Toppers Pizza: $1.15M Average Sales vs. $484K-$718K Franchise Cost

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Toppers Pizza franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Toppers Pizza franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Toppers Pizza outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Toppers Pizza franchise opportunity

Section V – Presentation and analysis of Toppers Pizza’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, highest, and lowest gross sales for the 26 affiliate-owned, 43 franchised, and 69 affiliate-owned and franchised (combined) Toppers Pizza restaurants that were open as of December 31, 2023, and that had been open and operating for at least the full fiscal year, grouped by number of years in operation

• 2023 average gross sales, cost of goods sold, cost of labor, rent & CAM, occupancy expenses, controllable expenses, fully discretionary expenses, and EBITDA for the 41 franchised Toppers Pizza restaurants that were open and in operation continuously during the entire 2023 fiscal year and provided Toppers Pizza the financial information disclosed

• 2023 average and median gross sales and net operating income for the 41 franchised Toppers Pizza restaurants that were open and in operation continuously during the entire 2023 fiscal year and provided Toppers Pizza the financial information disclosed, grouped by tercile

Section VI – Key ratios, comparables, computations, and analyses for the Toppers Pizza franchise opportunity (exclusive content for Platinum subscribers)

Section I – Toppers Pizza Franchise Costs

• Toppers Pizza franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $30,000
• Travel and Living Expenses for Your Initial Training:  $3,000 to $14,000
• Travel and Living Expenses for Toppers Pizza’s Training Team:  $600 to $11,000
• Equipment and Smallwares:  $125,000 to $155,000
• Construction and Leasehold Improvements:  $239,607 to $325,000
• Indoor and Outdoor Signage:  $7,500 to $11,000
• Pre-Opening Salaries and Payroll:  $6,000 to $11,000
• Pre-Opening Rent:  $0 to $12,000
• Utility and Insurance Deposits:  $2,000 to $6,000
• Initial Marketing and Market Introduction and Team Recruiting Program:  $4,000 to $20,000
• Opening Inventory:  $6,000 to $11,000
• Architectural Fees:  $13,000 to $20,000
• Permits and Professional Fees:  $2,100 to $4,500
• POS System Hardware:  $16,000 to $18,000
• POS System Software Licenses:  $2,500
• POS System Installation:  $2,000 to $5,000
• Project Management:  $0 to $7,500
• Opening Extension Fee:  $0 to $5,000
• Additional Funds for 3 Months:  $25,000 to $50,000
• Total Estimated Toppers Pizza Franchise Costs:  $484,307 to $718,500

Section II – Toppers Pizza’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Toppers Pizza’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $30,000
• Continuing Royalty:  5.5% of Gross Sales
• Brand Development Fund Fee:  3.0% of Gross Sales
• Contributions to a Cooperative:  not currently charged

Section III – Number of Franchised and Company-Owned Toppers Pizza Outlets

Franchised

2021

• Outlets at the Start of the Year:  47
• Outlets at the End of the Year:  44
• Net Change:  -3

2022

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  46
• Net Change:  +2

2023

• Outlets at the Start of the Year:  46
• Outlets at the End of the Year:  44
• Net Change:  -2

Company-Owned

2021

• Outlets at the Start of the Year:  20
• Outlets at the End of the Year:  26
• Net Change:  +6

2022

• Outlets at the Start of the Year:  26
• Outlets at the End of the Year:  27
• Net Change:  +1

2023

• Outlets at the Start of the Year:  27
• Outlets at the End of the Year:  27
• Net Change:  0

Section IV – News Updates on the Toppers Pizza Franchise

• How a Toppers Pizza Franchisee Thrives on Campus Life, Fun

• Rapidly Growing Pizza Brand Lays Groundwork for More Expansion

• Toppers Pizza Hits the Ground Running in 2023

• Toppers Pizza Eyes Record Development in 2023

• Toppers Pizza Expects to Surpass 100 Units in 3 Years

• Jimmy John’s Franchisee Inks Deal for 7 Toppers Pizza Units

• Toppers Pizza Executive Takes the Helm as the New CEO

• Toppers Pizza Expands Leadership

• Toppers Pizza Did Not Rank on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Toppers Pizza Franchise (Item 19, 2024 FDD)

Part 1 – 2023 Average Gross Sales

• The following tables contain historical Gross Sales information for the fiscal year ended December 31, 2023, for all restaurants (both affiliate-owned and franchised) that were open as of December 31, 2023, and that had been open and operating for at least the full fiscal year.

