With $15 million in new funding under its belt, MOD Pizza is accelerating growth with plans for several new company restaurants, along with commitments for 50 franchise locations by the company’s first group of franchisees.
Seattle-based MOD Pizza’s new capital comes from private investors, including some existing shareholders. Several new shareholders include heavy-hitters such as Nigel Travis, chair and chief executive of Dunkin’ Brands Group Inc., and Spencer Rascoff, chief executive of the real estate website Zillow.
Other new shareholders include Bill Schwartz, chairman of Schwartz Brothers Restaurants, based in Bellevue, Wash.; Lenny Thorndike, managing partner and portfolio manager of Boston-based investment firm Century Capital Management; and Matt McIlwain and Paul Goodrich, partners at Seattle-based venture capital firm Madrona Venture Group.
Currently, 16-unit MOD operates in Washington, Oregon and California, and all units are company-owned. The new funding will support its plan to open seven new company locations by the end of August in three new markets: the San Francisco Bay area, Phoenix and Houston. More units are also planned in the existing markets of Seattle and Los Angeles.
“As we begin to introduce the MOD brand to new markets across the U.S., we feel it is important to build a significant base of company-owned stores,” said Scott Svenson, MOD co-founder and chief executive. “We are a culture-driven business, and opening a significant number of company stores is the best way for us to refine the process for extending the MOD culture into new markets.”
MOD has raised more than $26 million total in capital to support the planned national expansion.
Details on number of units its first group of franchisees plan to open were not provided at press time.
The franchise operators are:
• Bob Merullo and Kevin Embree, franchisees of Red Robin Gourmet Burgers across the U.S. and Canada, who plan to bring MOD Pizza to Colorado and Boise, Idaho.
• Trevor Sanders, a former Jamba Juice franchisee who has also helped develop the Jack’s Urban Eats and Dos Coyote’s brands, has signed on to build MOD units in the Sacramento, Calif., area.
• Yaron Goldman, a franchise operator of McAlister’s Deli, will open MOD units in North Carolina.
MOD comes late to the franchising game. As a growing number of fast-casual pizza competitors crowd the niche, most already have aggressive franchise programs. Svenson, however, has pledged to limit franchise growth to a select few.
“Bringing the right partners on at this time is critical,” said Svenson in a statement. “While our growth will continue to be weighted heavily towards company-owned stores, we are looking for partners that can help us build a stronger business.”
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