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Extreme Pizza Franchise Cost & Fees

Date Incorporation: 1994

Franchising Since: 2000

Headquarters: San Rafael, California

 

Business Description: The franchisor, OOC Inc. d/b/a Extreme Pizza, has developed a system for the operation of restaurant facilities under the mark “Extreme Pizza” that provides on-premises dining as well as carry-out and/or delivery services, featuring gourmet pizza products, other entrees, salads, desserts and other food and beverage products, all prepared in accordance with specified recipes and procedures.

 

Franchise Offer: The franchisor franchises the right to operate a restaurant under the name “Extreme Pizza.” The franchisor also offers to qualified individuals the right to operate multiple franchised restaurants under an area development agreement.

 

Financial Assistance: The franchisor does not offer direct or indirect financing, nor will it not guarantee a franchisee’s note, lease or other obligations.

 

Training and Assistance: Before opening, the franchisor will provide initial training on the operation of an Extreme Pizza Business to the franchisee (or the managing shareholder or partner) and at least two other designated employees. The franchisor will provide four consecutive weeks (approximately 200 hours) of training that will be completed at a training facility designated by the franchisor and/or at an existing Extreme Pizza franchise business. Each manager must complete the initial training program, and none of the franchisee’s other personnel may be substituted for any manager undertaking the initial training at any time in during the training program. An additional two weeks (app. 100 hours) of training will be provided at the franchisee’s location after opening. Franchisees and their designated managers also must participate in all other activities required to open the Franchised Restaurant. Additional opening assistance is available for a fee. The franchisor may offer additional training programs and/or refresher courses to franchisees, their manager, and/or their employees. The franchisor also may, in its discretion, hold an Annual Conference.

 

Territory: The franchisee will operate your Extreme Pizza Business and solicit the purchase of the services by customers set forth in the geographic area described in the Franchise Agreement (the Designated Area) and will not engage in any direct marketing or other promotional activities outside of this area. The Designated Area will be determined by taking into consideration population density and other demographics and will be described in terms of street boundaries, cities or counties.

 

Term of Agreement and Renewal: The length of the initial franchise term is 15 years. The franchisee has the right to renew the franchise agreement for two successive, additional five year periods provided certain conditions are met.

 

Obligations and Restrictions: The franchisee or a designated and approved manager (maintaining a least a 10% ownership interest in franchisee)or at least one of the principals if the franchisee is a corporation or partnership, must personally supervise the day-to-day operations of any Franchised Restaurants operated. The franchisee, a designated and approved manager or at least one of the principals if franchisee is a corporation or partnership must devote his or her personal full-time attention and best efforts to the management and operation of the franchised restaurant(s). The franchised restaurant(s) must, at all times, be staffed with at least one individual who has successfully completed the initial training program. Franchisees must offer for sale and sell only those services that the franchisor has approved.

 

Estimated Number of Units: 40 

 

Investment Tables:

Initial Investment:

Single Franchise

Name of Fee Low High
Initial Franchise Fee $30,000 $30,000
Real Estate $2,000 $10,000
Lease Review $3,200 $4,500
Equipment List $55,000 $75,000
Point of Sale (POS) System $15,000 $16,000
Itemized Supply List and Supplemental Supply List $5,000 $10,000
Travel and Living Expenses While Training $7,000 $10,000
Installation of New Equipment $2,000 $10,000
Insurance $8,000 $15,000
Grand Opening Advertising $10,000 $10,000
Construction $25,000 $160,000
Construction Management $7,000 $12,000
Additional Funds (6 months) $40,000 $100,000
TOTAL ESTIMATED INITIAL INVESTMENT
$209,200 $462,500

  

Other Fees:

Type of Fee Amount
Continuing Services and Royalty Fee The greater of: 5% of Gross Sales; and (ii) minimum of $250 per week
Advertising and Development 1% of Gross Sales
Fund Contribution Local Advertising Greater of $24,000 a year or 3.5% of Gross Sales
Collection Costs, Attorney's Fees, Interest Fees and Costs Incurred/Interest at 18% or Highest Lawful Interest Rate for Commercial Transactions
Insurance Cost of Insurance. If you fail to maintain your insurance as required, we have the right to procure insurance on your behalf and charge a reasonable fee for expenses we incurred in connection with procuring this insurance.
Audit/Inspection Costs Reasonable cost of inspection/audit
Financial Records and Reporting Taxes on Payments to the Franchisor Cost of Preparing Audited Financial Statements Amount of Tax or Assessment
Transfer 25% of the current initial franchise fee
Renewal Fee $5,000 per Franchised Restaurant
Additional/Ongoing Training $500 per day, plus Expenses (meals, travel, lodging)
Indemnification Amount of Claim or Judgment
Supplier Testing Fee Reasonable cost of inspection and actual costs of test(s)
Liquidated Damages $2,000 per year for each year remaining under the terms of the Franchise Agreement
Management Fee Vary Depending on Circumstances
Accounting Services Fee Reasonable costs of services provided by accounting firm
Non-Reporting Penalty $350

 

The above information has been compiled from the FDD of Extreme Pizza. Year of FDD: 2013.

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