In this FDD Talk 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 2018 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 2018 FDD
- Section IV – Number of franchised and company-owned Pita Pit outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Pita Pit’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 high and low gross sales for the 191 franchisee-owned Pita Pit Restaurants in the United States that operated for the entire 2017 calendar year, including 6 located in convenience stores, 1 located in a mall food court, and 1 institutional location located on a college campus where the college was the franchisee
Section I – Background Information
19 Things You Need to Know About the Pita Pit Franchise
Revamps Loyalty Program and Releases Redesigned App
1. In early June 2018, Pita Pit announced that it had partnered with LevelUp and Olo to introduce a completely-revamped guest loyalty program, third-party delivery, and a redesigned app for order ahead. These latest technology initiatives will allow Pita Pit to increase its offering to its loyal customers, the Pita Fanatics, allowing for a more interactive and easily-accessible product.
2. Doug Reifschneider, vice president of marketing for Pita Pit USA, said, “We decided to join forces with LevelUp and Olo in an effort to bring something new and better to the table for our customers. This advanced technology will change the way that customers are able to enjoy our product, and also increase the franchise opportunity to our new and existing franchisees. These landmark partnerships will allow Pita Pit to get in front of new customers, and in a more convenient way.”
3. Pita Pit’s new engagement program powered through LevelUp features a completely-redesigned app, a new loyalty program, and LevelUp’s newest product, Broadcast, which helps restaurants reach massive audiences of new consumers by allowing them to browse live menus, order ahead, and pay directly from within a network of the world’s most popular and highly-trafficked digital channels such as Yelp, Chase Pay, Amazon Alexa, and more.
4. Seth Priebatsch, founder and CEO of LevelUp, said, “We’re excited to help Pita Pit provide excellent digital experiences for its guests across all locations and franchises. We look forward to supporting all of Pita Pit’s customer interactions and develop true omni-channel marketing campaigns that allow each location to connect with its guests on a highly-personalized way.”
5. Through its partnership with Olo, Pita Pit will be launching fast and easy pickup as well as third-party delivery to its customers. According to Noah Glass, founder and CEO of Olo, “Pita Pit is known for ‘Fresh Thinking’ and the revamp of their new digital program is no exception. We are thrilled to work with Pita Pit and help more guests access the brand on-the-go, whether it’s with fast and easy pickup or delivery at home or to the office through our network of delivery providers.”
Launches Reimagined Menu Across the Nation
6. At the end of May 2018, Pita Pit unveiled a newly-streamlined menu designed to increase speed of service and simplify the ordering process, while continuing to raise the bar on healthy and flavorful food. At the time of the announcement, Pita Pit said that the new menu would be available at all of its U.S. locations by the end of the summer.
7. The launch followed extensive testing at Pita Pit’s National Training Center in Coeur d’Alene, Idaho, where a wide variety of factors, including new menu design, build complexity, and ticketing systems, were closely analyzed in order to fine-tune the new menu items, efficiency, and order accuracy. Testing continued in over 40 locations throughout the Pita Pit system to refine the customer experience
across all regions.
8. Doug Reifschneider, vice president of marketing for Pita Pit USA, said, “We know that in order to stay relevant in the constantly shifting QSR industry, we need to continuously evaluate and deliver new products to our customers. While our guests will always have the option of customizing their pitas any way they want, we know there is a growing trend of customers who prefer to simply choose one of our chef-inspired pita builds instead. We believe that these additions will soon become go-to favorites.”
9. The new chef-inspired pitas will introduce flavorful combinations including the Sriracha Chicken, Boom Boom Black Bean, and Thai Chicken. Each of the menu items was designed for easy, health-focused ordering and is offered in a smaller pita option, salad, or available in a gluten-free wrap. In conjunction with the menu launch, Pita Pit will be eliminating some items from its menu, including Prime Rib and several less popular breakfast pitas.
