Papa John's Israel franchisee aims to be Israel's dominant pizza chain

The chains will focus on takeaway and home delivery rather than serving customers at the restaurant. The non-kosher status will not change.

JUNE 10, 2020 11:49

New York family pizza (photo credit: Courtesy) — New York family pizza

(photo credit: Courtesy)

Israeli entrepreneur Moti Richter won the Israeli franchise for the popular US pizza chain Popa John's, and plans to expand it to 25 branches in the country within five years, Globes reported.

Papa John's, the fourth largest pizza chain in the US, has been operating in Israel for four years, but its franchisees – Moshe Talor and Assaf Greenberg – lost the franchise to Richter, a former senior executive at Pizza Hut Israel.

There are currently three branches in operation in Israel – in Rehovot, Tel Aviv and Haifa – while a fourth location recently closed in Netanya.

However, Richter envisions Papa John's as becoming one of the most dominant pizza chains nationwide, and hopes to expand the franchise to 25 locations within five years, Globes reported.

Part of his plan is to reduce the size of existing branches as well as opening small outlets in the future, focusing on takeaway and home delivery rather than serving customers at the restaurant.

"We will focus on opening in places where businesses have already operated with low rent that will let us make a profit," Richter told Globes.

"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.

"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 focus on deliveries is especially noteworthy in the wake of the coronavirus pandemic. While restaurants have been hit hard by the pandemic, pizzerias have largely emerged unscathed due to the focus on delivery. In fact, even before the coronavirus pandemic hit, deliveries already make up 80% of business for Papa John's Israel locations.

"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," Richter told Globes.

"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."

Richter's first new branch is set to open in Rishon Lezion, Globes reported.

The chain's non-kosher status will remain unchanged.