Little Caesars
Little Caesars offers pizza, chicken wings, and Crazy Bread in single or territory reservation franchises, with investments ranging from $41,000 to over $1.8 million. Known for quick-service pizza, it operates in the fast-food restaurant industry.
About Little Caesars
Little Caesar Enterprises Inc. (LCE) is an American multinational chain of pizza restaurants founded in 1959. Little Caesars is the third largest pizza chain by total sales in the United States behind Domino's and Pizza Hut. It operates and franchises pizza restaurants in the United States and internationally in Asia, Europe, North America, and South America. The company is owned by Ilitch Holdings, and headquartered in Detroit, Michigan.
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Little Caesars franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operation of a single Little Caesars® restaurant franchise ranges from $490,500 to $2,263,700. This includes the $270,500 to $404,500 initial franchise fee and additional costs for supplies and pre-opening items from Blue Line [p.2, p.30].
What is the initial franchise fee?
The initial franchise fee can range from $0 to $20,000, with specific circumstances allowing for reductions or exemptions, such as for service-disabled veterans [p.30]. The exact amount depends on various factors and may not be uniform across all franchisees [p.16].
What are the ongoing royalty and advertising fees?
The ongoing weekly royalty fee and advertising fee are set forth in the Franchise Disclosure Document ('FDD') and the Franchise Agreement [p.363]. These fees are calculated based on the Applicable Percentage of Gross Sales for the preceding Accounting Week, which is defined as 2.5% or one-half of the then-current percentage advertising fee paid to Little Caesar by full-size Little Caesars® Restaurant franchises [p.169, p.164].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is 10 years [p.94]. You may have the option to renew this for another 10-year term, but you must notify Little Caesar in writing at least 12 months before your initial term expires whether you wish to renew and meet the specified conditions [p.94-95].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot assign or transfer your rights or obligations under the Franchise Agreement without the franchisor's approval [p.313]. If you wish to sell the restaurant and transfer the Little Caesars franchise, the new owner must accept the current version of the Franchise Agreement and may be credited with any unused portion of your Support Fees upon closing the transfer [p.313]. Additionally, good cause can include approval by the franchisor for such a transfer [p.259(g)].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law, as stated in [p.267]. Additionally, under New York State law, termination is permitted under Article 33 of the General Business Law, as mentioned in [p.268]. However, terminating a franchise without reasonable cause is unlawful according to the Virginia Retail Franchising Act and similar laws, which may affect enforceability if applicable to your situation, as noted in [p.277] and [p.284].
What financial requirements — net worth and liquid capital — do I need to qualify?
Every prospective buyer must meet Little Caesars' minimum net worth and liquidity requirements based on the total number of restaurants they would own and operate [p.350]. Specific details about these requirements are not provided in the excerpts, but buyers must submit financial summaries including assets, liabilities, and net worth along with proof of assets within ten days of submitting the Rider [p.350].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. Your Protected Territory is not exclusive and you may face competition from other franchisees, outlets owned by Little Caesars, or other competitive brands controlled by the company [p.51]. Additionally, there are no customer exclusivity rights [p.94], and the protected territories of other franchisees may overlap with yours as long as their restaurants are physically located outside your Protected Territory [p.51].
What training and ongoing support does the franchisor provide?
The franchisor provides a training program at their facilities [p.298], and they will offer advice and assistance in marketing, managing, and operating the restaurant as deemed appropriate [p.40]. Additionally, if you request extra assistance beyond what is customarily provided, there may be a fee for such services [p.40].
How many franchised outlets are there, and how many have closed or been terminated?
The number of franchised outlets is not directly specified in these excerpts. However, it has been corrected to account for some miscounted outlets. The information on the number of closed or terminated stores can be found on page [p.235], which details the name, address, and telephone of a franchisee who closed or transferred a store, but does not provide a total count.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if you are considering purchasing it. Additionally, they can supplement the information provided in Item 19 with possible performance at a particular location or under specific circumstances [p.71]. However, the franchisor does not make any representations about future financial performance or past financial performance of company-owned or franchised outlets [p.71].
What am I restricted to selling, and where must I buy supplies?
You must sell or offer for sale only products and services that meet the franchisor's quality standards and have been approved by them. You also need to use only items that conform to their specified standards and cannot deviate from their methods, recipes, and specifications [p.61]. For supplies, you may be required to buy or lease certain items from the franchisor or a limited group of suppliers they designate, which could potentially be more expensive than other options [p.4].