Do you want to start a restaurant business by buying Little Caesar’s franchise? If YES, here is how much it cost to open a Little Caesar’s franchise.
Little Caesars Franchise is one of the best restaurant brands in the United States. This pizza chain is just behind Pizza Hut and Domino’s Pizza as the third largest pizza franchise chain in the United States. Popularly known as the largest carryout-only pizza chain in the world, there’s no denying that Little Caesars is doing something right. This pizza company that was established in 1959 has grown into an international brand and a household name.
How Much It Cost to Open a Little Caesar’s Franchise
- Initial Franchise Fee: $15,000 – $20,000 (regular fee)
- Rent: $1,500 – $7,000
- Leasehold Improvements: $50,000 – $750,000
- Fixtures, Equipment and Signage: $186,000 – $392,000
- Grand Opening Advertising: $12,000 – $20,000
- Training Expenses: $12,000 – $16,500
- Start-up Inventory and Supplies: $63,000 – $154,000
- Insurance: $1,200 – $2,000
- Utility Expenses: $1,000 – $5,000
- Licenses and Permits: $1,000 – $20,000
- Additional Funds – 3 months: $17,000 – $47,000
- Royalty: The greater of 6% of Gross Sales for each one-week period or $100 for each one-week period.
- Advertising Fee: Up to 7% of Gross Sales, as determined by the franchisor.
- Blue Line Purchases: Varies.
- Caesar Vision System Annual Support Fee: $2,080 per year per Restaurant
- Mobile Transactions Fee: Up to $0.30 per transaction
- Per Diem for Onsite Caesar Vison Support: $1,500 per day per technician, plus travel expenses.
- I.K.E System Connection Fee: None currently
- Audit by Franchisor: The franchisor’s actual costs of audit (travel, lodging, wage expenses, and accounting and legal costs)
- Follow-up Inspections: The franchisor’s actual costs, including travel expenses, meals, lodging, and compensation of its representatives.
- Additional Training: Not more than $250 per attendee for initial training of additional employees.
- Transfer Fee: Varies from $0 to $5,000 per restaurant.
- Renewal Fee: $5,000
- Indemnification: Will vary with circumstances.
- Special Marketing, Management, and Operational Assistance Performed at Franchisee’s Request: Reasonable fee plus expenses.
- Private Securities Offering: $25,000 plus additional sums to cover the franchisor’s out-of-pocket costs to review the materials if greater than $25,000.
- Relocation Fee : $2,500
- Interest: 18% per year or the maximum rate permitted by law, whichever is less.
- Late Fee: Franchisor’s then-current late fee for overdue amounts. For overdue financial statements, tax returns, or other required reports, the then-current late fee for each 30 days (or portion thereof) that the financial statement, tax return or other report is overdue.
- Missed Meeting Fee: Varies
- Manual Update or Replacement Fee ($60 as of the date of this disclosure document)
- Management Fee: Commercially reasonable fee.
- Liquidated Damages Upon Termination for Franchisee’s Default: Calculated according to formula in FDD.
- Liquidated Damages – Failure to Comply with Post-Termination Obligations: $250 per day.
- Costs and Legal Fees: Franchisor’s actual costs.
7 Steps on How to Get or Open a Little Caesar Pizza Franchise
If financially you qualify, it would take at least 4 to 12 months from application process to when you open your new Little Caesars franchise store. This involves several steps and they include;
- Submitting Application with all Required Documents
This is the point where you show interest by letting the franchisor know about your intentions to buy the franchise. After filling your application, you will have to submit and attach all supporting documents. These documents typically include a cover letter, resume, the names and contact information of three professional references, a business plan, and a completed and signed confidential agreement.
Other relevant documents include a completed and signed application form, a financial forecast (the contents of this may include infrastructure, furnishings and equipment among others), revenue projections for the first three years and the financial structure among others.
- Application Review
Once you submit your application with all supporting documents, there is a period of review where the franchisor checks to see if your application suits the company requirements. Note that the time needed for this process to be complete may vary. It may depend on several factors including the number of applications submitted to it by other applicants and the intended business location.
- Franchise Disclosure Document Issuance
Have it in mind that you can only be provided with a Franchise Disclosure Document (FDD) if your application is approved by Little Caesars franchise. This document is very important and gives you an insight into the performance, and operations of the franchisor.
