There are many questions that potential owners have when it comes to owning a Little Caesars franchise. Opportunities like this don’t come along every day, so it’s important to do your research. This FAQ will aim to answer some of the most common ones. What are the requirements for ownership? What is the cost of a franchise? How much can I expect to make in profit? These are just some of the questions that will be answered below. So if you’re curious about what it takes to own a Little Caesars franchise, keep reading!
Facts About Little Caesars Pizza Restaurants
Little Caesars was founded in 1959 by Mike and Marian Ilitch. Their first franchise opened in Warren, Michigan in 1962. It is the fastest-growing pizza chain in the U.S. and a well-known brand internationally. They are the third-largest chain in the United States by total sales behind only Pizza Hut and Domino’s Pizza.
Little Caesars Franchise Cost
Opening a Little Caesars franchise business will require an initial investment starting at an estimated $379,000. This cost will vary based on factors such as the model you choose, the location of the franchise, and whether you are purchasing an existing restaurant or building one from scratch. In addition to a traditional model, they have other franchise models available that are perfect for military bases, universities, airports, and convenience stores.
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Little Caesars Franchise Fee
The initial franchise fee for a Little Caesars franchise is $25,000. This fee gives you the right to use their trademarked name and logos, as well as access to their proven business model. A franchise fee discount is available for military Veterans as well as first responders. There are other costs involved with starting your own Little Caesars such as a security and technology fee, real estate, build-out costs, and equipment.
Little Caesars Franchise Profit
Little Caesars is a profitable franchise. According to Statista, gross sales for Little Caesars pizza totaled $4.23 billion in the United States in 2021. This is up from the 2020 total of $3.95 billion. This number has risen almost every year since 2008.
Little Caesars Franchise Owners Salary
A Little Caesars franchise owner can make about 17% profit before taxes, depreciation, rent, amortization, or interest. This comes out to about $90,000 but an owner’s salary can range anywhere from $50,000 to $200,000 per year after expenses. Of course, this number will vary greatly depending on your location, operating costs, and other factors. Also, the more franchises that an owner has that are successful, the higher this number will be.
Little Caesars Franchise Requirements
There are several requirements that a prospective owner must meet before being allowed to open a Little Caesars restaurant. Qualified franchisees will need to meet these requirements:
Net Worth
To open a franchise restaurant with Little Caesars, an individual must have a net worth of at least $350,000. Your net worth can be made up of cash, savings, investments, or other assets.
Liquid Assets
A prospective owner must also have at least $150,000 in liquid assets. This is cash or other assets that can be quickly converted to cash.
Total investment
As mentioned earlier in this article, opening a franchise with Little Caesars requires an investment that starts at $379,000. Having this amount, or the ability to get financing for this amount is required.
Royalty Fee
All franchisees are required to pay a 6% royalty fee on gross sales or $100 per week, whichever is greater. This is how the company provides ongoing support to its franchisees. This is a relatively low fee compared to other franchise companies.
Advertising Fee
In addition to the royalty fee, a franchisee is required to spend up to 7% of gross sales on advertising. This fee goes towards local, co-op, and national advertising campaigns.
Rent
You’ll have to pay rent which can range anywhere from $1,500 per month to $7,000 per month. The amount you’ll pay will depend on the location of your restaurant.
Leasehold Improvements
Leasehold improvements can cost $50,000 to $1,000,000 and are required in order to build out the space for your restaurant.
Fixtures, Equipment, and Signage
The costs for your fixtures, equipment, and signage can cost you anywhere from $200,000 to $400,000. These are all necessary in order to open and operate your restaurant.
Grand Opening Advertising
You’ll need to spend $12,000 to $20,000 on grand opening advertising. This is a one-time fee that will help you promote your new restaurant and get it off on the right track.
Training Expenses
Training expenses are another required investment. This can cost you anywhere from $12,000 to $16,500 and is necessary to make sure your restaurant is running smoothly.
Start-up Inventory and Supplies
You’ll need to have enough money to purchase your opening inventory and supplies which can cost you between $63,000 and $154,000.
Insurance
Insurance fees can run you between $1,200 and $2,000. This is necessary to make sure your restaurant and employees are protected.
Utility Expenses
Utility expenses can cost you $1,000 to $9,000 per month. This is for things like water, electricity, trash service, and natural gas.
Licenses and Permits
You’ll need to obtain the necessary licenses and permits to open your restaurant. These can cost you between $1,000 to $20,000.
Additional Funds – 3 months
It’s always a good idea to have additional funds available when you’re first starting out. Little Caesars recommends that you have a $17,000 to $47,000 cushion available. This is to cover things like unexpected expenses, payroll, and other operating costs.
Eight-week in-store operations training program
Before you open your doors, you’ll need to complete an eight-week in-store operations training program. The program covers everything from pizza making to employee management.
Is Opening a Little Caesars Pizza Franchise Worth It?
The answer to this question depends on many factors. If you are passionate about pizza and customer service, then owning a Little Caesars pizza chain franchise can be a very rewarding experience. It is important to do your research and make sure you are aware of all the costs and ongoing fees involved before making any final decisions regarding any franchise opportunities.
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This article, "Little Caesars Franchise Ownership FAQs" was first published on Small Business Trends
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