Should I Buy a Pizza Hut Franchise?

Dear Scott,

My partner is considering buying a Pizza Hut franchise. He knows that most franchisees have had a hard time, but he is going into business with a friend, and both have previous fast food management experience. Also they will be working as managers, so will get a salary as well as profits. He thinks they can make it work. He has had a hard time finding a job since he left his last job (he was not happy there), so he thinks this will be the best option at his age (40). Should he do it?

Linda

Hi Linda,

Personally, I wouldn’t buy a food franchise for all the pizza in Penrith.

However, I’m biased by what I’ve seen over the years, namely, decent hardworking people getting financial food poisoning from the likes of Pie Face, Donut King and Michel’s Patisserie. Many of them invested their life savings into buying an 80-hour a week job, and were left broken and broke.

It could be different for Pizza Hut, though a quick Google served up a 2015 class action that “alleges Pizza Hut parent company Yum Brands breached its duties to its franchisees by denying them the chance to make a profit”.

I don’t know how much profit there is in $6 takeaway pizzas, but I think it’d be hard to make a crust. Maybe suggest he calls up any of the dozens of Pizza Hut franchisees who are currently offering their business for sale, and ask them.

Scott