In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Blaze Pizza franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Blaze Pizza franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Blaze Pizza franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Blaze Pizza outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Blaze Pizza’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average and median gross sales for the 166 franchised Blaze Pizza Restaurants that had been in operation for at least 18 months ending December 30, 2018
- 2018 average and median gross sales for the 4 corporate Blaze Pizza Restaurants that had been in operation for at least 18 months ending December 30, 2018
Section I – Background Information
16 Things You Need to Know About the Blaze Pizza Franchise
Launches New Value Platforms
1. At the beginning of January 2019, Blaze Pizza announced new value offers geared toward busy lunch time customers and carryout customers on the go. With the new offers, customers could purchase the $5 Lunch Hack, which featured any build-your-own half pizza, Monday to Friday, from restaurant open until 4:00 p.m. for just $5. Blaze Pizza’s Take Two deal allowed customers to add a side salad or four dough knots to their half pizza to create a full meal.
2. At the same time, Blaze also started offering a carryout deal of two nitrite-free pepperoni pizzas for just $10, available exclusively through online ordering and the Blaze Pizza app. The deals were only available for a limited time at participating locations.
3. Jim Mizes, president and CEO of Blaze Pizza, said, “Using scratch-made dough, totally clean ingredients and pizzas cooked by fire, Blaze has always offered the best quality pizzas at an insanely good value. But in 2019, we’re taking it to the next level, leveraging these new platforms to help us deliver the most deliciously accessible pizza on the planet.”
Partners with Postmates and Begins Testing Large Pizzas
4. In mid-February 2019, Blaze Pizza announced that it was testing large 14-inch pizzas as part of a campaign to grow its digital delivery and carryout business. According to Jim Mizes, president and CEO of Blaze Pizza, “Most delivery pizza is consumed at home with family and friends. Since 2012, Blaze Pizza has focused on the dine-in experience – serving personal size pizzas at lunch speed and lunch price point. Adding large pizzas will allow us to serve the at-home market, too.”
5. Large pizzas are similar to the chain’s original 11-inch personal pizzas – made with fresh dough and real ingredients – but the 14-inch size, cut into 8 slices, make them perfect for sharing. Pizza varieties include Build-Your-Own, Meat Eater, Green Stripe, Veg Out, BBQ CHKN, and Red Vine.
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6. Brad Kent, executive chef for Blaze Pizza, added, “Now you can get real artisanal pizza in a more sharable size delivered to your house. When compared to processed pizza made with frozen dough and cooked in a conveyor-belt oven, our large pizzas are a real game changer.”
7. At the time of the announcement, Blaze Pizza said that nine restaurants in California and Nevada were testing the new large pizzas. Pricing is competitive with the legacy pizza players; online deals include large pepperoni pizzas for $8.95 and two large 1-topping pizzas for $20.
8. Online orders placed through the Blaze website or Blaze app can be delivered for a $4.99 fee. Delivery is also available through Postmates. National rollout timing will be announced soon.
9. With systemwide sales expected to exceed $400 million in 2019, the move to expand beyond dine-in will allow the company to compete in all three segments of the $40 billion pizza category: dine-in, delivery, and carryout.
10. In the fourth quarter of 2018, Blaze Pizza’s off-premise digital sales grew by 121 percent, and now account for 10 percent of sales. The goal for 2019 is to exceed 20 percent of sales through digital orders.
11. Elise Wetzel, co-founder and chief marketing officer of Blaze Pizza, said, “Since the beginning, we’ve planned to build this second leg to our business and now the day has come. It’s why we’ve built a second make-line and an oversized oven into every restaurant since the beginning. This untapped capacity is a huge competitive advantage and allows us to grow our off-premise business without sacrificing our dine-in guest experience.”
12. In addition to announcing testing large pizzas, Blaze Pizza mentioned that it had inked a new deal with Postmates for third-party delivery. Through the agreement, Postmates has exclusivity for third-party delivery in certain key markets. Many of the company’s restaurants in Southern California and Arizona will be served exclusively by Postmates for third-party delivery.
13. Blaze Pizza was founded in 2011 by Elise and Rick Wetzel of Wetzel’s Pretzels, in Pasadena, California. The Wetzels wanted to open a pizza chain that was modeled after Chipotle’s made-to-order concept. After spending about year developing the Blaze Pizza concept, the Wetzels opened the first location in Irvine. Two months later, a second Blaze Pizza opened in Pasadena and this became the brand’s flagship store.
14. Blaze Pizza was an immediate success and more stores quickly followed the first two locations. By 2014, the 10 Blaze Pizza stores posted $1.55 million average unit volume and by the end of that year, there were 50 locations in 15 states. Over the next few years, Blaze Pizza continued to open stores across the United States and the brand plans to have at least 500 locations open by 2020.
15. The first international Blaze Pizza restaurants opened in 2018 in Canada, Kuwait, Saudi Arabia, and Bahrain.
Entrepreneur’s Franchise 500
16. Blaze Pizza ranked No. 61 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Blaze Pizza franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Blaze Pizza’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 99
- Outlets at the End of the Year: 163
- Net Change: +64
- Outlets at the Start of the Year: 163
- Outlets at the End of the Year: 224
- Net Change: +61
- Outlets at the Start of the Year: 224
- Outlets at the End of the Year: 289
- Net Change: +65
- Outlets at the Start of the Year: 5
- Outlets at the End of the Year: 6
- Net Change: +1
- Outlets at the Start of the Year: 6
- Outlets at the End of the Year: 6
- Net Change: 0
- Outlets at the Start of the Year: 6
- Outlets at the End of the Year: 7
- Net Change: +1
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
Average Gross Sales for Restaurants That Had Been in Operation for At Least 18 Months
- As of December 30, 2018, there were 296 Blaze Pizza Restaurants in operation: 289 franchised Restaurants (“Franchised Restaurants”) and 7 corporate or affiliate Restaurants (“Corporate Restaurants”).
- Blaze Pizza competes in an emerging category of fast-casual, artisanal pizza. Blaze Pizza Restaurants reach maturity generally after 18 months of operation. For purposes of this Item 19, Blaze Pizza has excluded outlets that have operated less than 18 months as the financial results of these development-stage outlets may not be representative of long-term results attained by mature outlets.
- In addition, no Restaurants are currently in development in food courts or traditional malls.
- Of the 296 Blaze Pizza Restaurants, 166 Franchised Restaurants and 4 Corporate Restaurants: (a) had been in operation for at least 18 months ending December 30, 2018; and (b) were not operated from food courts or traditional malls (the “Reporting Group”).
- The information in the table below shows the average and median Gross Sales of the Franchised Restaurants and Corporate Restaurants in the Reporting Group from January 1, 2018 through December 30, 2018.
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