How many pizzas can one country eat?!
(Or The Market in Franchising)

Franchising continues to grow as an industry at a rapid rate, but looking at the growth and saturation in some segments made me wonder, for example, how many pizzas can one country eat!

When looking at this segment of the Franchise industry and the proliferation of Franchised pizza store outlets over the past three or four years it would appear that surely as far as this particular industry is concerned, the market couldn’t possible grow any further or there can only be limited room to grow for the existing chains.

A close look at this market highlights the fact that competition stimulates growth and can also generate new ideas and opportunities within a sector as companies push themselves against their competitors and therefore benchmarks for success increase.  Companies become innovative and look to ways to market and promote their business.  Those that invest in their own research and development survive and remain successful and ahead of their competition.

Dominos have successfully operated predominantly in N.S.W and Queensland and has now entered the Victorian market and after some initial pain in adapting to the Victorian market has now established itself as a key player in the market and are increasing their market share and presence. 

At the same time we have been acting for a new Franchisor “Encore Pizza” which is currently based in regional towns and growth corridors in Melbourne. They are looking to expand regionally and in metropolitan areas promoting a substantially different business model to Domino’s.  They still sell pizzas though!

It’s interesting to see how over time Pizza Hut has moved away from the traditional US style pizza restaurant and now focus on take away/home delivery from small suburban stores with minimum space Franchises have reduced operating costs and overheads such as staff levels and costs.

Eagle Boys has over 150 stores and is also containing its expansion throughout Australia.  Other pizza brands such as “Hells Pizza” from New Zealand are looking to enter the Australian market
When you add this to the myriad of individual owner/operated pizza stores in every suburban shopping strip around town the mind simply boggles as to the extent of the market. 

These brands all seek to differentiate their business model and their products against their competitors.  Dominos promote their quick 8 minute turnaround in delivery time, Encore promote traditional style pizzas, others promote themselves on low cost. 

The Eagle Boys are looking to expand into a drive through model, micro store models in small country towns, and also models that suit large sporting venues and at Airports. 
Common themes from interviewing successful Franchisors are that they have passionate head office staff and a committed support structure for Franchisees’ in the areas of IT operations, marketing and Franchise development.  These are critical to a Franchise model’s success.  They are costly to implement and need constant review to ensure that the systems and support for Franchisees are being properly implemented.

Successful Franchisors select Franchisee’s who are open to change, are prepared to take responsibility for their own actions, they are open to business development, and willing to react swiftly to marketing and promotional activities and market trends. Franchisors need franchise operators who adopt and believe in the system rather than work against it. 

Franchisors need to fund research and development and maintain brand awareness.
It seems clear that in relation to the market in pizzas all the main players believe there is room for growth, and opportunities in their market and just one more pizza. 

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