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
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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.
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Cracker Barrel and Bob Evans have rolled out new value menus to compete with established offerings at competitors like Denny’s and Waffle House.
The recent deals from family-dining chains show a renewed focus on providing value to customers whose budgets have been squeezed by higher prices at the gas pump and grocery store.
On Thursday, Lebanon, Tenn.-based Cracker Barrel introduced $5.99 daily lunch specials, served from 11 a.m. to 2 p.m. From Monday through Friday, guests can choose a Country House salad, two chicken tenderloins, and a choice of a baked potato or cup of soup. Other daily specials include Baked Chicken n’ Dressing on Mondays, meatloaf and mashed potatoes on Tuesdays, chicken pot pie on Wednesdays, and Turkey n’ Dressing on Thursdays.
Cracker Barrel operates 604 family-dining restaurants in 42 states. The daily lunch specials are not currently available in about a dozen markets.
Bob Evans, the 563-unit family-dining chain, rolled out its Farmhouse Deals systemwide last week, which offers 10 items for $6. The new dishes include breakfast plates, such as the Sausage Gravy Breakfast and a combo of two eggs, sausage or bacon, and two biscuits; three Biscuit Bowl varieties; two types of Knife & Fork Sandwich; the Chicken-N-Noodles Deep-Dish Dinner; spaghetti with meat sauce; and Chicken & Broccoli Alfredo.
“We’ve always strived to offer our customers the best value possible,” said Randy Hicks, president and chief concept officer of Bob Evans. “In an economy like this one, these $6 Farmhouse Deals provide our guests with appetizing choices at convenient and affordable prices.”
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The chain withheld $1 million in advertising funds in the first quarter to spend incrementally in the current quarter to promote Farmhouse Deals, chief executive Steve Davis said in a recent conference call discussing parent company Bob Evans Farms’ earnings for the first quarter, ended July 29.
He also said Bob Evans would offer 99-cent add-ons to the value items. A spokeswoman for the brand said the add-ons are not currently part of the menu, but they may be offered at the holidays.
In the same call, Davis disclosed plans to augment Bob Evans’ Family Meals to Go value line of 10 meals under $20, with add-ons for $3, $4 and $5.
“Our guest in family dining, a lot more of those people are on fixed incomes,” Davis said. “So when supermarket prices spike, trade-offs are made and they look for the best value they can find.”
Columbus, Ohio-based Bob Evans has locations in 18 states.
Long-running family-dining value deals include the $2 $4 $6 $8 Value Menu at 1,670-unit Denny’s and the “Dollar$ Menu” at 1,600-unit Waffle House. Spartanburg, S.C.-based Denny’s updates its value menu several times a year. The value menu at Norcross, Ga.-based Waffle House now includes 17 items.
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In an ongoing strategy to put Quiznos locations in convenience stores, the sandwich chain franchisor said Thursday it is partnering with the Champlain Farms chain in Vermont.
Under the agreement, Quiznos outlets will be added to about 40 Champlain Farms gas and convenience store locations, which are located throughout Vermont in high-traffic areas, such as near college and university campuses, interstate exits and tourist destinations.
The first phase will include 10 units of the fast-casual restaurant, the first of which is scheduled to open next month, Quiznos said.
“As a locally-owned company, Champlain Farms brings unparalleled insight into the region and the local convenience customer,” Shultz Hartgrove, senior vice president of convenience and non-traditional development for Quiznos, said in a statement. “This local expertise, combined with exceptional operations, made Champlain Farms the ideal partner to extend our convenience store offering and best meet regional needs in the Northeast.”
Quiznos has been building its convenience store presence in recent years. This year, the chain has already added more than 200 convenience store outlets. Recent partnerships include the Hess Gas and Go chain in Florida, and MAPCO in Southern states.
Quiznos convenience store locations feature a menu tailored to round-the-clock dayparts, including its signature sandwiches and hot breakfast items for on-the-go dining.
Dave Simendinger, president of Champlain Farms, said in a statement that Quiznos’ brand recognition and menu will attract the convenience store chain’s customers.
“The Quiznos brand and distinctive, flavorful menu was a perfect fit for our foodservice needs,” he said. “We are proud of our commitment to quality and sought a strong quick-service partner to complement our strong convenience stores.”
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Freebirds World Burrito has named Jim Mizes to its new president position, parent company Tavistock Restaurants said Thursday.
Mizes served most recently as chief executive and president of Club One, a fitness facility chain. He has also served as vice president of brand development and store operations for Jamba Juice. Prior to that, he was president and chief executive of Noah’s New York Bagels.
In the past, Mizes has served as operations services vice president for Taco Bell and vice president of operations at Winchell’s Donut House.
Emeryville, Calif.-based multi-concept operator Tavistock Restaurants bought the Freebirds chain in 2007. At the time, the fast-casual burrito chain had 19 units.
Under Tavistock, the chain has grown to 54 units, with corporate growth in recent years focused on Texas, Oklahoma and California.
Tavistock is planning to launch a franchising program in the fourth quarter, and officials said the company is in active talks with franchisees to grow the brand nationally. [In addition to Freebirds, Tavistock owns and operates more than 90 restaurants across 16 concepts, including Abe & Louie’s, Alcatraz Brewing Company, Atlantic Fish Company, AquaKnox, Blackhawk Grille, Cafe del Rey, California Caf
SSI Holding Group Corp., parent to the Souper Salad salad buffet chain and the Grandy’s brand, filed Thursday for Chapter 11 bankruptcy protection in Delaware.
The Lewisville, Texas-based company said in a statement it was “exploring strategic alternatives for the business.” The bankruptcy petition was filed in the U.S. Bankruptcy Court for the District of Delaware.
“Despite making significant strides to reposition the business since 2005, it was unable to overcome the prolonged headwinds facing the restaurant industry and the downturn in consumer confidence,” Souper Salad said Thursday in its statement.
In 2005, Souper Salad sold an equity interest to Sun Capital Partners Inc., a Boca Raton, Fla.-based private-equity firm. On Thursday, a report from The Deal said the restaurant company was looking to sell both its Souper Salad and Grandy’s brands, and named sister Sun Capital portfolio holding Captain D’s as a possible suitor for Grandy’s.
Souper Salad said prior to its filing it had closed underperforming locations, improved supply-chain costs, decreased overhead and rolled out new marketing to drive traffic. But as its financial position declined over the past 18 months, the company said, it determined “that reorganizing under Chapter 11 would provide it with the best opportunity to reposition itself. During the reorganization period, the company expects to continue to conduct business as usual.”
Since July, the company has closed at least 24 company-owned stores, and one franchised unit has shuttered.
As of the bankruptcy filing Thursday, the company had 48 company and eight franchised Souper Salad units, primarily in the South and West, and two company and 64 franchised Grandy’s units in eight central and Southern states.
Ward Olgreen, who was named chief executive of Souper Salad last year, said Thursday in a statement: “We believe Souper Salad and Grandy’s are attractive, viable brands that have a place in the quick-casual restaurant sector and significant potential to capture greater market share.
“Unfortunately, the positive efforts the company has taken to improve its business have been hampered by the continued industry downturn,” he added.
In bankruptcy court documents, Souper Salad, which filed as SSI Holding Group Corp., listed liabilities of about $47 million and assets of about $24 million.
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