Are you planning on entering the food and beverage industry? What better way than to open up an already leading food franchise in your very own city? For anyone who intends to commence a new food business can very well opt for Pizza Hut franchise.
I am very sure all of you would have heard of Pizza Hut, one of the most amazing pizza restaurants which serve not only scrumptious pizzas but also garlic bread, pasta, salads and desserts as well.
This specific brand is not only loved and preferred by youngsters but it has also become an amazing place for fun and casual family dining.
Before we jump into the details of how a franchise can be opened in your city lets know something more about Pizza Hut history.
Yum! Brands Inc’s Dan and Frank Carney are the owners of Pizza Hut food chain worldwide with its headquarters in Texas. Pizza Hut was brought into India in the year 1996 and inaugurated its first restaurant in Bangalore. Since its commencement, it has become an integral part of the pizza market and also consistently maintained an impressive growth rate over these many years. As of 2018, pizza hut has over 422 outlets all over India and plans to open another 200 outlets by the end of 2022 in order to expand its retail footprint.Â
What is exactly Pizza Hut’s USP?
This eateries unique selling point is its wide variety of food items which comes in different flavours as well. Some of their well-known pizzas are hand-tossed, stuffed crust and pan pizzas. The pizza is further categorised on the menu which is mentioned below:
Veg and non-veg pizzas which are further categorised into:
- Classic
- Favourite
- Signature
- SupremeÂ
The other products on the menu are beverages, salads, appetisers, pasta, soups and desserts. Choco chip cookie sundae in the dessert category is one of their bestsellers.
Now, let’s focus on something other than food which is also considered as their USP. Pizza Hut basically concentrates more on their in-restaurant dining experience. If you visit their outlets you can see the spacious seating areas, play area for kids which sync perfectly well with their ambience and decor.
They are also known to conduct or organise birthday parties, kitty parties and even business meetings in their outlets. So you can see how Pizza Hut is always ready to add that extra personal touch by having customer interactions which intern generates major revenue from their restaurant sales. So its best to say that Pizza Hut’s main and major USP is their DINING EXPERIENCE.
Once you have complete knowledge of their USP, then the next important step is for me to inform you about certain important pointers of owning the company’s franchise in your city.
- The cost to open up a pizza hut franchise is high in India. However, when you put into consideration the Indian lifestyle and cheaper land value, the initial cost when translated into INR can roughly sum up to one and a half crore rupees. The initial franchise amounts approximately come up to Rs. 14 lakhs along with an annual 6.5% royalty on the total amount of profit.
- Although the initial investment is comparatively higher in India the return is always worth the investment. In the coming years according to yum! Restaurants India Mr Niren Chaudhary the business aims to touch 1 billion USD. This proves that pizza hut has a good future in India because of the Indian QSR industry expansion.
- Once you are considered a qualified client for opening a pizza hut franchise, the company will provide you with various training programs that will impart knowledge and also teach them on how to effectively run this food chain business.
What are the requirements of starting a Pizza Hut Franchise in India?
Area
As there is no direct requirement provided by Pizza Hut, going by the market standards you would at the minimum require 1000 Sq Ft to 1500 Sq Ft area. This can help you provide the dining experience that Pizza Hut is famous for. The main thing to consider primarily is whether the short-listed location is in an area which is open for development. You can also consider whether the proposed location is a suitable place based upon the location of your competitors, traffic patterns, household count, population growth, and other criteria.
Skill or experience
The candidate needs to be qualified in handling restaurant or retail business successfully along with ownership or management experience prior.
Training
Pizza Hut provides trained staff for its franchisors. These staff require and focus more on on-the-job training when compared with other places which are a combination of both classroom and on-the-job training. This particular training lasts for 8 to 12 weeks at your given location. The franchisees are solely responsible for expenses such as travel and accommodation of the management team.
These are the following initial training program categories that the staff has to go through:
Restaurant training – consisting of leader program, assistant manager program, Restaurant General Manager Program and Area Coach Program.
Franchise Onboarding – Individual meetings with designated functional leaders.
Pizza prep 1 – Brand Standards, relationship building, building know-how with key corporate departments.
