The pizza life takes a lot out of you, and the industry keeps posing new challenges every year, from higher staffing and food costs to unhinged online reviews and new technologies that can be downright bewildering to an old-school operator.
After decades of slinging dough, it just might be time to retire. But closing shop will break your heart, and selling it requires a level of business expertise that many independent operators lack. Fortunately, if you’ve built a strong reputation in the Long Island, New York area, run a smooth and savvy operation, and have a customer base that would hate to see your restaurant fall by the wayside, Scott and Tana Gerber, the dynamic husband-and-wife team of investors behind Hampton Brands, just might have you covered.
The Gerbers have been making headlines in Long Island with their strategic acquisitions of pizzerias, targeting retiring owners looking to pass on their beloved establishments. They bought Uncle Joe’s Famous Pizzeria from Giuseppe “Joe” Sciara in June 2023, with the Sciara family maintaining a minority share in the brand. Thus far this year, Uncle Joe’s, in turn, has purchased Fusilli in Miller Place, Wading River Pizzeria & Restaurant in Wading River, and Papa Nick’s Pizzeria in Bellport Village.
Related: PMQ’s Pizza Power Forum: How to start building the pizzeria of your dreams
The Gerbers aim to make it easy for older pizzaioli to retire while leaving their businesses in trusted hands. But, of course, it’s a win for Hampton Brands, too, as Scott Gerber explained in a recent Q&A with PMQ. Here’s what we learned:
PMQ: As business professionals and investors, what drew you to the pizza business specifically? Why pizza? Why not steakhouses?
Scott Gerber: Pizza has brought neighbors, friends and families together for generations. It’s a communal experience that creates joy and fosters memories. That’s a solid foundation for any investment with staying power.
Business-wise, we view acquiring well-run pizzerias and transitioning them into a multi-unit system as less risky than traditional hospitality ventures—while providing a strong investment return profile. For one thing, pizzeria acquisitions are capital-efficient “businesses in a box,” since customers, employees and equipment are already in place. This avoids expensive upfront capital expenditures or time-intensive startup requirements right out of the gate, such as construction, town permitting and approvals, major equipment purchases and recruiting.
Secondly, by grouping units together under a single brand system, we’re able to further decrease risk and optimize margins by unlocking volume vendor pricing, commissary kitchen capabilities and sponsorship dollars and provide for career opportunities to incentivize labor retention.
Lastly, when we look at investing in businesses, we always look for quick, inexpensive wins. Pizzerias offer us a number of low-hanging optimizations that can drive more revenue and higher margins quickly—all while ensuring the food remains of the highest caliber and quality. Some recent examples have included removing low sellers from menus, implementing inventory-management best practices, centralizing accounting and bookkeeping, investing in online marketing, third-party delivery integration, and technology improvements.
PMQ: So how many pizzerias has Hampton Brands purchased so far, and do you have a goal for purchasing a specific number of stores this year or in the coming years?
Gerber: We don’t share our acquisitions until they’re announced publicly, as we like to take our time and learn about our new units firsthand before they’re put into the spotlight. That said, four Uncle Joe’s pizzerias are currently operational in Suffolk County, with several others in Long Island currently operating under their previous names. We regularly review new prospective deals and intend to acquire a few dozen pizzerias by the end of 2026.
PMQ: Will every new pizzeria you purchase be folded into the Uncle Joe’s brand? Or do you see opportunities with multiple brands?
Gerber: In the near term, our focus is the Uncle Joe’s Famous Pizzeria brand. However, as we expand, we certainly recognize that there is value in owning a multi-brand portfolio that leans into different founding stories and distinct pizza styles.
PMQ: When you purchase a pizzeria, what are the factors you consider? What are you looking for?
Gerber: Presently, we buy proven businesses versus rebuilding distressed units or building new units from the ground up. We focus our diligence efforts on verifying the key factors that drive net cash flow by assessing five buckets: Operation, Ownership, Food, Financials and Opportunities. Below are some of the questions we ask ourselves when we review a prospective acquisition. Answering these types of questions, and others, helps us to determine what is working, what isn’t working and what low-hanging fruit margin improvement opportunities would exist under our stewardship:
Operation: Does the store use a POS to verify financials? How many customers does the unit serve a week? How do we rate the pizzeria’s hospitality? What is the staff tenure and turnover rate? Are there standard operating procedures in place? What is the condition of the venue and kitchen equipment? What marketing efforts have taken place over the last 12 months?
