Pizza Inn is ramping up expansion and franchising plans at its Pie Five Pizza Co. concept, which debuted in June in Fort Worth, Texas .
Charlie Morrison, president and chief executive of The Colony, Texas-based Pizza Inn, said the company plans to open a second Pie Five restaurant in Irving, Texas, by November. Six additional sites are being considered, he said, and Pizza Inn hopes to have nine Pie Five units open by June 2012.
The fast-casual concept offers specialty and create-your-own nine-inch pizzas for $6.49. Customers choose toppings, then see their pies dressed and baked in five minutes or less, as the “Pie Five” name suggests.
So far, sales have exceeded company expectations, prompting Pizza Inn to focus on building the brand.
“We wanted the concept to deliver $12,000 to $14,000 a week in sales, and we are well exceeding that expectation,” Morrison told Nation’s Restaurant News.
The Pie Five unit in Fort Worth measures 2,100 square feet, compared with a typical 4,000-square-foot Pizza Inn restaurant that earns an average $14,000 to $15,000 a week in sales.
Morrison said Pie Five is an evolution in product and procedures for Pizza Inn. “What we were looking for is where we could deliver a fresh pizza fast,” he said. “There are many pizza players that bake pizzas off, put them in a warming cabinet and then sell them, but usually you’re very restricted to a cheese, a pepperoni or a committed topping.”
Customers follow a line, much like at Subway or Chipotle, to customize their pizzas. “Those concepts have evolved the ability for customers to engage and design their own product. We felt like there was an opportunity for pizza,” Morrison said. “The key ingredient to make that happen was the oven.”
Hear more from Morrison about Pie Five’s expansion; story continues on page 2
Continued from page 1
Pie Five relies on an all-electric oven with a catalytic converter to eliminate emissions and the need for a hood and expensive venting. “That means we could bring the oven to the front counter and not invest a lot of money in a hood,” Morrison said. “That helps reduce cost. It allows us to bake the pizza in two minutes and 20 seconds. Most conventional ovens for pizza restaurants are four to six-and-a-half minutes. That one oven can do 360 pies an hour.”
Some best-selling specialty Pie Five pizzas are the meat-oriented Pie Five High Five; the Athenian, with chicken, kalamata olives, red onions, banana peppers, crumbled feta, basil and sun-dried tomatoes; and the Tree Hugger vegetarian pizza, created by a customer, with marinara, mushrooms, peppers, red onions, black and green olives, and banana peppers.
Three salads are offered from $2.99 to $6.49, but Morrison said those make up only about 5 percent of the sales mix. Pie Five also serves beer and wine.
The Fort Worth unit seats about 55 customers, but a Pie Five unit underway in Irving, Texas, will have about 75 seats in 2,200 square feet. Pizza Inn also has branded concepts for delivery, at 1,250 square feet, and express carryout.
For franchising, the company is looking at larger markets, as well as non-traditional sites, such as airports and educational campuses. For franchisees, it seeks “well-capitalized investors and veteran multi-unit operators who desire a fast-casual brand to add to their portfolio.” Pizza Inn is also offering the concept to its current franchisees.
As franchising begins, Pizza Inn anticipates the Pie Five units will require an all-in investment of $280,000 to $360,000 per store with a franchise fee of $20,000.
“We brought our key franchise leadership in as we were creating the concept,” Morrison said. “We have committed to them that we will not infringe on their territories.”
Outside the Dallas area, Pizza Inn is predominantly in smaller markets. “That’s good for them, because the real estate is cheaper and it’s more of a family-dining occasion,” Morrison said. “It appeals to a much different demographic. In urban markets, this concept has more appeal, because the footprint is smaller and real estate, therefore, is less.”
The 300-unit Pizza Inn also has franchised units in the Middle East. Morrison said he expects the company to franchise Pie Five internationally as well.
On Thursday, Pizza Inn reported net income for the fourth quarter, ended June 26, of $407,000, or five cents a share, compared to $49,000, or one cent a share, in the same quarter last year. Revenues for the fourth quarter increased 10 percent, to $11.3 million, compared with $10.3 million in the year-ago period. Domestic systemwide same-store sales increased 4.3 percent in the fourth quarter, driven by a 5-percent increase in sales at the buffet concept.