Pizza Hut franchise

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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 business details

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 500 stores in the UK 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:

  • UK stores: More than 500 
  • Required Investor net worth: £700,000
  • Required investor liquid cash: £350,000
  • Min. investment: £500,000
  • Max. investment: £2,053,000
  • Standard franchise term: 10 years

Can I start a Pizza Hut franchise?

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.

How much does a Pizza Hut franchise cost?

Pizza Hut set-up costs vary from a modest £500,000 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:

  1. Restaurant-based delivery (RBD) system restaurants, from which pizza and other products are sold for dine-in and carryout consumption and may be delivered for off-premises consumption.
  2. Delivery based restaurant (DBR)/Fast casual delco (FCD) system restaurants, from which approved products are sold for dine-in and carryout consumption and may be delivered for off-premises consumption.
  3. Delivery/carryout (Delco) system restaurants, from which approved products are sold for carryout and are delivered, all for off-premises consumption. The initial franchise fee is £25,000. Military veterans may be eligible for a discount off this cost.

After opening, you are required to pay an array of ongoing fees and charges. They include:

  • Monthly service fee: 6% of gross sales (6.5% in some circumstances)
  • Advertising fund: 4.75% of gross sales
  • PHFHA dues: 4.75% of gross sales
  • Digital sales fee: £0.41 per transaction from the app or online
  • Technology fee: £2,800 per year 
  • Help desk user fee: £12 per call and £7 per other service event (email, chat etc.)
  • Late charges: 1.5% per month
  • Transfer fee: £2,500 first restaurant, then £250 for additional locations

Estimated key costs to open a Pizza Hut franchise:

Key Costs GuideLowHigh
Franchise fee£25,000£25,000
Opening inventory£4,000£8,000
Building and site improvements£240,000£1,575,000
Computer system £15,000£30,000
Computer system training£0£1,500
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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Are Pizza Hut franchises profitable?

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 UK 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.

What is the failure rate for a Pizza Hut franchise?

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.

What are the franchise territory policies for Pizza Hut?

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.

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What franchise resources does Pizza Hut offer?

Pizza Hut support for franchisees includes:

  • Training: Pizza Hut conducts their initial training program. Successful completion of the initial training program is mandatory for all of the franchisee’s qualified operators. Currently, the initial training program includes ‘First Slice’, which requires at least the following for qualified operators: (i) attendance at all one-on-one meetings with designated Pizza Hut functional leaders; (ii) in-restaurant training at a time the franchisor designates; (iii) attendance at all pizza prep classes at or near corporate headquarters; (iv) satisfaction of all portions of the First Slice onboarding checklist. The length of the First Slice training program varies from 8 to 12 weeks and should be scheduled to finish 3 to 4 weeks prior to the opening of the new restaurant. Franchisees may request on-site training or assistance at any time. The franchisor may also develop additional training programs which the qualified operators and the system restaurant manager must attend and successfully complete. Lastly, the franchisor may occasionally conduct conferences, conventions or other training programs.
  • Marketing support: Pizza Hut provides promotional and other marketing support for their franchisees.
  • Third-party financing: Pizza Hut provides some financial support for investors seeking franchise funding. However, you may obtain more economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.

Why should you start a Pizza Hut franchise?

It seldom hurts to work with the big guys and Pizza Hut are a giant in the UK 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.

What is the process for starting a Pizza Hut franchise?

It begins with an application. Start the process today.

Secure franchise funding with Swoop

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 the UK. Just tell us what you need and leave the rest to us.

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Written by

Chris Godfrey

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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