Top 200 Franchise by Entrepreneur – Rank no.10 – Pizza Hut Inc. – US
Products & Services: Pizza, pasta, wings
Number of Locations: 14,357
Total Investment: $297K – 2.1M
Began Franchising: 1959
About Pizza Hut Inc.
While college students in Wichita, Kansas, Frank and Dan Carney were approached by a family friend with the idea of opening a pizza parlor. Inspired, the brothers borrowed $600 from their mother, purchased secondhand equipment and rented a small building on a busy intersection in their hometown. With that, the first Pizza Hut opened its doors in 1958. Just a year later, the company incorporated and the first franchise opened in Topeka.
More than 50 years later, Pizza Hut has locations throughout the world serving its specialty pizzas. Pizza Hut is owned by Yum! Brands, parent company of A&W Restaurants, KFC, Long John Silver’s and Taco Bell.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $25,000
Ongoing Royalty Fee: 6%
Term of Franchise Agreement: 20 years
Net Worth: $700,000
Liquid Cash Available: $350,000
|FINANCING TYPE||IN-HOUSE||THIRD PARTY|
Franchise Ranking History
|Type||Wholly owned subsidiary|
(15 June 1958)
|Founder(s)||Dan and Frank Carney|
|Headquarters||7100 Corporate Drive
Plano, TX 75024, U.S.
|Number of locations||11,139 worldwide (as of 2012)|
|Key people||David C. Novak, Chairman
Scott Bergren, President
pizza · pasta · Buffalo Wings
Yum! Brands (1997–present)
Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishesincluding salad, pasta, buffalo wings, breadsticks, garlic bread and desserts
As of 2012, there were more than 6,000 Pizza Hut restaurants in the United States, and more than 5,139 store locations in 94 other countries and territories around the world.
Pizza Hut was founded on June 15, 1958 by brothers Dan and Frank Carney in their hometown of Wichita, Kansas. When a friend suggested opening a pizza parlor—then a rarity—they agreed that the idea could prove successful, and they borrowed $600 from their mother to start a business with partner John Bender. Renting a small building at 503 South Bluff in downtown Wichita and purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first Pizza Hut restaurant; on opening night, they gave pizza away to encourage community interest. A year later, in 1959, Pizza Hut was incorporated in Kansas, and Dick Hassur opened the first franchise unit in Topeka.
Concept and format
Pizza Hut store (with distinctive roof and the older white sign used before 1999) inAthens, Ohio, typical of U.S. Pizza Hut restaurants
Pizza Hut is split into several different restaurant formats; the original family-style dine-in locations; store front delivery and carry-out locations; and hybrid locations that offer carry-out, delivery, and dine-in options. Many full-size Pizza Hut locations offer lunch buffet, with “all-you-can-eat” pizza, salad, bread sticks, and a special pasta. Additionally, Pizza Hut also has a number of other business concepts that are different from the store type; Pizza Hut “Bistro” locations are “Red Roofs” which offer an expanded menu and slightly more upscale options.
“Pizza Hut Express” and “The Hut” locations are fast food restaurants. They offer a limited menu with many products not found at traditional Pizza Huts. These type of stores are often paired in a colocated location with a sibling brand such as WingStreet, KFC or Taco Bell, and are also found on college campuses, food courts, theme parks, and in stores such as Target.
Vintage “Red Roof” locations can be found throughout the United States, and quite a few exist in the UK and Australia, and México. Even so, many such locations offer delivery/carryout service. This building style was common in the late 1960s and early 1970s. The name “Red Roof” is somewhat anachronistic now, since many locations have brown roofs. Dozens of “Red Roofs” have closed or been relocated/rebuilt. Many “Red Roof” branches have beer if not a full bar, music from a jukebox, and sometimes an arcade. In the mid 1980s, the company moved into other successful formats including delivery/carryout and the fast food “Express” model.
The oldest continuously operating Pizza Hut in the world is in Manhattan, Kansas, in a shopping and tavern district known as Aggieville near Kansas State University. The first Pizza Hut restaurant east of the Mississippi was opened in Athens, Ohio (see photo) in 1966 by Lawrence Berberick and Gary Meyers.
In North America, Pizza Hut sells “Stuffed crust ” pizza, with the outermost edge wrapped around a cylinder of mozzarella cheese; “Hand-Tossed”, more like traditional pizzeria crusts; “Thin ‘N Crispy”, a thin, crisp dough which was Pizza Hut’s original style; “Dippin’ Strips pizza”, a pizza cut into small strips that can be dipped into a number of sauces; and “The Edge pizza”, where the toppings nearly reach to the edge of the pizza. There was also formerly a crust that was not as thick as Pizza Hut’s pan pizza, and not as thin as its thin crust. This crust was used on the Full House XL pizza and discontinued in 2007. There are regional differences in the products and bases sold.
