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LITTLE CAESARS: What Franchisees Make on a $5 Pizza

November 17, 2009

Question:  Can Little Caesar’s franchise owners really make money on a five-dollar pizza?

Answer:  Not much. 

SmartMoney.com surveyed franchisees from different franchise chains regarding the cost to them of some current and recent promotions. The Smart Money article points out that franchisees generally bear the brunt of a promotions’s cost, including the food, labor, rent and utilities, among other things.

Here’s the Little Caesars HOT-N-READY pizza promotion, which report a $.90 profit per $5 pizza:

Little Caesars

Promotion: HOT-N-READY Pizza – Get one 14-inch large cheese or pepperoni pizza for $5 at participating locations.

Pre-promotion price: $10.99 (one large one-topping pizza)

Promotion Price: $5

Bottom line for restaurant: Profit of roughly 90 cents a pizza

Introduced six years ago, Little Ceasars [sic]HOT-N-READY Pizza promotion offers 14-inch cheese and pepperoni pies for just $5. Even though some stores charge about 55 cents more than that, margins are still slim. The cost of a single pizza’s ingredients and packaging amounts to about $3.50, according to a franchise operator in Georgia. Tack on another 60 cents for rent, labor and utilities and franchisees earn roughly 90 cents a pie. Little Caesars’ spokeswoman Colleen Kmiecik says the company’s own calculation on per-item profitability differs from those provided to us by franchisees, but she declined to provide specific figures. She also says the company provides long-term profitability information to its franchisees to show how the promotion will boost their bottom line, but would not provide further details.

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WHAT DO YOU THINK OF LITTLE CAESARS PROMOTIONS?  SHARE A COMMENT BELOW.

Comments

56 Responses to “LITTLE CAESARS: What Franchisees Make on a $5 Pizza”

  1. Joe says:

    I’m a franchisee in michigan and currently looking to move in a better environment so I can sell LC pizza all yr round.I read all of ur comments but in my own experience LC help me in my worst time.im sorry ti disagree with almost everybody’s number.if u own a store fully paid ur looking at a good return on ur investment if not u will stills survive.don’t forget the store pay for itself in 7 yrs that means u already have a 15 percent return every yr aside from what u take home.how I wish I could open as many store I can even with a partner to achieve faster growth.anybody know a little Caesars for sale in Cali,Arizona,Vegas and any warmth weather territory pls email me at [redacted] and I will be happy to entertain any proposition.to make this story short location and good operators can give u that security that ur looking for

  2. lisa says:

    I am starting to look into buying into LC frachise. I would greatly appreciate any and all guidance. I am located in California.

  3. Huy Nguyen says:

    I’m looking for investor who would like to partner with me in opening a LC in Sacramento California. Please e-mail me if your interested and we can work out the numbers.

  4. Lemontve green says:

    I would like to open a little LC also.How much are u talking about investing.

  5. Amy says:

    I am planning on opening a LC in California. I am looking for an investor.. If interested please email me at [redacted]

  6. Dan says:

    So yea… im not a franchisee… call me.. a former customer of little caesars… The price is right from a customer stand point… but simply put… I cannot eat their pizza… I eat other pizza… but little caesars pizza gives me the absolute worst heartburn ever.. and I have no idea why… googling “little caesars heartburn” turns up just an enormous amount of results and complaints… I used to eat it often… I just thought I had some sort of problem that was just me… Until I searched google and saw these results… then I stopped eating little caesars pizza… after about 3 months (no heartburn might I add)… I was for some reason craving some crazy bread and a LC pizza… So I went back and got some… Needless to say I had extreme heartburn… I mean… when you taste acid coming up in your throat… its a problem… havent had a LC pizza since… and havent had heartburn since (except when I got a pizza hut pizza… that too gave me a little heartburn… but not as bad as LC)…

    So.. now… The only pizza I eat is from non-chain pizza joints that use home made sauce… I never get heartburn from them..

    I have come to the determination that there is some preservative used in processed… mass produced sauces that somehow causes a negative reaction to the tomatoes.. that may or may not cause heart burn in some people… either way… I am kind of angry that I cant have LC pizza anymore… I mean… It does taste good… price is awesome.. one kind of close to me.. but its not worth the 6 hours of heartburn and sleepless nights…

    I would advise franchisees to contact corporate to see if they are aware of the issue and maybe correct it.. because its god awful heartburn..

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