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The Pita Pit Franchise Cost & Fees

Date of Incorporation: 1995

Franchising Since:  1997

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

Country of Origin: Canada

 

Business Description: Pita Pit Inc. (PPI) is the franchisor. The franchisor offers and sells franchises for the Pita Pit business concept which involves a marketing plan and system for the development, opening and operating of retail outlets specializing in the sale of pita sandwiches.

 

Franchise Offer: 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. The franchisee may also offer the Pita Pit’s line of smoothie products. The franchisor also offers qualified franchisees in certain areas the right to develop multiple restaurants within a designated geographic zone within a specified period of time.

 

Financial Assistance: PPI may refer the franchisee to unaffiliated financing companies. Pita Pit’s franchise system is eligible for expedited and streamlined SBA loan processing through the SBA’s Franchise Registry Program. PPI does not guaranty obligations to third parties. In addition, third party financing or leasing of POS Systems, fixtures, office equipment and other equipment may be available in the franchisee’s local market. PPI offers some indirect financing.

 

Training and Assistance: Unless PPI decides, in its sole discretion, that the franchisee does not require training, it will provide a training program concerning the operation of the Restaurant consisting of approximately 12 business days of training. Training will be provided either in Coeur d'Alene, Idaho or at another location which it may specify. Satisfactory completion of all mandatory training sessions is required. The required hours of training will vary depending on group size, needs, and dynamics. Typically, total training time will be approximately 115 hours. PPI may consider conducting additional seminars or other training programs for franchisees’ benefit and franchisees and/or their employees may be required to attend.

 

Territory: The franchisee will not receive an exclusive territory. The franchisee will be granted a territory delineated by a specific geographic boundary. The territory may be a ½ mile radius around the Restaurant but also may vary depending on population density or market considerations, as determined by the franchisor in its sole discretion before the franchisee enters the Franchise Agreement. PPI 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 Agreement, except that PPI may establish a corporate owned or franchised restaurant at any Institution. “Institution” means any facility where the owner or operator wants designated food services for those people who reside, work, attend and/or visit at the facility.

 

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

 

Obligations and Restrictions: The franchise agreement provides that the franchisee will devote his or her 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. It is highly recommended that the franchisee participate in the day to day management and operation of the Restaurant. Only in limited circumstances will The Pita Pit permit the franchisee to be an absentee owner. 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. The franchisee may only sell products and services that Pita Pit has approved.

 

Estimated Number of Units: 475

 

Investment Tables:

Initial Investment:

Name of Fee Low High
Initial Franchise Fee $25,000 $25,000
Initial Rent & Security Deposit $2,400 $10,000
Opening Cash $500 $1,000
Leasehold Improvements $58,860 $148,379
Business License $200 $2,500
Insurance $1,500 $4,500
Daily Discipline Marketing Program Package $3,000 $4,500
Legal & Accounting Fees $500 $2,500
Initial Furniture, Fixture and Equipment Package $67,530 $72,100
Staff and Management Training Expense $1,000 $3,200
Uniforms $1,000 $1,500
Initial Inventory Package $5,000 $8,000
Addtional Funds (for 3 months) $25,650 $31,500
Local Advertising 1% of Gross Sales of the Restaurant
Estimated Total $187,450 $314,979

 

Other Fees:

Name of Fee Amount
Continuing Fee Standard Continuing Fee is 6% of Gross Sales. Other Continuing Fee structures are currently available to executed franchise agreement holders for a limited time only.
General Advertising Fund Up to 2% of total Gross Sales as dictated by PPI.
Transfer Fee $7,000 plus PPI’s costs.
Additional Operating Assistance If PPI determines that the franchisee requires additional assistance, the franchisee will have to pay the employees' training expenses and may have to pay PPI a fee of up to $2,500. 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 people.
Audit Cost of Audit including all costs of auditor and of PPI’s employees.
Indemnification All liability, damages and costs, including lawyers’ fees, incurred.
Loyalty/Gift Card Fee Initial Fee: $185; Ongoing Fee: $95
Liquidated Damages An amount equal to the projected Continuing Fee for the lesser of the remaining term or 3 years.
Renewal Fee $25,000
Taxes on Fees Varies by State.
Late Payments Interest at 5% above highest domestic prime rate.
NSF Fee $100
Lost System Manual $1,000

The above information has been taken from the FDD of The Pita Pit. Year of FDD: 2014

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