Risk Score
Pending analysis
Investment Range
$609,000 - $2,056,000
Franchise Fee
$20,000
Total US Locations
60
Business Summary
Giordano's® Restaurants are pizza restaurants that specialize in preparing and selling stuffed deep dish and thin-crust pizzas, along with pasta, sandwiches, salads, and other related Italian food products. These restaurants follow specific recipes and operational standards. Giordano's® offers two types of restaurants: Limited-Service, which focuses on delivery and carry-out services with seating for up to 20 customers in a 900 to 1800 square foot space, and Full-Service, which includes delivery and carry-out but also offers dining room and bar seating, and sometimes private dining facilities, for more than 20 customers in a 3,500 to 4,500 square foot space. Most locations also serve alcoholic beverages.
Corporate History
The Giordano's® Restaurant concept was founded in 1974, with the first restaurant opening in Chicago, Illinois. Its predecessor, Giordano's Enterprises, Inc. (GEI), began offering Giordano's® franchises in 1980. In 2011, GEI and several affiliates filed for Chapter 11 bankruptcy. Following this, GEI sold its restaurant-related assets in November 2011 to VPC Pizza Operating Corp., an affiliate of the current franchisor. VPC Pizza Franchise, LLC was formed on November 22, 2011, and took over as the franchisor of Giordano's® Restaurants, continuing the brand's legacy.
Financial Overview
Investment Range
$609,000 - $2,056,000
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$40,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$504,000
Equipment Costs (High)
$1,813,000
Working Capital
$17,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for Giordano's show a significant member's deficit, totaling over $4.4 million as of December 30, 2024. This indicates accumulated losses over time. The company is a co-borrower on a long-term debt facility, with an allocated loan balance of over $4.7 million as of December 30, 2024. The Illinois Attorney General's Office also required the deferral of initial franchise fee payments due to concerns about Giordano's financial condition.
Financing Details
Giordano's does not offer any direct or indirect financing options to its franchisees, nor does it guarantee any notes, leases, or obligations. Franchisees must secure all necessary financing on their own.
Performance Metrics
Total US Locations
60
Franchised Units
32
Corporate Units
28
Avg Square Footage
2,700
Franchising Since
1980
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
Yes
Litigation Summary
Giordano's has no litigation to report.
Bankruptcy History
Although Giordano's itself has no bankruptcy history that requires disclosure in Item 4, the FDD indicates in Item 1 that its predecessor, Giordano's Enterprises, Inc. (GEI), and several affiliates filed for Chapter 11 bankruptcy in February 2011. This led to GEI selling most of its restaurant-related assets in October 2011, with the transaction closing in November 2011. As a result of this acquisition, VPC Pizza Franchise, LLC became the franchisor of Giordano's® Restaurants.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Giordano's franchisees must provide timely written notice, be and have been in good standing with Giordano's, and be in full compliance with their agreements. They are also required to make any reasonably necessary capital expenditures to renovate and modernize the restaurant to current brand standards. If renovation isn't feasible or they can't keep possession of the current premises, they must relocate the restaurant to an approved new site. Franchisees must sign the then-current form of franchise agreement and any related agreements, which may have different terms than their original agreement. Additionally, a renewal fee equal to 15% of the then-current Initial Franchise Fee must be paid, and proof of a lease term at least as long as the renewal term must be provided. All financial obligations to Giordano's and its affiliates, and suppliers, must be current at the time of renewal and for the preceding 12 months.
Training & Support Program
Franchisor Assistance
Giordano's provides franchisees with a range of assistance throughout the franchise lifecycle. Before a restaurant opens, Giordano's evaluates the proposed site, reviews the lease, and consults on interior construction, providing preliminary plans and specifications. They also furnish lists of required equipment and approved suppliers. Franchisees and their management team receive an initial training program at the Giordano's Pizza Academy and a Training Restaurant in the Chicago area. After opening, Giordano's sends 2-7 qualified employees to provide on-site opening and post-opening training and support. Ongoing assistance includes guidance and consultation through field visits, telephone, or written communication, as well as providing updates to the operations manual and information on newly developed products and methods. Additional or remedial training is also available upon request or as required, though franchisees are responsible for the costs of these extra sessions.
Initial Training Hours
320
Training Location
Giordano's Pizza Academy and Training Restaurant in Chicago, IL
Ongoing Support
Giordano's provides ongoing support to its franchisees through various channels. This includes continuous guidance and consultation via field visits, telephone, and written communication. Franchisees receive updates and amendments to the confidential Operations Manual, as well as information on newly developed products, supplies, and operational methods. Giordano's manages a mandatory Advertising Fund, collecting fees to support national and regional advertising, marketing research, menu development, and digital programs like gift cards, loyalty, and online ordering. Franchisees are also required to conduct local advertising and participate in any established local advertising cooperatives. Technology support mandates the use of specific computer systems, point-of-sale software, and participation in online programs, with an obligation to keep hardware and software updated. If franchisees fail to maintain their IT support, Giordano's can arrange necessary services and charge for them. Additionally, Giordano's conducts quality assurance inspections and "secret shopper" visits, for which franchisees contribute up to $1,000 quarterly, and may require periodic remodeling or maintenance of the restaurant, which the franchisor can enforce and bill for if the franchisee fails to comply.
Franchise Requirements
Ideal Candidate Profile
Giordano's seeks individuals who are willing to make the necessary investment and exert significant effort to operate a Giordano's® Restaurant. The ideal franchisee or their designated General Manager must commit to direct, day-to-day, full-time supervision of the restaurant. If the franchisee is a sole proprietorship, the owner must serve as the General Manager. For partnerships, partners holding a majority interest must be actively involved, with one designated as the General Manager. Corporate franchisees must appoint a senior officer who owns at least 10% of the entity as the General Manager. All General Managers must be approved by Giordano's, complete the required training program to the franchisor's satisfaction, and maintain current food safety certifications.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Limited
Staff Count
9
Territory Size Requirements
Giordano's defines franchise territories, if granted, by specific streets or as one or more cities or market areas. The size of these territories is determined by factors like demographic characteristics, population, household income, and distance. For Area Development Agreements, development areas are typically defined by streets, highways, or county lines, with the size and number of restaurants determined by population, market potential, demographics, economic conditions, and financial resources. There is no stated minimum size for a single restaurant territory.
Staffing Notes
Giordano's requires specific staffing levels and roles for its restaurants. For a Limited-Service Restaurant, the management team consists of a General Manager and one assistant manager. A Full-Service Restaurant requires a General Manager, one assistant manager, and a Kitchen Manager. All management team members must successfully complete Giordano's training program and maintain food safety certifications. In addition to management, specific roles such as pizza cooks (3 for Full-Service, 2 for Limited-Service), line cooks (2), and delivery/carry-out employees (2) are required to attend and complete pre-opening training. Franchisees are responsible for hiring all employees, setting their compensation, and ensuring they receive proper training in restaurant operations. All staff must adhere to Giordano's dress code, maintain cleanliness, and comply with all applicable labor laws and regulations.