Pizza Hut Non-Traditional Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$50,800 - $304,000
Franchise Fee
$5,000
Min Cash Required
$1,600
Total US Locations
1,332
Business Summary
Pizza Hut, LLC offers licenses to operate non-traditional locations, known as Licensed Locations, that sell Pizza Hut pizza and other approved products. These locations are typically integrated into existing facilities such as convenience stores, hotels, airports, or educational institutions, rather than operating as standalone restaurants. The licensed concepts include Pizza Hut Mini Kitchens, Kiosks, Retail Counters, and Retail Counters with Dining, which prepare and serve a limited menu of Pizza Hut products, possibly including WingStreet Express items, for self-service or counter-service. Delivery services are generally restricted to the same building or property, with specific exceptions for military bases and hotels.
Corporate History
Pizza Hut, LLC's predecessor, Pizza Hut, Inc. (PHI), was originally incorporated in 1967 as "Pizza Hut of San Diego, Inc." Pizza Hut, LLC and its affiliates have been operating Pizza Hut Restaurants in the United States since 1958 and began offering franchises for traditional Pizza Hut Restaurants in 1959. In 2016, PHI merged into Pizza Hut, LLC, which then became the franchisor for all domestic Pizza Hut operations, acquiring existing agreements and intellectual property. Pizza Hut, LLC's ultimate parent company is YUM! Brands, Inc. Company-owned Pizza Hut Express restaurants have been operated since 1987, and licenses for non-traditional locations have been offered to third parties since 1989.
Financial Overview
Investment Range
$50,800 - $304,000
Franchise Fee (Low)
$5,000
Franchise Fee (High)
$20,000
Minimum Cash Required
$1,600
Royalty %
10%
Equipment Costs (Low)
$42,500
Equipment Costs (High)
$265,000
Working Capital
$5,800
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Pizza Hut, LLC's financial statements have received an unqualified opinion from its independent auditors, indicating they are presented fairly. The company, through its direct parent Pizza Hut Guarantor, LLC, reported a net worth of $67.3 million as of December 30, 2024, significantly exceeding the $15 million minimum net worth required for certain state franchise registration exemptions. The consolidated statements show net cash provided by operating activities of $219.7 million in 2024. These figures indicate that Pizza Hut, LLC maintains a strong financial position, with no concerns raised regarding its ability to continue as a going concern.
Financing Details
Pizza Hut, LLC does not offer direct financing for the initial investment or ongoing operations. However, its ultimate parent company, YUM! Brands, Inc., has an arrangement with a third-party lender, LS BDC Adviser, LLC. Under this arrangement, YUM! Brands, Inc. may provide credit support in the form of limited guaranties for qualified franchisee applicants. If YUM! Brands, Inc. chooses to provide this credit support, it would guarantee up to 33% of the original principal or commitment amount of a franchisee's business loan, with a maximum guaranty of $5,000,000. Franchisees referred to this lender would negotiate loan terms, interest rates, and repayment directly with the lender. YUM! Brands, Inc. does not receive any fees or consideration from the lender for providing these loans.
Performance Metrics
Total US Locations
1,332
Franchised Units
1,332
Corporate Units
0
Avg Square Footage
419
Franchising Since
1959
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
4
Litigation Summary
Pizza Hut, LLC is currently involved in four active lawsuits. Two cases were filed by EYM Pizza of Georgia, LLC et al., a former franchisee. The first EYM lawsuit, filed in March 2024, alleged breach of a forbearance agreement, tortious interference, breach of fiduciary duty, and discrimination claims. This case was dismissed with prejudice in April 2024. The second EYM lawsuit, filed in July 2024, alleged tortious interference and conspiracy, claiming Pizza Hut, LLC improperly interfered with the sale of its restaurants and disclosed confidential information; this case is currently stayed through March 31, 2025, due to EYM's bankruptcy. Pizza Hut, LLC also initiated two lawsuits. One, filed in June 2024 against the EYM Federal Defendants, alleged breach of contract for failure to comply with franchise and other agreements, seeking monetary damages and legal fees. This case is also stayed due to the defendants' bankruptcy. The other, filed in November 2024 against Vardayani Mata, Inc., Mahender Patel, and Parul Patel, seeks to recover legal fees and expenses related to defending a prior lawsuit, for which the defendants had agreed to indemnify Pizza Hut, LLC.
