How to Finance a Lost Pizza Co. Franchise: Costs and SBA Notes
By Chris Cornella
A Lost Pizza Co. franchise loan usually funds a sit-down pizza restaurant with beer service, patio seating and a takeout and delivery business, along with the build-out and kitchen equipment that make up most of the budget. The franchisor’s own franchise page puts the initial investment at $600,000 to $1,200,000, so most owners pair personal cash with an SBA or conventional loan.
This article covers the brand’s background, the cost figures the franchisor publishes, its site and owner requirements, the SBA Franchise Directory notes for this brand and how lenders look at a full-service pizza restaurant.
US Professional Funding is not affiliated with, sponsored by or endorsed by Lost Pizza Co.; the name is used only to describe the business. Figures come from the franchisor’s franchise information page, which summarizes its Franchise Disclosure Document (FDD), and can change. Confirm every number in the current FDD. Loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Lost Pizza Co. Franchise Loan at a Glance
- Concept: a casual, deliberately quirky pizza restaurant serving pizza, wings and beer, with dine-in, takeout and delivery.
- Initial franchise fee: $25,000, due when the franchise agreement is signed, according to the franchisor.
- Royalty: 5% of sales.
- Marketing: up to 2% of sales may apply.
- Total investment: $600,000 to $1,200,000, per the franchisor’s franchise page.
- Franchise term: 10 years, with renewal options.
- Net worth and liquidity: not published; the franchisor asks that candidates be able to secure financing.
- Footprint: locations in Mississippi, Tennessee, Arkansas, Alabama, Texas and Florida.
- SBA Franchise Directory: listed under code S2858, with notes on a real estate purchase option and lien position.
What Is Lost Pizza Co.?
Lost Pizza Co. was founded in 2007 in Indianola, Mississippi, by college roommates Brooks Roberts and Preston Lott. The restaurant started out as Lost “Dog” Pizza Co. before taking its current name. The first franchised location opened in Tupelo, Mississippi, in 2011.
The brand has grown across the Mid-South and Gulf South, with restaurants in six states. It positions itself as a fun, funky neighborhood pizza place: dining rooms, beer, patios and outdoor seating are part of the model, with takeout and delivery adding a second sales channel.
Unit format. The franchisor looks for 3,000 to 4,000 square feet with about 40 parking spaces, preferably an end-cap or in-line space in a busy retail area or high-traffic shopping center, with a patio and covered outdoor seating.
Why lenders view it the way they do. Lenders see a regional system with more than a decade of franchising history, a defined site profile and a menu with broad appeal. They also see a full-service build-out with a dining room and patio, which is costlier than a carryout pizza shop and carries limited resale value as collateral.
Lost Pizza Co. Franchise Costs
Initial franchise fee. The franchisor lists a $25,000 franchise fee, paid at signing. Ask whether the current FDD offers different terms for additional restaurants.
Real estate and build-out. Most locations lease space in a shopping center or retail strip. Converting raw or second-generation space into a dining room, kitchen and patio is typically the largest cost and the main reason the investment range is wide. Our article on financing a restaurant build-out explains how lenders fund this stage.
Equipment, furniture and fixtures. A Lost Pizza Co. kitchen and dining room generally means pizza ovens, dough mixers, prep tables, walk-in and reach-in refrigeration, fryers for wings, a beer and beverage system, point-of-sale and online ordering technology, seating, signage and decor.
Opening costs and working capital. Opening inventory, staff training, grand opening marketing, insurance, deposits and operating reserves for the first months complete the budget.
Total investment. The franchisor states a total estimated initial investment of $600,000 to $1,200,000. The franchisor’s public page does not break that total into Item 7 line items, so request the full table in the FDD. Expect it to cover at least:
- Initial franchise fee
- Leasehold improvements and construction
- Kitchen equipment, beverage equipment and smallwares
- Furniture, fixtures, signage and decor
- Technology and point-of-sale systems
- Opening inventory and supplies
- Training, travel and pre-opening labor
- Grand opening marketing
- Deposits, permits, licenses and insurance
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Royalty. The franchisor lists a 5% royalty on sales.
Marketing. Up to 2% of sales may apply for marketing. Item 6 of the FDD will spell out how that contribution is calculated, along with any local marketing spending, technology fees, transfer fees and renewal fees.
