Investment

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Initial Investment Estimate:
$302,000-539,500

Pizza Hut, LLC offers a number of different asset types, but the most cost effective is the In Line/End Cap “Delco” Delivery / Carry Out Restaurant. Please refer to Item 7 of the FDD for the estimated initial investment for other assets types.

  • Initial Franchise Fee11

    $25,000
    Method of Payment
    Lump Sum
    Whom to Pay
    PHLLC
    When Due
    Before System Restaurant opens or when Development Agreement signed

    11 If you sign one or more Development Agreements for new System Restaurants, not in connection with an acquisition of existing System Restaurants from PH Seller or its subsidiaries, you must pay PHLLC a development fee of $25,000 for each System Restaurant. The Development Agreement will specify the date by which the System Restaurant must be open for business. If you open the System Restaurant by the schedule time, PHLLC will apply the development fee to the initial Franchise Fee for the System Restaurant. If you do not open on time, PHLLC will retain the development fee and will be free to develop the area or to franchise it to a third party. The development fee is not generally refundable. Please refer to the Development Agreement attached as Exhibit K to this Disclosure Document.

    If you purchase existing System Restaurants from PH Seller or its subsidiaries and you are required to develop new System Restaurants, you will be required to pay PHLLC $50,000 in development fees for each new System Restaurant location at the time you purchase the System Restaurants. If you open the System Restaurant by the scheduled time, PHLLC will apply one-half of the development fee to the initial franchise fee that would otherwise be due and PHLLC will refund to you the other half of the development fee. If you fail to open the System Restaurant by the scheduled time, PHLLC will retain the entire development fee and will be free to develop the area or to franchise it to a third party. Please refer to the Development Agreements attached as Exhibit M and N to the ASA (Exhibit E).

  • Development Fees11

    Varies
    Method of Payment
    Lump Sum
    Whom to Pay
    PHLLC
    When Due
    At the time of signing Development Agreement11

    11 If you sign one or more Development Agreements for new System Restaurants, not in connection with an acquisition of existing System Restaurants from PHLLC or its subsidiaries, you must pay PH Seller a development fee of $25,000 for each System Restaurant. The Development Agreement will specify the date by which the System Restaurant must be open for business. If you open the System Restaurant by the schedule time, PHLLC will apply the development fee to the initial Franchise Fee for the System Restaurant. If you do not open on time, PHLLC will retain the development fee and will be free to develop the area or to franchise it to a third party. The development fee is not generally refundable. Please refer to the Development Agreement attached as Exhibit K to this Disclosure Document.

    If you purchase existing System Restaurants from PH Seller or its subsidiaries and you are required to develop new System Restaurants, you will be required to pay PHLLC $50,000 in development fees for each new System Restaurant location at the time you purchase the System Restaurants. If you open the System Restaurant by the scheduled time, PHLLC will apply one-half of the development fee to the initial franchise fee that would otherwise be due and PHLLC will refund to you the other half of the development fee. If you fail to open the System Restaurant by the scheduled time, PHLLC will retain the entire development fee and will be free to develop the area or to franchise it to a third party. Please refer to the Development Agreements attached as Exhibit M and N to the ASA (Exhibit E).

  • Equipment

    $100,000-$175,000
    Method of Payment
    Lump Sum
    Whom to Pay
    Vender2
    When Due
    When Acquired2

    2 Subject to credit requirements, some vendors may require payment 30 days after the invoice date.

    In addition to the estimates disclosed in the tables above, you may elect to use the services of the third-party vendor, Revenue Management Solutions (as described more fully in Item 8). If you do, you will be required to pay Revenue Management Solutions its then-current cost (currently approximately $500 per System Restaurant per year). While your use of the RMS Services is currently optional; PHLLC reserves the right to require your use of such RMS Services at any time in the future, in its sole discretion.

  • Opening Inventory

    $4,000-$8,000
    Method of Payment
    Lump Sum
    Whom to Pay
    Vendor2
    When Due
    When Acquired2

    2 Subject to credit requirements, some vendors may require payment 30 days after the invoice date.

    In addition to the estimates disclosed in the tables above, you may elect to use the services of the third-party vendor, Revenue Management Solutions (as described more fully in Item 8). If you do, you will be required to pay Revenue Management Solutions its then-current cost (currently approximately $500 per System Restaurant per year). While your use of the RMS Services is currently optional; PHLLC reserves the right to require your use of such RMS Services at any time in the future, in its sole discretion.

