December 19, 2022
Pizza Hut Franchise in USA: A Road Map To Starting Your Own Restaurant
The continuously evolving technology and globalization have made it possible for people to enjoy delicious cuisines of different nations at their table.
For years, Pizza has continued to be one of the favourite cuisines for Americans. And when we talk about Pizza, there is no way one can ignore the dominance of a renowned brand- Pizza Hut. Today, the fast-food restaurant is being praised by millions of global customers for its exotic ranges of pizzas.
But, did you know? Besides offering delicious pizzas to the customers, the company also offers a profitable business opportunity for those intending to be a part of the food industry and earn long-term income. But how? Simply, by owning a Pizza Hut Franchise in USA.
In this report, we will discuss the financial requirements & costs, advantages, and fee structure of opening a Pizza Hut Franchise in USA so that you can make an informed decision.
Pizza Hut’s Business Standing: An Overview
Pizza Hut is a popular and leading fast food restaurant chain specializing in serving exotic pizzas and a wide selection of side items like pasta, wings, sides, desserts, drinks, and calzones.
Carney brothers – Frank and Dan started Pizza Hut from a single 500-square-foot outlet in Wichita, Kansas, in 1958, which grew exponentially and became the popular brand it is today. Currently, Pizza Hut operates under YUM! Brands, a fast food giant that owns popular brands like KFC, Taco Bell, etc.
The Pizza Hut chain now has over 6,500 outlets in the United States, plus another 50,000+ restaurants in 150+ countries and territories. Among these restaurants, most of them are franchise owned.
Despite a huge loss due to the Covid Pandemic in the last two years, Pizza Hut focuses on growing franchises in Massachusetts, Washington D.C., New York, Rhode Island, and New Hampshire.
Considering the company’s revenue, popularity and profit potential, owning a Pizza Hut franchise in USA can be a decision you would never regret. However, the company has set stringent rules for selecting suitable applicants.
The fast food giant prefers applicants with a solid restaurant or retail management experience. Additionally, the franchise owners must commit to opening outlets in at least two locations. The selected franchisees will undergo a training program in Dallas, Texas, for over two months.
What Kind Of Franchise Opportunities Does Pizza Hut Offer?
Pizza Hut currently offers two restaurant models to franchises: Traditional and Non-Traditional. These franchise models are developed considering the requirements and size of the franchise owner.
Traditional Franchise Opportunities
Traditional outlets have good seating space and are bigger in size. The outlets serve customers in various ways – dine-in, carry out and delivery. These restaurants are further classified into four types:
- Restaurant-based Delivery (Restaurant with delivery available)
- Delcos (Short for Delivery + Carryout)
- Fast Casual Delco (Outlet with counter-serve seating)
- Delivery-based Restaurant (Open Kitchen Delcos in the dine-in facility)
Non-Traditional Franchise opportunities
The non-traditional franchise facilities are usually set up in remote locations. You can find these outlets in airports, universities or anywhere in between. The non-traditional facilities are of 4 types:
- Mini Kitchen
- Kiosk
- Retail Counter
- Full Kitchen & seating
What Are The Minimum Requirements for Owning A Pizza Hut Franchise In USA?
To become qualified as a Pizza Hut franchisee and increase the chances of your application approval, you must be financially stable and a growth-oriented person. Here are the minimum requirements for owning a Pizza Hut franchise in USA:
Financial Requirement
- $700,000 Net Worth
- $350,000 Liquid Assets
- Strong Credit Report and History
Experience
An applicant must have good retail or restaurant business ownership experience or management experience in the food industry.
Growth-Oriented & Passionate
A qualified applicant must fully understand the business plan, be growth-oriented with strict attention to detail and be able to create a team of people and grow their capabilities.
Pizza Hut Franchise In USA: Cost / Initial Investment
Pizza Hut always looks for new franchisees ready to take forward the legacy of the company and its commitment to serving high-quality food to customers. However, investing in a big brand like Pizza Hut requires a hefty investment.
