FRANCHISE OPPORTUNITIES
Little Caesars Franchise Costs & Fees
Little Caesars Franchise Costs & Fees
Year Business Began: 1959
Franchising Since: 1962
Headquarters: Detroit, Michigan
Estimated Number of Units: 4,100
Franchise Description: Little Caesar Enterprises, Inc. is the franchisor. Little Caesars restaurants feature pizza, chicken wings, Crazy Bread products and other related products. Little Caesars restaurants generally are carryout-only restaurants, sometimes with a drive-thru window. Some existing Little Caesars restaurants also offer delivery services. The franchisor may consider additional delivery options or, alternatively, it may require existing Little Caesars restaurants that deliver to cease delivery and become carryout only. The franchisor currently offers both single Little Caesars restaurant franchises and a territory reservation agreement that allows franchisees to reserve a territory for potential development of multiple Little Caesars restaurant franchises.
Training Overview: Before opening the restaurant, franchisees (or, if they are a corporation, limited liability company or other entity, the principal acceptable to the franchisor) must attend the training program. As of the date of this disclosure document, the franchisor requires only one person from each restaurant to attend, and that person must be the franchisee or a principal acceptable to the franchisor, but it has the right to require the franchisee’s employees to attend. All trainees must complete the training program to the franchisor’s satisfaction. The training program lasts approximately eight weeks. The length of the program may be changed at any time. Before starting the training program, franchisees who are new to the brand must complete a two-day real estate/architectural/equipment training program and a two-day on-the-job evaluation in one of the franchisor’s restaurants. As part of the eight-week initial training, the franchisor provides food safety certification; currently, the franchisor offers the National Restaurant Association ServSafe program. The franchisor conducts initial training primarily at its headquarters and at company-owned restaurants in Detroit, Michigan. Training will include classroom instruction and formal on-the-job training in certified training restaurants. Franchisees or a principal or an individual they designate and the franchisor approves, at their expense, must attend all meetings, seminars and conferences the franchisor may specify as mandatory, including all regional and national meetings, all meetings related to new products or product preparation procedures, new system programs, new operations procedures or programs, training, restaurant management, financial management, sales or sales promotion, or similar topics and annual conferences.
Territory Granted: The Franchise Agreement grants franchisees the right to operate the restaurant only at the Approved Location. The Franchise Agreement typically defines a territory within which the franchisor will not establish or operate, or franchise any entity to establish or operate, a business using the Proprietary Marks and System. The Protected Territory is usually defined the as the territory within a one mile radius of the Approved Location. Under certain circumstances, however (e.g. the Restaurant will be located in a highly populated urban area), the Protected Territory may be reduced to a distance of ½ mile or less, or a Protected Territory won’t be granted. If the Approved Location is within any of the five boroughs of the City of New York, New York, the franchisor will not provide a Protected Territory.
Obligations and Restrictions: The franchisor requires that the franchisee (or, if the franchisee is a business entity, a principal) or an individual approved by the franchisor devote his or her full time and best efforts to on-site management and operation of the Restaurant. If franchisees are granted franchises for more than one restaurant, they must continue to personally supervise the operation of all their restaurants. If the restaurants are located in different market areas or if franchisees elect not to reside in the same geographic area as their restaurants, the franchisor must approve their on-site operator(s), and it may require that they have a minimum equity interest in the entity that operates and/or owns the restaurants they supervise. To ensure that the highest degree of quality and service is maintained, franchisees must operate the restaurant in strict conformity with the methods, standards and specifications that the franchisor prescribes in the Operational Resource Guide or otherwise in writing.
Term of Agreement and Renewal: The length of the initial franchise term is generally 10 years. There is generally one renewal term of 10 years from the initial term. All renewals are subject to contractual requirements.
Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligation.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $15,000 | $20,000 (regular fee) |
| Rent | $1,500 | $7,000 |
| Leasehold Improvements | $50,000 | $750,000 |
| Fixtures, Equipment and Signage | $186,000 | $392,000 |
| Grand Opening Advertising | $12,000 | $20,000 |
| Training Expenses | $12,000 | $16,500 |
| Start-up Inventory and Supplies | $63,000 | $154,000 |
| Insurance | $1,200 | $2,000 |
| Utility Expenses | $1,000 | $5,000 |
| Licenses and Permits | $1,000 | $20,000 |
| Additional Funds – 3 months | $17,000 | $47,000 |
| ESTIMATED TOTAL | $354,700 | $1,433,500 |
| Type of Fee | Amount |
|---|---|
| Royalty | The greater of 6% of Gross Sales for each one-week period or $100 for each one-week period. |
| Advertising Fee | Up to 7% of Gross Sales, as determined by the franchisor. |
| Blue Line Purchases | Varies. |
| Caesar Vision System Annual Support Fee | $2,080 per year per Restaurant |
| Mobile Transactions Fee | Up to $0.30 per transaction |
| Per Diem for Onsite Caesar Vison Support | $1,500 per day per technician, plus travel expenses. |
| M.I.K.E System Connection Fee | None currently |
| Audit by Franchisor | The franchisor’s actual costs of audit (travel, lodging, wage expenses, and accounting and legal costs) |
| Follow-up Inspections | The franchisor’s actual costs, including travel expenses, meals, lodging, and compensation of its representatives. |
| Additional Training | Not more than $250 per attendee for initial training of additional employees. |
| Transfer Fee | Varies from $0 to $5,000 per restaurant. |
| Renewal Fee | $5,000 |
| Indemnification | Will vary with circumstances. |
| Special Marketing, Management, and Operational Assistance Performed at Franchisee’s Request | Reasonable fee plus expenses. |
| Private Securities Offering | $25,000 plus additional sums to cover the franchisor’s out-of-pocket costs to review the materials if greater than $25,000. |
| Relocation Fee | $2,500 |
| Interest | 18% per year or the maximum rate permitted by law, whichever is less. |
| Late Fee | Franchisor’s then-current late fee for overdue amounts. For overdue financial statements, tax returns, or other required reports, the then-current late fee for each 30 days (or portion thereof) that the financial statement, tax return or other report is overdue. |
| Missed Meeting Fee | Varies. |
| Manual Update or Replacement Fee | Franchisor’s then-current fee ($60 as of the date of this disclosure document) |
| Management Fee | Commercially reasonable fee. |
| Liquidated Damages Upon Termination for Franchisee’s Default | Calculated according to formula in FDD. |
| Liquidated Damages – Failure to Comply with Post-Termination Obligations | $250 per day. |
| Costs and Legal Fees | Franchisor’s actual costs. |
The above information has been compiled from the FDD of Little Caesars. Year of FDD: 2019.
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