Risk Score
Pending analysis
Investment Range
$446,500 - $1,817,200
Min Cash Required
$17,000
Total US Locations
4,285
Business Summary
Little Caesar Enterprises, Inc. offers franchises for Little Caesars restaurants, which primarily feature pizza, chicken wings, Crazy Bread products, and other related food items. These restaurants traditionally operate as carryout-only establishments, sometimes including a drive-thru window. Little Caesars also offers territory reservation agreements for the potential development of multiple restaurants. Additionally, Little Caesars provides specific formats for Non-Traditional Restaurants, such as food trucks, which are generally available only to existing franchisees, and other outlets in venues like arenas, malls, and convenience stores.
Corporate History
Little Caesar Enterprises, Inc. was incorporated in Michigan in 1962. The company opened its first Little Caesars carry-out restaurant in 1959. Little Caesars began offering franchises for its restaurants in 1962 and operates under its corporate name and the 'Little Caesars' brand. The company reports having no predecessor or parent companies.
Financial Overview
Investment Range
$446,500 - $1,817,200
Franchise Fee (High)
$20,000
Minimum Cash Required
$17,000
Royalty %
6%
Marketing %
7%
Equipment Costs (Low)
$265,500
Equipment Costs (High)
$527,500
Working Capital
$32,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
The FDD highlights a special risk regarding the financial condition of Little Caesar Enterprises, Inc.'s affiliate guarantor, LC Trademarks. This financial condition, as reflected in LC Trademarks' financial statements, calls into question Little Caesar's ability to provide services and support to its franchisees.
Financing Details
Little Caesars does not offer any direct or indirect financing options to its franchisees. This means that Little Caesars does not provide loans for initial fees, equipment, or any other aspect of the franchise. It also does not guarantee any loans, leases, or other financial obligations that franchisees might secure from third parties. Franchisees are solely responsible for arranging all their own funding.
Performance Metrics
Total US Locations
4,285
Franchised Units
3,705
Corporate Units
580
Avg Square Footage
1,400
Franchising Since
1962
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Little Caesar Enterprises, Inc. has a disclosed litigation history that includes several completed and pending actions. In 2023, a former franchisee's affiliate sued Little Caesar for alleged breach of contract, conversion, and unjust enrichment, which was settled later that year with a payment. Four lawsuits were initiated by Little Caesar in 2022 and 2023 to enforce franchise terminations due to non-compliance with operational standards. These cases involved counterclaims from franchisees alleging wrongful termination, fraud, and violations of franchise and consumer protection laws, and were all settled in 2023, allowing franchisees opportunities to sell their terminated businesses or providing temporary fee relief. A prior significant case filed in 2018 against a former franchisee for wrongful termination and various counterclaims from the franchisee, including anti-trust and discrimination allegations, resulted in a preliminary injunction against the franchisees in 2019 and a summary judgment in Little Caesar's favor in 2019, which was affirmed on appeal in 2021. Another class action lawsuit in 2018 challenged an 'anti-poaching' provision in franchise agreements but was dismissed in 2019 and settled on appeal in 2020. As of late 2024, Little Caesar has four pending lawsuits against present or former franchisees, all initiated in 2024, primarily to enforce franchise termination.
Bankruptcy History
Little Caesar Enterprises, Inc. has no reportable bankruptcy history as stated in Item 4 of the FDD.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
Little Caesars franchisees can renew for one additional 10-year term (or 5 years for a Food Truck) by notifying Little Caesars in writing 12 months before the initial term expires. To be eligible, franchisees must have fulfilled all monetary and other obligations to Little Caesars and its affiliates, be in good standing with no defaults, and maintain a good working relationship. Franchisees must also secure the right to remain at their approved location, or get approval for a new site, ensuring it doesn't conflict with any other Little Caesars restaurants. If staying at the same location, the restaurant must be renovated and modernized to current brand standards before the initial term ends or on an approved schedule. Additionally, franchisees must sign a new franchise agreement (which may have materially different terms), pay a $5,000 renewal fee ($2,500 for a Food Truck), and sign a general release of all claims against Little Caesars. They must also be current with all obligations to lessors and suppliers.
