Edit ModuleShow Tags
Edit ModuleShow Tags

Pieology Acquires Competitor, Unleashes Pizza Wars


Published:

With so many new fast-casual pizza concepts out there, many industry watchers see Pieology’s recent acquisition of Project Pie as the first move in an eventual wave of consolidation that will trim the number of players in this rocket-fueled segment.

​Pieology CEO Carl Chang has “long said that consolidation was the future for the fast-casual pizza segment,” adding that purchasing Project Pie is his company’s “first big move of hopefully many more to come.”

With 105 units, Rancho Santa Margarita, California-based Pielogy also says it has more than 750 commitments in its pipeline in various stages of development. Its acquisition of Project Pie is intended to position the company to enter new markets that are complementary to its existing turf, while also allowing the company to accelerate its growth rate.

“I’ve always been predicting and believing that consolidation would happen, and what I consider the second- and third-tier players in the space would eventually fall by the wayside,” Chang said.

Looking forward, he predicted that the pipeline of new pizza players entering the field will taper off, noting that he’s already seen a number of upstart pizza brands go under near his home in Southern California.

He expects the chain to approach 200 open units by the end of 2016—which seems like a very tall order to this reporter. Chang added that most of the company’s franchisees fall into the “sophisticated multi-unit operator” category, which allows the company to reduce its needs at the headquarters.

“Knowing my background and wanting to teach and mentor … it becomes challenging in our concept early on if we have 100 single-unit operators,” he said about opening Pieology up to smaller ‘zees. “At this stage in our growth, we’ve chosen not to entertain too many single-unit operators just because it’d be difficult to service their needs.”

Panda Express, which bought a minority stake in Pieology earlier this year, improved the pizza chain’s buying power and economies of scale—further separating it from smaller brands that are also seeking to make it big time.

“When you’re looking to join a group in the fast-casual pizza segment, and when you look at somebody like us, look for the competitive advantages,” Chang said of anybody considering investing in a pizza concept. “We, now in partnership with Panda Express, operate like a 2,000-unit chain from a buying power perspective—you’re partnering with a group that can save you three, five, seven points of margin—that’s significant, real money.”

Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags


Covers everything from good news to bad judgment

About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Tom KaiserTom Kaiser is associate editor of Franchise Times. He can be reached at 612.767.3209, or send story ideas to tkaiser@franchisetimes.com.
 
Beth EwenBeth Ewen is editor-in-chief of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is staff writer at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonLaura Michaels is managing editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 
Nancy WeingartnerNancy Weingartner is editor-at-large of Franchise Times magazine and the editor of the Food On Demand media project. You can reach her at 612-767-3200 or at nancyw@franchisetimes.com.
Follow her on Twitter at http://twitter.com/nanweingartner.
 

Archives

Categories

Feed

Atom Feed Subscribe to the Franchise Times News Feed »

Recent Posts