Straw Hat Pizza Franchise Cooperative to Double in Size
March 18, 2008 by Sean Kelly
Filed under Business
(FranchisePick.Com) Straw Hat Pizza was once California’s largest pizza chain. It shrunk dramatically a couple of decades ago to only 45 units, but is planning a big comeback. Straw Hat Pizza is interesting in that it is a franchise cooperative that’s owned by its franchisees.
Straw Hat Pizza, once California’s largest pizza chain before dramatically shrinking in size two decades ago, is preparing to rapidly move in the other direction.
Jonathan Fornaci, the new president of Straw Hat Cooperative Corp. of San Ramon – who said he was brought on board in January to encourage rapid growth – said the company plans to more than double in size, increasing its Straw Hat Pizza and Straw Hat Express locations from 45 to 100 by 2011. It also will debut a new-concept restaurant, called Straw Hat Grill, on April 1 in the Southern California desert town of Barstow.
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At 5,500 square feet, it will be substantially larger than the average Straw Hat Pizza location at 4,000 square feet. But it will largely retain the same emphasis on family dining as the pizzerias.
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The company operates on a business model that is a cross between franchising and a traditional partnership. The core of 45 restaurants are run by franchise owners who become shareholders in the cooperative after paying a fee of $25,000.
Individual store owners are able to vote on company matters, including selecting the five-member board of directors, and share in company profits, which are distributed at the end of the fiscal year.
The 45 restaurants are what’s left of a chain that once boasted about 400 locations throughout California and neighboring western states as late as the mid-1980s. Fornaci said the coop owners, who were franchisees in the original Straw Hat chain, opted out of a sale of the parent Saga Corp. to Marriott International Inc., which converted hundreds of Straw Hat locations to the Pizza Hut brand in 1986.
Source: East Bay Business Times
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I wanted to speak with the president of coop at the last AAFD meeting because I was very interested in how the coop arrangement helped/hurt expansion.
Maybe next May, I will have something more to report.
I have extensive knowledge of the Straw Hat Pizza system and this press release is nothing more than self promotion. Many of the fact regarding their organization and history are incorrect. This is a “club” of pizza owners who all want to do their own thing, and if you receive their disclosure documents you will understand that there is no growth, in fact, the company is shrinking. Straw Hat’s new president apparently has no franchise experience and I wish them luck in their struggle to survive.
Interesting comments by “Susan”, that are basically true in my opinion. The East Bay Business Journal, picked up the same press release, but admirably sought a professional opinion from Technomic. The Technomic VP agrees that there is quite a large gap between the self promoting article and reality.
Who is Technomic? And what knowledge do they have?
Susan, could you expand on your points?
Technomic is the main restaurant industry trend-tracking research company. They’re based in Chicago. Their data and founder Ron Paul are both widely quoted in the restaurant industry press. While they can seem a bit skewed toward the chains that hire them for specialized research, they are a very credible source of restaurant data.
The article above is not a company-issued press release, it’s an article which featured an interview with the company president.
looks like it is from the company press release to me, check out their website under press room