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Report on Comparisons Between Pizza Hut & Domino's Pizza.

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Introduction

Report on Comparisons Between Pizza Hut & Domino's Pizza 15/01/02 To Lending Manager of HSBC Bank in Ealing From Tasneem Husain Terms of Reference To investigate the comparisons between two franchises which I have narrowed it down to. Once I have done this, I can then decide to open up the best one out of the two. The main reason of why I want to be a franchisee is because, being a franchisee would be safer than being a sole trader or in a partnership. I'm not saying it'll be the easier option, but as long as it pays as well as I put in, then there won't be any disappointments. There is one disadvantage of becoming a sole trader, which is unlimited liability. This means that I'd have to pay for the losses made by the business, even if it meant selling my personal possessions, e.g. my house or my car. Even though this is the only big disadvantage of being a sole trader, it is too big of a risk that I'm willing to take. I'm also not exactly sure what products or services I'd be able to offer customers. ...read more.

Middle

Domino's Pizza From the research that I have done, I found out that if I decided to open up a Domino's Pizza franchise, it would cost me �160,000 in total. When I say in total I mean that there are many things that make it to this amount. The first thing I would have to pay for is the construction of the actual store which would usually be about 900sq ft. I would not have to plan any designs because the store is project managed by Domino's Property Department. They do this until the store is completed from beginning to end. The construction cost alone is �68,000. The second thing that would cost me is the equipment. The equipment can be leased but that is a whole different situation. By equipment I mean like ovens, refrigerators, stainless steel tables etc. I will also have to pay for things like computer systems, telephones systems, security systems and the air conditioning. All of these things would cost about �54,000 altogether. The third thing that would cost me is the planning and architecture side of things. As I said before I only have to pay for all the work being done, I don't actually design the building. ...read more.

Conclusion

There are many reasons for why I have chosen this franchise. The investment costs are one of the main reasons. Domino's Pizza has an investment cost of �160,000. Pizza Hut has an investment cost between �150,000 and �185,000. Even though, Pizza Hut says that I'd have to negotiate with them for the final amount, I still think that after the final amount is agreed, there will still be costs that I will have to pay for. Also the investment cost for Domino's Pizza is including every thing that I'd have to pay for, Pizza Hut's isn't. Another reason is that Domino's Pizza says that the pay back time is five years. Pizza Hut says that it all depends on the way the manager runs the restaurant, but I think that they're just avoiding the question. One other main reason is because there are fewer hours with Domino's Pizza. I don't want long hours everyday. Therefore, Domino's Pizza seems like the best option. I already have about �10,000 in the bank; therefore if you would let me borrow �150,000 from the bank, I would be very grateful. Also you get it back with interest in less than five years because it isn't �160,000. ...read more.

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