Pizza Hut Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$367,000

-

$2,064,000

OPERATING PROFIT

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Emily

Updated

February 14, 2024

Is

Pizza Hut

a franchise?

Yes,
Pizza Hut
is a franchise and
currently
accepts
franchise
applications

Pizza Hut, a renowned American multinational restaurant chain, offers a versatile dining experience with its delivery, take-out, and dine-in options.

While the restaurant chain is renowned for its diverse pizza offerings, it also tantalizes taste buds with a delectable array of sides, including fries, Italian tacos, pasta, chicken wings, and breadsticks.

The legacy of Pizza Hut traces back to its inception in 1958, and in 1977, it became a proud member of the PepsiCo family.

Subsequently, Pizza Hut, along with Taco Bell and Kentucky Fried Chicken,became part of Tricon Global Restaurants, Inc., which was later rebranded as Yum! Brands.

As of 2022, the restaurant chain boasted an impressive global presence, with a total of 19,034 stores globally. Of these, 6,614 are franchised locatins in the US.

How many

Pizza Hut

franchises

are there?

In 2022, there were
5317
outlets in the United States, of which
5295
are franchises, and
22
are corporate-owned.

What are the

Pizza Hut

franchise

fees?

Initial franchise fee

$25,000

Royalty fee

6.0%

Advertising fee

4.75%

Initial Franchise Fee ($25,000)

The initial franchise fee for a standard Franchise Agreement with Pizza Hut is $25,000. This fee is payable in full upon signing the Location Franchise Agreement and is not refundable under any circumstances.

Royalty Fee (6.0% of Gross Sales)

Franchisees are required to pay a monthly service fee equal to 6.0% of the prior month's Gross Sales for each Restaurant franchised under the agreement.

Training Fees ($0 - $1,500)

The document mentions a lump sum payment for Computer System Training when requested, ranging from $0 to $1,500.

How much does

it cost

to start a

Pizza Hut

franchise?

It costs between
$367,000
and
$2,064,000
to start a
Pizza Hut
franchise.

The total estimated initial investment for a Restaurant Based Delivery (RBD) or Delivery Based Restaurant (DBR) ranges from $787,000 to $2,063,500.

The table below provides a detailed breakdown of the costs of RBD System Restaurants, offering a clear view of the financial landscape you're stepping into.

Type of Expenditure Amount
Initial Franchise Fee $25,000
Equipment $150,000 to $300,000
Opening Inventory $4,000 to $8,000
Smallwares $15,000 to $50,000
Building and Site Improvements $550,000 to $1,575,000
Computer System $20,000 to $40,000
Computer System Training $0 to $1,500
Additional Funds (3 months) $5,000 to $21,500
Miscellaneous $10,000 to $22,000
Advertising $0 to $16,500
Start-up "Other" $3,000 to $4,000
Total $787,000 to $2,063,500

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Pizza Hut

provide

training

to its

franchisees?

Yes,
Pizza Hut
provides training to its franchisees.

Before opening the restaurant, each franchisee or applicant must successfully complete Pizza Hut's Initial Training Program. This program is conducted approximately four times a year at the company's headquarters and at a System Restaurant in Plano, Texas.

The Initial Training Program includes various courses spread over a period. Some of the courses include:

  • Franchisee Onboarding: This involves individual meetings with designated PHLLC functional leaders over three days.
  • Pizza Prep 1: This course covers Life Unboxed, Brand Standards, relationship building, and building know-how with key corporate departments over two days.
  • Restaurant Training: This includes a range of topics such as team member expectations, food and restaurant safety, delivery safety and service, customer service basics, food preparation, and more.

The Initial Franchise Fee covers the cost of the Initial Training Program for the initially appointed Qualified Operators. However, for subsequent personnel, whether required or at the request of the franchisee, an additional charge is levied for providing the Initial Training Program.

Does

Pizza Hut

provides

territory

protection?

Franchisees are granted the right to operate a Pizza Hut Restaurant within a defined area referred to as the "Protected Area." Within this Protected Area, they are obligated to develop and operate the Franchised Restaurants.

However, while there are some territorial rights associated with the Protected Area, these rights do not guarantee exclusivity. Specifically, franchisees do not have the right to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales within or outside of their Protected Area.

Moreover, Pizza Hut and its affiliates may use these channels of distribution to make sales within the Protected Area using the Proprietary Marks without compensating the franchisee.

Can a

Pizza Hut

franchise

be run as

a passive

investment?

Pizza Hut recommends that the franchisee or their principal owners participate in the day-to-day operation of the System Restaurant(s), but it is not a requirement. However, each System Restaurant must be directly supervised on a day-to-day basis by a qualified and competent manager who has successfully completed Pizza Hut's mandatory training program.

Additionally, the franchisee must designate, and at all times maintain, one or more Qualified Operators to actively manage and participate in the day-to-day operation and ownership of the restaurant.

If the principal owner is an individual, they may serve as a Qualified Operator with Pizza Hut's approval, provided they have at least a 10% equity interest in the franchise.

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