Many potential owners have questions when considering the ownership of a Little Caesars franchise. Opportunities like this are rare, making it essential to conduct thorough research. This FAQ aims to address some of the most frequently asked questions. What are the requirements for ownership? What is the cost of a franchise? How much can I expect to earn in profit? These are just a few of the questions that will be answered below. If you’re interested in what it takes to own a Little Caesars franchise, continue reading!
Facts About Little Caesars Pizza Restaurants
Little Caesars was established in 1959 by Mike and Marian Ilitch. The first franchise debuted in Warren, Michigan, in 1962. Today, it is the fastest-growing pizza chain in the U.S. and has gained significant recognition worldwide. By total sales, it ranks as the third-largest chain in the United States, trailing only Pizza Hut and Domino’s Pizza.
Little Caesars Franchise Cost
Opening a Little Caesars franchise business requires an initial investment that starts at an estimated $379,000. This cost may vary depending on factors such as the franchise model you select, the location, and whether you are acquiring an existing restaurant or constructing a new one from the ground up. Alongside the traditional model, there are various franchise options tailored 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 grants you the right to utilize their trademarked name and logos, along with access to their established business model. Additionally, a discount on the franchise fee is offered to military veterans and first responders. Other expenses associated with launching your own Little Caesars franchise include a security and technology fee, real estate costs, build-out expenses, and equipment purchases.
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 successful franchises an owner has, 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 needs to have a minimum net worth of $350,000. This net worth includes 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 previously stated in this article, launching a franchise with Little Caesars necessitates an initial investment of $379,000. Either having this sum available or being able to secure financing is essential.
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 should budget between $12,000 and $20,000 for grand opening advertising. This one-time expense is essential for promoting your new restaurant and ensuring it starts off successfully.
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 range from $1,000 to $9,000 each month. These costs include essential services such as water, electricity, trash collection, and natural gas.
Licenses and Permits
To open your restaurant, you’ll need to obtain the necessary licenses and permits, which can cost between $1,000 and $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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