Food Franchise

Posts Tagged ‘Pizza Hut’

It’s an age-old American story. A business dream is born. A few dollars are borrowed. Years later, millionaires tell the tale of how they almost didn’t take the big risk. So it goes for Pizza Hut.

This worldwide pizza sensation began with what almost anyone would agree are quite humble roots and grew through dedication to become a powerhouse on the international business scene.

The history of Pizza Hut is interesting, as well, and can serve as a great case study for anyone who thinks a little risk isn’t worth the rewards it can bring. Read on!

Pizza Hut got its start not in the lands of the Old World. It didn’t even begin in the Italian section of New York City. It was founded, in fact, in 1958 by a pair of brothers from Wichita, Kansas. That’s right, Wichita!

After getting the idea from a family friend to open their own pizza shop, Frank and Dan Carney borrowed less than $1,000 from their mom to start the shop. With their nest egg, they bought used equipment, rented a building and went to work.

What began in that small shop has since grown to include more than 10,000 shops worldwide in a pizza empire that spans more than 86 countries.

Pizza Hut is now a portion of Tricon Global Restaurants and operates using franchises. Tricon also owns the Taco Bell and KFC names, bringing fast food restaurants to all corners of the globe.

The company, although a household name now, began with humble roots and was developed over time through the careful watch of the Carney brothers. The timeline for the restaurant’s growth is simply fascinating.

The store was founded in 1958 and by ‘59, the brothers had incorporated and opened their first franchise in Topeka. By 1965, Pizza Hut had its first commercial on television and by 1967 it made its first appearance at the Oklahoma State Fair.

A mere 10 years after the brothers opened their first shop, the company boasted 310 locations across the country and in Canada. The traditional red roof was added to the design in 1969.

The 1970s and 1980s saw it attain more worldwide prominence with menu additions, international openings and a New York Stock Exchange listing. Also at during these two decades, Pizza Hut became known for its employment of more than 10,000 teenagers and its willingness to get involved with charities. The chain overall surpassed the 4,000 store mark during this time.

The 1990s brought more success for the chain, including the introduction of convenience store locations, lunch buffets and more.

Today, the Pizza Hut chain serves nearly 2 million pizzas a day in its 12,000 plus locations. It has an estimated 4 million customers worldwide and has even boasted delivery to the White House and to former Russian President Boris Yeltsin.

What began as a $600 venture in Kansas grew through careful nurturing to be one of the world’s biggest restaurant franchises.

The company’s success all falls on the shoulders of two brothers with a desire and determination to make a good pizza and a good living.

Copyright (c) 2006

The reason franchises work is that they have an established name that is known nation wide; therefore, investing in the franchise is fairly safe due to the name itself. Of course you will need to make it successful, but the hard part is over with – establishment.

I know of at least one franchise that people are buying into that isn’t known at all. It’s some guy claiming that he made millions of dollars in foreclosure real estate. You buy into the franchise for about $50,000, then you pay $3,000 a month for advertising – which depending on your market will produce about 7 leads a month – he promises a GOOD 25! Then what you really get from the franchise is training. Week long seminars and audio tapes, and maybe a weekly conference call. I’m sorry, but that’s not my idea of a good investment of $50,000+. Ethical Home Buyers – that’s the name of the franchise – stay away!

Think about this! If an endeavor is so successful, why are they willing to share franchises? If the answer is uncertain – STAY AWAY! Of course the franchiser is doing it to make money, but if the money is really as good as they say it is – why don’t they open the place themselves. They’ll sure make a lot more money that way. RISK! That’s the answer – they aren’t willing to risk their own capital, so they make a bunch of big claims and promises – then if you fail, they release themselves from any obligation and let you fall on your ass.

So the most important thing to think about before starting a franchise? Is the franchise name universal and well-known (ie McDonalds, Wendy’s, Pizza Hut – those kinds of franchises are safe to invest in)

Papa John’s Pizza is the third largest pizza delivery/restaurant in the United States behind Pizza Hut and Domino’s. With nearly 3300 restaurants spread throughout America and 20 other countries, odds are there’s one up the street. If not, www.PapaJohns.com will having you eating in about an hour. Eating out has never been so easy. Now you can be served while at home.

Papa Johns was started by John Schnatter late 1984 in Jefferson Indiana. At age 18, Schnatter was earning college money delivery pizza for a Greek restaurant, when he decided to sell his own pizza in the back of his dad’s Lounge. He cut a hole thru a closet with a chainsaw, put a pizza oven in and began making money. In 1985, due to high sales, they changed the name from Mack’s Lounge to Papa Johns.

Headquarters: Louisville, Kentucky Owner: John Schnatter Since: 1985

Most of the 3300 restaurants in the Papa Johns Family are franchises. In order to qualify to own a franchise, a detailed background and financial check are preformed. You must have a NET WORTH of a least $250,000 and another 250,000 in cash or credit line available. If you’ve got more cash and want your own chain, with 4-10 restaurants you’ll need a NET Worth of a million dollars and 250,000 in available cash or credit per restaurant. Pricey to play with the big boys.

Getting approved is the hard part . On www.papajohn.comunder franchise info, you can download a Consideration Form. With this form you will need to submit a business plan and financial plan for the getting and making money. Submit an outline of why and how you will become a member of their team. They will require there be at least two partners. Both will need to submit full resumes with the consideration forms. It is important to have one applicant with experience in fast food management. It is mandatory this person live in the area of the location. This applicant will be considered the Principal Operator. The other partner shall have education in Business Management. With the Consideration Form, Resumes , financial documentation of Net Worth and credit capabilities, Business and financial plan, you are on your way to Pizza Royaly.

You’ve been approved, Now get ready to have money roll in, then watch it roll back out.

The initial fee is 25,000 per restaurant.

Papa John, REQUIRES you spend at least $ 9,000 on the Grand Opening. They want it big.

A royalty fee of 5% of monthly profit is sent to Papa Johns Corp. every month.

Papa John also requires another 2.7% of monthly sales be paid into a National Advertising Fund,

4.3% of monthly sales profit must be used on local ads. The Percentage of profit paid out to be one of Papa Johns elite Pizza People, 12%.

Another way to make money with the Franchise Papa Johns? NASDAQ (PZZA) about 19.50 per share