Sbarro Franchise Costs, Fees & FDD

Year Business Began: 1959

Franchising Since: 1977

Headquarters: Columbus, Ohio

Estimated Number of Units: 750

Franchise Description: Sbarro Franchise Co., LLC is the franchisor. The franchise offered is for the operation of a franchised Sbarro business to operate an Italian style restaurant, featuring Italian foods and related items. The menu offering includes pizza, pasta and other hot and cold Italian entrees, salads, sandwiches, desserts and beverages. The Sbarro restaurant will be located in a shopping mall (either as an “in-line” or “food court” restaurant), airport, casino, strip shopping center, downtown location, free-standing building, or other high pedestrian-traffic location.
Training Overview: The training program is mandatory for all new franchisees and must be completed to the franchisor's satisfaction. Depending on the size and location of the restaurant, the franchisor will, at its discretion, require franchisees to send up to four trainees to the training program. One of the trainees must be the full-time manager of the restaurant. Training is conducted on a regular basis at an approved Sbarro restaurant. Initial training lasts for approximately four weeks. Currently, there is no additional training required. The franchisor reserves the right to require ongoing training as needed.

Territory Granted: The franchise will be for a location that the franchisor will need to approve, or in the case of a conversion restaurant, for an existing location that the franchisor and the franchisee will mutually designate. Franchisees will not receive an exclusive territory. The franchisor may establish other franchised, licensed, joint-ventured or company-owned units that may compete with the restaurant in any degree of proximity to the location.

Obligations and Restrictions: The restaurant must at all times be under direct supervision by an “on-premises” manager (the operating principal) who has satisfactorily completed Sbarro’s training program, devotes his or her full time during business hours to the management of the restaurant, and owns and controls not less than 20% of the equity and voting control of the franchisee. Franchisees must sell all foods, beverages, menu items and other products designated and authorized by the franchisor in the manuals, and by the lease for the restaurant. Franchisees are precluded from offering any goods not specifically approved in writing by the franchisor.

Term of Agreement and Renewal: The length of the initial franchise term is generally 10 years for new restaurants. For conversion restaurants, the term will be for the remainder of the term of the existing lease for the location or 10 years, whichever is less. Franchisees have the option to renew the agreement for two additional five-year terms, if requirements are met.

Financial Assistance: Except for conversion restaurants, the franchisor does not offer direct or indirect financing, or guarantee a franchisee’s note, lease or obligation. For conversion restaurants, Sbarro LLC or an affiliate will sublease the premises to franchisees under the terms of a Sublease Agreement.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$30,000	$30,000
Lease	$10,000	$50,000
Leasehold Improvements	$50,000	$450,000
Purchase of Initial Equipment Package	$50,000	$225,000
POS/Computer System	$3,000	$20,000
Permits & Licenses	$2,000	$5,000
Outside Signs or Menuboards	$10,000	$25,000
Insurance Package	$1,200	$2,500
Opening Inventory & Supplies	$16,000	$16,000
Training Expenses	$7,000	$15,000
Utility Installations & Deposits	$200	$2,000
Architectural Fees	$20,000	$35,000
Project Design and Vendor Coordination	$0	$10,500
Legal & Accounting	$2,500	$5,000
Additional Funds (1 to 3 months)	$10,000	$15,000
ESTIMATED TOTAL (for new, traditional location)	$211,900	$931,000

 
Other Fees

Type of Fee	Amount
Royalty Fee	5% to 7% of total gross revenues (determined on case-by-case basis).
Local Advertising	1% of total gross revenues.
Marketing Fund Fee	Up to 2% of total gross revenues.
Additional Assistance	Actual cost.
Additional Rent	Varies. Generally, an amount equal to the rent payable under the primary lease, plus at the franchisor’s election, an additional rent charge of up to 1% of annual sales in consideration for the franchisor’s serving as the sublandlord under the sublease.
POS System Maintenance Fees	Provider's then-current fees.
Online Ordering Program	Provider's then-current fees.
Web Site Hosting Fee	The then-current fee, as will be described in the manuals (currently $0).
Transfer Fee	The greater of $3,500 or 10% of the then-current initial franchise fee.
Audit Costs	Understated royalty fee, interest, and costs of audit.
Inspection and Testing Costs	Costs of inspection and testing.
Interest Payments	Maximum rate permitted by law; if no maximum rate, 18% per year.
Sbarro's Lost Profits Following Termination	The mathematical product of (a) the average monthly royalty fees, and marketing fund fees, payable under the Franchise Agreement over the 12-month period preceding the date of termination (or a shorter time period if the Sbarro restaurant has been open less than 12 months); (b) multiplied by the lesser of 36 or the number of months remaining in the term of the Franchise Agreement.
Renewal Fee	$7,500
Relocation Fee	$1,000
Insurance	Varies.
Forms, Materials and Special Operating Assistance	Varies.
Enforcement Costs	All costs including reasonable accounting and attorney's fees.

The above information has been compiled from the FDD of Sbarro. Year of FDD: 2025.
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