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How Much Does A Sbarro Franchise Cost?
Quick-service restaurants (QSR) have become a popular choice to franchise due to its tried-and-tested business models. As such, many franchisees see this as a golden opportunity because of ROI and revenue. It’s a win-win strategy, too, because it will help grow the QSR and serve more customers. And Sbarro has become a top choice for many franchisees. But how much does a Sbarro franchise cost?
So, in this article, learn more about the Sbarro franchise and other requirements to start one.
Sbarro Franchise Overview
Before Sbarro became one of the biggest pizza chains in the world, its humble beginnings started in a salumeria in Brooklyn. Founders Carmela “Mama” and Gennaro Sbarro opened their doors to the public in 1956. They then opened a second location when Mama Sbarro realized their pizza slices were a hit. As of today, they have over 600+ units in 28 countries.
Aside from North America, so far, Sbarro is available in the following regions:
- Asia
- Europe
- Latin America
- The Middle East and Africa
Despite their popularity, this pizza chain does face a ton of competition from other fast-food chains. QSRs such as Pizza Hut, Papa John’s, and Domino’s Pizza are their main competitors. All of these restaurants serve pizzas and pasta. Aside from those, Sbarro also sells salads, stromboli, and sides.
If you think a Sbarro franchise would be a great fit for you, you can start by requesting information. To do that, all you need to do is click Request Info and fill out the form. From there, you can choose between a single or multi-unit franchise. After that, click Submit. Then, you’ll undergo seven more steps to finish the franchising process.
Training
Sbarro Franchise Co., LLC (the franchisor), requires new franchisees to undergo training. There are two types of training, one is classroom-based and another is an on-the-job experience. It may take around 144 to 160 days to complete both training sessions.
In some instances, it will require two to four more people to attend the training. One of them should be the manager of the new franchise unit. As for the location of the training, it will be held at a Sbarro restaurant.
Territory and Obligations
The franchisor will approve a new unit location but doesn’t grant an exclusive territory to any unit. However, both the franchisor and franchisee can “mutually designate” an existing site or a conversion restaurant. With this in mind, they might compete with other franchises or company-owned units in the area.
In terms of obligations, An on-site manager should be present on the premises at all times, provided they completed the required Sbarro training. It’s also expected that this on-site manager is a full-time employee to manage and oversee the franchise. Plus, only items approved by the franchisor can be sold by the franchisee. So this means, any items not approved beforehand will not be allowed.
The franchisor grants an initial 10-year term for new restaurants. Meanwhile, for conversion restaurants, it’s 10 years or the remainder of the term, depending which is less. Renewal is possible provided franchisees meet requirements, and a franchisor can grant two 5-year terms.
The Sbarro Franchise Cost
The franchisor estimates that the Sbarro franchise cost for new restaurants is estimated between $180,600 to $642,800. Potential franchisees should also prepare other fees such as royalty fees, local advertising, and renewal fees.
The franchisor doesn’t offer financing and guarantees to franchisees. However, for those planning on using converted restaurants may sublease from the franchisor or an affiliate. This will then reflect on the Sublease Agreement.
Your Investment
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $20,000 | $35,000 |
| Lease | $25,000 | $50,000 |
| Restaurant Purchase Price | $100,000 | $500,000 |
| Leasehold Improvements | Included in Restaurant Purchase Price | |
| Purchase of Initial Equipment Package | Included in Restaurant Purchase Price | |
| POS/Computer System | Included in Restaurant Purchase Price | |
| Permits and Licenses | $2,000 | $5,000 |
| Outside Signs or Menuboards | Included in Restaurant Purchase Price | |
| Insurance Package | $800 | $800 |
| Opening Inventory & Supplies | Included in Restaurant Purchase Price | |
| Training Expenses | $8,000 | $10,000 |
| Utility Installations & Deposits | $200 | $2,000 |
| Architectural Fees | $12,000 | $20,000 |
| Legal & Accounting | $2,500 | $5,000 |
| Additional Funds (1 to 3 months) | $10,000 | $15,000 |
| ESTIMATED TOTAL (for new restaurant) | $180,600 | $642,800 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 5% to 7% of total gross revenues (determined on case-by-case basis). |
| Local Advertising | 1% of total gross revenues. |
| Marketing Fund Fee | Up to 2% of total gross revenues. |
| Additional Assistance | Actual cost. |
| Additional Rent | Varies. |
| POS System Maintenance Fee | Provider’s then-current fees. |
| Web Site Hosting Fee | The then-current fee, as will be described in the manuals (currently $0). |
| Transfer Fee | The greater of $3,500 or 10% of the then-current initial franchise fee. |
| Audit Costs | Understated royalty fee, interest, and costs of audit. |
| Inspection and Testing Costs | Costs of inspection and testing. |
| Interest Payments | Maximum rate permitted by law; if no maximum rate, 18% per year. |
| Sbarro’s Lost Profits Following Termination | The mathematical product of (a) the average monthly royalty fees, and marketing fund fees, payable under the Franchise Agreement over the 12-month period preceding the date of termination (or a shorter time period if the Sbarro restaurant has been open less than 12 months); (b) multiplied by the lesser of 36 or the number of months remaining in the term of the Franchise Agreement. |
| Renewal Fee | $7,500 |
| Relocation Fee | $1,000 |
| Insurance | Varies. |
| Forms, Materials and Special Operating Assistance | Varies. |
| Enforcement Costs | All costs including reasonable accounting and attorney’s fees. |
Did You Know?
- The pizza chain wants its customers to enjoy their pizza to the fullest. Sbarro introduced a principle called the “Fold School.” The first step is to fold the pizza. Then, place the part of a pizza in their mouth. After that, they can imagine a nice place in the world (Sbarro did say Shangri-la). Lastly, repeat the process. Other than that, Sbarro lovers can even receive a free slice of XL NY Pizza. All they have to do is sign up for The Slice Society. From there, they’ll get exclusive discounts, coupons, and more!
- Customers can enjoy Sbarro at home through delivery. Or if they want to have a party, they can tap Sbarro to cater for them. Presently, Catering is available in 142 cities across the U.S.
- Aside from malls, potential franchisees can set up a Sbarro in universities, hospitals, train stations, airports, and etc. Franchisees can, however, suggest a place they want to establish one that isn’t on the list.
- The pizza chain serves vegan and gluten-free options in select restaurants. Aside from their salad, their dough, sauce, and pasta are also vegan. Customers can even request for no cheese if they’re vegan.
- When Sbarro introduced a new recipe in 2012, they gave out 35,000 pizzas for free. They even served it in a ‘40s style pizza truck. The new recipe pays homage to its Italian roots.
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