Pizza Hut Franchise Cost & Fees

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Description

Pizza Hut selects franchisees with solid restaurant or retail management experience. Owners must commit to opening at least two locations and ideally have eyes to open at least five Pizza Huts in as many years. Selected franchisees will complete a training program in Dallas, Texas for over two months. Currently, Pizza Hut is particularly focused on building and growing franchises in New York, Massachusetts, Washington D.C., Rhode Island, and New Hampshire.

Pizza Hut Franchise Opportunities – History

Frank and Dan Carney founded Pizza Hut in Wichita, Kansas in 1958. Since this time, Pizza Hut has grown exponentially. The restaurant chain now has over 6,000 restaurants in the United States, plus another 5000-something abroad in nearly 100 other countries.

pizza hut franchise fees

Pizza Hut Franchise Cost, Initial Investment , Income

Pizza Hut has a franchise fee of $25,000 for a 20-year agreement, although the total initial investment ranges between $297,000 and $2,109,000. Additionally, franchisees must pay the company ongoing royalty fee of 6% on all sales, as well as an additional 3% to be applied toward national marketing efforts. To purchase a franchise, interested parties must have a net worth of at least $700,000, with at least half of that amount available in liquid assets.

Year Business Began: 1958

Franchising Since: 1959Headquarters: Plano, Texas

Estimated Number of Units: 15,000Franchise

Description: The franchisor is Pizza Hut, LLC (PHLLC or Pizza Hut). PHLLC’s corporate parent is YUM! Brands, Inc. Franchisees operate a dine-in, delivery or delivery and carryout restaurant, offering primarily pizza, pasta and other Italian-style food items, under the name Pizza Hut. Franchisees may acquire one or more existing System Restaurants from PHLLC or one or more of its subsidiaries, or may construct a new System Restaurant. The franchisor currently offers franchises to operate three types of Pizza Hut-branded units at specific locations: Restaurant-Based Delivery (RBD) System Restaurants, from which “Pizza Hut” pizza and other products approved by PHLLC are sold for dine-in and carryout consumption and may be delivered for off-premises consumption; Delivery/Carryout” (Delco) System Restaurants, from which approved products are sold for carryout and are delivered, all for off-premises consumption; and Delivery Based Restaurant” (DBR)/Fast Casual Delco (FCD) System Restaurants, from which approved products are sold for dine-in and carryout consumption, and are delivered for off-premises consumption.

