If you are looking towards opening a Pie Five Pizza Franchise, it will be nice for you to have a preview of what the company represents before going ahead to enquire about the total cost of opening the franchise in your location.

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Pie Five Pizza was founded in 2011 and they began franchising in 2011, about 9 years ago. The current CEO is Brandon Solano and they have their corporate head office at 3551 Plano Pkwy. The Colony, TX 75056, USA. As of the 2021 Franchise Disclosure Document, there are 57 franchised Pie Five Pizza locations in the USA. Pie Five Pizza has franchise locations in 16 states. The largest region is the South with 43 franchise locations.

Pie Five Pizza has taken huge strides since its arrival on the pizza scene just three years, offering custom-made pizzas with fresh ingredients in less than five minutes. The popularity of its brand has been evident from an economic as well as artistic standpoint, and it’s growing primarily through word-of-mouth. When it comes to critical appraisals, Pie Fie Pizza has already garnered awards for hottest concepts and chains, along with an award for the company’s Chief Executive Officer.

Pie Five Pizza’s parent company is Pizza Inn Holdings, Inc., founded in 1958 and publicly traded company on the NASDAQ index. The company originally produced pizza in the traditional manner for its restaurants. Then, in 2011, Pie Five Pizza was created, beginning with a single store in the Dallas area. The concept of individual pizzas made fast caught on quickly, with 26 locations now covering nine states. In its most recent financial disclosure, the Pie Five Pizza subsidiary saw a 17 percent increase in comparable store sales.

Here are areas where you are expected to spend money and the costs associated with it;

  1. Initial Investment Range

    $392,500 to $585,417

  2. Franchise Fee

    $35,000

  3. Royalty Fee

    6 percent of Gross Sales and the Due Date for this fee is Paid by electronic funds transfer every Friday for the preceding Reporting Period. The amount of the Royalty Fee for any renewal term will be that provided in the Franchise Agreement executed for such renewal term.

Please note that “Gross Revenues” include all revenues generated from the provision of any and all services and/or the sale of any and all products and, whether by the franchisee or a third-party provider, that relate to or arise from the Franchised Business. It does not include taxes collected from customers.

  1. Development Fee

    $5,000

Please note that if you enter into a Development Agreement, you must pay $5,000 for each Franchised Restaurant you agree to develop under the Development Agreement.

  1. Grand Opening Advertising

    $15,000

Please note that you must conduct initial marketing for the Franchised Restaurant in accordance with a grand opening plan that you have prepared and to which the franchisor has consented (“Grand Opening Plan”).

Under the Grand Opening Plan, you will be required to spend a minimum of $15,000 on grand opening advertising over the period beginning one month prior to opening and continuing through the second month after opening. Guidelines for grand opening activities will be included in the Manual.

Within 10 days after the end of the period in which you conduct this initial marketing, you must submit appropriate documentation to verify compliance with the grand opening expenditure obligation.

  1. Real Estate

    This cost varies under different conditions

The cost of acquiring a location for the Franchised Restaurant will vary significantly depending on the geographic location. The franchisor expects that you will lease the land and building for the Franchised Restaurant. Alternatively, you may wish to buy land for the Franchised Restaurant.

Please note that if you choose to lease, the rent may range from $40 to $50 per square foot per year based on the franchisor’s affiliate’s experience in the Dallas/Fort Worth market. This estimate is based on a restaurant of approximately 2,200 square feet.  You may be required to pay the first and last month’s lease payment upon signing your lease agreement.

  1. Architectural Design Services: $10,000 to $20,000

Please note that the cost of architectural design services will vary depending on the geographic location, size, and condition of the premises.

  1. Construction and Leasehold Improvements: $180,000 to $222,000

Please note that this estimate is based on the buildout costs for a building shell for a Pie Five Restaurant of approximately 2,200 square feet in a typical in-line retail center space with construction costs ranging from approximately $55 to $88 per square foot.

