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MOD Pizza Franchise ProfileFood Franchises > Pizza |
What Are the Initial Investment Requirements for a MOD Pizza Franchise?
To open a MOD Pizza franchise, you should expect an initial investment ranging from $1,001,223 to $1,301,134. This includes a franchise fee of $30,000, along with ongoing royalty and marketing fees of 5% and 2% of revenue, respectively. It's essential to have cash readily available within this investment range, as well as a net worth of between $500,000 and $1,000,000 to qualify for franchise ownership.
What Are the Financial Performance Metrics for MOD Pizza Franchise Units?
MOD Pizza franchises have shown promising financial performance, with average annual revenues reported at $1,614,246 per unit. The median revenue stands at $1,200,000, while the lowest and highest recorded revenues are $1,000,000 and $1,200,000, respectively. The breakeven period is approximately 12 months, and franchisees can expect to recoup their initial investment in about 24 months, making it an attractive option for aspiring entrepreneurs.
What Is the Growth Trend for MOD Pizza Franchises?
MOD Pizza has demonstrated steady growth in its franchise network. From 2021 to 2023, the number of franchised units increased from 84 to 87, while corporate-owned units rose from 422 to 465 during the same period. This growth indicates a strong brand presence and potential for expansion, making it an appealing choice for new franchisees looking to enter a thriving market.
What Ongoing Costs Should MOD Pizza Franchisees Anticipate?
Franchisees should be prepared for various ongoing costs associated with running a MOD Pizza franchise. These include a royalty fee of 5% of revenues, a marketing fee of 2%, and additional expenses such as sales and marketing costs, general administrative expenses, and IT support services. The total annual operating expenses can range significantly, so careful financial planning is crucial for maintaining profitability and ensuring long-term success.
MOD Pizza Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
MOD Pizza Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 506 | 531 | 552 |
| Net Change YoY | 25 | 21 | |
| Franchised Units | 84 | 86 | 87 |
| Net Change YoY | 2 | 1 | |
| Corporate Units | 422 | 445 | 465 |
| Net Change YoY | 23 | 20 |
Initial Investment
Starting a MOD Pizza franchise requires an initial investment ranging from $1,001,223 to $1,301,134. This includes a franchise fee of $30,000. It's essential for prospective franchisees to prepare for these costs, which cover everything from equipment and inventory to training and marketing support.
Financial Performance
MOD Pizza franchises have shown promising financial performance, with average annual revenue per unit reported at $1,614,246. The median annual revenue stands at $1,200,000, while the lowest recorded revenue is $1,000,000. These figures highlight the potential profitability of investing in a MOD Pizza franchise.
Royalty and Marketing Fees
Franchisees are required to pay a royalty fee of 5% of gross sales along with a marketing fee of 2%. These fees contribute to the ongoing support and brand development provided by MOD Pizza, ensuring franchisees benefit from a well-established marketing strategy.
Breakeven and Investment Payback
Franchisees can expect to break even within 12 months of operation, with an investment payback period of approximately 24 months. This relatively quick turnaround can be appealing for investors looking to recoup their initial investment in a timely manner.
Unit Growth
MOD Pizza has experienced steady growth, increasing its number of franchised units from 84 in 2021 to 87 in 2023. The total number of units, including corporate locations, has also risen, indicating a successful expansion strategy and strong brand presence in the market.
Operational Expenses
Operational expenses for a MOD Pizza franchise include various costs such as sales and marketing expenses, general and administrative expenses, and local marketing contributions. With total annual expenses ranging from approximately $3,629 to $43,629, franchisees must effectively manage these costs to maintain profitability.
Frequently Asked Questions
The initial investment for a MOD Pizza franchise ranges from $1,001,223 to $1,301,134, which includes the franchise fee and other startup costs.