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This story appears in the December 1996 issue of Entrepreneur. Subscribe »

When Pizza Hut bought out Straw Hat Pizza nearly 10 years ago, Straw Hat franchisees faced a dilemma: Either convert or go independent. For a number of franchisees, neither option was appealing, so they came up with another alternative. They opted out of the Pizza Hut franchise and established a cooperative to retain ownership of the Straw Hat name, operating systems, recipes and logo.

Today, Dublin, -based Straw Hat Cooperative Corp. is going strong, with 50 members and 65 locations throughout California, and . An average of six new stores are added each year. All decisions guiding the company are made by an elected board of directors.

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