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What is The Real Mountain Mike’s Pizza Franchise Cost?
Everybody loves pizza! Admit it. That’s why you ended up in this Mountain Mike’s Pizza franchise cost article. But, the question is, “can you afford the franchise?” So, let’s find out the real cost of buying Mountain Mike’s Pizza franchise, and more!
Mountain Mike’s Pizza Franchise: The Details
The franchise is under Mountain Mike’s Pizza LLC. It started its pizza-making business in 1978 at Newport Beach, California. Ever since Mountain Mike’s Pizza began franchising in 1981 with an estimated 220 number of units to date. Aside from pizza, Mountain Mike’s restaurant sells the following:
- Sandwiches
- Salads
- Other food products and services.
Training Program
Initial training on operating a restaurant will be provided to franchisees, the managing owner, and one managerial employee. Also, the length of the training will consist of up to 15 days. Other than that, the training program’s location will be designated to one of Mountain Mike’s Pizza restaurants in California. Either that or any area designated by the franchisor.
Furthermore, all restaurant management staff will receive up to 10 days of additional training at the restaurant. Lastly, franchisees and other previously trained managers must attend any periodic refresher training courses advised by the franchisor. Take note that the franchisee will shoulder applicable fees for the said periodic courses.
Territory Agreement
Firstly, the specific location of the franchisee’s restaurant must be approved by the franchisor. Then, after the site is endorsed, the franchisor will identify the exclusive area. Furthermore, the franchisor will not establish or allow a franchisee to establish another Mountain Mike’s restaurant within the specified exclusive area.
The exclusive territory is within a 1 ½ mile radius from the restaurant. However, even if there are no other branches located within the restaurant’s designated area, there would be instances where an exclusive area may overlap with another franchisee’s exclusive location.
What’s Expected of a Franchisee?
- Franchisees must always be faithful, honest, and diligent in performing their contractual obligations.
- Exert excellent effort to promote and enhance the franchise restaurant.
- Not engage in any other activity that would conflict with obligations to operate the restaurant properly.
- Franchisees must offer all products and perform all services required by franchisor periodically.
- Offers for any product, or performing any services that are unauthorized by the franchisor is not allowed.
Terms of Agreement
The initial length for the franchise is 15 years. If franchisees are in good standing, they may acquire a successor franchise for 10 years based on franchisor’s then-current terms.
Financial Support
Unfortunately, the franchisor does not offer direct or indirect franchising. Also, the franchisor does not guarantee a franchisee’s note, lease or obligation.
However, a $15,000 reduction off of the $30,000 initial franchise fee is offered for any qualified veterans of the U.S. Armed Forces for each restaurant purchase.
Did You Know?
Before we dig in deep into Mountain Mike’s Pizza franchising cost, let’s learn some fun facts about the brand!
- Mountain Mike’s Pizza placed at #189 for America’s Top Performing Restaurant Chains.
- Listed in the “Ten Best Franchise Deals for 2020” by QSR Magazine.
- The restaurant’s “Mountain” pizza is 20” in diameter.
- Mountain Mike’s “Mountain” Pepperoni Pizza comes with over 200 mini pepperonis!
Mountain Mike’s Pizza Franchise Cost Breakdown
Finally, let’s dive in deep to the cost breakdown every franchisee should be aware of. So, let’s check out Mountain Mike’s Pizza franchise cost breakdown to get the gist of how much you would ACTUALLY spend. Please do note that details below are compiled from Mountain Mike’s 2020 FDD.
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $15,000 | $30,000 |
| Leasehold Improvements | $50,000 | $200,000 |
| Furniture, Fixtures, and Equipment | $60,000 | $150,000 |
| Signage | $3,000 | $15,000 |
| POS/Electronic Information System | $7,020 | $15,520 |
| Three Months’ Rent | $9,000 | $40,000 |
| Security Deposit | $3,000 | $12,000 |
| Opening Inventory and Supplies | $10,000 | $15,000 |
| Grand Opening Marketing Fee | $4,000 | $4,000 |
| Décor Package | $1,500 | $8,000 |
| Training Expenses for all attendees | $500 | $4,000 |
| Miscellaneous Opening Costs | $20,000 | $50,000 |
| Additional Funds – 3 months | $25,000 | $50,000 |
| ESTIMATED TOTAL (excluding real estate purchase costs) | $208,020 | $593,520 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty | 5% of restaurant’s weekly gross sales. |
| Marketing Fund | Up to 1% of restaurant’s weekly gross sales. |
| Advertising Cooperatives | Up to 2% of restaurant’s weekly gross sales but franchisees may agree to pay more. |
| Additional Training or Assistance | $200 – $1,200 |
| Transfer (Controlling Transfers) | $30,000 if a transfer to a new Mountain Mike’s Pizza restaurant franchisee and $15,000 if a transfer to an existing Mountain Mike’s Pizza restaurant franchisee. |
| Transfer (Non-Controlling Transfers) | $2,500 |
| Marketing | $4,000 |
| Renewal | 50% of the franchisor’s then current initial franchise fee. |
| Audit | $500 – $5,000, though actual amount could be much higher because it depends on extent of your non-compliance and the franchisor’s efforts required to detect that non-compliance. |
| Interest | Lesser of 1.5% per month or highest contract interest rate law allows. |
| Service Charge | $100 |
| Product and Service Purchases | Varies. |
| Operations Manual | $250 |
| Management Fee | Up to 15% of restaurant’s gross sales. |
| Costs and Attorneys’ Fees | Varies under circumstances and depends on the franchisee’s non-compliance. |
| Indemnification | Varies under circumstances and depends on nature of underlying claim. |
| Testing | $50 – $800 |
| Franchise System Website and Intranet | Not to exceed $50 per month. |
| Insurance | Varies under circumstances and depends on which insurance the franchisee did not obtain. |
| Non-Compliance Fee | $500 to $2,000 for deviations from operational requirements/system standards. |
| Re-Inspection Fee | $250. |
| Customer Complaint Reimbursement | Out-of-pocket cost reimbursement. |
| Lost Future Royalties | Depends on how much time remained in Franchise Agreement term when the franchisor terminated with cause or the franchisee terminated without cause. |
This sums up the actual breakdown of Mountain Mike’s Restaurant franchise cost. For more options on your franchising ventures, visit Franchise How.