Whats the profit margin on chain pizza stores?

[Jeff7]

Cici's pizza: 15" large is $5, regular price.

Extremely low cost of materials + low employee pay?
Or else their factories and kitchens contain nothing but robots.

 

[angminas]

another thread where you have no clue.......
Even if what you say were to be true , the percentage of internet sales doesn`t even come close to if lucky 5% of daily sales.......internet ordering is a fad that quite frankly is not catching on!! You cannot fine tune your operation based on 5% or for that matter 10% of total sales....sorry Charlie...

There are a lot of pizza stores out there that are getting more than half of their orders off the internet now. Are you drunk? 0/10 would not read again

 

[Mai72]

There are a lot of pizza stores out there that are getting more than half of their orders off the internet now. Are you drunk? 0/10 would not read again

I'd think the majority of sales for a pizza shop would be walk-ins.

 

[angminas]

I'd think the majority of sales for a pizza shop would be walk-ins.

For an average chain store, it's something like 10% walk-in, 30% internet, 60% phone. But it can vary a lot.

 

[angminas]

At least in the USA.

 

[JEDIYoda]

It's not standalone you idiot. It works in conjunction with pos. You're seriously trying to argue with me about food operations?

yes, I am..... sorry but the truth be told internet ordering has not taken off as the powers that be thought it would and to make matters worse unless a substantial amount of sales is via the internet say in the 30%+ region it helps little if any to fine tuning an7ything....

 

[MongGrel]

Didn't WOW used to have an ingame thing where you could order Pizza online many years ago.

I forget and haven't played WOW in ages, just seem to remember that.

And never used it.

 

[angminas]

Didn't WOW used to have an ingame thing where you could order Pizza online many years ago.

I forget and haven't played WOW in ages, just seem to remember that.

And never used it.

Yeah, you just typed /pizza and you could order from Pizza Hut somehow. I never used it, don't know if it's still in place.

 

[DrPizza]

Rough prices:
Cheese has been the most volatile ingredient, from 1.97 a year ago, to a high around $2.80 this year per pound of mozzarella. Rough estimate: about 1 pound (or less) of cheese per large papa johns pizza.

Sauce: a case runs around $19. That's enough for about 80 large pizzas. So, about 25 cents for sauce.

Dough - I can't recall the price of a 50 pound bag of flour, but it isn't much. I think it was in the neighborhood of $20. Plus shortening, oil, salt, and yeast, that adds in a few bucks per batch of dough - enough dough for more than 60 large pizzas. (Probably closer to 70.) So, 50 cents for dough per pizza.

Toppings. Don't be fooled by "omg, pepperoni costs so much per pound!" A 5 pound bag of pepperoni makes a shitload of pizzas. It amounts to just a few ounces per large pizza. So, even if you had a total of 8 ounces of toppings, you're only looking at $2.

So, total ingredient cost: $2.50+.50+.25+2 = 5.25 for a large pizza with a lot of toppings. (I think that mushrooms may actually be one of the more expensive toppings per pizza.) A pepperoni pizza might only cost a shop $4 to make. Now, of course, there are a lot of other costs - quality pizza pans aren't cheap, utilities, staffing, etc. You simply can't figure out a profit on each one - it takes a certain volume of pizzas to turn a profit. You have to sell a certain number of pizzas just to break even. Though, when you're selling them for $14 or more each, it doesn't take a hell of a lot of them before you're in the black.

But, let's say you have 5 guys working - that's going to cost at least $10/hour each. So, you're 50 in the hole to start. Plus, the utilities just to have the lights on, doors open, and ovens running. It would be hard for a start-up to compete, if they didn't have the access to the same level of price breaks because of volume.

 

[shortylickens]

my local franchise recently dropped the price on sauces by half, but raised everything else.

They also switched from Coke to Pepsi, which I do not like.

 

[Red Squirrel]

Online ordering is very convenient, I wish more places would do it. In fact it's probably easier on them since they can concentrate on making the food, not picking up the phone. Not sure how it works, if they have a display with all the pending orders, but at least they can just click, read the order and start prepping and just serially go through the queue. What is there is what the customer ordered, so no arguing about missed items or wrong orders etc.

I wish more places would do online ordering.

 

[mnewsham]

I wish more places would do online ordering.

Burger king delivery, not only is it fucking delivery burgers...but you can order online too.

 

[trmiv]

Didn't WOW used to have an ingame thing where you could order Pizza online many years ago.

I forget and haven't played WOW in ages, just seem to remember that.

And never used it.

It was Everquest II that had that.

 

[JulesMaximus]

Rough prices:
Cheese has been the most volatile ingredient, from 1.97 a year ago, to a high around $2.80 this year per pound of mozzarella. Rough estimate: about 1 pound (or less) of cheese per large papa johns pizza.

Sauce: a case runs around $19. That's enough for about 80 large pizzas. So, about 25 cents for sauce.

Dough - I can't recall the price of a 50 pound bag of flour, but it isn't much. I think it was in the neighborhood of $20. Plus shortening, oil, salt, and yeast, that adds in a few bucks per batch of dough - enough dough for more than 60 large pizzas. (Probably closer to 70.) So, 50 cents for dough per pizza.