Pizza Hut experiments with new products frequently, with less successful ones being discontinued. These include the initially popular two-foot by one-foot square cut pizza Bigfoot, the 16″ Big New Yorker, made with a sweet sauce, the Chicago Dish Pizza and Sicilian pizza, the latter also offered in 2006 as Lasagna Pizza. Other products Pizza Hut has offered are the “P’zone,” which is Pizza Hut’s version of the calzone; the Cheesy Bites pizza, similar to the Stuffed Crust pizza except the crust has been divided into 28 bite-sized pieces that can be pulled apart; and the Insider pizza, where a layer of cheese is in between two layers of dough. Another limited time offer was a Double Deep pizza with double the toppings and 50% more cheese, with the crust wrapped over the top to hold in all the toppings. In 1985 Pizza Hut introduced the Priazzo, a two-crusted Italian pie that resembled a deep-dish pizza. Varieties included Priazzo Milano, a blend of Italian sausage,pepperoni, beef, pork fillings, a hint of bacon, mozzarella and cheddar cheese; Priazzo Florentine, a light blend of five cheeses with ham and a touch of spinach, and Priazzo Roma, stuffed with pepperoni, mushrooms, Italian sausage, pork filling, onions, mozzarella and cheddar cheese. The double-crusted pie was topped with a layer of tomato sauce and melted cheese. The Priazzo was introduced by a $15 million advertising campaign, but proved too labor-intensive and was removed from the menu several years later.
A new, upscale concept was unveiled in 2004, called Pizza Hut Italian Bistro. Unveiled at fifty locations nationwide, the Bistro is similar to a traditional Pizza Hut, except that new, Italian themed dishes are offered, such as penne pasta, chicken pomodoro, toasted sandwiches and other foods. Instead of black, white, and red, Bistro locations feature a burgundy and tan motif. Pizza Hut Bistros still serve the chain’s traditional pizzas and sides as well. In some cases, Pizza Hut has replaced a “Red Roof” location with the new concept.
On May 9, 2008, Pizza Hut created and sold in Seattle, Denver, and Dallas, “The Natural”, featuring organic ingredients. This was discontinued on October 27, 2009 in the Dallas market. It has since launched a nationwide advertising campaign. Also in 2008, Pizza Hut created their biggest pizza ever, the Panormous Pizza.
Pizza Hut introduced stuffed pan pizza on August 23, 2009. Unlike a regular stuffed crust pizza, cheese is not inside the crust, just pressed into the pan crust. Pizza Hut introduced the Big Italy, a pizza that is almost two feet long on August 22, 2010.
Due to its previous ownership by PepsiCo, Pizza Hut, as with all Yum! Brands concepts, have a lifetime contract to sell Pepsi products. While Pizza Hut was owned by Pepsi, all three of Pizza Hut’s major competitors—Domino’s Pizza, Papa John’s Pizza, and Little Caesars—all sold Coca-Cola products. However, since Pepsi’s divestment of its restaurant business, both Papa John’s (in 2012) and Little Caesars (in 2007) later switched to Pepsi products themselves.
Pizza Hut developed a pizza for use as space food, which was delivered to the International Space Station in 2001. It was vacuum sealed and about 6 inches (15 cm) in diameter to fit in the Station’s oven. It was launched on a Soyuz and successfully eaten by Yuri Usachov in orbit.
In 2012, Pizza Hut released its own brand of perfume in limited quantities in Canada.
In the Summer of 2013, Pizza hut added a range of flatbread pizzas to its menu. These Firebaked-Style flatbreads are available across the United States.
Pizza Hut’s very first ad was “Putt Putt to the Pizza Hut”. It starts with a man apparently ordering take-out and driving his 1965 Mustang JR to Pizza Hut, while some of the townspeople start chasing him. He picks up his pizza and goes to his house, when all of the people who were chasing him start eating all the pizza except the man who ordered it. Frustrated, he calls Pizza Hut again.