More important, the document contains the franchising terms and conditions which you will need to adhere to. It is important to go through this document with the help of an attorney. You will need the help of an attorney to help you with interpretation of its contents.
You have to understand that the contents of the company’s FDD are legal. This interpretation helps you identify areas which may not be quite acceptable to you or conditions or terms of ownership which may be beneficial to you. The Franchise Disclosure Document (FDD) has sections that focus on franchise agreements, multi-unit agreements, loan documents, state addenda, general release, agents for service of process financial statements and other exhibits.
For every FDD, there are detailed information regarding the franchise system. It will include the executive management team, history, franchise-related litigation and bankruptcy, financial performance, and unit growth and turnover. Also, other contents of the FDD include the terms and conditions applicable to a franchisee and the operations of a unit, and finally the agreement which must be signed.
- Discovery Day Interview
This stage is a priceless opportunity and experience that allows you have a more detailed understanding on how the Little Caesars franchise functions. This process allows you to meet and discuss with the executives and support staff of the franchise.
The franchise license advisor contacts you and schedules this interview. There will be many group presentations and meetings between you (the prospective franchisee) and the franchisor. You are likely to be taken on a tour of existing units and given the opportunity to speak with multiple franchisees.
While you make your findings and evaluation about the franchise, the franchisor also makes its findings about you. This process is referred to as an interview because you are evaluated based on the contents of your application. You are only offered the franchise opportunity only when you suit the information provided in your application. After being chosen, you can then decide to accept or not.
During the interview process, you are expected be at your best behavior as this will form part of the selection criteria. Your application will be approved or rejected after the discovery day interview.
5. Real Estate Training and Site Selection
Once your application gets approved, you will then be invited to attend a series of real estate training and site selection classes. The length of time varies from 20 to 100 days. The aim of this program is to provide maximum exposure to all Little Caesars franchisees on all information relating to site selection.
6. In-Store Training
Aside from the real estate training and site selection classes you will be mandated to attend, you also have to attend an in-store training which is mandatory for all Little Caesars franchisees. While you are undergoing the training program, construction on the approved site will start. Before you are done with training, the site construction is almost complete.
7. The Grand Opening
At this point the stage is now set for your Little Caesars franchise grand opening. This is the last stage in the application process. The franchisor provides support to enable you achieve success with opening and running your franchise. As mentioned earlier, the entire application process can last anywhere from 4 months to a year depending on the circumstances on ground and the size of your franchise.
What You Must Know About Little Caesar’s Franchise
Its emphasis on value and convenience has helped grow the brand and contributes to its global success. It was the first pizza chain to offer two-for-one deals and sell its products in unconventional locations, such as military bases and sports areas.
Today, Little Caesars is looking for franchisees to help bring its unique pizza to its growing nationwide customer base. The company also offers opportunities in non-traditional franchise venues, including convenience stores, college campuses and military bases.
In such cases, Little Caesars works closely with franchisees to develop locations with customized architectural and build-out plans. Its very important to also outline that Little Caesars has a dedicated franchise development team that supports qualified franchisees in implementing the processes and systems that have helped so many other franchisees excel.
Little Caesar equips its Franchisees with the tools they need to follow the brand’s proven system, including ongoing training, architectural services to help with design and construction, preferred lenders, sustained research and development of new products, and continued, effective marketing promotions.
As a franchisee, you will also benefit from Little Caesars strong relationship with its sister company, Blue Line Foodservice Distribution, which allows the company to leverage its buying power and minimize costs for franchisees.
If you are interested in owning a Little Caesar non-traditional franchise, you will be offered three options. These include the Classic Express, the Cashier Express and the Self-Serve Express variants. Each of these has specific features that may suit your needs.
Under the Classic Express Non-traditional stores, it has a size of 800 square feet. It also has a full menu and staff. You are offered full franchise support and training. The training lasts a period of 6 weeks and is conducted in Detroit. There are several other features of the Classic Express stores that will be revealed to you in the FDD.
The Cashier Express non-traditional store is 675 square feet in size. This has a limited menu as well as a separate register. It requires lower labor to run. There is an optional breakfast menu available. If you choose to operate this store type, you enjoy full support as well as training which is provided onsite.
The third variant of the non-traditional Little Caesar store is 475 square feet in size. It has a limited menu offering with a self-service warming oven. This system uses the grab-and-go service concept. Customers are offered an optional breakfast menu. The franchisor offers full support and training.