All construction materials and fixtures must meet the franchisor’s standards and specifications but may be purchased from any supplier.

  1. Travel and Living Expenses While Training: $10,000 to $15,000

Please note that prior to opening a Pie Five Restaurant, you (or your Operating Principal), the Franchise Restaurant’s general manager, and any other managerial personnel whom the franchisor designates must attend the MIT Program.

The franchisor does not charge tuition for this training program, but you are responsible for all salaries, benefits, and travel, living, and other expenses incurred by you and your employees while attending the training.

  1. Furnishing, Fixtures, Equipment: $125,000 to $155,000

Please note that you must purchase certain items of furniture, fixtures, and equipment. You may purchase or lease approved brands and models of equipment and signs from any approved supplier.

  1. Signage: $7,500 to $15,000

Please note that the high end of the range represents an end cap location. This estimate includes costs for a building sign, pylon sign (if allowed by landlord and local code requirements).

  1. Exterior Trade Dress: $0 to $61,000

Please note that the high end of the range represents an end cap location, including patio, umbrellas, and architectural design elements on the building.

  1. Smallwares: $12,000 to $16,000
  2. Initial Inventory: $4,000 to $6,000

Please note that the cost of an opening inventory of food, beverages, ingredients, and other supplies and materials will vary depending on shipping distances from suppliers and price differences between suppliers. These items must conform to specifications established by the franchisor and/or be purchased from the franchisor and/or approved suppliers.

  1. Miscellaneous Opening Costs: $12,000 to $20,000

Please note that this item covers such miscellaneous pre-opening costs and expenses as manager and employee labor, utilities and utility deposits, lighting supplies, office supplies, security deposit, pest control, postage and shipping, storage fees, bank service charges, payroll service charges, licenses, permits, and a three-month premium for typical insurance coverage.

Manager and employee labor expenses vary according to the wage rate and number of employees and managers hired and trained before opening your Franchised Restaurant.

  1. Register or Point of Sale System: $10,000 to $16,000
  2. Additional Funds – 3 Months: $8,000 to $18,000

Please note that this is the franchisor’s estimate of your operating expenses for the initial 3 months of your business, including payroll costs for management, rent, insurance, and utilities.

These expenses do not include advertising or royalty payments made to the franchisor. The estimate also does not take into account revenue you may take in.

These figures are estimates, and the franchisor cannot guarantee that you will not have additional expenses starting the business.

  1. Liquidated Damages Under Area Development Agreement: This fee varies but the Due Date is Payable within 30 days of the termination of the Development Agreement.
  2. Audit Costs: All costs and expenses associated with the audit, reasonable accounting and legal costs.
  3. Indemnity: This fee will vary under the circumstances and the Due Date is As incurred.

Please note that you must reimburse Pie Five Pizza if it is held liable for claims arising out of your franchise operations.

  1. Insurance: Reimbursement of costs the franchisor’s out-of-pocket costs.
  2. Attorneys’ Fees and Costs: Will vary under circumstances. (Due Date:  As incurred.)

Payable to Pie Five Pizza if it is forced to retain independent counsel and seek damages or injunctive relief to enforce the Franchise Agreement (whether or not suit is filed) or if Pie Five Pizza is required to defend your unsuccessful claim against it.

  1. Total: $418,500 to $604,000 (Does not include real estate)

Please note that the franchisor relied on the experience of its affiliate in the restaurant business to compile these estimates.

  1. Veteran Incentives: This is open for negotiation with the franchisor
  2. Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If requirements are met, franchisees can renew for one additional term of 10 years.
  3. Financial Assistance: Pie Five Pizza offers in-house financing to cover the only franchise fee and Pie Five Pizza also has relationships with third-party sources which offer financing to cover the following: startup costs, and equipment et al.

In Summary,

  • Initial Franchise Fee: $30,000 to $40,000
  • Total Investment: $392,500 to $585,417
  • Working Capital: $8,000 to $18,000
  • Royalty Fee: 6.0%
Ajaero Tony Martins