Cici’s Pizza Franchise is an Italian American chain of buffet restaurants based in Coppell, Texas, specializing in pizza. The company was founded in 1985 and started franchising in 1987. There are 299 franchised and corporately owned restaurants in 24 states.
The Food and Beverage industry in the USA accounts for 13% of all manufacturing employment in the country. Around 1.46 million people get employed in this industry. Food franchises make up 36% of the total franchise establishments in the USA, and it is expected to create 1.6 million more jobs by 2027. The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x.
Cici’s Pizza competes in the Food and Beverage market against big brand companies such as Pizza Hut and Little Caesars.
If a pizza shop is doing in excess of $450,000 annually, the multiples will increase. Social media and reviews are important factors and can affect the value of goodwill in a pizzeria.
The estimated total investment necessary to begin the operation of a Cici’s Pizza ranges from $700,000 – $1,000,000. The following costs are part of the upfront costs included in the initial investment for Cici’s Pizza. Many of these are one-time fees that are needed to launch the franchise.
A Net Worth of $500,000 with $250,000 in liquid assets alongside a minimum credit score of 720 are required by Cici’s Pizza.
The following site selection criteria are taken from Cici’s website:
Also keep in mind that Cici’s is only offering franchises in the states shown below:
Cici’s Pizza made $286,000,000 in 2021 from 299 locations, amounting to an AUV of $956,521.
|Initial investment (midpoint)||%Profit margin of median franchise sales||Estimated Profits||Time to recoup investments|
Based on the median sales provided by Cici’s Pizza’s locations, at an average of a 15% profit margin, it will take around 7.5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin, which would elongate getting a return on your investment.
To assign a valuation multiple for Cici’s Pizza, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.
Under $5 Million Net Sales
When you go to sell a Cici’s Pizza based on the median multiple of .55 and net sales in 2021 of $956,521, it would sell for $526,086. This is significantly lower than the midpoint investment of $850,000.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.
Cici’s Pizza is looking to expand mainly in the south and midwest. Their payback period is similar to other pizza franchises.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Food and Beverage Industry.
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