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Blaze Pizza Franchise Opportunity for 2022

Written by: Collins Kibet
Last Updated: March 24, 2022
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This article is based on its most recent FDDKeep reading or watch the  video originally recorded on Vetted Biz Youtube Channel

Blaze Pizza was founded in 2011 by Rick and Elise Wetzel of Wetzel’s Pretzels. The first location was opened in 2012 in Irvine, California. The Wetzels modeled Blaze Pizza as a made-to-order approach to serving customers. The company’s name comes from the fact that the create-your-own pizzas are “Fast Fire’d” in a high-temperature open-flame oven – an average cook time is 3 minutes. Like Chipotle, Blaze Pizza customers choose what ingredients they want on their pizza while moving down a service line.

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Become a Blaze Pizza Franchise Owner

In early November 2019, Blaze Pizza announced the promotion of Mandy Shaw to the president and chief executive officer. Shaw has been with Los Angeles-based Blaze Pizza since 2018 as its chief financial officer and has also served as interim CEO since August 2019. Shaw has played a critical role in the company’s rapid growth over the past two years.

In today’s video, find out about how much a Blaze Pizza Franchise owner makes.

Buy FDD Blaze Pizza

How Much is a Blaze Pizza Franchise?

The initial franchise fee to start a Blaze Pizza franchise is $30,000.


The coronavirus pandemic definitely had a huge effect on Blaze Pizza but it seems to be growing rapidly given that it was founded in 2011.


 

Blaze Pizza Franchise Initial Cost

The total investment necessary to begin the operation of a Blaze Pizza restaurant is between $565,400 and $1,101,500 which includes $30,600 that must be paid to the franchisor.

Estimated Initial Investment. Your Estimated Initial Investment Franchise Agreement

Category of InvestmentLow AmountHigh AmountMethod of PaymentWhen dueTo Whom Paid
Initial Franchise Fee$30,000$30,000Lump SumWhen you sign your Franchise AgreementUs
Architect/Engineer$15,000$22,500As incurredAs invoicedApproved Suppliers
Permits and Liquor Licensing$1,500$25,000As incurredAs invoicedApproved Suppliers and Government Agencies
Leasehold Improvements$233,000$475,000As incurredAs invoicedApproved Suppliers
Furniture, Fixtures, Equipment and Décor$185,000$300,000As incurredAs invoicedApproved Suppliers
Signage and Graphics$6,500$34,500As incurredAs invoicedApproved Suppliers
Grand Opening Kit, Menu Boards$4,900$5,500As incurredAs invoicedApproved Suppliers
Computer Equipment & Information/POS Systems$22,000$35,000As incurredAs invoicedUs or Approved Suppliers
Uniforms, Initial Inventory and Smallware$24,000$41,500As incurredAs invoicedApproved Suppliers
Opening Advertising$10,000$30,000As incurredAs invoicedApproved Suppliers
Grand Openind Fee Pizzas$0$6,000As incurredAs invoicedApproved Suppliers
Insurance Deposits$500$5,000As incurredAs invoicedInsurance Carrier
First Month’s Rent/Security Deposit$3,000$24,000As incurredAs invoicedLandlord
Initial Training Expenses$5,000$7,500As incurredAs invoicedApproved Suppliers
Professional Fees$5,000$15,000As incurredAs invoicedYour Financial and Legal Advisors
Additional Funds — 3 Months$20,000$45,000As incurredAs invoicedSuppliers and Employees
TOTAL ESTIMATED INITIAL INVESTMENT$565,400$1,101,500

Blaze Pizza Ongoing Franchise Costs and Fees

The continuing royalty fee payable to the franchisor is 5% of gross sales. The creative fund distribution also takes up about 2% of weekly gross sales.

How much do Blaze Pizza franchise owners make?

The average gross sales of all franchised Blaze Pizza restaurants between 2019 and 2020 was $1,103,681.  The 2020 median gross sales were $1,183,590 and the 2019 median gross sales were $921,602.

Based on the average median gross sales, we calculated the time it would take to recoup your initial investment with 10%, 15%, and 20% profit margins. The results are shown below.

2020 Blaze Pizza Median Franchise Sales: $921,602

Initial investment (midpoint) %Profit margin of median franchise sales Estimated Profits Time to recoup investments
$ 833,450 10% $ 92,160 11.5 years
15% $ 138,240 8.5 years
20% $ 184,320 7 years

2019 Blaze Pizza Median Franchise Sales: $1,183,590

Initial investment (midpoint) %Profit margin of median franchise sales Estimated Profits Time to recoup investments
$ 833,450 10% $ 118,359 9.5 years
15% $ 177,538 7 years
20% $ 236,718 6 years

Is the Blaze Pizza Franchise Profit Worth the Franchise Cost?

When you go to sell a Blaze Pizza franchise based on the median multiple of 0.31 and net sales averaging between 2019 and 2020 of $1,103,681, it would sell for $342,141 which is significantly lower than the midpoint investment amount of $833,450. Reselling your franchise after a few years will therefore lead to a loss. 

However, if you own multiple Blaze Pizza franchises with net sales averaging over $5 million, then you will be able to earn more money from selling your franchises. For instance, if you own 10 franchises, the estimated gross sales would be about $11,036,810. With a median multiple of 0.86, the resale value of all the franchises would be $9,491,656. This resale value is higher than the total investment of the 10 franchises of about $8,334,500 by over $1 million

 

Blaze Pizza Holdings, LLC Income Statement

Blaze Pizza Holdings, LCC Income Statement. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DEC 27, 2020; DEC 29, 2019; AND DEC 30, 2018.

