In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the MOD Pizza franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for an MOD Pizza franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an MOD Pizza franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of MOD Pizza’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average, median, high, and low weekly net sales for the 78 company-owned MOD Pizza restaurants that had been open and operating for a minimum of 52 weeks as of December 25, 2016 (the end of the franchisor’s 2016 fiscal year) and had been operated continuously through December 25, 2016
- 2016 average, median, high, and low weekly net sales for the 12 franchised MOD Pizza restaurants that had been open and operating for a minimum of 52 weeks as of December 25, 2016 and had been operated continuously through December 25, 2016
- 2016 average, median, high, and low weekly net sales for the 30 company-owned and 1 franchised MOD Pizza restaurants that had been open and operating for a minimum of 104 weeks as of December 25, 2016 and had been operated continuously through December 25, 2016
Section I – Background Information
12 Things You Need to Know About the MOD Pizza Franchise
New Chief Operating Officer
1. In early July, MOD Pizza announced the appointment of Paul Twohig to the new role of Chief Operating Officer, effective immediately. Twohig most recently served as Dunkin’ Donuts’ President. During his tenure, he oversaw the development of over 2,000 new restaurants, launched six new international markets, and served as interim President for Europe and Latin America.
2. As Twohig settles in as MOD’s new COO, Chris Schultz, former Senior Vice President of Operations, will now serve as Senior Vice President, International to lead MOD’s development outside of the U.S.
Opens 200th Location
3. MOD Pizza celebrated a company milestone by opening its 200th location at the end of January. In just under a year, MOD has doubled its footprint; MOD added 100 stores in 2016, while expanding into six new markets: Kansas, Kentucky, Missouri, Ohio, South Carolina, and Wisconsin. In 2016, MOD Pizza opened its first international location in the United Kingdom.
4. MOD Pizza co-founder and CEO Scott Svenson said, “Thanks to the support of our loyal customers, we’re able to continue our growth, bringing new jobs into more communities and allowing us to support important grassroots causes across the U.S.”
5. The 200th store opened on January 31, in Frederick, Maryland. To celebrate the milestone, all MOD locations gave customers $2 off all MOD-size pizzas and salads last January 24.
BBX Capital Named Exclusive Florida Franchisee
6. Around the start of March, MOD Pizza revealed that BBX Capital, a diversified holding company, had added northern Florida to its franchisee territory. BBX Capital already owns the rights to develop MOD restaurants in central and southern Florida, and the new deal makes BBX Capital MOD’s exclusive franchisee for the entire state of Florida.
7. CEO Scott Svenson says that maintaining a few strong franchisees is the right approach for the company as it continues to grow.
Continued Expansion Into Southeastern U.S.
8. At the beginning of 2017, MOD Pizza announced that it had added its ninth franchise partner, Southern Pie, LLC, which will develop MOD stores in Georgia and Alabama. Southern Pie, LLC, led by Robbie Hill and his daughter Kimberly Hill Hayden, plans to open their first MOD restaurant later this year. The company also operates the Bojangles franchises in the same region.
9. MOD Pizza was founded in 2008 by husband and wife team Scott and Ally Svenson in Seattle, Washington. The Svensons started MOD Pizza after they were unable to find fast, affordable, and healthy meals for their four sons. James Markham, who was also part of the founding team, helped develop MOD’s recipes.
10. Over the next few years, the Svensons continued to open MOD locations in the Seattle area. In 2010, Markham left MOD Pizza after a dispute over the company’s direction with the Svensons, and went on to open a similar DIY pizza concept, Pieology.
11. By 2014, MOD Pizza had 31 locations across six states. It opened its first international location in Leeds, United Kingdom in 2016. Today, there are over 235 MOD Pizza locations in the U.S. and the U.K.
Entrepreneur’s Franchise 500
12. MOD Pizza has yet to appear on Entrepreneur’s annual Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of MOD Pizza franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on MOD Pizza’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
Part 1 – Analysis of Average Sales (Unaudited) for Certain Company-Owned MOD Pizza Restaurants Open for At Least One Year
- As of December 25, 2016, the franchisor had a total of 155 company-owned MOD Pizza Restaurants owned and operated by MOD SFP, MOD CA, and MOD WI in the United States.
- Of the 155 company-owned MOD Pizza Restaurants, 78 Restaurants met both of the following criteria (“Company-Owned Reporting Criteria”): each company-owned MOD Pizza Restaurant had been open and operating for a minimum of 52 weeks as of December 25, 2016 (the end of the franchisor’s 2016 fiscal year) and had been operated continuously through December 25, 2016.
- The results of the remaining company-owned MOD Pizza Restaurants did not satisfy one or both of the Company-Owned Reporting Criteria.
- The franchisor’s auditors have not performed any procedures on the financial information in the tables below, and assume no responsibility for that information.
- The sales information which follows in the table below was aggregated from the 78 company-owned MOD Pizza Restaurants that met both of the Company-Owned Reporting Criteria. A new franchisee’s individual financial results are likely to differ from the results described below.
Average Sales for Certain Company-Owned MOD Pizza Restaurants Open for At Least One Year