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 consumption is high in many parts of the world since it can be made with many kinds of proteins that are favoured by the local consumers, whether the protein is beef, chicken, seafood, or any other type of protein.
- Pizzas can also cater to those that adhere to a vegetarian and vegan diet.
- Pizzas are also a shareable type of food and fits well with the Asian culture especially.
- Pizzas are a perfect dine-in, delivery, and take-away type of food and can be made in stores of various sizes and from large to small store formats.
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 sean@vffranchiseconsulting.com or info@vffranchiseconsulting.com
Frequently Asked Questions (FAQS) About Pizza Franchises
Pizza is a very good business. Consider these 3 advantages to owning a pizza business:
1. Consumer demand: 13% of Americans over age 2 eat pizza on any given day. It’s popular all over. It is most popular in the Northeast and Midwest, according to PMQ Magazine. 3 We eat 3 billion pies per year.
2. Profitability: Ingredient costs are relatively low compared to the price charged, ensuring profitability.
3. Growing industry: The pizza industry is $47 billion a year, and franchises constitute $36.4 billion of that, according to research firm IBISWorld. It is forecast to continue growing over the next five years.
Pizza has become a food staple — whether deep dish, thin crust, unusual toppings or more. Among food franchises it is one of the most popular categories. You get the benefits of the franchise system and branding, together with sound business fundamentals and help choosing locations.
Accordion Sample DesThe amount you make with franchise pizza depends on the type of pizza business you operate. For example, the average Dominoes owner might expect to make between $107,000 to $116,000 per year, according to Glassdoor. However, a Papa John’s franchise owner might make about $142,000 before taxes, says Franchise.com. First, of course, you need to subtract out costs related to food, labor, marketing, supplies, royalty fees and real estate associated with these franchises.cription
Yes, a pizza franchise can be profitable. For example, the top 75 percent of Marco’s Pizza restaurants made between $543,093 and $1,736,679 in net royalty sales in 2019. The average store spent about 31 percent on food and supplies and 25 percent on labor. The exact amount each store makes depends on the size, market, and expenses.
Opening a pizza franchise can cost anywhere from $25,000 to over $1 million, depending on locations of your franchise business and other factors. Most fall somewhere between $200,000 and $600,000. Those that just offer a mobile component or pickup and delivery service tend to be cheaper. Large, dine-in restaurant locations with extensive menus fall on the more expensive end of the spectrum.
