Pizza Hut is one of the biggest Pizza chains in the world, and if you are wondering how much does a Pizza Hut franchise owner make, then you are on the right page!
In this article, we have shared the initial investment required to start a Pizza Hut franchise, details about the revenue, sales and profit, the repayment period, and more.
So make sure you read this until the end to find out if buying a Pizza Hut franchise is a good choice.
About Pizza Hut
In 1958, the two founders, the Carney brothers, borrowed $600 from their mother to start a pizza restaurant in Wichita, Kansas, and that marked the beginning of what you know as “Pizza Hut” today.
Pizza Hut’s lip-smacking taste became an instant hit, and just a year later, in 1959, they opened their first franchised store in Topeka, Kansas.
Today, Pizza Hut is part of the largest QSR family, with more than 50,000 restaurants in 150+ countries and union territories.
Pizza Hut offers a variety of franchise options, and the investment and profit for different types of outlets may vary.
Also, there are a few requirements that you must meet in order to be eligible for the Pizza Hut franchise. To find out what it means to be a Pizza Hut Franchise owner, keep reading!
Different Types of Pizza Hut Franchise Options
Pizza Hut offers various types of franchise models for traditional and non-traditional restaurant models. Let us have a look at these below, as the investment and profit will vary based on the type of franchise model you choose:
Traditional Opportunities
- Restaurant-Based Delivery (RBD): Dine-in restaurant with delivery abilities.
- Delco: Delco is short for “Delivery + Carryout.”
- Fast Casual Delco (FCD): A Delco outlet with counter-serve seating.
- Delivery-Based Restaurants (DBR): Open-kitchen Delco situated in a modern dine-in building.
Non-Traditional Opportunities
This includes four types of options:
- Mini Kitchen
- Retail Counter
- Kiosk
- Full Kitchen & Seating
((https://franchise.pizzahut.com/our-restaurants))
Investment Required for Pizza Hut Franchise
The investment amount required for the Pizza hut franchise depends on the type of restaurant format you choose.
For traditional options, Pizza Hut franchise investment will be between $367,000 TO $2,063,500, and for non-traditional options, Pizza Hut franchise investment will be between $40,600 TO $472,000.
How Much Does A Pizza Franchise Owner Make?
As stated earlier, different types of Pizza Hut franchise models make different sales amounts. Let us have a look at the tables below to find out how much a Pizza Hut Franchise owner make:
Median Sales of Pizza Hut Franchise by Restaurant Format in the Year 2020:
| Resturant format | Median Sales |
|---|---|
| RBD | $918,570 |
| Delco | $899,546 |
| All Franchises | $906,911 |
So, on average, a Pizza Hut franchise makes sales of $906,911 per year. This number is based on the annual sales figure of 4,632 “mature” franchises that operated in 2020.
How Much Does A Pizza Hut Employee Earn?
According to ZipRecruiter, Pizza Hut employees’ hourly rate ranges from $7.88 to $28.21 an hour, with the average pay being $17 an hour.
On yearly terms, Pizza Hut employees make a minimum of $16,399 a year and a maximum of $58,491 a year, with the average pay being $36,059 a year.
Please note that this is an average figure, and Pizza Hut employee’s salaries may vary slightly depending on their expertise, location, department, job title, etc.
What Is Pizza Hut’s Net Worth?
As of currently available data, Pizza Hut’s net worth is approximately $810+ billion, attributed to its impressive sales and worldwide recognition as a prominent fast-food chain.
Pros & Cons Of Pizza Hut Franchise
Pros Of Pizza Hut Franchise
- Provides training
- Offers financial assistance
- Global presence
- Highly profitable
- Offers territory protection
Cons Of Pizza Hut Franchise
- Strict vetting process
- No absentee-ownership
- High-cost investment
- Internal and external competition
- Require you to have a net worth of $700,000
- High royalty fee (6%) and ad-royalty fee (4.75%)
Pizza Hut Franchise Average Revenue & Profit
If we take a profit margin of 19% on the lower end after adjusting the EBITDA margin, then the Pizza Hut franchise makes an average of $168,685 profit per year.
We were able to find this profit estimate because the FDD provides a lot of information as to how much the franchise spends on labor costs, COGS, and other fees. Here’s a breakdown for you:
| Profit-and-loss | Amount ($) | As % of sales |
|---|---|---|
| Sales | $906,911 | 100% |
| Labor | $(295,653) | 32.6% as per FDD |
| Rent | $(63,484) | 7%* |
| COGS | $(238,518) | 26.3% as per FDD |
| Royalty + marketing fees | $(140,571) | 15.5% as per FDD |
| Adjusted EBITDA | $168,685 | 19% |
What is Pizza Hut Franchise Owner Salary?
A Pizza Hut franchise owner earns an annual salary of $168,685. This amount reflects their compensation for successfully managing and operating a Pizza Hut franchise business.
Pizza Hut Franchise Failure Rate
To determine the failure rate of Pizza Hut franchises let us look at the number of Pizza Hut outlets that opened and closed between 2019-2021 as per the FDD:
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 6124 | 5953 | -171 |
| 2020 | 5953 | 5323 | -630 | |
| 2021 | 5323 | 5295 | -28 | |
| Company-Owned | 2019 | 24 | 23 | -1 |
| 2020 | 23 | 22 | -1 | |
| 2021 | 22 | 22 | 0 | |
| Total Outlets | 2019 | 6148 | 5976 | -172 |
| 2020 | 5976 | 5345 | -631 | |
| 2021 | 5345 | 5317 | -28 |
As we can clearly see in the table above, a total of 630 Pizza Hut franchised restaurants closed down in 2020 owing to Covid-19. However, in the year 2021, the company managed to reduce the negative impact with 28 stores closing.
