Are you an entrepreneur looking to own a quick service franchise with a niche offering? Pita Pit could be a great choice as their offering is extremely rare in the industry with healthy fast food pita sandwiches.
If you are thinking about opening a Pita Pit franchise, you might wonder what they look for in franchisees, costs, and whether it’s worth opening one. Let’s discuss Pita Pit’s franchise system and see all the details.
About Pita Pit and Pita Pit History
Pita Pit is a quick-service restaurant that aims to offer fast food in a healthy manner. They specialize in pita sandwiches with vegetables, grilled meat, and various sauces, all fresh and healthy. They first opened in 1995 and started to franchise in 1997.
The restaurant offers healthy food along with music, authentic vibes, and entertainment, which is one-of-a-kind in its niche. They now have over 500 stores in the United States and in the world with an established franchise system to help their franchisees succeed as quickly as possible.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $216,354-$435,102 |
| Franchise | YES |
| Franchising Since | 1997 |
| Franchise-Fee | $24,000-$30,000 |
| Royalty-Fee | 5% |
| Liquidity | $75,000 |
| Estimated Outlets | 500+ |
How Much Does It Cost To Open A Pita Pit Franchise?
The total cost to open a Pita Pit franchise is between $216,354 and $435,102. This expected cost includes every start-up cost like training, equipment, rental deposit, lease, and many others. It also includes the franchise fee of between $24,000 and $30,000.
Franchise Requirements
Pita Pit doesn’t look for a background in the restaurant industry to open a franchise. They look for investors and entrepreneurs who have a minimum net worth of $100,000, $75,000 of which is in liquid assets.
You don’t need to have a background as a manager or anything similar, but you need to showcase that you are dedicated to growing the business as an owner.
Profit & Revenue Of Pita Pit
Since Pita Pit is not a public company, they also don’t share their financials. Our estimations and some information online show us that the company’s annual profit could be between $200 million and $300 million.
With an industry average profit margin of 10 to 15%, the annual net profit could be between $20 million and $45 million.
Overall Sales
Pita Pit doesn’t directly show the average overall sales numbers in their franchise disclosure document. Some reports online who has interviewed some of the franchisees give us an estimation.
According to this estimation, the expected gross overall annual sales are between $400,000 to $600,000.
What Is The Pita Pit’s Franchise Owner Salary?
Again, there is no official information about the net profits per franchised store. However, we do know that Pita Pit’s average sales figure is $500,000.
So if we consider a profit margin 15% as per the industry standards, then we can calculate that a Pita Pit’s franchise owner make $75,000 in net profits on average.
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 500000.00 |
| Rent | 10.63% | (53125.00) |
| Insurance | 5.31% | (26562.50) |
| Salaries | 21.25% | (106250.00) |
| Franchise Royalty Fees | 5.31% | (26562.50) |
| Utilities | 2.13% | (10625.00) |
| Cost of Goods Sold (COGS) | 26.56% | (132812.50) |
| Labor (Variable) | 13.81% | (69062.50) |
| Total (Expenses) | 85.00% | (425000.00) |
| Net Profit | 15.00% | 75000.00 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Pita Pit’s
The total investment is $435,102, and the yearly profit is $75,000. So, to find out how long it will take to earn back the initial investment:
Payback Period = Total Investment / Yearly Profit = $435,102 / $75,000 = 5.8 years
Based on these figures, it will take approximately 6 years to pay back the initial investment for Pita Pit. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Pita Pit
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 186 | 165 | -21 |
| 2020 | 165 | 131 | -34 |
| 2021 | 131 | 115 | -16 |
For the Franchised outlets:
- In 2019, the failure rate was (21)/186×100≈11.29%
- In 2020, the failure rate was (34)/165×100≈20.6%
- In 2021, the failure rate was (16)/131×100≈12.21%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 11 | 5 | -6 |
| 2020 | 5 | 3 | -2 |
| 2021 | 3 | 3 | 0 |
For the Company-Owned outlets:
- In 2019, the failure rate was (6)/11×100≈54.54%
- In 2020, the failure rate was (2)/5×100≈40%
- In 2021, the failure rate was (0)/3×100≈0.00%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 197 | 170 | -27 |
| 2020 | 170 | 134 | -36 |
| 2021 | 134 | 118 | -16 |
For Total outlets:
- In 2019, the failure rate was (27)/197×100≈13.7%
- In 2020, the failure rate was (36)/170×100≈21.17%
- In 2021, the failure rate was (16)/134×100≈11.94%
According to the above-mentioned data, we can see that the franchised outlets for Pita Pita declined from 2019 to 2021, showing a failure rate between 11.29% and 12.21%.
