Buying a pizza business: what to check in the numbers
Short answer
When buying a pizza shop, split sales by channel (dine-in, carryout, own delivery, third-party apps) from the POS, because each channel has a different margin. Third-party delivery commissions can turn a busy shop into a thin one. Check food cost (cheese is often the biggest and most volatile ingredient), labor and driver costs, oven and equipment condition, the lease, and for franchises the royalty, ad fund and any remodel requirements.
Pizza shops can be excellent small businesses: simple menus, strong repeat customers, delivery demand. They can also be busy and barely profitable, depending on who delivers the pizza.
Sales by channel
Illustrative example, not a real shop
Two shops each sell $800,000 a year. Shop A: 60% carryout, 25% own delivery, 15% third-party apps. Shop B: 25% carryout, 15% own delivery, 60% third-party apps. If apps take, say, 25% of each order (an example figure; actual commissions vary by contract), Shop B pays $120,000 in commissions on $480,000 of app sales, versus $30,000 for Shop A on $120,000. That $90,000 gap comes straight out of profit.
Test sales against cheese and flour
Pizza shops have an unusually good independent check: ingredient purchases. A shop's cheese and flour buying moves with pizza volume, and supplier statements are outside the seller's control. Ask for twelve months of statements from each food supplier, then compare.
Illustrative example, not a real shop or recipe yield
Supplier statements show 26,000 pounds of cheese bought in a year. If the shop's recipes use about 0.5 pounds of cheese per large-pizza equivalent (ask the seller for their actual portions and check against the make line), that's about 52,000 pizzas. At an average of $19 per pizza-equivalent including sides, sales should be around 52,000 × $19 = $988,000. If the seller claims $1.2 million, that's a $212,000 difference to explain: maybe a big catering account, more non-pizza items, or sales that don't exist. Ask before the LOI, not after.
What else to check
- Food cost trend, especially cheese and flour; supplier invoices vs sales.
- Labor and driver costs; driver classification and insurance; mileage reimbursements.
- Platform contracts and commission rates; refunds and chargebacks in payout reports.
- Ovens and equipment ages; hood and fire suppression compliance.
- Lease and parking; delivery radius.
- Owner's role (often making dough at 6am).
- For franchises: royalty, ad fund, tech fees, transfer approval, remodel requirements. See franchise resales.
The general restaurant checklist applies too: how to buy a restaurant.
Delivery: drivers, insurance and apps
Own delivery means drivers, and drivers mean three questions. How are they classified and paid (wage plus tips, per-delivery fee, mileage)? How is mileage reimbursed, and is it enough that drivers' pay doesn't fall below minimum wage once vehicle costs are counted? Does the shop carry hired and non-owned auto coverage for drivers using their own cars? Get the driver pay records and the insurance policy. For third-party apps, get each platform's payout reports and the contract, because commissions, marketing fees and refund deductions all come out before the money reaches the bank.
Franchise units: read the FDD before the P&L
If the shop is a franchise, the franchisor's Franchise Disclosure Document (required under the FTC Franchise Rule, 16 CFR Part 436) and the franchise agreement set the royalty, ad fund, technology fees, territory and transfer terms. Ask the franchisor directly about the transfer process, any transfer fee, training you must complete, and whether a remodel or equipment upgrade will be required at transfer. Those costs come out of your cash, not the seller's. See buying a franchise resale.
What moves the value of a pizza shop
| Factor | Supports a higher value | Pulls it lower |
|---|---|---|
| Channel mix | Strong carryout and own delivery | Most sales through high-commission apps |
| Records | POS, supplier purchases and returns agree | Cash claims, gaps |
| Owner role | Manager runs shifts, dough made by staff | Owner works every open and close |
| Equipment | Ovens and walk-in serviced, recent | Old ovens near replacement |
| Location and lease | Long lease, parking, delivery radius protected | Short lease, new competitor nearby |
We don't value deals or publish multiples we can't verify; these are the factors appraisers and lenders weigh.
What an SBA lender will check
Expect tax returns matched to IRS transcripts, a close look at the lease term against the loan, and questions about the owner's role. Pizza shops often run on an owner who makes dough at dawn and closes at night; the lender will want debt coverage to work after paying a manager. For franchises, lenders check whether the brand is eligible and review the franchise agreement.
