An introduction to running a successful pizzeria

  • How to Open this Business: Guide
  • TOP-7 KPI Metrics
  • Startup Costs List
  • Pitch Deck Example
  • How To Increase Business Profitability?
  • How to Sale More?
  • How to Value this Business?

Introduction

Mountain Mike’s Pizza has been a beloved family pizzeria since 1978, when the first pizzeria opened in Palo Alto, California. The business has grown exponentially year after year, with over 390 locations in 10 different states in the United States. As we know, the pizzeria business is a booming industry in the United States, worth more than billion a year.

For those looking to join this growing pizza franchise and jump on the profitable bandwagon, it’s important to understand the various costs and expenses associated with running a pizza place. From franchise fees, real estate and rental expenses to ingredients, payroll, utilities and insurance costs, there are many costs to consider when writing a budget.

Operating Expenses

Opening a Mountain Mike’s Pizza franchise requires sufficient funds to cover operating expenses, which will vary depending on the location and type of franchise. These include franchise fees, rent/lease payments, equipment, inventory, personnel, insurance, marketing and ulties.

  • Franchise Fees: Franchise fees are usually a one-time payment that goes directly to the franchisor.
  • Real Estate and Rental Costs: You must cover all costs associated with buying or renting real estate space, such as rent, security deposits, and improvement fees.
  • Equipment and supplies costs: All equipment and supplies needed for daily operations, such as ovens, refrigerators, ingredients, menus, utensils and restaurant decorations.
  • Food Ingredients and Costs: The cost of ingredients and food needed to prepare and serve meals, including fresh ingredients and packaged foods.
  • Utilities: Electricity, gas, water and other utilities necessary for daily operations.
  • Benefits and Employees: The costs of hiring, training, and retaining staff, including salaries and benefits.
  • Insurance: Any insurance required to protect the business such as liability, property and business interruption insurance.
  • Advertising expenses: The cost of advertising, promotional materials and marketing campaigns.
  • Maintenance and Repairs: All regular maintenance and repairs necessary to keep the franchise in working order.

Franchise fees

For those looking to start their own Mountain Mike pizza business, it’s important to recognize the potential franchise fees. As of 2020, the initial franchise fee for a new Mountain Mike’s Pizza Restaurant is ,000 . This fee covers the cost of training, signing a standard five-year contract, site selection and support, and a marketing package. There are additional One-Time Fees such as the cost of customer surveys, legal services, and trademarks and logos.

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After the one-time fee associated with the initial setup, there are annual renewal costs. The renewal fee is ,000 . There is also an Advertising Fee of 6% of a franchisee’s gross sales, which is paid into a national advertising fund. This fund helps advertise Mountain Mike’s pizza as a national brand, providing ongoing support to all franchise owners.

When considering the overall costs of starting a Mountain Mike pizza restaurant, potential franchisees should factor in the cost of equipment and additional resources to staff the store. Generally, the total cost to open a Mountain Mike pizza restaurant is estimated to fall in the 0,000 to 0,000 range. This represents the costs of physical equipment, legal fees, marketing fees, and the purchase and construction of the building.

Real estate and rental costs

When considering the costs of operating a Mountain Mike pizza franchise, real estate and rental costs must be considered. In 2017, US Franchise 500 real estate and leasing costs totaled a whopping .3 billion , making it the fourth highest operating cost that year. While it may seem daunting, the median real estate and rental costs for a single Mountain Mike pizza franchise fell nearly 16% in 2017, compared to the 2016 median.

When it comes to negotiating the best deal on a restaurant lease, it’s important to remember that this cost is usually the biggest start-up expense. Depending on location, Mountain Mike’s pizza franchise starting rate can range from ,150 – ,200 per month, with the national average rental rate at a premium of ,133 . Common factors that can impact the rate include the length of the lease, escalating rents and breaking inclusive base rent and any additional rent.

In addition to paying rent, other rental costs and fees that may be incurred when setting up a new Pizza Mouke’s Pizza franchise include security deposits, water and garbage collection, fees service connections, maintenance or repairs, and any occupancy and zoning permits. It is important to review these expenses and understand what is expected of the owner.

Below is a list of the top five expenses for real estate and rental fees for Mountain Mike’s Pizza Franchise in 2017, based on data reported by the U.S. Franchise 500:

  • Location rental fee: ,700 per month
  • Build restaurant costs: 6,000
  • Security deposit: ,000
  • Maintenance and repairs: ,500 per incident
  • Utility hook-up fee: ,000

As you can see, the costs associated with real estate and renting can add up quickly. Therefore, it is essential to look closely at all costs before committing to operating Mountain Mike’s pizza franchise. Additionally, if you have questions or need clarification when it comes to finding a profitable franchise deal, a franchise consultant can provide valuable advice and resources.

