Pita Pit
Pita Pit offers franchises in pita sandwich preparation and sale. Known for its Middle Eastern-inspired menu, it operates in the quick-service restaurant sector.
About Pita Pit
Pita Pit is a quick-service restaurant franchise serving pita sandwiches with fresh vegetables, grilled meat and sauces. Worldwide, it has two separate owners. Its franchising rights for the United States and its Territories are owned by Pita Pit USA 4.0, Inc., headquartered in Coeur d’Alene, Idaho. The remainder of the franchising rights are owned by Foodtastic, which is headquartered in Kingston, Ontario.
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Pita Pit franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a single Pita Pit franchise ranges from $353,154 to $685,075 per Restaurant. This includes a Single-Unit Franchise Fee of $20,000 and Development Fees ranging from $45,000 for three Restaurants to $50,000 for five Restaurants [p.2].
What is the initial franchise fee?
The initial franchise fee consists only of payments for the opportunity to buy a franchise, initial training, site selection assistance, and legal and administrative services, which are distinct from and not brand or trademark-related to the Franchisor [p.75]. This fee is recorded as deferred revenue until the services are substantially complete and the franchise is open to the public [p.215].
What are the ongoing royalty and advertising fees?
The franchisees pay royalties based on a percentage of their sales or fixed fee arrangements [p.215]. Additionally, they must contribute to the General Advertising Fund (GAF) by remitting a percentage of their sales into it for use in advertising and promotional programs [p.216].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement's duration isn't specified in these excerpts. However, you have the option to renew the agreement for an additional term of either ten years or until the expiration or termination of the lease or sublease of the premises upon payment of a renewal fee [p.21].
Can I sell or transfer my franchise, and what does that require?
According to [p.214], you can transfer your franchise to a new owner for a reduced franchise fee, and the transfer fee is recognized upon ownership transfer. However, this information is not specified in the earlier excerpts provided.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.77]. Additionally, if the franchise is terminated, the franchisor has the right to purchase substantially all of the assets of the franchise from the franchisee [p.215]. However, RCW 19.100.180 and potential court decisions may supersede these terms regarding termination and renewal [p.159, p.82].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
Yes, you are granted an exclusive territory as described. Your territory is designated with a ½ mile radius from your premises, and it excludes existing franchised locations and their territories and any existing and future institutional PITA PIT franchises [p.34, p.92]. This exclusivity applies to opening additional restaurants within your defined territory without the franchisor's permission [p.45].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program that can last up to nine days, typically conducted at their National Training Center or another location designated by them. This training is included in the Franchise Fee but requires the franchisee to cover food, lodging, and travel expenses for attendees. The franchisee must also purchase a laptop meeting specific hardware, peripheral, and software specifications. Ongoing support includes general employment-related training and guidance, though the franchisee remains responsible for hiring, managing, and disciplining employees. [p.100, p.48]
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2023, there were seventy-four (74) operational franchised Pita Pit Restaurants in the United States. Out of these, twenty-five (25) permanently closed during the 2023 calendar year because they did not have a full twelve (12) months of reported sales.
Does the franchisor share any financial performance or earnings information?
The franchisor shares financial performance information based on the actual historical performance of its franchised outlets, but only for those that operated throughout the entire year. This information is provided in Item 19 of the FDD [p.57]. However, the franchisor does not make any financial performance representations other than what is included in the disclosure document and does not authorize its employees or representatives to make such representations orally or in writing [p.57].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those products and services that the franchisor has approved [p.49]. For supplies, you generally must purchase from suppliers designated or approved by the franchisor [p.102, p.98], though there may be some flexibility in obtaining approval for alternative sources under certain conditions [p.102, p.98].