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The Real Cost Of Owning A Marco’s Pizza Franchise
Marco’s Pizza was established in 1978. Then, just a year after, they opened their doors for franchising. Presently, the company is headquartered at Toledo, Ohio, and has around 900 stores in over 34 states. So, if you are interested in putting up your own store, make sure you know the requirements and the estimated Marco’s Pizza franchise cost. Furthermore, we listed below all essential information that could help you decide if this business is for you as well.
Franchise Description
The brand’s main franchisor is Marco’s Franchising LLC. And they offer pizza for delivery, carryout, in-store, catering, and dining services. However, other stores can provide products approved by the franchisor. This also includes salads, beverages, chicken wings, and desserts. Generally, a store is around 1200 to 1600 square feet and can house more or less 12 people.
Franchisee Training
The franchisor will require training for the franchisees. However, if the franchisee will not be included in the in-store operations, then two designated persons should complete the entire training. These persons should meet high standards and be responsible in terms of operating the store.
Trainees will be using Marco’s University Online – the company’s tool for online instructions. The classroom training is conducted at the Marco’s Support Center in Toledo, Ohio. The franchisor will also require the trainees to have on-the-job training at a certified training store. This depends on the area covered by the new franchisee.
The initial training online will take 12.7 hours. On the other hand, classroom training will run for approximately 53.5 hours. Meanwhile, the on-the-job training, which takes the most part, will be completed in more or less 266 hours.
The franchisees must complete and satisfy all the recommended programs before they can open the actual stores. If necessary, they need to undergo continuous training for its employees. In some instances, there will be refreshers and additional courses as well.
Territory
Once there is a ‘Permitted Site’, the franchisor will delegate an ‘Area of Responsibility’. The franchisees are only allowed to operate within their permitted site and could deliver within their area of responsibility.
Take note that there is no minimum area of responsibility. In fact, it can be confined to the building where the store operates. Generally, the area of responsibility is within a 1.5-mile radius from the store.
During the franchise term, the franchisor will not grant others to operate within the same area of responsibility, unless there are ‘special venues’ as described by the main franchisor.
Franchisee Obligations
The franchisees should ensure that the store operates using its maximum capacity. Not to mention, that high-quality of work should be in place all the time. They must also provide the necessary vehicles and staff to allow the store to operate seven times a week, except on specified holidays. The franchisees must offer all the goods and services required by the franchisor.
Term of Agreement
The term of the original agreement is for ten years. It can be renewed for another two terms, each with ten years, assuming that the requirements are completed and that the franchisor is satisfied.
Financial Assistance
The franchisor does not currently provide direct or indirect financing. Likewise, they do not guarantee a franchisee’s note.
Did You Know?
There’s more to know about the technicalities of franchising your own restaurant or the estimated Marco’s Pizza Franchise cost. There are fun facts which might make you more interested in putting up your own unit. Check out some of these below.
Only Serving Authentic Italian Pizza
Sure, there are a lot of pizza restaurants all over the globe. But what makes Marco’s Pizza different is that they offer authenticity. If you want a slice of Italy, then this is one of the best places to get your pizza.
Its owner, Pasquale Giammarco, is particular about using the freshest ingredients. Without a doubt, that’s the same culture being passed on to the franchisees as well.
Top 10 Pizza Companies in the United States
If you are wondering if Marco’s Pizza is one of the best, then the recognition says it all. In fact, in 2016, Marco’s Pizza was ranked number 10 on the Pizza Today list of Top 100 Pizza Companies in the United States. Besides that, Marketing Quarterly and Franchising World named them as one of the Top 25 Pizza chains and Number 8 in the list of Fast and Serious Growth Franchises, respectively.
These are just a few of their accolades, and we expect that the company will receive more.
Excellent Service and Cleanliness
Besides their pizza and other products, Marco’s Pizza’s service is always commended by its pool of loyal customers. It’s above satisfaction, and you would enjoy coming back for more. They will make you feel like you are a part of their family indeed. And of course, such is crucial if you want to sustain your business.
Keto Menu
When you own a Marco’s Pizza, it means you can serve a diverse market. They finally offer Keto Crustless Pizza Bowls, which is ideal for people on a strict Keto diet. And for those who would like to stay away from meat, they also have a Garden Crustless Pizza bowl! In sum, you can now have fast-food guilt-free.
Your Investment
Check out the estimated Marco’s Pizza franchise cost below. The amount could change without prior notice.