  • Smallwares

    $10,000-$18,000
    Method of Payment
    Lump Sum
    Whom to Pay
    Vendor2
    When Due
    When Acquired2

    2 Subject to credit requirements, some vendors may require payment 30 days after the invoice date.

    In addition to the estimates disclosed in the tables above, you may elect to use the services of the third-party vendor, Revenue Management Solutions (as described more fully in Item 8). If you do, you will be required to pay Revenue Management Solutions its then-current cost (currently approximately $500 per System Restaurant per year). While your use of the RMS Services is currently optional; PHLLC reserves the right to require your use of such RMS Services at any time in the future, in its sole discretion.

  • Building and Site Improvements

    $130,000-210,0003
    Method of Payment
    Varies
    Whom to Pay
    Varies
    When Due
    Varies

    3 Land, building, and site improvement costs vary depending upon location and size of land and building and on whether the land and building are owned or leased. The typical number of square feet required for System Restaurants is 2,000-4,000 for a “Red Roof” Dine-In System Restaurant, 1,600-2,900 for a “DBR/FCD” Dine-In/Delivery/Carryout System Restaurant and 1,000-1,600 for a “Delco” Delivery/Carryout System Restaurant.

  • Leasehold Interest

    Varies3
    Method of Payment
    Varies
    Whom to Pay
    Lessor
    When Due
    When Acquired

    3 Land, building, and site improvement costs vary depending upon location and size of land and building and on whether the land and building are owned or leased. The typical number of square feet required for System Restaurants is 2,000-4,000 for a “Red Roof” Dine-In System Restaurant, 1,600-2,900 for a “DBR/FCD” Dine-In/Delivery/Carryout System Restaurant and 1,000-1,600 for a “Delco” Delivery/Carryout System Restaurant.

  • Delivery Vehicles

    4
    Method of Payment
    4
    Whom to Pay
    4
    When Due
    4

    4 System Restaurants offering delivery are not required to provide delivery vehicles (they may rely on employee-owned vehicles). If you acquire your own vehicles, costs will vary depending upon the type of vehicle and whether it is owned or leased.

  • Computers5

    $15,000-$30,000
    Method of Payment
    Lump Sum
    Whom to Pay
    PHLLC, its Affiliates, or approved Vendors
    When Due
    When Acquired

    5 See Item 11 for a complete description of the Computer System and your obligations concerning it.

  • Additional Funds (3 months)6

    $5,000-$21,500
    Method of Payment
    As Incurred
    Whom to Pay
    Employees, Utilities and Suppliers
    When Due
    As Incurred

    6 This is an estimate of your initial start-up expenses, taking into account that a System Restaurant is essentially a cash business. These funds consist of preopening expenses (including training), initial employee wages, insurance premiums, licenses, permit costs, recruitment , and other variable costs (such as initial utility bills, paper products, and cleaning and other supplies). These figures are estimates and we cannot guarantee that you will not have additional expenses starting the business. Your actual costs will depend on many factors, such as: your management skill, experience, and business acumen; local economic conditions; local market conditions; prevailing wage rates in your community; competition; and the sales level reached in the period covered.

  • Miscellaneous7

    $10,000-$22,000
    Method of Payment
    As Incurred
    Whom to Pay
    Employees, Utilities, and Suppliers
    When Due
    As Incurred

    Miscellaneous costs consist of pre-opening and grand opening expenses, such as training, utility deposits, restaurant set-up, etc.

  • Advertising8

    $0-$25,000
    Method of Payment
    As Incurred
    Whom to Pay
    Media, Suppliers
    When Due
    First 18 Weeks

    8 PHLLC recommends an 18-week advertising campaign to drive sales from new “Delivery” and “Delco” System Restaurants. The advertising campaign is not required, but PHLLC believes that it effectively increases sales. This figure excludes national and co-op dues.

  • Start-up "Other"9

    $3,000-$5,000

    9 Start-up “Other” costs consist of new unit office supply package, banners, forms, and uniforms.

  • Total10

    $302,000-539,500

    10 On those costs that are not fixed, PHLLC does not expect your costs to increase beyond inflation in the relevant industry segment unless the supplier’s costs increase due to shortages, catastrophes, strikes, Acts of God, or other causes beyond the supplier’s control.

* None of the expenditures shown on the tables above are refundable.