Dynamic Restaurant Holdings, the parent of Midwestern pizza concepts Happy Joe’s and Tony Sacco’s, filed for bankruptcy in early September.
The company listed nine Happy Joe’s and two Tony Sacco’s restaurants in its filing. Of those, three Happy Joe’s units and both Tony Sacco’s stores have shut down. Dynamic also franchises 37 Happy Joe’s and two Tony Sacco’s restaurants, but none of those units are including in court proceedings. The restaurant owner blamed financial woes on the lingering effects of COVID, including rising employee and supply costs and expensive lease obligations.
In 2017, Dynamic purchased a majority stake in both concepts, and still owes money from the acquisition. The company has yet to pay off $5.3 million on two loans from private equity firm AAVIN, which served as a financial partner in the transaction. It also owes $1.2 million on a loan (referred to as a seller’s note) from the seller of Happy Joe’s.
Despite the bankruptcy, Happy Joe’s sales and development numbers are moving in the right direction. Sales jumped 13 percent in 2021 compared to 2020. In the first quarter of this year, sales rose 4 percent year-over-year and 11 percent against two years ago, marking the chain’s fifth straight quarter of positive growth. Last year, the restaurant rolled out a new mobile app and followed that up with a new website to strengthen its robust off-premises program. Delivery mixed 35 percent in Q1 and takeout accounted for 38 percent of sales. The combined revenue from these two channels was 12 percentage points higher than 2019.
In terms of development, Happy Joe’s signed 28 franchise deals in 2021 and opened five stores, which is more than the past five years combined. Internationally, the brand inked a master franchise agreement with Ahmed Elbatran, whose restaurant group plans to open more than 50 locations across Egypt and the Middle East. The 50-year-old concept also partnered with global design firm Harrison to create a new image and brand design.
Happy Joe’s was founded in 1972 by Lawrence Joseph “Happy Joe” Whitty, and is known for its signature pizzas, sandwiches, pasta, and ice cream sundaes. Tony Sacco’s offers traditional and speciality pizzas made from a coal-fired oven. Both chain’s are led by CEO Tom Sacco, a 30-plus-year restaurateur who’s had past stops at Red Robin, BJ’s Restaurants, and Ponderosa and Bonanza steakhouses. He joined the company in the fall of 2020.
