about $22.4 million.  That’s a large distribution check for the owners to miss out on!

Source: Dallas Morning News Jim Schwartz, president and chief executive of NPC International Inc., said he was disappointed and “frankly frustrated” with the company’s 12.6 percent drop in same-store-sales from continuing operations for the quarter that ended June 30. It was the third consecutive negative quarter for the Overland Park, Kan.-based company, due in part to difficult comparisons to last year’s sales tally. That’s when Addison-based Pizza Hut launched its line of Tuscani pastas. Schwartz noted that cash-strapped consumers have been looking for less expensive meals, even among the pizza players.

A former franchisee of Pizza Pizza in Ontario lost his franchise for allegedly falling behind on payments to the franchisor.  This whole relationships seems to have gone mismanaged by both sides.  The franchisee wasn’t keeping good sales records and delivery drivers were impatient with customers, and the franchisor let bad practices continue for too long. http://news.guelphmercury.com/News/Local/article/524725

The pizza industry is in a larger downturn than I would have predicted.  Papa John’s is even delaying scheduled increases in their royalty:  Papa John’s, meanwhile, is extending sweeping financial assistance to its franchisees. The company is delaying for at least six months an increase in its royalty rate on sales to 4.5% from 4%. It also is rolling back the royalty it collects on Internet-generated sales, a fast-growing part of its business, to 2% from 3%, and markedly cutting the price of cheese it sells to franchisees. Finally, those franchisees suffering the most will get special marketing support.   While hamburger chain McDonald’s Corp. has posted consistent gains in its domestic same-store sales, with 4% growth in 2008, U.S. franchised same-store sales at Domino’s fell 1.7% in 2007 and 5.6% in the first nine months of 2008. Papa John’s is predicting its same-store sales will be flat to down 2% this year, and Pizza Hut, whose same-store sales slipped 1% in the fourth quarter of 2008, is off to a slower start than expected this year, according to Yum, which has called the division its biggest challenge.Pizza’s woes started before the current recession gripped the nation. Figures compiled by Chicago-based restaurant-consulting firm Technomic Inc. show that while the overall U.S. fast-food category experienced compounded annual growth of 6.4% from 2002 to 2007, pizza sales rose only 2.5% during that period.

Well, you have to go to Australia to buy these Pizza Hell franchises. Hell has been torture for Matt Blomfield – so he’s auctioning his $830,000 Auckland store for a $1 reserve. Mr Blomfield, a Hell Pizza franchisee, is so fed up with the New Zealand owner TPF Group’s handling of the business that he’s willing to take a loss selling up his five stores. “I just want to get the business sold, pay all the bills and move on with my life.” Why is this business model not making money? Here are potential reasons from the article: The Herald has also sighted emails from franchisees complaining of the lack of support from TPF, the high cost of ingredients – which they can only purchase from TPF’s own supply and distribution operation – and what they say is unsatisfactory marketing.

Pizza franchises throughout the U.S. are struggling with escalating costs of cheese. Block cheddar cheese – the benchmark for mozzarella and other cheeses – reached $2.08 a pound Thursday on the Chicago Mercantile Exchange, up 78 percent from $1.17 a pound a year ago. Industry observers attribute the price surge to strong demand and higher production prices – from the cost of milk to the cost for dairy farmers to feed their herds. Pizza Hut and Papa John’s International have raised their cheese-only pizza prices, and smaller restaurants, including Fat Jimmy’s in Louisville, Ky., have raised prices, too. Papa John’s uses about 100 million pounds of cheese each year, and the cheese typically makes up 35 percent to 40 percent of the food cost in making a pizza. Read the story “Pizza makers struggling with higher cheese costs” by Bruce Schreiner in the Daily Herald.Something tells me that America’s Desire for pizza will remain. According to Pizzaware .com Americans eat approximately 100 acres of pizza each day, or about 350 slices per second. Pizza is a $30+ billion dollar per year industry. There are approximately 69,000 pizzerias in the United States. Approximately 3 billion pizzas are sold in the U.S. each year. (Source: Blumenfeld and Associates) Pizzerias represent 17% of all restaurants. (Source: Food Industry News.) Pizza accounts for more that 10% of all foodservice sales. (Source: Food Industry News.) 93% of Americans eat at least one pizza per month. (Source: Bolla Wines.) 66.66% of Americans order pizza for a casual evening with friends. (Source: Bolla Wines.) Each man, woman and child in America eats and average of 46 slices, (23 pounds), of pizza per year. (Source: Packaged Facts, New York.) Italian food ranks as the most popular ethnic food in America. (Source: National Restaurant Association.) According to a …

