- 2023 Franchise 500 Rank
#40 Ranked #60 last year
- Initial investment
$367K - $2.1M
- Units as of 2023
17,996 4.5% over 3 years
Pizza Hut Franchise
Everyone loves pizza, so there will always be a market for great pizza chains and restaurant companies. If you're looking to build a business that will always have a hungry customer base, a Pizza Hut franchise is right up your alley.
For numerous reasons, starting a Pizza Hut restaurant franchise could be an excellent idea.
Currently, Pizza Hut is the largest pizza restaurant chain in the world, hosting over 6200 restaurants in the United States alone. There are another over 4000 restaurants located in other countries.
For over 50 years, Pizza Hut has grown its brand and market dominance. Today, it’s a household name offering pizza, garlic bread and plenty of other food products to its loyal customer base. Pizza Hut offers franchise opportunities to those with the drive and ambition to succeed.
Do you need help figuring out where to start or what it takes to start a Pizza Hut franchise? This article will go over everything you need to know.
Why should you start a Pizza Hut franchise?
You may want to start a Pizza Hut franchise for many reasons.
For example, Pizza Hut is a subsidiary of its parent company, Yum! Brands. Why does that matter? In a nutshell, Yum! provides all of its subsidiary companies with substantial resourcing and marketing support.
As a result, you’ll never feel like you are running your Pizza Hut franchise entirely by yourself. Pizza Hut is a successful multinational company because of its integrated corporate resources for franchise owners.
That’s not the only reason to start a Pizza Hut franchise. You can pick from one of three different restaurant types for your franchise business, including the following:
- Restaurant-based deliverysystem restaurants or RBD system restaurants. These include dine-in and carry-out restaurant options for customers. Think of the classic Pizza Hut restaurant you've probably patronized in the past; that's what this restaurant model is.
- Delivery or carry-out or Delcosystem restaurants. These offer approved products to be sold for carry-out and delivery only, essentially acting as a delivery food station.
- Delivery-based restaurants or DBR and fast casual Delcosystem restaurants. With this restaurant model, your employees will deliver products for off-premises consumption, but you'll also offer some dine-in consumption options. It's essentially a hybrid restaurant model.
Given this flexibility, you can start a Pizza Hut restaurant of whatever type. If you want to run a clean, neat establishment with lots of seating areas, you can do that. Or you can lean more into the dine-out craze currently sweeping the country. Your business opportunity is yours to customize.
However, note that Pizza Hut does recommend that franchisees or principal owners participate in the day-to-day operation and running of their system restaurants, though it is not explicitly required.
Still, Pizza Hut recommends that only business owners and managers who enjoy hands-on work apply for franchising. A lot goes into running a successful Pizza Hut chain restaurant; most work occurs on-premises.
Does Pizza Hut grant franchisees territory exclusivity?
Part of why Pizza Hut is such a popular franchisor is because it grants limited exclusivity to franchisees.
Specifically, each franchisee gets a protected radius of about 500 yards surrounding their restaurants. This way, you don’t have to worry about another Pizza Hut franchisee directly cutting in on your profits or competing for the same customer group.
That said, you’ll still need to choose the right location for your restaurant carefully, as the odds are that big cities will have many Pizza Hut franchised locations already established.
Luckily, the franchisor will help you choose the perfect spot based on your initial franchise fee, cash reserves and other factors.
With Pizza Hut’s help, you can set up a new restaurant with an underserved market, improving the likelihood that you’ll immediately thrive, even accounting for royalty fees and loans.
On top of that, Pizza Hut will guarantee a specified delivery area for the restaurant you choose to operate. That way, you won’t have to compete with other Pizza Hut delivery services.
What resources and support does Pizza Hut provide franchisees?
Pizza Hut franchisees can use various support resources, including online support, field operations support, site selection support and security and safety procedures support.
On top of that, you’ll get access to proprietary software and the franchisee intranet platform. If you ever have a serious question to ask corporate, you’ll find it easy to contact them.
As a business manager, you can attend Pizza Hut meetings and conventions to grow your business skills and network with other franchisees.
