In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Marco’s Pizza franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Marco’s Pizza franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Marco’s Pizza outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Marco’s Pizza franchise opportunity

Section V – Presentation and analysis of Marco’s Pizza’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, lowest, and highest Net Royalty Sales on a category and cumulative basis, for the top 25%, 50%, 75%, and 100% and the bottom 25%, 50%, and 75% of the 894 Franchised Stores that were open for business for 52 weeks in Marco’s Pizza’s fiscal year ended December 31, 2023

• number of Franchised Stores with Net Royalty Sales over $1,000,000 for the 2023 fiscal year

Section VI – Key ratios, comparables, computations, and analyses for the Marco’s Pizza franchise opportunity (exclusive content for Platinum subscribers)

Section I – Marco’s Pizza Franchise Costs

• Initial Franchise Fee:  $25,000
• Real Property:  $6,000 to $18,666
• Equipment, Fixtures:  $97,725 to $175,000
• Point of Sale Computers:  $19,000 to $21,000
• Credit Card Processing:  $6,604
• Leasehold Improvements:  $65,000 to $400,000
• Signage:  $3,000 to $15,000
• Opening Inventory:  $7,000 to $11,000
• Small Supplies:  $14,200 to $18,500
• Deposits, Prepaid Expenses:  $2,500 to $6,000
• Business Licenses:  $500 to $3,000
• Insurance:  $2,366 to $16,500
• Training Expenses:  $1,500 to $8,650
• Miscellaneous Expenses:  $500 to $5,000
• Architectural and Engineering:  $8,000 to $15,000
• Technology Fee:  $336
• Delivery Area, Streets Database for POS, and Shape Files for POS and OLO Platform Maps:  $500
• Brand Launch Program:  $15,500 to $25,500
• Store Technology Infrastructure System:  $800 to $2,400
• Menu Boards:  $600 to $1,200
• Additional Funds (3 Months):  $9,000 to $30,000
• Total Estimated Marco’s Pizza Franchise Costs:  $285,631 to $804,856

Section II – Marco’s Pizza’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Initial Franchise Fee:  $25,000
• Royalty:  5.5% of Net Royalty Sales (subject to adjustment up to a maximum of 6.0%)
• Brand Development Fund:  currently, 1.0% of Net Royalty Sales. Marco’s Pizza has the right to increase this fee by 0.5% by giving you 90 days’ prior written notice.
• Geography Based Advertising Funds (includes National Advertising Fund and Regional Advertising Funds):  the current amount of contribution required to Marco’s Pizza’s National Advertising Fund is 4% of Net Royalty Sales. The amount of contribution required to a Regional Advertising Fund depends on the geographic region in which the Store is located. Your total combined contribution to a National Advertising Fund and Regional Advertising Fund will not exceed a total of 5.5% of Net Royalty Sales combined for all levels of the Geography Based Advertising Funds.
• Market Advertising Cooperative:  amount set and spend determined by co-op member votes
• Local Store Marketing:  calculated at minimum of 7% minus the percentage contributed to the Brand Development Fund, Geography Based Advertising Funds, and any Ad Co-op

Section III – Number of Franchised and Company-Owned Marco’s Pizza Outlets

Franchised

2021

• Outlets at the Start of the Year:  912
• Outlets at the End of the Year:  956
• Net Change:  +44

2022

• Outlets at the Start of the Year:  956
• Outlets at the End of the Year:  1,022
• Net Change:  +66

2023

• Outlets at the Start of the Year:  1,022
• Outlets at the End of the Year:  1,076
• Net Change:  +54

Company-Owned

2021

• Outlets at the Start of the Year:  42
• Outlets at the End of the Year:  45
• Net Change:  +3

2022

• Outlets at the Start of the Year:  45
• Outlets at the End of the Year:  44
• Net Change:  -1

2023

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  41
• Net Change:  -3

Section IV – News Updates on the Marco’s Pizza Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Marco’s Pizza Franchise (Item 19, 2024 FDD)

• As of December 31, 2023, there were 1,076 Marco’s Pizza Franchised Stores. Of the 1,076 Franchised Stores, 894 Franchised Stores operated for the full 52-week period ending December 31, 2023.

• Except where otherwise noted, Marco’s Pizza has prepared this financial performance representation to reflect the historical data of the Net Royalty Sales of 894 Marco’s Pizza Franchised Stores that were open during 52 weeks of the fiscal year ending December 31, 2023.

