Little Caesars Franchisee Closes Units, Blames $5 Price
Multi-unit franchise owner Alan Knox has shut down all 21 of his Kansas City Little Caesars units, leaving the Missouri city completely without the pizza chain's presence. He blames the franchisor's $5 campaign for his downfall.
To Knox, the beginning of the end was that $5 Hot-N-Ready deal Little Caesars advertised nationwide. He couldn’t make money at that price, not in Kansas City. But when Knox charged $5.99, Detroit pressured him to go back to $5.
Others have said Detroit’s $5 promotion posed problems for Little Caesars franchise holders, particularly as food, wages and other costs have risen.
“The $5 price point … has become an unprofitable business model for many and is fast becoming unprofitable for many more,” Todd Messer, executive director of the Independent Organization of Little Caesar Franchisees, wrote in a recent issue of the Toga Times quarterly magazine for members. —Mark Davis, The Kansas City Star