Although the number of closed Pizza Hut franchise outlets doesn’t paint a pretty picture, it must be noted that Covid was a big culprit in the shutdowns.
Potential investors can put faith in this company as it is one of the biggest names in the QSR industry and is also the most valuable brand in the food industry.
Pizza Hut Franchise Payback Period
To find out the payback period of the Pizza Hut Franchise, let us do some calculations:
| AVERAGE INVESTMENT | $1,215,250 |
| AVERAGE REVENUE PER OWNER | $907,000 |
| AVERAGE PROFIT PERCENTAGE | 19% |
| AVERAGE PROFIT PER YEAR | $168,685 |
| AVERAGE PAYBACK PERIOD | 7.5 years |
PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR
= 2315900/354019 = 7.2 = 7.5 Years based on median
The average investment for a Pizza Hut Franchise is $1,215,250.
With an average profit percentage of 19%, the average profit per year is $168,685.
This means that the average payback period for a Pizza Hut Franchise is 7.5 years, and the total investment of $1,215,250 would be recovered within this period.
Pizza Hut Might Be The Hardest Franchise To Get
Qualifying for the Pizza Hut franchise is not a cakewalk. You must meet the following requirements in order to own a Pizza Hut franchise:
- Have a net worth of $700,000.
- Have liquid assets worth $350,000.
- Strong Credit Report and History
- Restaurant or retail business ownership or management experience.
Facts About Pizza Hut
- In 2012, Pizza Hut released some limited edition perfume that smelled like “fresh dough with a bit of spice.”
- The sign board on the building where the first pizza hut opened had space for only eight letters, so Pizza Hut got its name by chance.
- Pizza Hut once delivered a pizza to the top of Mt. Kilimanjaro.
- Pizza Hut wanted to get their logo lasered on the moon’s surface, but the plan failed as for the logo to be visible, it had to be the size of Texas.
- In 2016, during the anniversary celebration of the Super Bowl, Pizza Hut gave Pizza covered in gold to a few lucky fans.
- Pizza Hut is the only restaurant that has delivered Pizza in space.
- Pizza Hut was the first company to launch online pizza ordering in 1994.
- Pizza Hut uses 300 million pounds of cheese every year and takes up three percent of U.S. cheese production.
- Pizza Hut in Aggieville, Manhattan, Kansas, was the longest-operating Pizza Hut chain, and it served for 55 years.
- The first Pizza Hut restaurant had to be transferred to Wichita State University, and now it has become a museum.
((https://www.mentalfloss.com/article/70987/15-things-you-might-not-know-about-pizza-hut))
What Is Pizza Hut Known For?
Pizza Hut is a multinational restaurant chain that is wildly popular for its numerous range of Pizzas and especially for its pan pizzas.
Apart from Pizzas, they also serve breadsticks, pasta, and other desserts. And because of Pizza Hut’s unique and delicious taste, it is considered one of the best Pizza Chains in the world.
Here is a list of popular pizza and other items on the Pizza Hut menu:
- Chicken Alfredo Pasta.
- Detroit Style Pizza.
- Pepperoni Pan Pizza.
- Personal Pan Cheese Pizza (whole).
- Cinnabon Mini Rolls.
- Hand-Tossed Cheese Pizza.
- Cheese Pan Pizza.
- Hand-Tossed Pepperoni Pizza
- Breadsticks
- Honey BBQ Boneless Wing
Is Pizza Hut Franchise Profitable?
The Pizza Hut franchise is definitely profitable, as by putting in an average initial investment of $1,215,250; you can earn an average profit of $168,685 per year.
And if we look at the sales figure of Pizza Hut franchises in the year 2020, then even the worst-performing outlet made sales of $221,848, and the best-performing outlets made sales of $3,058,878 with 43.7% of outlets exceeding the average sales of $690,470 based on 4,632 franchised outlets.
Concluding from these figures, opening a Pizza Hut franchise is definitely profitable.
Pizza Hut Franchise Earning Potential
Between 2017-2018 Pizza Hut saw the most significant year-on-year increase in the number of outlets that opened. However, in 2020 many Pizza Hut outlets closed, showing a sharp decline, which we believe was due to Covid.
Even so, Pizza Hut is a globally recognized Pizza brand and was tagged as the most valuable pizza brand in the world in 2021. And as per Technavio, the Pizza industry is expected to grow by 6.11%.
If the pizza market grows at this rate, we will see drastically increased sales for Pizza chains as well. And since Pizza Hut is one of the biggest names, surely its profit-earning potential would be high.
Wrap Up
Getting a Pizza Hut franchise is not easy; it requires you to have a hefty net worth and liquid capital, along with experience in the restaurant industry.
It also requires you to put in a heft initial investment of $367,000-$2,063,500, but it has the capability to generate high profit as well.
Pizza Hut is a profitable and popular Pizza franchise to invest in, and you can definitely consider buying this franchise.
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Frequently Asked Questions
How much royalty and advertisment fees does Pizza Hut charge?
Pizza Hut charges monthly royalty fees of 6% of Gross Sales and monthly national advertising fees of 4.75% of Gross Sales.
What is Pizza Hut's initial franchise fee?
Pizza Hut charge an inital franchise fee of $25,000.
Does Pizza Hut offer financing?
Pizza Hut does not offer direct financing. However, upon request, they can give you a list of third-party financiers.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.