Marcos Pizza
Marcos Pizza offers various pizza sizes and recipes for dine-in, carryout, and delivery, along with secondary products like chicken wings and desserts. Known for its pizza offerings in the quick-service restaurant sector.
Marcos Pizza franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Marco's Pizza Store ranges from $286,727 to $807,152. This includes an initial franchise fee and other required payments as specified in the FDD [p.1, p.40].
What is the initial franchise fee?
The initial franchise fee is a fixed amount, with each Store requiring an initial franchise fee of $25,000.00 [p.202]. This fee is allocated among three performance obligations: management training, site selection, and the franchise right [p.160]. It must be paid in full upon signing the Franchise Agreement and is not refundable [p.19].
What are the ongoing royalty and advertising fees?
The ongoing royalty payment is a minimum of 7% of Net Royalty Sales, which includes fees, payments, and expenditures related to advertising, marketing, and promotional programs. For advertising contributions, you must spend at least 7% of your Net Royalty Sales on these activities, with the Franchisor determining the specific allocation and managing the expenditures through various funds. [p.237, p.61]
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is typically 10 years [p.158]. You have the option to renew this license for up to 2 additional terms of 10 years each, provided you exercise your option at the expiration of the Term on the terms and conditions of the then-current form of franchise agreement [p.220].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you generally cannot sell or transfer your franchise without the franchisor's permission, except for good cause [p.5]. Good cause includes but is not limited to specific reasons determined by the franchisor. This provision also allows the franchisor a right of first refusal to purchase the franchise in case of a sale [p.5].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.112]. However, termination without reasonable cause is unlawful under Virginia Retail Franchising Act [p.113], and good cause for termination includes failure to comply with lawful provisions of the franchise agreement that must be cured within a reasonable time, typically no more than 30 days [p.5].
What financial requirements — net worth and liquid capital — do I need to qualify?
You must maintain a net worth and liquidity at least equal to the Franchisor's then-current minimum requirements for franchisees [p.228]. Additionally, you are required to have a minimum of $9,000 in working capital available when your Store opens for business and all expenses are paid [p.40].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You have territorial rights, but you may face competition from other Marco's Pizza Stores owned by the franchisor or from other channels of distribution or competitive brands controlled by them [p.72, p.74].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program consisting of eight weeks at their training center in Toledo, Ohio, and at a certified training store. This program is mandatory for the Designated Franchise Operator to complete or have two designated trainees graduate from the IOE (Introduction to Operational Excellence) Program. Additionally, area representatives provide training and support to franchisees in some areas [p.11, p.227]. The franchisor also offers ongoing support through regular communication and adherence to their manuals [p.227].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 29, 2024, there were 1114 Marco's Pizza Franchised Stores. Out of these, 25 stores had closed in 2024 (none less than 12 months old), and one store was terminated and then reopened within the same fiscal year, resulting in a net increase of 15 outlets opened during that period [p.98].
Does the franchisor share any financial performance or earnings information?
The franchisor does provide some historical financial performance data for existing Marco's Pizza franchised stores. Specifically, as of December 29, 2024, net royalty sales data is provided for 955 out of 1114 franchised stores that were open during a full 52-week period. However, this information does not include certain types of locations or international outlets [p.87]. Additionally, the franchisor may provide actual records of an existing outlet if you are purchasing one [p.91]. The franchisor is not obligated to share detailed financial performance data for its advertising funds, and such summaries are only provided to recognized franchisee councils upon request [p.242, p.66].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling products only from the Franchised Business, in accordance with the requirements of the Agreement and procedures set forth in the Manual, and specifically to retail customers for consumption on the premises, carry-out consumption, catering, or delivery [p.74]. You must purchase or lease equipment and supplies only from suppliers designated or approved by the franchisor, except that the franchisor may waive this requirement under certain circumstances [p.246].