In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Toppers Pizza franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Toppers Pizza franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Toppers Pizza franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Toppers Pizza outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Toppers Pizza’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 average gross sales, cost of goods sold, gross profit, operating expenses, and EBITDA for all 19 restaurants that were open and continuously operated by the franchisor’s affiliate for a minimum of two full fiscal years as of December 31, 2017, and for all 16 restaurants that were open and continuously operated by the franchisor’s affiliate for a minimum of four full fiscal years as of December 31, 2017
- 2017 average gross sales for all Toppers Pizza restaurants (both affiliate-owned and franchised) that were open as of December 31, 2017, and that had been open and operating for at least one full fiscal year, at least two full fiscal years, at least three full fiscal years, at least four full fiscal years, and at least five full fiscal years, respectively
Section I – Background Information
16 Things You Need to Know About the Toppers Pizza Franchise
New Additions to Executive Leadership Team
1. At the end of 2017, Toppers Pizza made a few changes to its executive leadership team with the appointment of David Biederman as executive vice president, Colleen Glendinning as director of social media and public relations, and Joanne Esser as franchise sales coordinator.
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2. Biederman has over four decades of experience in the restaurant business and has held high-level leadership positions in the areas of marketing, operations, and development at concepts such as McDonald’s, Quiznos, and Smashburger before joining Toppers Pizza in 2016 as chief development officer. In his new role as executive vice president, Biederman will take on broad-based authority and responsibility, including increased involvement in marketing and operations, while continuing to lead the development department for the growing pizza franchise.
3. Glendinning got her start in the restaurant industry working for a Qdoba franchisee in Wisconsin after college. From there, she worked at Noodles & Company as part of the field marketing team, eventually being promoted to regional marketing manager. In her time at Noodles & Company, Glendinning oversaw the opening of 58 restaurants, preparing her for Toppers Pizza where the company has plans to have 200 locations open by 2020.
4. Esser previously worked at Batteries Plus Bulbs and she joins the Toppers Pizza development team as it continues its mission of smart growth and expansion. She will be working with qualified franchisee prospects interested in joining the growing Toppers Pizza system. Both Esser and Glendinning will provide valuable assistance to the corporate team that continues to hone in on ways to improve unit level economics and pairing it with strategic growth.
Launches New Value Menu
5. In early April 2018, Toppers Pizza launched several new menu items as part of its new Pick 2 or More for $5.99 value menu. The new menu items included a new line of Baked Mac ‘N Cheese options, a new House Recipe, the Nacho Topper, as well as Nachostix. Customers can choose any combination of the following items from the $5.99 value menu: any medium 2-topping pizzas; any single order of Topperstix; any half pound of boneless wings; and any Baked Mac ‘N Cheese.
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6. Scott Gittrich, founder and president of Toppers Pizza, said, “The corporate big brands in the pizza industry continue to dole out inferior products at a low price point. But we respect pizza and we respect our pizza-loving fans. So, with our new Baked Mac ‘N Cheese, Nacho Toppers, Nachostix and our Pick 2 or More for $5.99 menu, we are continuing to show them that you can get a tremendous quality product featuring real, never-frozen 100% Wisconsin mozzarella cheese, hand-cut fresh veggies, and hand-tossed dough made-from-scratch in our locations every day — and get that at a value. Simply stated, better doesn’t have to cost more.”
7. According to Toppers Pizza, the new line of Baked Mac ‘N Cheese is the result of the significant investment in research and development by the brand’s corporate team and represents a viable side item to boost menu mix for franchisees in the Toppers system. The recipes were initially tested in Nebraska and Wisconsin locations and were well received. To celebrate the launch of the new Baked Mac ‘N Cheese line, Toppers Pizza offered one of the Baked Mac ‘N Cheese options free with the purchase of any large pizza at regular menu price.
8. In addition to the Pick 2 or More for $5.99 value menu, Toppers will continue to offer its Pick 2 for $9.99 deal which was introduced earlier in the year. The deal features any pizzas at any size or any Topperstix at any size. The new Nachostix have been added to the Pick 2 for $9.99 deal. Last December, Toppers Pizza introduced the Ragin’ Pepperoni as a limited-time offer, and due to the popularity of the pizza, it will remain on the menu and is available as part of the deal.
