Extreme Pizza
Date Incorporation: 1994
Franchising Since: 2000
Headquarters: San Francisco, California
Description: The franchisor 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. The franchisor has developed and continues to further develop a proprietary line of food products as part of the menu items including special sauces and marinades, special dessert recipes and special spice mixes and may develop and offer and sell to the franchisee for retail sale to its customers an assortment of privatelabeled apparel and related products and merchandise bearing the Extreme Pizza trademark and logo.
Franchise Offer: The franchisor franchises the right to operate a single restaurant under the name "Extreme PizzaTM". The franchisor also offers to qualified individuals the right to operate multiple franchised restaurants under an area development agreement. The franchisor also offers to qualified individuals the right to be an area representative and recruit franchisees to own and operate franchised restaurants, provide support services to franchisees within a given territory, as well as open their own franchised restaurants.
Financial Assistance: The franchisor does not offer any direct or indirect financing.
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. An additional two weeks (app. 100 hours) of training will be provided at the franchisee location after opening. The franchisor may also hold an annual conference serve the purpose among other things, of updating franchisees on new developments affecting franchisees, exchanging information between franchisees and the personnel regarding Extreme Pizza restaurant operations and programs, and recognizing franchisees for their achievements. franchisor may offer additional training programs and/or refresher courses to the franchisee, their manager, and/or their employees. The franchisee or their employees may be required to attend these programs and/or courses.
Territory: The franchisee will operate the Extreme Pizza business in the geographic area described as the designated area. This designated area is an exclusive territory and the franchisor reserves the right to operate Extreme Pizza restaurants outside the area on any terms it deems appropriate, and also the right to open business which sell products and services similar to those sold by Extreme Pizza restaurants at any location, as long as these good and services are sold under different trademarks or service marks. The franchisee will retain the territorial protection described above so long as the franchise agreement is in force and effect. The franchisee maintains rights to their area even though the population increases.
Term of Agreement and Renewal: The term of the franchise agreement is 15 years. The franchisee can renew for two successive additional 5-year periods provided certain conditions are met.
Obligations and Restrictions: The franchisee (or at least one of their principals if it is a corporation or partnership), or one of the designated managers, must personally supervise the day-to-day operations of any franchised restaurants operated by the franchisee. The franchisee must devote their personal full-time attention and best efforts to the management and operation of their franchised restaurant(s), area development business, and/or area representative business, as applicable. The franchisee may, however, delegate the day-to-day operation of their franchised restaurant(s) to a designated manager.
The franchisee must offer for sale and sell only those services that have been approved. The franchisee may not offer for sale any products or perform any services that have not been authorized. The franchisee may not install any vending machines, jukeboxes, or video games on the franchised restaurant premises without the franchisor's prior written consent.
Total Number of Units: 42 units
Investment Tables:
Initial Investment:
Single franchise
| Expenditures | Low | High |
|---|---|---|
| Franchise fee | $30,000 | $30,000 |
| Real estate | $2,000 | $10,000 |
| Equipment list | $55,000 | $75,000 |
| 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 | $11,000 |
| Grand opening advertising | $10,000 | $10,000 |
| Construction | $25,000 | $160,000 |
| Additional funds (3 months) | $25,000 | $50,000 |
| Total | $169,000 | $376,000 |
Area development
| Expenditures | Low | High |
|---|---|---|
| Area development fee | $30,000 + $15,000 for each additional restaurant | $30,000 + $15,000 for each additional restaurant |
| Real estate | $2,000 | $10,000 |
| Equipment list | $55,000 | $75,000 |
| 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 | $11,000 |
| Grand opening advertising | $10,000 | $10,000 |
| Construction | $25,000 | $160,000 |
| Additional funds (3 months) | $25,000 | $50,000 |
| Total (first restaurant under agreement for 3 franchise restaurants) | $186,500 | $393,500 |
Area representative
| Expenditures | Low | High |
|---|---|---|
| Area representative fee | $100,000 | $1,000,000 |
| Insurance | $2,000 | $3,000 |
| Travel and living expenses while training | $7,000 | $10,000 |
| Additional computer hardware and software investments | $500 | $2,500 |
| Registrations and professional fees | $650 | $15,000 |
| Advertising cost | $4,000 | $40,000 |
| Additional funds (3 months) | $5,000 | $15,000 |
| Total | $119,500 | $1,085,500 |
Ongoing fees:
| Name of fee | Amount |
|---|---|
| Continuing services & royalty fee | The greater of 4% of gross sales and minimum of $250 per week |
| Advertising and development fund contribution | 1% of gross sales |
| Local advertising | The greater of $24,000 a year or 3.5% of gross sales |
| Financial records and reporting | Cost of preparing audited financial statements |
| Renewal fee | $5,000 per franchised restaurant |
| Additional/ongoing training | $500 per day, plus expenses |
Date of FDD: 2008
The above information has been taken from the UFOC/FDD of Extreme Pizza
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