With just $500, a rented storeroom and a few pieces of used equipment, Jim Fox opened his first pizza shop in Pitcairn, PA. That was in 1971, and a few years later, Fox started franchising. Today, Fox's Pizza Den boasts some 250 units, the majority in Pennsylvania and the mid- Atlantic states.
Most of the Pittsburgh, PA-based chain's franchisees—Fox says 99%—are single-store operators, which he claims is one of the keys to his success.
"We've grown because the franchisee's investment is so low," Fox says, who sets the franchise fee at $8,000. Plus, instead of royalties as a percentage of gross sales, he charges a flat $200 a month. He estimates that the average franchisee can open a Fox's Pizza Den with a total investment of under $100,000.
In 2004, 40 new units opened, and the company has 30 units under contract for this year. The regional chain has franchisees planning to open as far from home as Southern California.
Fox estimates systemwide 2004 sales at $110 million, which it says is up about 15% over the previous year—at a time when the segment's sales have been flat. While new stores account for some of that growth, Fox says comp-store sales increased about 10% in 2004.
Average unit volumes run $9,000 a week, over $450,000 a year. Store size varies from 600 sq. ft. to as much as 4,000 sq. ft., but the average is 1,200 sq. ft. The business splits 50-50 between delivery and pick-up, with almost no dine-in business.
Fox's menu also features sandwiches, salads, and wings. Some of the more exotic pies include Bacon Double Cheeseburger, Taco, and Barbecue Chicken.
But the thing that differentiates Fox's Pizza Den from the Pizza Huts and Domino's is the Wedgie.
Fox has been selling this unusual sandwich since he opened his second store in 1973. The Wedgie is a 9-in. pizza crust that sandwiches any of the fillings found in its hoagie sandwich line. Selling for the same price as the sandwiches, the Wedgie is the chain's No. 1 selling item.
Fillings include Steak, with melted provolone and mozzarella cheeses, sweet peppers, onions, and mushrooms; Club, with baked ham, turkey, bacon, melted mozzarella provolone and cheddar cheeses; and a Veggie Wedgie, with mushrooms, green peppers, and onions, covered with provolone and mozzarella cheese.
Fox is planning a new menu item—the Big Doggie, a 1-lb. hot dog. It's something else you won't find in a Little Caesar's, and gives the regional chain an edge on its own turf.
"We've closed up Domino's in the western Pennsylvania market," Fox claims.