The U.S. pizza market is valued at approximately $45.73 billion industry — making it among the most successful fast-food segments in America. So if you’re considering buying a pizza delivery business, there are few arguments against it being a wise business investment.
No doubt, Americans have an undying love for pizza — the average person eats 46 slices every year and 83 percent of consumers admit to eating pizza at least once a month. Today there are 76,944 pizzerias in the United States, selling more than 3 billion pizzas per year.
Buying a pizza delivery operation then is often viewed as a no-brainer. But no matter how beloved the product you’re selling, it’s still a business, and you need to be as prepared as possible when buying into it if you want to succeed. So, let’s take a look at some of the most important things to know about buying a pizza delivery business of your own.
Is this a good fit for your personality?
It takes a certain personality to own and run a business in any industry, and pizza delivery is no exception. While there is no specific education required to own a pizzeria, you will benefit from having the business acumen to succeed when it comes to the day-to-day duties of running a business and managing employees.
You will need to handle the accounting and bookkeeping, supplier contracts, employee management, and many other details, or have the capital resources to hire someone to manage those functions for you. You should also have at least a basic knowledge of marketing, or the ability to hire someone to carry out the responsibilities of marketing and growing your business.
Finally, as cliché as it may sound, you need to be a “people person.” To succeed you must have the desire and temperament to offer great customer service and interact with lots of different types of employees, suppliers, and other business contacts.
What to look for in a pizzeria
Franchise vs. independent
When vetting pizza delivery businesses available for sale, you will first need to decide if you want to buy a franchise or an independent store. More than 60 percent of the business in the market are franchises, including Domino’s, Pizza Hut, and Papa John’s.
Franchising offers benefits including an established brand, proven business model, and assistance with marketing and staffing. Independently owned establishments also offer compelling benefits such as allowing you more freedom in how you run things vs. a franchise. And depending on how involved the seller wants to be, he or she can also assist you with a succession plan, including marketing techniques that have proven successful.
Staffing qualified employees will be critical to your business success, so that is another consideration when evaluating various pizzerias for sale. Franchises and independent owners alike have the option to include existing employees as part of the sale. This can be hugely beneficial if you want to hit the ground running with (at least some) staff that knows the ins and outs of the operation.
Otherwise, you must develop a plan for how you will vet and hire employees. You will need to offer competitive wages to attract reliable and quality talent to cover your in-store and delivery needs. The average currently hourly wage for a pizza delivery driver in the U.S. is $10. And although delivery drivers are typically entry-level positions, competition from other dedicated food-delivery services such as DoorDash and Grubhub are making staffing more challenging.
When purchasing a pizza delivery business you will also want to assess the current customer base. Does the business have a good amount of existing and repeat customers? Is there a potential to grow the business? These are worthy questions that will help you determine how to best market and grow your new business going forward and the level of effort that will be involved.
Location is key
With any food business, it’s all about location. If you’re trying to decide between a couple — or several — different pizzerias for sale, location is an important factor that can tip the scales towards one or the other. Your location will be key to your success.
Most areas in the U.S. are fairly well saturated with pizza-delivery options. Still, when looking for a pizzeria to buy, try to find one that strikes a balance between proximity to a solid consumer base and being distant enough from other pizzerias that you aren’t competing for the same customers.
Ideally, your pizzeria should be located in an area that is densely populated enough to attract dine-in (if you offer that option) and takeout customers, as well as those who want their pizza delivered. Servicing a wider delivery area will also give you a competitive edge — especially as an independent owner. Wherever your location, be sure to research the best ways to implement profitable delivery in your area.
Do your due diligence
When buying any business, it’s essential to do your due diligence in order to develop a solid foundation on which to base this important decision. Here are some of the tasks that should make your to-do list as you evaluate the pizza-delivery businesses available for sale.
- Try a slice - Checking out any business firsthand is perhaps the most important first step you can take as a prospective buyer of a pizza shop. Position yourself as a customer as you think about what the future of this business will be. If you don’t like the food or the experience, there’s a good chance others won’t either.
- Observe the business - If the current owner will permit it, spend some time observing. This will give you important insight into things including: the volume of customer traffic and delivery orders, average daily revenues, and any staffing or other issues that impact customer service or delivery times.
- Talk to the current owner - Before you hammer out the details of a prospective deal, take some time to get to know the owner. Ask honest questions about why they are selling, how the business has been over the last few years, and any issues or problems you should be aware of. Talk to them about existing contracts and agreements with suppliers, equipment providers, landlord and maintenance staff.
If, after getting a good firsthand look at some of the above, you’ve decided to pursue the sale, here are some more detailed items you need to consider:
- Review the paperwork - Financial and legal records are key to understanding the health of a business. No matter what the current owner says, the paperwork will tell the complete story.
- Talk to everyone involved - Take the time to seek out suppliers, employees, former employees (if possible), and customers. The more information you get, the more well-rounded understanding you will have about the state of the business.
- Recognize red flags - If the shop is struggling financially, you'll need to determine the reason. If it's something that’s easily explained (like "We stopped marketing six months ago because we want to sell)," then you need to determine what that will cost you. If it's something more serious (like "Ever since that new pizza place opened up down the street, it's been a ghost town around here"), then you need to walk away. One of the most important things you can do as a prospective business buyer is be ready to walk away if necessary.
Build your team of experts
Keep in mind that it is wise to seek the assistance of professionals to help you accomplish some of the tasks mentioned in this article. Retaining a business broker, accountant, attorney, and commercial real estate agent are just a few options to consider. This is an extremely important decision, and you must invest accordingly to set yourself up for success.
If after reading this you feel you’re ready to be the boss of your own pizza-delivery business, we invite you to browse the Businesses For Sale website for an extensive list of pizzerias currently available for sale.