Pizza Hut, the fast-food giant founded in 1958 in Wichita, Kansas, by Frank and Dan Carney, has made many investors serious cash. Although the startup costs can seem high, Yum! Brands Inc., the parent company of Taco Bell, and KFC, lends substantial support that includes help with advertising, business coaching, training, development, and cooperative sourcing. Performance improvement programs and support are also offered to each new franchisee, along with 12 to 16 weeks of required training, paid for by Pizza Hut, at a test restaurant in Dallas, Texas (franchisees are responsible for their own travel arrangements and accommodations).
Background and Future Franchise Benefits
Pizza Hut has been making pizza for more than six decades, serving up original-style pizzas available in a variety of crusts. As America’s first national pizza chain, Pizza Hut has enjoyed continuous growth.
At present, Yum! Brands is the worldwide leader in multibranding, offering consumers choice, convenience, and value by combining multiple brands under one roof. Yum! Brands’ multi-brand offerings have historically proven to be more successful, albeit with higher start-up costs. Within Yum! Brands, Pizza Hut, seems to be somewhat of a straggler in the franchise department, although a logo and corporate rebrand in 2014 was tested and implemented company-wide in an effort to tighten the gap between Pizza Hut and other, more popular franchise brands.
The tag rolled out in 2014 reads “The Flavor Of Now," clearly exemplifying a push for a new identity. The redesigned logo and color scheme was created to attract a younger customer base to the aging brand, but the rebrand is a powerful step in the public idea of Pizza Hut. In many ways, Yum! Brands injected new life into the franchise, and the opportunity to secure a lower-cost franchise option like Pizza Hut is worth serious consideration.
Pizza Hut represents a strong brand that has demonstrated economic stability over time. Yum! Brands is committed to franchising, with over 80 percent of its stores owned by independent franchise operators.
Pizza Hut Franchise Information
In order to be considered for a franchise, potential franchisees must have a strong credit history and meet some minimum requirements. The approval process can take up to a year—10 to 12 weeks of background checks and interviews, followed by three to nine months of identifying and securing a location—and once approved, a franchisee has a year to open their store. The following is a breakdown of the specific requisites and fees:
- Franchise Fee: $25,000
- Royalty Fee: 6% of Gross Sales
- Advertisement Fund: 4.25% of Gross Sales
- Total Investment: $297,000 to $2,000,000
- Net worth requirement: $700,000
- Cash liquidity requirement: $350,000
As with any franchise, the profit potential isn't guaranteed. The weight of a franchise's income stream is dependent almost as much on the franchise owner as on the brand itself, which is why Yum! Brands Inc. is careful not to make any financial promises.
In addition to the initial investment required to open a Pizza Hut location, there are also other costs to consider, including land acquisition and construction, which franchisees are responsible for covering. New franchisees can requests bids from various contractors with the help of Pizza Hut, which maintains a list of local contractors experienced with building Pizza Hut locations. In terms of equipment, franchisees are required to work Restaurant Supply Chain Solutions (RSCS) to acquire furnishings and equipment from approved suppliers.
Advertising Advantages of the Brand
Yum! Brands offer the power of a well-tested media department. The company has ample experience marketing fast food, which means their teams are able to develop a direction suited to your location and demographic that has usually been tested in various other locations. The company's expertise can help broaden customer appeal, which has the potential to increase the average check size. Field offices are located throughout the U.S. to support franchised and company-owned restaurant operations.