Pizza Hut franchisee’s earnings fall, revenue rises Comparable sales rose 0.7 percent.

Pizza Inn is ~400-unit buffet, delivery, carryout, sometimes-drive thru pizza chain in the soutwestern United States with a drama filled past few years that would make some soap opera’s jealous. In 2002, the then-CEO Rogers of Pizza Inn borrowed about $2 million from the company to buy company stock. The stock sank and Rogers couldn’t pay back the company’s cash loan. Rogers was fired as CEO and Pizza Inn wrote off the debt and moved Parker, then President, to CEO. Shortly thereafter, ex-CEO Rogers sold his 27% stake in Pizza Inn to a private investment firm escaping with a tidy profit. With the private investment firm holding a controlling interest, the current executives sought to protect their jobs by writing employment agreements with Pizza Inn. The employment agreements provide that if the four executives left for “good reason” or were removed from their posts, they would receive payouts totaling $7.4 million (Parker would have pocketed $5.4 million, Olgreen $630,000, Clark $605,000 and Preator $597,000), more than twice Pizza Inn’s 2003 profit of $3.1 million, which would have surely bankrupted the company. Eventually the private investment firm got their wish and the shareholders elected new candidates to the board of directors. Parker, the CEO with the parachute employment agreement, resigned and claimed this trigger the parachute and the company owed $5.4 million (he sold 98,000 shares a few days before). He eventually won a settlement of $2.8 million. Pizza Inn even sued its former legal counsel for its role in advising the company on the huge severance packages (the lawyers were supposed to work for the best interest of the company, not the executives). In the meantime, revenues of the franchisor fell due to lower franchisee sales which resulted in the franchisor suffering less royalties and less revenue from the …

Middleby’s new $55,000 WOW! oven is quite an innovation, reducing pizza baking times from 7.5 minutes to 5.5 minutes. The WOW oven cuts a pizza’s “belt speed,” or cooking time, to five-and-a-half minutes from seven-and-a-half minutes. That means places like Jimmy John’s can serve more customers even as it advertises — and charges for — “gourmet” sandwiches, and Domino’s can deliver faster or to a wider area. The oven creates a more pleasant workplace, too, since the oven stays cooler on the outside. It’s helping Papa John’s with a “takeout pizza in 10-minutes or less or it’s free” program. For six years running, consumers have rated Papa John’s no. 1 in customer satisfaction among all national QSR chains in the highly regarded American Customer Satisfaction Index (ACSI). At March 26, 2006, there were 2,924 Papa John’s restaurants (509 companyowned and 2,415 franchised) operating in 49 states and 22 countries. Here’s another article about the oven. Quick trivia – What are the five most popular pizza toppings? 1. Pepperoni 2. Sausage 3. Mushrooms 4. Ham 5. Green Peppers

I found this article giving an overview of the different styles of pizza across the USA quite interesting. While I love Chicago style, I’m quickly becoming a fan of California style pizza. With all the popularity of speciality pizza, choosing a non-traditional style pizza franchise concept will help differentiate your menu offfering in the minds of customers, and will help you command a premium price.

Panera Bread looks to pizza to further increase sales: The analyst day event included a showcase of management talent at key skill positions and the unveiling of the soon to be offered Crispani, a pizza-like product to be rolled-out this September. After sampling the Crispani products, Oakes said they adhered to Panera’s “quality image” with an “upscale twist.” Management repeatedly emphasized that Crispani was part of an overall “evening strategy” geared to serve the Panera customer desiring to avoid the dinnertime delay at casual diners.