30 year food franchise industry veteran tells you what you need to know before investing in a food franchise. Click here.
10 Things Every Prospective Franchisee Needs to Know About the Pizza Ranch Franchise Opportunity
1. Adrie Groeneweg, with the backing of his father, started Pizza Ranch in 1981 when he was just 19 years old, fresh out of high school and with some experience working part time at a local pizza place. Adrie’s dad signed for a business loan (at the prevailing interest rate of 17.5%) and together they renevoted an old 4,000 square foot building in Hull, Iowa and purchased $16,000 worth of used equipment. Fortuntately, the business took off and they opened a second location in 1984.
2. Their menu includes thin-crust, pan-style, and gluten-free pizzas. The original pizza sauce created by Adrie remains the same, but they’ve since added an Alfredo sauce option. They also serve wraps, bbq and crispy ranch chicken, and a substantial salad bar.
3. The biggest change to the business model of Pizza Ranch occured about 10 years ago when the franchise evolved into primarily a buffet concept. They’ve always had a noon and Tuesday night buffet, but they started offering a nightly buffet about 10 years ago in response to customer requests. Today, buffet diners account for 75% of the business at a typical Pizza Ranch location. The remainder of the business is split between delivery and carryout (all locations have drive-up windows).
4. Their buffet consists of unlimited pizzas (customers can even make a special request for any kind of pizza they want), chicken, mashed potatoes and gravy, salad, potato wedges, dessert (including their famous Cactus bread), and soft drinks. Although prices vary by location, a typical lunch buffet is $9 while a typical dinner buffet is $10.
5. The total initial investment to open a Pizza Ranch restaurant ranges from $798,600 to $1,893,000. The initial franchise fee is $30,000 and ongoing royalty is 4% of gross sales.
6. New franchisee training consists of 4 weeks conducted at the corporate headquarters in Orange City, Iowa and an additional 2 weeks at the franchisee’s location.
7. The Pizza Ranch culture emphasizes community involvement: contributing to the local school system, providing positive first-time work experience to area youth, pitching in and helping with a fund raising drive, etc.
8. Although not required, it is strongly recommended that the restaurant operator have an equity stake in the business/real estate.
9. There are currently 157 Pizza Ranch locations operating in 9 states (Iowa, Illinois, Wisconsin, Michigan, Minnesota, North Dakota, South Dakota, Nebraska, and Kansas). The company has been opening around 12-15 locations per year, which they hope to bump up to 25 a year starting next year, targeting the greater Midwest area. They currently have just 1 corporate owned restaurant, but they plan to open more in order to better understand unit economics and gain credibility when making suggestions to franchisees.
10. Pizza Ranch was ranked #193 in Entrepereneur Magazine’s Franchise 500 for 2011.