PIZZA HUT

Submitted by :-Prabhat Kumar

PGDM-Exe

Fundamentals of Franchising WHO GETS WHAT

The Franchisee:

• Established trademark or service mark • Shorter learning curve than an entrepreneur

• Economies of scale.a large business network lets you compete with big chains at low cost

• Joint advertising and promotion with franchiser

• Transfer of management expertise

• Training and support

The Franchiser:• Greater access to capital thanks to franchisee fees• Possibility of rapid expansion with low operating costs• Access to varied skills and feedback

Fee Structure:Licence fee is an upfront fee that you pay to the franchisor for

using the brand. For an established brand, it forms a major chunk of the initial investment (upto 65% in some cases). It also depends on the area you are going to operate from

Royalty is an ongoing fee you have to pay the franchiser for using the brand. It is mostly a percentage of your gross business (not net profit) and amounts to a sizeable chunk. Some may charge a fixed sum also

Why Franchising……

Given that the survival rate of a franchised business is more than twice the survival rate of independent small businesses, it makes sense to start your own business riding on the back of an established and proven model.

The franchise model is a great way for a franchiser to expand operations rapidly, with relatively low overheads and expenses, coupled with the local expertise that franchisees provide.

“The ship works primarily in three formats: where both players are small, when the franchiser is big and the franchisee is small, and when the franchisee is big and franchiser is small.”

For the franchisee, this business model makes sense:

Since he will have to spend less on infrastructure and processes than he would have in an independent business.

The franchiser helps the franchisee establish and get over teething troubles and franchisees are free to grow their operation.

Expanding business and revenues is what matters the most.

A franchisee is in an ideal position to make profits, since the business he is entering has already been proven to be successful.

PIZZA HUT

Pizza MarketMarket Size - 2300 crCAGR- 25%No one in India-Dominos- 67% Mkt ShareNo two- Pizza HutNon-Veg Offering Contribute-30%http://timesofindia.indiatimes.com/india/

Vegetarian-has-biggest-slice-of-pizza-pie/articleshow/25967622.cms

BacKgroundPizza Hut entered India in 1996, and opened its firstrestaurant in

Bangalore. Since then it has captured a dominant and significant share of the pizza market and has maintained an impressive growth rate of over 40 per cent per annum.

Pizza Hut now has 95 outlets across 24 cities in India; and employed nearly 4,000 people by end of 2004. Yum! has invested about US$ 25 million in India so far; this is over and above investments made by franchisees.

Yum! Brands Inc is the owner of the Pizza Hut chain worldwide. A Fortune 300 company, Yum! Brands owns Kentucky Fried Chicken, Pizza Hut, Taco Bell, A&W and Long John Silver’s restaurants worldwide.

Yum! generated more than US$ 25.9 billion in worldwide sales in the year 2003, and has more than 33,000 restaurants in over 100 countries.

2014: 320 outlets of Pizza Hut in 60 cities of India. 27% market share.

Pizza Hut FranchiseProsRanking - Ranked No. 1 in its category in 2008.Multi-Branding - Yum! Brands is the worldwide

leader in Multi-branding.ConsOperations - Can take up to 46 weeks to open the

first store, but it's probably worth the wait.Pizza Hut Franchise InformationBusiness Established: 1957 

Franchising Since: 1959 

Franchise In India How to Start Pizza Hut Franchise in India:

Investments, Cost & ROI, application processEighteen years have passed since the first

opening of Pizza Hut franchise in India,Pizza Hut is a property of the Yum! brand, and

remains to be one of the top ten food franchises in India.

Starting a Pizza Hut franchise in India can be an excellent business plan because of the international reputation of all Yum! brands, an ever increasing popularity among consumers.

Why starting a Pizza Hut franchise in India is a good business idea?

The precise answer is, due to the enormous growth in the last few years that has led Yum! corporation to start the separate Yum! Restaurants India back in 2011.

As of now, it runs more than 220 KFC franchise in India, alongside 320  Pizza Huts and more than a hundred Pizza Hut Home Service Units.

The third Yum! brand, Taco Bell, is also entering the Indian market (yes, starting a Taco Bell franchise in India is yet another good option). Pizza Hut has also been ranked as the #1 most trusted food franchise in India by The Economic Times.

