Franchised Pizza Store Update

Franchised Pizza Store Update

Note from Tom:

I have written about pizza shops and how saleable they are. I mentioned that I can count six within a six mile area of my home – and we live 30 miles + from Boston. I recently found some interesting figures from the recent PMQ survey. The question was: How many pizza shops are there within a 10 miles radius of your shop?

Less than 5 30%
5 to 9 36%
10 to 15 13%
More than 15 20%

Indeed there a lot of pizza shops. In addition, I can’t remember ever seeing a closed one. That doesn’t mean that some owners haven’t put the key in the door, but I doubt that many have for lack of business. The good ones are very saleable. Following is some information that is current and we will be adding to it later in the year.

Franchised Pizza Store Update

Following is a report on franchised pizza businesses. It is comprised mainly of two lists – The first list displays 12 franchise chains and their rule of thumb which will produce an approximate price when the annual sales are multiplied by the rule of thumb. Several of the businesses had a percentage multiple of, for example of — 35% to 40%. The lower figure was the one used in tabulating an average. This produced an average rule of thumb of 37.5% of annual sales = the “ballpark” price.

Blackjack’s Pizza 40% of annual sales
Domino’s Pizza 45% of annual sales
Gatti’s Pizza 25% of annual sales
Godfather’s Pizza 25% of annual sales
Hungry Howie’s Pizza 35% of annual sales
Little Caesar’s Pizza 55% of annual sales
Mountain Mike’s Pizza 28% of annual sales
Mr. Jim’s Pizza 35% of annual sales
Papa Murphy’s Take n’ Bake 35% of annual sales
Pizza Factory 30% of annual sales
Pizza Inn 47% of annual sales
Sarpino’s Pizza 50% of annual sales

The second displays 21 franchises pizza businesses along with their estimated annual sales for 2010. The two highest grossing franchises and the two lowest grossing chains were eliminated when figuring an average. This produced an average of $607,600.

Here are some franchised pizza operations and their approximate annual sales per unit:

Bertucci’s Brick Oven Pizza $2,000,000
California Pizza Kitchen $3,000,000
Chuck E. Cheese’s Pizza $740,000
CiCi’s Pizza $805,000
Domino’s $560,000
Gatti’s Pizza $900,000
Godfather’s Pizza $464,000
Hungry Howie’s Pizza $410,000
Little Caesar’s $415,000
Marco’s Pizza $540,000
Mazzio’s Pizza $756,000
Mountain Mike’s Pizza $525,000
Papa Gino’s $830,000
Papa John’s Pizza $675,000
Papa Murphy’s Take N Bake $490,000
Pizza Factory $375,000
Pizza Hut $595,000
Pizza Inn $414,000
Round Table Pizza $720,000
Sbarro Pizza $625,000
Shakey’s Pizza $900,000

Source: Franchise Times, Nation’s Restaurant, Pizza Marketing Quarterly, Top 400 Restaurant Chains 2010 and various other publications.

Note: The figures above are 2010 estimated annual figures. Our calculations have revealed that annual sales of franchised pizza stores have decreased by approximately 10 percent from 2009 to 2010. The figures above reflect this decrease. In some cases we have just reduced the 2009 figure by approximately 10 percent which might not be quite fair to some franchises. However, since most franchise companies don’t reveal the average figures for the franchised units, we have relied on many sources to come up with the above figures. Keep in mind that they are educated estimates.

A recent survey conducted by PMQ Pizza Magazine revealed the following as part of its annual survey. If you are at all involved in selling pizza businesses this email publication is absolutely necessary.

79 percent of the respondents own only one unit.

Here are the results of the question concerning annual sales.

Less than $250,000 in annual sales 24.3%
$250,000 to $500,000 36.8%
$500,000 to $750,000 14.5%
$750,000 to $1 million 8.6%
$1 million to $2 million 6.6%
$2 million + +7%

Figures don’t add up to 100% as some people declined to answer this particular question.

Expenses as a percentage of annual sales

Food Cost 28% to 30%
Payroll/Labor 25% to 30%
Occupancy 6% to 8%

Source: 2011 Business Reference Guide

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