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Happy Joe's Pizza revamps with 'Cafez' concept

Pizza and ice cream have served Happy Joe's well for three decades, but now the company is rolling out an upgraded concept that includes breakfast and premium salads and sandwiches.

August 21, 2005

The year 2002 was tough on the pizza industry. Like an anchor, the recession dragged down segment sales and many operations to the bottom.

Larry Whitty remembers it well, but not, ironically, as a down time. The recession pushed the president of Happy Joe's Pizza & Ice Cream into a contemplative mood, inspiring him to consider the 65-unit chain's future.

What's Important  After more than three decades as a pizza-and-ice-cream restaurant, Happy Joe's is going a bit upscale with its Happy Joe's Cafez concept. The new Cafez will offer a limited breakfast menu, including breakfast pizzas, grab-and-go egg items, sweets and coffee. All items are available for delivery, dine-in or carryout. In order to expand more surely and quickly, the 65-unit company is seeking area developers who already operate non-competing brands.

Whitty's father, Joe, after whom the chain is named, unwittingly came up with the kernel of an idea that initiated the change: breakfast pizza.

A community-minded member of several organizations, the senior Whitty found himself meeting regularly for breakfast with groups at restaurants other than his — because Happy Joe's wasn't open in the morning.

That inspired the former professional baker to get into the kitchen and develop some breakfast pizzas. When he served them at a later meeting, the pies were a hit, and his friends urged him to put them on the menu. But knowing his chain didn't offer breakfast, Whitty thanked them and passed the idea along to his son.

That got Larry Whitty thinking, "Why not do breakfast?" and he lobbed the idea back to his semi-retired dad. "I was kind of against it at first because we'd never done breakfast," said founder Joe Whitty, whose 33-year-old chain posted $43 million in sales in 2004. "But I had to say to myself at some point, 'If you're going to have your son run the company, you'd better give him the leeway to do things.'"

When the company began breakfast trials at a unit in Bettendorf four years ago, customers raved, and the ever-energetic septuagenarian had a change of heart about Happy Joe's future.

"People were complimenting me for this great concept that my son put together," he laughed. "But you have to admit that it makes sense. Even though you don't open in the morning, the bills go on, the taxes go on and the rent goes on. So opening for breakfast, you're basically doing it with very little cost because you've already paid for almost everything else."

As the Whittys continued looking at other successful restaurant concepts to see which attributes they could incorporate into an updated Happy Joe's, they saw a need to change both its menu and its facilities.

In so doing they created a new concept dubbed Happy Joe's Cafez. While remaining focused on its family-centered roots, the new Cafez are larger, have more room for private parties, larger games areas and menus stretching a bit beyond the pizza-and-ice-cream core of the traditional Happy Joe's.

Larry Whitty, owner of Bettendorf, Iowa-based Happy Joe's Pizza.

Premium beverages, salads and sandwiches are now available, including a recently introduced Chipotle line of pizza, pasta and salad. The essentially egg-centric breakfast menu includes Scramblers, panini, Omelet Pizzas, cinnamon and pecan rolls, and high-end coffee.

Meals on wheels

Not only is the menu engineered for grab-and-go convenience, 100 percent of it is available for dine-in, carryout or delivery. That's right, delivery.

"We're doing a lot of business-to-business deliveries in the mornings," Larry Whitty said. "We've also noticed over the last two years that during football season, a lot of tailgaters headed to games will stop and grab three or four omelet pizzas and a half-gallon coffee tote."

Freeport, Ill., franchisee Heather Drake said the breakfast pizzas actually hold up better under the temperature stresses of delivery than regular pizzas. "And we use just the typical insulated bag, not heated ones," said Drake. "Eight to 10 percent of total pizza sales are Omelet pizzas. ... I think (customers) are thinking this is like breakfast pizza they can pick up at a convenience store. But then they're blown away over how good they taste."

Drake expects breakfast eventually will account for a 25 percent of her restaurant's overall business, but she said that won't happen until she gets more dine-in traffic. "We wish more people would stay and eat, but that's not happened yet."

Old dogs and new tricks

Despite its enthusiasm for the new concept, four conversions of Happy Joe's to Cafez units have taught the company just how strongly people resist change. Long-time customers "don't always get it when they hear we're serving breakfast," Joe Whitty said, and staffers have had to adjust to arriving for work almost three hours earlier than their normal 9 a.m. clock-in times.

To test whether opening a totally new unit would communicate a different message to customers, the company closed a Happy Joe's unit in Pella, Iowa, moved the staff and equipment to another site across town, and reopened it as a Cafez, and "got a new-store response," said Larry Whitty. "They didn't have to overcome thinking, 'Is this Happy Joe's?'"

Drake said bringing employees in earlier allows them to get a jump on the evening's prep work, which, in turn, allows evening workers to arrive later.

"I've had a lot of other Happy Joe's operators ask me how it's going so far, and I tell them it's really going well," Drake said. "The concept isn't any more difficult to execute with breakfast, you just have to manage the details much better."

Go for growth

Eager to grow its Cafez concept, Happy Joe's hired Bob Thiess last year as its executive director of franchise development. The veteran spent the last two decades in franchising for companies like Kentucky Fried Chicken and Papa John's.

An artist's conception of the new Happy Joe's Cafez concept.

Thiess called Happy Joe's "a well-kept secret whose time has come."

Not only do modern parents want more time with their children, he said they want to take them to restaurants where kids can be kids and adults can eat foods they like.

That's always been the tone set by Joe Whitty, who described his restaurants as "the indoor picnic."

Thiess agreed. "This is a place where kids can leave the table, move around and play games," he said. "We don't cringe or get upset if they spill their drink. There's really no other place out there like this, so we believe the country's wide open for us to expand."

The company wants not only area developers, but preferably those who already have non-competing brands in the marketplace. Such franchisees can leverage their knowledge of the market, their existing infrastructure and potentially their current employee base to open a Happy Joe's Cafez quickly and smartly.

"This company is really an undiscovered treasure, so I spent a lot of last year just trying to trying to get people familiar with who we are," Thiess said. "We want to get the word out that this is unique, that you can't get what we offer at a Chuck E. Cheese's or a Papa John's."