Routes to Ownership

Open a New Store

New Store Opening

Advantages

  • More flexibility on location and city
  • Control over the lease
  • All new equipment and décor
  • Lower maintenance costs
  • You pick and train your own team
New Store Next Steps

Buy Existing Store

Buy Existing Store

Advantages

  • Known sales and expenses
  • Established customer base
  • Faster timeframe
  • Easier financing
  • Experienced crew
Stores for Sale
Randy
I am proud to say that my wife and I have been Straw Hat Pizza franchisees since 1985. During that time we've seen our business thrive and grow to become one of the most sucessful units in the restaurant chain. The marketing and support that we receive from the corporate office is a great benefit and well worth the monthly royalties.
—Randy Wise, Santa Maria, CA

Qualifications

To become a Straw Hat Pizza Franchisee, we are looking for an entrepreneur who is not afraid to take a risk in the hopes of making profits. We are looking for motivated individuals or partnerships who will strengthen the Straw Hat Pizza brand. You do not need to have restaurant experience to be successful. It will depend more on the following skills:

  • Ability to design and implement a business plan
  • Belief in the Straw Hat Pizza products and systems
  • Outgoing and good with customers and employees
  • Not afraid to get out in the community to market your location(s) in person
  • Time to be involved in your business. The restaurant business is not for absentee owners.
Net Worth Required: $300,000
Liquid Capital: $100,000

Startup Costs

ExpenseEstimated Amount or Estimated Low-High RangeMethod of PaymentWhen DueTo Whom Paid
TOTAL$447,000-$844,000 
Initial Franchise Fee$30,000Lump SumWhen applicable contract signedStraw Hat Restaurants, Inc.
Initial Leased Real Estate Costs$6,000-10,000As incurredAt lease signing, monthly thereafterLandlord
Leasehold Improvements and Construction$250,000-$511,000As arrangedBefore openingContractors, Architect
Utility Deposits$2,000-$4,000As incurredBefore openingUtility Company
Equipment and Fixtures$100,000-$175,000As incurredBefore openingVendors
Signs, Menu Boards, and Décor$2,000-8,000As arrangedBefore openingVendors
Computer System$10,000-$25,000As arrangedBefore openingVendors
Initial Inventory$7,000-$10,000As incurredBefore openingVendors
Licenses and Permits$3,000-$5,000As incurredBefore openingPublic Agencies
Insurance$6,000-$8,000InstallmentAs arrangedInsurance Company
Travel and Room during training$1,500-$3,000As incurredBefore openingHotel and third parties
Opening Marketing$0-5,000As incurredBefore openingVendors
Additional Funds (Working Capital)$40,000-$60,000As incurredEmployeesVendors

Item 19 Financial Performance Representations

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Straw Hat Restaurants, Inc. 18 Crow Canyon Court, Suite 130, San Ramon, California 94583, telephone number (925) 837-3400, the Federal Trade Commission, and the appropriate state regulatory agencies.

Ways to Finance Your Restaurant

  1. Self-Funding
    • Cash – A potential option if you have the financial resources available.
    • 401k Rollover – If you have significant amount in your 401k, there are ways to set up a business and rollover the 401k to fund it. This type of investment can’t be passive so you would need to be an active participant in the business.
  2. Partners – Writing a great business plan and looking for a partner is another way to finance your Straw Hat Pizza restaurant. This would be the responsibility of the buyer to find a partner.
  3. Seller Financing – If you are buying an existing Straw Hat Pizza location from the current owner, they may be able to offer some financing. This also might work if you find an existing location selling by an independent pizzeria or other chain, then convert it over to a Straw Hat Pizza.
  4. Vendor Financing – This is not for the entire business, but some items purchased during the building of your store may have financing available from the vendor. It can help manage your startup costs.
  5. SBA Loans – You will need an excellent credit score as well as good personal credit to qualify for an SBA loan or traditional loan from a bank. This will depend on the individual lender and business factors as provided by your business plan. We do not partner with any specific company or bank. Start with your current bank and find out what their criteria and collateral requirements are to fund a new business.

Location Requirements

  • Ideal: 2800-3200 Sq. Ft.
  • Strip shopping centers with solid anchor
  • Easy accessibility
  • Ample parking
  • Excellent visibility of signage
  • Should be on a main street - NOT at the edge of town
  • Space should not be too narrow or difficult to lay out
  • Adequate Utilities (Gas, Electric) to support operations
  • Zoned for Restaurant Use
  • Ability to install oven hood

Key Area Demographics

  • Large household size in area
  • High percentage of children and young adults
Store Layout

Frequently Asked Questions (FAQs)

Does this franchisor just pick any potential franchisee if they have the money or are they concerned about picking a quality franchisee and saying no when they need to for the sake of the other franchisees?

