Two of the fastest-growing restaurant chains count former Starbucks executives, pretzel magnates, a top basketball player and some of the best-regarded private-equity firms among the people involved in their creation and growth.
They also happen to be rivals that have helped to create the fast-casual pizza sector: MOD Pizza and Blaze Pizza.
Blaze, founded in 2012 by the creators of Wetzel’s Pretzels and boasting LeBron James among its investors, generated 48.9% system sales growth and 36.1% unit count growth last year, according to Technomic’s Top 500 data.
Among the 200 largest restaurant chains, only one concept grew faster: rival MOD Pizza, which generated 80.2% system sales growth and 58.8% unit count growth. The chain was founded by Scott and Ally Svenson, who created a coffee chain in the United Kingdom that they sold to Starbucks in the late 1990s.
Both companies are adding units so quickly it’s difficult to keep up. MOD finished 2017 with 297 locations, while Blaze operates 230. But Blaze finished last year with higher total system sales: $271.4 million, versus $270 million for MOD.
The two have lured hundreds of millions in total investments. Blaze’s investors include Brentwood Associates, industry veteran Greg Dollarhyde and James, among others, while earlier this year, MOD received another $33 million investment, led by PWP Growth Equity and Fidelity Management.
In order to outdistance rivals to become the dominant fast-casual pizza players in the U.S., the two are generating same-store sales growth and establishing pizza as a legitimate lunchtime option. “The hole in the market was ... you couldn’t get great pizza for lunch,” Blaze CEO Jim Mizes says. “You can get an artisanal pizza now with lunch pricing and speed. The legacy chains can’t deliver lunch and the high quality that comes with it.”
MOD’s Scott Svenson says the burgeoning sector provides customers with value, individualization and a “great product” that comes to consumers hot, something a lot of fast-casual concepts can say.
“That’s an important differentiator,” he says. “You’re getting a freshly cooked product just for you. And you get it super fast at a great value, and it’s just what you want.”
Svenson adds that the one-price model that MOD pioneered in 2008, in which consumers pay a single price and get as many toppings as they want, has helped the sector’s value perception. “People view the offering as being simple, straightforward and honest,” Svenson says.
Both chains have their differentiators. MOD, Svenson says, is “building a business driven by our mission to make a positive social impact.” He says the company cares more about its workers than about customers, the product or the profit. That goal, he says, helps attract labor at a time when finding good employees is not easy.
“We hire 20 to 30 people in a community where we can use pizza as a platform to do good,” he says.
Blaze is using its connection with James to market the concept, while using technology to drive the business forward. It was the first fast-casual pizza chain with a mobile app, it has more than 1 million customers on its email list, and it recently launched delivery.
“We punch above our weight in a category with a lot of heavyweights,” Mizes says.
Blaze also uses technology to ensure that its growth doesn’t get too fast, helping to identify the best locations.
“[We] know the pitfalls of fast growth,” Mizes says. “We aim for quality, not quantity. We know what can happen when you grow too fast.”