Domino's Pizza Franchise vs. Pizza Hut Franchise
Considering buying a fast-food pizza franchise? The following information on differences between a Domino's Pizza franchise and a Pizza Hut franchise reveals the scoop on each, allowing you to compare the two and make a decision about which suits you better.
The Pizza Hut Franchise
Pizza Hut started with brothers Frank and Dan Carney borrowing $600 from their mom to start a pizzeria in Wichita, Kansas. In 1958, the first Pizza Hut opened its doors. The first Pizza Hut franchise soon followed, opening in 1959 in Topeka, Kansas.
Today, Pizza Hut has over 18,000 locations in more than 100 countries throughout the world, including more than 6,000 franchises in the U.S. and over 11,000 in other countries. The company's products include pizza, pasta, wings, breadsticks, other sides, and desserts. Pizza Hut is owned by Yum! Brands, which is also the parent company of KFC and Taco Bell.
Franchising Information for Pizza Hut
- Entrepreneur Franchise 500 Rank (2019): #16
- Estimated Initial Investment: $357,000-$2,213,500
- Net-Worth Requirement: $700,000
- Liquid Cash Requirement: $350,000
- Initial Franchise Fee: $25,000
- Ongoing Royalty Fee: 6%
- Ad Royalty Fee: 4.75%
If you have a budget of between $1.3 million and $3 million and a net worth of $700,000 with $350,000 in liquid assets, you can be in business within a year, but there are other requirements as well. You must commit to building at least three restaurants over three years. Pizza Hut's franchisee qualification and approval process takes eight to 12 weeks, followed by seven to 21 weeks for market selection and approval, then 18 to 36 weeks for construction and training.
Pizza Hut is part of an organization that offers tremendous franchise support, including advertising, business coaching, training, development, and cooperative sourcing. Performance improvement programs and support are also offered to each new franchisee, along with eight to 10 weeks of required training conducted in a certified training restaurant in Dallas.
Pizza Hut does not provide financing; however, the company does provide a list of banks and financing institutions that have expressed an interest in lending to Pizza Hut franchisees. To facilitate financing, Pizza Hut is listed on the SBA registry.
About Domino's Pizza
Brothers Tom and James Monaghan borrowed $500 in 1960 to purchase DomiNick's, a pizza store in Ypsilanti, Michigan. In 1961, James traded his half of the business to Tom in exchange for a Volkswagen Beetle.
In 1965 Tom Monaghan renamed the company Domino's Pizza LLC. Soon after, in 1967, the first Domino's Pizza franchise opened in Ypsilanti, Michigan. Tom Monaghan retired in 1998, selling 93% of the company to Bain Capital for $1 billion. After a falloff during the financial crisis, Domino's stock has risen from $3.85 a share in 2008 to nearly $300 a share in late 2019.
On top of regular, thin-crust and pan pizzas, Domino's products include sandwiches, pasta, bread, desserts, buffalo wings, and specialty chicken dishes. The chain operates more than 16,500 stores in more than 85 countries.
Domino's Pizza Franchise
- Entrepreneur Franchise 500 Rank: Not ranked
- Estimated Initial Investment: $119,700-$461,450
- Net-Worth Requirement: $100,000
- Liquid Cash Requirement: $100,000
- Initial Franchise Fee: $0-$25,000
- Ongoing Royalty Fee: 5.5%
- Ad Royalty Fee: 3% and up
Franchisees at Domino's Pizza fall into one of two categories: internal or external. Internal franchisees have already worked within Domino's as a general manager for at least one year. External franchisees have not previously worked with Domino's as a general manager, but do bring outside business or other management experience to the table.
For the first group, the franchise fee is $0 to $25,000 depending on the social segment (woman, minorities, veterans). For external franchisees, the fee is set at $25,000. Domino's Pizza offers a comprehensive training program covering store operations, marketing, finance, and human resources. Training consists of a five-day Franchise Development Program and four days of Pizza Prep School.
Domino's economic model is built on strong cash-on-cash returns. Its technology platform enables online ordering, direct email marketing, cost controls, and store management. The company's supply chain is designed to ensure quality, leverage purchasing power, and give back to the franchise owners with a profit-sharing program. Domino's provides in-store and classroom training for all new franchise owners.