Part
01
of one
Part
01
What companies have successfully franchised fast casual restaurants and what are their revenue numbers and franchise models? How much does it cost to open one? How much do they make?
Hello! Thanks for your question regarding companies that have successfully franchised fast casual restaurants and the financial aspects of these establishments. The sources we found most useful were Entrepreneur and Credibly. In short: Jimmy John's, Culver's, Subway, McAlister's Deli, Schlotzsky's Deli, Newk's Eatery, Pizza Factory, Firehouse Subs, Charley's Philly Steaks, and Pita Pit are all companies that have successfully franchised fast casual restaurants. You will find a deep dive of our findings below.
METHODOLOGY
In order to answer your question, we looked at industry reports, trusted media sites, corporate websites and financial websites. We first analyzed Entrepreneur's 2017 list of the 500 top franchised companies. From these, we selected 10 fast casual restaurants to focus on. In order to further ensure success, each one of these restaurants ranks within the top 300 companies on this list. From there, we looked at each company individually in order to find their revenue numbers, franchise models, cost to open, and how much the franchises make. While you did not specify whether or not you were looking for revenue numbers regarding the overall companies or their individual franchises, we were able to find a mixture of both. As you will see, we indicated whether the revenue presented was the revenue of a single franchise or, if this information was not available, we presented the revenue of the overall company. In some cases, we were able to provide both sets of revenues. Determining precisely how much a franchise makes in dollar amounts proved difficult, as there are various factors which can affect this number, such as location. However, for each company, we were able to uncover information regarding a percentage of sales which the franchise pays to the company in royalties. From this, we can assume the percentage left over is what the franchise essentially makes (before all other costs of running the franchise are deducted). In some cases, we were able to uncover a more detailed analysis of what a franchise makes, such as AUV. In these instances, we have presented any relevant information as available. In addition to this, we also came across information regarding how every franchised company files a yearly FDD report, which includes their official and detailed financial information. However, we were not able to find any of these reports in their entirety which are available publicly and free of charge. We wanted to note the existence of these reports here, as we felt it may be of further interest to you.
1) JIMMY JOHN'S GOURMET SANDWICHES
How much a franchise makes:
Royalty fees paid to the company are 10.5% of sales.
$247,256 is the "average net profit from operations".
25.68% is the "average cost of food and paper".
Cost to open:
Franchise Model:
Includes - "Purchasing co-ops, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media."
2) FIREHOUSE SUBS
Annual Revenue:
$5.1 million (In 2015, based off of a case study of one franchise owner, who owns 7 stores, which we have calculated equals approximately $728,571 per store.)
How much a franchise makes:
Cost to open/operate:
Franchise Model:
"Firehouse Subs has relationships with third-party sources which offer financing to cover the following: franchise fee, equipment, inventory."
Includes, "ongoing support, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media."
3) SUBWAY
Annual Revenue:
How much a franchise makes:
Cost to Open:
Franchise Model:
"Offers in-house financing to cover the following: franchise fee, equipment third-party: franchise fee, startup costs, equipment, inventory."
Veteran Incentives - "Franchise fee waived if opening on a military/government location; 50% off franchise fee if opening on non-government location but receiving government financing."
Includes "ongoing support, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media, absentee ownership allowed."
4) CHARLEY'S PHILLY STEAKS
Annual Revenue:
How much a franchise makes:
Cost to open/operate:
Franchise Model:
"Charleys Philly Steaks has relationships with third-party sources which offer financing to cover the following: startup costs, equipment, inventory, accounts receivable, payroll."
Includes "ongoing support, purchasing co-ops, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, absentee ownership allowed."
5) SCHLOTZSKY'S DELI
Annual Revenue:
How much a franchise makes:
Cost to open/operate:
Franchise Model:
"Schlotzsky's has relationships with third-party sources which offer financing to cover the following: startup costs, equipment, inventory."
Includes "ongoing support, purchasing co-ops, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media."
6) MCALISTER'S DELI
Annual Revenue:
How much a franchise makes:
Cost to open:
Franchise Model:
"McAlister's Deli has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll."
Includes "ongoing support, purchasing co-ops, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media, absentee ownership allowed."
7) PITA PIT
Annual Revenue:
How much a franchise makes:
Cost to open:
Franchise Model:
"Pita Pit Inc. has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll."
Includes "ongoing support, purchasing co-ops, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media, absentee ownership allowed."
8) NEWK'S EATERY
Annual Revenue:
"Newk’s Eatery discloses Average Net Revenue Volume of $2,156,905 of 67 franchised restaurants for the 2015 fiscal year."
Cost to open/operate:
Liquid Cash Requirement - $1,500,000
Franchise Model:
"Newk's Eatery has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll."
Includes "ongoing support, newsletter, meetings, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, regional media."
9) PIZZA FACTORY
Annual Revenue:
"The total sales for Pizza Factory franchises in America [in 2015] was $48,117,117."
"Average annual sales for a Pizza Factory location is $441,441."
Cost to open/operate:
Franchise Model:
Includes "ongoing support, newsletter, meetings, toll-free line, grand opening, internet, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media, absentee ownership allowed."
10) CULVER'S
Annual Revenue:
$98.5 million in 2015 (revenue for the entire company).
"More than 80% of the revenue came from franchise fees and royalties."
How much a franchise makes:
Cost to open/operate:
Franchise Model:
Includes "ongoing support, newsletter, meetings, grand opening, security, field operations, marketing support, co-op advertising, ad slicks, national media, regional media."
CONCLUSION
To wrap it up, Jimmy John's, Culver's, Subway, McAlister's Deli, Schlotzsky's Deli, Newk's Eatery, Pizza Factory, Firehouse Subs, Charley's Philly Steaks, and Pita Pit are all companies that have successfully franchised fast casual restaurants. Thanks for using Wonder! Please let us know if we can help with anything else!