The Pizza Factory franchise has been around for over 30 years. Compared to other companies in the industry, it has remained strong in terms of quality and preferences.
Unlike what many believe, the company started in its early years as a franchise to be able to compete with larger companies. However, before that, it was a basic and common pizza restaurant in only one location.
Today, the pizza company offers franchises and many different opportunities for growth, but it does take money to be able to invest in one as most franchising options.
This review will cover how much it costs to open a Pizza Factory Franchise as well as what is required when you are investing in such a business model. Is it better to bet for your independent business, or should you give it a chance?
That can be hard to tell, but we are here to simplify the answer.
Early History: When Pizza Factory Started
The franchise’s history takes us back to 1979 when its owners, Danny and Carol Wheeler, invested in a pizza restaurant for $5,000.
In the beginning, they opened the restaurant naming it Danny’s Red Devil Pizza on California State Route 41, Oakhurst, California.
The restaurant performed relatively well during its first two years to the point of having Joyce and Ron Willey. They were frequent customers and opened another location in the city called Pizza Factory.
Both locations were performing well thanks to pizzas but also different recipes added to the list. In 1982, friends approached the Wheelers and Willeys about opening their own Pizza Factory restaurants.
This was, unintentionally, the beginning of the franchising opportunity.
After their friends’ approach, they have allowed them the use of the Pizza Factory name for a small fee. They even offered help to set the new restaurants in San Joaquin Valley.
Seeing how people wanted to open their own restaurants, Joyce Willey and Carol Wheeler wanted to preserve the consistency of the food. They convinced their husbands that they would franchise the business starting in 1986.
The company was owned by Ron Willey and Danny Wheeler and their wives, and franchises were handled as usual.
At the time, the requirements to become a franchisee included between $50,000 and $55,000 cash and a $20,000 franchise fee.
A three percent royalty charge was charged by the company, which is considered low compared to similar franchises. A one-percent advertising fee was also charged.
After the franchising model started and some new locations were set, each earned between $25,000 and $100,000 annually.
The chain operated 36 franchise restaurants in California, Arizona, and Idaho. Willey stated that the company had a goal to open 20-25 new restaurants each year.
However, Willey and his partner wanted to be able to manage the company independently. Their ultimate goal was to have 200 restaurants by 1992.
Although most franchises had very little competition, the couple stated that this was not what made them successful. In order to teach Pizza Factory franchisees everything they need to know about the company and how to operate a restaurant, three training schools were created to maintain the quality.
In addition to sponsoring an annual convention, the company also sponsors semi-annual regional meetings.
By 2000, over 45 restaurants were opened in six states, including Arizona, California, and Florida.
Pizza Factory’s first promotion campaign featured television, radio, and newspaper advertisements as well as billboards. The Rice brothers were appointed to represent Pizza Factory on the company’s TV commercials.
Although the franchise’s success continued to the point of opening a new location in China, the owners decided to sell it in 2012.
After Selling: Its Expansion & Where It Stands
Both couples decided to sell the company to now CEO Mary Jane Riva for an undisclosed sum. Mary is known for being a long-standing Pizza Factory franchisee of the business and resident of Murrieta in California.
Riva was then named the president and chief executive of the company. At the time, the company had 111 locations across five western states.
Riva planned to open 20 more locations in 2014, and during the time she has been in the presidency, she has been able to achieve most of her ideas.
These included opening a new Pizza Factory Montana restaurant in Billings in March 2017.
In June 2017, the company also announced plans for a new Pizza Factory location in Kalispell. This is the same location that they previously owned approximately a decade ago.
These new plans are part of a growth strategy that will expand the company’s presence in five small states, including Montana, New Mexico, and Texas. Riva said that although the company doesn’t focus on major cities, considering the most popular franchises are in small ones, it wasn’t a bad idea to include some.
Most of Pizza Factory’s growth has been made in several small places and the main states: Arizona, California, Idaho, Nevada, Washington. Oregon then joined the list of a total of six.
To this date, the company was reduced a bit in terms of locations due to COVID-19 issues. However, it is continuously expanding and remains one of the best pizza restaurants in the USA.
Just keep in mind that this one remains more family-friendly dining than for Millenials compared to other pizza restaurants.
How Much Do You Need to Invest?
If you are considering a pizza restaurant, it may be a good approach to franchise instead of dealing with the entire project on your own.
Pizza Factory is stable and allows you to open a restaurant with all the assistance required. The best part is that it can be even better for you if you are in a small city.
