Vellore Pizza Co. — Business Model & Revenue Streams
The business model and revenue streams across corporate and franchised stores, delivery, the dark-friendly kitchen formats, franchising fees and the unit economics.
Section 7 · Business Plan
Business Model & Revenue Streams
The business model and revenue streams across corporate and franchised stores, delivery, the dark-friendly kitchen formats, franchising fees and the unit economics.
Vellore operates a hybrid quick service restaurant model that blends
corporate-owned flagship restaurants with a franchised network, both
supplied by a central commissary. This structure is deliberately
designed to balance control (corporate stores set the
operating standard and capture full unit economics) with
capital-efficient scale (franchising recycles capital
and accelerates coverage), while the commissary converts the entire
network’s purchasing into an internal, high-margin supply annuity.
7.1 The Five Revenue Streams
| Stream | Source | Basis | Margin character |
|---|---|---|---|
| Corporate store sales | Company-owned restaurants | Full retail revenue | Full unit economics |
| Franchise royalties | Franchisee system sales | 6% of net sales | Very high margin |
| Marketing levy | Franchisee system sales | 2% of net sales | Ring-fenced for brand |
| Franchise fees | New franchise openings | R165k per store | One-off, high margin |
| Commissary supply | All stores (corp + franchise) | Markup on inputs | Recurring, scalable |
The strategic significance of this mix is that it transforms a
capital-intensive restaurant business into something closer to a
brand-and-supply platform as it scales. By FY5, franchise royalties, the
marketing levy and commissary supply together contribute a growing share
of Company revenue at substantially higher incremental margin than
corporate store sales, driving the EBITDA-margin expansion shown in the
financial projections.
7.2 Store Formats
| Format | Footprint | Channel focus | Indicative fit-out |
|---|---|---|---|
| Flagship | 180–240 m² | Delivery + takeaway + limited dine-in | ~R4.4m |
| Delivery hub | 90–130 m² | Delivery + takeaway | ~R2.6m |
| Express / kiosk | 40–70 m² | Grab-and-go, transit nodes | ~R1.6m |
| Drive-thru | 150–200 m² + lane | Drive-thru + delivery | ~R3.8m |
Corporate flagships establish the brand and operating standard in
anchor locations; the lower-cost delivery-hub and express formats are
the primary vehicles for franchise expansion, because their lower
capital requirement improves franchisee returns and widens the pool of
viable operators and sites.
7.3 The Franchise Model
Vellore’s franchise offer is structured to be attractive to operators
while protecting brand integrity and Company economics. Franchisees pay
an initial fee of approximately R165,000, ongoing royalties of 6% of net
sales, and a 2% marketing levy, and are required to purchase core inputs
from the commissary. In return they receive a turnkey operating system,
site selection support, training, technology, supply-chain access and
national marketing. This is consistent with prevailing South African
pizza-franchise economics, where royalty-plus-marketing fees of 8–11% of
turnover are standard.
Capital recycling: franchisees fund their own store
capex, so Company capital is not the binding constraint on growth. Aligned incentives: owner-operators run tighter
local operations than salaried managers. Annuity economics: each store adds recurring
royalty, levy and commissary revenue at high incremental margin. Faster coverage: local operators bring local market
knowledge and accelerate national reach.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Vellore Pizza Co. (Pty) Ltd.