However, the cost may vary depending on the franchise type you choose. So let’s take a look at how much you’ll likely need to invest in starting a Pizza Hut franchise in USA.
| Traditional Opportunities | Non-Traditional Opportunities | |
| Estimated Initial Investment* | $367,000 to $2,063,500 | $40,600 to $472,000 |
| Net-worth Requirement | $700,000 | $700,000 |
| Liquid Cash Requirement | $350,000 | $350,000 |
Pizza Hut Traditional Franchise – Initial Investment Breakdown
Here’s a detailed breakdown of all the fees and initial investments required to own a Pizza Hut franchise in USA:
| Cost | Minimum | Maximum |
| Initial Franchise Fee | $25,000 | $25,000 |
| Opening Inventory | $4,000 | $8,000 |
| Equipment | $100,000 | $450,000 |
| Building and Site Improvements | $180,000 | $1,575,000 |
| Smallwares | $10,000 | $50,000 |
| Delivery Vehicles | Varies | Varies |
| Land | Varies | Varies |
| Computer System Training | $0 | $1,500 |
| Computers | $20,000 | $40,000 |
| Additional Funds (3 months) | $5,000 | $21,500 |
| Miscellaneous | $10,000; | $22,000; |
| Advertising | $0 | $16,500 |
| Start-Up “Other” | $3,000 | $4,000 |
| Estimated Total* | $367,000 | $2,063,500 |
Other Fees/Charges For Pizza Hut Franchise
Apart from the above-mentioned cost and investment, the applicant should understand some fixed charges and fees before making an offer.
| Fees | Amount |
| Monthly Service Fee | 6% of Gross Sales |
| System Advertising Fund Contribution | 4.75% of Gross Sales |
| Taxes | As per tax authorities |
| Dues of International Pizza Hut Franchise Holders Association (IPHFHA) | 4.75% of Gross Sales |
| Restaurant Technology Fee (currently, a “SUS Fee”) | $2,500 Annually |
| Digital Innovation Fees | $0.38 per transaction conducted through a digital channel |
| Initial Training Costs | $500 per week per person |
| Software Training Fee | $1,500 plus travel and living expenses. |
| Proprietary Products | N/A |
| On-Site Training and Assistance | Current Training Fees + Expenses |
| On-Going Training | Current Training Fees + Expenses |
| Inspection and Testing Cost | Franchisees must reimburse all expenses |
| Late Charges | Currently 1.5% per month |
| Audit | Entire Audit expense |
| Unauthorized Closure | An amount equal to 24 times the average Monthly Service Fees paid |
| Transfer Fee | $2,500 + $250 per System Restaurant transferred |
| Relocation | Varies |
| Advances | Varies |
| Indemnification of PHLLC | Varies |
| Attorneys’ and Experts’ Fees, Court Costs | Varies |
How To Get Started With A Pizza Hut Franchise?
Pizza Hut provides franchise opportunities to every individual so that anyone can apply for the Pizza Hut franchise in USA. Just follow these simple steps to get boarded in the Pizza Hut family.
Ensure You Fulfill Minimum Requirement
In order to start a Pizza Hut restaurant franchise in USA, you must have a net worth of more than $300,000 and a good experience in the retail & restaurant business.
You will understand the real estate costs, the cost of equipment and signs, licenses and permits, the cost of insurance, the cost of uniforms, etc.
Evaluate Your Prior Experience
You should thoroughly evaluate your past business experience & ideas before applying for a Pizza Hut franchise in USA.
Now, look at the market availability and location for your franchise. See if markets are available in your preferred location before proceeding with the franchising application.
Submit Your Application
Upon submission, the Pizza Hut franchise team will review your application. You will receive an email with a confirmation receipt upon reception of your online application.
