In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Hungry Howie’s franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Hungry Howie’s franchise, based on Item 7 of the company’s 2020 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Hungry Howie’s franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Hungry Howie’s outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Hungry Howie’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average, median, highest, and lowest gross sales for the 289 franchised, 33 affiliated, and all 322 Hungry Howie’s restaurants (separately stated) that were open for the entire 52-week period from December 31, 2018 to December 29, 2019
- 2019 average, median, highest, and lowest gross sales, food costs, paper costs, and labor costs for the 238 franchised, 32 affiliated, and all 270 Hungry Howie’s restaurants (separately stated) that provided select cost information in income statements submitted to the franchisor for the entire 52-week period from December 31, 2018 to December 29, 2019
Section I – Background Information
22 Things You Need to Know About the Hungry Howie’s Franchise
Appoints New Vice President of Operations
1. At the end of April 2020, Hungry Howie’s announced the appointment of Tonya Michael as the company’s new vice president of operations. Michael, formerly serving as a franchise business partner at McDonald’s, joins Hungry Howie’s with more than two decades of experience in the restaurant sector and a proven track record of achieving operational brilliance. Previously, Michael spent a 22-year tenure at McDonald’s, where she was responsible for the operations of over 500 company-owned and franchised locations.
2. In her new role at Hungry Howie’s, Tonya will focus on strengthening the brand’s operational support, ensuring that franchisees are well-supported with the tools needed for success. As the head of operations, she will devise new processes and procedures to drive the brand forward as a leader in the pizza industry.
3. Steve Jackson, president and CEO of Hungry Howie’s Pizza, said, “We are proud to welcome Tonya to the Hungry Howie’s family, and know that her knowledge and discipline of the largest restaurant company in the world will empower our teams and strengthen our operational foundation to improve the efforts to grow our brand. With almost 550 restaurants open across the United States, Tonya will play a key role in elevating operations for the growth of our brand.”
4. Michael added, “In the unprecedented times we face, if everyone can agree on one thing, it’s a love for delicious pizza. I am honored to join the Hungry Howie’s team, and look forward to creating an unparalleled experience for our franchisees that will propel the brand forward.”
Furthers Partnership with National Breast Cancer Foundation to Provide Relief Amid COVID- 19 Pandemic
5. In early May 2020, Hungry Howie’s announced that it was continuing its 10-year partnership with the National Breast Cancer Foundation, Inc. (NBCF) to provide relief for those affected by breast cancer amidst the COVID-19 pandemic. Customers who place their order via Hungry Howie’s mobile app or online have the option to contribute to NBCF’s COVID-19 Relief Fund by rounding their bill up to the nearest dollar and donating the change.
6. Hungry Howie’s has been a proud supporter of NBCF for over 10 years through their annual “Love, Hope & Pizza.” Since the program’s inception in 2009, the brand has raised more than $3 million collectively.
7. NBCF created the COVID-19 Relief Fund to support breast cancer patients and nurse navigators in hospitals across the United States. NBCF navigators are on the frontlines of helping breast cancer patients recently diagnosed or currently undergoing treatment. Funds raised will go directly towards life-saving patient navigation services and support to their network of hospital partners treating breast cancer patients during this pandemic.
8. According to Steve Jackson, CEO of Hungry Howie’s, “Hungry Howie’s is honored to further our involvement with NBCF during this unprecedented time. Now more than ever, it is important to provide support to those on the frontlines, and we are incredibly grateful for the healthcare providers, first responders and other essential workers keeping our communities safe amid this pandemic. We look forward to working alongside NBCF to not only provide relief, but to build stronger communities.”
Reignites Growth in Home State After 10 Years
9. In late January 2020, Hungry Howie’s announced development plans in its home state of Michigan. For the first time in 10 years, there are franchising opportunities available statewide for new-store development, as well as the resale of established locations. Reopening this market to expansion has been long-awaited by many savvy entrepreneurs in the Mitten State looking to deliver a high-demand product with brand recognition by way of a franchise model.
10. Although the brand has continued to expand in other states over the years, development came to a halt in Michigan about 10 years ago due to saturation of markets. There were also effects from the Great Recession, especially with the downfall of the auto industry.
11. “We thought probably 10 years ago that we couldn’t grow anymore [in Michigan],” says Jennifer Jackson, vice president of development. “We had so many existing agreements already signed with existing franchisees that were going to open that we just closed down the development for people outside of the system.”
