- How to Open this Business: Guide
- Startup Costs List
- How To Increase Business Profitability?
- How to Sale More?
- How to Value this Business?
Introduction
The pizza industry is one of the most lucrative food sectors. According to Statista, the American pizza industry is expected to generate nearly billion in 2020 with 14,000 restaurants spread across the country. Marco’s Pizza is one of the nation’s favorite pizza chains and offers a franchise opportunity with great growth potential. Although investing in franchises comes with potential rewards and insights that only experienced entrepreneurs can provide, there are also several associated costs that need to be considered.
As a budding franchisee, it’s important to consider the possible operating costs you may be responsible for when investing in a Marco pizza franchise. In this blog post, we will explore the various costs associated with running a Marco pizza franchise.
Operating Expenses
Operating a Marco pizza franchise can be an expensive business in terms of required expenses. These costs can range from mandatory license/franchise fees to more fluid costs such as employee salaries and marketing expenses. It is important to budget for and understand all of these costs before investing in a franchise.
Below is a complete list of expected operating expenses when opening and running a Marco Pizza Franchise:
- Rent/lease payments
- License/franchise fees
- Marketing/advertising costs
- Salaries / wages of employees
- Utility and maintenance costs
- Inventory of food and supplies
- Insurance costs
- Equipment/technology purchases
- Transport costs
Rent/lease payments
Rent/lease payments are a big factor when it comes to running a Marco pizza franchise. According to the 2018 Franchise Disclosure Document, the estimated initial investment for a Marco pizza franchise ranges from 9,680 to 5,390, with ,215 to ,890 of that range allocated to rent or lease of payments.
As a Marco Pizza franchisee, the potential costs associated with rent/lease payments depend on a variety of factors, most importantly specific market conditions such as the availability and cost of real estate and the size of the restaurant. Generally, MARCO’S PIZZA franchisees can expect to pay base rent in addition to a percentage rent payment or percentage of gross sales on a minimum amount. This means that a franchisee’s rent or lease costs can vary depending on the timing of the opening, the size of the restaurant, the nature of the business, and the restaurant’s relative success.
It is important to note that during the first three months of operation of a Marco pizza franchise, Franchisees will pay a minimum base rent until their franchise has had the opportunity to begin operations and show the sales. This initial cash flow relief allows franchisees to deal with other costs, including staffing, training, and marketing. Marco’s Pizza franchisees are also responsible for all other costs associated with the rent/lease of their food service unit, such as insurance, maintenance of common areas, property taxes and other miscellaneous charges.
Also, a franchisee may need additional working capital depending on their particular situation. This additional cash requirement may be necessary to meet additional costs associated with rent/lease payments, unexpected construction delays, and other factors. Again, it is important to note that the estimated initial investment costs noted in the franchise disclosure document do not necessarily reflect the actual cash outlays of an individual franchisee.
License/franchise fees
Starting a successful pizza franchise from scratch can be an expensive business, but with a household name like Marco’s Pizza, the costs can be worth it. Most potential franchisees considering investing in a Marco pizza franchise are interested in understanding licensing and franchise fees.
When considering license/franchise fees, it is important to understand that the vast majority of expenses come from purchasing or renting the physical space, staff, and all other parts of running a business. pizza franchise. License/franchise fees are only part of the equation.
In terms of actual standard licensing/franchising fees, most Marco’s pizza owners need to invest an average of ,000-,000 when signing the franchise agreement. After initial fees, total development costs can range from 0,000 to over million. These license/franchise fees will include start-up costs such as rent, equipment, training materials, and other operational expenses.
Prospective franchisees should also be aware that some of the costs associated with becoming a Marco pizza franchisee include royalties and marketing fees, as well as fees to purchase any of the company’s branded goods and services, such as uniforms and signage. These fees are often negotiated on a case-by-case basis with Marco’s Pizza and can range from 2.25% to 6% on any royalty or marketing fees.
Considering operating costs in addition to license/franchise fees is an important step for anyone considering investing in a Marco pizza franchise. If you’re ready to dive into the world of pizza franchising with the help of a big name and an incredible reputation, Marco’s Pizza is a great place to start.
Marketing/advertising costs
It is estimated that marketing and advertising for a Marco pizza franchise can range from ,000 to a high of ,000 or more. This includes newspaper, radio and television advertisements, website development and promotions. The average marketing and advertising budget for a Marco pizza franchise is estimated to be around ,100. This amount can vary greatly depending on where the store is located and the type of promotions used. In some cases, marketing expenses can be much more when franchise owners choose to use a more aggressive approach to their promotional campaigns.