Worked example: own delivery vs app delivery on one order
Illustrative example, not real commission rates or wages
A $30 order. Food and packaging cost $9 either way. Through an app at a 25% commission, the shop pays $7.50 and keeps $30 − $9 − $7.50 = $13.50 before kitchen labor. Through its own driver, the shop pays a driver wage share of about $4 for the run plus $2 of mileage reimbursement, and the card fee is about $0.90, keeping $30 − $9 − $4 − $2 − $0.90 = $14.10. Close. But if the shop's own drivers make 2 deliveries an hour on a slow night, the wage share per delivery doubles and own delivery loses. Busy nights favor own drivers; slow ones favor apps. Ask for delivery counts by hour before you decide anything about the channel mix.
Red flags specific to pizza shops
- Cheese purchases that don't support the sales claim. See the cheese test above.
- App sales counted at the menu price rather than what the platform paid out.
- Drivers with no proof of insurance or paid in cash.
- An oven near the end of its life. Ask for service records and get a technician's view; deck and conveyor ovens are expensive to replace.
- A lease with no protection on the use. A neighboring pizza tenant could move in.
- Franchise transfer conditions nobody has asked the franchisor about yet.
Documents to request
- POS reports by channel, day and hour for 24 months.
- Card processor, delivery platform payout reports and bank statements; tax and sales tax returns.
- Food supplier statements for 12 months.
- Payroll by role; driver pay and mileage records; insurance policies.
- Equipment list with service records; hood and fire suppression inspections.
- Lease and any franchise agreement and FDD.
The first 90 days after you buy
Keep the recipes, the dough schedule and the staff. Pizza customers are loyal to taste, and changing suppliers to save money on cheese is the classic early mistake. Learn the ordering and prep routines with the seller, check portioning on the make line, and track food cost weekly against sales. Review app contracts and delivery hours once you can see which nights each channel actually pays.
Questions to ask the seller
- What were sales by channel each month for two years?
- Can I see every food supplier's statements for the last twelve months?
- How are drivers paid and insured, and has anyone ever filed a wage or accident claim?
- What do the delivery apps charge you in total, including marketing fees?
- How old are the ovens, mixer and walk-in, and when were they last serviced?
- How many hours a week do you work, and doing what?
One last test before closing: order from the shop yourself several times, on different nights and channels, and time each order from click to door. It is the customer's view of the business you are buying.
Frequently asked questions
Why does the delivery channel matter so much?
Third-party platforms take commissions from each order, and own-delivery requires drivers, insurance and vehicle reimbursements. The same sales figure can produce very different profit depending on the mix.
How do I verify a pizza shop's sales?
POS reports by channel and day, card processor statements, delivery platform payout reports, sales tax returns and bank deposits, plus food supplier purchases.
What equipment matters most?
Ovens, mixers, walk-in coolers and make lines. Ask for ages and service records; replacements are expensive.
Franchise or independent?
Franchise units have brand and systems but pay royalties and must follow standards; independents keep more margin but rely on local reputation. See buying a fast food restaurant and franchise resales.
Are pizza delivery drivers employees or contractors?
It depends on how they're managed, and misclassification is a common liability in delivery businesses. Check how drivers are paid, whether mileage is reimbursed and how, and whether the shop's insurance covers drivers using their own cars. Review against IRS guidance and your state's rules.
What drives the value of a pizza shop?
Channel mix (carryout and own delivery generally keep more margin than third-party apps), steady repeat customers, controlled food and labor costs, the lease, equipment condition and how much the owner works. We don't publish multiples we can't verify; for an SBA loan the lender orders an independent valuation.
Sources
- IRS: About Form 1099-K (payment platforms)
- FTC Franchise Rule, 16 CFR Part 436
- FDA Food Code 2022
- IRS: Independent contractor or employee?
- FTC Franchise Rule, 16 CFR Part 436 (franchise disclosure)
Related guides
General information, not legal, tax, financial or investment advice. Rules and lender practices change; check the linked sources and talk to your attorney, CPA and lender about your deal. Examples with named numbers are illustrations, not real businesses. OKtoBuy's Deal Check does not value businesses or give price opinions.