Pizzerias are a worthwhile business opportunity to consider. Pizzerias generate $43 billion in revenue each year in the US. So, is it better to own an independent pizzeria or a franchise? Fifty eight percent of pizzerias in the US are independently owned and they control almost fifty two percent of the market share. However, owning a franchise like a Pizza Hut can be a wise investment. When deciding between purchasing and independent or franchise pizzeria for sale it’s necessary to examine your individual skills set and experience. Of course there are pros and cons to owing each.
The Pros and Cons of Buying an Independently Owned Pizzeria for Sale
Pros
Find out what's happening in South San Franciscofor free with the latest updates from Patch.
Customers–According to market research, customers of pizzerias are generally from the upper middle class, earning more than $75,000 annually. This means that independent pizzerias are typically unaffected by down turns in the economy.
Control – An advantage of owning an independent pizzeria is that you have total control. You ultimately decide what products to make and ingredients to use. You pick which vendors you want to work with. You create any promotions you offer.
Find out what's happening in South San Franciscofor free with the latest updates from Patch.
Cons
Marketing–As an independent pizzeria owner, you are in charge of the marketing strategy and as well as all marketing efforts. If you end up buying a pizzeria with little brand awareness than you will need to step up marketing efforts and budget you’re time and funds appropriately to get your business’s name out there.
The Pros and Cons of Buying a Franchise Pizzeria for Sale
Pros
Established Business Model – When buying any franchise, you are attaining an established business model. The company already knows what works and what doesn’t and can provide you with valuable knowledge and experience to be successful.
Established brand name-
An advantage to purchasing a franchise is you are getting an established brand name. This means customers probably have heard of your pizzeria and are familiar with the products offered. Franchises are capable of devoting resources to advertising and marketing that are above the means of what an independent business can do.
Cons
Little Control over the Product–
When owning a franchise, you have limited control when it comes to products offered and ingredients used. However, this could be seen and a benefit if you have no pizza making experience as recipes and methods used are provided for you.
Ongoing Fees–
Aside from paying an initial franchise, you will have to pay ongoing royalty fees. These fees are usually directed toward advertising and marketing related expenses. Fees are typically based on sales so the more you sell the more you end up paying out in fees.
There is no right or wrong choice when it comes to deciding between buying an independent pizzeria or a franchise. In my professional opinion, it is necessary to assess your own skills and experience. Owning an independent pizzeria is more suited for an experienced pizza maker who is selling a decent product. For those with lack of experience in pizza making, a franchise is a better opportunity.
About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com, a website for businesses for sale, businesses wanted to buy, resources, & articles, and the BizBenNetwork Online Community. He advises and consults with business buyers, business sellers/owners, brokers, agents, investors, & advisors on a daily basis. Reach him direct at 866-270-6278866-270-6278 to discuss strategies regarding buying, selling, (or financing a purchase of) small to mid-sized businesses.
