Hell Sells for $15 Million

The cheeky Wellington pizza chain that named its pizzas after the seven deadly sins has sold for about $15 million to the New Zealand franchise holders of Burger King.

According to a report from Stuff.co.nz:
Hell co-founder Callum Davies, who started out as a pizza shop owner in Wainuiomata, plans to use the proceeds to build the Hell brand in Britain, Australia and China, while leaving the rapid expansion of Hell in New Zealand to its new owners.

TPF Group’s new Hell general manager Colin Mellar would not disclose exactly how much the privately owned group had paid for the New Zealand master franchise rights for Hell, but said the $15 million figure speculated on in several media reports was not too far off.

Mr Mellar said TPF, which is owned by Dennis Jones and Mark Backhaus, had no plans to change the “irreverence and naughtiness” of the Hell brand.

Last month Hell ran foul of the Advertising Standards Authority for giving away thousands of condoms to promote its “lust” meat lovers pizza.

“Hell has a complete point of difference to the other pizza brands,” Mr Mellar said. “Although it’s naughty, it has a charm about it.”

TPF saw major growth potential for the Hell brand, Mr Mellar said. Currently there are about 60 Hell outlets throughout New Zealand.

“If you look at fast food chains such as McDonalds and Subway, they are sitting at around 150 stores in New Zealand.

“We don’t know how far this brand can go, but we certainly see significant growth in the next couple of years.”

One of the other attractions of Hell was its online ordering system, designed by Wellington company Spikefin, Mr Mellar said. About 15 per cent of Hell’s orders were placed over the Internet, compared with 3 per cent to 4 per cent at other fast food chains.

Hell’s former owners, Callum Davies, Stuart McMullin and Warren Powell, will use some of the money from the sale to launch Hell in Britain, Australia and China.

Mr Powell said the strategy was to open up to five company-owned stores in each of those markets, prove the brand and then sell the master franchise rights.

Mr Powell said that about $5 million of the sale proceeds would go into the international expansion of Hell and $5 million would go into the bank.

The rest would be spent on “fast cars and fast women”, he said.

Hell had offers in for a number of sites in London, had been interviewing potential employees in Hong Kong and was talking to an established fast food company in Australia about selling franchise rights there, he said.

Hell had its genesis when Callum Davies, who was running a pizza shop in Wainuiomata, visited Taupo in the mid 1990s.

He was impressed by the quirky marketing of a radio station called The Fish, which had a car called the Fish Tank and a telephone number for listeners called The Fishing Line.

Deciding he wanted to give his pizza store some personality he came up with the Hell brand and opened the first store in Kelburn, near Victoria University in 1996. By 2002 Hell had four stores, but it has grown rapidly in the past few years after it started selling franchises.

All of the growth has been generated by cashflow with no other investors involved.

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