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

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.

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.

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.

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.

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.