FDD Talk 2017: What You Need to Know About the Pita Pit Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

In this FDD Talk 2017 post, you’ll learn the following:

• Section I – Background information on the Pita Pit franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Pita Pit franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pita Pit franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Pita Pit’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 high and low gross sales for the 188 franchisee-owned Pita Pit Restaurants in the United States that operated for the entire 2016 calendar year, including 4 located in convenience stores, 2 located in mall food courts, and 1 institutional location located on a college campus where the college was the franchisee

Section I – Background Information

12 Things You Need to Know About the Pita Pit Franchise

Redesigned Restaurants Prepare Brand for Future Growth

1.  In late June, Pita Pit said that the new restaurant design rollout across “half a dozen” of its locations, is helping the brand prepare for the future. The redesigned restaurants feature new tables, paint, lighting, as well as a change to the food counter to increase store throughput.

2.  Pita Pit USA president Peter Riggs said that the new counter design displays the food better so customers have an easier time picking out toppings as they walk down the line. The new design also features interchangeable stations that will allow for prep for smoothies and sandwiches to be switched depending on which items are receiving more orders.

3.  Pita Pit said that it will be discussing all of the design changes with franchisees at its annual conference before rolling out the changes to its more than 250 U.S. units.

4.  Pita Pit has also been testing out new menu items offering a more curated approach to its pitas. Riggs said, “What we’re going to do is give customers more of a jumping-off point to say, ‘here’s this build and if you want to get it as it’s listed on the menu board, it’s going to be a knock-your-socks-off pita, but if you don’t like onions or mushrooms or you want to add tomatoes or something like that, you still have that option. We’re trying to give customers more guidance.”

Launches Lower Calorie, Lower Price Option to Menu

5.  At the start of 2017, Pita Pit rolled out its Small Pita Pairings, a smaller, cheaper, and lower-calorie pita that is “perfect for pairing with a side and a beverage.” Patrick O’Dell, Director of Marketing for Pita Pit USA, said that the brand wanted to support their customers’ New Year’s resolutions to maintain a healthier lifestyle.

6.  Not only is the new smaller pita a healthier option, it is also more affordable for customers. The small pitas come at a lower price, but still feature the customization options that Pita Pit is known for. O’Dell said, “When we were looking to add a new size to our menu, we consciously wanted to have a lower price option for our guests. Eating trends are shifting and with our demographics, we know that our customers are eating smaller meals throughout the day. It became increasingly important to us to offer a less expensive, lower calorie option that still was customizable and grilled fresh to order.”

Targeting Northeast Florida for Expansion

7.  In late March, Pita Pit announced that it wants to expand the brand’s presence in Florida after the success of its Jacksonville, Florida franchisee Christina Dziedzicki. Dziedzicki owns one of the most successful Pita Pits in the company’s entire network and now the company sees Northeast Florida and the state as a whole as a growth area.

8.  Dziedzicki opened her first Pita Pit location in Jacksonville Beach in 2011 and the store has consistently ranked Top 3 in sales systemwide. The Jacksonville franchisee said that her first store’s success led to Pita Pit opening a location on the University of Florida campus and that her second Jacksonville location will be opening soon.

9.  Dziedicki said that she wants to have at least three Pita Pit locations in the Jacksonville area and that she is scouting out areas that would be good for future locations. Dirk Ferrell, Director of Development for Pita Pit, said, “There are absolutely plans for expansion in the state of Florida. In a perfect world, Pita Pit wants to open about 30 stores this year nationwide, and we have 65 stores in the pipeline.”

Company History

10.  The first Pita Pit shop was opened in 1995 by Nelson Lang and John Sotiriadis in Kingston, Ontario, Canada. Lang and Sotiriadis wanted to open a fast-casual restaurant that served a healthier alternative to the usual fast food fare and initially started serving Lebanese-style pita sandwiches.

11.  Pita Pit began franchising in Canada in 1997 and two years later, the brand started franchising in the United States. Since then, the brand has been growing globally and today there are over 600 Pita Pit locations around the world in countries such as the United Kingdom, France, Brazil, Panama, Trinidad and Tobago, New Zealand, Australia, Singapore, and India.

Entrepreneur’s Franchise 500

12.  Pita Pit has appeared on Entrepreneur’s annual Franchise 500 list ever year in the past decade. The company’s highest rank was No. 113 in 2016, while its lowest rank was No. 212 in 2007.

Section II – Estimated Costs

• Please click here for detailed estimates of Pita Pit franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Pita Pit’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

• This is a historic financial performance representation about a subset of outlets. This subset is made up of those franchisee-owned outlets that operated for the entire 2016 calendar year.

• The range of Gross Sales for franchisee-owned Restaurants provided in this Item 19 is comprised using the 2016 financial information derived from Pita Pit’s franchisees’ point-of-sale system, or in some instances, sales reports provided to Pita Pit by its franchisees that do not utilize a point-of-sale system.

• On December 31, 2016, there were 236 franchisee-owned Restaurants in the United States. These 236 Restaurants do not include any Restaurant that was corporately-owned for any period during 2016. Of these 236 franchisee-owned Restaurants, 188 operated for the entire 2016 calendar year.

• Of these 188 Restaurants, 4 were located in convenience stores, 2 were located in mall food courts, and 1 was an institutional location located on a college campus where the college was the franchisee.

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