Operations

Happy Joe's ready for growth, focuses on product over price

Happy Joe's Pizza & Ice Cream has become a Midwestern mainstay with a wide variety of pizzas. The brand has more than 30 units in the pipeline.

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July 6, 2022 by Mandy Wolf Detwiler — Editor, Networld Media Group

If pizza and ice cream had two things in common, it's that they're both loved by kids of all ages. Happy Joe's Pizza & Ice Cream caters to just that demographic. CEO and President Tom Sacco is even named as the company's chief happiness officer, and it's a title he's proud to own.

Happy Joe's was founded in the East Village of Davenport, Iowa, in 1972 by Lawrence Joseph "Happy Joe" Whitty. The restaurant was sold, closed and reopened in nearby Bettendorf, Iowa.

Whitty met someone from Shakey's Pizza when he was operating a bakery in a hostel in Iowa. They offered him a job as a manager at Shakey's, he took the job and succeeded.

He was moved to Albuquerque where he worked in a couple different restaurants. Whitty thought he could help the company with its dough, but was shot down, leaving him frustrated. So Whitty moved back to Iowa and founded his own restaurant, Happy Joe's Pizza & Ice Cream.

Tom Sacco serves as CEO, president and chief happiness officer for Happy Joe's Pizza & Ice Cream.

Today, the company has 44 franchised units and eight-company-owned restaurants.

"We're celebrating our 50th year and we're growing quite a bit," Sacco said in a phone interview. "We've got over 30 restaurants in the pipeline. We've got a couple of really large deals we're working on now. One is domestic and one is international.

"The growth is really focused on franchising. With Joe, it was really focused on company operations."

Happy Joe's is owned by a Cedar Rapids-based investment group, Aavin, whose original goal was not to grow the business but to build a self-fulfilling distribution company and buy smaller pizza brands like Happy Joe's and Tony Sacco's, another brand owned by the company.

Sacco has a background in franchising, has owned his own restaurants and has worked in company stores and said his expertise would help the company grow.

"Many times, franchisees, just because they need to look for additional lines of revenue and ways to make additional profit, sometimes are a little more creative and think outside the box," Sacco said. "And they're a lot more nimble than when you're dealing with a big, giant corporation that's going to put it through layers and layers and years of R&D to ensure that something is going to be successful. … You're as strong as your franchise community is."

Franchisees are an integral part of Happy Joe's with a franchise board helping to make decisions for the brand. It's a move that helps make Happy Joe's transparent, Sacco said, for the best interest of the company.

In the first year Sacco took over as CEO and president, the company worked on its digital initiatives, such as updating POS systems, designing a new online ordering system from the ground up and building a loyalty app. They worked with a design firm to help create Happy Joe's prototypes complete with the company's signature game rooms.

"We were able to draw on resources that a typical 50 unit-sized restaurant company wouldn't be able to do," Sacco said. "We've made a lot of significant investments in the company."

Three different groups have signed agreements for the state of Florida, and one is close to closing in South Carolina and North Dakota, all new markets for the brand.

"Happy Joe's is just exploding," Sacco said, "but it wouldn't have exploded if the investment hadn't been made in updating the brand and making the brand more relevant. The core business model is really good."

Staying in states where Midwestern values are replicated is important to Sacco and his team.

Happy Joe's has opened four units already in 2022 with eight in the queue right now. He'd like to squeeze in one or two more, but equipment delivery has been a challenge. Next year's goal is to open 20 or more, and then the brand plans to increase that number by 10 units a year.

In addition to growth in the states, Happy Joe's is planning international units as well, including India, a triple-digit contract, and the Middle East and Nigeria.

In all, 32 agreements are in the pipeline.

On the menu

Happy Joe's top seller is the Taco Joe, a Mexican-style pizza. Company lore claims Whitty originated the Mexican pizza, which features a proprietary refried bean sauce, taco-seasoned beef and sausages, lettuce, tomatoes and taco chips. A Supreme version adds black olives, onions and sour cream. Sacco says the Taco Joe accounts for more than 50% of pizza sales.

One of the differentiating factors for the brand is that it serves pizzas for breakfast, up to 6 to 12, and up to 18 dessert pizzas. One new dessert pizza is rolled out every quarter. Strong LTOs keep Happy Joe's fresh as well.

The pepperoni pizza has a whopping 80 slices of pepperoni, while other pizza brands average between 38 and 48 pieces on their own large versions. Quality is a hallmark of the brand.

"We don't do cheap," Sacco said. Dough and pizza sauce is made from a third-party company, though he said some of the "old-timers" still make their ingredients in house. It got too difficult to maintain consistency across the brand with so many stores spread out, Sacco added.

"Everything we do is so over the top," Sacco said. "That's why people are so fascinated and in love with the brand, because it doesn't matter how far people go away, I think this is a tradition throughout the middle part of the country."

The days before and after Thanksgiving are the busiest of the year for Happy Joe's stores, when customers coming home for Christmas stop in for their favorite pizza.

Challenges

Like most pizzerias, the pandemic was difficult for Happy Joe's. It took an initial dip in sales after COVID hit in 2020, but Sacco said he came in, made some recommendations and the company has experienced sales growth ever since.

The brand was already set up for carryout and delivery, as it doesn't use third-party delivery services. Some Happy Joe's franchisees even have their own fleets of cars for delivery. During the pandemic it started offering free delivery and discounts on delivered pizza to aid sales.

Happy Joe's added pick-up windows as well.

Recruitment and retention remain a challenge for Happy Joe's, and it has had to give $1 to $2 across-the-board pay increases.

Supply chain issues continue to plague the brands, as it is looking for a new sauce vendor since it has had difficulty getting it in. Sacco said he's driven from one store to another to bring pizza sauce and dough countless times over the past two years.

"What we do we do really, really well and we stay in our sandbox. We don't try to compete or work with the discounters," Sacco said. "We don't work off of numbers. We work off of serving a great product."

About Mandy Wolf Detwiler

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Mandy Wolf Detwiler is the managing editor at Networld Media Group and the site editor for PizzaMarketplace.com and QSRweb.com. She has more than 20 years’ experience covering food, people and places.
 
An award-winning print journalist, Mandy brings more than 20 years’ experience to Networld Media Group. She has spent nearly two decades covering the pizza industry, from independent pizzerias to multi-unit chains and every size business in between. Mandy has been featured on the Food Network and has won numerous awards for her coverage of the restaurant industry. She has an insatiable appetite for learning, and can tell you where to find the best slices in the country after spending 15 years traveling and eating pizza for a living. 

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