With this in mind, how much capital do you need?
Like every franchisor, it has set its requirements, and they differ from the previous ones since inflation and extra expenses have been considered. Thus, expect to follow these:
- Initial franchise fee: Between $15,000 and $20,000.
- Initial investment: $281,000 to $552,000.
- Net worth requirement: $250,000.
- Cash requirement: $90,000.
- Royalty fee: 5%.
- Ad royalty fee: 3%.
- Franchise term: Renewable.
As you can see, fees have also changed following the success of the company. Moreover, you need to know that the franchise term refers to how long the agreement lasts.
Since it is renewable, it means it does expire at a specific time. With Pizza Factory, you sign for up to 10 years and need to pay a new fee once this expires.
The good part is that the franchise offers financing options, including third-party sources that cover their majority’s initial fees and expenses.
But what does this include to be so expensive?
All this comes with the benefits of becoming a franchisee:
- Two hundred two hours of on-the-job training.
- Twenty-three hours of classroom training.
- Training at the store when needed.
- Ongoing support with marketing, newsletter, meetings, and anything related to the company.
- The marketing support is an individual section that includes advertising, templates, SEO, loyalty programs, email marketing, website development, social media, etc.
- Anything you need to make the franchise successful is provided.
Pros & Cons: Is Pizza Factory a Good Opportunity?
Overall, the company is an incredible franchising alternative when you want to focus on this niche. However, you need to determine if franchising itself is what you want.
Although we should be focusing on the company, we are more interested in the business model in this case.
Franchising means you need to pay royalties all the time, deal with renewable terms, follow the rules and conditions, agree with policies, maintain the company’s images as they like it, and more.
You get to be independent but only to a certain degree. However, this doesn’t mean franchising doesn’t involve benefits.
We will be covering them along with the other cons and pros of the business:
Pros:
- Pizza Factory is a strong company with a great reputation and great customer reviews.
- The restaurant offers more than pizzas. Pasta, cannolis, and other Italian food are included. This allows for variety in the menu.
- You don’t have to start from zero with the business, and all the support can guarantee the perfect setting and opening—even future success.
- Veteran’s discounts are available.
- Financing from third parties is a huge plus.
- It takes between 4 to 6 months to start. This is much less compared to other franchises in the industry.
- You get all the training required to guarantee the standards of the business and its success with customers.
- The franchise continues expanding, which means it is doing things well, and you can rely on its longevity in the market.
- Exclusive territories are available.
- It is possible to have an in house advertising team,
- Multi-unit development opportunities are available.
Cons:
- Franchising means you won’t get a net profit since fees need to be paid.
- It is a full-time job. Not a good fit if you aren’t willing to invest all your time.
- You required 8+ employees to start.
- You can’t (naturally) run the franchise remotely.
- The investment can be expensive for many people regardless of the financing options.
- Food franchises come with many legal regulations to fulfill if you don’t want to fail in your entrepreneurship.
Most of the cons aren’t even related to the company itself but rather the entire concept of franchising and the industry you will be choosing.
Thus, just take the time if it is something you actually want to do.
Is It Possible to Invest Less?
It is always possible to bet for less expensive businesses. However, are they profitable?
If there’s something this pizza franchise shows is that the rate of success is quite high based on how franchise owners have grown and thrived over the years. But you truly need to like this industry and have the money for it.
As much as traditional businesses are amazing, we prefer online options that require a bit less physical effort.
There are many business models, so you need to evaluate them before deciding on franchises or opportunities.
We believe it is a good option to start with online alternatives before jumping to the regular ones. You might be wondering what we recommend to start then. The answer is easy: Lead generation.
This digital business model allows you to generate leads without leaving your home. You don’t even need real estate or other employees. This can help you save lots of money and work around what you want and how you want your business to be.
It is quite easy to understand what you need to do:
- Choose a niche for small businesses or local businesses, such as tree trimming, septic tank maintenance, and others.
- Contact them and offer to build a website for them.
- Once you have closed a deal, you can begin building the site.
- To generate traffic to the sites, you must rank it on Google, which is part of your job.
- After the website is stable, you start generating leads by converting the traffic.
- You get paid per lead.
This passive income model is great because you don’t have to do the same steps twice. You can just wait for the companies to pay you for leads after you have finished the settings and the site generates traffic.
For it, you do need to invest. More specifically, in training and some tools. However, the investment can be much lower than with Pizza Factory and still very profitable or even more than the actual franchise.
Don’t know where to start? This training program can be a great help.
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