Do you love the lip-smacking taste and the concept of Little Caesars and are thinking whether this could be a great investment for you? We have the answers that you are looking for!
In this guide on How Much Does A Little Caesars Franchise Owner Make, we have shared the investment breakdown, profit and revenue stats, details about the profit potential, and more. So make sure you read till the end!
About Little Caesars
Little Caesars is the third largest multinational pizza chain in the United States, and it was founded by couple, Mike Ilitch and Marian Ilitch in the year 1959, in Garden City, Michigan.
Owing to its delicious taste, the company became a hit, and two years later, it opened its first franchised store in Warren, Michigan.
Their decision to expand their business via franchising paved the way for Little Caesars to become what it is today.
As of 2023, there are 4,181 Little Caesars stores in the United States alone, and it also owns stores in 27+ countries and territories around the world.
If you want to be a part of Little Caesars and want to invest in its franchise, then keep reading to find out information regarding its investment, profit potential, revenue, etc.
Also Read: How Much Does Subway Franchise Owner Make?
How Much Does A Little Caesars Franchise Owner Make?
According to Statista, Little Caesars generated $4.23 billion in sales in 2021, an increase from the previous year’s figure of 3.95 billion U.S. dollars.
And the good news is that this number has been rising since 2008. And Little Caesars saw some growth in the year 2020 as well despite of the Pandemic.
If we talk about the individual profit of Little Caesars’ franchise owners, then their average salary can range between $50,000 to $200,000 per year, with the average being $70,820.
You should note that this is just a ballpark number, and the profitability and sales of Little Caesars franchises may vary depending on their location, store operation, management, ongoing expenses, etc.
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How Much Does Little Caesars Employee Earn?
The average salary of Little Caesars employees can vary based on their location, department, position, skills, etc.
However, as per ZipRecruiter, the minimum hourly pay of Little Caesars employees is $7.40 /hour, and the maximum hourly pay is $26.00 /hour, with the average pay being $14 /hour.
In yearly terms, the minimum pay of Little Caesars employees is $15,390 a year, and their maximum yearly pay is $54,084 a year, with the average being $29,225 a year.
Pros & Cons Of Little Caesars Franchise
Pros Of Little Caesars Franchise
- Third Largest Pizza Chain in the world
- Provide assistance and training
- Multinational Brand
- Offers Veteran discount
- Offers third-party financing
- Territory protection
Cons Of Little Caesars Franchise
- High-Cost Investment
- Charge various fees
- Internal and external competition
- Low-profit margin
Little Caesars Franchise Average Revenue & Profit
As mentioned earlier, Little Caesars generated sales of $4.23 billion from their 4,181 stores in the United States, generating individual franchise revenue of $1,011,719 per year.
If we consider a profit margin of 7% after deducting all the fees and expenses, then a Little Caesars franchise owner makes a profit of $70,820 a year.
Little Caesars is, although very popular, but due to its various franchise-related fees and low-profit margin, the net profit that you can make from it is not substantial.
Little Caesars Estimated Initial Franchise Cost Breakdown
|Additional funds for 3 months||$17,000 to $47,000|
|Grand opening advertising||$12,000 to $20,000|
|Fixtures, equipment, and signage||$186,000 to $392,000|
|Initial franchise fee||$20,000 (can be reduced with discounts through programs)|
|Licenses and permits||$1,000 to $20,000|
|Leasehold improvements||$50,00 to $1,000,000|
|Rent||$1,500 to $7,000|
|Training expenses||$12,000 to $16,500|
|Start up inventory and supplies||$63,000 – $154,000|
|Utility expenses||$1,000 to $7,500|
|Estimate Total||$360,000 to $1,686,000|
|Advertising fee||7% of gross sales, as determined by the franchisor|
|Mobile transaction fees||$0.30 per transaction|
|Caesar vision system annual support fee||$2,210|
|Royalty||6% of gross sales per week or $100 per week (whichever is greater)|
|Security and technology fee||$0.02 per transaction|
|Transfer fee||$0 to $5,000 per restaurant|
Little Caesars Franchise Failure Rate
To check Little Caesars franchise failure rate let us see the number of Little Caesars outlets that opened and closed between 2019-2021 in the table below:
|Outlet Type||Year||Outlets at the start of the year||Outlets at the end of the year||Net Change|
As we can see from the data above, Little Caesars has declined slightly for both franchised and company-owned outlets at the rate of 35 units a year.
This means that either those outlets were not performing well or the franchisees are not renewing the franchise term after it had ended.
Little Caesars Franchise Payback Period
To find out the Little Caesars franchise payback period, let us do some calculation:
|AVERAGE REVENUE PER OWNER||$1,011,719|
|AVERGAGE PROFIT PERCENTAGE||7%|
|AVERGAGE PROFIT PER YEAR||$70,820|
|AVERAGE PAYBACK PERIOD||5 years|
PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR
= 3159,700/70,820 = 5 = 5 Years based on median
The average investment for the franchise is $359,700 to $1,686,000 and the average revenue per owner is $1,011,719.