Pizza prep 2 – Culture, customer experience and behaviour, brand building, culinary innovation, marketing
Regions of operation
The company as of 2018 operates 422 outlets in India i.e the North Zone, South Zone, West Zone, Central Zone and Union Territories. Yum brand – the owner of Pizza Hut food chain plans to open another 200 outlets in India by the end of 2022. They are the second largest pizza place in the Asia Pacific region.
Minimum staff requirement
The staff appointed at the franchise has to be deemed physically and mentally fit to handle the equipment and serve customers with the right attitude.
How Much Does it Cost to Start Pizza Hut Franchise in India?
Investment
The initial investment that you would have to put up is 25 thousand US dollars which equals to about 14 lakh rupees along with an annual royalty of 6.5% p.a. The above investment amount does not include restaurant construction, inaugural of the restaurant expenses or opening inventory.
- Initial Franchise Fee = 14 lakh rupees
- Monthly Royalties = 6.5% of Gross Sales
- National Advertising = 4.25% Gross Sales
Profitability
If you want to start any business or invest your money into an existing one, the most crucial part is money. Now that all of you have gotten a considerably fair idea of the investment cost that is required to start a franchise, we will then focus into another important matter which is a cost that is incurred on a daily basis of running the business. This can be better explained in the following situation hypothetically so that you can have a better understanding of its profitability.
Let’s say that there is a restaurant A who has rented a plot of 1000 Sq Ft where the rent amounts to Rs. 20,000. The franchise then hires a manager and 3 employees for Rs.20,000 and Rs.5,000 each respectively. The miscellaneous costs amount to Rs. 40,000 on an average. According to the pricing mentioned the average amount for each order would be Rs. 200.
Total revenue every month is Rs. 2,00,000.Â
The rent incurred every month by this restaurant is 10% of the monthly revenue which is Rs. 20,000 ( 10% of Rs. 2,00,000 ).
The food cost incurred on a monthly basis is Rs. 80,000 ( 40% of Rs. 2,00,000 ). Now let’s see about the labour costs which sums up to 20% of the monthly revenue which is Rs. 35,000.
And the final item to consider is other operating costs incurred monthly which totals up to 20% of the monthly revenue which is Rs. 40,000.
So the total profit of this particular restaurant A is Rs. 2,00,000 every month I.e
Total revenue – 2,00,000Â
Total cost (including rent, food, labour and misc expenses) – 1,70,000
Profit = 2,00,000 – 1,70,000 = Rs. 30,000.
Now based on the example if restaurant A aims to earn at least 20,000 rupees every month then at least 5 customers should eat or get a takeaway or home delivery from the restaurant on a daily basis.
The profitability of any business majority depends on the footfall of customers, area, state and how well the franchise owner is able to analyse the situation and work towards making it better.
ConclusionÂ
To conclude this article all I would like to say is Pizza Hut is a great company to invest in as it has a huge demand in the market. There are numerous factors that affect people eating from Pizza Hut such as the price of their substitute product, quality of the food produced, customer taste and preference and also their income.
If you see a recent survey done on the pizza market share customers have shown more loyalty towards pizza hut based on parameters such as quality, price, ambience, dining experience and service offered to the customers. The main positive areas that pizza hut focuses on is how they regularly improve their customer satisfaction rate. They try and incorporate more new dishes based on customers taste and preference which gives customers more choices to choose from. They also offer various discount schemes by creating combo meals and providing discount vouchers which the customers can use it in their next visit to their restaurant thereby making sure that customer footfalls are stable day-to-day.
The best example that proves pizza hut listens to their customers are the two outlets that pizza hut food chain have opened in Gujarat which comprises of the completely vegetarian food menu. This is one of the main highlight features of pizza hut because they are changing menus based on customer taste and their demand.
This kind of recognition, flexibility and customising food menu according to customers makes the people feel heard and respected. By doing so pizza hut is no taking a monotonous route rather it is bringing change in their menus by observing customer behaviour and what they prefer in order to boost their sales on a regular basis. All the above-mentioned things can only happen if enough thought and research work has been done by the owner keeping in mind the location, ambience, decor, dining experience along with profitability.