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Should I do it?

C

cj1

New member
I’m undecided whether to pull the trigger with this franchise I am dealing with. The main reason, everytime I talk to him the price of his product goes up. Last year it would cost me $3.74 for me to purchase his crust, sauce, and pizza box. Now the price is up $4.90. He stated his price of cheese went up. Now I am looking at selling a pizza for about $12 just to make a $7 profit per pie without toppings. Is this enough? His product is excellent and his nine franchises are all profiting very well. I’m getting nervous because the price keeps increasing. I don’t know if paying 5 employees along with all the other costs’, rent, utilities, accounting fees etc., etc., if this is going to be all worth it…
 
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Don’t go franchise unless you think you can’t do it on your own. If you think you can’t do it on your own don’t get into the business.

This is just my own humble opinion.
 
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Daddio hit it right on the head.

Going franchise is a bad decision. Can I ask what company it is ?
 
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cj:
I’m undecided whether to pull the trigger with this franchise I am dealing with. The main reason, everytime I talk to him the price of his product goes up. Last year it would cost me $3.74 for me to purchase his crust, sauce, and pizza box. Now the price is up $4.90. He stated his price of cheese went up. Now I am looking at selling a pizza for about $12 just to make a $7 profit per pie without toppings. Is this enough? His product is excellent and his nine franchises are all profiting very well. I’m getting nervous because the price keeps increasing. I don’t know if paying 5 employees along with all the other costs’, rent, utilities, accounting fees etc., etc., if this is going to be all worth it…
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Need more info to make an informed opinion, but I would look at it like this: Normally, food cost should run in the area of 25%, that means your $12 pizza should cost about $3 to make. That means that $1.90 (16%) of your sales are going to go to the franchisor. IF that is what they’re suggesting you sell your pizzas for, I would only pull the trigger if the gun were aimed at his you-know-what. On the other hand, if this is a product which should sell for $15 or $16 a pie, it’s not a horrible deal. Is the $12 price point you mentioned similar to what other franchisees are charging? What size pizza is it? What type of support (advertising, training, etc) is included? Personally, it’s not something I’d want to get into - do your own research, come up with a kick a$$ product, and keep that extra 16% for yourself. Plus, when you discount your product, it raises that percentage even higher - if THEY run a systemwide promotion for $2.00 off any pizza, are you going to get a break on the cost, or is it all on you?
 
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bring your price up can not you? at 4.90 your food cost is 40% considering the extra topping it seems high you need to be around 30 with paper cost and all if the product is great why worry about it increase your price you said 12.99 and did not mention the size what size is it and what kind of cheese is he selling you ? high quality i hope what kind of sales you do a week ? if you have good sales why mess with it just increase your price
 
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It is a 12 cut sicilian type pizza from old forge, PA. Very popular in that neck of the woods. Franchisor is waving franchise, marketing, royality, training fees. I just have to buy his homemade crust, cheese, and make his sauce. Also, he giving me all his receipes for pasta, wings, etc. All the other franchises are doing very well and they all charge $12 for a plain, and then $13 to $15 for their speciality pizzas. Or, I don’t use his name and he charges me around $3.25 plus delivery for the pizza ingredients.
 
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I see you are new on the board (Nov 6 2007). Welcome to the world of the extremely blunt but honest opinions.

Do you have pizza experience? Do you know what your costs would be getting the ingrediants from another source (for price comparison)?

If they are waving the franchise fees what is in it for them? I suspect an inflated price on your product. If he is charging you 3.25 without the name and 4.90 with the name and the price set at 12.00 that is a 13.75% royalty the way I do the math. So I would say the franchise fee is not waved at all. You Are being taken for a ride if you go this route.
 
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Remeber he is still making money on you even at the $3.25 price or he would not sell it to you. I would not want to do business with someone that actually cheats their franchise store owners by selling their product to others either, before you know it he will cheat you as well by raising prices or something. Once you open a store with his pie you become dependent on him so he might decide to stick it to you, and then you either take it or make your own pie. Keep it simple and more profitable and just make your own pie from the begining. Good luck!
 
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Thanks for the advice. But how much does it actually cost to make a sicilian style pizza (12 cuts) with just cheese, with the pizza box. I’ve read on other threads here it costs anywhere from $2-$4.
 
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wouldn’t it be easier and more dependable, to just develop your own?? create your own recipe, and you’ll never have to rely on someone else to get your pies from. doesn’t sound like a true franchise deal, no support no name just a pie??? hmmm…
 
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lilian:
bring your price up can not you?
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:lol: Yoda!
(just teasing a little) 😉
 
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