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Big Boy Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a Big Boy Franchise?
To open a Big Boy franchise, you will need to prepare for a significant initial investment ranging from $943,000 to $3,630,500. This includes a franchise fee of $50,000, along with additional costs such as equipment, real estate, and initial inventory. You should also have a cash reserve of $57,500 to $68,750 and a net worth of at least $100,000 to meet the financial criteria set by the franchisor.
What Are the Ongoing Fees Associated with a Big Boy Franchise?
As a Big Boy franchisee, you will be responsible for ongoing fees that include a royalty fee of 5% on gross sales and a marketing fee of 2.5%. These fees contribute to the overall support and advertising efforts of the brand, helping to maintain its presence in the market. It's essential to factor these costs into your financial planning to ensure long-term profitability.
What Is the Average Revenue Potential for a Big Boy Franchise?
Big Boy franchises have strong revenue potential, with an average annual revenue per unit reported at $1,934,252. The range of annual revenue varies, with the lowest at $910,758 and the highest reaching $2,225,773. Understanding these figures can help you assess the potential return on investment and make informed decisions about entering the franchise system.
What Is the Breakeven and Payback Timeline for a Big Boy Franchise?
The breakeven time for a Big Boy franchise is approximately 12 months, indicating that you could recover your initial investment within the first year of operation. Additionally, the investment payback period is around 30 months, which highlights a relatively quick return compared to many other franchise opportunities. This timeline is crucial for potential franchisees to consider when evaluating the financial viability of the business.
Big Boy Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Big Boy Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2017 | 2018 | 2019 |
|---|---|---|---|
| Total Units | 79 | 76 | 73 |
| Net Change YoY | -3 | -3 | |
| Franchised Units | 50 | 50 | 58 |
| Net Change YoY | 0 | 8 | |
| Corporate Units | 29 | 26 | 15 |
| Net Change YoY | -3 | -11 |
Initial Investment
The Big Boy franchise offers a range of initial investment options, with costs varying from $943,000 to $3,630,500. This investment covers everything from equipment and signage to real estate and initial inventory, providing franchisees with a comprehensive setup to launch their restaurant. The initial franchise fee is $50,000, which grants access to the established brand and operational support.
Ongoing Fees
Franchisees are required to pay a royalty fee of 5% on gross sales, along with a marketing fee of 2.5%. These fees contribute to the overall brand marketing efforts and ongoing support provided by the franchisor, ensuring that franchisees can benefit from the collective strength of the Big Boy brand while maintaining their local operations.
Financial Performance
The average annual revenue per Big Boy unit is approximately $1,934,252, with a median matching this figure. This indicates strong sales potential across the franchise network. Revenue can range from a low of $910,758 to a high of $2,225,773, highlighting the variability in performance based on factors such as location and management efficiency.
Breakeven and Payback
Franchisees can expect to reach breakeven within 12 months of operation. The investment payback period is approximately 30 months, allowing franchisees to plan their financial strategies effectively and understand the timeline for recovering their initial investment.
Corporate and Franchise Units
As of 2019, Big Boy operates a total of 73 units, comprised of 58 franchised locations and 15 corporate-owned units. This distribution demonstrates a balanced approach to growth, with franchising playing a significant role in expanding the brand's footprint while maintaining corporate oversight on some locations.
Operational Insights
Franchisees should anticipate annual operating expenses averaging between $273,500 and $388,500. Key costs include employee salaries, insurance, utilities, and marketing. Understanding these expenses is crucial for effective financial management and maximizing profitability in the competitive restaurant landscape.
Frequently Asked Questions
The initial investment for a Big Boy franchise ranges from $943,000 to $3,630,500, which includes the $50,000 franchise fee and other startup costs.