Out of Bankruptcy, Happy Joe’s Ready to Grow | Franchise News


Calling it a “rapid-fire bankruptcy,” CEO Tony Sacco said Happy Joe’s Pizza & Ice Cream is now positioned to expand after it shed problematic locations, sold others and can focus on helping franchisees operate profitably.

“We made the best business decision to keep this company around for the next 50 years,” said Sacco of the Davenport, Iowa-based brand that came out of bankruptcy January 12. Happy Joe’s, which filed for bankruptcy protection September 2, 2022, under Subchapter V of Chapter 11, needed to reorganize and address high rents and real estate that was no longer viable, Sacco said.

Going into effect in 2020 under the Small Business Reorganization Act, Subchapter V is a faster and less expensive path to reorganize under Chapter 11 of the U.S. Bankruptcy Code. Businesses are eligible if they have $7.5 million or under in liabilities, still a relatively small figure but improved from the original $2.7 million.

Founded by Lawrence Joseph “Happy Joe” Whitty in 1972, Happy Joe’s was acquired by Dynamic Restaurant Holdings in 2017. The new ownership group, said Sacco, “got stuck with all these really high rents,” and in October 2020 brought him in to modernize the Midwestern brand and refresh the business model.

Sacco previously led the image refresh and revitalization at Ponderosa Steakhouse & Buffet and Bonanza Family Restaurants. He also helped lead national expansion at Red Robin Gourmet Burgers, BJ’s Restaurant & Brewhouse and Ghirardelli Chocolate & Ice Cream Shoppes.







Happy Joes-Rickey McBride

Rickey McBride says he “grew up off Happy Joe’s” and is excited to bring the brand to Dallas with business partner Bryan Shorter.


Sacco said he told ownership that company restaurants “were going to lose between $500,000 and $600,000 a year, not because we weren’t making money, but because the rents were so high” and it would be expensive to repair and maintain older buildings. Happy Joe’s closed two corporate restaurants, in Davenport and Eldridge, Iowa, and sold its two stores in Kewanee and Galesburg, Illinois, to franchisees.

The remaining three company locations are “killin’ it,” said Sacco. Its unit in Bettendorf, Iowa, did $2.1 million in gross sales from October 2021 to September 2022. Full-size franchise locations had average gross sales of $961,520 during that time frame; delivery/carryout-focused units averaged $869,403 in sales.

Happy Joe’s has 42 restaurants open, including the company units, with about half of the locations in Iowa. Since Sacco joined, the company has made numerous investments to position it for growth, he said, including the introduction in 2022 of a new image and brand design created with consulting firm Harrison. It also rolled out a mobile app using Punchh, upgraded the point-of-sale system and integrated guest feedback platform Tattle.

Sacco, who pointed out he’s 70 years old and came out of retirement when he got the call from Dynamic Restaurant Holdings, said he’s excited about the “unbelievable strides” the brand has made.

“Sometimes you find something that pulls and tugs on your heart,” he said. “I want my grandchildren to experience the Happy Joe’s dining environment.”

That same attachment to the brand is what brought Rickey McBride and business partner Bryan Shorter in as franchisees. Friends since high school, both are Davenport natives, and McBride said he “grew up off Happy Joe’s.” When they learned Happy Joe’s was again pushing franchise expansion, “it was a no-brainer” and they signed a two-unit agreement for the Dallas-Fort Worth market. Theirs is the first Black-owned business group for the brand.

“I’ve always loved what Happy Joe’s makes you feel like,” McBride said. “It’s like home. It’s a family atmosphere and we want to create that in Dallas.”







Happy Joes interior

Happy Joe’s introduced a new image and brand design last year, one of several investments made in the brand, said CEO Tom Sacco.


Happy Joe’s is perhaps best known for its Taco Joe, its signature taco pizza that McBride noted consumers in the Dallas area “would gravitate toward.” He also called out newer options such as a cauliflower crust pizza that can broaden the brand’s appeal.

McBride lives in Atlanta and owns Gold Sea Moss, which he described as one of the largest suppliers of sea moss for nutritional supplements and powders in the United States. His and Shorter’s operating partners live in Texas and will run the business day to day. Their ownership group, HJ SMS OpCo, came to Happy Joe’s when it was in bankruptcy, a status McBride said “wasn’t going to deter us at all.”

“We’re all team players, we all want what’s best for Happy Joe’s. We’re excited to help it grow,” he said. “We’re in ‘go’ mode.”

Sacco said four domestic restaurants are expected to open this year, including McBride’s first, and Happy Joe’s is also growing overseas. It has one restaurant open in Cairo, Egypt, through its master franchise agreement with Ahmed El Batran of H.J. Middle East, and four others slated to launch this year in a suburb of Giza and in the Mall of Egypt and the Mall of Arabia.  

In the U.S., Happy Joe’s is targeting Orlando, Florida, Nashville, Tennessee, and Phoenix. “We’re staying off the coasts because real estate is way more expensive and the minimum wage is much more expensive,” said Sacco. The bankruptcy, he noted, “is so far in the rearview mirror.”

“Our franchisees are making good money and our company stores are making good money.”

The cost to open a full-size Happy Joe’s ranges from $486,850 to $1,164,250; the investment range for the DELCO delivery/carryout model is $287,250 to $639,535.



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