Incredible Pizza Co. inks deal for 42nd location

The Springfield-based pizza and games company awarded its 40th franchise store Jan. 27, granting Paul Zacharias the rights to Columbia. That gives the corporation, known as America’s Incredible Pizza, 42 locations on the map, two of them corporate-owned stores up and running in Springfield, 2850 S. Campbell, and Tulsa, Okla. Rights for the remaining 40 locations have been sold to seven franchisees, with Houston, Texas, developer Robin French owning the lion’s share – 33 locations from Arizona to Florida – under a master franchise agreement.

The brisk franchise activity in 2004 has netted America’s Incredible Pizza $450,000 in franchise sales, according to company officials.

While franchise development grows rapidly, store openings are coming at a slower pace. In May, the first franchise store is set to open in Warr Acres, Okla. It is French’s first store to open after he originally forecasted two store openings in 2004.

“We’re very particular about the location,” French said of the delay. “The location is very, very critical and there’s a lot of negotiation in getting the exact spot in these markets that we want. Plus, the build-out is about five and a half months.”

French, who owns several companies but is working this deal through French’s Family Entertainment Center LLP, said the store will occupy a 65,000-square-foot former Wal-Mart, vacant since April 2000.

What it takes

The cost to open one Incredible Pizza restaurant averages $6 million, according to company owner and founder Rick Barsness. Such pricey decisions aren’t made overnight.

“The scope of the project definitely is one of the things that leads to the time delay between when an area is acquired and when we serve the first pizza,” said Scott Axon, Incredible Pizza’s director of franchise development.

Axon, who also works as a business broker for Kingsley Group in Springfield, added that the entire process is lengthy.

“There’s a period of diligence in which they do research on us, they read our (Uniform Franchise Offering Circular), they come to a store, meet with our people and decide if this is a good investment for them,” he said. “After they decide, we have a cycle that they go through, then they will sign a contract with us in which we guarantee them the territory and they pay us a portion of the franchise fee at that point.”

Franchisees agree to a $50,000 franchise fee per store and 5.5 percent of sales in royalties once operating.

To begin, Incredible Pizza requires $10,000 to hold a market for 90 days. “Then they’ll go out and try to find a location and raise their funds,” Barsness said. The next commitment of $25,000 “opens up the windows into Incredible Pizza, our financial statements, our construction drawings … all the secrets of Incredible Pizza Co. are released at that time,” he said. The remainder is paid when plans are finalized.

Franchisees receive more than permission to use the Incredible Pizza name and recipes, Axon said. The company helps with site selection, lease negotiation, planning and zoning issues, and researching and negotiating sign ordinance issues.

“Just because you have a checkered floor and go-carts doesn’t mean you have the key to success,” Axon said. “The key to success is Rick and Cheryl (Barsness) … and the team’s 25 years of experience, the $300,000-plus we’ve invested in online interactive training, our proprietary systems, our proprietary recipes. Those are the keys to success, and those are very difficult, if not impossible, to duplicate just by eating our pizza and walking through and taking pictures of our game room.”

Closer to home

Following 2003’s revenues of $5.3 million, the Springfield store hit $4.5 million for 2004, according to Todd Eastlake, chief financial officer. But Rick Barsness isn’t worried.

“I think when you first open up, those first three months everybody in the world comes out to see you. If you take those first three months out of it, put those on an average, we’re doing exactly the same as we did last year,” he said.

The Tulsa, Okla., store, is off to a good start, reporting $3.8 million in sales since its Aug. 18 debut, according to Eastlake.

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