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Pizza Hut Franchise Cost & Fees

Date of Incorporation: 1958

Franchising Since: 1959

Headquarters: Plano, Texas

 

Business Description: The franchisor, Pizza Hut, Inc. (PHI or Pizza Hut), operates and franchises pizza restaurants. PHI's primary activity is the operation, development, franchising, and servicing of single-purpose Pizza Hut restaurants, which offer various combinations of family dine-in, carryout, and delivery services, primarily serving pizza, pasta, and other Italian-style food items. PHI's corporate parent is YUM! Brands, Inc.

 

Franchise Offer: PHI is currently offering a number of different types of non-traditional concepts (Licensed Concepts) depending upon (among other factors) the nature of the proposed location, the identity of the proposed licensee, and the nature and quantity of other existing or proposed foodservice operations at the proposed location. The Licensed Concepts that PHI is either offering or contemplating offering in the foreseeable future are: "Pizza Hut Retail Snack Bars", "Pizza Hut Stadium and Arena Concession Stands", "Pizza Hut Hotel/Resort Pizza Kitchens", "Pizza Hut Recreation Centers", "Pizza Hut Institutional Kiosks", "Pizza Hut Airports/Tollways Concept" and "Pizza Hut School Commissary Concept". Each Licensed Concept involves the preparation and self-service or counter-service sales of a limited menu of Items, typically including pizza, breadsticks and beverages. The Licensed Concept typically is part of a larger foodservice facility.

 

Financial Assistance: The franchisor does not offer, directly or indirectly, any arrangements for financing the initial investment or the continuing operation of the franchise. The franchisor does not guarantee the franchisee’s note, lease or obligation.

 

Training and Assistance: The franchisor will provide Basic Operational Training to the franchisee (if the licensee is an individual) and your managers as needed at the Pizza Hut Express Training Center in Piano, Texas. In addition PHI will provide training for two "Pizza Hut Champions" from each Licensed Location before opening. A Pizza Hut Champion is a member of management who will be working at the Licensed Location on its work schedule. The franchisor also will provide periodic assistance and consultation in the proper operation of the concept, as reasonably requested.

 

Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees or licensees, from restaurants that PHI owns, or from other channels of distribution or competitive brands that the franchisor or affiliates control.

 

Term of Agreement and Renewal: The term of the franchise is five years for each Licensed Location. PHI may agree to a longer term, but in no event will the Term end more than 10 years from the Starting Date. There is currently no option to renew.

 

Obligations and Restrictions: PHI recommends, but does not require, that the franchisee, or principal shareholders or partners, if the franchisee is a corporation or partnership, personally supervise the Licensed Concept. In addition, the franchisee must designate two individuals as “Pizza Hut Champions” for each Licensed Location. A Pizza Hut Champion can be designated to cover more than one Licensed Location. The Pizza Hut Champion will be responsible for ongoing training of unit level employees, ensuring the quality of operations at the Licensed Location, and visiting the Licensed Location at least biweekly. The Pizza Hut Champion most successfully complete PHI's training and must be certified by PHI as capable of functioning as a Pizza Hut Champion. All employees exposed to the Pizza Hut Information must sign a written agreement to maintain the confidentiality of PHI's trade secrets and proprietary information. The franchisee must sell only those products that PHI has approved for the Licensed Location in the area of the Licensed Location associated with the Licensed Concept and PHI's Marks.

 

Estimated Number of Units: 14,360

 

Investment Tables:

Initial Investment:

Hotel/Resort Pizza Kitchen

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $10,000  $10,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $20,000  $49,000
 Signage  Varies  Varies
 Remodelling and Construction  $2,000  $20,000
 Inventory  $225  $2,100
 Additional Funds (3 months)  $1,500  $11,500
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $34,025  $95,200

 

Retail Snack Bars

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $5,000  $15,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $16,000  $75,000
 Signage/Menu Boards
 Varies  Varies
 Remodelling and Construction  $15,000

 $66,000

 Inventory  $980  $2,620
 Additional Funds (3 months)  $3,450  $9,230
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $41,730  $170,450

 