With an average profit percentage of 7%, the average profit per year is $70,820.
This means that the average payback period for the Little Caesars franchise is approximately 5 years on the lower end, as the total investment of $359,700 would be recouped within this period.
Facts About Little Caesars
- Little Caesars was started with humble beginnings. Mike and his wife put in all their savings of $10,000 to start this company.
- The couple who started this pizza chain had seven kids, and they believed that every family should have the right to pizza night. This is the reason why their pizzas are so affordable.
- Mike Ilitch, the co-founder, used to be a baseball player, playing for the Detroit Tigers farm team. However, an injury ended his baseball career and prompted him to start a new business that is Little Caesars, of course.
- Mike and Marian own two sports teams, Detroit Red Wings and the Tigers, along with a casino, a theater, and other holdings.
- The founders of Little Caesars are one of the richest residents in the U.S. The couple amassed a net worth of $4.2 billion and was even ranked #123 richest Americans by Forbes magazine.
- Little Caesars’ iconic “Pizza! Pizza!” slogan is 35 years old, and the campaign began in 1979.
- Back in the day, Little Caesars used to give free Crazy Bread to customers for saying, “Pizza! Pizza!
- Before the famous comedian Bill Murray became famous, he used to work at Little Caesars.
- Little Caesars runs a food truck that feeds poor and hungry people for free.
What Is Little Caesars Best Known For?
Little Caesars is the third-largest pizza chain that sells lip-smacking, affordable pizzas and their distinguishing factor is their Calzone-like Crust.
Unlike other pizza chains that offer thin crust or cheese-stuffed bases, they offer pizza bases made of folded leavened dough and filled with a unique blend of muenster and mozzarella cheese, ensuring that you get that cheesy taste in each bite.
The company is also famous for its advertising catchphrase “Pizza! Pizza!” which refers to two pizzas being offered at the price of one.
The company also introduced a new concept of shaker boards in 1997 to advertise their large pepperoni pizza called “Hot-N-Ready Pizza,” which they sold for only $5, and it has been popular on their menu ever since then.
Apart from this, some other items that Little Caesars is best known for include:
- ExtraMostBestest Pizza.
- Crazy Bread.
- Italian Cheese Bread.
- Hot-N-Ready Cheese Pizza.
- ExtraMostbestest Thin Crust Pizza.
- Pepperoni Deep! Deep! Dish Pizza.
- 3 Meat Treat Pizza, and more
Is Little Caesars Franchise Profitable?
In a word, Yes. The Little Caesars franchise is profitable, and its owner can expect to make an average of $50,000 to $200,000 per year.
However, only the top percent make as much as $200,000 per year profit, and a majority of stores make only $70,820 a year because of the low-profit margin.
The profitability of the Little Caesars franchise varies depending on the store’s location, the owner’s skills, and the staff’s efficiency, among many other factors.
So if this number seems sufficient to you, then you can consider investing in this franchise.
Little Caesars Franchise Earning Potential
As per to IBISWorld, The market size of Pizza restuarant industry by its revenue is $65.0bn in 2023 and since 2008 there has been a growth of only 3%.
And if we talk about the sales of Little Caesars then it generated $4.23 billion in sales in 2021, an increase from the previous year’s figure of 3.95 billion U.S. dollars.
Another thing to take note of is that Little Caesars has a very low profit margin of 7% on average because of its low cost pizza’s and various kinds of franchisor fees.
The sales figure, demand of the pizza industry and the profit margin of Little Caesars bring us to the conclusion that the earning potential of Little Caesars is not very high.
After looking into the Little Caesars franchise details, here’s what we conclude:
There is no doubt that Little Caesars is extremely popular and so cheap that there is a very low chance that its demand will go down in the future.
But because of this exact reason, along with plenty of fees that they charge, the profit margin of Little Caesars is limited.
Along with this, their initial investment cost is a bit higher than the pizza industry average, and they also require you to fulfill some hefty eligibility criteria.
Investing in this franchise is totally up to you. You will definitely make a profit from this franchise, but it is limited.
Frequently Asked Questions
Does Little Caesars offer Veterans discount?
Yes, Little Caesars offers Veterans discount as well as First Responders discount. The benefits include:
- Franchise fee discount
- Financing assistance
- Equipment and supply discount
- Advertising and publicity support, etc.
How much does it cost to start Little Caesars franchise?
In order to start the Little Caesars franchise here’s how much you need:
- Estimated total investment: Starting at $379,000
- Liquid asset requirement: $150,000
- Net worth requirement: $350,000
Does Little Caesars offer international franchising?
Yes, Little Caesars offers both national and international franchising opportunities. In fact, there are a lot of outlets in countries like Asia, the Middle east, Canada, etc.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.