10. Ben Drake, vice president of branded products for Pita Pit, said, “We analyzed historical sales and online ordering data from Pita Pit locations across the country, as well as purchase and order history through our supply partner, US Foods. The decision to eliminate select menu items stems from a combination of increasing food costs, number of inventory items and the volume of those specific items sold across our system.”
11. Customers at the Pita Pit test locations liked the new menu and system. They saw a decrease in wait times and a simplified ordering process that allowed for greater consistency at each location. Pita Pit is confident that the new approach will increase customer satisfaction and sales.
12. Peter Riggs, president and CEO of Pita Pit USA, added, “As we continue to fine-tune our processes, we remain focused on thinking outside of the box to have a great selection of menu items for each customer that walks through our doors. Introducing new flavors and products to our customers ultimately elevates both our level of service and their overall experience.”
Hires New Vice President of Marketing
13. In early September 2017, Pita Pit hired Doug Reifschneider as its new vice president of marketing. In his new role, Reifschneider will be focused on developing innovative campaigns, improving restaurant technology, and will look to further enhance Pita Pit’s loyal fan base and market position.
14. Reifschneider said, “What attracted me to join the Pita Pit team was the ‘fresh thinking’ approach they take to their business. Even their interview protocol was different than anything I had experienced in the past. Through discussions with the entire Pita Pit team, I realized there was a unique opportunity to grow the brand, increase the footprint of the restaurants as well as increase guest awareness across the country.”
15. Reifschneider comes to Pita Pit with a seasoned background in the fast-casual sector, specifically in the franchise space. He most recently served as vice president of marketing for Firehouse Subs. In this position, Reifschneider grew the brand’s marketing department from a one to 16-person team to help facilitate the growth of Firehouse Subs from 235 to over 1,000 restaurants during his tenure.
16. Under his leadership, the marketing team strengthened brand equity through several successful marketing campaigns. The growth the concept experienced was propelled by investment spending by franchisees in the system, and the investment spending was validated through various test markets. Increased spend bought more advertising and proved ROI through appropriate sales growth.
17. Pita Pit was founded in 1995 by Nelson Lang and John Sotiriadis in Kingston, Ontario, Canada. Lang and Sotiriadis were interested in offering a healthier fast-food alternative. The business partners opened the first Pita Pit near Queen’s University and the Lebanese-style pita sandwiches packed with fresh veggies, grilled meats, and zesty sauces were an instant hit with the college and university crowd. Pita Pit’s late hours also appealed to the students.
18. With the success of the first Pita Pit location, franchising started just two years later and Pita Pit franchises were opened across Canada. In 1999, Pita Pit expanded into the United States with the first store opening in Syracuse, New York. There are now Pita Pit locations outside of Canada and the U.S., in countries such as the United Kingdom, France, Brazil, Panama, New Zealand, Australia, Singapore, India, and Trinidad and Tobago.
Entrepreneur’s Franchise 500
19. Pita Pit ranked No. 342 on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Pita Pit franchise costs, based on Item 7 of the company’s 2018 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 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 210
- Outlets at the End of the Year: 224
- Net Change: +14
- Outlets at the Start of the Year: 224
- Outlets at the End of the Year: 236
- Net Change: +12
- Outlets at the Start of the Year: 236
- Outlets at the End of the Year: 219
- Net Change: -17
- Outlets at the Start of the Year: 14
- Outlets at the End of the Year: 16
- Net Change: +2
- Outlets at the Start of the Year: 16
- Outlets at the End of the Year: 16
- Net Change: 0
- Outlets at the Start of the Year: 16
- Outlets at the End of the Year: 15
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2018 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 2017 calendar year.
- The range of Gross Sales for franchisee-owned Restaurants provided in this Item 19 is comprised using the 2017 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, 2017, there were 219 franchisee-owned Restaurants in the United States. These 219 Restaurants do not include any Restaurant that was corporately-owned for any period during 2017. Of these 219 franchisee-owned Restaurants, 191 operated for the entire 2017 calendar year.
- Of these 191 Restaurants, 6 were located in convenience stores, 1 was located in a mall food court, and 1 was an institutional location located on a college campus where the college was the franchisee.