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FDD Talk 2015: The Hungry Howie’s Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on October 2, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Pizza Franchises

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Hungry Howie's Pizza Photo by toastforbrekkie

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Hungry Howie’s franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Hungry Howie’s franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Hungry Howie’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average gross sales for the 314 Hungry Howie’s restaurants that were open and reported sales during the entire 52-week period from December 30, 2013 to December 28, 2014
  • 2014 average gross sales, food costs, paper costs, and labor costs for the 222 Hungry Howie’s restaurants, including 11 JFS and 18 Properties restaurants, located in strip malls or as freestanding buildings within metropolitan and suburban areas, and that were open during the entire 52-week period ended December 28, 2014

Section I – Background Information

Hungry Howie’s Maintains Strength, Continues Expansion

Although not yet all across the United States, Hungry Howie’s Pizza consistently hovers around the No. 10 spot in rankings of pizza restaurants. The chain is currently the 11th-largest pizza chain in the U.S. and continues to enlarge its presence in existing territories while seeking franchisees in new territories.

Hungry Howie’s was ranked No. 80 in Entrepreneur’s 2015 Franchise 500.

From Hamburger Shop to Pizzeria

Hungry Howie’s was founded in 1973 by Jim Hearn, who converted a hamburger shop into a delivery and carry-out pizzeria in Taylor, Michigan.

Steve Jackson, who in the beginning delivered pizza for the restaurant, partnered with Hearn in 1976. Jackson became president of the company in 1981 and is currently president and CEO. He still owns and operates 11 Hungry Howie’s restaurants in the Detroit metro area.

Franchising Takes Off

Hearn and Jackson started franchising in 1982, the same year Hearn moved to Florida, and the first franchised location opened in 1983 in Auburn Hills, Michigan.

Sixty-five locations opened in the next three years, and more than 160 were added in the rest of that decade. Hungry Howie’s reached 300 locations in 1995, 400 in 1999 and 500 in 2005. More than 600 locations are now present in 21 states.

The stores are still designed primarily for carry-out or delivery, although they generally feature a handful of seats for those who want to eat their food on the premises. The chain’s mascot is Howie, a cartoon version of a smiling boy.

Founder Dies at 71

Hearn, who moved to Florida in 1982 and operated more than 200 Hungry Howie’s locations there, died in 2013 of an illness. He had been in remission from cancer. He was 71 at the time of his death.

The chain, headquartered in Madison Heights, Michigan, has many locations in Michigan and other Midwest states, as well as Florida, but is steadily expanding its territories. A number of locations have opened in Southern states near Florida, and growth has been shown in the Southwest as well, with stores in California, Nevada, Arizona, Utah and Colorado.

Franchise opportunities are available in all 50 states, and multi-store operators can buy territories. Availability is limited in saturated Michigan and Florida, but there’s plenty of opportunity in Northern states east of Michigan, where Hungry Howie’s has not yet made inroads.

Flavored Crust Is Key for Hungry Howie’s

The chain is best known for its Original Flavored Crust pizzas, with crust flavors such as Garlic Herb, Sesame, Cajun and Ranch developed through what Hungry Howie’s calls “crustomization.”

The Daily Herald of Provo, Utah, reported that the flavored crust is “a pretty cool feature” during a review of an opening in Orem, Utah. Writer Doug Fox said it was the secret to the chain’s success.

Calzone-style sub sandwiches and salads are also popular menu items. Customers can also buy Howie’s Bread, Howie’s Wings, oven-baked subs and other items. Dough is baked fresh daily in each store.

Section II – Estimated Costs

  • Please click here for detailed estimates of Hungry Howie’s franchise costs, based on Item 7 of the company’s 2015 FDD.

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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