Ownership: Is the owner a “chief bottle washer” or absentee? How many years has he or she been in business? What is the owner’s goal after selling the business?
Food: What is the caliber of the ingredients in dishes, homemade doughs and sauces? How many items are on the menu, and what is the product mix? What is the pizza to non-pizza sales mix ratio?
Financials: What is the store’s annual net cash flow for the last three years? What is the average order value? What are the weekly labor and food cost percentages? What are the revenue center percentages for takeout, delivery, catering and in-store dining? Is the current rent deal about 8% or less of annual net revenues?
Opportunities: Does the pizzeria offer delivery and/or third-party delivery? Does it have any unique food products that can expand to other units in our system? How many individual menu items sold represent less than 2% of the unit’s annual net revenue? Can the menu be slimmed down without material losses of revenue? Does the store offer catering? Are there key employees that can grow within our system?
PMQ: So far, it seems you’ve been purchasing businesses from pizza people who want to retire? What’s the thinking there?
Gerber: On a personal note, there’s something about taking care of people that have worked hard all of their lives with respect and dignity that resonates with us. Many mom-and-pop pizzeria owners have sacrificed a tremendous amount to build their pizzerias—working six to seven days a week, 12-18 hours a day, missing milestone events and so forth, all in the name of building a better life for their families and providing quality food for their neighbors. We have a lot of respect for that level of commitment and grit. It’s the American dream, personified.
From a business point of view, the wave of retiring Boomers over the next decade presents a massive market opportunity. Thousands of pizzerias will change hands. However, transacting these businesses has gotten much more difficult for sellers in recent years. Between labor challenges, inflation and enterprise-level competition, among other headwinds, the industry has changed dramatically for independent operators, making more traditional buyers hesitant. The same drastic changes have also come for what was once the “foolproof” succession plan. In many instances, children no longer want to take over their parents’ businesses, and many employees can’t afford to purchase units from the current owners—or purchase on terms that the owners are comfortable accepting. All of these factors combined present a clear investment thesis for us.
PMQ: So if I were a retiring pizzeria owner, why would I want to sell to you instead of to someone else? What makes this a better deal?
Gerber: We are a family business buying a family business, so often there is great alignment right from the start. Firstly, many of our acquisitions come about from inbound, off-market deals and don’t require the owners to hire a broker or spend money to market the sale of their business. That savings alone can be anywhere from 5-8% of the sale value.
We’re always willing to talk to a prospective seller, so them coming to us first before embarking on a formal process offers them a no-risk opportunity to have us evaluate the business. Worst case, if they don’t like the terms or we aren’t interested, they can just decide to put it on the market. Whether brokers are involved or not, we’re able to assess pizzerias rather quickly—sometimes getting to a framework deal structure in three days or less. Independent operators have enough to worry about, so we make the process simple, quick and as painless as possible.
Secondly, we have the ability to be flexible in our deal structures. As an example, some owners want out of the business entirely as soon as the closing date, while others want the opportunity to work for a few more years.
Thirdly, many owners have tenured staff members that are almost like family to them. We do our best to keep the existing team in place when we transition businesses, often providing them new career paths as a multi-unit operator that wouldn’t be available otherwise.
Lastly, we always treat owners respectfully and fairly whether we are interested in pursuing their business or not—we’ve even gone so far as to offer some sellers confidential advice after we pass about how to go about their sale process. Thus far. almost every deal we have set out to buy has closed, so we think that says something.
PMQ: What’s next for Hampton Brands? Do you envision moving beyond Long Island?
Gerber: We intend to expand more meaningfully across Long Island by the end of 2026. Thereafter, we will have interests in expanding our footprint outside of Long Island through a combination of company-owned stores, licensing and franchising.
As with any venture, we aim to build a large, profitable business that is a leader in both hospitality and food quality. That said, preserving pizzaiolo culture is important to us. In an age of conveyor belts, quick-heat food and delivery-first concepts, it’s something of an imperative to us to protect the local neighborhood slice shops and red-sauce joints of yesteryear. Call us nostalgic, but that’s as meaningful a part of this venture as any financial goal we aim to reach in the years ahead. If we can play a small role in providing families and communities with great slices at a reasonable price for generations to come, we’d certainly say that’s a job well done.
