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Earnings Claims of Top Franchises Revealed

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Franchise Costs 2013: Detailed Estimates of Marco’s Pizza Franchise Costs (2013 FDD)

by Franchise Chatter on December 19, 2013

in Franchise Costs, Pizza Franchises



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Detailed Estimates of Marco’s Pizza Franchise Costs Based on Item 7 (Estimated Initial Investment) of Marco’s Pizza’s 2013 Franchise Disclosure Document

Limited Seating Stores

1.  Initial Franchise Fee:  $25,000

  • Qualified U.S. veterans may be eligible to receive a $5,000 discount on the initial franchise fee.

Marco's Pizza Interior Photo2.  Real Property:  $5,000 to $12,000

  • The estimate in the chart is for the space that you will need to operate your Store, through the end of the third month of operation.
  • Your location must be in a general area that will allow you to provide delivery services efficiently and conveniently to customers in your territory.
  • You will need about 1,200 to 2,500 square feet of space for your location.
  • Most franchisees find suitable space in a commercial district or strip mall located relatively close to residential areas.
  • Limited Seating Stores typically occupy 1,200 to 1,600 square feet of space at an annual rate of rent between $15 and $35 per square foot.
  • If you lease a location, you are also likely to incur build-out expenses. You may also incur real estate broker fees, additional prepayments, “additional rent,” common area maintenance (CAM) fees, operating fees, or other costs, depending on the terms of your lease and the prevailing real estate market in your area.
  • Most franchisees lease their space.

3.  Equipment, Fixtures:  $60,000 to $94,000

  • This cost estimate includes all major pieces of equipment for your Store as required under the manuals, installation costs, and freight. It does not include any sales tax on the equipment, which varies from state to state.
  • The low estimate assumes the purchase of some refurbished equipment. The upper estimate assumes that you will purchase all new equipment.

4.  Point of Sale Computers:  $26,000 to $34,000



  • The franchisor requires all new Stores to install an approved “point-of-sale” (POS) computer system.

5.  Leasehold Improvements:  $20,500 to $130,000

  • You will incur costs for the build-out of your Store.
  • The upper end of this scale would include substantial rehabilitation costs not normally incurred and also assumes substantial remodeling of the space not previously useable by a food business, with little or no work performed or funded by the landlord.
  • You may be able to negotiate a construction allowance from the landlord, which may cover a portion of the build-out/leasehold improvement expenses.
  • The lower estimate assumes a substantial amount of the work will be performed or funded by the landlord.

6.  Signage:  $3,000 to $9,000

7.  Opening Inventory:  $6,000 to $10,000

  • You will need an initial supply of inventory, including items like foodstuffs and paper goods. The estimated cost should cover approximately 1 to 2 weeks of operation.

8.  Small Supplies:  $6,000 to $7,500

  • You will need various “small supplies,” including various hand tools for pizza making. You will also need miscellaneous stationery and office supplies, including forms the franchisor designates.

9.  Delivery Vehicles:  Amount Not Specified



  • You will need a sufficient number of delivery vehicles, each of which must be outfitted with a sign or painted to the franchisor’s specifications.
  • The estimate assumes that you will hire delivery drivers who will have their own vehicles, and that you will simply lend a “car-top” sign for each vehicle.
  • Most Stores need 6 to 12 delivery vehicles available.
  • The estimate does not include the cost of directly leasing or buying vehicles.

10.  Deposits, Prepaid Expenses:  $1,400 to $7,000

  • In most cases, your lease will require you to pay electric, gas, water, and other utilities directly; however, some landlords cover some utility charges through CAM fees or operating fees.

11.  Business Licenses:  $100 to $500

12.  Insurance:  $1,500 to $4,000

  • The estimate is for initial amounts paid in the first 90 days, which may include a full year of liability insurance coverage, including hired/non-owned automobile coverage. If you have employees, you must maintain adequate workers’ compensation and liability insurance.

13.  Training Expenses:  $500 to $5,000

  • This estimate does not include additional training fees, which would apply if you decide to send more than one person to the initial training course.
  • These costs would be paid to other suppliers such as hotels and airline companies if you were traveling.

14.  Miscellaneous Expenses:  $500 to $5,000

  • Legal expenses would be a miscellaneous expense included in this cost estimate.
  • In some cases, you may need assistance from others in helping to obtain financing for your Store. The amount of that assistance may depend on the size of your financing and may run as high as 3% of your financed amount (or more in some circumstances).
  • In addition, if your financing must be guaranteed by the SBA (Small Business Administration), the SBA may require you to pay a 2% guarantee fee.

15.  Additional Funds (3 Months):  $25,000

  • The franchisor requires you to have a minimum of $25,000 in working capital available when your store opens for business and all expenses are paid. This is an estimate only of the amount of funds you may need for start-up expenses you may incur and your start-up expenses may be higher or lower.

16.  Architectural and Engineering:  $4,000 to $6,500

  • You will be required to obtain professional blueprints and engineering drawings for your Store and in most cases to obtain construction permits, food service permits, and other required permits.

17.  Web-Based Training:  $92

  • You will be required to pay to the franchisor the periodic payment due for the first quarter of $91.25 for the company’s online or web-based training program. This program is also referred to as “Marco’s University.”

18.  Six Month Brand Launch Program:  $21,960

  • The total cost of the Six Month Brand Launch Program is $30,000 and covers all the expected costs of local store marketing for the first 6 months the store is open. This cost estimate assumes a marketing reach of 8,000 to 12,000 households and an estimated expenditure of $0.35 per house per month during the first 6 months.
  • Of the total $30,000 amount, $21,960 will be paid to the franchisor before you open and during the first three months after you open.

19.  Total:  $206,552 to $396,552

Expanded Seating Stores

1.  Initial Franchise Fee:  $25,000

2.  Real Property:  $5,000 to $16,000

  • Expanded Seating Stores typically occupy 1,500 to 2,500 square feet of space at an annual rate of rent of between $10 and $30 per square foot.

3.  Equipment, Fixtures:  $60,000 to $103,000

  • Expanded Seating Stores will require tables and chairs, benches, or other seating arrangements ranging in cost from $50 to $150 per seat, inclusive of the cost of the table.

4.  Point of Sale Computers:  $26,000 to $37,000

  • Expanded Seating Stores may need to install an additional order taking station at a cost of approximately $2,000.

5.  Leasehold Improvements:  $30,000 to $180,000

6.  Signage:  $3,000 to $9,000

7.  Opening Inventory:  $6,000 to $10,000

8.  Small Supplies:  $6,000 to $8,500

9.  Delivery Vehicles:  Amount Not Specified

10.  Deposits, Prepaid Expenses:  $2,400 to $7,000

11.  Business Licenses:  $100 to $500

12.  Insurance:  $1,500 to $5,000

13.  Training Expenses:  $500 to $5,000

14.  Miscellaneous Expenses:  $500 to $5,000

15.  Additional Funds (3 Months):  $25,000

16.  Architectural and Engineering:  $4,000 to $9,000

17.  Web-Based Training:  $92

18.  Six Month Brand Launch Program:  $21,960

19.  Total:  $217,052 to $467,052


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