Who doesn’t love pizza? The pizza industry is a $132 billion industry globally and with Asia leading most of the current industry growth due to a fast-rising consuming class and a large and growing share of the world’s population. While there are many factors that drive profitability in the industry, there are some key factors that contribute to the continuing popularity and growth of the industry worldwide.
These success factors include:
Pizza brands that focus on the core pizza products have tended to do better than that have complicated menus that consist not only of pizzas but offer various appetizers, salads, pasta and rice dishes, grilled dishes, and desserts. Brands such as Pizza Hut have moved in this direction, while brands such as Little Caesars Pizza continue to focus on a core menu of pizzas, wings, and a very limited non-core menu items, which simplifies the operation and maximizes the efficiency of the business while being able to operate on a smaller store format.
While every pizza brand is different, profit margins can range wildly between 0 – 25% or more and the payback period can range from 2.5 – 5.0 years, depending on the franchise brand and the country the brands operate in.
Author: Sean T. Ngo is the CEO and Co-Founder of one of Asia’s leading franchise consultancy, VF Franchise Consulting. He is Vietnamese American and has been living in Vietnam for over 16 years. You can reach him at [email protected] or [email protected]