Receive Approval & Start Training
Once your application meets the company’s criteria and your financial and background checks are completed, you will receive franchise approval. Sign the official agreement and enjoy your success!
Note: The approval process may take up to 9-12 months. The initial qualification typically takes 10 to 12 weeks and comprises several background checks and interviews. The following step is locating and seizing opportunity checks. Depending on the size and extent of the opening, it may take 3 to 9 months.
What Are The Training And Support Offered By Pizza Hut Franchise?
Pizza Hut offers an excellent training program for its new franchise owners. However, instead of emphasizing a traditional training programme, the organization offers job training to the workers for a period of time that might last between 8 and 12 weeks.
Additionally, the firm offers help in the form of business support and marketing support. A franchisee can attend conferences with other franchisees as part of business assistance and gain useful information. The business allows the franchisee to use its branding potential while providing marketing help.
Why Is The Pizza Hut Franchise So Popular?
There are various reasons behind the ever-increasing popularity of Pizza Hut in the U.S. and worldwide. Here are some top reasons why Pizza Hut is a popular fast food chain today:
Top-Ranked Franchise
Throughout its history, Pizza Hut has frequently appeared in lists such as Entrepreneur’s Franchise 500 and Top Global Franchises. These rankings are based on an analysis of over 150 data points, including charges and fees, size and growth, assistance for franchisees, brand strength, and financial strength and stability.
Innovative & Adaptive
Pizza Hut focuses on innovation and adapts according to customer needs. For instance, Pizza Hut in China is totally different and is a high-standard restaurant serving Asian, Thai, French, and American foods.
Applies Successful Marketing Strategy
The company has a stronghold in the fast food industry, with its large number of menu items and their varieties, which is helping the company to be competitively ahead of its competitors.
Is It Profitable To Own Pizza Hut Franchise In USA?
Pizza Hut is a profitable business model in 2022. The average gross sale of a single outlet was $960,470 in the fiscal year 2020, while it grew to $1,046,429 in the fiscal year 2021.
Here’s detailed information on the average sale of a traditional Pizza Hut facility:
Dine-in/Restaurant-based Delivery (“RBD”)
The average gross sales for restaurants in the fiscal year of 2021 ranged from $219,847 to $2,996,833, with 44.8% of them exceeding the all-time high of $1,075,836. In addition, the average gross sales rose by 10.6% even though there were fewer stores in this category overall.
Delco Delivery/Carry-out Restaurants
The average gross sales for restaurants in the fiscal year of 2021 ranged from $218,514 to $2,993,149, with 43.5% of them exceeding the average of $1,022,827. In addition, the average gross sales for this category climbed by 7.7% as the number of outlets increased.
Conclusion
Investing in a Pizza Hut Franchise in USA opens up new and profitable opportunities for entrepreneurs, especially post COVID-19. For those wishing to break into the QSR market, the entrance investment of $367,000 is ideal.
There are extensive opportunities for development and success with Pizza Hut. Overall, it is worth considering as a franchise if you have substantial management expertise and want to open 5–10 Pizza Hut locations or more!
Faq’s
The Initial qualification process involves several background checks and interviews and may take up to 10-12 weeks. Following that, identifying and getting an opportunity may take 3 to 9 months, depending on the size and scope
The building of your restaurant will be your responsibility. Pizza Hut, however, offers a number of resources available to help you, including the names of general contractors that operate across the United States, who have substantial experience constructing Pizza Hut stores.
You must participate in and pass the Pizza Hut operations training course before opening your restaurant with your key operator. An accredited training restaurant in Plano, Texas, hosts the training programme, which lasts between 8 and 12 weeks.
Pizza Hut does not provide financial support, but upon request, it will share a list of banks and other financial institutions that have shown an interest in lending to Pizza Hut franchisees. In addition, Pizza Hut’s listing on the SBA register is intended to make borrowing easier.
No, only approved products can be sold in franchisees’ restaurants.
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