• As of December 31, 2023, there were 71 Toppers Pizza restaurants open and operating, 70 of which operated during the entire 2023 fiscal year. Of those 70 Toppers Pizza restaurants, 44 were franchised and 26 were affiliate-owned.

• Toppers Pizza excluded from the results that it used to prepare the tables in this Part 1 one franchised restaurant with various temporary closures during the 2023 fiscal year and for which the franchisee was actively selling such location, and one affiliate-owned restaurant that opened during the 2023 fiscal year. Also excluded are two franchised Toppers Pizza restaurants and one affiliate-owned restaurant that permanently closed during the 2023 fiscal year.

• The 2023 fiscal year ran from January 1, 2023 to December 31, 2023.

A.  All Restaurants

Open at Least 1 Fiscal Year

• Number of Outlets in Data Set:  69
• Average Gross Sales:  $1,114,844
• Number That Met or Exceeded the Average:  29 (42%)
• Lowest Gross Sales:  $556,021
• Highest Gross Sales:  $2,202,979
• Median Gross Sales:  $1,054,976

Open at Least 2 Fiscal Years

• Number of Outlets in Data Set:  67
• Average Gross Sales:  $1,133,459
• Number That Met or Exceeded the Average:  27 (40%)
• Lowest Gross Sales:  $556,021
• Highest Gross Sales:  $2,202,979
• Median Gross Sales:  $1,076,281

Open at Least 3 Fiscal Years

• Number of Outlets in Data Set:  64
• Average Gross Sales:  $1,147,381
• Number That Met or Exceeded the Average:  26 (41%)
• Lowest Gross Sales:  $576,588
• Highest Gross Sales:  $2,202,979
• Median Gross Sales:  $1,100,252

B.  Affiliate-Owned Restaurants

Open at Least 1 Fiscal Year

• Number of Outlets in Data Set:  26
• Average Gross Sales:  $1,056,528
• Number That Met or Exceeded the Average:  10 (38%)
• Lowest Gross Sales:  $556,021
• Highest Gross Sales:  $1,793,893
• Median Gross Sales:  $986,232

Open at Least 2 Fiscal Years

• Number of Outlets in Data Set:  26
• Average Gross Sales:  $1,056,528
• Number That Met or Exceeded the Average:  10 (38%)
• Lowest Gross Sales:  $556,021
• Highest Gross Sales:  $1,793,893
• Median Gross Sales:  $986,232

Open at Least 3 Fiscal Years

• Number of Outlets in Data Set:  24
• Average Gross Sales:  $1,078,627
• Number That Met or Exceeded the Average:  8 (33%)
• Lowest Gross Sales:  $608,373
• Highest Gross Sales:  $1,793,893
• Median Gross Sales:  $1,015,429

C.  Franchised Restaurants

Open at Least 1 Fiscal Year

• Number of Outlets in Data Set:  43
• Average Gross Sales:  $1,150,104
• Number That Met or Exceeded the Average:  21 (49%)
• Lowest Gross Sales:  $576,588
• Highest Gross Sales:  $2,202,979
• Median Gross Sales:  $1,121,905

Open at Least 2 Fiscal Years

• Number of Outlets in Data Set:  41
• Average Gross Sales:  $1,169,367
• Number That Met or Exceeded the Average:  16 (39%)
• Lowest Gross Sales:  $576,588
• Highest Gross Sales:  $2,202,979
• Median Gross Sales:  $1,100,252

Open at Least 3 Fiscal Years

• Number of Outlets in Data Set:  40
• Average Gross Sales:  $1,180,419
• Number That Met or Exceeded the Average:  15 (38%)
• Lowest Gross Sales:  $576,588
• Highest Gross Sales:  $2,202,979
• Median Gross Sales:  $1,133,107

• Gross Sales are calculated in the same manner as you will calculate Gross Sales under the Franchise Agreement.

• “Gross Sales” means all sums or value received or receivable by you, directly or indirectly, in cash, exchange, or barter, from or in connection with the operation of your Restaurant and all other business operations originating at or from the premises of your Restaurant, excluding monies collected for taxes chargeable to customers by law.

• Gross Sales include revenues generated from the sale of food, beverages, and other goods and products (including vending machines, games, slot machines, automated teller machines, amusement rides, and telephones, which shall in any event be subject to Toppers Pizza’s prior written approval), and from the rendering of services of any kind or nature, at or from your restaurant, or under, or in any way connected with the use of the Marks, whether for cash, credit, or barter (the Gross Sales amount from any barter shall equal the fair market value of that barter).

