Jet’s Pizza Franchise Cost Worth Profit Potential? (2024)
This article is based on its 2022 FDD.
Jet’s Pizza franchise is an American pizza chain. It was founded in 1978 in the Detroit suburb of Sterling Heights and operates primarily in the state of Michigan.
Contents
How is Jet's Pizza Franchise Positioned in the Food and Beverage Industry?
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 1.6million more jobs by 2027. The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x.
This franchise 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.
How Much is a Jet's Pizza Franchise?
The initial franchise fee is $25,000. You have to pay this upfront fee when opening.
Franchise Cost
The estimated total investment necessary to begin the operation of a Jet’s Pizza Franchise ranges from $600,000 – 750,000. The following costs are part of the upfront costs included in the initial investment. Many of these are one-time fees that are needed to launch the franchise.
Franchise Requirements
A Net Worth of $500K, and 500K in Assets (350K maximum for financing & 500K Liquid/ Cash) at minimum are required.
How much do Jet's Pizza franchise owners make?
The owners made $343,000,000 in 2021 from 383 locations amounting to an AUV of $895,561.
2021 Median Franchise Sales: $895,561
| Initial investment (midpoint) | %Profit margin of average franchise sales | Estimated profits | Time to recoup investment |
|---|---|---|---|
| $675,000 | 10% | $89,556 | 9 years |
| 15% | $134,334 | 6.5 years | |
| 20% | $179,112 | 5.25 years |
Based on the median sales provided by the franchise locations, at an average of a 15% profit margin it will take around 6.5 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.
Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Food and Beverage stores; the extent of market penetration and brand awareness that Jet’s Pizza stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
Is the Jet's Pizza Franchise Profit Worth the Franchise Cost?
To assign a valuation multiple for Jet’s Pizza franchises, 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
- Estimated Selling Price = Net Sales * 0.55
When you go to sell a franchise based on the median multiple of .55 and net sales in 2021 of $895,561, it would sell for $492,558. This is significantly lower than the midpoint investment of $675,000.
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.
Conclusion
Jets Pizza’s payback period is longer than other franchises that are more established like Domino’s.
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.
