Slice: The Reverse Franchise for Pizzerias

Welcome to the 30th Network Effects Newsletter.

Slice is a vertical SaaS platform for pizzerias, founded by Ilir Sela, who grew up in Staten Island surrounded by family members who ran pizzerias in New York City.

He observed firsthand the challenges most independent pizzerias faced and founded MyPizzeria in 2010, providing websites, online ordering, and marketing software to independent pizza shops nationwide. After a successful exit in 2016, Ilir built on his experience and founded Slice, with a technology solution to empower local pizza shops, starting with a POS solution.

Today, Slice powers over 20,000 pizzerias and generates more than $100M in ARR, making it one of the largest SMB enablement platforms in the $50B pizzeria sector.

Let’s Dive in

The Pizzaeria Landscape - David vs Goliath

Today, Domino's, Papa John’s, Pizza Hut and Little Caesars have become the largest pizza chains, with 20,000+ stores together worldwide. These chains have built their brand explicitly on a promise rooted in standardization and operating leverage. For example, Domino’s proprietary technology and fortressing strategy have been instrumental to its financial success.

The average sales at the biggest chain location exceed $1M, while the average sales at an independent pizzeria are roughly over $440k. The disparity reveals various gaps in sales, marketing, delivery, operations, and other areas where large chains have an advantage over. 

Yet, with 56,000+ independent pizzerias across the globe, many are thriving by emphasizing authenticity and locality. They compete not on speed or price, but on character and connection. Slice’s mission is to “keep local thriving” by equipping independents with the tools and infrastructure usually reserved for large chains.

Slice’s Full Service Journey

Slice’s core value proposition is to offer a one-stop shop for industry-specific white-label solutions, in addition to integrations with third-party platforms and proprietary technology. Therefore, their customers can derive chain-scale benefits without cookie-cutter control.

At a high level, there are three archetypes of services Slice offers to its merchants: platform solutions, network-based solutions and managed services

1. Technology Solutions

Slice provides a full operating system tailored for pizza shops, including:

• POS & Register Systems

• Inventory Ordering and Management 

• Dispatch & Delivery Management

• Custom Websites & Online Ordering

• Loyalty Program & Marketing Suites

These are largely capital-light, white-label tools, which are the bread and butter of most restaurant SaaS competitors. But Slice goes further by integrating them with its network-based services, differentiating itself from the rest of the competition.

2. Network-based Solutions 

Network-based solutions transcends beyond its software infrastructure offerings, it offers individual pizzeria chain-scale benefits across supply and distribution

Slice Life

The Slice Life marketplace mobile app, with over 9M active users, allows local pizzerias to be discovered by nearby customers, offering a demand channel similar to Uber Eats but designed to preserve margins and brand identity.

Pizza Boxes & Supplies 

Slice can aggregate pizza box demand from its independent merchants to get bulk purchasing discounts from the supplier. For example, instead of paying $30-$35 for 50 pizza boxes, Slice merchants can access bulk purchasing discounts and buy the same quantity for $20, implying a 50% savings from the pizza box cost.

This group buying model also extends to other high-volume inputs such as ingredients and store supplies, which will have a material margin improvement to independent stores with less scale.

Delivery Network 

Slice offers “Flex Delivery,” allowing pizzerias to supplement in-house drivers with Slice’s own network. Unlike third-party delivery apps:

1. Merchants retain control and flexibility, blending self-delivery with Slice’s network.

2. The system is natively integrated into their POS and order management tools.

“About 90% of the order volume that passes through our platform is self-delivery… The reality is delivery is the primary form of revenue for many pizzerias, and they are incredibly hesitant to offload that to a third party or someone that they don’t know, where they don’t control the experience… For shops for whom delivery is such a big part of their business, self-delivery is the winning formula.”

Merchant Community

Slice has built a community of merchants to exchange ideas and seek help, including

• Online discussion forums

• In-person networking events

• A dedicated education center for pizzeria operations

3. Managed Services 

Slice Marketing

For operators with limited digital expertise, they have opted to let Slice run full-funnel marketing campaigns, from paid ads to retention programs, directly on behalf of the shop. Therefore, Pizzeria owners can focus on designing and delivering pizzas for their customers.

Slice Phone
A 24/7/365 call center that handles customer calls with full context around your menu, backlogs, pricing, delivery capabilities, etc. As a result, it alleviates the operational load for in-store employees and improves order intake and customer satisfaction with greater precision.

Drawing Parallels with Dominos 

Slice’s model increasingly mirrors the Domino’s franchise flywheel, but in reverse.

Both Slice and Domino’s are:

• Heavily invested in proprietary technology across distribution and operations

• Aligned on merchant success, earning revenue as a % of GMV

• Vertically integrated with some centralization across marketing, delivery, and supply

However, while Domino’s builds around brand uniformity, Slice enables individuality. Its merchants retain full branding and local identity while benefiting from shared infrastructure.

That said, Slice operates in a more volatile environment: nearly 60% of new independent pizzerias fail in their first year, compared to much lower closure rates for franchises. One of Slice’s north star metrics was about minimizing merchant closure rates, Slice is continually developing solutions to improve profitability and cash flow of the business, including its expansive effort to scale the group-buying capabilities beyond pizza boxes. 

Conclusion 

Slice is a testimonial to the reverse franchise model, extending its vertical software proposition with operational and service offerings, including group-buying, marketplace, marketing services, and community solutions. Other examples include Moxie for MedSpas (check our deep dive here) and Odeko for Cafes. 

As vertical platforms mature, having robust software (system of record) isn’t sufficient; there is going to be a need to deliver value for their customers outside of software. From distribution to group buying discounts to managed services, platforms have to evolve their identity beyond a vertical technology provider to expand their addressable market.

If you found this valuable, consider sharing with a colleague or founder in vertical SaaS.

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Resources 

• Change Order Podcast - Ilir Sela

• Product Paths To Building A vSaaS Monopoly - Linear 

• Unbundling the Franchise - Tidemark