The cofounder of MOD Pizza, the fastest-growing restaurant chain in America, reveals how its hiring strategy was key to its meteoric rise during the recession

Mod Pizza pizza line

Irene Jiang / Business Insider

"Impact hiring" is at the very core of how MOD Pizza is run.

  • MOD Pizza is America's fastest-growing restaurant chain, beating out popular chains like Shake Shack and Jersey Mike's, according to Nation's Restaurant News' latest ranking.
  • MOD cofounder Ally Svenson recently told Business Insider that the chain never prioritized growth, instead focusing on filling a need for its customers and employees.
  • MOD's purpose-driven business model, which utilizes the practice of "impact hiring," or hiring people with significant barriers to employment, leads to a greater degree of employee enfranchisement and, therefore, better customer service, she said.
  • Visit Business Insider's homepage for more stories.

In 2019, MOD Pizza raised a whopping $160 million with plans to open 1,000 locations total.

But MOD, currently the fastest-growing restaurant chain in America according to Nation's Restaurant News, started off by tiptoeing onto the restaurant scene during the worst economic meltdown since the Great Depression. Advertisement

"It's not a logical time to open a restaurant or to launch a business. But we used it to our advantage," Ally Svenson recently told Business Insider in an interview.

The Svensons implemented a one-price model to provide a strong value proposition for recession-era customers who had limited disposable income.

"Just building a fast-casual pizza business for the sake of building a big business was not something that justified the investment for us. But being able to build something that changed lives and had a purpose beyond its product was very interesting to us," she said.

"We didn't really know at the time how significant that was until we started to watch this type of employee," she said. "These individuals became so committed. Their work ethic was incredible, and this translated into pretty tremendous customer service."Advertisement

Mod Pizza Bellevue

Irene Jiang / Business Insider

MOD facilitates mealpacking events at its restaurants, often partnering with local businesses and organizations.

But it would take five years of experimentation before the Svensons were ready to expand. Ally Svenson said that they wanted to fail fast in order to find out what worked and what didn't.

"When we opened the first location in Seattle, we really opened the laboratory to create the category of fast-casual pizza. We had so much to figure out, so we took years to get it right and to make sure that what we had was a sound business that was worthy of scaling. Once we knew that we had accomplished that, we then had to ask whether or not this was a growth that we wanted to pursue," she said. Advertisement

The Svensons strongly considered keeping MOD a regional brand. Staying in the Seattle area would allow for the Svensons to regularly visit each location and to keep the network of restaurants closely connected to each other.

Read more: I ate at MOD Pizza, America's fastest-growing restaurant chain, and saw why it's miles ahead of the competition

Ultimately, it came back to the "why" of MOD: impact. For the MOD "squad," that need is food insecurity, and the opportunity is to combat it, both inside and outside of the restaurant space. MOD facilitates mealpacking events at its restaurants, often partnering with local businesses and organizations. Employees have also been eager to participate.Advertisement

"Many [of our employees] have stepped forward and shared their stories around how they grew up with food insecurity, so they've been very motivated to give back. We're a for-profit business, but our purpose is to make a positive social impact," Svenson said.

The Svensons are very protective of the MOD brand: only 25% of the chain's more than 400 restaurants are franchise locations. Those restaurants are run by a total of nine franchise partners. Advertisement

Even now, while MOD is the fastest-growing chain in America, Svenson said the team remains cautious and thoughtful about growth.