One of the country’s fastest-growing restaurant chains is hitting the accelerator. MOD Pizza announced May 21 that Clayton, Dubilier & Rice acquired a significant stake in the 443-unit fast casual. In a financing round led by CD&R, MOD Pizza landed more than $160 million and now plans to effectively double in size, it said, hitting 1,000 locations over the next five years.
“This strategic partnership with CD&R is further validation of our belief that profit and positive social impact can co-exist. We are incredibly energized by the opportunity to work with CD&R to scale the MOD brand, while continuing to build our people-first, purpose-driven culture,” MOD Pizza CEO and co-founder Scott Svenson said in a statement.
MOD Pizza, which has raised a total of $335 million, opened 100-plus restaurants in each of the last three years. It debuted 102 stores—an increase of 34 percent—in 2018 and boomed systemwide sales to $398 million, up 45 percent, year-over-year.
The company plans to sustain that growth rate, opening roughly 100 stores per year, to reach the four-digit mark. MOD Pizza said it expects to create more than 14,000 jobs along the way.
"We could not be happier with our new MOD partnership and we look forward to working closely with management on strategies and operational initiatives to ensure that the company profitably achieves its ambitious growth plans," said Ken Giuriceo, CD&R partner, in a statement. "The MOD team has created an exciting, market-leading business with a truly special culture and purpose."
Giuriceo and Paul Pressler—the former CEO of Gap Inc. and senor Disney executive—will also join the MOD board of directors.
Pressler said the investment would help MOD Pizza innovate as well as grow.
“MOD has made important investments in online and mobile app ordering, innovative digital marketing strategies and customer loyalty programs and leads its competition in virtually all relevant customer satisfaction scores," he said. "We are especially excited about the new store opening opportunity ahead of the company, which will create an even more valuable enterprise."
In March, MOD Pizza unveiled MOD Rewards, a new customer loyalty program powered by its app. In addition to gaining points, customers can also, through collaboration with Generosity Feeds, pay their reward forward. MOD Pizza makes a donation to help provide meals to children.
In 2018, MOD Pizza funded, packed, and distributed nearly half a million meals to food banks and backpack programs throughout the U.S., and expects to create an additional million meals in 2019.
"Over the past 11 years, we have built MOD upon a conviction that we could build a best-in-class business by putting our people and the communities we serve first," Svenson said.
MOD Rewards is the company’s first loyalty program and is supported by a new CRM system that enables more personalization and frequency.
MOD Pizza was founded in 2008 by Scott and Ally Svenson. In January it brought on former Chipotle executive director of marketing Mark Shambura as CMO.
Current MOD Fidelity Management & Research Co. also participated in the round.