The Financial Breakdown of a Godfather’s Pizza Franchise

With more than 500 franchise locations, Godfather’s Pizza is one of the largest U.S. pizza chains. Customers love this brand because of its unique pizzas, and investors recognize this franchise as an excellent business opportunity to start a business.

Willy Theisen and Gregg Johnson founded the Godfather’s Pizza in 1973 in Omaha, Nebraska. This company has had a lot of business ups and downs, which is expected when we know how long they have been present in the market.

The peculiarity of this company is that Godfather’s Pizza gives a relatively low-cost starting business opportunity if we compare it to the offers from other giants in the pizza industry.

How Much Does The¬†Godfather’s Pizza Franchise Cost

The Godfather’s Pizza franchise cost ranges between $119,900 and $864,800: the initial franchise fee is included in the financial calculation. The amount of cost will depend on the type of location that the new franchisee chooses.

Honorably discharged United States Army Force members have a 50% initial fee discount. Godfather’s Pizza gives one of the biggest veteran discounts in the franchising industry, which will be very beneficial for all veterans interested in this business concept.

It is recommended that investors should own at least $200,000 in liquid assets (non-borrowed funds). Past business experience in the same industry is not necessary for starting this franchise.

The location of the Godfather’s Pizza franchise will significantly impact how high the cost of the total investment will be, so every investor must know what locations are available.

Godfather’s Pizza franchise cost by location type:

  • $119,900 to $331,300 for a non-traditional location
  • $159,000 to $557,800 to purchase an existing company-owned location
  • $265,000 to $562,300 for a delivery / carryout location
  • $459,500 to $864,800 for a full service restaurant

Godfathers’ Pizza as a company does not offer the possibility of direct financing, which means that the franchisee will have to find a third-party funding source. This should not be a significant obstacle because many companies offer this type of financial service.

Godfather’s Pizza franchise cost list:

  • Estimated total investment: $119,900 to $864,800
  • Equipment: $ 30,000 – $ 245,000
  • Opening Inventory: $4,000 – $12,000
  • Lease of Real Estate: $3,000 to $50,000 (3 months)
  • Leasehold Improvements: $15,000 – $350,000
  • Insurance: $3,000 – $23,000
  • Signs: $3,000- $12,500
  • Employees Training: $3,500- $7,800
  • All other costs: $10,000 – $30,000

Godfather’s Pizza Franchise Fee

Godfathers Pizza franchise’s initial fee ranges between $7,500 to $25,000; this fee is a one-time cost, and it depends on the type of location. All ongoing costs are in total of 5% of the gross revenue; the Royalty fee is 3%, and the Marketing/Ad fee is 2%.

The Godfather’s Pizza initial franchise fee for convenience stores and other nontraditional locations is $7,500, delivery/carryout locations have an initial cost of $15,000, and for traditional sit-down locations, the fee is $25,000. This initial cost can be slightly cheaper if the investor chooses to develop more than one franchise unit.

As we mentioned before, only honorably discharged U.S Army forces Veterans have the right to a 50% discount on the initial franchise fee. The cost of ongoing fees is the same for all types of locations.

We also must mention the training fee cost for the education of managers and employees; this fee is $ 750 per person for traditional Godfathers Pizza franchise locations and $ 500 per person for nontraditional locations. This is a one-time fee, and the education takes place in the class and on the field.

The Godfather’s Pizza Franchise, with its ongoing fees that are only 5% of gross revenue, has one of the best franchise offers currently. These ongoing fees usually are somewhere between 8% to 14% for the pizza franchises.

Godfather’s Pizza franchise fee list:

  • Royalty Fee: 3% of the gross revenue – an ongoing cost
  • Marketing Fee: 2% of the gross revenue – an ongoing cost
  • Training Fee: $500 to $750 per person – one-time fee
  • Renewal Fee: $1,000 to $2,000 – paid after franchise agreement expires
  • Transfer Fee: $3,000 to $5,000 – paid if the franchisee decides to sell the franchise

Godfather’s Pizza Franchise Profit

A Godfather’s Pizza Shop profit margin will be in the range between 10 to 15% of the gross revenue. So, every new owner of this franchise can expect that 10% to 15% of the total turnover will stay in his pocket after paying franchise fees, leasing cost, cost of ingredients, and employees.

This profit margin is predicted based on how much pizza shops earn. Still, Godfather’s Pizza franchises can have a higher profit than this mentioned above because cold and hot beverages that are sold there have a very good profit margin, which is why these restaurants’ profit can go all the way up to 20% of the gross revenue.

Godfather’s Pizza franchise has a relatively low start-up cost, but the main advantage of this brand is the really low ongoing fees. The franchise must give only 5% of gross revenue to the franchisor, and that percentage will not affect the overall profitability of this business concept.

In exchange for ongoing fees that are only 5%, the franchisee receives a tried and tested business model, customer brand awareness, and the support of a franchisor for the entire duration of the franchise agreement.

Also, the shops from this brand are known for the fact that their pizzas are delicious and that they do not skimp on ingredients. This is very important because a customer who comes out from the restaurant satisfied and full will become a regular visitor.

Real estate lease is the highest monthly cost of Godfather’s Pizza franchise, so it is important not to rush when choosing the location. The restaurant’s location must be in a frequent place, but the monthly lease rent of that space must not be a burden to the overall profitability of the facility.

Godfather Pizza History

1973 Willy Theisen and Gregg Johnson (now the owner of Minsky’s Pizza) opened the first Godfather’s Pizza shop; after one year of doing business, their business paths separated, and Theisen became the only owner.

With franchising, they began in 1975; the first Godfather’s Pizza franchise was opened in 1975 in Columbus, Nebraska; after that, they opened two more franchise units.

The main trademark of this restaurant was five pounds pizza, and even today, they are known for their large food portions.

From 1977 to 1980, the enormous growth of this company started, and in only 36 months, they broke all records and opened an incredible 450 franchise units. This take-off comes thanks to Godfather’s Pizza franchise cost that was the cheapest compared to other similar business concepts.

Their focus was not on building real estate; they opted for leasing already made locations. Thanks to this, the costs were minimal, and they have the possibility to open more franchise units in less time.

1985 Godfather’s Pizza was the fifth-largest pizza chain in the U.S., but in that year, Theiven sold his business to the Pillsbury Company. Since then, they started to have financial problems, and more than 200 restaurants have been closed in a short time.

After that, this company stagnated until 2009, when Ronald Gartlan purchased the Godfather’s Pizza from Pillsbury. Gartlan stabilized the company, and currently, this brand has steady growth momentum.

Godfather’s Pizza franchise cost is low when we analyze other similar companies; also, they have the lowest ongoing fees in the industry.

This franchise can be an ideal opportunity for entrepreneurs who want to start a business venture in the Pizza Industry, with the help of a proven business model that has been operating on the market since 1973.

Summary

Godfather’s Pizza has an excellent franchise package that will be helpful to all investors regardless of previous business experience. So, if you want to run a profitable pizza shop, this can be the right option for you.

This chain has fans all over the United States and Canada, and a large base of loyal customers, so all entrepreneurs who want to enter the Pizza industry must review this business opportunity.

Written by:

Stuart MacPherson

Hi, I'm Stuart. I've been running my own small business since 2019 after leaving a successful career in finance. I created FranchiseTheory to share my enthusiasm for franchising and the franchise business model.

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