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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

54 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.

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