There were times when pizza ruled the food franchise market. Certainly, 30 years ago it was a business revelation. Today, pizza is still popular but the healthy food campaigns and competition somewhat contained the "beast". This does not mean that pizza franchises are on the decline. In fact, the need to open outlets of the existing pizza franchisors is still significant.
There are pizza franchises and.... There Are Pizza Franchises.
The original model of this type of business is not complicated.
You can pickup the pizza or you can pay extra for the delivery.
Some franchisors offer dine-in facilities which resemble franchise restaurants.
Pizza consists of two parts: the base and topping. Both components must be right for the business to succeed. You should get an independent opinion about the taste and the quality of the product from various pizza franchises. Pizza is so popular that the opinion of the "average man" does matter. The business analysis of the franchise is important.
However, the success of the franchisor on the stock exchange does not guarantee the success of the franchisee on the front line. Investigate the popularity of the prospective outlets. Order some meals to get the idea about products and services. The big brands of the pizza franchises are well known to the public. However, the pizza business has also proved that the good pizza can bring success irrespective of the company logo. If you are purchasing an established pizza franchise, which have operated in the area for some time then the investment is warranted.
However, if the franchise is offering a new outlet then you must be careful. New to the area and unknown pizza franchises have little chance to compete with the established players. In this case, the franchise cost will be better spent on your independent pizza business. If you can afford a franchise with a known logo than the new outlet can work to your advantage.
The pizza franchising applies to a number of large players and many smaller operators.
The well known Pizza Hut sells for $300K plus the initial fee.
Prominent locations of the Pizza Hut can sell for as high as $500K for the total initial investment.
The business model of Pizza Hut is similar to franchise restaurants.
Dominos Pizza is another well known brand. It differs from Pizza Hut model by exclusively providing the take-away service with little or no dine-in facilities. You need $250K-$350K plus GST to run your own Dominos Pizza store. The same cost is for Pizzacutters Gourmet Pizza, which resemble Dominos in its business model. There are cheaper alternatives, though. Smaller players such as Maries Pizza sell for $200K.
The real question is: do you really need to enter the famous pizza franchising business or a lesser known brand will suffice?
Generally, good pizza will sell anywhere.
Most of the pizza franchising depends on the word-of-mouth.
Thus, the bad product sooner or later will ruin the store.
If you intend to open an outlet in the countryside or in the smaller town then the brand is not so important. Yet, by investing into Mariez Pizza rather than Dominos you can save at least $100K. In more competitive areas, the brand does matter. However, through clever marketing and loyalty discounts you can still perform well with the lesser known logo.