By Rick Hynum

Tom Sacco wasn’t looking for a job when Happy Joe’s Pizza & Ice Cream asked him to take the reins as president and CEO in 2021. A hospitality veteran with 30-plus years of executive leadership experience at brands like Bonanza Steakhouse, Ponderosa Steakhouse, BJ’s Restaurant and Brewhouse, and Red Robin Gourmet Burgers, Sacco was happily retired and spending time with the grandchildren he adores. He even tried to talk the company out of choosing him. “If you don’t believe me, I’ll get my wife in here to tell you,” he recalls. “She did not want me going back to work, and I tried everything I could to not have them hire me.”

But Happy Joe’s, based in Bettendorf, Iowa, wanted a transformational leader. And parent company Dynamic Restaurant Holdings (DRH) knew they’d found one in Sacco. The family-friendly brand had struggled since the death of founder Joe Whitty in 2019. Sacco, for his part, had been instrumental in Red Robin’s expansion and revitalized franchise growth for Ponderosa and Bonanza. Could he work his magic on Happy Joe’s?

By his own admission, Sacco, now 71, is no spring chicken. “I’m a straight shooter,” he says. “I just tried to be honest and said, ‘Listen, you need someone who’s got a lot of stamina, a high energy level. You probably need somebody in the 40-to-50 age range.’”

Happy Joe’s, however, had gone through a couple of younger CEOs already. What it needed was business savvy and the wisdom that comes with a little wear and tear. Smarts with a lot of heart. And Sacco, a proponent of servant leadership, has delivered on all counts.

Related: Turning tragedy into triumph: Pizzaiolo seeks help teaching teen orphans to dream big

Sweet, Not Savory

“Lead with a servant’s heart” is Sacco’s mantra, and he came by it honestly. At the age of eight, he started working in his grandparents’ restaurant in Niagara Falls, New York. “This is where, for me, the mystique started,” he reflects. For his grandfather, who immigrated to the U.S. from Italy during WWI, English was a second language—and not an easy one to master. Sacco helped him better pronounce words for ingredients, like “eggplant.” In return, his grandfather taught him about service to others. “He would talk about why it was important to serve good quality food, take care of your employees, and make sure that anybody who bought food from you was happy with the quality, the service and the price,” Sacco says.

Even so, Sacco’s parents had other plans for their son: He was meant to be an attorney, not a restaurateur. But, after a semester in law school, it didn’t take. Instead, he found a job managing a local restaurant called Mother Tucker’s Food Experience. “Even though I was really young for management, I’d been doing it my whole life,” Sacco says. “Things that other people needed to be taught were second nature to me, having had the kind of mentoring I grew up with—not mentoring where it was force-fed to me, but because it was done with the love of my grandfather’s heart.”

Sacco was still a New Yorker, though, and an ambitious one at that. As he worked his way up in the chain restaurant industry, he says, “I was really aggressive with my management style. This warm and fuzzy servant leadership thing wasn’t part of who I was. It came after a few years as a VP at Red Robin, but the one where I had the biggest impact, initially, was Bonanza. I realized that Bonanza was so large that, if I was going to move up the ranks, I couldn’t do it by just outperforming my competitors, because there were, like, 10 vice presidents there….That’s when I started to realize maybe you can get more with sweet than you can with savory.”

In discussions with his wife, Sacco began thinking back on the lessons he’d learned in his childhood. “She said, ‘Remember what your grandfather used to tell you. Take care of these people. Put them before you. Don’t make it about you—make it about them.’ It took me probably 10 years to get to the point where I was not only doing that at work, but it became the way I lived my personal life. And it changed everything.”

Remembering the Golden Rule

For families with children, Happy Joe’s, founded by Whitty in 1972, has always been part pizzeria, part playground and part party central. Throw a birthday bash there for your kids, and they’ll want to come back next year and the year after that—all the way through adulthood, maybe even into old age. While many restaurant brands are just now starting to grasp the importance of creating a full and memorable experience for their customers (rather than hustling them in and out in a hurry), Whitty made that his mission from the start, along with enriching the lives of children with special needs (he eventually founded the Happy Joe’s Kids Foundation for that purpose).

“I look much like I would imagine a typical Midwest Santa Claus looks, with rosy cheeks, a mischievous twinkle in deep-brown eyes, and wispy tufts of salt-and-pepper hair floating under my trademark straw hat,” Whitty wrote in his 2012 autobiography, Not Your Average Joe.

Early on, Happy Joe’s founder Joe Whitty grasped the importance of creating a memorable experience for his customers, especially kids.

But, for all its trademark “happy-place” ambience, Happy Joe’s is also a franchisor—currently only three of its 42 stores are company-owned. And not all of the franchisees were happy as Sacco was coming aboard. Twenty were reluctant to renew their agreements. Sacco had some work to do—retaining franchisees was paramount to turning around the company’s fortunes.

