Last summer, Blaze Pizza’s buzzword was agility.
At that point, the 340-unit cult favorite was only a few months removed from a global pandemic that rocked the entire world. Its 80 percent dine-in business plummeted to zero overnight. Franchisee security, family bundle deals, and digital innovation were among the countless pivots. The journey was tough, to say the least. Total revenues in the U.S. dropped from $38.4 million in 2019 to $29.8 million last year, according to the brand’s FDD. Blaze also swung a net loss of $2.8 million compared to a net income of $3.4 million in 2019.
But Blaze, once labeled “America’s fastest-growing chain ever'” is better for it, the company says, and franchisees can see the potential. In early April, Blaze announced agreements to develop 16 restaurants across Texas, Florida, and Tennessee. Twenty-six-year-old Kelsey Irvine, CEO of Carpo Pizza Enterprises, will open 10 stores in the greater Austin area. In addition, franchisee Kunal Patel has locations under development in Pigeon Forge, Tennessee, and Panama City, Florida. He has future plans to grow throughout the Florida panhandle, Alabama, and Mississippi in the next several years.
Blaze’s goal is to reach north of 800 restaurants by 2025. Right now, the brand resides in roughly 40 states and six countries—an already robust network. But CFO Brad Reynolds, who joined the company a few months ago, believes there’s plenty of whitespace to achieve the lofty objective. Blaze isn’t settling to a return to normal. Instead, it wants to improve upon where it was two years ago.
“The excitement is there. The passion is there,” Reynolds says. “Our brand is really well-loved out in not just the pizza marketplace but fast casual, broadly speaking. We have a really great concept and a great product and people love that, and our franchisees do, as well. So there’s existing franchisees looking to grow with a renewed perspective on their development territories and how they can really take advantage of a post-COVID environment and also new franchisees growth in our system with new territories. There’s a lot of infill opportunity, a lot of whitespace out there.”
Reynolds will play a significant role in directing Blaze’s growth, given his unique background. His most recent role was COO of C3, a restaurant platform focused on creating outlets for virtual brands and mastering online food halls. He also picked up fast-casual experience at Smashburger, where he served as CFO and senior vice president of franchise operations. The industry veteran describes his knowledge as the ideal hybrid. On one hand, he’s been responsible for maximizing profitability for hundreds of restaurants and cultivating relationships with franchisees. On the other, he’s immersed himself in the nontraditional game by streamlining off-premises, building delivery, implementing labor efficiencies, organizing packaging, and optimizing kitchen space.
At his core, Reynolds wants to be an analyst and a strategist, and what better opportunity than a brand eyeing rapid development and trying to revolutionize the fast-casual pizza space.
“If we’re going to hit all of our growth targets, we have to have a really healthy robust franchise system. And my job is to help lead by example and be a good partner both in the restaurants we own and operate, but specifically in our franchise community,” Reynolds says. “And so my background being from both the financing strategy world and having an operational background running everything from new restaurant development, supply chain, construction design, having a deep footprint into operations and also the strategy, FP&A, and restaurant unit level economic model focus, that’s a holistic background that I have that I’m bringing here to hopefully drive all of our success going forward.”
Much of the on-premises business is returning, and demand is “off the charts,” Reynolds says. Even with those dine-in sales rising, the pizza company is maintaining a significant portion of the 130 percent increase in digital channels it saw during the peak of COVID. That’s really the focus now—innovating and evolving both inside and outside the four walls.
What’s the source of this resurgence? Reynolds acknowledges the $1,400 stimulus checks played a role. However, that’s not the biggest contributing factor. To Reynolds, it’s restaurants reopening and customers craving an experiential setting to enjoy quality food. Now of course, people are more motivated to leave the house or order online when they have more money in their pocket, but the CFO says it’s hard to deny that individuals weren’t already itching to return to their normal routines.
“We’re seeing similar volumes in terms of digital ordering, and then you combine that with an in-restaurant on-premise mix, that’s hopefully—in all markets—getting close to where it was in 2019, and you have a pretty robust restaurant profile or economic profile per restaurant,” Reynolds says. “So that’s really what we’re focused on right now. I think honestly it’s really just guest demand. Our food eats great at home, but it also eats incredibly well in the restaurant. It’s pizza, right? It’s a cuisine for all occasions, and people just want to experience it in the restaurant more than they have been able to in the last year and a half. So I think it’s all of the above. We’re really just seeing a combination of an incredible amount of desire and demand [to eat out] combined with the ability to do so with restaurants reopening.”
“I think people as they get a little more confidence going out for food, going out for an experiential dining occasion, I think that puts us in a really good position, and it puts everybody in the restaurant industry out in here in a position to recover incredibly well,” says Blaze Pizza CFO Brad Reynolds.
With the exception of nontraditional venues like airports and stadiums, all of Blaze’s restaurants have reopened their dining rooms with some degree of capacity limitations. As well as Blaze is performing right now, much opportunity remains. The chain is based in California, which houses more than 100 locations. The Golden State has been one of the most restrictive markets since the pandemic began, but now major markets like Los Angeles and San Francisco counties have returned to 50 percent capacity. Additionally, on June 15 California is expected to remove all restrictions and mask mandates — a complete reopening of its economy.
As Reynolds explains, certain states are beating others in sales and traffic. Some of that is due to great operations and brand presence, but the overwhelming factor is the openness of the jurisdiction. That gives Blaze assurance that the difference in performance will only be temporary.
“I think people as they get a little more confidence going out for food, going out for an experiential dining occasion, I think that puts us in a really good position, and it puts everybody in the restaurant industry out in here in a position to recover incredibly well,” the executive says. “So we’re excited about that.”
The biggest question is the labor shortage. Reynolds says onboarding for restaurant labor, particularly general manager talent, is at an “all-time premium” right now. However, the CFO notes the strains are market dependent and that it hasn’t materially affected Blaze’s business. With an efficient four-wall operation, Reynolds knows the chain can still drive sales at the store level even in a challenging labor environment.
It’s yet another reason for Blaze to be excited about the summer. Similar to capacity restrictions, the labor crisis is a temporary obstacle. As labor variables become more favorable into August and September, operators will be able to “put the pedal to the medal” in terms of marketing and returning to normal hours. And with cities and states reopening, the lunch daypart should return and be incremental to the gains during the dinner daypart, Reynolds says.
“We’re really excited about it, certainly really positive about where our business is now and how we’ve been able to evolve and innovate in terms of digital, in terms of our on-premise experience, so that when folks come back into our restaurant we can still satisfy all different sales channels,” he says.