Costs associated with marketing and advertising may also depend on stores performing the work. Most franchise owners will need to budget for collateral materials such as catering menus, point of sale materials, and other items, which can range in price from ,000 to ,000. Together, these elements are essential to help raise awareness of the franchise and can often mean the difference between success and failure.
The latest data from the National Restaurant Association (NRA) for 2020 shows that the amount of American restaurants spent on marketing and advertising increased from .3 billion to .3 billion for the year ending the 31st of December. This includes a combination of traditional media (such as newspaper, radio and television) which accounts for 53%, and digital media (including social media) which accounts for 47%.
As the digital world continues to grow, research also shows that a strong digital marketing strategy is also critically important and can contribute to a successful franchise. A recent Franchise Grade study showed that franchise owners who engage in online marketing experienced an average increase of more than 20% in franchise revenue in their first year and this percentage continues to increase every year. year.
Salaries / wages of employees
When considering the costs associated with running a successful Marco pizza franchise, employee wages/salaries are considered a top priority. According to the US Bureau of Labor Statistics, the median hourly wage for restaurant workers in May 2018 was .37 . This means that the costs associated with hiring and retaining employees are a large component of the overall costs associated with a successful Marco pizza franchise.
When creating a budget for your Marco pizza franchise, it is important to include expected salaries for employees. While Statista reports that the median hourly wage for pizza cooks in the United States in 2019 was .32 , employee salaries can vary widely based on individual experience, location, and other factors. Additionally, where possible, it is best practice to provide employees and incentives through health benefits, vacations, and other avenues, which will also add to your overhead.
It is important to note that some states have minimum wage laws that exceed the federal minimum wage of .25 per hour . A number of cities and states have implemented a minimum wage that is higher than the federal minimum, and therefore the employer must abide by these laws and provide their employees with the mandatory wage. Additionally, some states, such as California and New York as of June 2019, require employees to receive benefits such as paid sick days and vacations, and this should be included in any budget consideration.
In order to ensure that a successful Marco pizza franchise is profitable, it is important to do the necessary research and budgeting to account for all potential employee costs. From potential salaries, benefits, and overtime, having an accurate picture of all potential costs associated with employees is critical to protecting success.
Utility and maintenance costs
Investing in a Marco’s pizza franchise comes with a variety of different expenses. One of them is dedicated to the costs of utilities and maintenance. As a franchisee, you are responsible for all utility and maintenance costs associated with the continued operation of your business. This includes power, water, sewer and garbage bills in addition to any additional maintenance or repairs needed to keep your store running.
In the United States, the average monthly utility and maintenance bill for a single Marco’s Pizza Franchise store is estimated to be between ,000 and ,000. Depending on store size, location and whether the location is open 24-7, the actual cost may be higher or lower. It is important that future Marco’s pizza franchise owners be well prepared to pay this cost over the life of the business.
Utilities and maintenance costs are necessary, unavoidable expenses. It is important to consider this cost when financially projecting your Marco pizza franchise. With the proper budget in place and reasonable expectations, you can ensure that your Marco pizza is successful and profitable!
Inventory of food and supplies
One of the major operational costs of a Marco pizza franchise is the cost of inventory and food supplies. According to a 2019 analysis, the average cost of inventory and supplies for a Marco pizza franchise ranged from ,000 to ,000 per month. These costs are based on the particular size of the store and the menu items offered. Items can include paper products, bulk frozen foods, sauce ingredients, dairy products, and other foods.
In addition to these inventory costs, franchisees are also responsible for potential food price increases. Rising food costs are one factor that can have a significant impact on a franchise’s operating budget. Food costs can vary greatly depending on season and availability. Prices can also be affected by market conditions, variations in agricultural supply, transport costs and labor costs. Marco’s Pizza franchisees should be aware of these potential price fluctuations and plan accordingly.
Marco’s Pizza franchisees can also expect ancillary costs associated with maintaining inventory and food supplies. This includes storage costs for frozen ingredients, as well as food spoilage costs. For example, if ingredients are not stored properly, they can spoil quickly, leading to wasted food and increased costs. It is important that franchisees take appropriate preventative measures to reduce spoilage and maximize profits.
Overall, food inventory and supplies are a significant part of the operating costs of running a Marco pizza franchise. Although these costs can be significant, they are necessary to provide quality products and services. Proper management of food inventory and supplies can help franchisees save money and maximize profits.
Insurance costs
Owning and operating a Marco pizza franchise comes with certain mandatory and recommended insurance costs. The exact cost of insurance for Marco’s pizza differs depending on factors such as location, number of employees, and other business activities. According to the United States Small Business Administration, the national average for most insurance policies for small business owners is 9,000 per year. This includes all types of insurance, such as property damage, casualty and liability coverage.
Property damage coverage provides protection against accidents that cause damage to physical items, such as buildings and vehicles. This type of insurance often covers fire and natural disasters. Exact coverage and cost may vary depending on business size and scope.
