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Marco’s Pizza Franchise Cost & Fees

Date of Incorporation: 1978

Franchising Since: 1979

Headquarters: Toledo, Ohio

 

Business Description: A Marco’s Pizza Store makes and sells various sizes and recipes of pizza for carryout and delivery and soft drinks. Stores also sell, to a much lesser extent, secondary products such as chicken wings, salad, cheezybread, and sandwiches. Depending on the franchisee’s situation, he or she may not be required to sell these secondary products.

 

Franchise Offer: Under a Franchise Agreement, the franchisor will grant the franchisee the right (and the franchisee will accept the obligation) to operate a Store at an agreed-upon location. There are three types of Stores offered: those with limited or no seating for consumption of products on the premises (Limited Seating), those with a certain amount of designated area(s) for seating and consumption of products on the premises (Expanded Seating), and those located in “captive markets,” which include non-foodservice businesses of any sort within which a Marco’s Pizza Store or branded facility is established and operated, including, for example, hotels and resorts; airports and other travel facilities; other academic facilities; shopping malls; gasoline convenience stores; and sporting event arenas and other such centers (Special Venue).

 

Financial Assistance: The franchisor offers limited assistance in obtaining financing for the Store. Franchisees are not required to accept any loans, leases or other financing that is offered to them through this program and they may obtain financing on their own or fund the cost of the Store from internally generated funds. Certain programs which the franchisor offers through affiliates or recommended vendors may require the franchisee to pay a fee for their services, but the franchisor does not receive any portion of such fees. The franchisee must obtain the franchisor’s approval of the terms of any financing he or she enters into for his or her Marco's Pizza Store.

 

Training and Assistance: The franchisor will provide training to the natural person(s) designated by the franchisee, subject to the franchisor’s approval, to manage and assume responsibility for the operation of the Store (Franchisee Operations Manager). The initial training program will consist of six to eight weeks at the franchisor’s training center in Toledo, Ohio, or, at other locations deemed appropriate. The franchisee must, upon opening the Store for business, implement and maintain a continuous training program for employees in accordance with applicable training standards and procedures the franchisor prescribes in the Manuals or any subsequently published notices or memorandum.

 

Territory: The franchisee will receive a protected territory (Area of Responsibility). If no other metes and bounds description has been defined in the Franchise Agreement, the Area of Responsibility will be an area of a 1 ½ mile radius from the Store's location. The franchisor does not guarantee that the Area of Responsibility will contain any given level of population or households. There is no minimum territory granted under the Franchise Agreement, and in some cases, the Area of Responsibility may consist of only the building in which the Store operates. The franchisor agrees not to establish, and not to license to any other person to establish another Store at any location within the Area of Responsibility, however it does not include Captive Market Locations or Institutional Facilities.

 

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If the franchisee is in good standing, he or she may renew for up to two renewal terms of 10 years each.

 

Obligations and Restrictions: The franchisee must devote his or her best efforts to operate the Store at maximum capacity and efficiency. The franchisee must also maintain a high quality of work and services, provide suitable staffing and delivery vehicles, employ sufficient help to do same, and continuously remain open for business seven days per week throughout the year, with the exception of certain holidays and during business hours as specified in the Manuals. The franchisee must perform the tasks as deemed reasonably necessary to adhere to the minimum performance standards established for the operation of the Store. The franchisee must offer all the goods and services designated as required for all franchisees.

 

Estimated Number of Units: 600

 

Investment Tables:

Initial Investment

Limited Seating

Name of Fee Low High
Initial Franchise Fee $25,000 $25,000
Real Property $5,000 $12,000
Equipment, Fixtures $60,000 $94,000
Point of Sale Computers $26,000 $38,000
Leasehold Improvements $20,500 $130,000
Signage $3,000 $9,000
Opening Inventory $6,000 $15,000
Small Supplies $6,000 $7,500
Delivery Vehicles Varies
Deposits, Pre-Paid Expenses $1,400 $7,000
Business Licenses $100 $500
Insurance $1,500 $4,000
Training Expenses $500 $5,000
Annual Conference Expenses $1,000 $1,500
Miscellaneous Expenses $500 $5,000
Additional Funds (3 months) $32,500 $32,500
Architectural and Engineering $4,000 $6,500
Web-Based Training $92 $92
Brand Launch Program $33,500 $38,000
Estimated Total $221,592 $431,592

 