Bankruptcy History
Pizza Hut, LLC has no bankruptcy history that is required to be disclosed in this document.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their license agreement, Pizza Hut, LLC franchisees must meet several conditions. They must have consistently complied with the Master License Agreement, Brand Standards, and other related agreements, and must be in good standing. All financial obligations to Pizza Hut, LLC, its affiliates, landlords, and material third-party suppliers must be current. Franchisees need to show they can maintain possession of the Licensed Location or secure an approved substitute location without business interruption. They must also comply with current training requirements, sign a general release of claims against Pizza Hut, LLC, and complete any required upgrades to meet then-current Brand Standards. A renewal fee, equivalent to the then-current initial license fee (with a maximum 50% increase), must be paid. Additionally, franchisees must provide written notice of their desire to renew at least six months before the current term expires, and no territorial Pizza Hut franchisees must have objected to the renewal. Upon successful renewal, the parties will enter into a new Schedule to the Master License Agreement.
Training & Support Program
Franchisor Assistance
Pizza Hut, LLC provides assistance to licensees in several key areas. Before opening, Pizza Hut, LLC offers operational training for two designated "Pizza Hut Champions" from each Licensed Location, either virtually or in-person at the Pizza Hut Express Training Center in Plano, Texas. This training is provided at no cost to the licensee for the training itself, though licensees are responsible for their trainees' travel and living expenses. The training covers Licensed Concept operations and product preparation, and Pizza Hut Champions must complete pre-requisite e-learning curriculums. Pizza Hut, LLC also loans training materials and digital access to its Manual (Express Library), and provides lists of approved suppliers and product specifications. For site selection, Pizza Hut, LLC reviews and approves proposed sites, considering various factors including existing Pizza Hut franchisee territories. Licensees must hire registered architects and engineers for construction documents that comply with Brand Standards, which are then submitted for Pizza Hut, LLC's approval. Pizza Hut, LLC may also provide prototype specifications and equipment cut sheets. After opening, Pizza Hut, LLC continues to provide updates on new products and methods, offers on-site retraining at the licensee's cost, and provides periodic assistance and consultation as reasonably requested. Pizza Hut, LLC may also provide channel-specific marketing ideas and may require licensees to conduct online or digital advertising.
Initial Training Hours
30
Training Location
Pizza Hut Express Training Center in Plano, Texas, or Virtual Session
Ongoing Support
Pizza Hut, LLC provides ongoing support to its licensees during operation by continuing to offer updated training elements and Manuals through its Express Library. Pizza Hut, LLC may periodically obtain and authorize the use of additional trademarks, service marks, patent rights, and copyrights. The franchisor develops new products and methods, providing information about these developments to licensees. On-site retraining is available at the licensee's request and cost. Pizza Hut, LLC also offers periodic assistance and consultation on proper Licensed Concept operation, for which fees may be established.
Franchise Requirements
Ideal Candidate Profile
Pizza Hut LLC primarily seeks existing businesses operating in non-traditional channels, such as airports, universities, motor fuel, or other retail outlets, that are looking to integrate a Pizza Hut concept into their current operations. Ideal candidates should possess a strong business and financial background, demonstrate sound business experience, and have robust control and accounting systems. While personal supervision is recommended, it is not strictly required, but the licensee must designate two Pizza Hut Champions from their management for each location to ensure quality operations and employee training. The franchisor also values candidates with good managerial experience, strong moral character, and a solid credit rating, particularly for transferees.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
non-exclusive
Territory Size Requirements
Pizza Hut LLC does not grant its non-traditional licensees an exclusive territory. Instead, licensees receive a limited right to operate a specified Licensed Concept at a single, specific Licensed Location, as detailed in a Schedule to the Master License Agreement. Pizza Hut LLC and its affiliates retain the right to develop and operate, or license others to operate, any other business concepts, including those using Pizza Hut marks or selling similar products, at any location, even near the licensee's location. Licensees also cannot relocate their Licensed Location. If a Licensed Location is within the territory of an existing Pizza Hut franchisee with territorial rights, a Franchise Location Addendum is required, which outlines certain limitations on advertising for that specific location.
Staffing Notes
Pizza Hut, LLC requires licensees to designate at least two individuals as "Pizza Hut Champions" for each Licensed Location. These Champions are typically unit management personnel responsible for the ongoing training of unit-level employees and ensuring operational quality according to the agreement and training materials. They must successfully complete Pizza Hut, LLC's training program and maintain certification for five years. Additionally, at all times when the Licensed Location is preparing or selling Licensed Products, there must be at least one manager on duty with a current Food Protection Manager Certification, and two persons on-site certified in operating the Licensed Concept fundamentals. Licensees are also responsible for ensuring employees maintain confidentiality of Pizza Hut information and sign confidentiality agreements.