Second only to Domino’s, Pizza Hut is a major player in the globe’s growing pizza industry. The company operates in more than 100 countries.
Pizza Hut began life as a single restaurant in Wichita, Kansas in 1958. More than 65 years later, the company has corporate headquarters in Plano Texas, over 270 stores in Australia and more than 19,000 outlets worldwide. Pizza Hut have offered franchise opportunities since 1959 and are a wholly owned subsidiary of global conglomerate, Yum Brands.
Pizza Hut at a glance:
Like all the major fast-food brands, getting into a Pizza Hut franchise can be expensive. You’ll also need a minimum net worth of $700k and liquid cash of $350k or more. As well as the steep financial requirements, the company prefers franchisees who have solid experience in the hospitality industry and, ideally, have previously worked in a managerial or supervisory capacity in a Pizza Hut store. They also like their franchisees to take an active role in the daily running of the restaurant. This franchise may not be suitable for passive investment.
Pizza Hut set-up costs vary from a modest $412,000 to an eye-watering $2,053,000 depending on the location, size and type of restaurant you launch – a cost range that ranks as moderate to very high.
Listed by set-up cost (high to low), the company currently offers three types of franchise operation:
After opening, you are required to pay an array of ongoing fees and charges. They include:
| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $25,000 | $25,000 |
| Equipment | $100,000 | $400,000 |
| Opening inventory | $4,000 | $8,000 |
| Smallwares | $10,000 | $50,000 |
| Building and site improvements | $240,000 | $1,575,000 |
| Land/leasehold | varies | varies |
| Computer system | $15,000 | $30,000 |
| Computer system training | $0 | $1,500 |
| Miscellaneous | $10,000 | $22,000 |
| Advertising expenses | $0 | $16,500 |
| Other opening costs | $3,000 | $4,000 |
| Additional costs – first three months | $5,000 | $21,500 |
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Yes. In 2021, full service Pizza Hut RBD restaurants averaged $973,000 gross revenues and DBR/FCD and Delco restaurants generated average sales of $960,000. Profit margins in the Australian pizza industry are notoriously tight due to intense competition, but 10% to 15% is typical. Based on 2021 income figures, a Pizza Hut franchise owner could expect to receive net profits of $97,000 to $146,000 from an RBD outlet, or $96,000 to $144,000 from a DBR/FCD or Delco store. These results rank as good to very good.
The failure rate for a Pizza Hut franchise is 3% in year one, rising to 8% by year three. This ranks as low to moderate.
Franchisees receive a protected radius consisting of 500 yards surrounding their restaurant. Subject to the franchisee’s compliance with all brand standards, fulfilling delivery orders to national, regional and institutional accounts and their providing adequate delivery service throughout their delivery area, Pizza Hut will not develop or operate, or allow any other franchisee or licensee to develop or operate within the protected radius, a restaurant that is the same type of restaurant that the franchisee operates at their location. In theory, this means that if you operate a Pizza Hut RBD type of restaurant, a new franchisee could open a Pizza Hut Delco outlet within your protected area.
Pizza Hut support for franchisees includes:
It seldom hurts to work with the big guys and Pizza Hut are a giant in the Australian pizza industry. If you can get over the qualification hurdles, meet the entry price of up to $2 million and accept that it may take more than a decade to get your investment back, a Pizza Hut franchise may be the opportunity for you.
It begins with an application. Start the process today.
Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new restaurant like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across Australia. Just tell us what you need and leave the rest to us.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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