It has a good future for sure as the Indian QSR industry is expanding fast.

India is one of the fastest growing markets in the world.

The organised segment is valued at about 8,000 crore, growing 20%-25% a year. "Global chains are looking for more control of India operations and want more share of the value creation of their brands,”

Investments: Cost of starting Pizza Hut franchise in India and ROI

Indeed, the cost of starting a Pizza Hut franchise in India is quite high.

In the United States, minimum investment required for opening a Pizza Hut franchise would be something around $350000 to $400000.

Translated into Indian currency at the prevailing rates, that means nearly 2 crore rupees.

The initial franchise fee is 25 thousand USD, or nearly 14 lakh rupees as per the present conversion rates. Additionally, you will have to pay an annual 6.5% royalty on your profit.

Source- franchising.com

For those who qualified as Pizza Hut franchisees, the corporation will provide them multiple training programs that will teach them how to manage effectively this food chain business. With leadership and management courses, franchisees will be more equipped with knowledge which can maximize their profit.

The franchisor does not offer, directly or indirectly, any arrangements for financing the initial investment or the continuing operation of the franchise. The franchisor does not guarantee the franchisee’s note, lease or obligation.

 

Training and Assistance: The franchisor will provide Basic Operational Training to the franchisee (if the licensee is an individual) and your managersas needed at the Pizza Hut Express Training Center in Piano, Texas. In addition PHI will provide training for two "Pizza Hut Champions" from each Licensed Location before opening. A Pizza Hut Champion is a member of management who will be working at the Licensed Location on its work schedule. The franchisor also will provide periodic assistance and consultation in the proper operation of the concept, as reasonably requested.

 

Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees or licensees, from restaurants that PHI owns, or from other channels of distribution or competitive brands that the franchisor or affiliates control.

  Term of Agreement and Renewal: The term of the franchise is five years for each

Licensed Location. PHI may agree to a longer term, but in no event will the Term end more than 10 years from the Starting Date. There is currently no option to renew.

  Obligations and Restrictions: The franchisee must designate two individuals as “Pizza

Hut Champions” for each Licensed Location. A Pizza Hut Champion can be designated to cover more than one Licensed Location. The Pizza Hut Champion will be responsible for ongoing training of unit level employees, ensuring the quality of operations at the Licensed Location, and visiting the Licensed Location at least biweekly.

The Pizza Hut Champion most successfully complete PHI's training and must be certified by PHI as capable of functioning as a Pizza Hut Champion. All employees exposed to the Pizza Hut Information must sign a written agreement to maintain the confidentiality of PHI's trade secrets and proprietary information.

The franchisee must sell only those products that PHI has approved for the Licensed Location in the area of the Licensed Location associated with the Licensed Concept and PHI's Marks.

 

Pizza Hut's Mission Statement

We take pride in making a perfect pizza and providing courteous and helpful service on time all the time. Every customer says, "I'll be back!"

P. E. A. R. L. S

a) PASSION for excellence in Doing everythingb) EXECUTE with positive energy and urgency.c) ACCOUNTABLE for growth in customer satisfaction and

profitability. d) RECOGNIZE the achievement of others and have fun doing

it. e) LISTEN and more importantly, respond to the voice of the

customer.

PRODUCTSPizza Hut sells "Stuffed Crust" pizza,

with the outermost edge wrapped around a coil of mozzarella cheese; "Hand-Tossed," more like traditional pizzeria crusts.

Depending on the individual restaurant size, Pizza Huts also may offer pasta dinners such as spaghetti and Cavatini – a mixture of Cavatelli (shells), Rotini (spirals), and Rotelle (wheels).

MARKETING STRATEGYPizza Hut’s Says:We want to satisfy

our customerby offering them“The Best”

Be C.H.A.M.P.S(Cleanliness, Hospitality, Accuracy, Maintenance,Product quality and Speed)

You will Find 3F’s at Pizza Hut(Fun, Friendly and Familiarity)

MARKETING STRATEGY

SERVICE ON TIME

MAIN COMPETITORSDOMINOS

PAPA JOHNS

PIZZA VILLA

LITTLE CAESAR’S

MARKET SHARE

Pizza Hut“Think Global act Local”First to introduce localized menu

MARKET SHARE IN USA

THANK YOU