Pepper Lunch Franchise FDD, Profits & Costs (2025)
Pepper Lunch is a Japanese fast-casual restaurant franchise that stands out for its signature do-it-yourself teppanyaki concept. Launched in 1994 by chef Kunio Ichinose in Kanagawa, Japan, the chain introduced an innovative way of dining where meals are served on patented iron plates heated to 500°F, allowing guests to cook their food at the table.
This interactive style transforms dining into a personalized and memorable experience.
The brand began its international growth in 2003, adjusting its operations for food courts and suburban locations by creating lighter iron plates and enhancing its kitchen systems. Its North American headquarters is located in Westlake Village, California.
The menu features sizzling steaks, pepper rice, curry rice, and teriyaki favorites, all presented on hot iron plates. What sets Pepper Lunch apart is its hands-on approach, giving customers the freedom to prepare dishes to their exact preference.
Initial Investment
How much does it cost to start a Pepper Lunch franchise? It costs on average between $714,000 – $1,501,000 to start a Pepper Lunch franchised restaurant.
This covers expenses such as restaurant build-out, specialized iron plate equipment, initial food inventory, and early operating costs. The total investment can vary based on factors like the restaurant format, geographic location, and whether the franchisee decides to lease or buy the property.
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $50,000 |
| Architects & Engineers | $12,500 – $30,000 |
| Site Review Fee | $0 – $500 |
| Studies & Site Work | $1,200 – $3,500 |
| Business Licenses & Permits | $3,000 – $5,000 |
| Professional Fees (Legal/Accounting) | $3,000 – $10,000 |
| Beer/Wine License | $0 – $12,500 |
| First Month’s Rent and Security Deposit | $10,000 – $35,000 |
| Utilities and Related Deposits | $5,000 – $10,000 |
| Insurance – Annual Premium | $3,000 – $5,000 |
| Tenant Improvements/Construction | $273,000 – $730,000 |
| Design & Décor | $15,000 – $30,000 |
| Equipment | $101,000 – $176,000 |
| Furniture and Fixtures | $95,000 – $150,000 |
| Smallwares | $13,000 – $18,000 |
| Office Supplies | $1,000 – $3,000 |
| Uniforms | $1,500 – $3,500 |
| Signage | $7,500 – $25,000 |
| Computers & POS | $20,500 – $25,000 |
| Initial Inventory & Supplies | $15,000 – $25,000 |
| Initial Training Expenses | $25,000 – $35,000 |
| Pre-Opening Labor | $13,000 – $30,000 |
| Pre-Opening Advertising | $1,500 – $3,500 |
| Grand Opening Campaign | $7,500 – $15,000 |
| Grand Opening Kit | $6,000 – $12,000 |
| New Restaurant Opening Fee | $5,000 |
| Miscellaneous Opening Costs | $1,000 – $3,000 |
| Additional Funds – Working Capital (3 months) | $25,000 – $50,000 |
| Grand Total | $714,200 – $1,500,500 |
Average Revenue (AUV)
How much revenue can you make with a Pepper Lunch franchise? A Pepper Lunch franchised restaurant makes on average $1,157,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
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Frequently Asked Questions
How many Pepper Lunch locations are there?
As of the most recent data, Pepper Lunch operates 6 restaurants worldwide.
What is the total investment required to open a Pepper Lunch franchise?
The total investment required to open a Pepper Lunch franchise ranges from $714,000 to $1,501,000.
What are the ongoing fees for a Pepper Lunch franchise?
Pepper Lunch franchisees pay a 5% royalty fee on gross sales and a 2% marketing and advertising fee on gross sales.
What are the financial requirements to become a Pepper Lunch franchisee?
To qualify as a Pepper Lunch franchisee, candidates are generally required to have a minimum net worth of $1,000,000 and at least $250,000 in liquid capital. These financial requirements ensure that franchisees have the resources to cover the initial investment, manage operating expenses, and sustain the business during its early stages of development.
How much can a Pepper Lunch franchise owner expect to earn?
The average gross sales for a Pepper Lunch franchise are approximately $1.16 million per location. Assuming a 15% operating profit margin, $1.16 million yearly revenue can result in $174,000 EBITDA annually.
Who owns Pepper Lunch?
The Pepper Lunch franchise is owned by Hot Palette Holdings, a Japan-based restaurant group that manages and develops the brand worldwide.
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