• Toppers Pizza includes gift certificate, gift card, or similar program payments in Gross Sales when the gift certificate, gift card, other instrument, or applicable credit is redeemed.

• Gross Sales also include all insurance proceeds you receive for loss of business due to a casualty to or similar event at your restaurant.

• There shall be deducted from Gross Sales for purposes of said computation (but only to the extent that they have been included) the amount of all sales tax receipts or similar tax receipts which, by law, are chargeable to customers, if such taxes are separately stated when the customer is charged, and the amount of any reasonable, actual, and verifiable refunds, rebates, over-rings, and allowances given to customers in good faith.

• Approximately 75% of the Toppers Pizza restaurants shown in the tables in Part 1 above are located within the states of Minnesota and Wisconsin. Accordingly, the Gross Sales of these Toppers Pizza restaurants are impacted by the recognition and goodwill that Toppers Pizza restaurants benefit from within those states and the Midwest more broadly.

• Although the franchisor believes Toppers Pizza restaurants have consumer appeal that will extend well beyond the Midwest, the concept has had only limited operating history outside of its core market of the Midwest.

Part 2 – 2022 Net Operating Income

• The following tables contain sales, expense, and net operating income information for the fiscal year ended December 31, 2023, for 41 of the 44 (93.2%) franchised Toppers Pizza restaurants that were open and in operation continuously during the entire 2023 fiscal year (the “Net Operating Income Group”).

• Toppers Pizza excluded from the results in this Part 2 one franchised restaurant with various temporary closures during the 2023 fiscal year and for which the franchisee was actively selling such location, and two franchised restaurants which did not provide Toppers Pizza the financial information disclosed under this Part 2. Also excluded from the Net Operating Income Group are two franchised Toppers Pizza restaurants that permanently closed during the 2023 fiscal year.

Average

Gross Sales:  $1,171,358 (100.0%)

Operating Expenses

• Cost of Goods Sold:  28.6%
• Cost of Labor:  25.5%
• Rent & CAM:  3.4%
• Occupancy Expenses:  6.8%
• Controllable Expenses:  28.2%
• Fully Discretionary Expenses:  1.3%

Net Operating Income:  $73,386 (6.3%)

• Cost of Goods Sold means the percentage of Gross Sales spent on all food, paper, cardboard, and beverage products used in creating final food and beverage products for customers.

• Cost of Labor means the percentage of Gross Sales spent on employees’ actual wages and manager’s salary and does not include any labor taxes or benefits.

• Rent & CAM means the percentage of Gross Sales spent on rent and common area maintenance under the leases for each restaurant.

• Occupancy Expenses means the percentage of Gross Sales spent on supplies, repairs, uniforms, accounting, legal fees, insurance (excluding workers’ compensation insurance and employee health insurance), property taxes, and utilities for each restaurant.

• Controllable Expenses means the percentage of Gross Sales spent on payroll taxes, workers’ compensation insurance, third-party aggregator delivery fees, mileage reimbursement, advertising (including, but not limited to Brand Development Fund contributions), Continuing Royalties, and technology fees.

• Fully Discretionary Expenses means the percentage of Gross Sales spent on employee benefits (including employee health insurance, 401(k) programs, and bonuses), as well as recruiting and training expenses and gifts and awards.

• Net Operating Income is calculated as Gross Sales less (i) the Cost of Goods Sold, (ii) the Cost of Labor, (iii) Rent & CAM, (iv) Occupancy Expenses, (v) Controllable Expenses, and (vi) Fully Discretionary Expenses.

Part 3 – 2023 Average Gross Sales and Average Net Operating Income

• The following table contains average Gross Sales and average Net Operating Income information for the fiscal year ended December 31, 2023, for the Net Operating Income Group identified in Part 2, set forth in terciles determined by the Gross Sales of such franchised Toppers Pizza restaurants for the fiscal year ended December 31, 2023.

High Tier

• Number of Outlets in Data Set:  13
• Average Gross Sales:  $1,624,812
• Median Gross Sales:  $1,597,654
• Average Net Operating Income:  $180,851
• Median Net Operating Income:  $210,868

Middle Tier

• Number of Outlets in Data Set:  14
• Average Gross Sales:  $1,118,317
• Median Gross Sales:  $1,132,103
• Average Net Operating Income:  $47,492
• Median Net Operating Income:  $48,606

Low Tier

• Number of Outlets in Data Set:  14
• Average Gross Sales:  $803,334
• Median Gross Sales:  $789,797
• Average Net Operating Income:  $4,239
• Median Net Operating Income:  ($6,026)

• Some restaurants have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much.

Section VI – Toppers Pizza Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️