In 1959, the first Little Caesars Pizza opened in Michigan. Since then, the Little Caesars' brand has expanded to more than 3,600 stores around the world. A business owner wanting to cash in on the Little Caesars brand can go through the process of opening a Little Caesars franchise.
Go Through the Application Process
Opening up a Little Caesars franchise requires the franchisee to have at least $100,000 in liquid assets and at least $250,000 of net worth. Little Caesars asks all potential franchisees to fill out the franchise inquiry form found on the Little Caesars franchising website. If Little Caesars decides that an aspiring franchisee is a good fit, it will send him a franchise application. After Little Caesars approves the application, it sends the applicant a franchise disclosure statement. When the franchisee returns the disclosure statement, Little Caesars will invite him to a discovery day and interview at Little Caesars world headquarters in Detroit. Little Caesars makes its final decision to accept or deny a franchise applicant after the interview. In the 15 states that regulate the offers and sales of franchises, the franchisee must also submit additional pre-sale registration and disclosure documents.
Choose a Site
Once Little Caesars approves a franchisee, it requires him to attend real estate training and site selection classes. After the classes, the franchisee can choose a site for the new restaurant, sign the lease on the property and receive the store design and floor plan. The franchisee attends a six-week, in-store operations training program when construction starts on the new site. The entire process, from submitting an application to opening a store, takes anywhere from three to 18 months to complete.
Pay the Franchising Fee
The initial franchising fee is $20,000 with several exemptions. A current Little Caesars franchisee buying another store franchise only pays $15,000, as do United States military veterans. Little Caesars does not charge service-disabled veterans any franchising fees. As soon as Little Caesars approves a franchisee, he must pay $5,000 upfront with the rest due when he signs the franchise agreement. Additionally, each franchisee must pay royalties each week, which equal 6 percent of that week’s gross sales or $100, whichever is greater. A franchise must also pay advertising fees of up to 7 percent of gross sales for each year.
Set up Funding for Start-Up Costs
According to Little Caesars, the cost of opening a store is often above $350,000. The cost of opening a carryout store typically ranges from $265,000 to $681,500. Higher-end locations are usually free-standing buildings as opposed to strip mall locations. Start-up costs include fixtures, equipment and signage, which typically run between $150,000 and $225,000 per store; and initial inventory and supplies, which cost $25,000 to $35,000. Grand opening advertising costs $11,000 to $20,000; new manager and employee training costs $8,000 to $11,000; and licensing and permit costs range from $1,000 to $10,000.
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