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Sets Aggressive Growth Plan
by Beverly Dykes
In mid-2016, MOD Pizza announced it had achieved a planned funding infusion intended to buffet the company’s growth plans leading into 2017. At that time, the company operated about 125 locations positioned in 15 states. With the infusion of $32 million in investor funding raised in March to support further expansion, MOD Pizza announced an accelerated growth plan involving the opening of dozens more franchise locations in markets across the U.S. Having experienced same stores sales growth of over 12 percent in both 2015 and 2016, and fueled by the latest round of private-equity funding, the store count has burgeoned to over 190 units (approximately 75 of which are company-owned). In California, as of the close of 2014, the chain operated eight restaurants, primarily serving the southern regions of the state. As of late 2015, the number had grown to over 25 locations operating throughout the state. Dozens more are projected to be added in 2017 in new and existing targeted markets.
The story behind MOD Pizza began in 2008, when a couple in Seattle, Scott and Aly Svenson, in the midst of the financial crisis occurring at the time, sought a way to keep their busy family fed, and conceived of a way to bring a bit of enjoyment to others’ lives as well. They set out to create an authentic, fresh, affordable dining option. Inspired by their love of Italian street-style pizza, and in conjunction with a small group of supportive entrepreneurs along with the valued input of experienced friends, they developed a restaurant concept that would offer an honest, special experience for customers and employees alike.
From the beginning, MOD Pizza sought to offer something unique that grew out of the shared values of the founders. So they took a leap and opened the first location in downtown Seattle in fall of 2008. The great inspiration behind the fast-casual pizza shop was to allow customers to choose exactly what they wanted, with no extra charges added on. The destination quickly evolved into a place where customers wanted to bring their friends and family. Among the concept’s associates, a unique camaraderie emerged from the spirit of teamwork and service that was engendered.
The influx of capital in 2016 was led by the company’s existing private-equity investor PWP Growth Equity. PWP also led a $45 million funding round in 2015 for the operator. Stated MOD Pizza Founder/CEO, Scott Svenson at the time of the announcement, “It’s going into new stores and we’re continuing to build infrastructure.” MOD Pizza is exhibiting tremendous momentum, with the latest round of funding another indicator of the chain’s success going forward.
Stated Chip Baird, a co-head of PWP Growth Equity and member of MOD’s board of directors, “We have been very impressed with the way MOD has executed its aggressive growth plan, and believe the company is well positioned to remain an industry leader in fast-casual pizza.” Since it began franchising in 2014, MOD has worked to gain a significant foothold in markets across the country. “We get into a market and build presence as quickly as we can,” stated Scott Svenson. He further remarked, “Our franchise partners are good at what they do and they’re raising the bar for us in helping us to be a better operation. Our workers are happy and engaged and have bought into the company culture. That is the clearest sign that growth is at the right pace.”
Much of the attraction at MOD Pizza can be attributed to its easy to navigate menu that features seemingly endless options (and singular affordable price, no matter how many toppings are chosen). The artisan-style pizzas are made-on-demand using organic fresh-pressed dough and signature sauces. 800 degree ovens are utilized to cook them in under eight minutes. Customers create their own pizza and salad combinations via a selection of 30 featured toppings. For those not wanting to customize to that degree, the menu recommends choosing from the Top 10 MOD Classics, among which are Dominic (topped with white sauce, asiago, basil, red onion, sliced tomatoes and mild sausage); Mad Dog (mozzarella, pepperoni, mild sausage, crumbled meatballs and MOD red sauce); Tristan (mozzarella, asiago, roasted red peppers, mushrooms an pesto), etc. It is an engaging list of quality offerings inspired by individualized taste sensations.
For those wanting to truly express themselves, there is an array of choices under the categories of sauces, cheeses, meats, veggies, and spices that can be added at the customer’s discretion, allowing them to modify the pizza to suit their whims. Available sauces, for example, include red or white, pesto or BBQ. Besides the expected mozzarella, additional cheese selections include parmesan, gorgonzola, asiago and feta. The veggies list encompasses traditional items as well as artichokes, jalapenos, roasted red peppers, sun-dried tomatoes and arugula. Rounding out the meal are sides, salads and three varieties of “graham cracker cookie” type desserts, incorporating such toppings as cream cheese, black berries, strawberry glaze and cinnamon. Beverage options include hand-spun milkshakes, house made teas and lemonades, local draft beers and wine.
The concept seeks to occupy 1,200-3,500 sq. ft. of space (in-line, end cap, freestanding or pad sites) in power centers, community centers, upscale neighborhood strip centers, open air lifestyle centers, mixed use centers and downtown central business districts. Projected growth targets call for approximately 80-100 new locations to be added annually through 2018. California is among dozens of states in the U.S. identified as prime for further development.
Remarks made by Scott Svenson on the occasion of the company’s 14th store opened (in California in late 2013) ring just as true today: “The MOD brand and culture continue to resonate with families, students and professionals who are looking for a cool and welcoming gathering place where they can enjoy fast, friendly service and fresh, high quality food, individualized for them at an incredible value. We plan to continue our expansion throughout the state, and remain committed to creating one great location at a time.”
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