In this FDD Talk 2015 post, you’ll learn the following:
- Section I – Background information on the CiCi’s Pizza franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a CiCi’s Pizza franchise, based on Item 7 of the company’s 2015 FDD
- Section III – Presentation and analysis of CiCi’s Pizza’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
- 2014 average sales, food and paper costs, team labor, management salaries, taxes and benefits, operating expenses, advertising, videos/other income, occupancy costs, and restaurant EBITDA for the 11 company-owned CiCi’s Pizza restaurants in the Dallas/Ft. Worth, Texas market that were open and operating for at least 18 months before December 28, 2014 and in operation during the company’s entire 2014 fiscal year
- 2014 average, high, and low gross sales for the 427 company-owned and franchised CiCi’s Pizza restaurants (divided into 3 categories according to sales volume) open and operating for at least 18 months before December 28, 2014 and in operation during the entire period of the company’s 2014 fiscal year
Section I – Background Information
Joe Croce and Mike Cole decided to launch a different kind of pizza restaurant back in 1985. At the time, their novel idea was to bring buffet-style service to the pizza market and cater to families. They opened the first restaurant in Plano, Texas that year.
In 2001 the chain undertook a major overhaul, expanding its buffet offerings as well as remodeling all of its locations. Its buffet of pizza, pasta, wings, soup, salad, and desserts has continued to be its distinguishing characteristic in the crowded pizza segment.
Croce retired in 2003 and sold the business to the company’s executive team. Headquartered in Coppell, Texas, and currently headed by CEO Darin Harris, the chain now boasts nearly 500 locations in 34 states, with a mix of franchised and corporate-owned stores.
Here’s how CiCi’s keeps things lined up, buffet style:
Varieties of Pizza
You might think only a few varieties of pizza would be made available on a buffet line, but CiCi’s tends to have at least 24 kinds of pizza pies on the line, including Alfredo, BBQ pork, beef, buffalo chicken, cheese, classic chicken, deep dish pepperoni, garlic cheesy bread, ham & pineapple, cheese flatbread, garlic veggie flatbread, pepperoni & sausage flatbread, mac & cheese, Olé (beef crumbles and fresh lettuce with spicy red sauce topped with shredded cheddar cheese), pepperoni, pepperoni & beef, pepperoni & jalapeno, pepperoni & sausage, sausage, spinach Alfredo, veggie, zesty ham & cheddar, zesty pepperoni, and zesty veggie.
Its “endless buffet” approach means you pay one price and graze until you’re satisfied.
Expansion into the Northeast
In recent years, CiCi’s has begun making moves to bring its pizza buffet concept to the Northeast through a partnership with Newmark Grubb Knight Frank, an established commercial real estate advisory firm. Expansion has been targeted to the nation’s capital, Baltimore, Buffalo, New York, Philadelphia, and New Jersey.
Creative Equity Partnerships
CiCi’s also came up with an innovative plan to stimulate new restaurant creation among its dedicated franchisees. With its Franchisee Partner Investment program, the company will pump $100,000 of equity into new stores for qualified new and existing multi-unit operators who sign a development agreement committing them to opening at least two new locations within a five-year window of time.
The message to franchisees is clear: CiCi’s is more than willing to put some skin in the game. As an added incentive, if the franchisee can pay back the corporate investment early, those funds will be reinvested into the franchisee’s next new location.
Diversified Revenue Streams and Location Flexibility
The chain offers various revenue streams, including the standard custom buffet, catering (including birthday parties and fundraisers), take-out service, and the game room. In addition, location concepts can range from 1,200 to 3,600 square feet to fit a variety of local conditions and markets.
Pizza on the Fly
CiCi’s is also actively seeking franchisees interested in placing locations within some of the nation’s most highly-trafficked airports. The effort is based on the chain’s recent experiences of introducing several new restaurant prototypes designed exclusively for airports.
The chain is also exploring other nontraditional venues such as universities, military bases, and casinos.
Section II – Estimated Costs
- Please click here for detailed estimates of CiCi’s Pizza franchise costs, based on Item 7 of the company’s 2015 FDD (updated).