St. Louis Snack Brand Switching to Philly Pretzel Factory | Franchise Mergers and Acquisitions

Philadelphia-style pretzels are different than the well-known Bavarian version, having a distinct figure 8 shape, which differentiates Philly Pretzel Factory from other well-known pretzel franchises.

Looking to expand into St. Louis, Philly Pretzel Factory found a company to partner with that also creates the figure 8-style snack. That partner is Pretzel Pretzel, a company with 11 locations in the St. Louis metro, which stretches across the border of Illinois and Missouri.

Of the 11 units, eight of Pretzel Pretzel’s locations are franchised. By the end of February, those eight franchised stores will be converted to Philly Pretzel Factory units. Philly Pretzel founder and CEO Dan DiZio said the transition agreement between the two brands is the result of several discussions with Pretzel Pretzel owner Anthony Simmons over the years.

“He had eight franchisees, and they were asking for support and assistance with things like graphic design,” DiZio said. “He is a small operator, though, and we have all of those programs for operations, training and marketing. So we found it to be a good fit together to converge his franchisees.”

DiZio said following discussions with Simmons, Philly Pretzel Factory flew all eight franchisees out to the brand’s headquarters to discuss the situation, and they were all on board.

“We didn’t buy the locations, all of the owners had to sign new franchise agreements,” DiZio said. “We were able to interview each other, and now they will be getting new signage, menu boards and equipment as they convert.”

Philly Pretzel CEO

Philly Pretzel Factory founder and CEO Dan DiZio

The goal of the unit conversions is to continue Philly Pretzel’s expansion efforts in the area, as the brand already had a unit there and another in development.

“We felt like we needed the numbers to scale it and distinguish ourselves,” DiZio said. “We really like that market, and believe 60 to 70 stores could be built in that area between Missouri and Illinois. Hopefully, it generates interest from other franchisees who’re looking at developing locations.”

The eight converted will join the more than 175 existing Philly Pretzel locations. The brand, with most of its locations in the northeast, was founded in 1998 and began franchising in 2003. DiZio said negotiations are continuing with Simmons to have the three-remaining company-owned Pretzel Pretzel locations to also convert to Philly Pretzel, but the first step was to transition the franchised units.

DiZio said because the pretzel style is similar, fans of the previous brand should find something they like with the new brand.

“The product will look the same and the flavor profile is something I think people will like,” DiZio said. “Our menu is also a little more expansive than theirs and we have a lot of dips to make the product their own. Hopefully, we keep the customers from Pretzel Pretzel and gain some loyal Philly Pretzel fans as well.”

Before the end of the year, DiZio said the brand plans to open six to eight more locations in the St. Louis metro. Along with the Gateway to the West, DiZio said Phillly Pretzel is also targeting Florida for expansion.

“We’re looking at those two markets, and we’re still filling in existing areas,” DiZio said. “We have unique products and equipment, so that when we go to a new market, we can’t just open one and call it a day.”

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