Houston Pizza Concept Announces Major Expansion into North Texas

February 11, 2020

Houston-based Russo’s New York Pizzeria & Italian Kitchen is heading into North Texas in a big way.

Founder and CEO  Anthony Russo’s interest in expanding in Dallas-Fort Worth is rooted in the high growth the Metroplex is experiencing.

“There are a lot of customers from New York and New Jersey that live out there, and they miss that good calzone,” said Russo.

Over the next three years, the company plans to open 10 to 15 units. Russo will own some, while the others will be franchisee locations.

Of the company’s more than 50 stores, Russo owns six and is looking at possibly opening a couple of stores in North Texas as corporate stores to facilitate training.

Russo wants the company’s second Dallas store to open up near Southern Methodist University and is looking to open that unit this coming fall. Other stores would be spread out north of Dallas in Frisco, where Russo sees a lot of growth, and in Fort Worth.

To facilitate this expansion effort, the pizza company has partnered with Dallas-based commercial real estate company Henry S. Miller Co. With potential locations being scouted across North Texas, prospective franchise owners can reach out to the pizza company.

The pizzeria’s average annual sales are slight north of $1 million. Of the average $1,020,383, owners typically net 18.2 percent yearly. With a target area of high income and more affluent neighborhoods, Russo believes there are many opportunities to grow sales in the three- to five-mile radius.

Russo said the company looks for franchise owners with a net worth of about $500,000. The typical start-up costs for a Russo’s require franchise owners to have $200,000 on-hand. The company helps the franchise owners with the financing and construction efforts. in addition to training.

“Once they come check us out, they are pretty much sold on the concept,” said Russo. “What sets us apart is when they see how fresh our product is and how the numbers work. …The bottom line it’s pretty attractive to someone who wants to start a new business.”

According to Russo, potential franchise owners are often surprised by how low food costs are for the pizzeria. The numbers are in the low 20s at 20 and 21 percent for food costs where most restaurants spend 30 to 35 percent, he said.

The restaurants require an average of about 1,800 square feet, and labor costs typically range from 20 to 23 percent, he added.

In terms of obstacles for the expansion, Russo noted that finding the right location can be challenging and time-consuming.

“My challenge is finding the right site in certain areas, but we will.” said Russo, noting that he partnered with Henry S. Miller because “they know Dallas inside and out.”

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*The following data involves historic performance information for Domestic Restaurants corporate- or affiliate-owned, open and operating under effective Franchise Agreements by the same franchisee for fiscal year 2021. There are 35 franchised domestic Russo’s New York Pizzeria Restaurants operating under effective Franchise Agreements as of December 31, 2021. 30 of which had been open for 12 months or longer. The following results include (a) the average Gross Sales for the 24 Domestic Russo’s New York Pizzeria Restaurants that were franchisee owned, open, and operated for fiscal 2021. (b) The cash flows for the FOUR (4) company-owned Russo’s New York Pizzeria Restaurants operated for fiscal year ended December 31, 2021. Because we do not maintain the accounting records of our franchisees, we are unable to make any representation to the reliability of the financial data provided by franchised Restaurants.
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