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Philly Pretzel Factory Franchise ProfileRetail Franchises > Specialty Retail |
What Are the Initial Investment Requirements for a Philly Pretzel Factory Franchise?
To open a Philly Pretzel Factory franchise, you should be prepared for a total initial investment ranging from $133,999 to $351,193. This includes a franchise fee of $35,000. Additionally, you will need to have cash reserves between $133,999 and $196,087, and a net worth of at least $150,000 to $250,000. These figures are crucial for ensuring you have the financial stability to launch and sustain your franchise.
What Are the Ongoing Fees and Financial Expectations?
As a franchisee of Philly Pretzel Factory, you will be subject to ongoing fees, including a royalty fee of 6% of your gross sales and a marketing fee of 2%. Understanding these costs is essential for maintaining profitability. The average annual revenue per unit is approximately $431,351, with a median of $382,701, indicating a solid revenue potential. However, keep in mind that the breakeven time is around 12 months, and the investment payback period is approximately 37 months.
What Does the Financial Performance Look Like for Philly Pretzel Factory?
Philly Pretzel Factory units exhibit strong financial performance, with average annual revenues reaching $1,090,855. The cost of goods sold (COGS) is about 25.9%, allowing for a gross profit margin of 74.1%. After accounting for operating expenses, which average $556,336, franchisees can expect an EBITDA of approximately $251,636, representing 23.1% of revenue. These figures highlight the potential for a lucrative business model.
How Many Units Are Currently Operating and What Is the Growth Trend?
As of 2018, Philly Pretzel Factory has seen a steady increase in franchised units, growing from 138 in 2016 to 159 in 2018. The total number of units reached 163 by 2018, with a decline in corporate-owned units from 10 in 2016 to just 4 in 2018. This trend indicates a shift towards expanding the franchise model, which may present opportunities for new franchisees to join a growing network.
Philly Pretzel Factory 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:
Philly Pretzel Factory Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2016 | 2017 | 2018 |
|---|---|---|---|
| Total Units | 148 | 157 | 163 |
| Net Change YoY | 9 | 6 | |
| Franchised Units | 138 | 149 | 159 |
| Net Change YoY | 11 | 10 | |
| Corporate Units | 10 | 8 | 4 |
| Net Change YoY | -2 | -4 |
Franchise Overview
Philly Pretzel Factory is a fast-casual restaurant chain specializing in soft pretzels and related snacks. Established with a focus on quality and customer satisfaction, the franchise has grown significantly since its inception, offering a unique menu that includes pretzel sandwiches, pretzel bites, and a variety of dipping sauces. With a strong brand identity and a commitment to fresh ingredients, Philly Pretzel Factory provides a delicious twist on traditional snack foods.
Investment Requirements
To become a franchisee with Philly Pretzel Factory, the initial investment ranges from $133,999 to $351,193. This includes a franchise fee of $35,000. Potential franchisees should have a net worth between $150,000 and $250,000 and a minimum cash requirement of $133,999 to $196,087. These financial prerequisites ensure that franchisees are well-prepared to manage their business effectively.
Financial Performance
Philly Pretzel Factory franchises have demonstrated strong financial performance, with an average annual revenue of $431,351 per unit. The median revenue stands at $382,701, while the highest-performing units report revenues of up to $1,090,855. This potential for profitability, combined with a breakeven time of just 12 months, makes the franchise an attractive investment opportunity for aspiring entrepreneurs.
Ongoing Fees
Franchisees are required to pay ongoing royalties of 6% of gross sales, along with a marketing fee of 2%. These fees contribute to the overall brand strength and marketing efforts, helping franchisees attract and retain customers. Understanding these fees is crucial for franchisees to effectively budget and plan for their operational expenses.
Operational Support
Philly Pretzel Factory provides comprehensive support to its franchisees, including training programs, marketing assistance, and operational guidance. Franchisees benefit from a network of experienced professionals dedicated to helping them succeed. This support system is essential for navigating the challenges of running a franchise and optimizing overall performance.
Growth Potential
With 163 total units as of 2018, Philly Pretzel Factory has shown consistent growth, expanding from 148 units in 2016 to 163 units in just two years. This upward trend indicates a strong market demand for their products and presents opportunities for new franchisees to join a thriving brand. The combination of a loyal customer base and ongoing expansion plans positions the franchise for continued success in the competitive food service industry.
Frequently Asked Questions
The initial investment for a Philly Pretzel Factory franchise ranges from $133,999 to $351,193, which includes the franchise fee and other startup costs.