• This information does not include (i) the performance of any international locations (including locations in Puerto Rico, which are developed by the master franchisee for the Caribbean), (ii) 77 new Stores that were not open for the entire 52-week period in 2023, (iii) special venue locations, and (iv) certain locations developed and operated by Hoogland Foods, LLC, formerly operated as dba Family Video.

• No significant changes to the System were made to account for current market conditions resulting from the COVID-19 pandemic, and Marco’s Pizza is not anticipating any future changes to the System to account for future market conditions resulting from the COVID-19 pandemic.

• The financial information in Item 19 has been prepared by Marco’s management and has not been compiled, reviewed, or audited by Marco’s auditors.

Part 1 – Net Royalty Sales of Franchised Stores by Category (2023 Fiscal Year)

• The following charts provide the average and median Net Royalty Sales on a category and cumulative basis, for the top 25%, 50%, and 75%, and the bottom 25%, 50%, and 75% of the 894 Franchised Stores which were open for business for 52 weeks in Marco’s Pizza’s 2023 fiscal year.

Top 25% of Franchised Stores

• Number of Stores in Category:  224
• Lowest Net Royalty Sales in Category:  $1,152,117
• Highest Net Royalty Sales in Category:  $2,246,571
• Average Net Royalty Sales in Category:  $1,405,079
• Median Net Royalty Sales in Category:  $1,347,984
• Number of Stores Meeting or Exceeding the Average for Category:  88
• Percentage of Stores Meeting or Exceeding the Average for Category:  39%

Top 50% of Franchised Stores

• Number of Stores in Category:  447
• Lowest Net Royalty Sales in Category:  $895,779
• Highest Net Royalty Sales in Category:  $2,246,571
• Average Net Royalty Sales in Category:  $1,208,653
• Median Net Royalty Sales in Category:  $1,152,117
• Number of Stores Meeting or Exceeding the Average for Category:  185
• Percentage of Stores Meeting or Exceeding the Average for Category:  41%

Top 75% of Franchised Stores

• Number of Stores in Category:  671
• Lowest Net Royalty Sales in Category:  $700,860
• Highest Net Royalty Sales in Category:  $2,246,571
• Average Net Royalty Sales in Category:  $1,072,441
• Median Net Royalty Sales in Category:  $1,088,013
• Number of Stores Meeting or Exceeding the Average for Category:  276
• Percentage of Stores Meeting or Exceeding the Average for Category:  41%

Bottom 25% of Franchised Stores

• Number of Stores in Category:  224
• Lowest Net Royalty Sales in Category:  $318,006
• Highest Net Royalty Sales in Category:  $700,860
• Average Net Royalty Sales in Category:  $581,792
• Median Net Royalty Sales in Category:  $597,287
• Number of Stores Meeting or Exceeding the Average for Category:  127
• Percentage of Stores Meeting or Exceeding the Average for Category:  57%

Bottom 50% of Franchised Stores

• Number of Stores in Category:  447
• Lowest Net Royalty Sales in Category:  $318,006
• Highest Net Royalty Sales in Category:  $895,328
• Average Net Royalty Sales in Category:  $691,187
• Median Net Royalty Sales in Category:  $700,860
• Number of Stores Meeting or Exceeding the Average for Category:   233
• Percentage of Stores Meeting or Exceeding the Average for Category:  52%

Bottom 75% of Franchised Stores

• Number of Stores in Category:  671
• Lowest Net Royalty Sales in Category:  $318,006
• Highest Net Royalty Sales in Category:  $1,152,117
• Average Net Royalty Sales in Category:  $798,275
• Median Net Royalty Sales in Category:  $802,006
• Number of Stores Meeting or Exceeding the Average for Category:  341
• Percentage of Stores Meeting or Exceeding the Average for Category:  51%

Total

• Number of Stores in Category:  894
• Lowest Net Royalty Sales in Category:  $318,006
• Highest Net Royalty Sales in Category:  $2,246,571
• Average Net Royalty Sales in Category:  $949,920
• Median Net Royalty Sales in Category:  $895,553
• Number of Stores Meeting or Exceeding the Average for Category:  392
• Percentage of Stores Meeting or Exceeding the Average for Category:  41%

Part 2 – Number of Stores with Net Royalty Sales Over $1,000,000 (2022 Fiscal Year)

• The following chart provides information regarding the number of Franchised Stores with Net Royalty Sales over $1,000,000 for the 2023 fiscal year.

2023

• Total Franchised Stores Reported:  894
• Franchised Stores Over $1,000,000:  346
• % of Franchised Stores to Total Reported:  38.7%

Section VI – Marco’s PizzaFranchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️