2020 2019 2018
REVENUES
Company store retail sales $9,041,744 $10,875,078 $9,041,127
Royalty revenue, franchise fees, and other Advertising fees and related income $15,511,227 $20,106,455 $17,749,837
Advertising fees and related income $5,214,214 $38,390,409 $33,239,296
Total revenues $29,767,185 $38,3900,409 $33,239,296
COSTS AND EXPENSES:
Company store operating costs $10,827,682 $10,659,564 $8,756,128
Advertising expenses $5,374,729 $7,408,876 $6,261,845
Selling, general, and administrative expenses $16,483,946 $17,114,716 $13,025,393
Total costs and expenses $32,686,357 $35,183,156 $28,043,366
(LOSS) INCOME FROM OPERATIONS $(2,919,172) $3,207,253 $5,195,930
OTHER INCOME — Income from equity method investment $73,826 $183,986 $168,842
NET (LOSS) INCOME $(2,845,346) $3,391,239 $5,364,772
NET LOSS ATRIBUTABLE TO NONCONTROLLING INTEREST $- $- $(172,396)
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY $(2,845,346) $3,391,239 $5,192,376

Blaze Pizza Holdings, LLC Income Statement Key Insights

Unlike in 2019 and 2018, Blaze Pizza made a net loss of $2.8 million in 2020. This was a massive decrease in net incomes from the previous two years which were $3.3 million in 2019 and $5.19 million in 2018. The net losses experienced in 2020 are most likely due to the severe economic impact of the novel coronavirus pandemic on many of their franchised outlets. 

Blaze Pizza Holdings, LLC Cashflow Statement

Blaze Pizza Holdings, LCC Cashflow Statement. CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DEC 27, 2020; DEC 29, 2019; AND DEC 30, 2018.

 202020192018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income$(2,845,346)$3,391,239$5,364,772
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization expense1,274,7211,251,9541,021,889
Employee stock-based compensation731,080881,440798,320
Deferred rent17,31425,324(52,579)
Dividends from equity-method investments69,745183,986178,208
Income from equity-method investments(73,826)(183,986)(168,842)
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable(212,684)(332,638)(126,861)
Inventories(70,517)6,329(18,414)
Prepaid expenses and other current assets835,773(164,237)(410,118)
Other assets29,09163,006(8,373)
Increase (decrease) in liabilities:
Accounts payable and accrued expenses903,9291,567,381567,587
Deferred franchise fee revenue(1,227,033)(410,002)732,154
Net cash (used in provided by operating activities(567,753)6,279,7967,877,743
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment(567,426)(709,836)(325,553)
Return of equity-method investment63,24532,528
Purchase of franchisee restaurant(925,000)
Net cash used in investing activities(568,426))(646,591)(1,218,025)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowing on line of credit10,000,000
Cash received for stock options excercised60,88180,1808,850
Purchase of remaining noncontrolling units(6,400,000)
Deferred financing costs(167,579)
Payments for capital leases(191,707)(211,922)(163,898)
Distributions to members(10,693)(2,640,995)(9,964,251)
Net cash provided by (used in) financing activities9,858,481(2,772,737)(9,964,251)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS8,722,3022,860,468(3,304,533)
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS — Beginning of year8,571,9215,711,4539,015,986
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS — End of year$17,294,223$8,571,921$5,711,453
SUPPLEMENTAL DISCLOSURES OD CASH FLOW INFORMATION: Fixed asset additions unpaid$93,123$55,429$16,163
Fixed assets financed with capital leases$38,673$107,755$118,798

Blaze Pizza Holdings, LLC Cashflow Statement insights

Blaze Pizza had a lot of cash and cash equivalents left at the end of 2020 compared to 2019 and 2018. The amount of cash left in 2020 was about $17.2 million and the amount left in 2019 and 2018 was about $8.571 million and $5.71 million respectively.

Despite this huge difference between 2020 and the other two years, these figures show that the financials of Blaze Pizza are healthy since they balance their spending on operations, finances, and investments well. 

How many Blaze Pizza stores have opened and closed?

System-wide Outlet Summary for Years 2018—2020

Outlet typeYearOutlets at the Start of the YearOutlets at the End of the YearNet Change
Franchised2018224290+66
2019290307+17
2020307296-11
Company-Owned201867+1
2019770
2020713+6
Total Outlets2018230297+67
2019297314+17
2020314309-5

 


There has been a consistent growth in the number of franchised outlets since 2018 except in 2020 when there was a net negative change of 11.


 

This decline is probably due to the negative effects of the coronavirus pandemic.

Is it worth investing in a Blaze Pizza Franchise?

The average gross sales of a Blaze Pizza franchise are over $1 million. This is an indication of a great business with massive sales. However, it takes time to recoup your initial investment with the payback period going as high as 11.5 years with a 10% profit margin. Many outlets continue to open around the country except in 2020 when the franchise was severely impacted by the economic impact of the covid19 pandemic. 

In 2020, the franchisor also made a huge net loss of over $2 million unlike in 2018 and 2019 when the company experienced huge profits. The coronavirus pandemic definitely had a huge effect on Blaze Pizza but it seems to be growing rapidly given that it was founded in 2011. 

We recommend that you speak to at least 5 franchise owners to get a better sense of their business model before deciding to buy one. You can also check out other franchising options in the Food & Beverage Industry —or others— on our Vetted Biz website. 

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