In his first month on the job, Sacco paid visits to every franchisee to discuss their concerns. “I would ask them simple questions, like, ‘What can I do to help you? What’s the most important thing right now with your business and your family that, if I could do anything to help, you would ask me to do?’ And it ranged all over the place,” Sacco says. “Some of it was royalty relief. Some of it was, ‘We’re having a hard time with our food costs, and [the corporate office is] getting rebates. And on top of that, we’re paying royalties and advertising.’ So I had to check on all of this, and, sure enough, it was correct, and I canceled all that stuff.”

Sacco’s approach was to deal with one franchisee’s problems at a time and look for solutions. “What do I need to do for the guy in Branson? What do I need to do for the guy in North Dakota? Because everybody’s needs are different. I said to all of them, ‘Give me six months, and then let’s revisit.’ And that’s what I did. Six months later, I had all 20 franchise agreements re-signed. Half of them have re-upped for another restaurant. And that was only after seven or eight months.”

To attract new franchisees, meanwhile, Sacco waived the initial franchise fee and reduced royalties for the first two years. He also sought franchisees’ input on everything from the menu to equipment changes. “I went back to some of the old recipes that Joe started with, ones that the franchisees were very, very high on but [had been cut] to maximize the bottom line,” he says. “I brought back the higher-quality food. And now people say, ‘Wow, during COVID, your sales were up when everybody else was shut down. You’re adding restaurants when other [chains] are going bankrupt.’ It’s kind of magical in a lot of ways, but, if you think about it, all we did was follow the golden rule: I took care of my franchisees, I took care of my vendors, and I took care of the guests.”

The Little Things Add Up
Sacco also guided Happy Joe’s through a rapid-fire bankruptcy process, from September 2, 2022, when the company filed, through January 12, 2023, when it emerged ready for new growth. One major problem he faced during that period was inordinately high rent for the brand’s corporate stores, due to a previous deal with a real estate investment trust (REIT). Even then, Sacco tried to come up with a win-win deal for Happy Joe’s and the REIT’s leadership. “I had to walk away from some of those leases, but, because of the relationship that I had with this man, we re-upped all the leases on the stores we wanted to keep, he lowered the rent and gave me the contracts we wanted….And I just [recently] helped him put a new franchisee in a place where we didn’t have a franchisee. That’s how you take a lemon and make lemonade. I took his situation and tried to help him.”

Related: Happy Joe’s keeps growing, adding its eighth franchised store in Illinois on December 16

Today, Happy Joe’s is back on the upswing. New locations are currently under construction in Navarre, Florida—the company’s first store in the South—and in Oro Valley and Surprise, Arizona. Franchise development deals have also been struck for Nevada and New Mexico. Egypt is another hotspot for Happy Joe’s, with two stores already operating, eight more scheduled to open by the end of the year, and more on the way. But “leading with a servant’s heart” extends to Happy Joe’s customers, too. Sacco is quick to share stories about how the brand’s franchisees have helped customers, particularly those facing mental and physical challenges. A Burlington, Iowa, franchisee who personally delivered pizza and gifts to a longtime regular who had been severely injured in a car wreck. Events for children with special needs. Helping employees with opioid addiction get into rehab. “We’re doing it because it’s the right thing to do,” he says. “And sometimes doing the right thing has a greater impact on the brand’s sustainability than being the one that tries to make the most money.”

Every year, Happy Joe’s throws Christmas parties for children with special needs and their families, remaining true to Joe Whitty’s big-hearted spirit to this day. “We feed 2,000 special-needs children—kids who have all kinds of illnesses or really bad medical problems,” Sacco says. “Some of them have spina bifida. Some are prone on a hospital bed. More than half are in wheelchairs. We bring in Santa Claus, and everybody gets a gift, and we cater it for them. We turn it into, like, a nightclub, with music and a mirror ball. They’re in their chairs or their beds, and we go up and wiggle the chair with them, because they’ll never get to go to a club like you or I would because of their physical condition. But it doesn’t mean they can’t be respected and treated to something special.”

Sacco gets a little choked up when he recalls one such Christmas party in 2023. “This little boy wheeled himself over in his wheelchair and hugged my legs while I’m standing at the door. And he said, ‘I’m so happy you didn’t forget me this year. Thank you so much for my invitation.’ I can’t express enough how meaningful these things are, all because you act as the servant instead of the big boss.”

Of course, Sacco notes that he’s still a capitalist at heart. “Everything I do is about, ‘How do I improve the bottom line? How do I grow the business? How do I get a return to the shareholders?’ But I love getting up every day. I can’t wait to go to work, because…if you do these little things—one birthday party, one person you get into drug rehab—one by one, they don’t really change the world. But when you add them all up, it makes a huge difference.”

Rick Hynum is PMQ’s editor in chief.

Featured, Marketing