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Little Caesar's Franchise Cost & Fees

Date of Incorporation: 1959

Franchising Since: 1962

Headquarters: Detroit, Michigan

 

Business Description: Little Caesars restaurants feature pizza, chicken wings, Crazy Bread® products and other related products.

 

Franchise Offer: Under the Franchise Agreement, the franchisor grants the franchisee the right to operate a single Little Caesars restaurant at a location that it approves, in most cases within a certain protected territory. The primary menu items of Little Caesars restaurants are pizza, chicken wings, Crazy Bread® products and other related products.

 

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee the franchisee’s note, lease or obligation.

 

Training and Assistance: The franchisor conducts initial training primarily at its headquarters and at company-owned Restaurants in Detroit, Michigan. Training will include classroom instruction and formal on-the-job training in certified training Restaurants. The franchisee and other employees the franchisor designates must attend such additional training programs as the franchisor may reasonably require periodically and at any time. The franchisee or a principal or an individual the franchisee designates and the franchisor approves must attend all meetings, seminars and conferences specified as mandatory.

 

Territory: The Franchise Agreement grants the franchisee the right to operate the Restaurant only at the Approved Location. The Franchise Agreement typically defines an exclusive territory within which the franchisor will not establish or operate, or franchise any entity to establish or operate, a business using the Proprietary Marks and System. The Protected Territory is usually defined the as the territory within a one mile radius of the Approved Location. Under certain circumstances, however (e.g. the Restaurant will be located in a highly populated urban area), the Protected Territory may be reduced to a distance of ½ mile or less, or a Protected Territory won’t be granted.

 

Term of Agreement and Renewal: The length of the initial franchise term is generally 10 years. There is generally one renewal term of 10 years from the initial term. All renewals are subject to contractual requirements.

 

Obligations and Restrictions: The franchisor requires that the franchisee personally supervise the operation of the Restaurant. If the franchisee is granted franchises for more than one Restaurant, the franchisee must continue to personally supervise the operation of all the Restaurants. To ensure that the highest degree of quality and service is maintained, the franchisee must operate the Restaurant in strict conformity with the methods, standards and specifications that the franchisor prescribes in the Operational Resource Guide or otherwise in writing.

 

Estimated Number of Units: 3,840

 

Investment Tables:

Initial Investment

Name of Fee Low High
Initial Franchise Fee $0 $20,000
Rent $1,500 $7,000
Leasehold Improvements $50,000 $300,000
Fixtures, Equipment and Signage $150,000 $225,000
Grand Opening Advertising $11,000 $20,000
Training Expenses $8,000 $11,000
Start-up Inventory and Supplies $25,000 $35,000
Insurance $500 $1,500
Utility Expenses $1,000 $5,000
Licenses and Permits $1,000 $10,000
Additional Funds - 3 months $17,000 $47,000
Estimated Total $265,000 $681,500

 

Other Fees

Type of Fee Amount
Royalty The greater of 6% of Gross Sales for each one-week period or $100 for each one-week period.
Advertising Contributions Up to 7% of Gross Sales, as determined by the franchisor.
Blue Line Purchases Varies.
Caesar Vision System Annual Support Fee $1,500 per year if the Restaurant had a manager with Caesar Vision Certification (CVC) on staff for 80% or more of the previous year.
$1,875 per year if the Restaurant did not have a manager with CVC on staff for at least 80% of the previous year.
Audit by Franchisor Costs of audit plus interest.
Additional Training Not more than $250 per attendee for initial training of additional employees.
Transfer Fee Varies from $0 to $5,000 per unit.
Renewal Fee $5,000
Indemnification Will vary with circumstances.
Special Marketing, Management, and Operational Assistance Performed at Franchisee's Request. Reasonable fee plus expenses.
Private Securities Offering $25,000 plus additional sums to cover the franchisor's out-of-pocket costs to review the materials if greater than $25,000
Relocation Fee $2,500
Interest 18% per year or the maximum rate permitted by law, whichever is less.
Late Fee Franchisor's then-current late fee.
Reimbursements for Testing Products Varies.
Missed Meeting Fee Varies.
Manual Replacement Fee Franchisor's then-current fee.
Liquidated Damages Upon Termination for Franchisee's Default Calculated according to formula in FDD.
Liquidated Damages - Failure to Comply with Post-Termination Obligations $250 per day.
Costs and Legal Fees Franchisor's actual costs.

The above information has been taken from the FDD of Little Caesars. Year of FDD: 2014

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