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Pie Five – closes locations and is reportedly struggling

Top your own pizza prepared “Chipotle Style” is a great concept and is hear to stay.

However, Pie Five, a big player in the space from RAVE Restaurant Group (formerly named Pizza Inn), is having trouble. Two locations in Colorado Springs closed within a year of opening. Franchisees closed locations in Chicago and Minnesota, too. The franchisor closed 10% of its company-owned stores this year. The lower-than-expected sales and repeat visits were blamed on the brand and store design, with franchisees claiming it was tough to stand out in a crowded pizza market. They also accused the franchisor of misrepresenting sales numbers.

One franchisee that owns 7 locations in the midwest is suing the franchisor, for misrepresentations. A big thorn is this:

…the suit claims Pie Five’s food supplier, Performance Food Group, doesn’t provide fair pricing to franchisees. According to NRN, Pie Five collects a 2.5 percent rebate on food that Performance sells to its franchisees.

Ouch!  That adds up when you are barely breaking even and you can’t reduce your food costs.

Frankly, I’m a bit surprised at Pie Five. They started off strong. The store style was nice and modern, but the final pizza quality was lacking. Just about everyone I knew that ate there said is no better than “average” with somewhat dry crust, and that won’t inspire repeat visits or groups spending $8 a person for pizza. With foodies experiencing hand-crafted Neapolitan style pizza using the delicate ’00’ flour, you gotta up your game Pie Five.

Blaze Pizza has the makings of a winner in this category, excellent product and excellent dough, despite the baking method that depends on an attentive pizza attendant with long peel.

 

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
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