Franchise Cost — Jet's Pizza Feasibility

$30K

Franchise fee ($15K military)

$572K–$786K

Total initial investment

450

Units system-wide (+28 in '24)

1.5 mi

Protected territory radius

The one nuance almost every website gets wrong

Jet's charges its royalty and ad fees on "Acquired Inventory" — the franchisee's monthly cost of food, packaging and supplies — not on gross sales. Portals that say "royalty 8–12% of sales" are mis-stating it.

The headline 12% royalty is 12% of purchases. At typical ~30% food cost, that's only ~3.5–4% of revenue — materially lighter than a "12% royalty" sounds. Model it off purchases, and off the $1,200/mo minimum.

Key economics

Metric	Figure	Source
Initial franchise fee	$30,000 ($15,000 with 50% military discount)	FDD Item 5
Total initial investment	$572,500 – $786,000 (leased space; excludes buying real estate)	FDD Item 7
Royalty	12% of Acquired Inventory, $1,200/mo minimum (≈3.5–4% of sales)	FDD Item 6
General ad fund	Up to 10% of Acquired Inventory (shares cap with a currently-$0 tech fee)	FDD Item 6
Regional ad fund	~25¢/box or $0–$1,000/week, region-dependent	FDD Item 6
Term	10 years + one 10-year renewal ($4,000 renewal fee)	FDD Item 17
Protected territory	1.5-mile radius (0.25 mi in NYC/Chicago/1M+ cities)	FDD Item 12
Store size / format	1,200–1,500 sq ft strip center; carryout + delivery	FDD Item 7
Net worth / liquid req.	Not in FDD. Portals estimate ~$500K net worth / ~$125K–$200K liquid	3rd-party (est.)
AUV / average sales	No Item 19 disclosure. ~$895K–$951K figures are unsourced 3rd-party estimates	FDD Item 19

Total initial investment — the itemized build (Item 7)

Line item	Low	High
Initial franchise fee	$15,000	$30,000
Travel & living while training	$9,000	$15,000
Security deposit	$4,000	$10,000
Rent — 3 months	$7,500	$20,000
Blueprints (architect)	$10,000	$15,000
Leasehold improvements (buildout)	$300,000	$400,000
Fixtures & equipment	$175,000	$225,000
POS system	$20,000	$30,000
Computer maintenance	$1,500	$2,000
Miscellaneous opening costs	$3,000	$6,000
Opening inventory	$12,000	$14,000
Insurance	$10,000	$16,000
Working capital — 3 months	$60,000	$60,000
TOTAL	$572,500	$786,000

Biggest drivers: buildout ($300K–$400K) and fixtures/equipment ($175K–$225K). Rent runs ~$30K–$60K/yr. Buying the real estate would add substantially and is excluded here.

Reno beats California on labor

The cost research flags California's $20/hr fast-food minimum wage as a margin-killer — but this store would be in Nevada, not CA. Nevada's minimum wage (~$12/hr) is far lower, so a Reno unit should carry a lighter labor load than a California store. That's a real tailwind for this specific location versus a comparable California build.

System health & growth

Type	YE 2022	YE 2023	YE 2024
Franchised	360	369	394
Company / affiliate	47	53	56
Total	407	422	450
Net units added	+13	+15	+28

Growth is accelerating and franchisee-led (+25 franchised in 2024). ~88% franchised. Anchor markets: Michigan (~137), Ohio (~47), Tennessee (~34), Florida (~33), Illinois (~29), across ~20 states. Transfers are modest and declining, terminations rare — the system looks stable and healthy (a green flag on FDD Items 20/21).

The gap that must be filled: real unit economics

Jet's makes no Item 19 financial performance representation — it discloses zero sales or profit data. The ~$895K–$951K AUV numbers online have no franchisor sourcing. To underwrite honestly, an operator must obtain actual store P&Ls (request the records of a comparable unit from Jet's; they can share them) or build bottoms-up from franchisee calls. This is the single biggest open number.

How the store actually runs

Format: 1,200–1,500 sq ft strip-center store, carryout + delivery, minimal/no dine-in. Detroit-style square deep-dish.
Buildout timeline: ~90–120 days from signed lease to open; converting an existing pizzeria is possible.
Training: Jet's Pizza University — ~318 hours (≈20 classroom + ~298 on-the-job); two trainees free, $1,000 each additional.
Operator's day-to-day (the on-site operating role): hire/train/schedule staff, run dough & prep to spec, manage the make-line and delivery throughput, order & control inventory, hit food-safety/quality, run local marketing, manage labor & COGS, and file monthly royalty/ad reporting. Owner or a designated trained manager must actively run the store.

If it becomes more than one store

Jet's Area Development Agreement (min 3 units): $75,000 for 3 ($37,500 military), or individually $30K / $25K / $20K / $15K-each-after. The development fee generally covers the per-unit franchise fees.

Territory is protected — good for a first-mover

Item 12 grants a 1.5-mile protected radius. It's modest, but it means an operator who does the market-building work as the first Detroit-style operator in Reno is protected from Jet's immediately opening a company store on top of that unit. The exact language should be confirmed in the franchise agreement.