Pizza Hut Franchise - Information and Costs

Pizza Hut sign on the roof of a restaurant.
Paul Seheult /Eye Ubiquitous / Getty Images

In 1958, Frank and Dan Carney, both students at Wichita State University, borrowed $600 from their mother, purchased second-hand equipment, and “rented a small building on a busy intersection in their hometown of Wichita, Kansas.” There they opened the first Pizza Hut. It did not yet have the now famous red roof that the Pizza Hut brand is known for, but it shared the same fundamental tenants of the brand today; namely, providing a quality pizza pie at an affordable price.

Today, Pizza Hut is owned by Yum! Brands, Inc., the parent company of Taco Bell, Kentucky Fried Chicken, A&W Restaurants, and Long John Silver’s. It is the world's largest pizza restaurant company with more than 6,200 restaurants in the United States and more than 4,000 restaurants in 100 other countries. Pizza Hut as a brand also includes several different restaurant formats, including the original family-style dine-in locations, delivery and take-out only locations, and even a more upscale Italian bistro concept, which began operating in 2004.

For decades, the quick-service delivery pizza market was dominated by a few major players. In this new millennium, however, that pizza oligarchy has been challenged by a number of young upstarts looking to capture their own slice of the market. The competition has come from all sides, through menus expanding to include salads and a generally broader variety of options, to brands who have tightened their focus on creating the best pizza pie they can make.

The market seemed to be dictating that the consumer either wanted everything, or they wanted the best thing.

In recent years, Pizza Hut has attempted to rebrand itself as a company that offers a premium product at a not-so-premium price, using better ingredients and coming up with fresh and inventive new flavors and dishes.

Accompanied by a logo change, this was Pizza Hut’s attempt to combat the increased competition in the quick-service delivery pizza sphere.

Their new slogan – “The Flavor Of Now” – clearly exemplifies this push for a new identity. It is too early to know if this tactic is going to have the desired effect, but it seems like an uphill climb to convince consumers that Pizza Hut’s product – which was traditionally low quality, reflecting the price point – will be able to compete with new competitors whose entire brands are built on quality.

Background and Benefits

Pizza Hut has been making pizza for over 50 years, serving up original -style pizzas available in a variety of crusts. As America’s first national pizza chain, Pizza Hut has enjoyed continuous growth. At present Yum! Brands is the worldwide leader in multi-branding, offering consumers choice, convenience, and value by combining multiple brands under one roof.

Multi-brand opportunities still exist across America, though some have proven less successful than others.Yum! Brands’ multi-brand offerings which include Kentucky Friend Chicken along with Taco Bell have proven to be successful, but the Pizza Hut brand has not shown the same type of success when included with other brands.

How Much Does a Pizza Hut Franchise Cost?

The initial investment required to open a Pizza Hut location lays between $295,000 to $2,000,000, with a net worth of $700,000 and $350,000 in liquid assets; however, there are also other requirements. You must commit to building at least 3 restaurants over 3 years.

Pizza Hut is part of an organization that offers tremendous franchise support including advertising, business coaching, training, development, and cooperative sourcing. Performance Improvement Programs and support are also offered to each new franchisee, along with 12 to 16 weeks of required training.

What We Like About Pizza Hut Franchises

Yum! Brands offers the power of multi-branding that includes two national media budgets, two category-leading brands, and two menus. It can broaden customer appeal, which has the potential to increase the average check size.

Field offices are located throughout the U.S. to support franchised and company-owned restaurant operations.

Pizza Hut represents a strong brand that has demonstrated economic stability over time. Yum! Brands is committed to franchising with over 80% of its stores owned by independent franchise operators.

Pros

  • Ranking - Ranked No. 11 in Entrepreneur's Franchise 500 in 2016
  • Multi-Branding - Yum! Brands is the worldwide leader in multi-branding.

Cons

  • Operations - Can take up to 46 weeks to open the first store, but it's probably worth the wait.

Pizza Hut Franchise Information

Business Established:1957
Franchising Since:1959
Franchise Fee:$25,000
Royalty Fee: 6%
Ad Fund: 4.25%
Total Investment:$297,000 to $2,000,000
Net worth requirement:$700,000
Cash liquidity requirement:$350,000