LITTLE CAESARS: What Franchisees Make on a $5 Pizza

View Comments

• Hi,

  How many Pizzas + Crazy breads can a Little Caesars sell per day?

• Fountain sodas 99% profit. You must be stealing the syrup, co2, cups, straws and the ice from 7-11. Electricity is 1% knob. A franchise, any franchise is buying a job. Period. Good, bad or ugly. A McDonald's if you could ever get one nets the average
  Owner 335,000$ annually. That's the top dog. King of the hill. A concept like chipotle can do 80,000 a week with unbelievable margins. Cogs is so low you would take your mother to Aruba scuba diving to get one. That's why you can't. Highly profitable, smartly run concepts don't need us to buy them. Chipotle has it down too. Where did they get their $. Ronald McDonald, and paid his ass back in no time. Beware cause they have duplicated all foods to their way of thinking and soon you will see. Prototype Chinese already in DC. Do it on your own. Steal the concepts idea, put your heart and soul in it so you have no one to blame if you go out. Be the master of your own destiny. Power to the little man.

• If you have $400k you are not going to invest all of that in LC. The most likely case is that you will require $400k, which your would obtaining via a bank. The bank will require about 20-30% downpaymen, maybe lower or higher depending on the program and/or your credits, background. Worst case, you are required 30% downpayment so your initial invest to start LC franchise is $120K, making $40k a year is actually returning about 25% on your initially invest. But you have to take into account your payment to the bank for the loan, franchise fee, etc.

• Trust me, they make money at it.

  I've worked for LCE 3 times. The first time the big sell was 2 everything pizzas for 10.99. We made money. The second time was adding to the menu to make the place a LC Italian Kitchen. In my area alone there were 40 planned in a 12 month period. They stopped after 4 because it didn't work. The last time $5 Pep Pizza. They make money.

  The owners watch the bottom line like a hawk. If what they do does not make money they stop. Franchisees are making money if they are taking care of customers.

  Fact- 98% of non franchised businesses fail. 98% of franchised businesses succeed.

  [RC - What you say about Little Caesar's may be true, but both your statements that 98% of non-franchised businesses fail and that 98% of franchise businesses succeed are untrue and dangerous. The "98% franchise success rate" is a lie that is perpetrated by dishonest franchisors, brokers and salesmen that's been long since debunked. If you have any doubt, look at the franchise failure rates of these franchises: https://unhappyfranchisee.mystagingwebsite.com/worst-franchises-in-america/ Or read through the rest of the site. - ADMIN]

• It will cost you around $250k to go into a space and put in an LC. You may can find some landlords who will be willing to give you some build out money, then tack it on the lease. If you do your homework and are good at negotiating, you can get into a store for $60k (not including any finish out a Landlord may supply).
  Also, some of the finish out you can do yourself to save labor expense.
  if you open a location and operate it, you can easlily pull 100k per location.
  But, you need high visibility, easy access and a minimum 10k people within a mile radius.
  I have 6..

• I agree with Mr. Peterson.... If your interested in numbers do your homework; request an FDD and quite frankly research the brand..... How many closures and why? The numbers on here appear to be guesses and leaving a lot of costs out of the picture... Lots of reference to putting a store "in low income densley populated areas" Really, is that where you want to work 60-70 or more hours a week? Four major national brands with in a 1 mile of your proposed locations with boards on the windows? The franchisor is not the one who will be staffing the store or making bank runs, they will not be receiving the phone calls at 2:00 a.m when the alarm has gone of for the third time that week. Franchising is beautiful when it works, and very ugly when it does not....Finding what your passionate about first, and then finding the right franchisor in that industry... What is their strategy get rich off selling equipment, store supplies/commodities, and opening stores or building a sustainable brand that focuses on growth by making their franchisees profitable....

• The numbers make no sense, one guy said his best day was 200 pizzas on a Friday, seems that is the best day. The only way these guys would make money is probably taking food stamps and discounting the Stamps for pizzas.

  The numbers make no sense, these guys used to run convenience stores in Black neighborhoods where they sold stuff for food stamps, no wonder so many got caught, using the same model they will make money or since this is a cash business can do a lot of laundering

• I have been a banker and a small business owner -- but never a franchise. Am 'considering' a LC unit. However, doubt I'll go that route. Other self-started businesses take less cash and have much less risk. As to 'return', since my mom ran a small convenience store 30 years ago, I've been mesmerized by what some business owners consider return on investment. (Read the finance books....including real estate finance books....they detail different returns.) The FIRST thing any business owner should consider is how much his time is worth. If he's leaving a $50,000 per year job to open a dinky franchise, his 'opportunity' cost is $50,000. EVERY business owner should 'pay' himself a reasonable amount (including taxes and benefits) whether he/she takes the actual cash out or not. In other words, if your EBITDA is $40,000 a year and you work 10 hours a week running the business and assume you're worth $25 an hour, deduct 1.2x $25 (to include benefits) so 52 weeks x $30 an hour x 10 hour weeks = $15,600. Your 'return' is now $24,400 on $400,000. As the finance books teach, a risk-adjusted return is much, much higher than the approximate 6% you're getting out of this business. As real estate people know, cash-on-cash return is one key measure. If you paid $50,000 cash and borrowed $350,000, your cash-on-cash return is $24,400/$50,000 which is close to 50%. (Even this is incorrect because the interest carry has to considered differently.) The point being: before you learn how to make a pizza, learn how to read a financial statement and how to determine true cash flow and ROI, ROA, terminal values, exit strategies, etc., etc.

• You hit the nail right on the head swtrader. A lot of people get into franchising without knowing the finances and the worth of their own time they put into the business. However, as the owner you do own the freedom of being your own boss!

• It may have been mentioned earlier in this discussion; I may have missed it. But, recently a franchise in the town where I live removed some main ingredients from it's product; stuff they'd offered for years. A fellow in town had just opened his store a few months before. I was wondering what happens to the franchise holder when the company changes the product in a way that loses customers.