Editor’s note: This article is part of an ongoing franchise series, highlighting brands that are new or aggressively expanding through franchising. Is your restaurant starting to be franchised? Email us at [email protected]
When Erik Frederick became CEO and President of Pizzeria Uno in April 2020, the company had not signed a national franchisee for at least 10 years. But just two years later, the fast-casual pizza chain leaned into franchise development, launching a hotel catering program and aggressively seeking hotel operators as franchisees. The roughly 80-unit chain opened its first hotel and restaurant earlier this year at a hotel near Chicago’s O’Hare Airport, followed by another just outside Detroit and another in northern Indiana.
Pizzeria Uno’s menu offers more than pizza, with entrees ranging from appetizers to pasta, chicken, steak and seafood. Frederick believes this range could help hoteliers deliver a more robust dining experience, said he declared. If partner hotels use third-party delivery to reach diners beyond hotel guests, hotel operators could also benefit from bringing people from within the local community to visit a well-known branded restaurant, did he declare.
“Hopefully this gets people back to their hotels,” Frederick said.
Installing a restaurant in a hotel and launching online ordering takes only a fraction of the time it takes to develop the site, especially since most hoteliers do not need to obtain permit to modify the interior decoration.
“You can pretty much build the location in the time it would take to find a location, if you’re trying to get a new franchisee with a full-service restaurant,” said Chris Dellamarggio, chief marketing officer of Pizzeria Uno. “It’s been a remarkable turnaround.”
While hotel-restaurant conversions are currently the brand’s franchise focus, Pizzeria Uno is also considering franchisees for traditional restaurants and is in talks with a potential franchisee.
Development projects: Pizzeria Uno plans to finalize agreements to add 10 hotel catering units by the end of the year. Frederick estimates the chain could eventually expand to 100 units or more, he said.
“It really depends on what we can absorb…and our ability to successfully open someone up,” Frederick said. “We are not going to grow too fast.”
The company currently has restaurants that span from Maine to Washington, DC, as well as locations in Chicago and select locations in Orlando, Florida. However, Frederick thinks there’s a lot of white space in the hotel restaurant category, as those types of partnerships wouldn’t work for most casual chains due to store cannibalization.
Ideal franchisees: Pizzeria Uno seeks operators with multiple hotels because it makes it easier to scale operations and reduce customer acquisition costs, Frederick said. Ideal candidates would be mid-conversion with their restaurant, so development costs would be minimal. Those operators would just have to change their color scheme and acquire the oven used by Pizzeria Uno, Frederick said.
Quick facts about franchises
- Minimum investment required: $546,500 to $1.4 million
- Franchisee fees: $40,000
- Royalty fee: 5%
- Marketing fee: 1%, but could go up to 3%