Aimed to Provide 150,000 Meals Through “Hunger Relief” Event
9. On February 26, 2018, Toppers Pizza hosted a one-day Hunger Relief event at all of its locations nationwide. Through the event, the company aimed to provide 150,000 meals to local food banks. Since 2011, Toppers Pizza has donated more than one million meals through similar fundraising efforts.
10. On the day of the Hunger Relief event, Toppers Pizza offered a $4.99 carry-out only special for medium, one-topping pizzas where $2 from each sale was donated to local food banks in that store’s community. According to Toppers Pizza, for every dollar donated, three meals can be provided for those in need.
11. In addition to the one-day system-wide event, Toppers Pizza franchisees continually prioritize partnerships with local food banks in their communities, from hosting Topperstix eating contests to developing various menu promotions to create long-standing relationships with these nonprofit organizations. As Toppers Pizza continues to grow, Scott Gittrich, founder and president of Toppers Pizza, believes that the company will be able to expand on its fundraising efforts and reach a greater number of families affected by hunger.
12. Toppers Pizza was founded in 1991 by Scott Gittrich in Champaign, Illinois. Gittrich had already been working in the pizza industry since 1984 when he started out as a delivery driver for Domino’s. He eventually worked his way up the Domino’s ladder and ended up managing 22 franchise locations as a director of operations. Gittrich saved up as much money as he could while working for Domino’s and eventually fulfilled his dream of opening his own pizza place.
13. According to Gittrich, “The founding vision of Toppers was to be the quality pizza delivery place. We would make our dough from scratch, use great ingredients and make funky combinations of pizzas using unique toppings. We wanted to be the antithesis of Domino’s, while still delivering just as fast — if not faster — as the corporate joints making cheap, homogeneous pizza.”
14. After the success of his first location, Gittrich opened a second Toppers Pizza restaurant in 1993 in Whitewater, Wisconsin, which is where the company is headquartered today. Around this same time, Gittrich added the brand’s signature Topperstix to the menu.
15. Toppers Pizza started franchising in 1997 and the first franchised location opened in Eau Claire, Wisconsin. Today, the chain is still primarily located in the Midwestern region of the United States. The franchise’s target market is college students and other customers between the ages of 18 and 34. Since this demographic tends to stay up late, most Toppers Pizza locations remain open until 3 a.m. to accommodate late-night business.
Entrepreneur’s Franchise 500
16. Toppers Pizza did not rank on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Toppers Pizza franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Toppers Pizza’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 45
- Outlets at the End of the Year: 48
- Net Change: +3
- Outlets at the Start of the Year: 48
- Outlets at the End of the Year: 53
- Net Change: +5
- Outlets at the Start of the Year: 53
- Outlets at the End of the Year: 60
- Net Change: +7
- Outlets at the Start of the Year: 21
- Outlets at the End of the Year: 25
- Net Change: +4
- Outlets at the Start of the Year: 25
- Outlets at the End of the Year: 23
- Net Change: -2
- Outlets at the Start of the Year: 23
- Outlets at the End of the Year: 22
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
Part 1 – 2017 Profit and Loss for Affiliate-Owned Restaurants
- The following table contains profit and loss information for the fiscal year ended December 31, 2017 for all 19 restaurants that were open and continuously operated by the franchisor’s affiliate for a minimum of two full fiscal years as of December 31, 2017, and for all 16 restaurants that were open and continuously operated by the franchisor’s affiliate for a minimum of four full fiscal years as of December 31, 2017.
- The same 19 restaurants were open and continuously operated by the franchisor’s affiliate for three full fiscal years as of December 31, 2017, so the franchisor has consolidated those results in the table below.
- The franchisor does not have all of the information necessary in order to provide the same information for franchised restaurants.
- The franchisor’s affiliate purchased 2 restaurants from a franchisee in May 2017. Since the franchisor does not have full year financial information for those restaurants, they are excluded from the information disclosed in this Part 1.
Average Gross Sales, Expenses, and EBITDA for Restaurants Open Two and Three Full Fiscal Years