Pizza Inn’s Chain Cuts Royalty Fees with Development Incentive Program

While many franchisors are pulling the plug on expansion, Pizza Inn (Nasdaq:PZZI) is defying recession-conservatism by offering a new development incentive program designed to maximize potential for domestic growth and offer flexible alternatives for franchisees who may be discouraged by the current credit crisis.

Offered to both new and existing franchisees, the benefits of the incentive program include 0% royalty for the first full year of operation and 2% royalty for the second full year, easing start-up costs during the first two years of a new restaurant’s operation. The royalty for the remainder of the Franchise agreement is only 4% of gross sales, still attractive when compared to other options in the industry, some of which charge as much as 6%.

“While we cannot change the economic climate, we can offer incentives that reward our franchisees and keep our brand energized and moving forward,” said Charlie Morrison, CEO of Pizza Inn. “We look forward to welcoming new franchisees into our system and continuing to expand the Pizza Inn legacy nationwide.”

To qualify for the incentive program, signed agreements and new unit franchise 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 in states where Pizza Inn is currently registered to offer Franchises today and is only available for new construction of buffet restaurants.

With more than 320 locations, Pizza Inn has benefited from America’s increasing commitment to family-friendly dining, affordable pricing and freshly-made food items. By offering consumers a variety of traditional and specialty pizzas, with its dough made fresh daily, as well as pastas, sandwiches and desserts, Pizza Inn has delighted consumers taste buds for more than 50 years.

Focused again on growth 51 years after its founding, Pizza Inn launched the development incentive program to grow the brand through a combination of full-service restaurants and carry out/delivery sites. To augment the company’s growth, Pizza Inn is seeking single and multi-unit franchisees, as well as area developers in select regions of the country.
 
“New and proven operators have already taken advantage of the program, looking to put the maximum amount of gross sales in their pockets,” Morrison added. “The incentive, coupled with our brand recognition and quality food offerings, will no doubt facilitate a transformation in the pizza marketplace and further enhance the brand nationwide.”

About Pizza Inn
Headquartered in The Colony, TX, Pizza Inn, Inc., is an international pizza chain featuring traditional and specialty pizzas, as well as freshly made pastas, sandwiches, and desserts. Founded in 1958, publicly traded Pizza Inn (NasdaqCM:PZZI) franchises approximately 320 restaurants and owns two restaurants with annual, domestic and international chain-wide sales of approximately $135 million.