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Kono Pizza Franchise Costs & Fees

Date of Incorporation: 2013
Franchising Since: 2013
Headquarters: Manalapan, New Jersey

Business Description: Kono USA LLC is the franchisor. Kono Pizza franchisees own and operate a casual dining restaurant emphasizing pizza cones with a variety of specialty fillings, including classic pizza ingredients, salads and drinks.

Franchise Offer: The franchisor has three different prototype restaurants:

  • QSR: The QSR is an express type restaurant with no wait staff.
  • KIOSK: The Kiosk model is a QSR restaurant, with a full or limited menu, located in non-traditional locations such as enclosed malls, sports venues and airports.
  • CART: A Cart restaurant is a fully mobile, self-contained unit with its own portable water system, pizza oven, and storage drawers. Cart restaurants are usually operated at activities including fairs, sporting events, conventions, rodeos, festivals, trade shows, grand openings, and seminars, but may also be operated from permanent, fixed sites located in strip centers, schools, office buildings, hospitals, airports, colleges, health clubs, auditoriums, arenas, and concert and sports arenas.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee any note, lease or obligation. The franchisor does not receive any compensation or other payments from any person for the placement of financing with any lender. The franchisor and its affiliates do not have any present practice or intent to transfer, assign, discount or sell to a third party, in whole or in part, any note, contract or other instrument signed by franchisees, but the franchisor and its affiliates reserve the right to do so in the future.

Training and Assistance: Training is conducted at the franchisor’s corporate training facility in Newport, New Jersey or at an alternative location it designates, and it is generally 5 days in duration. Franchisees and their designated manager or Operations Manager must complete the training program to the franchisor’s satisfaction at least one week prior to opening before the franchisor will authorize franchisees to open their Franchised Business. If the franchisor approves the franchise operating with an Operations Manager, at least the Operations Manager plus another manager must successfully complete the training program, unless the franchisor waives this requirement with respect to him or her. For each new location under the Franchise Agreement, the Operations Manager for such location must successfully complete the training program. Other managers may attend. While most additional training is optional, franchisees may be required to attend the additional training. If franchisees are required to attend the additional training, no tuition fee will be charged to them, although they will be responsible for all transportation, lodging, food, and other costs incurred in attending the training. From time to time the franchisor may offer conferences and other training courses relating to its industry and to the conduct of the Franchised Business.

Territory: The territorial protections for the franchise will not depend on the type of franchised business the franchisee licenses. Franchisees will not receive an exclusive territory based on distance, geography, or population. Franchisees may face competition from other franchisees, from other outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. Franchisees do not have any exclusive right to any particular market or customers. However, the franchisor will consider a franchisee’s proximity when evaluating the site of another franchisee submitted for the franchisor’s approval.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. One 10-year renewal term is available provided franchisees remain a franchisee in good standing.

Obligations and Restrictions: The franchisor encourages but does not require franchisees to personally supervise the franchised business, and prefer to select franchisees who favor and appear committed to a “hands on” and well-informed approach to the business. The franchisor strongly recommends that franchisees devote a substantial amount of time to their Kono Pizza restaurant, whether or not they hire a manager. Franchisees are forbidden from hiring away another franchisee’s employees or otherwise employing them within 3 months after their departure from employment at another Kono Pizza restaurant without the written consent of the previous employer. Franchisees must sell all food and beverage items included on the franchisor’s standard menu, as periodically revised. Franchisees may sell beer and wine at their option, provided they comply with all applicable alcohol licensing requirements. Franchisees must also sell any retail items the franchisor offers to the public as it directs.