12. A decade later, Jackson says Hungry Howie’s is prepared to re-launch and invest more in Michigan. There are now franchising opportunities available statewide – Traverse City, Muskegon, St. John’s, Grand Rapids, Dearborn, and more – for new-store development, as well as the resale of established locations.
13. The Hungry Howie’s team realized there was more space available in Michigan after forming a partnership with Dallas-based Buxton Predictive Analytics. Jackson said, “We were able to lay out to get a really good deep foundation of our customer base for moving forward with our growth outside of Michigan. So we thought, hey let’s utilize this module that we created that allowed us to see these pockets that our brand could be in that maybe we didn’t realize from a demographic standpoint however many years ago. It gave us a lot of excitement to reopen the state and re-energize that.”
14. “We have such a big love for our brand here being here for so many years. We started utilizing (the analytics module) outside the state of Michigan probably about a year ago and just started to re-input it in Michigan and realized, ‘Oh my gosh, we can do so much more here.’ … Because we have the data now from our actual customer base, we were able to go in and pinpoint that per household. So, we’re super excited,” said Jackson.
15. Franchisee Robert Leger, who works with business partners to operate 65 stores across Michigan, Ohio, North Carolina, and Florida, opened a store in Big Rapids, Michigan, in January and another in Melvindale, Michigan, in early February. They plan to open more in Michigan in the next year. Jackson notes there is room for 35 more units within Michigan.
16. “It is a privilege to have had the opportunity to grow Hungry Howie’s Pizza throughout the great state of Michigan,” Leger said in a statement. “Community is extremely important to us, and all of our restaurants have become an integral part of their local neighborhood. We can’t wait to serve high-quality, delicious pizza to the local Melvindale residents and provide exceptional service to this area.”
17. Jackson notes that growth within Hungry Howie’s isn’t limited to Michigan. Dozens of states like North Carolina and Georgia are open for development, as well. “I just think that it’s a super exciting opportunity for any individual just because we have a proven model,” Jackson says. “We’re still one of the top-10 pizza companies in the country, but we’ve got the availability, which many of the top ones don’t in the U.S.”
Company History
18. Hungry Howie’s was founded in 1973 by James Hearn in Taylor, Michigan. Hearn converted a small hamburger shop into a carry-out and delivery pizzeria. Not long after, Hearn hired future CEO Steve Jackson as a delivery driver. It didn’t take long for Hungry Howie’s to become popular with the local teens.
19. After a few years, Hearn took Jackson on as a partner and they opened a few more locations in the area. In 1983, Hearn and Jackson started franchising the Hungry Howie’s concept. The first franchised restaurant opened in Auburn Hills, Michigan.
20. Two years after franchising started, Hungry Howie’s introduced its signature flavored crusts. Eight flavors were initially introduced. Current crust flavors include butter, butter cheese, Asiago cheese, ranch, onion, Cajun, sesame, and garlic herb. Crust flavors can be combined.
21. Hungry Howie’s continued to grow over the next few decades and by the early 2000s, the chain had 500 stores around the U.S. Today, there are Hungry Howie’s restaurants across 21 states.
Entrepreneur’s Franchise 500
22. Hungry Howie’s ranked No. 233 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Hungry Howie’s franchise costs, based on Item 7 of the company’s 2020 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Hungry Howie’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
Franchised
2017
- Outlets at the Start of the Year: 516
- Outlets at the End of the Year: 522
- Net Change: +6
2018
- Outlets at the Start of the Year: 522
- Outlets at the End of the Year: 518
- Net Change: -4
2019
- Outlets at the Start of the Year: 518
- Outlets at the End of the Year: 504
- Net Change: -14
Company-Owned
2017
- Outlets at the Start of the Year: 32
- Outlets at the End of the Year: 32
- Net Change: 0
2018
- Outlets at the Start of the Year: 32
- Outlets at the End of the Year: 32
- Net Change: 0
2019
- Outlets at the Start of the Year: 32
- Outlets at the End of the Year: 33
- Net Change: +1
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
- The financial performance representations below are based on the historical performance of a subset of existing Hungry Howie’s Units.
Part 1 – Average and Median Annual Gross Sales of Certain Hungry Howie’s Units for the 52 Weeks Ended December 29, 2019
- The franchisor examined the Gross Sales of certain Hungry Howie’s Units that were open for the entire 52-week period from December 31, 2018 through December 29, 2019 (the “Measuring Period”). Such information was obtained from point-of-sale systems at each individual Unit.
- The data below was derived from Gross Sales information from Franchised Units, Affiliated Units, and All Units.
Gross Sales
Franchised Units
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