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To Hell and back: pizza chain bought by founders

The founders of the Hell pizza chain have bought back the business they sold less than three years ago.

Warren Powell, Stu McMullin and Callum Davies take the helm again on Friday, and plan to shift the Hell brand back to its quirky roots.

The trio sold Hell to TPF, owners of Burger King, for $15 million in December 2006.

They retained the international rights to the brand and have opened outlets in Australia, England and Ireland, with Canada next on the list.

But negative publicity about discontented franchisees and customer complaints of a decline in quality have plagued Hell’s local operations since the sale. 

At the root of the problem, observers say, was the innate conflict between the management style of a profit-driven corporate like TPF and the founders' more personalised approach that franchisees and customers were used to.

“Hell is all about adding on, not taking off,” Mr McMullin says.

Mr Powell says the timing was right for both parties when he and his colleagues sold the business; and now it’s right again for the buyback.

The sale price is confidential but it is believed to be a fraction of the $15 million that TPF paid for the business.

Messrs Powell, McMullin and Davies plan to introduce a “super gourmet” pizza range to Hell, which will retail at near the $20 mark, as well as other product lines such as Thai food and items that are gluten free and organic.

They say there is work to do on a store level first, to make sure customers have their needs met or exceeded, before the new items are introduced.

There are 61 Hell stores in New Zealand and 50 franchisees.

The founders are expecting some consolidation; Mr Powell says they are more concerned with brand consistency than the number of outlets.

Despite the recession, they are adamant that customers are willing to pay more for pizza as long as the product and brand experience stacks up.

In Hell’s six Brisbane stores, the pizzas sell for $A18-20 each.

TPF maintains its ownership of Burger King, although it has been evaluating its capital structure since last year.

TPF director retail operations Glenn Corbett says there are a number of discussions taking place that will give TPF options for attracting investment capital.

These range from debt funding to other parties taking an equity stake in the business.

“Those discussions are all positive,” Mr Corbett says, adding that he’s expecting to be announcing TPF’s future strategy in the next couple of months.

 

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