Toppings. Don't be fooled by "omg, pepperoni costs so much per pound!" A 5 pound bag of pepperoni makes a shitload of pizzas. It amounts to just a few ounces per large pizza. So, even if you had a total of 8 ounces of toppings, you're only looking at $2.

So, total ingredient cost: $2.50+.50+.25+2 = 5.25 for a large pizza with a lot of toppings. (I think that mushrooms may actually be one of the more expensive toppings per pizza.) A pepperoni pizza might only cost a shop $4 to make. Now, of course, there are a lot of other costs - quality pizza pans aren't cheap, utilities, staffing, etc. You simply can't figure out a profit on each one - it takes a certain volume of pizzas to turn a profit. You have to sell a certain number of pizzas just to break even. Though, when you're selling them for $14 or more each, it doesn't take a hell of a lot of them before you're in the black.

But, let's say you have 5 guys working - that's going to cost at least $10/hour each. So, you're 50 in the hole to start. Plus, the utilities just to have the lights on, doors open, and ovens running. It would be hard for a start-up to compete, if they didn't have the access to the same level of price breaks because of volume.

I'd be surprised if they used anywhere near that much cheese on a large pizza. Hell, even with double cheese I'd bet it would be 8-10oz at most.

Oh, and one more thing: papa johns SUCKS!!!

 

[MongGrel]

It was Everquest II that had that.

I stand corrected, ya I believe that was it.

 

[Jeff7]

Online ordering is very convenient, I wish more places would do it. In fact it's probably easier on them since they can concentrate on making the food, not picking up the phone. Not sure how it works, if they have a display with all the pending orders, but at least they can just click, read the order and start prepping and just serially go through the queue. What is there is what the customer ordered, so no arguing about missed items or wrong orders etc.

I wish more places would do online ordering.

I would expect so. The fewer things you need people for at your company, the more you can (typically) cut operating expenses. Vanguard has said that online transactions have significantly reduced their operating expenses. The majority of their transactions are now handled over the Internet. I set up an IRA with them, and have had it for close to 2 years now. I have yet to communicate directly with anyone working at the company.

A division of my own employer tries to drive its web sales for that reason: Someone ordering a simple product online is someone who isn't taking up a salesperson's time. That person can then potentially be on the phone talking to someone else who wants to buy something more complex or profitable.


It's weird that more places don't offer that.
Cici's is an example: They're not a small chain. And in my experience, there's not always someone near the phone to pick it up. So their phone ordering isn't so good, and they're a fairly large organization.

Or maybe they can't afford to get online ordering set up because their 15" pizzas are $5.

 

[mnewsham]

Oh, and one more thing: papa johns SUCKS!!!

depends on the location.

hell it depends who is working that day. Blanket statements just make you look like more of an ass.

 

[Fern]

As a CPA I've worked with chain pizza shops. I also was part-owner of one for a little while.

In any restaurant owners often use several categories of costs:

1. Food costs (the actual costs of ingredients)

2. Labor

3. Other fixed and administrative costs.

4. Some also consider paper/plastic etc. This would be particularly relevant for a pizza place like Domino's that is take out/delivery where each pizza uses a box.

The actual food costs for pizza is around 20% (many owners will cite 17%).

Other than #4 above the non-food costs allocated per pizza are dictated by volume. So, AFAIK, there are no reliable 'rule of thumb' to quote. There will be 'target' numbers, but that is a different matter.

Pizza, pasta and sub places have the lowest food costs of all restaurants I have ever seen. The 28% - 35% range is where most other restaurants seem to fall.

Fern

 

[HeXen]

I hate...hate, freaking hate. I mean I hate Papa Johns. Dominoes and Papa Murphy's on that list as well. To sum it all up, I really hate them.

 

[CPA]

Profit margins for most restaurants are between 3 - 6 percent.

 

[MagnusTheBrewer]

yes, I am..... sorry but the truth be told internet ordering has not taken off as the powers that be thought it would and to make matters worse unless a substantial amount of sales is via the internet say in the 30%+ region it helps little if any to fine tuning an7ything....

Reading comprehension isn't your strong point I see.

 

[KillerBee]

depending on the area and chain - a good manager can make +$100k

 

[Spydermag68]

I use to work for Little Caesars Pizza. The store that were just scraping by made about $5000 a week or $260000 a year. The busy stores raked in about 3 times that. At that time you could get 2 everything pizzas for $10.

 

[JEDI]

I use to work for Little Caesars Pizza. The store that were just scraping by made about $5000 a week or $260000 a year. The busy stores raked in about 3 times that. At that time you could get 2 everything pizzas for $10.

10yrs ago, my local starbucks was grossing $20k a wk/$1M a year. it was considered a starter store.
a cup of coffee (including cup) cost them $0.08.

there was also a little ceasars in the same shopping mall.

your story explains why that Little Caesars is no longer there and why my sbux stock has gone up 9x!

 

[smitbret]

Taking 50% off the price of a pie is easy. Charging two quarters more per pizza pie to get employees healthcare is not.

I wouldn't either.

I would only employee part time.