Donatos Pizza Wins Franchise Times Zor Award as Top Brand to Buy

Winner: Donatos Pizza

Finalists: Papa Johns and Pizza Ranch

In addition to steady growth in sales and locations, Donatos Pizza earned a Zor Awards nod in the By the Slice category this year thanks in part to the in-depth financial performance data provided in its franchise disclosure document. The brand’s Item 19 details sales information for franchise and company-owned stores going back to 2018, reports an average check of $24.12, and lists average costs for its corporate and select franchisee locations.

For franchisee Spence Sheldon, who owns four locations in Kentucky and Tennessee, a key operational advantage involves the supply chain and resulting efficiency in the kitchen.

“They make it very simple and easy for us,” Sheldon said. “Our dough is shipped to us; it’s not made in house. So, the pizza and operations are all consistent. We’re all getting the same dough across all stores, and my people don’t have to be there at 5 or 6 a.m. making the dough.”

Sheldon said the same is true with the sauce and other ingredients, which are all made in advance and shipped to franchisees.

The support from the franchisor began right from the start, said Sheldon, who was named the brand’s Franchise Partner of the Year in 2021. Coming from a family of entrepreneurs, Sheldon said he had a desire to own his own business and decided on pizza. Donatos, he noted, was the only one to take him seriously.

“They gave me a shot, that was a big deal for me as a young kid trying to figure himself out,” said Sheldon, who was 24 years old when he became a franchisee.

Sheldon opened his first location about six years ago, in his hometown of Bowling Green, Kentucky. He added a second location across town three years later, and recently purchased two more in Tennessee.

Sheldon said another plus of being in the Donatos system is the balance between support and freedom offered by the franchisor.

“I think for some franchises, there’s this stigma of having an eye in the sky and a company isn’t going to let you have creative freedom, or the freedom to run your operation a certain way,” Sheldon said. “Yes, there are non-negotiables that I have to abide by, but they allow me to undeniably be myself and have my own voice as a franchisee. That’s been one of the things that I’ve appreciated the most. How when I need the support, they can identify that and help.”

For Christina Vogel, a deep dive during the due diligence phase was key to her selection of Donatos. Vogel had worked at a regional pizza chain while she was in high school and college, but after graduating, went into the insurance industry.

When she and her husband moved to Erie, Pennsylvania, though, she saw it as a good opportunity to have her own business and decided to get back into pizza.

“I searched the 100 best pizza franchises, and analyzed corporate culture, geography and finances,” Vogel said. “I went through every criteria and Donatos came out on top.”

Vogel said she hadn’t heard of the company before, but on a family trip to Cleveland visited a location and liked the product. She now owns three stores in Erie.

“For me, an important factor is they were a family-owned business and they were very committed to the community,” Vogel said. “They were also financially solvent and growing, and they were trying to expand and taking steps to do so. They are very intentionally making changes to position them for the future.”

The Grote family has owned Donatos for almost all of the past 60 years. Jim Grote founded the company in 1963 and the first franchise location opened in 1991. McDonald’s acquired the brand in 1999 in an effort to enter the pizza space, but the Grotes bought the company back in 2003. Jim’s daughter, Jane Grote Abell, is the brand’s executive chairwoman and chief people officer. Her husband, Tom Krouse, is CEO.

Talking opportunities for improvement, Vogel said Donatos needs to build awareness outside of the Ohio region. “What I see is they are so saturated in Columbus and have such a well-known brand there, that they can forget how hard it is for us in the expanding markets,” Vogel said. “They’re more conscious of it now and they’re realizing what they need to do.”

Vogel said she’s been providing her input on that subject and in other areas as a member of the brand’s franchise advisory board.

Prospective franchisees, meanwhile, should prepare themselves for hands-on ownership, said Sheldon.

“You can’t be scared of the work,” he said. “You have to still be heavy in operations. Any given day, I have to be called to one of my kitchens and I have to be ready to jump in.”

Donatos Pizza

Positives

• Food products including dough and sauce come from a central commissary kitchen, which enhances operational efficiency at the store level.
• The brand gives its franchisees a good deal of freedom, while still offering support.

Use Caution

• While growing, Donatos is still a regional brand with most locations concentrated in Ohio and not much awareness in other markets.

Based in Columbus, Ohio, and founded in 1963, Donatos Pizza has 173 locations serving more than a dozen signature pizzas, plus subs, calzones, wings and salads. In 2019 it launched a partnership with Red Robin to put its pizzas on the menu at nearly 200 Red Robin units.