How lenders factor these in. When sizing a Lost Pizza Co. franchise loan, lenders subtract royalties, marketing contributions, rent, food and beverage costs and labor from projected sales to estimate the cash flow available for debt service. In a full-service pizza restaurant, labor and rent are the largest fixed costs, so lenders will look closely at your staffing model and lease terms.
Franchisor Requirements for New Owners
The franchisor does not publish minimum net worth or liquid capital figures. Instead, it lists the qualities it wants in an owner:
- Restaurant industry background, preferably with multi-unit experience
- Local experience in the target market
- Experience managing teams
- Willingness to work hands-on and put in long hours
- A high-energy approach to marketing the brand locally
- Commitment to high quality standards
- The ability to secure financing
Site criteria. The franchisor looks for a trade area with a population of 50,000 or more within 3 miles and at least 30,000 vehicles passing daily. Those thresholds also help a lender judge whether your sales projections are realistic.
The approval process. The franchisor suggests visiting a restaurant, reviewing its information, emailing the company, completing an application and meeting with the team before both sides decide on fit. Training covers up to 3 owners or managers, followed by onsite staff training before opening.
Ways to Own a Lost Pizza Co.
A new restaurant. Most owners open a new location. Financing covers the fee, build-out, equipment and working capital and is underwritten on projections, your experience and your equity. See our restaurant start-up financing options.
Buying an existing location. If a franchisee sells, the buyer can show a lender actual sales and expenses, which often makes underwriting easier. The franchisor must approve the transfer. Our article on buying a franchise resale covers the transfer steps.
Multiple restaurants. The franchisor prefers multi-unit restaurant experience, and growth across several locations is possible with approval.
Financing Options for a Lost Pizza Co. Franchise
A Lost Pizza Co. franchise loan can come from several sources, often combined.
SBA 7(a) loans. Because Lost Pizza Co. is listed on the SBA Franchise Directory, an SBA 7(a) loan can fund the franchise fee, build-out, equipment and working capital in one package, subject to the lender’s approval.
SBA 504 loans. If you buy or build the restaurant property, an SBA 504 loan can finance owner-occupied real estate and long-lived equipment. Note the directory comment about the franchisor’s real estate purchase option, explained below.
Conventional term loans. Owners with strong liquidity and restaurant experience may prefer a conventional business loan, though terms vary by lender.
Equipment financing. Pizza ovens, mixers, refrigeration, fryers, draft beer systems and point-of-sale hardware can be financed or leased separately to preserve cash. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. A line of credit can cover payroll during training, opening inventory and the slower weeks while a new restaurant builds its customer base. Our restaurant working capital page explains the options.
Seller financing on resales. When buying an existing restaurant, the seller may agree to carry part of the price. Seller notes are typically subordinate to the senior loan, and SBA rules may limit how they are structured.
SBA Loans for Lost Pizza Co. Franchisees
The SBA Franchise Directory lists franchise brands whose agreements have been reviewed for SBA eligibility. SBA lenders generally require a brand to be listed before making an SBA-guaranteed loan to one of its franchisees. A listing does not approve any borrower; it clears the franchise relationship for review.
Lost Pizza Co.’s listing. The brand appears on the directory as Lost Pizza under code S2858, with two notes:
- Purchase option on real estate: the franchisor may not enforce its purchase option on real estate that is owned by the franchisee or a franchisee affiliate and taken as collateral for the SBA loan. In plain terms, if you own the building and pledge it to secure your SBA loan, the franchisor’s right to buy that property cannot override the lender’s collateral position.
- Lien position: the lender or certified development company must obtain the correct lien position on all collateral as SBA rules require.
For most borrowers who lease their space, the first note will not come into play. It matters mainly for owners who buy the restaurant property, particularly with a 504 or a 7(a) real estate loan.
Program size. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
SBA application tips. Gather personal tax returns, a personal financial statement, a resume showing restaurant management experience, the signed or proposed franchise agreement, a letter of intent or lease, contractor bids and a detailed business plan. Our SBA loan calculator can help with early payment estimates, which are for planning only.
How Lenders Evaluate a Lost Pizza Co. Deal
Personal credit and financial history. Lenders review credit, tax returns and debts.
Net worth and liquidity. Even though the franchisor does not publish thresholds, lenders will require an equity injection and want reserves left after closing.
Industry and management experience. The franchisor asks for a restaurant background, and lenders do too. Prior general manager or multi-unit experience strengthens a request.
