3 min read

How Much Does a Pizza Franchise Cost?

Jack 11/14/24 3:29 PM

Franchise Cost Pizza Franchise

5:09

Are you interested in learning how much a pizza franchise costs? If so, you’re not alone.

At Jack in the Box, questions about the franchise investment, fees, and royalties are some of the most common we receive.

In this article, we will take a look at how much it costs to start a pizza franchise.

Pizza Franchise Cost Breakdown

The total cost of your pizza franchise can vary significantly depending on several factors including:

Franchise Fee: This is a one-time payment to the franchisor for the right to use their brand, systems, and support.
Initial Investment: This includes the cost of the franchise fee, equipment, inventory, leasehold improvements, and working capital.
Ongoing Royalties: These are recurring payments to the franchisor, typically a percentage of your sales.
Advertising Fees: You may be required to contribute to a franchise-wide advertising fund.

There are several other factors that can influence the overall cost of your pizza franchise:

Location: Prime locations in high-traffic areas will generally be more expensive.
Size of the Franchise: Larger franchises may require a higher initial investment.
Level of Customization: The degree of customization you want in your restaurant can affect costs.
Experience Level: If you have no prior business experience, you may need to invest in additional training or consulting.

For example, here is a breakdown of our costs at Jack in the Box:

Franchise Fee: $50,000 per Location
Royalty Fee: 5% of Gross Sales
Advertising Fee: 5% of Gross Sales
Estimated Initial Investment: $1,810,600 - $4,207,500

Due to these costs that will make up your initial investment, we have two financial requirements all of our potential franchisees must meet:

Minimum Liquidity: $500,000
Minimum Net Worth: $1,500,000

Please note, these requirements for liquidity and net worth will vary by how many restaurants you commit to develop.

Franchise Fee & Royalties: What Do I Get?

Paying your initial franchise fee and ongoing royalties will grant you access to a wide variety of assets and services designed to help you run your restaurants.

Here are a few of the items you’ll receive at Jack in the Box:

Use of the Jack in the Box® brand name, systems, logo, and store design.
A comprehensive JIB Management Training Program designed to prepare you for daily operation of your restaurant.
Site selection support.
Construction & design support. Conceptual floor plans and site plans are provided. These must be sealed by an approved architect before submitting them to local government entities.
Franchise development support and a step-by-step guide through the process of new-store layout, ordering of equipment, furniture, and fixtures.
Support and training assistance in pre-opening and opening.
Ongoing support from: JIB Franchise Business Consultants, the JIB Culinary & Innovation Team, and R&D. Plus, purchasing, distribution, and marketing support for local store.

When you pay your franchise fees and royalties, it will ensure you have the best possible resources to run your pizza franchise and bring customers to your location.

How to Finance Your Pizza Franchise

Due to the financial requirements of opening a pizza franchise, you may need to consider your financing options to get started.

Some of the most popular financing methods in the franchising industry are:

Small Business Administration (SBA) Loans
Franchisor Financing
Commercial Bank Loans
401k Rollovers
Business Partners
Stocks & Bonds

At Jack in the Box, we do not provide direct franchisor financing. However, we can provide a list of banks who have expressed interest in lending to our franchisees.

Consider Multi-Unit Franchise Incentives

One way to reduce your pizza franchise costs is by asking if the franchise you’re interested in offers multi-unit development incentives.

Jack in the Box offers an incentive for multi-unit franchisees who choose to sign up for three or more stores under our Development Incentive Program.

Eligible franchisees are able to take advantage of reduced royalties during the first five years their location is in operation.

The royalty fee (5% of Gross Sales) will be reduced to 1% for the first year, 2% for the second year, 3% for the third year, 4% for the fourth year, and 5% for all subsequent years.