By Brian Bixler
During the last few years, a band of start-ups has been racing to become what some have called “the Chipotle of pizza,” seizing upon the fast-casual custom concept and mimicking the company’s model in hopes that they can do for pizza what Chipotle did for the burrito. With major names in franchising recognizing the potential in the fast-casual custom pizza segment and backing some of the brands financially, potential franchisees are seeing dollar signs in what has evolved into the hottest franchise concept of 2014—one that looks to have staying power, rather than being a passing fad.
That’s the conclusion drawn in a report from Franchise Chatter, an online information resource for franchisees. Published on franchisechatter.com, the new report looks at the latest developments and growth within the fast-casual custom pizza segment, which has been drawing increasing interest among investors as new brands look toward explosive expansion, spreading the concept across the country.
“There are now dozens of brands in this segment, which could become as popular as frozen yogurt franchises were a few years ago,” said Ambrosio Cantada, founder of Franchise Chatter. “As these companies gain market share, we know potential franchisees will want to read about the future of this segment of the pizza category, and which brands may end up on top. “
Since 2008, a growing number of companies has moved into the custom pizza segment by establishing fast-casual restaurants in which customers choose their ingredients—including the dough, sauce and toppings—along a service line. With pizzas being cooked in high-temperature ovens, the concept combines speed and customization that customers are looking for today, with a variety of healthy ingredients.
So many new brands are entering the market with none of them dominating yet that potential franchisees face the dilemma of striking while the iron’s hot (or, in this case, the oven) or sitting on the sidelines to see which brand will best capture market share.
Some brands are posting impressive annual sales volumes as high as $1.8 million at individual units, according to Technomic Executive Vice President Darren Tristano, who recently completed the Fast-Casual Pizza Cluster Report for the market research firm.
Even though Technomic’s year-end 2013 figures show Pie Five Pizza Co., Uncle Maddio’s and Your Pie leading some competitors in the number of units, each with 18, the landscape is about to change.
“I think right now the two brands that are at the forefront would be PizzaRev because of the investment of Buffalo Wild Wings and Blaze Pizza, which is expanding rapidly,” Tristano says. “They both have strong management and overall knowledge of the consumer market.”
The speed with which the dueling companies bring their concepts to additional markets will be key to determining their success, he added. Tristano expects the custom pizza segment to be especially popular with the noon crowd.
“Fast-casual pizza has emerged out of a white space that’s typically lunch time,” he said, adding that brands that offer comfortable environments and alcoholic beverages will also be able to pick up dinner and nighttime customers as well.
“We expect to see a lot of opportunity for growth in the next five to eight years,” Tristano said. “It will likely attract more franchisees and other investors to come into the market as it’s still in the very early stage.”
The Franchise Chatter report includes updates on specific brands it has identified for having the greatest growth potential over the next five years.
Brian Bixler is a freelance journalist and blogger who writes for several business-oriented websites, including Franchise Chatter, a membership site devoted to reviewing franchise earnings claims. By talking to executives of leading brands as well as some of the most successful franchisees across the country, Franchise Chatter reports on growing brands as well as those that might be struggling. The website also examines the profit potential of all the major brands with its FDD Talk feature.