5 Things You Need to Know Before You Buy a Pizza Hut Franchise
The pizza delivery giant is one of the most expansive franchises in the world. Is it a good investment for you?
"Pizza Hut is the most loved pizza brand in the world."
Take a trip to Pizza Hut's franchising site, and you'll find these words in big, bright lettering. It sounds like the usual sort of marketing phrase that doesn't mean anything, but in this case, if we're talking about sheer numbers, it might just be true.
For example, Pizza Hut ranks third among pizza franchises in the 2018 Entrepreneur Franchise 500 list (and 47th overall), trailing just Papa John's and Marco's Pizza. But, at the start of 2017, Pizza Hut had just under 15,000 locations worldwide, while Papa John's had approximately 5,000.
Pizza Hut had 8,760 international franchises. Marco's had 13. That's not an insignificant difference.
There's no question that the Pizza Hut franchise is one of the most popular restaurants across the globe, and that sort of branding and clout can help make your franchise a success.
But, just because Pizza Hut is a great franchise doesn't necessarily mean it's right for you. Here are five things you need to consider before diving in.
There are plenty of franchises on the Franchise 500 that you can buy for $25,000 or less. Pizza Hut is not one of them. In fact, you'll pay that just in the initial franchise fee. Then, after construction costs, buying equipment and other startup costs, you'll end up paying $302,000 -- minimum. Depending on your exact location and specifications, that number could balloon to more than $2 million.
By comparison, a Papa John's franchise will cost between $130,120 and $844,420. A Marco's Pizza franchise will run anywhere between $222,830 and $663,830.
Given Papa John's and Marco's respective price tags, you might think the Pizza Hut price is exorbitant, but it's actually right in line with other popular food franchises. For example, a McDonald's will cost between $1 and $2.3 million. A Dunkin' Donuts will run between $229,000 and $1.7 million. Sonic's price range is $1.1 and $2.4 million.
But, just because it's on par with other big-name brands, doesn't mean it's affordable for everyone. Pizza Hut requires a franchisee has a net worth of at least $700,000. That's not exactly chump change.
Pizza Hut's training regiment is a little different than most other restaurants and franchises. Most places require a combination of classroom and on-the-job training. For example, Marco's requires 266 hours of on-the-job training and 60.4 hours of classroom training.
Pizza Hut skips the classroom training altogether and extends the on-the-job training. Expect eight to 12 weeks (or 320 to 480 hours) of training at your location when you start a Pizza Hut franchise.
At the start of 2008, there were 11,734 Pizza Hut locations across the world -- 5,080 franchises in the U.S., 4,016 franchises abroad and 2,638 restaurants owned by the company.
By the start of 2017, there were 14,997 Pizza Huts -- 5,885 franchises in the U.S., 8,760 abroad and 352 restaurants owned by the company.
So, over nine years the company has seen 805 more U.S. franchises and 4,744 more international franchises, but 2,286 fewer company-owned restaurants.
That number represents 27.8 percent growth in units in nine years.
Despite the large number of locations, Pizza Hut is still looking for investors both across the globe and the U.S. The Pizza Hut franchising website showcases opportunities in northeastern states like Pennsylvania and New York, but you'll probably need to request more information from Pizza Hut to find specific opportunities.
However, just as important as the geographic location is the physical location -- or what type of store you choose to franchise. Do you want to be part of a mall or a standalone restaurant? Pizza Hut says you can find its restaurants in airports, shopping malls, college campuses, casinos, resorts and more.
What exactly are you getting with your investment, other than a pizza restaurant? After all, you could probably start your own pizza delivery place for $2 million. Pizza Hut is similar to many franchises in that it offers two types of support.
The first is ongoing business support, which includes a newsletter and conventions you can attend with other franchisees to learn tips and tricks of the trade, as well as a grand opening, a toll-free line and online support.
The second type is marketing support. Here, the international brand can help you with more than just national or regional media. The company will also help with a loyalty program, an app, co-op advertising and ad templates you can use to market your business.