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How Much Does a Pizza Hut Franchise Cost?




Pizza Hut Franchise

In the Beginning…
Way back in 1957, two brothers living in Wichita [Kansas] borrowed a small sum of money and used it to open a pizza joint.  Fifty-plus years later and now part of a major corporation that includes such familiar fast-food names as Taco Bell, KFC and A&W, the Pizza Hut logo represents probably the most well known pizza brand in the world.  There are more than 6,200 Pizza Hut restaurants in the United States, and more than 4,000 restaurants in close to 100 other countries.

Starting Your Own Pizza Hut Franchise
Only two years after its midwestern launch, the original owners of Pizza Hut recognized the popularity of their concept and the value of offering franchises for sale to others.  This trend continues today, as independent operators own more than 80 percent of Pizza Hut locations.  The corporation will take a very close look at your bank balance in order to judge whether you have the financial resources to succeed.  After all, they want you to represent the Pizza Hut brand successfully.  This requires sufficient up-front capital as well as enough money on hand to help smooth out what can sometimes be a slow beginning, as your location builds its business.

Capital Expenditures
Nearly every parent company charges a franchise fee, which is sort of like an initiation fee.  This shows that you are serious about running the business, and the money also goes toward training, back-office operations (computer systems, software, etc.) and perhaps even advertising.  To begin the process, Pizza Hut will charge you a $25,000 franchise fee.  They also ask that you have a net worth of $1 million, of which at least $360,000 is cash on hand.  In order to actually open for business, you can expect to spend anywhere from $1.3 million to $3.1 million.  Much of this money goes toward things like equipment – pizza ovens, dough-mixing machines, etc. – plus furniture and fixtures, but the significant difference between the high and low figures is almost entirely dependent upon the size and location of your building.

Other Ownership Factors
Unlike its early days, Pizza Hut’s parent company wants a guarantee from its franchisees that they will open at least three restaurant locations in their first three to five years of business.  Clearly believing that more [and bigger] is better, this philosophy also helps expand the brand name within a particular geographic area.  One of the advantages to having more than one store involves the prospect of buying inventory and supplies in bulk, which helps keep operating costs down.  The corporation also levies a 6.5 percent royalty fee against all gross sales, which goes toward supporting the financial health of the parent company as well as providing strong national ad campaigns.  An intensive training regimen that generally lasts from 12 to 16 weeks will prepare you to be a competent Pizza Hut owner, and the corporation has field offices scattered throughout the country to offer active, ongoing support to all its franchisees.

Top Rankings and Multi-Branding
One of the best reasons to own a Pizza Hut restaurant is the fact that it consistently ranks as the best national pizza franchise in the country.  Significant name recognition easily translates into solid financial success.  Another benefit involves the other brands that are part of the umbrella corporation.  It is possible to open a Pizza Hut store that also shares space with one of the other big names – for example, a unit that sells both pizza and Mexican-style food (Taco Bell), or one that sells pizza alongside burgers and fries (A&W), or fried chicken (KFC).  This multi-branding concept gives the franchise owner two menus to sell, and two national media campaigns from which to benefit.  One estimate claims that it may take close to a year to open a Pizza Hut location – what with build-out, delivery of equipment, and the hiring of a trained staff – but experts generally agree that the effort is well worth the wait.

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