Training & Support Program
Franchisor Assistance
Before opening, Little Caesars provides prototype design plans and specifications for restaurant construction, site selection assistance upon request, and electronic access to its Operational Resource Guide (ORG). Initial pre-opening training programs are offered for the franchisee and designated employees, with Little Caesars providing instructors and materials. Franchisees are responsible for their own travel, lodging, meals, and wages during training. Little Caesars also offers initial advice and assistance in marketing, management, and operations, with additional assistance available for a reasonable fee. Ongoing assistance includes periodic revisions to the ORG, which franchisees must implement promptly. Little Caesars offers required and optional training programs, along with continuing advice in marketing, management, and operations, for which additional services may incur a fee. Little Caesars conducts frequent, often unannounced, inspections of restaurant premises, management, and operations to maintain system standards, including the right to collect data, take media, interview staff and customers, and inspect records. Franchisees are also required to attend mandatory meetings, seminars, and annual conferences specified by Little Caesars. An annual fee is charged for access to digital training materials through the Learning Management System (LMS). Little Caesars also provides guidance on product pricing and requires participation in promotional activities, gift card programs, and customer experience programs. The franchisor also mandates specific technology, including the Caesar Vision system, requiring maintenance, support contracts, and adherence to new standards. It also offers a franchisee-only private network for reporting sales, ordering products, and accessing resources.
Initial Training Hours
306
Training Location
Detroit, MI and other metro areas, with virtual components
Ongoing Support
After opening, Little Caesars provides ongoing support through periodic revisions to its Operational Resource Guide (ORG), which franchisees must implement promptly. Little Caesars offers required and optional training programs, in addition to providing continuous advice and assistance in marketing, management, and restaurant operations. Should franchisees request assistance beyond what is customarily furnished, an additional fee plus expenses may apply. Little Caesars conducts frequent, and often unannounced, inspections of restaurant premises, management, and operations to ensure compliance with system standards. These inspections may involve taking photographs and videos, removing product samples, interviewing employees and customers, and inspecting records. Franchisees are also required to attend mandatory meetings, seminars, and annual conferences. An annual fee is charged for access to digital training materials through the Learning Management System (LMS). Little Caesars provides guidance on product pricing and requires participation in various promotional activities, gift card programs, and customer experience programs. Furthermore, the franchisor mandates the use of specific technology, such as the Caesar Vision system, requiring its proper maintenance, support contracts, and adherence to new operational standards. Little Caesars also maintains a franchisee-only private network for sales reporting, product ordering, and accessing various resources.
Franchise Requirements
Ideal Candidate Profile
Little Caesars seeks franchisees who, or whose approved owner/operator, will devote full-time and best efforts to the on-site management and operation of the restaurant. Ideal candidates must demonstrate strong educational, managerial, and business standards, along with good moral character, business reputation, and credit rating. They should possess the aptitude, ability, and sufficient financial resources and capital to properly operate, maintain, upgrade, and promote the restaurant while meeting all financial obligations. Previous related business experience is also considered beneficial.
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
protected
Territory Size Requirements
Little Caesars typically defines the protected territory for a restaurant as a one-mile radius around the approved location. However, this radius may be reduced to a half-mile or less in highly populated urban areas. In the five boroughs of New York City, no protected territory is granted. For a territory reservation agreement, the reserved territory's size and number of restaurants are mutually determined based on local market conditions and population, with boundaries defined by streets, highways, city limits, or county lines.
Staffing Notes
Little Caesars requires the franchisee, or an owner if the franchisee is a business entity, or an approved individual, to dedicate their full time and best efforts to the on-site management and operation of the restaurant. They are solely responsible for all employment decisions, including recruiting, hiring, firing, scheduling, training (beyond brand training), compensation, benefits, and discipline. All workers must be clearly informed that the franchisee, not Little Caesar, is their employer. The franchisee must ensure employees are trained in product preparation, maintain good customer relations, and adhere to governmental health standards. While Little Caesars provides recommendations, it does not control employee wages, hours, or working conditions. The franchisee is responsible for indemnifying Little Caesars against any claims of co-employment or joint employment. All officers, directors, and store supervisors, along with individuals and entities providing a Guarantee, must sign confidentiality and non-compete agreements.