Recreation Center

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $5,000  $10,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $16,000  $66,000
 Signage/Menu Boards
 Varies  Varies
 Remodelling and Construction  $5,000  $16,000
 Inventory  $735  $1,960
 Additional Funds (3 months)  $3,450  $9,230
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $41,485  $164,790

 

Institutional Kiosk

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $5,000  $10,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $16,000  $75,000
 Signage  Varies  Varies
 Remodelling and Construction  $5,000  $16,000
 Inventory  $385  $2,755
 Additional Funds (3 months)  $1,600  $11,500
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $29,285  $117,855

 

Stadium and Concession Stand (Per Unit)

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $5,000  $10,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $38,500  $103,000
 Signage/Menu Boards
 Varies  Varies
 Remodelling and Construction  $15,000  $70,000
 Inventory  $600  $4,000
 Additional Funds (3 months)  $2,538  $17,300
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $62,938  $206,900

 

Airports/Tollways

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $5,000  $10,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $28,500  $77,000
 Signage/Menu Boards
 Varies  Varies
 Remodelling and Construction  $10,000  $66,000
 Inventory  $400  $2,750
 Additional Funds (3 months)  $1,600  $11,500
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $46,800  $169,850

 

School Commissary

Name of Fee  Low  High 
 Application and Background Check Fee (for each of the franchisee's principals - or higher for non-US citizens
 $300  $600
 Initial License Fee  $5,000  $10,000
 Real Estate  Varies  Varies
 Equipment and Smallwares  $65,000  $195,000
 Signage  Varies  Varies
 Remodelling and Construction  $5,000  $30,000
 Inventory  $2,500  $14,800
 Additional Funds (3 months)  Varies  Varies
 Marketing Fee  $1,000  $2,000
 Estimated Total (excluding real estate)  $78,800  $252,400

 

Other Fees:

Type of Fee Amount
Monthly Service Fee 10% except in the following circumstances:
(a) Franchisee operates a Pizza Hut Stadium/Arena Concession
Stand that is not located in a PHI Franchise Territory, in
which case the fee is 7%.
(b) Franchisee operates a Pizza Hut Airports/Tollways unit, in which case the fee is 9%.
(c) Franchisee operates a Pizza Hut Hotel/Resort Pizza Kitchen with sales of less than $80,000 per year, in which case the
minimum annual royalty is $8,000.
(d) Franchisee operates a Pizza Hut School Commissary In which
case you pay a fee based on products produced.
Additional Materials/PHI Manual
Reasonable publication, preparation and administrative fees (set by PHI)
Marketing Fee
$1,000- $2,000 (set by PHI each year for each concept)
Design Service Fee
Up to $2,000 with one concept, $3,000 for two or more concepts. For the Licensed Location, PHI will provide one set of customized electronic drawings, including an equipment plan, equipment schedule and interior elevation. Additional fee of up to $1,000 if dining area is included. If the franchisee elects to purchase a sample board, equipment cut sheet booklet or 11 x17 printed drawings, they are available at an approximate cost of $100 each. Additional renderings, exterior elevations, if needed, are also available for purchase.
Taxes As levied by tax authorities.
Audit Costs of audit plus 1.5% per month interest on underpayment, but not greater than maximum legal rate, beginning on date due.
Administrative $500 fee for PHI's administrative service in processing changes in the franchisee’s corporate structure and other approved modifications.
Inspection and Testing Costs (if paid by franchisee) $0 to $50,000
Additional Training
Costs of travel, meals, and accommodations of PHI's employees for any training or on-site retraining.
Late Charges As set by PHI (currently 1.5% per month), but not greater than maximum legal rate.
De-identification Costs
Actual cost of de-identifying unit.
Voluntary Termination Fee
If voluntary termination occurs within 24 months after the "Starting Date" (as defined In the Master License Agreement) of the current term, the termination fee will be $15,000. If voluntary termination occurs more than 24 months after the "Starting Date" of the current term, the termination fee will be $10,000.
Cure Fee $1,000

Date of FDD: 2013

The above information has been compiled from the FDD of Pizza Hut.
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