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Pizza Franchising Experiences a Renaissance

Thanks to pizza franchises like Domino’s, Pizza Hut and Papa John’s, Americans can enjoy pizza at every corner of the country.

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Thanks to pizza franchises like Domino’s, Pizza Hut and Papa John’s, Americans can enjoy pizza at every corner of the country. And even though business declined for pizza franchises during the recession, a new report from Franchise Direct has found that pizza franchises are growing again.

Franchise Direct previously published many exclusive reports on franchising. Yet its latest, which was written after analyzing the Franchise Disclosure Documents of 25 pizza franchises, shows that pizza franchising continues to have a strong slice of the national pizza pie. While 59 percent of American pizzerias are independently-run, franchises have almost 50 percent of the total pizza sales share.

With the slumping economy and consumer spending at an all-time low, pizza franchises felt the pinch in the latter part of 2008 and throughout 2009 as the cost of ingredients soared. But Franchise Direct’s report shows that pizza franchises, particularly those specializing in delivery and take-out, have quickly taken back their market share thanks to their high-quality, affordable product.

Pizza franchises are successful because they include some of the country’s most established and forward-thinking food chains. Three of America’s biggest pizza franchises—Domino’s, Pizza Hut and Little Caesars—have been in business for over half a century. While pizza hasn’t evolved much as a meal, America’s best pizza franchises are driving success by tapping into the country’s ever-growing interest in technology and green energy.

As consumers increasingly look for value, pizzeria operators are expected to respond with lower prices and promotions. Consumers have less money to spend, but they still want to dine out for convenience and enjoyment. By responding with value pricing, specials and combo-deals, pizza franchises will meet this ongoing consumer need. The major pizza players are offering online ordering and some are now offering text ordering from mobile phones, PDAs and other web enabled mobile devices. Major pizza chains are using social networking sites like Facebook and MySpace as platforms to build a loyal customer base and to facilitate ordering directly from the sites. Papa John’s is also pioneering the use of green technology with new eco-friendly ovens. In this competitive field, franchises must always be ready for radical change.

With over 68,000 pizza stores in America and sales up across the industry in the first quarter of 2010, Franchise Direct’s new report predicts that pizza franchises will enjoy even more success in the future as they give Americans the food they want, the way they want it.