The Power and Strength

of the Segment &

Latest Trends

Investing in Pizza:

There are an ample amount of business concepts that have the potential to prosper in America, but none of them quite compare to that of the pizza franchise industry. This report will serve as a guide to further examine the growth of the franchise and pizza industry and why today is a great time to invest in a pizza franchise brand.

Franchise Industry Success: Restaurant Sector

America is known for its abundance of restaurants, ranging from fine-dining establishments to the newly popular quick-service restaurant, and accordingly, Americans love dining out. In fact, $680 billion is spent at restaurants each year by Americans alone. Due to this love for eating outside of the home, the restaurant industry, specifically the franchising sector, has been experiencing significant growth over the past few years and continues to prosper.

Restaurants make up the largest portion of the franchise segment. Today, there are 155,571 quick-service franchise restaurants and 36,981 full-service franchise restaurants. Franchise restaurants tend to have built-in demand because consumers regularly look for franchise food outlets due to their consistent products and services.

Over the past few years, the quick-service restaurant segment of the franchise industry has truly thrived. The specific segment includes limited-service eating establishments, cafeterias, fast food restaurants, carry-out restaurants and other establishments that focus on serving a meal without taking an extended period of time and offering limited customer service.

In terms of sales, the quick-service industry is one of the fastest-growing sectors in franchising, experiencing about 6.1 percent growth in 2013 alone, according to the International Franchising Association (IFA). In particular, restaurants in this segment are expected to be one of the main drivers of job creation in 2014, adding an estimated 75,596 new jobs to the U.S. economy, according to the IFA. Additionally, one of the front-runners in the quick-service franchise industry is the pizza sector.

$680 BILLIONis spent at restaurants

each year by

americans

full-service franchise

restaurants exist

today

6.1%GROWTHthe current

growth rate of the

quick-service industry

75,596NEW JOBS

were created in quick- service

restaurants in 2014

36,981 RESTAURANTS

Customers Want a Slice of the Pie - Driving Pizza

Franchise GrowthIt shouldn’t be a surprise that pizza ranks as one of America’s most beloved foods. In fact, an immense 93 percent of Americans enjoy a slice of pizza at least once per month, and for each meal of the day, about 13 percent of people can be found consuming pizza. Approximately 3 billion pizzas are consumed in the United States each year, and Americans eat nearly 100 acres of pizza every single day – that’s the equivalent to the area of 75 football fields!

Unmistakably, pizza has mass appeal across the United States, so it should not be unexpected that the pizza industry in the U.S. is worth $40 billion. As a result of the astounding success of the current pizza segment in the U.S., over 70,000 pizza establishments currently are in operation in America, making up 20 percent of all U.S. restaurants.

Of all of these pizza businesses spanning the U.S., pizza franchises in particular are among the most prosperous. According to the Pizza Power 2013 State of the Industry Report, last year the pizza industry experienced its third consecutive year of growth, and this is expected to extend through the tail end of 2014 and most likely into 2015.

Due to their consistency and reliability, pizza franchises account for 60 percent of pizza sales in the U.S. regardless of only accounting for 47 percent of the aggregate amount of pizzerias. These figures provide entrepreneurs with a promising business archetype to invest in when looking to join the pizza industry.

Franchises

account for

60% of

pizza sales

in the U.S.

Franchises

account for

47% of the

pizzerias in

the U.S.

Capitalizing on Demand for Healthier 0ptions

Nutrition is increasingly becoming more important to the American consumer today, and for worthy reason. The health risks associated with unhealthy eating and weight gain are top-of-mind to many individuals. According to the Centers for Disease Control and Prevention (CDC), about one third of adults in the U.S. are considered obese. When an individual is considered obese, they are at greater risk for a plethora of other conditions including heart disease, stroke, type II diabetes, certain types of cancer and more. Due to the rising obesity rate in modern America, numerous consumers have started to second guess their food consumption habits.

As a substitute of ingesting oftentimes gluttonous and high-calorie meals, Americans are beginning to consume food products with more nutritional and health benefits. Accordingly, frequent restaurant goers have started to demand healthier options. In fact, more than 70 percent of adults are looking to eat healthier when they at restaurants according to the National Restaurant Association (NRN). The NRN similarly reports that over the last several years, consumers have seen an escalation in the health and nutritional needs and demands of consumers when eating out at restaurants. In response to these new customer demands, many restaurant franchises and establishments have answered with implementing healthier choices into their menus. The majority of restaurant owners, according to the NRN, have started to

add healthier dishes to their menus, and customers are taking notice. In fact, as many as 86 percent of adults have reported that over the past two years, they have seen an uptick in the quantity of healthier items offered.

