When franchisees are first given a brand’s Franchise Disclosure Document, or FDD, they often don’t know where to start. The document can seem overwhelming considering it’s hundreds of pages long and is made up of multiple subsections and charts. But there’s one part of the FDD that prospective franchisees are sure to review—Item 19.
One of the QSR market’s most competitive Item 19s belongs to
Pita Pit. That’s because the heathy eating brand’s summary of both franchise and corporate sales gives franchisees a realistic idea of whether or not the franchise will meet their goals.
“You can love pitas and be on board with our concept, but at the end of the day if our Item 19 isn’t right, it’s hard for prospective franchisees to even think about investing. Item 19 is the brass tacks of our entire operation,” said Bill Wilfong, Pita Pit’s vice president of franchise growth. “It has to be attractive to future business owners, which is why we’re constantly working to keep sales up and our cost of entry down.”
Pita Pit’s cost to open a new franchise is extremely attractive in the QSR industry. The brand stays as close to a 2-1 ratio as possible when it comes to its Item 19. That means if a franchise is expected to make about $500,000 in sales, the brand aims to get it open for $250,000.
So far, Pita Pit’s approach to its Item 19 has been successful. The document looks attractive to bankers, lenders and the rest of the financing industry. Pita Pit also has a spot on the U.S. Small Business Administration’s approved list of franchises.
The brand’s Item 19 also has a track record of being consistent as average franchise sales numbers have remained around the $500,000 mark. Pita Pit credits that level of consistency and success to being straight forward.
“Between our Item 19 and the rest of our FDD, we give people enough information to figure out what they’ll potentially be able to make out of one store,” Wilfong said. “Pita Pit doesn’t mix corporate sales figures in with franchise numbers to paint a different picture than what’s actually happening. Our goal is to be as honest and realistic as possible.”
When it comes to its Item 19, Pita Pit is focused on giving franchisees the information they need to know in order to feel comfortable investing with the brand. They don’t want a prospect to be surprised by sales figures or costs of doing business when they officially open their doors and start building their brand.
“For future franchisees, the gap between expectation and reality is disappointment. We do our best to eliminate that at Pita Pit by making sure our Item 19 gives prospects the full picture,” said Wilfong.
For more information on franchising opportunities with Pita Pit, click
here.
