The Wellington founders of the quirky Hell Pizza chain have bought their baby back 2 1/2 years after selling it to TPF Group - the New Zealand Burger King franchise holders.
Callum Davies, Stu McMullin and Warren Powell opened the first Hell Pizza in Kelburn, in Wellington in 1996.
With a menu and branding themed on the seven deadly sins and a penchant for provocative marketing campaigns, which included giving away condoms to promote its lust pizza, the chain had expanded to 66 stores by the time it was sold for about $15 million in December 2006.
The founders would not say how much they bought it back for but it is understood they paid less than they sold it for.
"We got it back at market value," Mr Powell said. "We're very happy with the price."
Since selling the New Zealand business, the founders have been focused on building the brand overseas. Master franchise rights have been sold in Australia, Ireland and Canada. Hell has six stores in Brisbane with nine more to be opened this year.
A Dublin branch opened last week and a Vancouver store will open in three months.
In Britain, Hell has a company-owned store in the London suburb of Fulham and a franchised store will soon be opened in Shepherd's Bush.
The money from the New Zealand sale had been used to expand internationally and now that Hell was doing well overseas it had freed up capital to buy back the New Zealand business, Mr McMullin said.
Under TPF's stewardship the number of Hell's New Zealand stores dropped to 61.
In Wellington, the Island Bay branch recently went into liquidation although is still trading. Last September, a memo from TPF telling franchise owners to reduce the quantities of pizza toppings by 10 to 25 per cent and not reduce prices or tell customers was leaked, causing embarrassment. TPF also introduced a cheaper range of large pizzas priced at $10.
Mr Powell said the cheaper range would be dropped, the product range would be reorganised and a more expensive super-gourmet range would be added.
"If the brand had any problems, it got confused," he said.
"People didn't understand if it was cheap or if it was gourmet. We'll be focusing on the quality aspect of the product.
"We've got no intention of competing against [budget pizza chain] Domino's."
Tim Benest, Hell's Glenfield (Auckland) franchise owner, said he was happy the founders were back as some franchisees had lost faith in the brand's direction under TPF.
"The Hell brand was built on those guys' energy and passion," he said. "That's something that's been lacking of late and it's really good to get that back."
TPF director retail operations Glenn Corbett said there had been a range of performance across the Hell network in the past 2 1/2 years. TPF had sold Hell because it wanted to focus on Burger King and had a goal of lifting store numbers from about 70 to 100.
However, BusinessDay understands TPL has also been looking to sell Burger King and that some parties, including Pacific Equity Partners and the US-owned Reading Cinemas, have taken a look. "We've been exploring a number of different options over the last few months," Mr Corbett said. "We are still continuing discussions."
http://www.stuff.co.nz/dominion-post/news/wellington/2407063/Founders-back-in-Hell/