Pizza Hut corporate will provide further marketing support as you market your Pizza Hut location. Ad templates can quickly prepare your online and conventional marketing media.
You’ll also receive social media marketing support, plus be able to use the Pizza Hut corporate loyalty program and app. With those resources, you’ll be able to curate and maintain a loyal customer base in your local area for years.
How much does starting a Pizza Hut franchise cost?
But what will it take to start a brand-new Pizza Hut franchise? As it turns out, that answer can vary depending on your franchise location and market competitiveness.
As specified in the Franchise Disclosure Document (FDD), you'll have to pay a minimum initial franchise fee of $25,000. Then you'll need to make an initial investment, ranging between $367,000 and over $2 million for some of the more competitive locations.
Therefore, your net worth requirement is $700,000; Pizza Hut requires this to ensure new franchisees have the funds needed to make their restaurants successful. You'll also need another $350,000 in cash (this can be part of your net worth).
After establishing your restaurant, you'll have to deal with royalty fees totaling 6%, plus ad royalty fees of 4.75%. That can diminish your gross sales, but the fees are comparable with other restaurants, like Taco Bell and KFC.
When you sign the contract, you enter a 20-year agreement term. The term is renewable if you enjoy running your Pizza Hut restaurant and its business model. If your restaurant has been profitable, you may be able to keep the same profit margins or even see reduced royalty fees.
Does Pizza Hut offer financial assistance?
Don’t have quite enough to start your own Pizza Hut franchise? Good news; Pizza Hut can connect you to third-party lenders to secure financing for the franchise fee, startup costs, payroll costs and any other initial payment you may need to make to get your restaurant up and running.
Because of this, starting a Pizza Hut franchise could be a little more financially accessible than you initially imagined. However, Pizza Hut doesn't have veteran-specific financial incentives, unlike many other fast food franchisors.
What are the training requirements for opening a Pizza Hut franchise?
To successfully run your Pizza Hut franchise, you must complete an initial training program in Plano, Texas. This includes attending one-on-one meetings with designated Pizza Hut functional leaders, in-restaurant training, completing pizza prep classes at or near the Pizza Hut corporate headquarters and other training.
This all totals approximately 320 to 480 hours of on-the-job training and another 43 to 45 hours of classroom training.
The training program, "First Slice," includes an onboarding checklist. The good news is that the training program and checklist are so comprehensive that you'll feel well-prepared and ready to run your franchise successfully when you complete it.
You should finish the training portion of the program within 3 to 4 weeks before opening your system restaurant.
Plus, Pizza Hut offers all franchisees on-site training or assistance at any time. So, for example, if you hire a new batch of employees for your franchise location, you can contact Pizza Hut corporate and ensure that those new employees are trained to top capabilities.
Start a Pizza Hut franchise today
Anyone can start a successful Pizza Hut franchise. If you’re interested in running a hands-on business and enjoying a practically recession-proof enterprise, consider starting a Pizza Hut franchise today.
Check out Entrepreneur’s other guides and articles for more information about Pizza Hut and other franchise opportunities.
About Pizza Hut
|Franchising Since||1959 (64 years)|
|# of employees at HQ||500|
This company is offering new franchisees throughout the US.
This company is offering new franchisees worldwide.
|# of Units||17,996 (as of 2023)|
Information for Franchisees
Here's what you need to know if you're interested in opening a Pizza Hut franchise.
Financial Requirements & Ongoing Fees
Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
|$367,000 - $2,063,500|
Net Worth Requirement
Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company
What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
Term of Agreement
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
|Is franchise term renewable?||Yes|
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
|Third Party Financing||Pizza Hut has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll|
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
|On-The-Job Training||480-504 hours|
|Classroom Training||37-65 hours|
Meetings & Conventions
Security & Safety Procedures
Franchisee Intranet Platform
Additional details about running this franchise.
|Is absentee ownership allowed?||No|
Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Franchise 500 Ranking History
Compare where Pizza Hut landed on this year's Franchise 500 Ranking versus previous years.
Curious to know where Pizza Hut ranked on other franchise lists? Find out below.
Are you eager to see what else is out there? Browse franchises that are similar to Pizza Hut.
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