Rosati’s Pizza Franchise Profits, Costs & Stats (2023)

If you’re considering getting into the pizza restaurant business and you’re thinking franchising, you should seriously consider Rosati’s Pizza.

Indeed, it’s one of the most profitable Italian food franchises: whilst you would invest $466,000 on average to pay for the startup costs, one Rosati’s restaurant generates on average $840,000 in turnover per year… That’s a great sales to investment ratio (1.8x).

In this article we’ll look into how much profits you can make with a Rosati’s Pizza, how much it really costs and whether you should get into the Rosati’s Pizza franchise business. Let’s dive in!

Rosati’s Pizza franchises: key figures

Franchise fee	$30,000
Royalty fee	5.0%
Marketing fee	2.5%
Investment (mid-point)	$466,000
Average sales	$840,000
Sales to investment ratio	1.8x
Payback period*	4 years
Minimum net worth	$250,000
Minimum liquid capital	$80,000

Rosati’s Pizza: a brief introduction

Rosati’s Pizza Enterprises Inc. is an American pizzeria restaurant famed for its delicious Chicago-style pizza. 

It was founded in 1926 by Saverio Rosati as a simple Chicago restaurant serving delicious Italian food. 

Headquartered in Elgin, Illinois, the pizzeria restaurant is famous for its tasty pizzas, sandwiches, salads, desserts, pasta, French fries, mushrooms, onion rings, mozzarella sticks, and breadsticks. 

Rosati’s Pizza started franchising in 1979 and has today over 175 locations in the US. 

Rosati’s Pizza franchises: pros and cons

Pros

• Flexible business concept: Rosati’s Pizza allows franchisees to operate their businesses as sports hubs or carryout/delivery restaurants. 
• Initial training: the brand offers extensive training to help franchisees operate a successful business. 2-4 weeks of onsite, hands-on training equips franchisees with the knowledge they need to launch a rewarding franchise. In addition, the 30-day training program covering the pre-opening and opening phases helps restaurant owners keep pace with the latest in the American and global pizza industry.  
• Exclusive territories: under the Franchise Agreement, franchisees get exclusive rights to operate their restaurants within designated locations. They are guaranteed a competition-free environment to operate their business. 
• Financing: while the franchisor doesn’t provide direct or indirect funding, it occasionally offers partial financing to help franchisees cover the remodeling and repair costs. This only applies to established franchises. 
• Ongoing support: Rosati’s Pizza provides ongoing support through business meetings, seminars, and conventions. This is part of the operations and marketing strategies to help increase sales and profits.

Cons

• Previous experience: the franchisor only desires highly qualified individuals with prior business, marketing, and sales experience. In addition, franchisees must have the right motivation and financial qualifications to run a successful franchise business.
• No absentee ownership: the franchisor strongly recommends that restaurant owners view Rosati’s Pizza franchise as a serious, full-time commitment. It discourages absentee ownership. 
• No part-time running: In addition to the no absentee ownership requirement, Rosati’s Pizza can’t be run part-time either. Franchisees must be willing to work full time instead
• Minimum employee requirement: franchisees must employ at least 6-8 individuals to run the business. 
• Competition: like any other pizza chain, Rosati’s Pizza faces strong competition in this sector from many players: Blaze Pizza, Mountain Mike’s, Hungry Howie’s, Marco’s Pizza, Pizza Ranch to name a few, in addition to the giants Pizza Hut and Domino’s)

How much does a Rosati’s Pizza franchise cost?

You would have to invest on average $318,850 to open a new Rosati’s Pizza franchise restaurant.

This is the investment required for carryout/delivery restaurants. Indeed, the vast majority of restaurants are carryout or delivery (81 out of the 122 total franchised restaurants).

To clarify, there are 2 kinds of formats of restaurants you can choose:

• Carryout/delivery ($318,850 required investment)
• Sports pub ($757,000 required investment)

Here’s the full breakdown of costs by category for each restaurant format:

	Carryout/delivery	Sports pub
Franchise fee	$30,000	$30,000
Furniture, fixtures and equipment	$55,000 – $150,000	$125,000 – $350,000
Leasehold improvements	$25,000 – $175,000	$50,000 – $600,000
Professional fees	$5,000 – $20,000	$10,000-$30,000
3 months working capital	$5,000 – $30,000	$15,000 – $75,000
Other	$22,200 – $90,500	$40,000 – $159,000
Total	$142,200 – $495,500	$270,000 – $1,244,000

What’s the average turnover of a Rosati’s Pizza?

On average, a Rosati’s Pizza franchise makes $840,242 in sales per year. 

This number is the weighted average median annual sales of carryout/delivery restaurants ($689,250, 69 units) and sports pub ($1,129,642, 36 units) in 2021. This excludes 12 of the 81 carryout/delivery franchised restaurants and 5 of the 41 sports pub franchised restaurants.

How profitable is a Rosati’s Pizza franchise?

On average, a Rosati’s Pizza franchise makes $257,493 profits per year (31% profit margin).

Rosati’s Pizza is a profitable franchise. Indeed, we found that the 31% profit margin (adjusted EBITDA) is higher than the average for similar restaurant franchises (25-27%).

We calculated this number using the information available in the Franchise Disclosure Document 2022. Unfortunately, Rosati’s Pizza has not provided detailed information on the cost of goods sold (COGS), and labor costs. Therefore, we used 25% and 29% of sales respectively, as per franchise industry benchmarks.

Profit and loss	Amount ($)	As % of sales
Sales	$840,242	100%
COGS	($210,060)	25.0%*
Labor	($243,670)	29.0%*
Rent	($66,000)	7.8%
Royalty + marketing fees	($63,018)	7.5%
Adjusted EBITDA	$257,493	31.0%

Is a Rosati’s Pizza franchise a good investment?

31% adjusted EBITDA is a great profit margin, actually one of the highest we found for restaurant franchises. So does it mean you should go ahead and buy a franchise? Not yet.

In order to assess whether Rosati’s Pizza is a good investment, we must look at the payback period: how many years it takes for a business’ profits to repay the startup costs.

We found the payback period for a Rosati’s Pizza is 3.7 years on average, this is excellent. Indeed, any payback period around 5-6 years is good, and anything below is excellent.

Now, after reading this post, are you convinced? If you’re considering starting a new Rosati’s Pizza franchise you must prepare a solid business plan. Download our template below and access a pre-built financial model with the latest Franchise Disclosure Document data. You’ll find everything you need from your 5-year pro forma financial statements, your breakeven point and more.

How does it compare vs. other restaurant franchises?