Expanded Seating

Name of Fee Low High
Initial Franchise Fee $25,000 $25,000
Real Property $5,000 $16,000
Equipment, Fixtures $60,000 $103,000
Point of Sale Computers $26,000 $38,000
Leasehold Improvements $60,500 $237,000
Signage $3,000 $9,000
Opening Inventory $6,000 $15,000
Small Supplies $6,000 $8,500
Delivery Vehicles Varies
Deposits, Pre-Paid Expenses $2,400 $7,000
Business Licenses $100 $500
Insurance $1,500 $5,000
Training Expenses $500 $5,000
Annual Conference Expenses $1,000 $1,500
Miscellaneous Expenses $500 $5,000
Additional Funds (3 months) $32,500 $32,500
Architectural and Engineering $4,000 $9,000
Web-Based Training $92 $92
Brand Launch Program $33,500 $38,000
Delivery Area, streets database for POS, and shape files for POS and OLO platform Maps $1,000 $1,500
Estimated Total $262,092 $546,592

 

Special Venue Store

Name of Fee Low High
Initial Franchise Fee $10,000 $25,000
Real Property $5,000 $12,000
Equipment, Fixtures $60,000 $94,000
Point of Sale Computers $0 $38,000
Leasehold Improvements $20,500 $130,000
Signage $3,000 $9,000
Opening Inventory $6,000 $15,000
Small Supplies $6,000 $8,500
Delivery Vehicles $0 $0
Deposits, Pre-Paid Expenses $2,400 $7,000
Business Licenses $100 $500
Insurance $1,500 $5,000
Training Expenses $500 $5,000
Annual Conference Expenses $1,000 $1,500
Miscellaneous Expenses $500 $5,000
Additional Funds (3 months) $30,000 $30,000
Architectural and Engineering $4,000 $9,000
Web-Based Training $92 $92
Special Grand Opening Marketing Program $0 $10,000
Delivery Area, streets database for POS, and shape files for POS and OLO platform Maps $0 $0
Estimated Total $150,592 $404,592

 

Other Fees

Type of Fee Amount
Royalty - Limited and Expanded Seating Stores 5.5% (subject to adjustment as described in up to a maximum of 6.0%) of Gross Royalty Sales.
Royalty - Special Venue Stores Standard is 5.5% of Net Royalty Sales but may be reduced by agreement based on the various Special Venue facilities characteristics and event criteria.
Royalty - Key Management Employee Program 2.5% of Net Royalty Sales after taking into consideration any commissions due to an Area Representative.
Brand Development Fund Currently, 1% of Net Royalty Sales; Depending on the venue, Special Venue Stores may not be required to participate in the Brand Development Fund.
Geography Based Advertising Funds Currently, the franchisor does not require contribution to a National Advertising Fund.
Market Advertising Cooperatives As set by co-op member votes.
Local Store Marketing Minimum of 0.5% of Net Royalty Sales, but not more than 7% minus the percentage contributed to the Brand Development Fund and Geography Based Advertising Funds.
Additional Training $1,000 per person.
Replacement Operations Manager Training $5,000 per person.
Additional Assistance $300 per day.
Performance Deficiencies Service Fee $500 per continued failure to comply with operational standards or policies.
Transfer $1,000-$8,250 or 1/3 of the then current initial franchise fee.
Audit Cost of audit, plus prime, plus 4% interest on underpayment.
Renewal Fee - Limited and Expanded seating Stores $6,250 or 25% of the then-current Initial Franchise Fee, whichever is greater.
Renewal Fee - Special Venue Store 25% of the then-current Initial Franchise Fee, but may be reduced by agreement based on the various Special Venue facilities, characteristics and event criteria.
Insurance Varies
Interest and Additional Expense Fees 1.5% per month interest on all late payments, plus a 5% Additional Expense Fee.
Termination Fee Average Royalty Fees due for the 24 full Accounting Periods immediately preceding the time the franchisee ceased operations times the lesser of:
(a) 36; and
(b) the number of Accounting Periods remaining in the Term of the Franchise Agreement.
On-line Order Entry System Pyrimont Currently, the maximum charged is $145 per month.
On-line Order Entry System FoodTec Solutions Currently $100 per month.
Web Based Training $1/day ($365 per year) in quarterly installments of $91.25
Una Fonte $50 per each Accounting Period.
Costs and Attorneys' Fees Will vary under circumstances.
Audit Costs All costs and expenses associated with the audit, reasonable accounting and legal costs; and interest on the underpayment.
Indemnification Will vary under circumstances.
Securities Offering Fee $2,500 or the franchisor’s actual expenses, whichever is greater.
Development Agreement Continuation Fee 75% of the weekly average systemwide sales, multiplied by 5.5%

The above information has been taken from the FDD of Marco's Pizza. Year of FDD: 2015

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