The family pizza business is very different, unlike a McDonald’s or most restaurants where people only go in for a quick meal. Straw Hat Pizza is a community centric restaurant with strong support from local schools, families, churches, and sports teams. We will not approve a franchisee unless they are good operators, not only from the point can they make money, but more important, are they connected in the community?

What type of location is best for a Straw Hat Pizza? I have one in mind, will it be ok?

Our restaurants range in size from 1000-6000 square feet. We have found that 3000-3200 is the best size to maximize sales while keeping your rent at a reasonable level. The location should be in a center with a good anchor store (supermarket or other business with heavy traffic) and plenty of easy parking for guests.
Pizza

How does the franchisor support the franchisee?

Multiple ways, from the time a franchisee signs the franchise agreement, we take a turnkey approach:

  1. Having our real estate team work with the franchisee to find the location
  2. Operations team works to design the layout of the restaurant
  3. Construction team will do the entire build out if required
  4. Assist with locating either new or used equipment
  5. Intensive 3 week/8 hours a day/6 days a week training program
  6. Prior to opening we send an operations person to your location to help open, train your staff and be a support person for the opening week.
  7. After opening you will see a field marketing or operations person frequently, plus you can make an appointment for someone to come in and assist you with any issues.

Does a new franchisee get any mentoring from a current franchisee?

Yes: We provide a franchisee with a link to an existing franchisee so they can share ideas and just ask questions. Plus, at the annual convention, the franchisees get together and share ideas.
Chopping Veggies

Is your food cost higher because of the fresh ingredients?

We do not feel there is a premium on the cost of fresh products. We do use higher grade of items in a number of specified pizza toppings. For example, the olives that we use are a California grade A when a lesser grade would be acceptable. Our pizza sauce is packed each September from fresh tomatoes unlike a number of chains that use canned concentrated tomatoes. The cost is only marginally higher but the product in our opinion is worth the cost.

Does the franchisor realize that the franchisee deals with customers on the front lines and that they have more of a sense of how to improve overall restaurant operations?

Success in any franchise is following the proven system of operations. If you want to do your own thing, then a franchise might not be the best business model for you. However, we do always listen, and when it makes sense, use your feedback to the benefit of the system.
Balloon

Does the franchisee seem happy overall? Do they enjoy going to work every day?

Yes: In 2010 we scored an 82.28% FSI (Franchise Satisfaction Index) vs. the industry average of 64.63%. This placed us at the top 5% of all national franchises. Working at a Straw Hat Pizza is fun. You are not slinging burgers but running a restaurant where families, sports teams, and business people all come to eat great food and relax while socializing or watching the big game on large HDTVs.
Halloween Deal

What products/menu items are unique/different than the competition?

Straw Hats make our dough from scratch each day. We use six different cheeses on every pizza and our guests rave about our famous Hot Hats, salad bar, sandwiches and appetizers. All of our produce is cut fresh in the store.

How is communication between the franchisor and franchisees? Is the franchisor team available for consultation and help on a regular basis?

Every quarter there is a newsletter that goes out to all franchisees. Our field reps are in your store every 3-4 months and available more frequently when requested. This is after you are open for awhile and operating well.

Is the franchisor support team trained in every station of the restaurant? If not, how do they understand issues that come up with the franchisees?

Yes: The field support team has years of knowledge in the restaurant and the pizza business.
Buffalo Wings

Are the POS systems high quality and easy to use? Does the company who supplies POS system offer support for the franchisees?

Yes: The company provides training and installation support, plus ongoing 24/7 support.

Is the franchisor on the preferred list of franchises for SBA loans? If not, why not?

Since Straw Hat has been in business for since 1959, a number of the locations have been approved and opened with SBA loans.

Does the franchisor require the franchisee to purchase equipment from their hand-picked supplier or can the franchisee buy used or lease equipment for tax purposes so it is counted as assets?

Straw Hat has a preferred vendor for equipment purchases but you can choose a different vendor to buy or lease from. All equipment must comply with our specifications. We want new locations to open with new equipment so the new owner doesn’t have to worry about repair costs and they get a full warranty.

How does the franchisor support the stores efforts on social media?

Each location has their own Facebook and Instagram page. These are posted to weekly with the eclub offer and when new promotions come out. It is up to the owner to add to it their own personality and content to drive business. With each promotion we provide Facebook banners the stores can use.
Woman Eating Pizza