Risk Score
Pending analysis
Investment Range
$353,154 - $685,075
Franchise Fee
$10,000
Total US Locations
77
Business Summary
Pita Pit operates retail outlets that specialize in preparing and selling pita sandwiches, smoothies, and other related food items. Franchisees establish and run these restaurants following Pita Pit's specific system and brand standards.
Corporate History
Pita Pit Franchising, LLC traces its origins back to Pita Pit Inc., which began franchising in the United States in 2002. In 2005, Pita Pit USA, Inc. was formed by a group of individuals who acquired Pita Pit Inc. This entity continued to operate until December 2018, when a majority of its shareholders sold their controlling interest to Pita Pit CANUSA, Inc. However, due to defaults on promissory notes following the COVID-19 pandemic, the assets of Pita Pit USA, Inc. and its subsidiaries were returned to the original selling shareholders on March 7, 2023. These shareholders then formed new companies, Pita Pit USA 4.0, Inc., and Pita Pit Franchising, LLC. Pita Pit Franchising, LLC, an Idaho limited liability company, now serves as the sole franchisor for all Pita Pit brand restaurants in the United States, continuing the business that the original shareholders started in 2005.
Financial Overview
Investment Range
$353,154 - $685,075
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$20,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$287,806
Equipment Costs (High)
$585,475
Working Capital
$31,725
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Despite receiving an unqualified audit opinion for the period ending December 31, 2023, the FDD explicitly states in its "Special Risks to Consider About This Franchise" section that Pita Pit Franchising, LLC's financial condition, as shown in its financial statements, raises questions about its ability to provide services and support to franchisees. Additionally, the Maryland, North Dakota, and Minnesota state addenda note that their Securities Commissioners have required financial assurance, deferring initial and development fees until pre-opening obligations are met and the first restaurant opens, further indicating concerns about Pita Pit Franchising, LLC's financial capacity. Pita Pit Franchising, LLC utilizes services from its parent company, Pita Pit USA 4.0, Inc., which assessed a significant management fee of $1,211,746 for the period from March 7, 2023, to December 31, 2023.
Financing Details
Pita Pit Franchising, LLC does not offer any direct or indirect financing to its franchisees. Franchisees may be able to obtain third-party financing, such as loan guarantees from the United States Small Business Administration, or financing for renovations and equipment from other third-party lenders. Pita Pit Franchising, LLC does not receive payments for placing this third-party financing.
Performance Metrics
Total US Locations
77
Franchised Units
74
Corporate Units
3
Avg Square Footage
1,200
Franchising Since
2002
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Pita Pit Franchising, LLC has no litigation to report in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Pita Pit Franchising, LLC has no bankruptcy history to disclose in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Pita Pit franchise agreement, franchisees must notify Pita Pit Franchising, LLC in writing between six and twelve months before their initial term expires. They must not be in default of their franchise agreement or any other agreements with Pita Pit Franchising, LLC, and all outstanding payments must be made. Franchisees need to hold an effective business license and achieve an evaluation score of 90% or higher after an inspection. They may also be required to make capital expenditures for modernizing, renovating, and refurbishing the premises, including all fixtures, furnishings, equipment, and signs, to meet Pita Pit Franchising, LLC's then-current standards for new franchises. A renewal fee of $20,000 is required, of which $17,500 can be applied towards these required capital expenditures, with any remaining balance not obligated to be paid if the expenditures are less than $17,500. Franchisees must also sign Pita Pit Franchising, LLC's then-current franchise agreement, which may have different terms, including royalty rates, and provide a complete release and indemnification of Pita Pit Franchising, LLC and its affiliates.
Training & Support Program
Franchisor Assistance
Pita Pit Franchising, LLC provides comprehensive assistance to its franchisees both before and after their restaurants open. Before opening, Pita Pit Franchising, LLC helps with designating an exclusive territory, approving site locations, and guiding lease negotiations, though franchisees are responsible for legal and broker fees. They provide all necessary layout plans, specifications, and drawings for restaurant construction and equipping, along with a list of approved suppliers for equipment and initial inventory. Franchisees are required to attend up to nine days of training at the Pita Pit National Training Center, covering everything from operations and marketing to product preparation and pricing, with pre-training assignments to complete. During this time, Pita Pit Franchising, LLC also facilitates agreements with designated suppliers. After the restaurant opens, Pita Pit Franchising, LLC offers continuing advice and guidance on product selection, purchasing, stocking, and display, along with ongoing training programs. They also support franchisees with advertising and promotional campaigns, introduce system improvements and new product developments, provide recommended pricing, and assist with administrative, bookkeeping, accounting, and inventory control procedures. General financial advice and consultation are also provided, although franchisees are encouraged to consult local certified public accountants for specialized financial guidance.
Initial Training Hours
86
Training Location
Coeur d'Alene, Idaho
Ongoing Support
After a Pita Pit franchise opens, Pita Pit Franchising, LLC provides ongoing advice and guidance on various operational aspects. This includes assistance with the selection, purchasing, stocking, and display of products, as well as offering additional training programs as needed, which may incur a reasonable fee for the franchisee. Pita Pit Franchising, LLC also supports franchisees with advertising and promotional programs and keeps them informed about improvements and new developments within the Pita Pit System. Franchisees receive recommended pricing for menu items, and assistance with establishing and maintaining administrative, bookkeeping, accounting, and inventory control procedures. General financial advice and consultation are also provided, though franchisees are encouraged to consult local certified public accountants for specialized financial guidance.
Franchise Requirements
Ideal Candidate Profile
Pita Pit seeks qualified purchasers who are willing to devote their full time, attention, energy, and best efforts to the management and operation of the Restaurant, with a strong recommendation for day-to-day involvement. Candidates with prior relevant experience, such as franchising or managing another Pita Pit or similar restaurant, may be exempt from initial training. For those who own the franchise through an entity, the controlling equity owners must personally guarantee all obligations. When evaluating transfers, Pita Pit looks for transferees with good character, general business experience, an apparent ability to operate the restaurant successfully, and a sound credit standing.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
limited
Territory Size Requirements
Each Pita Pit Franchising, LLC single-unit franchise is granted a territory defined as a one-half (0.5) mile radius around the specific restaurant location.
Staffing Notes
Pita Pit Franchising, LLC requires that for each restaurant, there must be at least one designated individual, exclusive to that location, who has successfully completed Pita Pit Franchising, LLC's training program. This individual typically completes training six to eight weeks before the restaurant's opening. Franchisees are solely responsible for all aspects of employee management, including hiring, training, managing, disciplining, and firing staff. They must also ensure that all employees adhere to Pita Pit Franchising, LLC's operational standards, methods, and techniques to maintain brand integrity and trademark protection. Pita Pit Franchising, LLC does not act as an employer in these situations.