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Real Property | $6,000 | $18,666 |
| Equipment, Fixtures | $48,947 | $108,165 |
| Point of Sale Computers | $14,000 | $27,617 |
| Credit Card Processing | $3,225 | $3,225 |
| Leasehold Improvements | $45,000 | $240,000 |
| Signage | $3,000 | $12,000 |
| Opening Inventory | $6,000 | $13,500 |
| Small Supplies | $14,600 | $15,500 |
| Delivery Vehicles | Varies | |
| Deposits, Pre-Paid Expenses | $2,500 | $8,500 |
| Business Licenses | $500 | $1,500 |
| Insurance | $800 | $8,000 |
| Training Expenses | $3,000 | $10,000 |
| Miscellaneous Expenses | $500 | $5,000 |
| Architectural and Engineering | $4,500 | $12,000 |
| Technology Fee | $330 | $330 |
| Delivery Area, Streets Database for POS, and Shape Files for POS and OLO Platform Maps | $500 | $500 |
| Brand Launch Program | $25,000 | $25,000 |
| Store Technology Infrastructure System | $800 | $2,150 |
| Menu Boards | $3,633 | $3,757 |
| Additional Funds – 3 months | $15,000 | $45,000 |
| ESTIMATED TOTAL | $223,535 | $586,410 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty | 5.5% of net royalty sales. It is subject to adjustment up to a maximum of 6.0%. |
| Royalty – Key Management Employee Program | 2.5% of net royalty sales. This applies if commission is due to an Area Representative, this will increase by an additional 2.2%. |
| Brand Development Fund | 1% of net royalty sales. The franchisor has the right to increase this fee by 0.5% by giving franchisees 90 days prior written notice. |
| Geography Based Advertising Funds | The amount of contribution required to the National Advertising Fund is 4% of net royalty sales. This amount then depends on the geographic region in which the store is located. The total combined contribution to a National Advertising Fund and Regional Advertising Fund will not exceed a total of 5.5% of net royalty sales combined for all levels of the Geography Based Advertising Funds. Depending on the venue, Special Venue Stores may not be required to participate in the Geography Based Advertising Fund. |
| Market Advertising Cooperative | Amount set and spend determined by co-op member votes. |
| Local Store Marketing | Minimum of 0.5% of net royalty sales. But not exceeding 7% minus the percentage contributed to the Brand Development Fund and Geography Based Advertising Funds. |
| Additional Training | $1,000 per person. |
| Replacement Designated Franchise Representative Training | $5,000 per person, as well as the costs of any services requested by franchisees to translate the training program from English. |
| Additional Assistance | $300 per day. |
| Performance Deficiencies Service Fee | $500 per continued failure to comply with operational standards or policies. |
| Financial Reporting Fee | $100 per violation if financial reports are not submitted. |
| Relocation | $8,250 or 1/3 of the then-current initial franchise fee. |
| Transfer | $2,500-$8,250 or 1/3 of the then current initial franchise fee as well as 3% of gross selling price if buyer is acquired through the franchisor’s lead generation system or existing franchisee. |
| Audit | Cost of audit, plus prime, plus 4% interest on underpayment. |
| Renewal Fee | $6,250 or 25% of the then-current Initial Franchise Fee, whichever is greater |
| Insurance | Varies. |
| Interest and Additional Expense Fees | 1.5% per month interest on all late payments, as well as a 5% Additional Expense Fee. |
| Liquidated Damages | Average royalty fees, brand development fund contributions, and geography-based fund contributions paid or owed for the 36 accounting periods immediately preceding the effective date of the termination. It is multiplied by the lesser of: (a) 36. Or (b) 90% of the number of accounting periods remaining in the term of the Franchise Agreement at the date of termination, discounted at a rate of 5% per annum. |
| Web Based Training | Payment included as part of the technology fee. |
| Technology Fee | $110.54 per accounting period by ACH. |
| Costs and Attorneys’ Fees | Varies. |
| Audit Costs | All costs and expenses associated with the audit, reasonable accounting and legal costs; and interest on the underpayment. |
| Indemnification | Varies. |
| Securities Offering Fee | $2,500 or the franchisor’s actual expenses, whichever is greater. |
| Development Agreement Continuation Fee | 90% of the weekly average system-wide sales, multiplied by 5.5% |
| Marco’s University Online & Inventory Tablet | $285.50 |
| Email Upgrade Fee | $10 per account per month. |
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