Pizza Inn Unveils Development Incentive Program for Existing and Prospective Franchisees

Year of Successes and Difficult Economic Times Spark Generous Incentive Plan

January 15, 2009 // Franchising.com // Pizza Inn (Nasdaq: PZZI) today announced a new development incentive program for new and existing franchisees which will make it easier to invest in a new Pizza Inn Buffet franchise under the current economic challenges. The program is designed to ease start-up costs for new franchise locations during the first two years of the restaurants operation.

The benefits of the franchise incentive program include 0% royalty for the first full year of operation and 2% royalty for the second full year of operation. The royalty for the remainder of the franchise agreement is 4% of gross sales. Royalties paid are calculated as a percentage of gross sales. Pizza Inn's 4% royalty rate is attractive when compared to other options in the industry, some of which charge as much as 6% of gross sales. In addition, existing or new franchisees can take advantage of discounted franchise fees by signing up for the chains' standard multi-unit restaurant development agreement incentive. Multi-unit agreements under the program will be structured as follows:

  • First Restaurant $25,000
  • Second Restaurant $18,750
  • Third Restaurant & More $12,500


Pizza Inn officials see the new incentive program as an ideal plan to maximize the potential for domestic growth of its new buffet prototype restaurant, but it also offers some flexible alternatives for franchisees who may be discouraged by the current credit crisis.

Pizza Inn President and Chief Executive Officer Charlie Morrison said, "This incentive program is one of the most competitive packages any chain has offered. We recognize that the existing economic environment will make it difficult for existing and new prospects interested in investing in the Pizza Inn brand to obtain financing. We anticipate that lenders will look favorably on our offer in their decision to provide funding for these prospects to pursue their desire to be a part of the Pizza Inn family."

The new franchise incentive program is the latest in a string of successful announcements since January 1, 2009, for Pizza Inn. The chain heralded the honor of being named 2008 Pizza Chain of the Year by PizzaMarketplace.com. 2008 was a milestone year for Pizza Inn, as it posted six consecutive quarters of same store sales, celebrated its 50th anniversary, reintroduced its beloved mascot JoJo the Pizza Man, and opened a successful newbuffetprototype restaurant in Denton, TX.

To qualify for the incentive program, signed contracts and new unit fees must be received by June 28, 2009, and the restaurant must open within one year of the contract date. The incentive is being offered only in states where Pizza Inn is currently registered to offer franchises today. To learn more contact the Franchise Development department at 1.800.284.3466 or email franchising@pizzainn.com. Pizza Inn is actively seeking new franchisees for both international and domestic development. To learn more about these opportunities, go to www.pizzainn.com for details and contact information.

Certain statements in this press release, other than historical information, may be considered forward-looking statements, within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Pizza Inn's operating results, performance or financial condition are its ability to implement its growth strategies; success of its franchise operations; national, regional and local economic conditions affecting the restaurant industry; competition within the restaurant industry; restaurant sales cannibalization; negative publicity; fluctuations in quarterly results of operations, including seasonality; government regulations; weather; and commodity, insurance and labor costs.

Pizza Inn, Inc. is headquartered in The Colony, Texas, along with its distribution division, Norco Restaurant Services Company. The Company is a franchisor and food and supply distributor to a system of franchised and company owned restaurants operating both domestically and internationally under the trade name "Pizza Inn."

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