Happy Joe's, the iconic Quad-City pizza chain known for its Taco Pizza and other creations, rolled out a new ownership model Thursday designed to create a large national operator of multiple pizza brands.
During a news conference at its Bettendorf headquarters, Happy Joe's Pizza & Ice Cream Parlors, Inc. announced a partnership with the newly formed Dynamic Restaurant Holdings, or DRH. Led by CEO James Smith and Jim Hayes, chief financial officer, DRH plans to bring Happy Joe's and other branded pizza companies into the DRH family of brands.
"We're absolutely excited about it," said Larry Whitty, Happy Joe's president, who told reporters he has looked for such an opportunity for 20 years.
"In the financial world, it's called a roll-up strategy," he said. "Some might call it a merger. We are partners."
AAVIN Equity Advisers, a private investment group based in Cedar Rapids, serves as the financial partner in the deal. It provides capital for ownership changes, business expansions, mergers and acquisitions.
Financial details of the transaction, which closed Tuesday, were not disclosed. But Whitty confirmed that DRH is the majority partner.
"We've been fortunate enough to be chosen and courted by investors who wanted to grow the company," said Kristal Whitty-Ersan, Happy Joe's marketing and public relations director. "They want to look for more pizza brands across the country to put under the umbrella of DRH."
Her brother, Larry Whitty, compared DRH to multi-brand owner YUM! Brands, Inc., the owner of Taco Bell, Kentucky Fried Chicken and Pizza Hut. "That's a similar model on an enormous scale," he said.
Founder and namesake Lawrence "Happy Joe" Whitty was flanked by his family, team members and Smith for the announcement, joking about how the deal was "the only way" they could get the Taco Pizza recipe.
His children, Larry Whitty and Kristel Whitty-Ersan, will join the DRH team, which will be headquartered at the Happy Joe's Support Center (home office) at 2705 Happy Joe Drive.
According to Smith, he had recruited some of the business and industry expertise he need to advance the concept, but Happy Joe's "provided the core support" to assist current franchisees in expanding and improving their operations as well as growing new franchisees. The synergies and economies of scale of multiple companies under one owner will help franchisees with their buying power for food and supplies as well as marketing, he added.
The holding company already has added another pizza company to the family with its purchase of Tony Sacco's, a coal-fired pizza maker in Michigan, Smith said. "We are talking to three other companies about coming under DRH."
Smith said DRH's goal is to help Happy Joe's go to the next level, first growing regionally across its five states. Today, Happy Joe's has 55 stores, 10 of which are company-owned.
"We're able to infuse more cash and capital with other opportunities," Smith added. "I can't get to my goals if we don't do it as a team."
"We wanted a base of companies that we could add capital to and showcase," he said, adding that the goal is for brands to first grow regionally and then look to expand nationally.
Whitty-Ersan said Happy Joe's constantly hears requests from old customers who have moved away and want Happy Joe's to bring a restaurant to their area. "Now I can say 'maybe' (we will)..."
Smith who has industry experience with several national brands, including Little Caesar's and Hungry Howie's, called himself a "pizza guy" at heart. He will be relocating to the Quad-Cities. But former Quad-City resident and CFO Hayes, who could not attend the announcement, will remain in Tennessee.
Happy Joe Whitty, who turned 80 years old this year, said he was pleased DRH is maintaining Happy Joe's headquarters and its staff in Bettendorf. "They love my employees as much as I do."
Whitty, donning his signature hat, provided a fun, light-hearted mood to the announcement as he shared some of his early antics for getting the Happy Joe's name in the marketplace when he opened his first restaurant 45 years ago in the Village of East Davenport.
Among the special guests was Sarah Thoms and her husband, Rock Island Mayor Mike Thoms. "Sarah was my first employee," Whitty recalled.
"The Quad-Cities should be proud," his daughter Whitty-Ersan said. "It's a homegrown deal because we wouldn't be here without the patronage of loyal fans... We want to say thank you to our team members and loyal guests."