- MOD Pizza announced on Tuesday that it had raised another $US160 million, bringing its total equity capital raised to $US335 million.
- The fast-casual pizza brand is one of the fastest-growing chains in the restaurant industry. Last year, it opened a net 98 US locations, an increase of 33%.
- CEO Scott Svenson told Business Insider that MOD would use the $US160 million to continue its rapid growth as the chain works to reach 1,000 locations in the next five years.
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MOD Pizza is refusing to slow down in its quest to reach 1,000 locations.
On Tuesday, the fast-casual pizza chain announced a $US160 million equity financing round led by the private-equity investment firm Clayton, Dubilier & Rice. Including this round of funding, MOD has raised $US335 million to date.
MOD has more than doubled its size over the past three years, to 430 total stores in the US and UK. Nation’s Restaurant News last week named it the fastest-growing major chain in the entire restaurant industry in 2018, based on its 44.7% year-over-year US systemwide sales growth and its net addition of 98 US stores, an increase of 33%.
“For the past four years, we’ve been the fastest-growing restaurant brand in the country. And that rate of growth requires capital,” Scott Svenson, MOD’s cofounder and CEO, told Business Insider.
The $US160 million round of funding is crucial to MOD’s plan to continue its explosive growth – Svenson said the chain plans to reach 1,000 locations in the next five years to cement its place as the dominant fast-casual pizza brand.
“We ultimately decided that if we were going to become the leader in this category … we need to get out and be aggressive about our growth in this kind of formative stage of the category,” Svenson said.
Svenson said that while there’s a “strong case” to be made that there are already more restaurants open across America than can feasibly survive and grow sales, this argument has not convinced him that MOD should slow its expansion efforts. He said MOD plans to continue to open roughly 100 new locations a year.
“Consumers are leaning into brands that are more relevant, that are delivering a product and an experience that’s more in keeping with what they’re looking for today,” Svenson said. “We are, I think, one of the brands that is benefiting from that.”
Svenson also said the chain’s commitment to social impact was crucial to its success. MOD recruits workers who might otherwise struggle to find employment, including people who were previously incarcerated. Perks such as higher pay, free meals, and a fund that employees can access during emergency situations help build culture and reduce turnover, Svenson said.
“Profit and social impact can coexist,” Svenson said. “And not only can they coexist, but if you do it well it can lead you to build a stronger and more relevant and more sustainable business.”
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