Sector Summary: Pizza has become one of America’s favorite foods with approximately 69,000 pizzerias in the US today. The pizza industry is a highly competitive sector and consists of both franchised and non-franchised outlets. The fierce competition results in pizza stores spending a large amount of money on advertising to help differentiate their product, and discounting is used frequently to boost sales. Because of this, pizza franchises must operate efficiently to maintain a good level of profit. Overall, we like the pizza sector, but are slightly cautious due to saturation.
Investment Summary: Papa John’s is a top-tier pizza franchise with worldwide brand recognition and over 2,800 locations across the US. Relative to its peers, they have a strong product, a successful marketing platform and attractive unit economics. Read full post.