Until early 2007, Pizza Hut’s main advertising slogan was “Gather ’round the good stuff”, and was “Now You’re Eating!” from 2008 to 2009. From 2009 to 2012, the advertising slogan was “Your Favorites. Your Pizza Hut.” The advertising slogan is currently “Make it great,” an updated version of the original “Makin’ it great” slogan that was used from 1987 to 1993. Pizza Hut does not have an official international mascot, but at one time, there were commercials in the United States called ‘The Pizza Head Show.’ These commercials ran from 1993 to 1997 and were based loosely on the Mr. Bill shorts from Saturday Night Live during the late-1970s. The ads featured a slice of pizza with a face made out of toppings called ‘Pizza Head’. In the 1970s, Pizza Hut used the signature red roof with a jolly man named “Pizza Hut Pete”. Pete was on the bags, cups, balloons and hand puppets for the kids. In Australia during the Mid to late 1990s, the advertising mascot was a delivery boy named Dougie, with boyish good looks who, upon delivering pizza to his father, would hear the catchphrase “Here’s a tip: be good to your mother”. Adding to the impact of these advertisements, the role of Dougie was played by famous Australian soap opera and police drama actor Diarmid Heidenreich.
Pizza Hut sponsored the film Back to the Future Part II (1989), and offered a free pair of futuristic sunglasses, known as “Solar Shades”, with the purchase of Pizza Hut pizza. Pizza Hut also engaged in product placement within the film itself, having a futuristic version of their logo with their trademarked red hut printed on the side of a mylar dehydrated pizza wrapper in the McFly family dinner scene, and appear on a storefront in Hill Valley in the year 2015.
The 1990 NES game Teenage Mutant Ninja Turtles II: The Arcade Game, came with a coupon for a free pizza. The game was filled with Pizza Hut advertising (the first ever console video game with product placement) and pizza that would refill the character’s life.
In 1994, Donald Trump and ex-wife Ivana Trump featured in a commercial. The ending of the commercial showed Ivana Trump asking for the last slice, to which Donald replied, “Actually dear, you’re only entitled to half”, a play on the couple’s recent divorce.
In 1995, Ringo Starr appeared in a Pizza Hut commercial which also featured The Monkees. A commercial with Rush Limbaugh dates from the same year, in which he boasts that “nobody is more right than me,” yet he states that for the first time he will do something wrong, which was to participate in Pizza Hut’s then “eating pizza crust first” campaign regarding their stuffed crust pizzas.
In 1999, the game Crazy Taxi for Sega Dreamcast featured Pizza Hut as one of the locations that players were able to drive to and drop off customers. However, in the 2010 re-release of the game for Xbox Live and PlayStation Network, all of the product placement, including the Pizza Hut locations were removed.
January 2003 saw Pizza Hut’s Advert’s Slogan Called “Eat. Laugh. Share.” the Commercials are Created By Head Gear Animation as of January 2007 the New Commercial we called The “4 For All” At The End of the “Excitement” Commercial. Hew Open and Closes the Pizza Hut Box to reveal an Underwater while saying “¿Se puede tener un Pizza Pan” The Subtitles with the words “Can you Have a Pan Pizza” in it Early 2007 saw Pizza Hut move into several more interactive ways of marketing to the consumer. Utilizing mobile phone SMS technology and their MyHut ordering site, they aired several television commercials (commencing just before the Super Bowl) containing hidden words that viewers could type into their phones to receive coupons. Other innovative efforts included their “MySpace Ted” campaign, which took advantage of the popularity of social networking, and the burgeoning user-submission marketing movement via their Vice President of Pizza contest.
Talk show host Jonathan Ross, co-starred in an ad with American model, Caprice Bourret. They were used to advertise the stuffed crust pizza, with Jonathan Ross saying “Stuffed Cwust”, to which is a play on Jonathan’s pronunciation of ‘R’s.
Another UK ad shows British Formula One driver Damon Hill visit a Pizza Hut restaurant and order a pizza, with famous F1 commentator Murray Walker visiting with him, and narrating as though it was a Formula One race. As Hill is about to finish his meal, Walker, in a play on Hill’s 1994 & 1995 seasons where he was runner up in the Formula One World Championship both won by Michael Schumacher, shouts “And Hill finishes second, again!” at which Hill grabs Walker by his shirt and shakes him angrily, Walker proclaiming, in his usual tones, “He’s lost it! He’s out of control!”
Following England’s defeat to Germany on penalties in the semi-finals of Euro 96, Gareth Southgate, Stuart Pearce and Chris Waddle featured in an advert. The advert shows Southgate wearing a paper bag over his head in shame as he was the one, who missed the crucial penalty against Germany. Waddle and Pearce, who both missed penalty kicks in Italia 90 are ridiculing him, emphasising the word ‘miss’ at every opportunity. After Southgate finishes his pizza he takes off his paper bag, heads for the door and bangs his head against the wall. Pearce responds with, “this time he’s hit the post”.
