🍟 1/5/2023 – The Pizza Franchise Started By a Domino’s Employee

FRANCHISES OF THE WEEK

1) Toppers Pizza

Fast Facts

Background

  • Founded in 1991, franchising since 2000
  • Based in Wisconsin; 70 locations open at the start of 2022 (44 franchised)
  • Specialty pizzas with toppings such as oven-roasted tomatoes, mac ‘n cheese and tater tots, along with the company’s signature cheesy breadsticks called Topperstix

Fees + Investment

  • Royalty: 5.5%
  • Brand Fund: 3.3%
  • Franchise Fee: $30,000
  • Initial Investment: $322,875 – $578,100

Financial Performance

  • The below table disclose information for 53 of the 66 Toppers Pizza restaurants that were open and in operation during the entire 2021 fiscal year
  • Of the 53 locations, 33 were franchised and 20 affiliate owned 

The Wolf’s Take 🍟

The founding story of Toppers is a good one. 

It started back in 1984 at the University of Illinois – Scott Gittrich worked at a local Domino’s to earn some money. He would keep that job and ultimately work his way up as a Director of Operations for a multi-unit franchisee of Domino’s.

In 1991, he decided to go on his own and founded Toppers. While he has far fewer locations open today, ~70 locations is a great accomplishment.

Additionally, the unite economics compared to Domino’s aren’t too shabby…

A Domino’s store today will run you $107,450 – $682,500 to build, and will yield roughly $1.3M in revenue and $200k in EBITDA.

Meanwhile Toppers current franchisees are yielding close to $1.2M in average revenue, and $125K in EBITDA (though I’d recommend paying closer attention to the median EBITDA of $93k). Even so, an emerging restaurant that has an investment lower than $600K and close to six figure EBITDA, is not a common find.

Overall, if you’re interested in the pizza business, this is an emerging brand that could be worth a look. If you do reach out to Toppers via the link below, the only potential red flag I noticed is the franchised units have declined from 56 to 44 locations since 2019. 

That could be covid related struggles or a poor choice of a franchisee – but either way you’d want to understand what happened there. 

Resources

2) 1-800-Plumber + Air

Fast Facts

Background

  • Founded in 1983, franchising since 2017
  • Based in Texas; 32 territories operating at the start of 2022
  • A plumbing + HVAC franchise

Fees + Investment

  • Royalty: 6%
  • Brand Fund: 2%
  • Franchise Fee: $49,500
  • Initial Investment: $100,495 – $246,395

Financial Performance

  • The below table shows the annual total sales for 7 franchisees who operated the entire calendar year in 2021

The Wolf’s Take 🍟

I’ve covered plenty of franchises that fall under the home services category, but this is the first plumbing / HVAC brand I’ve reported on.

Oddly enough, my start in the franchise world came via a supply house franchise called Johnstone Supply. We sold equipment and parts to residential and commercial HVAC and plumbing contractors.

The contractors that had both technical employees (i.e. folks who were damn good at fixing AC & plumbing issues) and a good business sense, would absolutely print money. Most of the competition is unsophisticated mom & pop outlets.

But seeing a company doing both aspects well was rare, and the labor shortages in the industry make finding good technicians difficult. 

With all that said though, the numbers for this brand look good early on, and I wouldn’t’ be surprised if the margins are ~20%. If you’re a scrappy entrepreneur, there is definitely money to be made competing in this industry.

Resources

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