Pizza Factory Franchise Costs $274K – $542K (+ 2024 Profits)

Pizza Factory, established in 1978, has grown into a well-known franchise in the pizza industry, deeply rooted in the communities it serves. Headquartered in Oakhurst, California, Pizza Factory has maintained its reputation as a community classic, providing a warm, inviting atmosphere that’s perfect for families and friends to gather and enjoy their wide range of pizzas and other menu items. 

Pizza Factory began offering franchising opportunities in 1985, expanding its reach and allowing entrepreneurs to bring the beloved pizza brand to their local communities.  

Pizza Factory stands out from the competition with its “Awesome Performance,” highlighting a significant year-over-year average unit volume growth, and its robust support system for franchisees, including comprehensive training, marketing tools, and technology support, ensuring ease of operations and success in the competitive food industry.

Type of Expenditure	Amount
Initial Franchise Fee	$20,000 – $25,000
Wages, Travel and Living Expenses During Training	$4,000 – $8,000
Real Estate and Improvements	$91,000 – $300,000
Signage	$10,000 – $20,000
Equipment and Fixtures	$97,000 – $175,000
Deposits, License Fees & Other Prepaid Expenses	$10,000 – $25,000
Opening Inventory/Incidentals	$10,000 – $15,000
Advertising – First 3 months after opening in addition to contributions to Advertising Fund	$2,000
Advertising Fund	$35,000 – $60,000
Additional Funds – 3 months	$35,000 – $60,000
Total	$279,000 – $630,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

For Pizza Factor, the initial franchise fee is structured based on the number of Traditional PF Restaurants being developed. For the 1st through the 4th Traditional PF Restaurant, the initial franchise fee is $20,000. Starting from the 5th Traditional PF Restaurant onwards, the initial franchise fee is reduced to $10,000 per restaurant. This fee is payable upon the execution of each Franchise Agreement entered into pursuant to the Area Development Agreement.

Additionally, a credit of $10,000 is applied per Franchise Agreement for the second through fourth Traditional PF Restaurants, and a rate of $5,000 per Franchise Agreement for the fifth and subsequent Traditional PF Restaurants.

Royalty

A royalty fee of 5% of Net Sales is due monthly.

Advertising Fee

An advertising fee of 3% of Net Sales is payable monthly.

Technology Fee

A monthly technology fee, currently $200, is due along with the royalty fee.

Service Fee

A service fee of $75 per month or 10% of the amount due, whichever is greater, is assessed for each month that the royalty or advertising fee remains unpaid.

Initial Training for an Additional Person

An additional fee of $3,500 per person is required for training beyond the initial two persons covered by the franchise fee.

Transfer Fee

A transfer fee of $15,000 is applicable for selling, transferring, or assigning the Pizza Factory restaurant.

Renewal Fee

A renewal fee of $5,000 is charged for renewing the franchise agreement.

Franchise Pros and cons

The Pros:

• Pre-opening training: The brand offers its franchisees comprehensive initial classroom and on-site training. It trains franchisees about the business concept, customer service, restaurant management, and operational procedures necessary to carry out a successful grand opening and succeed in the business.
• Flexible formats: The brand utilizes different franchise formats to help franchisees operate a restaurant that fits into the available real estate opportunities. Franchisees can choose between quick-serve and fast-casual options. In addition, the brand has introduced the Express model to enhance the carryout and delivery system, making use of a sleek design to save on operations, staff, and FF&E expenses.
• In-house financing: Pizza Factory provides in-house financing to franchisees to fund payroll costs. It also offers third-party financing for the franchise fee, startup costs, equipment, inventory, and accounts receivable.
• Absentee ownership: The brand provides a passive business ownership opportunity. Franchisees can operate the franchise as they pursue other obligations.
• Exclusive territory protection: The brand grants the franchisees the right to operate their restaurants in a fixed-size area defined in the franchise agreement. The brand may not license any other franchise or operate a competing restaurant within the protected area.

The Cons:

• Not a part-time business: The franchise does not present a part-time business opportunity. Franchisees need to be open as per the franchisor’s stated hours.
• Competition: A Pizza Factory franchise faces competition from brands such as Pizza Hut, Domino’s, Little Caesar’s, Papa Murphy’s, Blaze Pizza, etc.
• Not a mobile business: Pizza Factory is not a home-based business. Franchisees are required to have office facilities for running their restaurants.

How to open a Pizza Factory franchise

Opening a Pizza Factory franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Pizza Factory franchise.

1. Initial Inquiry and Research

• Start by exploring the Pizza Factory franchise opportunity, understanding their brand values, community focus, and the support they offer to franchisees.
• Visit the Pizza Factory franchising website to gather preliminary information about the franchise.

2. Reach Out to Pizza Factory

• Fill out the inquiry form on the Pizza Factory franchising website to express your interest.
• Provide the necessary personal and financial details to initiate the franchising process.

3. Introductory Call

• Participate in an initial call with the Pizza Factory franchising team to discuss your interest and compatibility with the franchise.
• Use this opportunity to ask questions and express your business aspirations and expectations.

4. Program Review Web Meeting

• Attend a web meeting to dive deeper into the details of the Pizza Factory franchise opportunity, including costs, revenue averages, support, and training.
• Discuss every phase from site selection to opening day, ensuring you have a comprehensive understanding of the franchising process.

5. Application and Financial Review

• Complete the Request for Consideration application provided by Pizza Factory.
• Undergo a review of your financial capabilities, discuss available territories, and explore financing options if needed.

6. Due Diligence and Validation

• Review the Franchise Disclosure Document (FDD) to understand the legal and financial aspects of the franchise.
• Engage in validation by talking to existing franchisees and participate in a video interview with Pizza Factory’s CEO to discuss your goals and fit with the franchise.

7. Discovery Day

• Attend Discovery Day to meet the leadership team, gain insight into the brand’s vision, and understand the support offered to franchise partners.
• Present your business plan and discuss any remaining questions before signing a franchise agreement.

8. Franchise Agreement Execution

• Upon mutual agreement, you will be awarded a Pizza Factory franchise.
• Finalize territory details, business entity, and prepare to sign the Franchise Documents.

9. Site Selection and Build-Out

• Collaborate with Pizza Factory’s real estate team to select an ideal location for your franchise.
• Follow the guided process from securing the location to building out the store and preparing it for opening day.

10. Comprehensive Training Program

• Engage in Pizza Factory’s extensive training program covering kitchen operations, corporate office procedures, and hands-on training at a training store.
• Ensure you and your team are fully prepared to operate your Pizza Factory franchise effectively from day one.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.