Training Overview: The franchisor conducts the Initial Training Program at its headquarters offices in Plano, Texas and at a System Restaurant in Plano, Texas. Successful completion of the Initial Training Program is mandatory for all of the franchisee’s Qualified Operators. Currently, the Initial Training Program includes “First Slice” which requires at least the following: the Qualified Operators’ attendance (as well as all other personnel the franchisor may require) at all “one-on-one” meetings with designated Pizza Hut functional leaders (Franchisee Onboarding); the Qualified Operators’ completion (as well as all other personnel the franchisor may require) of in-restaurant training (including all required web-based training through the Learning Zone) at a time the franchisor designates (Restaurant Training); the Qualified Operators’ attendance (as well as all other personnel the franchisor may require) at all Pizza Prep classes at or near the franchisor’s corporate headquarters; and the Qualified Operators’ satisfaction (as well as all other personnel the franchisor may require) of all portions of the First Slice Onboarding Checklist. The length of the Restaurant Training and concurrent Franchisee Onboarding portion of the Initial Training Program will vary from 8 to 12 weeks at PHLLC’s discretion depending on the experience of franchisees and/or their Qualified Operators. The franchisor may from time to time develop additional training programs which the Qualified Operator and the System Restaurant manager(s) must attend and successfully complete.Territory Granted: The franchisor will grant franchisees a protected radius consisting of 500 yards surrounding each of their System Restaurant(s)—subject to their compliance with all Brand Standards, their fulfilling delivery orders to National, Regional and Institutional Accounts and their providing Adequate Delivery Service throughout their Delivery Area(s)—within which the franchisor will not develop or operate, or allow any other franchisee or licensee to develop or operate, any SystemRestaurant(s) of the type of System Restaurant Concept(s) franchisees are granted under the Location Franchise Agreement. In addition, the franchisor will grant franchisees a specified delivery area for each individual System Restaurant they operate, within which they may deliver their System Restaurant(s) approved products.Obligations and Restrictions: The franchisor recommends, but does not require, that franchisees, or their principal owners, participate in the day-to-day operation of the Restaurant(s). Each System Restaurant must be directly supervised by an on-site manager who has successfully completed PHLLC’s mandatory training program. Franchisees must also designate, and at all times maintain, one or more “Qualified Operators” (as the franchisor may require according to the size and scope of their Business) to actively manage and participate in the day-to-day operation and ownership of their franchised business. Each of the Qualified Operators must be approved by PHLLC, and such approval shall not be unreasonably withheld. Franchisees must sell in and from their franchised restaurant(s) only and all approved products that the franchisor designates as “standard” for the System Restaurant Concept(s) franchisees are franchised the right to operate unless otherwise agreed in writing.Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Franchisees can enter into two consecutive Renewal Franchise Agreements for a term of 5 years each if they meet certain requirements and timely notify the franchisor of their desire to renew.Financial Assistance: Except as set forth below, PHLLC does not offer, directly or indirectly, any arrangements for financing a franchisee’s initial investment or the continuing operation of their PHLLC business. Even if franchisees meet all of the requirements set forth for the programs, the franchisor may decide to not permit them to participate in either Lending Assistance Program. In addition, PHLLC can discontinue the Lending Assistance Programs at any time.YUM Minority Lending Assistance Program: The YUM Minority Assistance Program covers financing for new minority franchisees purchasing an existing Outlet, purchasing an existing Company-Owned Outlet, or developing a New Outlet. YUM will guarantee 25% of up to $12,000,000 of the principal of the franchised business loan, up to a maximum of $3,000,000 per loan or franchisee.Pizza Hut Employee Lending Assistance Program: PHLLC offers an optional lending assistance program for qualified former employees of PHLLC and its predecessor and/or affiliates. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $25,000 $25,000 Development Fees $25,000$50,000 Equipment $100,000 $450,000 Opening Inventory $4,000 $8,000 Smallwares $10,000 $50,000 Building and Site Improvements $130,000 $1,575,000 Land Varies Delivery Vehicles Varies Computers $15,000 $30,000 Computer System Training $0 $1,500 Additional Funds (3 months) $5,000 $21,500 Miscellaneous$10,000;$22,000Advertising$0$16,500 Start-Up “Other” $3,000 $4,000 Estimated Total $327,000 $2,253,500 *The estimated initial investment range covers multiple variations of new “Traditional” restaurant types. Please see FDD for more details. There is a separate FDD for “Express” restaurant types as well. Other Fees Type of Fee Amount Monthly Service Fee 6% of Gross Sales (6.5% under certain circumstances). Taxes As levied by tax authorities. System Advertising Fund Contribution 4.75% of Gross Sales International Pizza Hut Franchise Holders Association (IPHFHA) Dues 4.75% of Gross Sales (set by franchisees) Digital Innovation Fees $0.38 per transaction conducted through a digital or other automated channel established by PHLLC. Restaurant Technology Fee (currently, a “SUS Fee”) $2,500 per year Software Training Fee $1,500 plus travel and living expenses. Software Maintenance/Support Fee Currently $1,792 per year per unit for all services listed in FDD (PHLLC may increase this fee as needed). Training All living and transportation expenses of all trainees. The amounts are unknown and may vary depending upon factors such as the third-party supplier selected and the franchisee’s distance from training. Additional and subsequent trainee charge: $500 per person per week. On-Site Training and Assistance The then-current training fees plus expenses.  On-Going Training The then-current training fees plus expenses. Proprietary Products If developed in the future, franchisees must buy proprietary products from the franchisor (RSCS, if it offers and sells same), its affiliate or designee. Inspection and Testing Costs Franchisees must reimburse PHLLC for all costs and expenses incurred in connection with the review, inspection and/or approval of a proposed product or supplier, including any salary, travel and lodging expenses incurred in connection therewith. Audit The amount of the audit expenses is unknown and may vary depending upon factors such as the auditor selected. Employee Piracy Double the annual compensation of employee involved, plus costs and attorneys’ fees Late Charges Currently 1.5% per month Unauthorized Closure An amount equal to 24 times the average Monthly Service Fees paid or due with respect to the closed System Restaurant during the prior calendar year. Relocation Varies, depending on the franchisor’s costs in connection with reviewing and/or approving the request. Transfer Fee $2,500 plus an additional $250 per System Restaurant transferred  Advances Varies Indemnification of PHLLC Varies Attorneys’ and Experts’ Fees, Court Costs The amount of these fees and costs are unknown and may vary depending upon factors such as the attorneys and experts selected and the court costs. The above information has been taken from the FDD of Pizza Hut. Year of FDD: 2018NOTE: FDD pages are provided for informational purposes only. It is an overview of what is contained in the full document, which is to be given to the prospective franchisee by the franchise–and receipt of which must be formally notarized between the parties. If you are interested in getting in touch with a franchise company, please search our listings via the “Industry” pages accessible from the drop-down menu above.Franchise Direct’s Disclaimer

 

Other Fees
Type of Fee Amount
Monthly Service Fee 6% of Gross Sales (6.5% under certain circumstances).
Taxes As levied by tax authorities.
System Advertising Fund Contribution 4.75% of Gross Sales
International Pizza Hut Franchise Holders Association (IPHFHA) Dues 4.75% of Gross Sales (set by franchisees)
Digital Innovation Fees $0.38 per transaction conducted through a digital or other automated channel established by PHLLC.
Restaurant Technology Fee (currently, a “SUS Fee”) $2,500 per year
Software Training Fee $1,500 plus travel and living expenses.
Software Maintenance/Support Fee Currently $1,792 per year per unit for all services listed in FDD (PHLLC may increase this fee as needed).
Training All living and transportation expenses of all trainees. The amounts are unknown and may vary depending upon factors such as the third-party supplier selected and the franchisee’s distance from training. Additional and subsequent trainee charge: $500 per person per week.
On-Site Training and Assistance The then-current training fees plus expenses.
 On-Going Training  The then-current training fees plus expenses.
 Proprietary Products  If developed in the future, franchisees must buy proprietary products from the franchisor (RSCS, if it offers and sells same), its affiliate or designee.
Inspection and Testing Costs Franchisees must reimburse PHLLC for all costs and expenses incurred in connection with the review, inspection and/or approval of a proposed product or supplier, including any salary, travel and lodging expenses incurred in connection therewith.
Audit The amount of the audit expenses is unknown and may vary depending upon factors such as the auditor selected.
Employee Piracy Double the annual compensation of employee involved, plus costs and attorneys’ fees
Late Charges Currently 1.5% per month
Unauthorized Closure An amount equal to 24 times the average Monthly Service Fees paid or due with respect to the closed System Restaurant during the prior calendar year.
Relocation Varies, depending on the franchisor’s costs in connection with reviewing and/or approving the request.
Transfer Fee $2,500 plus an additional $250 per System Restaurant transferred
 Advances  Varies
 Indemnification of PHLLC  Varies
 Attorneys’ and Experts’ Fees, Court Costs  The amount of these fees and costs are unknown and may vary depending upon factors such as the attorneys and experts selected and the court costs.