Moti Richter, a former senior executive with Pizza Hut Israel, has won the Israeli franchise for the US pizza chain Papa John’s. Papa John’s, the fourth largest pizza chain in the US, has been operating in Israel since early 2016 with partners Assaf Greenberg and Moshe Talor as the franchisee. But in the past few months, they lost the franchise, which has now been awarded to Richter.
Richter takes charge and ownership of Papa John’s three pizza outlets in Israel with plans to make it a dominant pizza chain in the country. He took control of the franchise on March 11, several days before Israel went into lockdown because of the coronavirus pandemic.
Papa John’s Israeli branches are in Tel Aviv, Haifa and Rehovot. A fourth branch in Netanya recently closed, but Richter has plans to expand to 25 branches within five years.
Richter plans to reduce the store size of the existing branches and open relatively small outlets to save on rental costs with outdoor seating and an emphasis on takeaway and home delivery. The chain’s non-kosher status will remain.
Richter told “Globes” “We will focus on opening in places where businesses have already operated with low rent that will let us make a profit. The current branches are profitable but very difficult to operate and we need places with low operating costs. Particularly in the current situation there are many opportunities for places that had a restaurant that has closed down.
He added, “The old format branches were 80-100 square meters and we will focus on 60-80 square meters. The cost for a franchisee to open a branch will be about NIS 350,000.”
The first new Papa John’s pizza branch to open under Richter will be in Rishon Lezion East near the Soho restaurant.
While restaurants in Israel and worldwide have been hit hard by the coronavirus crisis, pizzerias have generally fared very well during the crisis. Richter said, “Our business is built on deliveries. From our experience in wars and crises, the businesses that work best are businesses with deliveries, and the chain’s sales revenue has risen significantly due to that. I’ve been in the field for many years and in my entire life I’ve never seen such large amounts of deliveries. During Passover we had 60 Wolt delivery people waiting for pizzas and the police turned up because they didn’t understand why it was so crowded outside our door.”
Even in ordinary times, 80% of Papa John’s Israel business is in deliveries.
In addition to his experience with Pizza Hut in Israel, Richter also set up a pizza chain for Israeli businessman Teddy Sagi’s Camden Market in London.
Published by Globes, Israel business news – en.globes.co.il – on June 7, 2020
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