Estimated Number of Units: N/A

Investment Tables:
Initial Investment for QSR Restaurants
Name of Fee Low High
Initial Franchise Fee $14,900 $39,000
Store Creation Fee $2,500 $10,000
Opening Inventory and Packaging $3,600 $4,800
Ovens $19,000 $19,000
Leasehold Improvements $10,000 $75,000
Furniture, Fixtures and Equipment $76,950 $90,200
Architect Fee $1,500 $5,000
Signage/Graphics $10,000 $15,000
Revel POS System and Telephone $526 $4,436
Video Surveillance Camera System, Music and Entertainment System $550 $1,300
Deposits $3,000 $7,000
Training Living Expenses $1,000 $3,500
Grand Opening Marketing Expense $5,000 $10,000
Uniforms $500 $500
Permits $1,750 $1,750
Insurance $1,500 $1,500
Professional Fees $2,700 $4,000
Additional Funds (3 months) $10,000 $40,000
ESTIMATED TOTAL $164,976 $331,986
Initial Investment for Kiosk Restaurants
Name of Fee Low High
Initial Franchise Fee $14,900 $39,000
Store Creation Fee $2,500 $10,000
Opening Inventory and Packaging $3,600 $4,800
Ovens $19,000 $19,000
Kiosk Design/Build/Shipping $58,700 $68,700
Smallwares/Additional Equipment $3,100 $10,550
Architect Fee $1,500 $5,000
Signage/Graphics $0 $0
Revel POS System and Telephone $526 $4,436
Deposits $2,500 $6,000
Training Living Expenses $1,000 $3,500
Grand Opening Marketing Expense $5,000 $5,000
Uniforms $500 $500
Permits $1,750 $3,500
Insurance $1,500 $2,500
Professional Fees $2,700 $4,000
Site Construction Expense $3,000 $35,000
Additional Funds (3 months) $10,000 $40,000
ESTIMATED TOTAL $131,776 $256,486
Initial Investment for Cart Restaurants
Name of Fee Low High
Initial Franchise Fee $14,900 $39,000
Store Creation Fee $2,500 $10,000
Opening Inventory and Packaging $3,600 $4,800
Ovens $9,500 $9,500
Cart $25,000 $32,100
Smallwares/Additional Equipment $3,100 $8,600
Cart Transportation Trailer $500 $10,000
Revel POS System and Telephone $526 $4,436
Deposits $0 $2,000
Training Living Expenses $1,000 $3,500
Grand Opening Marketing Expense $5,000 $10,000
Uniforms $500 $500
Permits $500 $3,500
Insurance $1,500 $2,500
Professional Fees $2,700 $3,000
Additional Funds (3 months) $5,000 $15,000
ESTIMATED TOTAL $75,826 $153,436
Other Fees
Type of Fee Amount
Royalty 6% of weekly Gross Sales; Minimum monthly royalty of $450/month per location for all prototypes.
Store Creation Fee $10,000 for 1st location, $5,000 for 2nd location, and $2,500 for 3rd or additional locations.
Software Support Package $74.95 per month per location.
Remodeling Fee No more than $5,000
Décor Update Package No more than $15,000
Local Cooperative Fees No additional fee.
National Advertising Fees 2% of Weekly Gross Sales.
Local Advertising Fees Greater of $750/month per location or 1% of Monthly Gross Sales.
Renewal Fee Greater of (i) $10,000 or (ii) 50% of the then-current initial franchise fee.
Transfer Fee $5,000
Audit Fee The cost of audit.
Collection and Interest Charges 18% or highest lawful rate if lower.
Initial Training Expenses Initial franchise fee and store creation fees include pre-opening training for three people prior to opening of the first location and for the Operations Manager of each new location prior to opening of such location.
Additional Training Expense Standard rate of $450 per day plus expenses and travel. Travel costs will include reimbursement for mileage at the then-current IRS published rate.
Unapproved Advertising Fines 1st infraction: $250
2nd infraction: $500
3rd infraction: $1,000
New Supplier/Product Evaluation Fee Actual out-of-pocket costs.
Hold Harmless If any, will depend on unknown factors.
Attorney’s Fees and Costs, and Arbitration Will vary.
Insurance Premium Reimbursement Varies according to plan and provider.
Enforcement Costs Will vary.
Fines Up to $1,000 per infraction.
Insufficient Funds $50 plus any fee charged us for uncollected funds.
Failure to Attend Required Training/Convention Increase royalty up to 1% for balance of calendar year.

The above information has been taken from the FDD of Kono Pizza. Year of FDD: 2016

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