Loss coverage helps Marco’s pizza franchise owners protect themselves against potential lawsuits. This type of coverage can cost anywhere from ,000 to ,500 per year, depending on the level of protection needed. This type of coverage typically includes general liability insurance, professional liability insurance, and product liability insurance.
General liability insurance protects business owners against risks including legal costs and medical expenses related to injuries to customers and employees, as well as damage to property. This coverage can cost between 0 and ,000 per year, depending on the company’s activities.
Professional liability insurance is also important for franchise owners and is also known as errors and omissions insurance. This type of coverage protects against financial loss resulting from errors or mistakes made in the course of business. The average cost for this type of insurance is around 5 to 5 per year.
Product liability insurance is also important for any Marco’s Pizza franchise owner. This type of insurance protects against losses due to product defects or failure. Product liability insurance typically costs between 0 and ,050 per year.
In addition to all of these types of insurance, Marco’s pizza franchise owners may also need to carry additional coverage, depending on their specific business operations. For example, workers’ compensation and disability insurance may be necessary in some cases.
Equipment/technology purchases
Opening a Marco pizza franchise can be expensive. Equipment and technology purchases make up a large portion of these expenses, and owners should plan carefully to arrive at the most cost-effective solution. Statistics from 2017 show that Marco’s average pizza franchise had a total equipment cost of around ,000 (,000) .
While most of the equipment used in a Marco pizza is relatively standard for the pizza industry, one area where owners might consider cost savings is in technology. Developments in the POS market mean that many owners are choosing cloud-based software solutions as opposed to traditional on-premises servers. In addition to cost savings of around ,000 (,000) for a cloud-based system, there are also other benefits such as more comprehensive reporting and analytics packages.
Further potential cost savings can be found in automating other processes such as cooking. This has the potential to reduce labor costs, as well as increase both efficiency and pizza quality. Looking at new technologies and new innovations is one way to ensure that your Marco pizza franchise is profitable. As a potential franchise owner, you need to plan ahead for these expenses and consider the cost-benefit of these investments.
Transport costs
When it comes to running a Marco pizza franchise, transportation costs must be considered. The cost of delivering pizza to customers can add up quickly. Delivery personnel must be paid a salary, gasoline purchased, vehicle maintenance and insurance taken care of and all vehicles must meet Marco’s standards. In 2020, American businesses spent an estimated 8.6 billion on transportation costs. A pizza delivery business can expect to pay at least ,000 to ,000 in vehicle costs per year , depending on the types of vehicles used and the distance traveled. Delivery staff salaries can cost an additional ,000 to ,000 per year, depending on their experience and hourly rate.
When determining transportation costs, it is important to consider the cost of vehicle insurance. Delivery drivers must meet Marco’s standards and obtain the necessary insurance. Depending on the age of the driver and the size of the vehicle, insurance costs can vary considerably. For example, a driver under the age of 25 driving a full-size truck can pay as much as ,000 or more per year . On the other hand, a driver over the age of 25 driving a sedan may only pay 0 to 0 annually. Insurance is mandatory and depending on the type of cover chosen, the cost may be deductible.
Initial vehicle costs can also be a factor in transport costs. Many Marco pizza franchises purchase delivery vehicles from the company, which means the cost of purchasing the vehicles may be included in the franchise fee. However, for those who decide to buy vehicles on the open market, the cost of the vehicles must be considered. Delivery vehicles are usually large and require high performance engines. Typical costs for a full-size truck can range from ,000 to ,000 . Smaller sedans are significantly cheaper, ranging from ,000 to ,000 .
Finally, gasoline costs should be taken into account when calculating transportation costs. The cost of gasoline varies considerably across the country, and the amount of gasoline used will depend on the types of vehicles used and the mileage driven. On average, a delivery vehicle may require up to 25 gallons of gas per week. At the time of writing, the US national average for regular gasoline is .93 per gallon . Depending on the vehicle and the number of trips per week, a pizza delivery business can spend between and 0 or more each week on gasoline.
Conclusion
Marco’s Pizza offers great potential for growth and expandability for franchise owners. Investing in a Marco’s pizza franchise is a big financial decision and can have short and long term implications. A budding franchisee must carefully assess various operating costs associated with running a franchise. As we have seen, there may be significant rent/lease payments, licensing/franchise fees, marketing/advertising costs, employee wages/salaries, utility/maintenance costs, food inventory/supplies, insurance costs, equipment/technology purchases and transportation costs.
Ultimately, selecting a franchise requires a person to consider all of the elements involved and determine which route best suits their business needs. All factors considered, starting a Marco pizza franchise can be a lucrative and rewarding venture.