In fact, Technomic’s Pizza Consumer Trend Report showed that more than 40 percent of frequent pizza customers are looking for their favorite pizzerias to implement more nutritious options into their menus such as whole wheat crust, organic toppings, natural or locally cultivated ingredients. Pizza can be engineered to be remarkably healthy and nutritious by cutting back on higher-fat elements, such as extra cheese, thick crusts and salted meats and instead adding in more nutritious toppings like vegetables. Pizza brands don’t need to sacrifice the taste of their final products to accommodate healthy ingredient requests. In fact, the Pizza Power 2013 State of the Industry Report revealed that almost 40 percent of pizza consumers actually prefer the taste of thinner crust options over pan-style or thicker crust.

A large amount of consumers recognize that in some circumstances, these dietary demands may increase the price of their pizza, but a large percentage of customers are actually accepting of this. In fact, according to this same report, 34 percent of diners said that they were willing to pay more money for healthier ingredients. Many pizza chains are beginning to move their focus toward using superior ingredients or thinner crusts to satisfy their customers, and this is only expected to become more prevalent.

Kono Pizza takes on Nutritional Customer

Concerns Consumers are expected to become even more health-conscious as more studies on obesity and the dangers of eating an unbalanced diet continue to populate the media, PMQ reports. As pizza franchise customers continue to crave fresh ingredients, an increasing amount of pizzerias are expected to utilize high-quality products and cooking methods.

Kono Pizza, home of the original pizza cone, is an industry leader in this practice. Kono Pizza is an exceptional franchise concept in the pizza industry, capitalizing on a unique product with built-in, healthy alternatives. The Kono team has worked diligently to deliver optimal ingredients to its consumers including the finest cheeses, fruits and vegetables from local merchants.

Each Kono location serves breakfast, lunch, dinner and dessert cones that incorporate healthy alternatives into several menu items. There are a total of seven low-calorie cones on the menu, and they are visibly identified as being low-calorie so consumers know that they are making a nutritious choice. Some of the premium, nourishing ingredients that are included in these lower-calorie cones include eggs, peppers, turkey, lettuce, tomato, feta cheese, olives and more.

Kono Pizza has discovered how to implement delicious ingredients into its menus without packing on the calories. A standard piece of vegetable pizza contains on average 450 calories. Comparatively, a margherita cone from Kono Pizza, which includes turkey, swiss, tomato, lettuce and the cone itself, totals just 250 calories. With the cone’s low-moisture cheese and thinner crust, the majority of this franchise’s cones are between 250-280 calories a piece. Because of the product’s unique shape, the pizza cone is perfect for on-the-go consumers because it tends to be mess-free.

Due to the pizza industry’s continual growth and popularity not just in America, but around the world, consumers have shown that pizza franchises are here to stay. As pizza franchises adapt to consumer lifestyle and taste trends, the fresh and calorie-friendly pizza industry proves to be a great value for the money as they will experience growth and enduring profitability.

Kono Pizza takes on Nutritional Customer

Concerns

250Calories

(vegeterian)

450Calories

The Kono Pizza Franchise 0pportunity

Because of its delicious and consumer-friendly product, the pizza cone, the Kono Pizza model has already attained international success. Currently there are 130 franchise locations operating in 20 countries, and Kono Pizza USA is looking to expand in the U.S. marketplace.

Kono Pizza is a flexible franchise to own, and franchisors are there to help with every step of the process. Kono Pizza is an optimal franchise to own for a plethora of reasons, including:

Location Support: When choosing a location from available markets, each franchisee will have the chance to work with a Real Estate Representative to help franchisees determine the best location for their new store and support negotiations on rental spaces. Kono Pizza also offers site selection support and can aid in the actual design and layout of a franchise location.

Format Options: Prospective franchisees have the option to choose from three different franchise formats when investing in a Kono Pizza, including a quick service restaurant (QSR), a kiosk or a food truck. Kono Pizza is currently looking into potentially offering cart locations, as well, where franchisees will have the choice of what specific cones (breakfast, lunch, dinner or deli) they will sell. This increased variety in location makes investing in this pizza concept more realistic for a wider range of prospects due to the varying initial investment depending on the type of store chosen, as the start-up cost is on the lower end, ranging from $150,000 to $340,000.

Simple Operations: Limited staff is needed to run this operation, ranging from 4-8 part-time employees and one full-time manager. All staff members will follow detailed instructions and a set menu while preparing food, making it a virtually mistake-free preparation process.

Thorough Training: All franchisees and store managers will go through training, including intensive onsite workshops, online courses and hands-on training at Kono Pizza USA’s corporate training facility to ensure the successful operation of each location. During these trainings, franchisees will not only learn how to create the perfect pizza cone, but they will learn how to create a superb customer service experience for all visitors. Field staff will meet with prospective franchisees to help strategize and build and execute their business plan unique to their local community.

Grand Opening Support: Franchisees are supported throughout every aspect of the exciting store opening process, such as by providing ongoing marketing and advertising support to get the word out about the new store opening. The Kono Pizza team will assure that each franchisee’s store opening is truly impressive and will help set them up for continual growth.