If you are looking towards opening a Pizza Ranch 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.
Pizza Ranch was founded in 1981 and they began franchising in 1984, about 36 years ago. The current CEO is Adrie Groeneweg and they have their corporate head office at 204 19th St. S.E. Orange City, IA 51041, USA. As of the recent Franchise Disclosure Document, there are 210 franchised Pizza Ranch locations in the USA. Based on 2016 FDD data, Pizza Ranch has franchise locations in 14 states. The largest region is the Midwest with 196 franchise locations.
At age 19, Adrie Groeneweg opened the first Pizza Ranch in Hull, Iowa, offering pizza recipes developed by his mother Lorraine. The midwest pizza chain’s menu has since expanded to include chicken, buffalo wings, dessert and salad. Customers can order from the menu or eat from a buffet.
Pizza Ranch, Inc. is the franchisor. Pizza Ranch family restaurants specialize in pizza and chicken and related items. The restaurants offer an all-you-can-eat buffet that includes pizza, chicken, salad and other approved items, as well as special ordering from the menu. Restaurants offer “to-go” service and also offer delivery service from the restaurant. The franchise includes the right to use the trademark “Pizza Ranch” as well as other identifying marks, trademarks and logos the franchisor uses now or may develop in the future, and its unique system relating to the establishment, development and operation of a restaurant.
Here are areas where you are expected to spend money and the cost associated with it;
Table of Content
Initial Investment Range
$1,127,500 to $2,526,500
Greater of $500 or 3.5% of gross revenues per month 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.
Furniture, Fixtures & Equipment
$530,000 to $580,000
Leasehold Improvements (for retrofit/leased restaurants) or Construction Costs (for new restaurant)
$63,700 to $1,248,000
Architect and Engineering Fees
$46,000 to $110,000
- Cost for Land: $0 to $500,000
- Pre-Opening Training Expenses: $48,000 to $68,000
- Food Used During Team Member Training: $7,000 to $9,000
- Start-Up Costs: $19,500 to $24,500
- Cost for Rent: This fee varies
- Interest on Pre-Opening Loans: $5,000 to $35,000
- Working Capital (3 months): $20,000 to $20,000
- Audit Costs: All costs and expenses associated with the audit, reasonable accounting and legal costs.
- Indemnity: This fee will vary depending upon loss $5,000 to $100,000 and the Due Date is As incurred.
Please note that you must reimburse Pizza Ranch if it is held liable for claims arising out of your franchise operations.
- Cost for Insurance: $8,000 to $25,000 per year.
- Service Fee: 0.5% of gross revenues.
- Marketing and Production Fund Contribution: Up to 5% of gross revenues (current contribution is 2.25%).
- Local and Regional Advertising: Up to the difference between 5% and the amount of the franchisee’s contributions to the marketing and production fund. Currently, the franchisor requires only the difference between 3% and the amount of the franchisee’s other contributions.
- Promotions: Costs to purchase, lease and install all materials necessary for sales promotions the franchisor establishes; including marketing start-up materials, prize contests, sweepstakes, coupon programs, posters, give-away items, loyalty cards and gift cards. Currently, this amount ranges from $50 to $500 per month.
- Management Team Training (post opening): $0 – $2,000 for replacement managers to train, depending on where training occurs, plus $200 per trainee for training materials (both fees subject to change).
- In Restaurant Supplemental Restaurant Training: $200 per day for each of the franchisor’s trainers (subject to change) plus each trainer’s travel and living expenses.
- Training Materials: Approximately $200 per year for materials.
- Audit Fees: $100 to $1,000 per day for each auditor plus each auditor’s travel and living expenses.
- Relocation Fees: $2,000 for restaurant.
- Interest: Lesser of 18% per year or maximum legal rate on late payments.
- Costs and Attorneys’ Fees: This amount may range from $500 to $5,000 depending on circumstances. (Due Date: As incurred.)
Payable to Pizza Ranch 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 Pizza Ranch is required to defend your unsuccessful claim against it.
- Inspection and Testing Fees: $100 per day for each of the franchisor’s inspectors plus each inspector’s travel and living expenses.
- Updating, Maintenance or Remodeling of Restaurant; Computer Updates: Amount varies and is based on the extent of construction, repairs or remodeling necessary. Currently, this amount may be up to $250,000.
- Additional Restaurant Inspections: $294 per inspection, plus the franchisor’s costs incurred (including travel expenses) in conduction additional inspection(s).
- Training and Transfer Fee: $10,000
- Returned Check Charge and Dishonored Debit Charge: $25 to $100 per returned check.
- Appraisal Fee: One-half the cost of the independent appraiser or the cost of the appraiser the franchisee appoints. Currently, this amount ranges from $500 to $2,500.
- Manual Copies: Currently, $30 to $110.
- Veteran Incentives: This is open for negotiation with the company
- Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date the restaurant first opens for business. Franchisees can have two separate renewals of 10 years each, if requirements are met.
- Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligation.
- Initial Investment: $1,127,500 – $2,526,500
- Liquid Cash Requirement: $297,000 – $465,000
- Ongoing Initial Franchise Fee: $30,000
- Ongoing Royalty Fee: 4%
- Ad Royalty Fee: 2.25%
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