Pita Pit Franchise Costs, Fees & FDD

Year Business Began: 1995

Franchising Since: 1997

U.S. Headquarters: Coeur d'Alene, Idaho

Country of Origin: Canada

Estimated Number of Units: 70 (US only)

Franchise Description: Pita Pit Franchising, LLC is the franchisor. The franchisor offers qualified purchasers the right to establish and operate, from a single location, a retail outlet specializing in the sale of pita sandwiches, smoothies, and other ancillary menu items.
Training Overview: Franchisees must attend training. For each restaurant that the franchisee owns, there must be at least one designated individual exclusive to that restaurant, that has successfully completed the training program. Individuals attending training will be required to complete pre-work assignments prior to attending the training program. The required hours of training will vary depending on group size, needs, and dynamics. Typically, the total classroom training will be 33-36 hours, and the total in-store training will be 45-50 hours. The franchisor may consider conducting additional seminars or other training programs for franchisees’ benefit and they and/or their managers may be required to attend.

Territory Granted: Franchisees will be granted a territory delineated by a specific geographic boundary. The territory is a 1/2 mile radius around the restaurant as provided in the Franchise Agreement. The franchisor will refrain from operating or granting franchises to operate a restaurant utilizing the system at a location within the territory, provided that the franchisee is in full compliance with the Franchise Agreement, except that the franchisor may establish a corporate owned or franchised restaurant at any “institution.” Institution means any facility such as universities, colleges, hospitals and other health care facilities, airports, military installations, sports complexes, etc.

Obligations and Restrictions: The Franchise Agreement provides that franchisees will devote their full time, attention, energy and best efforts to the management and operation of the restaurant, subject to the employment of competent professional management in the franchisor’s opinion. The franchisor highly recommends that franchisees participate in the day to day management and operation of the restaurant. For each restaurant the franchisee owns, there must be at least one designated individual exclusive to the restaurant that has successfully completed training. All managers must sign a confidentiality agreement. Franchisees may only sell products and services that the franchisor has approved. Subject to local laws, franchisees must keep the restaurant open on the days and during the hours specified in the system manual.

Term of Agreement and Renewal: The length of the initial franchise term is equal to the earlier of 10 years or the expiration of the franchisee’s lease or sublease. Franchisees can renew for one term equal to the earlier of 10 years or the expiration or termination of the franchisee’s lease or sublease, if requirements are met.

Financial Assistance: The franchisor does not offer direct or indirect financing. If franchisees are successful in obtaining SBA funding, the franchisor may be required to enter into a Franchise Agreement Amendment with them. Third party financing may be available to franchisees for the renovation of existing restaurants and the repair and replacement of worn equipment and fixtures.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$20,000	$20,000
Initial Rent & Security Deposit	$2,400	$10,000
Opening Cash	$800	$1,500
Leasehold Improvements	$190,011	$400,000
Business License	$200	$1,000
Insurance	$275	$750
Store Launch and Daily Discipline Marketing Program Package	$3,300	$4,830
Legal & Accounting Fees	$500	$3,000
Initial Furniture, Fixture, Equipment Package	$97,795	$185,475
Staff and Management Training Expense	$1,000	$7,000
Uniforms and New Store Kit	$1,243	$1,800
Initial Inventory Package	$5,300	$10,200
Additional Funds (for 3 months)	$25,650	$37,800
Local Advertising	1% of net sales of the restaurant.
Laptop Computer	$500	$1,000
Laptop Computer Monthly Software Fees	$5	$70
Online Ordering & Loyalty Program	$495	$650
ESTIMATED TOTAL	$353,154	$685,075

 
Other Fees

Name of Fee	Amount
Continuing Fee	6% of net sales.
General Advertising Fund	Currently 2% of total net sales but up to 3%.
Transfer Fee	$7,000 plus the franchisor’s costs, subject to state law.
Additional Operating Assistance	If the franchisor determines that the franchisee requires additional assistance in the form of corporate training, the franchisee will have to pay the employees' training expenses and may have to pay the franchisor a fee of up to $5,000.  In the event additional assistance is required to ensure that the franchised system is being properly implemented the franchisee may have to pay the cost of that additional assistance, including but not limited to travel, food, lodging, and time of the franchisor’s employees.
Audit	Cost of audit including all costs of auditor and of the franchisor’s employees.
Indemnification	All liability, damages and costs, including lawyers’ fees, incurred by reason of third party claims or a breach of the Franchise Agreement. All lawyer’s fees if the franchisee breaches the Franchise Agreement.
Renewal Fee	$20,000
Taxes on Fees	Varies by state.
Late Payments	Interest will be charged at 5% above highest domestic prime rate, which amounts shall not exceed the maximum allowed under state law.
Initial Gift Card Fee	$68
NSF Fee	$100
Liquidated Damages	An amount equal to the projected continuing fee for the lesser of the remaining term or two years, subject to state law.

The above information has been compiled from the FDD of Pita Pit. Year of FDD: 2024.

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