piza hut franchise final 1

8/7/2019 Piza Hut Franchise Final 1

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PRESENTATION

ON

FRANCHISING SYSTEM

AT

PIZZA HUT

Kunal Assudani



MARKET PRESENCE

A subsidiary of Yum! Brands, Inc. Pizza Hut,has more than 6,000restaurants in the United States and more than 5,600 restaurants in

other countries

For more than 50 years Yum!, is the world's largest restaurantcompany in terms of the number of restaurants with more than

37,000 locations in more than 120 countries

The Yum! system includes three operating segments: U.S.,International and China Division



Pizza is the #1 dinner choice and 93% of Americans eat atleast one pizza per month

(Pizza Today Magazine)

Today, franchised pizza chainscommand an approximately60% share of the U.S. pizza market.(pizzamarketplace.com)

The pizza industry "has grown into a food service,commanding $30 billion a year from U.S. customers



Pizza Hut Review application

Issue Franchise Disclosure Document(FDD)

Verify assets and geographic interests Conduct and review credit check and

franchise profile

Conduct background check

Identify candidates goals

Overview approval process

Overview training requirements

Overview Operating Plan outline Overview development plan

opportunities

Sign and return FDD receipt

Review FDD and prepare questions

Complete franchising profile

Prepare Operating Plan

Franchisee Candidate

Sign and return FDD receipt

Review FDD and prepare questions

Complete franchising profile

Prepare Operating Plan



Pizza Hut

Conduct Interview

Review Operating Plan

Identify and discuss issues

Inspect candidates existing operations,

if applicable


Prepare for interview

Attend interview

Follow up with additional information

after interview, if necessary



Pizza Hut

Set up half day in-store experience

Host Discovery Day at Pizza Hut Center

of Restaurant Excellence (CORE)

Discuss initial trade area strategy

Conduct Q&A


Attend half day in-store experience

Attend Discovery Day

Provide initial trade area direction

Follow up with additional information

after Discovery Day, if necessary



Pizza Hut

Determine trade area selection

strategy

Provide detailed demographic

information on selected trade areas

Discuss scale objectives and future

development

Discuss Pizza Hut Development

Services options

Create and approve proposed tradearea map

Prepare and issue Letter of Intent

(LOI)


Outline development vision

Identify focus trade area(s)

Sign and return LOI with deposit



Pizza Hut

Conduct notification process to existing

franchisee(s)

Review and approve candidates

business entity

Prepare and issue Development

Agreement


Prepare business entity

Begin initial site identification and

negotiation

Sign and return Development

Agreement with development fee



Pizza Hut

Provide on-boarding support

Review and approve architectural

drawings

Schedule/conduct operations training

Provide development expertise

Support Grand Opening


Finalize site negotiations and lease

Finance restaurant

Build restaurant

Hire team

Attend operations training

Grand Opening



Pizza Hut

Provide business support

Develop marketing calendar

Provide on-going training

Provide Pizza Hut brand leadership


Run a great restaurant

Execute marketing programs

Build people capability

Create a growth vision



Pizza Hut

Verify Growth Readiness


Build Additional Restaurants



TRAINING SUPPORT 8-10 week operations training program highlighting all

aspects of owning and operating a Pizza Hutrestaurant.

In-store training taught by a Restaurant Training

Manager or Certified Training Instructor held in acertified training restaurant

Store opening support, which includes members of the

Pizza Hut Operations Development team present at thestore prior to and after the restaurant opening toensure execution excellence



CONTD

Pizza Hut provides each franchisee with a FranchiseBusiness Coach who provides individual businessconsultations and has a support team of operationsmanagers and local store marketing experts.

Regional meetings provide training on new product rolloutsand other information pertinent to your local market.

Educational sessions are held at two franchise business

conferences each year.

Classes are offered through Yum! University that cover awide range of topics.



Minimum requirements to qualify to be a Pizza Hut

franchisee

Financial:

$250,000 Net Worth

$250,000 Liquid Assets

Strong Credit Report and History

Endorsed financial plan for future development

Experience:

A qualified candidate will have successful business ownership or

management experience, ideally in the restaurant or retail industries.

Growth Mindset:

A Pizza Hut franchisee must have a vision to be a five-unit operator in four

to five years, if opportunities are available.

Should be cutomer oriented



Fees, royalties and advertising payment

Initial Franchise Fee = $25,000

Monthly Service Fee (Royalties) = 6% of Gross Sales

Advertising = 4.25% of Gross Sales

Duration of approval process Initial qualification involves a series of background checks and interviews

takes 10-12 weeks.

After that, trade area selection and approval can take three to ninemonths

Opening $ running of the restaurant

After approval, franchaisee gets 1 year time to open.

Franchisee has the responsibility to open the restaurant , franchisor only

guides. No personal equipments/ funtiure/menu can be used

Material can only be purchased from the approved suppliers by pizza hut



Type of Expenditure Amount Payment When Due

Initial Franchise Fee $25,000

Method: Lump

Sum

Payment To: PHI

Before Restaurant

opens or when

Development

Agreement signe

d

Development Services Fee Varies

Method: Lump

Sum

Payment To:

YRSG

Within 30 days of

receipt of invoice

from YRSG

Development Fees Varies

Method: Lump

Sum

Payment To: PHI

or its Subsidiaries

and Affiliates

At the time of

signing

Development

Agreement

Equipment $100,000-$200,000

Method: Lump

SumPayment To:

Vendor

When Acquired

Opening Inventory $4,000-$8,000

Method: Lump

Sum

Payment To:

Vendor

When Acquired

Smallwares $10,000-$20,000

Method: Lump

Sum

When Acquired



Building and Improvements $115,000-$250,000Method: Varies

Payment To: VariesVaries

Delivery Vehicles See footnote

Method: See

footnote

Payment To: See

footnote

See footnote

Computers $15,000-$45,000

Method: Lump

Sum

Payment To: PHI,

its Affiliates or

approved Vendors

When Acquired

Additional Funds (Three Months) $5,000-$20,000

Method: As

Incurred

Payment To:

Employees, Utilities

and Suppliers

As Incurred

Miscellaneous $10,000-$22,000

Method: As

Incurred

Payment To:

Employees, Utilities

and Suppliers

As Incurred

Advertising $15,000-$25,000

Method: As

Incurred

Payment To: Media

Suppliers

First 18 Weeks

Start-up "Other" $3,000-$5,000

TOTAL $302,000-$620,000

piza hut franchise final 1

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