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Equipment and supplies

When it comes to investing in a Pizza Mountain Mike franchise, the cost of purchasing equipment and supplies can be one of the most expensive investments. According to the Franchise Disclosure Document , an estimated cost of up to ,000 is suggested to be allocated for equipment and supplies. This sum will cover all the necessary items you need to run a successful franchise.

Items included in the cost of equipment and supplies include:

  • kitchen equipment
  • Food preparation equipment
  • Local area network (LAN) components
  • Safety equipment
  • counters
  • little wars
  • bar equipment
  • Indoor furniture
  • Driver Uniforms
  • Office supplies

These items, over time, may need to be replaced or upgraded as the franchise grows and evolves. An additional ,000 should be allocated for inventory and any other supplies that may be needed when you get your business up and running.

When you choose to go with a Pizza Mountain Mike franchise, you can expect high quality equipment and supplies that will last for years to come. As with any investment, the cost of purchasing equipment can ultimately be offset by the return you make through increased profits.

Food ingredients and costs

Mountain Mike’s pizza is one of the fastest growing pizza franchises in America, and for good reason. Not only does Mountain Mike have amazing food, but there are also some serious savings to be found. One of the biggest savings when owning a Mountain Mike pizza franchise can be found in ingredients and food costs.

The current average ingredient and food cost for a Mountain Mike pizza franchise is approximately 20-22% of gross sales. This includes the cost of food purchases, including – but not limited to – pizza toppings, cheese, dough, sauces, and anything else that needs to be purchased. However, a more accurate estimate of the cost of these items will depend on Mike’s individual pizza location. Additionally, since labor costs and menu offerings may vary, the cost of ingredients and food will also vary.

Although the cost of buying food and ingredients is relatively low, you should always keep an eye on the food and ingredient costs to make sure you’re getting the best deals for the items you need. You can compare prices between suppliers, or even find agreements with your local suppliers on certain products or ingredients. Additionally, you may consider serving locally sourced produce to further reduce costs.

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In the United States, the average cost of pizza ingredients and food was estimated to be around -12 USD in 2019. Also, a recent survey estimated that the average food cost percentage for a pizza restaurant was 26.4% of annual sales.

By keeping a watchful eye on ingredient and feed costs, you can ensure that you operate in the most efficient and cost-effective way possible. This will help keep your costs low, your customers happy and Mountain Mike a winning investment.

Public services

The cost of utilities for a Mountain Mike pizza franchise will vary depending on the location. However, it is important to consider estimated utility costs when calculating total operating costs. In the United States, energy costs (electric and natural gas) account for 10 to 20 percent of the total operating cost for quick-service and casual-size restaurants, according to the National Restaurant Association. For a 3,000 square foot restaurant, utilities can cost ,000 – ,000 a month.

Other utility expenses that a Mountain Mike pizza franchise may have to pay include water, sewage, and garbage collection. For example, according to a survey of restaurants in the United States, the average monthly cost of water and wastewater was 7.43 in 2020, while monthly waste collection expenses were 7.12 . Restaurants in large urban cities are likely to experience higher utility costs.

It is important to thoroughly research local utility companies and identify the exact charges for services such as water, electricity, natural gas, and waste disposal. Fees may differ depending on franchisor or restaurant owner usage. Some of the factors that affect the cost of utilities include the number of staff, restaurant size, hours of operation, equipment used, and type of menu items. Once potential utility costs have been determined, the franchisor can incorporate these figures into the budget to get an accurate estimate of total operating costs.

Benefits and Benefits

When it comes to a successful business, payroll and employee benefits costs play a key role in budgeting and cash flow. As for Mountain Mike’s Pizza Franchise, the approximate payroll and benefits costs for an average location for the year 2020 could be estimated at ,400 .

The payroll component of these costs typically covers salaries and wages. Employees are often paid an hourly wage for time worked, with a particular pay rate depending on industry, position, and location. The exact nature of how pay is calculated can sometimes vary from company to company, with overtime and bonuses playing a part in the overall total. Typically, payroll costs are the largest component of labor expenses.

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In the case of Mountain Mike’s Pizza, payroll costs may also include tips for servers, delivery drivers and other first house staff. This guidance can be supplemented with other forms of compensation such as vacation days, health care, exclusive access to discounts and offers, and performance bonuses.

For employers, benefits can include a range of offers, from health insurance to pension plans or other financial incentives. These benefits could include contributions to an employee’s 401(k) or some form of paid time off. Long-term disability programs, vision care and benefits are also common.

Benefits packages vary greatly by company size and industry, but most companies must provide some level of compensation and benefits to attract and retain good staff. About 53.1% of companies in the United States provide their employees with health care benefits and 56.6% provide some form of retirement with various employee benefits.

At Mountain Mike’s Pizza, employees can get more than pizza as part of their pay. The franchise regularly offers its staff days off, health insurance and a 401(k) plan. The company also provides tools and training to employees for career expansion, as well as competitive salaries.