In 1997, former Soviet Union Premier Mikhail Gorbachev starred in a Pizza Hut commercial to raise money for the Perestroyka Archives. In recent years, Pizza Hut has had various celebrity spokespeople, including Jessica Simpson, the Muppets, and Damon Hill and Murray Walker.
On April 1, 2008, Pizza Hut in America sent emails to customers advertising that they now offer pasta items on their menu. The email (and similar advertising on the company’s website) stated “Pasta so good, we changed our name to Pasta Hut!” The name change was a publicity stunt held in conjunction with April Fools’ Day, extending through the month of April, with the company’s Dallas headquarters changing its exterior logo to Pasta Hut. This name change was also used to promote the new Tuscani Pasta line and new Pizza Hut dine-in menu. The first Pasta Hut advertisement has the original Pizza Hut restaurant being imploded, and recreated with a sign saying “Pasta Hut” placed on the building.
Outside the United States
Pizza Hut was launched in Pakistan in 1993. Since that time it has setup its outlets in almost all major cities in Pakistan. Karachi, Lahore, Faisalabad, Rawalpindi and Islamabad are the backbone cities where they manage to attract many customers daily.
In the United Kingdom, Pizza Hut announced it would be changing its name to Pasta Hut in October 2008, six months after the US ‘April Fool’ trial. It was described as a temporary name change to reflect the chain’s new emphasis on healthier foods. On January 19, 2009, the company announced that following an online poll where 81% of voters chose to keep the Pizza Hut name, therefore all stores converted to Pasta Hut would revert to their original name.
In Costa Rica, aside from the Pizza Hut restaurants, there is another brand called “PHD – Pizza Delivered Hot by Pizza Hut.” This brand is only for food courts at malls and for express delivery. This was created to compete on the “fast food” market while restaurants will concentrate in casual food.
In Nicaragua, aside from the Pizza Hut restaurants, there is another brand called “PHD – Pizza Hut Delivery.” This brand is for deliveries. There are various Pizza Hut Delivery stores which are equipped with 10–20 motorcycles per store to fulfill the demand. All of the stores are in Managua.
In Southeast Asian countries, such as Vietnam, Hong Kong, and Macau, aside from Pizza Hut restaurants, there is a subsidiary brand called “PHD – Pizza Hut Delivery by Pizza Hut,” only for food courts at malls and for express delivery. Pizza varieties are changed to suit local tastes; pasta products with similarly Asian tastes are also sold in Indonesia. In Singapore, Pizza Hut have sold a baked rice dish called Curry Zazzle.
- In the early 1990s, as part of PepsiCo’s sponsorship of The NewsHour with Jim Lehrer (and its former moniker, The MacNeil/Lehrer NewsHour), Pizza Hut was included in the acknowledgment alongside Taco Bell and KFC, which PepsiCo owned at the time.
- In 2000, Pizza Hut was a part-time sponsor of Galaxy Motorsports‘ #75 Ford in the then NASCAR Winston Cup Series, driven by Wally Dallenbach Jr.
- Pizza Hut was the shirt sponsor of English football club Fulham F.C. for the 2001–02 season.
- Terry Labonte drove selected events with Pizza Hut as the primary sponsor of his #44 car in 2005.
- Pizza Hut purchased the naming rights to Major League Soccer club FC Dallas‘ stadium, Pizza Hut Park, prior to its opening in 2005. These were allowed to expire in January 2012.
- Pizza Hut is a sponsor of the Newcastle Vipers ice hockey team for the 2007/08 EIHL season in the UK.
Pizza Hut has been a sponsor of the Book It! reading incentive program since it started in 1985. Students who read books according to the goal set by the classroom teacher, in any given month from October through March, are rewarded with a Pizza Hut certificate good for one free, one-topping Personal Pan Pizza; and the classroom whose students read the most books is rewarded with a pizza party sponsored by Pizza Hut. The program has been criticized by some psychologists on the grounds that it may lead to overjustification and reduce children’s intrinsic interest in reading. However, a study of the program found that participation in the program neither increased nor decreased reading motivation. The program’s 25th anniversary was in 2009. The Book It! program in Australia ceased in 2002 when Pizza Hut in Australia was removing its dine-in stores as Australians opt for take away pizza instead of dine-in.
In the UK, Pizza Hut was criticised in 2007 for the high salt content of its meals, some of which were found to contain more than twice the daily recommended amount of salt for an adult. The meats that consumers demand for pizza toppings (pepperoni, sausage, bacon, etc.) are, likewise, salty and fatty meats.
To meet the Food Standards Agency 2010 target for salt levels in foods, between 2008 and 2010 the company removed over 15% of salt across its menu.