Photo Credit: http://www.eightsolid.com

In June of 2003 I opened my first franchised pizza store here in Michigan. I went into partnership with my best friend from college. We had worked for 18 months planning our business, finding the perfect location, learning about the pizza business (him a lot more than me, as he went through the training program), etc. Our timing could not have been better! We opened with a bang, were having a lot of fun, and making some pretty good money too.

FAST FORWARD A COUPLE OF YEARS…Me and that same partner have now purchased a 2nd pizza store franchise from a struggling franchisee. We have went into partnership with his father on two sandwich shops and a “Starbucks type” coffee franchise…(but much cooler than Starbucks!) ANYWAYS…My partner lost interest in the pizza business. He was married now and the late hours sucked for him (besides, he was a morning person anyways…he loves to get up at 4:30 AM to go bass fishing, crazy, I know!) This love for the morning made the coffee business a perfect fit for him, but the bottom line is that the pizza stores were going down hill and he wanted out.

In 2005 my younger brother and I bought him out of the two pizza franchises, and my brother took over the day to day operations of the stores. He was just out of college, and had no trouble putting in the long and late hours of the pizza game. In less than a year, sales were up 20% at our original store, and 40% at the second store that we purchased. They were highly profitable again and life was good.

In 2007 we were approached by another franchisee who owned 3 pizza stores in Michigan. He wanted to buy our stores. He paid a lot less than we had originally wanted, but we eventually sold him the stores and walked away with a nice profit. This franchisee now had 5 pizza stores in Michigan. I don’t know the story, or what happened, but that guy who bought our pizza stores closed up all 5 of his stores about a year later. Which leads me back to the title of this “long winded” post…Is a Pizza Franchise a Good Investment? THE ANSWER, IT DEPENDS!

In the town I live in, we have seen about 10 pizza stores close over the past two years.  I believe this is directly related to the $5 Little Caesars “Hot N Ready” Pizza.  It is hard to compete with a OK pizza for $5 in Michigan, even if you are selling a GREAT pizza for only $10.00.  Little Caesars has changed the industry here in Michigan for sure, and probably in other states too.  So in the Mid West today, I would be very cautious about investing in a pizza franchise! 

Depending on where you live though, population density, competition, average age, and number of households…a pizza business can be very fun and profitable.  You REALLY have to do your homework though.  There is TONS of data that needs to be sifted through in determining if any restaurant will be successful in a given town.  I’ve developed a system to try to figure that out.  If you are ever considering a franchised restaurant, zip me an e-mail, and I will try to help if I can!

Happy Easter! -B

Be Sociable, Share!