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Sbarro Franchise ProfileFood Franchises > Pizza |
What Are the Initial Investment Requirements for a Sbarro Franchise?
To open a Sbarro franchise, you will need to prepare for a range of initial investment costs. The franchise fee is set at $30,000, while the total initial investment can vary significantly, ranging from $99,900 to $1,006,000. It's essential to have cash available between $99,900 and $394,500, and your net worth should be between $100,000 and $500,000. These figures reflect the financial commitment necessary to establish a successful Sbarro location.
What Are the Ongoing Fees Associated with a Sbarro Franchise?
Owning a Sbarro franchise entails ongoing fees that are crucial for maintaining brand standards and marketing efforts. Franchisees are required to pay a royalty fee of 5% of their gross sales, in addition to a marketing fee of 1%. These fees contribute to the overall support and advertising strategies provided by the franchisor, helping to enhance brand visibility and drive sales.
What Is the Average Revenue Potential for a Sbarro Franchise?
Sbarro franchises have demonstrated strong revenue potential, with an average annual revenue per unit reaching approximately $680,000. The median annual revenue stands at $122,446, while some units report revenues as low as $211,900 and as high as $1,250,000. Understanding these figures can help potential franchisees gauge the financial viability of their investment in a Sbarro location.
How Quickly Can You Expect to Break Even with a Sbarro Franchise?
One of the attractive aspects of investing in a Sbarro franchise is the relatively quick breakeven time, which is typically around 12 months. This means that franchisees can expect to recover their initial investment within the first year of operation, assuming they effectively manage their business and adhere to the brand's operational guidelines. This quick return on investment can be appealing for aspiring entrepreneurs looking for a profitable venture.
Sbarro 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:
Sbarro 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 | 291 | 306 | 344 |
| Net Change YoY | 15 | 38 | |
| Franchised Units | 139 | 157 | 197 |
| Net Change YoY | 18 | 40 | |
| Corporate Units | 152 | 149 | 147 |
| Net Change YoY | -3 | -2 |
Company Background
Sbarro is a well-known fast-casual restaurant chain specializing in Italian-American cuisine, particularly its signature pizza and pasta dishes. Founded in 1956 in New York City, Sbarro has grown to become a recognizable brand, operating in various locations including shopping malls, airports, and travel plazas. With a focus on fresh ingredients and authentic flavors, Sbarro aims to provide a quick yet satisfying dining experience for its customers.
Franchise Opportunity
Investing in a Sbarro franchise presents an exciting opportunity for aspiring entrepreneurs looking to enter the food service industry. With a low initial investment starting at $99,900 and a proven business model, Sbarro offers franchisees the chance to tap into a well-established brand with a loyal customer base. The support provided by the corporate team, along with comprehensive training, helps franchisees navigate the challenges of restaurant ownership.
Financial Requirements
To become a Sbarro franchisee, potential investors must meet specific financial criteria. The initial franchise fee is $30,000, with total initial investments ranging from $99,900 to $1,006,000. Franchisees are required to have a net worth of $100,000 to $500,000 and liquid cash available between $99,900 and $394,500. These financial metrics ensure that franchisees are well-prepared for the operational demands of running a Sbarro location.
Royalties and Fees
Sbarro franchisees are subject to a royalty fee of 5% of gross sales, along with a marketing fee of 1%. These fees contribute to the ongoing support, marketing efforts, and brand development provided by the corporate team. Understanding these financial obligations is crucial for franchisees to manage their profitability and ensure long-term success.
Performance Metrics
On average, Sbarro franchise units generate significant annual revenue, with figures reaching up to $680,000. The median annual revenue stands at $122,446, while the highest-performing units can achieve revenues of $1,250,000. With a breakeven time of just 12 months, franchisees can expect a relatively swift return on their investment, making Sbarro an attractive option for those looking to enter the franchise landscape.
Growth and Expansion
Sbarro has demonstrated consistent growth in its franchised unit count, increasing from 139 units in 2021 to 197 units in 2023. This expansion reflects the brand's commitment to reaching new markets and enhancing its presence in the food service industry. The balance of franchised and corporate units showcases Sbarro's strategic approach to growth while providing franchisees with a solid support network.
Frequently Asked Questions
The initial investment for a Sbarro franchise ranges from $99,900 to $1,006,000. This includes the franchise fee, equipment, and other startup costs.