It’s clear that employee benefits and benefits remain an important consideration for businesses, and Mountain Mike’s Pizza carefully considered this when setting up their franchise. With competitive salaries, benefits and incentives, they are able to attract and retain the best candidate.

Assurance

When calculating the costs of operating a Mountain Mike pizza franchise, it is important to consider the cost of insurance. For business owners, securing liability insurance that covers food contamination and property damage is essential to protect the business from costly lawsuits. Depending on the city and state where the franchise is located, the cost of these policies can range from 0.00 to ,000.00 per year.

The business owner should also contact the local health department and apply for a food service license. Most cities require restaurant owners to pay for an annual food service license anywhere from .00 USD to 0.00 USD depending on the type of establishment. Additionally, business owners should purchase property and auto insurance to protect their equipment, vehicles, and other assets.

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These policies can be extremely expensive due to the fact that they often cover the entire equity of the business. For example, a business owner may need to purchase a property insurance policy that covers all restaurant furniture, equipment, or other items up to an estimated value of 0,000.00 . For most business owners, such an expense can be a challenge and should be considered when determining the overall costs of operating a Mountain Mike pizza franchise.

Advertising expenses

If you’re considering opening a Mountain Mike pizza franchise, it’s important to consider the advertising expenses associated with running a successful business. According to the International Franchise Association, annual spending on advertising for full-service restaurants in the United States typically has a measure of four to seven percent of gross sales. It has been estimated that marketing and advertising costs for large chains offset up to 10-20% of the franchisee’s operating expenses.

For the purposes of budgeting for a Mountain Mike franchise, prospective franchisees should consider the following advertising expenses:

  • Type of Advertising Used: Newspaper and radio advertising, local shop postcard or flyer endorsers, website/social media advertising, etc.
  • Costs of designing and producing publicity materials such as radio or television advertisements, mailers and other printed materials.
  • Costs of setting up and maintaining a website, such as hosting fees, development costs, etc.
  • Costs to hire a professional advertising agency or third-party digital marketing services.

Recent statistics show that the average total cost for an ad campaign for a standard pizza franchise small business is around ,000. This amount may vary from year to year depending on the size and scope of the advertising campaign and individual franchise needs.

In addition to initial expenses, franchisees should consider ongoing costs associated with advertising campaigns such as staff and personnel to manage campaigns and respond to enquiries, material costs such as printing and mailings, etc To offer discounts during peak periods such as holidays etc. and the costs associated with these discounts should also be factored into the overall advertising budget.

Partnering with other local businesses and dining establishments can be a great way for Mountain Mike franchisees to share advertising costs and increase their potential to reach larger audiences. Franchises should also consider joining local chambers of commerce and taking advantage of any marketing opportunities offered by the organization.

When creating a budget for a Mountain Mike franchisee, it is important to consider all advertising costs, initial and ongoing, in order to have a successful and profitable business. Knowing the average costs associated with marketing advertising campaigns can help franchisees estimate the budget needed to maximize their return on investment.

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Maintenance and repairs

When considering the Mountain Mike pizza franchise opportunity, one must consider the cost of maintenance and repairs . According to a 2020 survey conducted by the International Franchise Association, the average cost of these expenses for independent pizza shops was ,500. It should be noted that this number is subject to change due to region, materials and degree of repair.

For franchised pizza shops (including Mountain Mike), the cost may be higher. This is because the franchisor usually takes responsibility for some maintenance and repairs, and therefore passes on some of the costs to the franchisee. If one is considering a Mountain Mike franchise, they will want to take stock of the cost of maintenance and repairs before they open the doors and include it in their budget.

These costs usually include any necessary repairs or improvements, such as:

  • Pest control and extermination
  • Cleaning and janitorial products
  • Interior renovations
  • Update Equipment
  • Interior and exterior general maintenance

In addition to these general repairs, Mountain Mike’s requires franchisees to maintain their stores to match brand standards. This includes membership in the Home Design Program, which covers kitchen equipment and layout, as well as the Operational Support Program, which covers other franchise-related operational items like uniforms, requirements security and vendor changes.

Given all of this, it’s important to review the cost of maintenance and repairs when looking at the financial side of a franchise opportunity. It’s important to work with a franchisor who has demonstrated transparency with these costs, and has a track record of helping franchisees stay within budget.

Conclusion

When it comes to running a successful Mountain Mike pizza franchise, there are many things to consider, from startups and ongoing costs to insurance and advertising expenses. The key is to budget carefully and consider all expenses associated with running a successful pizzeria, as well as investigating any financing opportunities that may be available. This will ensure a healthier bottom line and a sustained long-term business model.

The total cost of running a Mountain Mike Pizza franchise can range from 0,000 to ,000,000+, depending on a number of factors. If done right, franchising with Mountain Mike’s Pizza is a great business opportunity and can result in huge profits over time.