Iconic Midwestern pizza brand moves to strengthen business model for future growth by trimming unprofitable stores hampered by sky-high leases and increased costs
BETTENDORF, Iowa (Sept. 1, 2022) – Over the last 18 months, Happy Joe’s Pizza & Ice Cream has signed more franchise agreements and opened more new locations than during the entire previous decade. The brand’s takeout and delivery sales are greater than pre-pandemic levels, and it has successfully started expanding overseas. The vast majority of Happy Joe’s 50-plus locations are highly profitable, with its franchise restaurants leading the way having recently remodeled or are in the process of upgrading to the brand’s modern new design, leading to higher guest satisfaction.
Happy Joe’s also operates a handful of company stores, a few of which have not been remodeled in nearly two decades. The one-two-three punch of COVID-19, rising food and labor costs, and recessionary fears have been too much for these older stores to overcome with today’s economic challenges.
Tom Sacco was recruited to become Happy Joe’s chief executive officer in October 2020, not only to modernize the 50-year-old Midwestern brand, but to restructure, revitalize and refresh the proven business model for future success heading into its second 50-year run. Sacco has distinguished himself as a transformational agent throughout his career, most notably during his leadership tenures at Ponderosa Steakhouse, Red Robin Gourmet Burgers, BJ’s Restaurant & Brewhouse and Ghirardelli Chocolate Shoppes.
On Friday, Sept. 2, Sacco filed a plan of reorganization on two of the four corporate entities. The first is the entity that operates Happy Joe’s company restaurants; the second operates Tony Sacco’s company restaurants. Both entities only operate company-owned restaurants and are not associated with any franchisee restaurants. The two franchising entities – Happy Joe’s Franchising and Tony Sacco’s Franchising – were not part of the filing. (Tom Sacco and Tony Sacco are not related.)
“When I arrived at Happy Joe’s, I figured out really quick where the problems were. With COVID wreaking havoc on our industry, expensive sale-leasebacks of company-owned restaurants taking place just prior to my arrival, a significant increase in food costs exacerbated by supply chain issues, and an ever more difficult labor market, our challenges kept increasing exponentially,” said Sacco, Happy Joe’s CEO, President & Chief Happiness Officer. “While nobody wants to put a company through a restructuring, it was the right thing to do for the long-term health and continued growth of the iconic Happy Joe’s brand.”
“We simply should not continue to deplete our strong flow of franchise revenue to cover losses from a couple of underperforming company restaurants. The company stores need to stand on their own,” continued Sacco. “The good news is that we are reinvigorating the Happy Joe’s brand, remodeling older restaurants, opening highly successful new franchise locations and entering new markets in Florida, Texas and Arizona – along with our international expansion into Egypt and throughout the Middle East. All of this is contributing to a stronger and healthier business model that will be significantly more profitable going forward.”
“We even signed our newest franchise partners – who will be introducing our brand-new Happy Joe’s prototype into the St. Louis market – just two days ago. This is a great time to be a part of the Happy Joe’s family – whether as a team member, franchisee, company store coach, supply partner or guest – because our best is still ahead of us!”
Happy Joe’s has been named a QSR Magazine “Top 50 Contender” in 2021 and 2022, a FastCasual “Top 200” concept, a Franchise Times “Top 400” business and a Nation’s Restaurant News “Top 500” restaurant.
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