(Ambrosio’s note: Over the next few days, I will be discussing the Item 19 financial performance representations of 10 up-and-coming pizza franchises that you’ve probably never heard of.
Unlike Papa John’s, Papa Murphy’s, Marco’s Pizza, and Hungry Howie’s (all of which I’ve featured previously on FDD Talk), these franchises are not yet household names. But I do think they are worth examining because they can provide us with helpful clues on the profit potential of pizza franchises in general.
Please stay tuned for my industry-level bottom line analysis to be published at the end of this series.)
Highlights of Flippin’ Pizza’s 2011 Franchise Disclosure Document
- The franchise offered is for a quick-service restaurant operating under the name “Flippin’ Pizza New York Style” offering pizza, various appetizers, salads, and fountain drinks on a dine-in, delivery, and carry-out basis.
- The total investment necessary to begin operation of a Flippin’ Pizza franchised business is $221,300 to $398,300. This includes $25,000 that must be paid to the franchisor and/or its affiliate, as appropriate.
- Flippin’ Pizza may sell rights to individuals or entities to develop a number of restaurants within a specified area. If you are a multi-unit operator, you will pay a reservation fee equal to $12,500 for each Restaurant to be developed under the Multi-Unit Operator Agreement.
- The total investment necessary will vary based on the number of Restaurants to be developed. If you choose to develop 5 units, the total investment necessary is $285,900 to $462,900. This includes $62,500 that must be paid to the franchisor.
- Flippin’ Pizza also offers to qualified individuals and entities the opportunity to become a Development Agent within a specific geographical area. A Development Agent will act as the franchisor’s agent in a specific territory, solicit new franchisees, assist existing franchisees, and conduct inspections of Restaurants in the territory, among other things.
- The total investment necessary to begin operation as a Development Agent is $273,400 to $1,400,400. This includes between $50,000 and $1,000,000 that must be paid to the franchisor, as appropriate. A Development Agent must also own at least one franchised business and pay the related fees, which are included in the total investment.
Actual Sales of Affiliate-Owned Restaurants
- The following represents an example of the actual sales achieved by Flippin’ Pizza’s affiliate-owned restaurants which were in operation for more than the past 12 months, but operating expenses were not included.
- Your revenues may vary significantly depending on a number of factors, including the location of your Restaurant and how you operate your business.
- During the calendar year January 1, 2010 to December 31, 2010, the franchisor’s affiliate, Flippin’ Pizza LLC, had seven Restaurants that were open the full year. The gross sales achieved by these Restaurants were: