Editor’s note: This article is part of an ongoing franchise series, which highlights brands that are new to or aggressively expanding via franchising. Is your restaurant starting to franchise? Email us at [email protected]
When Erik Frederick became CEO and president of Pizzeria Uno in April 2020, the company hadn’t signed on a domestic franchisee in at least 10 years. But just two years later, the fast casual pizza chain leaned hard into franchise development, launching a hotel restaurant program and actively seeking hotel operators as franchisees. The roughly 80-unit chain opened its first hotel restaurant earlier this year at a hotel near Chicago’s O’Hare airport, followed by one just outside of Detroit and another in Northern Indiana.
Pizzeria Uno’s menu offers more than just pizza, with items ranging from appetizers to pasta, chicken, steak and seafood. Frederick believes this lineup could help hoteliers provide a more robust dining experience, he said. If partner hotels use third-party delivery to reach diners beyond hotel guests, hotel operators could also benefit from people within the local community coming to visit a well-known brand restaurant, he said.
“Hopefully this will drive people back to their hotels,” Frederick said.
Getting a restaurant set up within a hotel and launching online ordering takes just a fraction of the time needed for ground-up site development, especially since most hoteliers don’t need to pull permits for interior design changes.
“You can virtually build out 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,” Pizzeria Uno Director of Marketing Chris Dellamarggio said. “It’s been a remarkable turnaround time.”
While hotel restaurant conversions are the brand’s current franchising focus, Pizzeria Uno is also considering franchisees for traditional restaurants and is in talks with a prospective franchisee.
Development plans: Pizzeria Uno expects to finalize agreements to add 10 hotel restaurant units by the end of the year. Frederick estimates the chain could eventually expand to 100 units or more, he said.
“It really comes down to what we can absorb … and our ability to successfully get somebody opened up,” Frederick said. “We’re not going to grow too fast.”
The company currently has restaurants that span Maine to Washington, D.C., as well as locations in Chicago and some locations in Orlando, Florida. However, Frederick believes there is plenty of white space in the hotel restaurant category since these types of partnerships wouldn’t work for most casual chains due to store cannibalization.
Ideal franchisees: Pizzeria Uno is seeking out operators with multiple hotels because it makes it easier to scale operations and reduces customer acquisition costs, Frederick said. Ideal candidates would be mid-conversion with their restaurant so development costs would be minimal. These operators would just need to switch color schemes and acquire the oven Pizzeria Uno uses, Frederick said.
Franchise quick facts
- Minimum investment required: $546,500 to $1.4 million
- Franchisee fee: $40,000
- Royalty fee: 5%
- Marketing co-op fee: 1%, but could go up to 3%