On the other hand, for company-owned outlets, the failure rate of Pita Pita was lying in the range between 54.54% and 0.00% for the same period of time.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the Pita Pita franchise has declined in the years 2019-2021 showing a total failure rate between 13.7% and 11.94%.
Training and Support
There is an initial training of 9 days that takes place in Pita Pita’s National Training Center in Idaho. The person, either the franchisee or a designated manager, who will oversee the store’s operations has to successfully complete this training. After opening the store, there might be additional training programs or seminars as part of their support package.
Pita Pit has a dedicated franchise resource center that franchisees can reach via phone call. This center can help with an operational problem and provide assistance if needed. Each store also gets a systems specialist who occasionally visits the stores to evaluate the current situation.
Terms of Agreement and Renewal
The term of the initial agreement is 10 years at a maximum or equal time to the franchisee’s lease. A renewal is possible if the franchisor agrees to it and the franchisee meets the requirements. The renewal is for a maximum of 10 years or in accordance with the franchisee’s lease.
Obligations and Restrictions
The franchisee must spend full-time efforts on the management and operations of their restaurant and participate in the daily operations and management of the store. It’s extremely rare for the franchisor to allow an absentee owner.
Each franchised restaurant also must have a designated person who has successfully completed the initial training.
Depending on the local laws, the franchisees are obligated to keep their stores open on the days and times that are specified in the franchise manual. The franchisees also must sell all products and services that the franchisor wants them to.
Financial Assistance
Pita Pit doesn’t offer direct financial assistance, but they may offer indirect financial assistance by introducing you to banks or financial institutions.
Additionally, they may help you to get the necessary financing through your own bank and help your bank understand the Pita Pit franchising business to get you an SBA loan.
Pita Pit Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Taziki’s Mediterranean Café | $35,000 | 4% | $473,000-$934,000 |
| Tropical Smoothie Café | $15,000-$30,000 | 6% | $296,500-$661,500 |
| Pita Pit | $24,000-$30,000 | 5% | $216,354-$435,102 |
Conclusion
The quick-service restaurant market is massive, with billions of dollars in annual profits. Pita Pit is one of the restaurants that take a portion of this market with over 500 stores and a solid franchising system in a niche part of the industry.
The franchisees are estimated to make about $40,000 to $90,000 annually in net profits with just a total investment of up to $435,102.
The net profits might seem low, but the entry point is also fairly low, and they offer an extensive program to get you started and manage your business well. It might be worth owning a couple of Pita Pit franchises if you have the necessary finances to make good money.
FAQs
Does Pita Pit help with the financing of my franchise store?
They don’t directly help, but they may introduce you to banks or help your bank understand their business to help your SBA loan process.
Is Pita Pit a franchise?
Yes, Pita Pit has been a franchise since 1997.
What experience do I need to open a Pita Pit franchise?
You don’t need any experience as a manager, business owner, or any role in any industry. You only need to comply with the financial requirements.
Who owns Pita Pit?
Pita Pit is a Canadian quick-service restaurant service franchise serving pita sandwiches with fresh vegetables, grilled meat, and sauces. The company is owned by Foodtastic Inc.
Where is the headquarters of Pita Pit?
The headquarters of Pita Pit is located in Kingston, Ontario.
How many locations does Pita Pit have?
As of 2023, there are more than 450 Pita Pit stores in North America, Europe, Asia, the Middle East, and Asia-Pacific.
Who founded Pita Pit?
Pita Pit was founded by Nelson Lang and John Sotiriadis in the year 1995 in Kingston, Canada.
Sources
https://pitapitusa.com/franchising/investmen