How Much Does It Cost to Start a Pizza Franchise?

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Every day, some 13 percent of Americans eat pizza, according to the U.S. Department of Agriculture. Among males ages two to 39, the stats are even higher - one in six will eat pizza today for breakfast, lunch or dinner.

America’s love affair with pizza has created a booming industry, to the tune of $37 billion per year. We eat one-third of the world’s pizza, in fact. This makes the idea of opening a pizza franchise appealing for entrepreneurs, but getting started can be a long and expensive process, and there are firm requirements franchisees must meet to be considered. It’s worth the investment if done right, but it’s important to know what to expect before you starting dreaming of dollar signs and unlimited free pies.

Financial Requirements to Open a Pizza Franchise

Pizza franchises, like all fast food chains, typically set minimum net worth and/or minimum liquid assets requirement for franchisees. Minimum net worth requirements can range from $100,000 to more than $1 million. Those who don’t meet the minimums won’t be considered in most cases.

Additionally, there are initial franchise fees that range from about $10,000 to $50,000; ongoing service or royalty fees that usually range from 3-8% of gross monthly sales; and, in some cases, monthly advertising fees.

The good news is, most pizza chains are forthcoming about their fees, posting them clearly on their websites to inform potential franchisees. We’ve gathered some cost details for some of the most popular franchises below.

Pizza Hut: $295,000-$422,000

In addition to the information below, Pizza Hut’s website offers a very detailed breakdown of fees and expenses required to open a franchise, including costs for things like inventory, computer equipment and building improvements. Click here to view the complete list.

• Minimum net worth: $700,000
• Minimum liquid assets: $350,000
• Initial franchise fee: $25,000
• Royalties: 6% of gross monthly sales
• National advertising: 2.5-3% of gross monthly sales

Domino’s: $119,950-$461,700*

Opportunities with Domino’s are very limited. The company only seeks new franchisees when it does not have existing franchise owners who can buy or build stores in need. Fees are not published online, but FranchiseHelp.com reports the following, which does not included minimum net worth and liquid assets.

• Initial franchise fee: $25,000
• Royalties: 5.5% of gross monthly sales

Little Caesars: $266,000-$681,500

Like Pizza Hut, Little Caesars offers a detailed breakdown of costs. The total cost varies widely because it is influenced by a number of factors, including whether you open a standalone franchise or a smaller store in a strip mall.

• Minimum net worth: $250,000
• Minimum liquid assets: $100,000
• Initial franchise fee: $15,000-$20,000
• Grand opening advertising: $12,000-$20,000

Papa John’s: $250,000 for an average strip mall unit

Papa John’s is actively seeking franchisees to expand throughout the United States, and it runs incentive programs that wave franchise fees, offer reduced royalties for four years and provide food credits. The numbers below represent normal fees without the incentive package.

• Minimum net worth: $250,000
• Minimum liquid assets: $50,000
• Initial franchise fee: $25,000
• Royalties: 5% of net monthly sales
• Advertising: 8% of net monthly sales must be spent for marketing purposes, including the national marketing fund and local marketing initiatives
• Financing: Ability to obtain up to $275,000 in financing

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