2008 Dynamic Dozen, No. 2: Incredible Pizza Co. Inc.

“We have no formal franchise opportunity. We’ve never done any advertising. … We just answer the phone,” said Barsness, founder and CEO of Incredible Pizza, which has its headquarters in Springfield and its operational office in Tulsa, Okla.

Last year, Incredible Pizza’s revenues hit almost $64 million through a combination of corporate and franchise stores in Missouri, Oklahoma, Texas, Tennessee and Monterrey, Mexico. The company landed in the No. 1 spot among the 2007 Dynamic Dozen honorees. The fact that the company is No. 2 this year doesn’t signal a slowdown, though.

Incredible Pizza stores are planned for Phoenix; Indianapolis; Dayton, Ohio; Charlotte, N.C.; and Louisville, Barsness said, and the Monterrey store is the first of 20 in Mexico for franchisee Gonzalo Barrutieta Losada.

The deal to take Incredible Pizza into Mexico came about the way many do: as the result of a customer visit to an existing Incredible Pizza store. In the case of Monterrey, a Houston customer told her family in Mexico about the chain. Her family just happened to own 200 grocery stores in Mexico – and it was looking for a new use for some of its properties.

“We had to tweak the concept quite a bit in Mexico, and we’re still doing that with the first store,” Barsness said.

Mexican birthday parties, for instance, have an average attendance of between 40 and 50 people. In America, the average is between 12 and 15. Format changes include bigger party rooms; different food, games and table configurations; and a room designed just for a pinata, Barsness said.

Incredible Pizza has interest in China but no deal, and talks continue in Canada, he said.

Barsness entered the pizza business in the early 1970s as a Mr. Gatti’s franchisee in Texas. Barsness applied his food-and-games formula to Mr. Gatti’s initially, but he parted ways with the company when Mr. Gatti’s ownership wanted to go the sports-bar-and-alcohol route.

Barsness wanted to focus on family entertainment, and in 1999, he sold his stores and targeted Springfield for its demographics and restaurants.

“It’s a great testing ground for new concepts,” he said. “If you can make it here, you can make it anywhere because there are so many restaurants.”

In 2003, Barsness settled a lawsuit with Mr. Gatti’s Pizza that claimed Barsness used proprietary information to start Incredible Pizza. For the $1 million settlement, Barsness must make annual payments of 1 percent of Incredible Pizza’s net sales through 2013.

Typically, Incredible Pizza opens new stores in empty big boxes – such as former Wal-Mart, Kmart and grocery stores – as a second-generation tenant, because it costs 60 percent less to renovate an existing structure than it does to build a new one, Barsness said.

Those sites, however, are not always easy to find. Barsness looked for a year and a half before finding the spot at 2850 S. Campbell Ave. for the Springfield store. The building formerly housed a Hastings Entertainment store.

Incredible Pizza opened seven new stores in 2007, but Barsness said area development agreements help keep franchise growth in check, limiting franchise expansion to no more than two or three new stores a year.

Incredible Pizza franchisees pay a $75,000 franchisee fee and startup costs of $5 million. Once a new store opens, franchisees pay a 5.5 percent royalty on sales, Barsness said, noting that some corporate stores have partner owners.

Scott Axon, a member of Incredible Pizza’s advisory board, cites clean stores, good food and family fun for the company’s success.

“ … We fill a very unique (niche) in the marketplace that families are crying for,” said Axon, who also handles franchising for the company. “It’s likely – unless things change quite a bit – we’ll maintain 70 percent growth in the foreseeable future.”

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