Business plan and projections. Base projections on the trade area’s population and traffic counts, the split between dine-in, takeout and delivery, food and beverage cost, staffing and rent.
The FDD and franchise agreement. Lenders review the 10-year term, renewal conditions, transfer rules and the real estate purchase option. Our article on reading an FDD for financing explains which items matter most.
Site and lease. Expect the lender to review the lease term, rent, renewal options, any tenant improvement allowance and patio rights.
Historical financials for resales. For an existing restaurant, lenders will request several years of profit and loss statements, sales reports and tax returns.
Multi-Unit Growth and Development Agreements
The franchisor prefers candidates with multi-unit restaurant experience, which signals openness to operators who grow beyond one location. Ask whether the current FDD offers development agreements and what schedule they require.
Financing a second or third restaurant. Once your first restaurant has operating history, lenders can underwrite its cash flow alongside the new location. Our article on multi-unit franchise financing explains how lenders handle growth.
Real-World Scenarios
A restaurant manager opening a first location. A longtime general manager signs for a new restaurant in a growing suburb that meets the franchisor’s population and traffic criteria. An SBA 7(a) loan funds the build-out, equipment and working capital, and the manager’s experience offsets the lack of prior ownership.
An operator buying an existing restaurant. A buyer purchases a franchised location from a retiring owner. The lender underwrites historical results, and the seller carries a small subordinate note.
A multi-unit owner buying real estate. An operator with two restaurants buys the building for a third. An SBA 504 loan finances the property, and the lender confirms its lien position consistent with the directory note on the franchisor’s purchase option.
Common Mistakes to Avoid
- Assuming the low end of the investment range fits a site that needs a full kitchen and patio build
- Choosing a location that misses the franchisor’s population or traffic criteria
- Underestimating payroll during training and the first weeks of service
- Ignoring the real estate purchase option when buying the property
- Leaving too little working capital after closing
For more pitfalls, read about the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Lost Pizza Co. Franchise
Step 1: Visit a restaurant and contact the franchisor. Follow the franchisor’s process and request the FDD.
Step 2: Review the FDD with advisors. Study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 3: Assess your finances. Decide how much equity you can contribute while keeping reserves.
Step 4: Talk with a financing specialist. Learn early how SBA and conventional lenders will size a loan for this brand.
Step 5: Secure a site. Find a space that meets the franchisor’s criteria and negotiate lease terms that support the loan.
Step 6: Apply and close. Submit your business plan, contractor bids and personal documents, then coordinate closing with the franchisor’s approval and your opening schedule.
Lost Pizza Co. Franchise Loan FAQs
How much does it cost to open a Lost Pizza Co.?
The franchisor estimates a total initial investment of $600,000 to $1,200,000.
What is the Lost Pizza Co. franchise fee?
The franchisor lists a $25,000 franchise fee, due at signing.
What royalty does Lost Pizza Co. charge?
The franchisor lists a 5% royalty, and up to 2% of sales may apply for marketing. Confirm all ongoing fees in Item 6.
How much liquid capital or net worth do I need?
The franchisor does not publish minimums; it asks that candidates be able to secure financing.
Can I get an SBA Lost Pizza Co. franchise loan?
Yes. It is listed on the SBA Franchise Directory under code S2858. Every loan still requires lender approval.
Can I buy an existing Lost Pizza Co.?
Yes, if a franchisee sells and the franchisor approves the transfer. Lenders can then underwrite actual results.
Can a first-time owner qualify?
Possibly. A first-time owner with strong restaurant management experience has a better chance, since both the franchisor and lenders weigh it heavily.
Can I open multiple locations?
The franchisor prefers multi-unit restaurant experience. Ask about development agreements in the current FDD.
How long is the franchise term?
The franchisor lists a 10-year term with renewal options.
Does Lost Pizza Co. offer financing?
The franchisor’s page does not describe direct financing. Check Item 10 of the FDD.
Does the FDD include financial performance information?
Review Item 19 of the current FDD to see whether it includes financial performance representations.
Final Thoughts
A Lost Pizza Co. restaurant is a full-service, personality-driven concept with a modest franchise fee and a build-out heavy budget. Buyers seeking a Lost Pizza Co. franchise loan who choose a site that meets the franchisor’s criteria, bring restaurant experience, plan for payroll and reserves, and understand the SBA directory notes give themselves the best chance at approval.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
